Minutes of Meeting of the Board of Directors of Travis County Municipal Utility District No

MINUTES OF MEETING OF THE BOARD OF DIRECTORS OF TRAVIS COUNTY MUNICIPAL UTILITY DISTRICT NO. 2

June 3, 2020

THE STATE OF TEXAS § § COUNTY OF TRAVIS §

A meeting of the Board of Directors of Travis County Municipal Utility District No. 2 was held on June 3, 2020 via telephone conference call pursuant to Section 551.125, Texas Government Code, as modified temporarily by Governor Greg Abbott, and the related guidance from the office of the Texas Attorney General, in connection with the Governor’s COVID-19 Disaster Proclamation. Notice of the meeting was given as required by the Texas Open Meetings Act. A copy of the Certificate of Posting of the notice is attached as Exhibit “A”. The meeting was open to the public via the toll-free dial-in telephone number provided in the meeting notice. An electronic agenda packet for the meeting was provided on-line via the link included in the meeting notice and the meeting was recorded and made available at the same link after the meeting.

In order to facilitate the efficiency of the telephone proceedings, Director Roberts asked Mr. Bartram to moderate the meeting. There being no objections, Mr. Bartram called the telephone conference meeting to order at 12:03 p.m. The roll was called of the members of the Board:

Wilmer Roberts - President Michael Moore - Vice President Debora Pickens - Secretary Ray Mura - Assistant Secretary Tracy T. Johnson - Assistant Secretary and all of the Directors were present, thus constituting a quorum. Also present on the call were Jeremy Sheard, a resident of the District; Dennis Hendrix of Crossroads Utility Services LLC (“Crossroads”), the District’s utility operator; Lauren Smith of Public Finance Group LLC, the District’s financial advisor; Nancy Olson of McCall Gibson Swedlund Barfoot PLLC, the District’s auditor; Ken Schroeder of Schroeder Engineering Company, the District’s engineer; Russ Allison of Argent Management, LLC, representing SG Land Holdings LLC, a developer in the ShadowGlen community; Allen Douthitt of Bott & Douthitt, PLLC, the District’s bookkeeper; and John Bartram of Armbrust & Brown, PLLC, the District’s general legal counsel. Hasan Mack of McCall, Parkhurst & Horton L.L.P., the District’s bond counsel, joined the call later.

Mr. Bartram announced that the Board would first receive citizens’ communications and Board member announcements. He first noted that an inquiry had been received through the District’s website regarding district bond issues. He stated that Cheryl Allen, the District’s financial advisor, had responded and learned that the inquiry had been made on behalf of an unnamed company involved in the development of storm drainage improvements. Mr. Bartram stated that Ms. Allen had agreed to pass the company’s information on to the District’s engineer once the name of the company would be released. Mr. Hendrix next reported inquiries had also been received through the District’s website regarding rebates for rainwater collection, water quality complaints, and transfers of service, all of which had been addressed. He further noted that he had corresponded with Mr. Sheard regarding his customer service experience as he transitioned his utility account from one address in the District to a new address in the District,

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a copy of such correspondence being attached as Exhibit “B”, and he asked Mr. Sheard if there was anything specific he would like to discuss with the Board. Mr. Sheard thanked the Board for the opportunity to participate in the meeting, noting that, if the meeting had been in-person, he would likely not have been able to attend. He confirmed that all of his issues had been addressed. He stated that he appreciated everyone’s attention and hoped that his experience would result in improvements to the process in the future. He also indicated that he had received his refund check quickly. Director Roberts stated that he had spoken to Mr. Sheard and confirmed that the District would look at ways to streamline the process for changing accounts within the District. Mr. Douthitt stated that this was a rare situation, but one that could certainly be addressed. Mr. Sheard shared that trying to communicate exclusively via email had been frustrating. He stated that it had taken multiple emails to accomplish what one short telephone call had been able to resolve; and he encouraged the District to maintain an in-person customer service option instead of forcing everyone to email. Director Roberts asked Director Moore if he could add to the District’s website Mr. Hendrix’s contact information and a link to the District’s folder in the Armbrust & Brown online database. Director Moore confirmed that that information could be added. Mr. Sheard then asked how he could keep up to date on future Board meetings. Mr. Bartram stated that the Board typically met every-other month on the first Wednesday of the month. Director Roberts stated that agendas were posted at the ShadowGlen club house and on the District’s website. Mr. Sheard stated that the calendar on the District’s website was blank. Director Moore suggested that Mr. Sheard subscribe to notifications from the website. Mr. Sheard stated that he had but that he had not received a notification since October 2018. He stated he would calendar reminders for the first Wednesday of the month. Director Moore stated that he would look into updating the calendar and subscription functions of the District’s website.

Mr. Bartram then stated that the Board would next consider approving the minutes of the April 1, 2020 Board meeting. Upon motion by Director Moore and second by Director Mura, the minutes were unanimously approved.

Mr. Bartram then stated that the Board would consider an amendment to the District’s rate order. He explained that the purpose of the amendment was to conform to current law the maximum amount of lead permitted in plumbing infrastructure. Upon motion by Director Moore and second by Director Pickens the Board voted unanimously to approve the Amended Order Establishing Rates and Charges, and Adopting Rules with Respect to District Water, Wastewater and Drainage, Including Water Quality, Systems attached as Exhibit “C”.

Mr. Bartram next recommended that the Board consider adopting procedures that would allow bids on District projects to be received electronically. He directed the Board’s attention to the Order Adopting Rules and Procedures for Electronic Bids for District Projects attached as Exhibit “D” and explained that the Texas Water Code expressly authorized electronic bids as long as the Board had adopted rules to ensure the identification, security, and confidentiality of electronic bids and to ensure that the electronic bids remain effectively unopened until the proper time. Mr. Bartram stated that the proposed procedures were designed with flexibility to allow the process to be managed by the District engineer on a case-by-case basis. Mr. Schroeder confirmed that he had had an opportunity to review the procedures and recommended approval. After discussion, upon motion by Director Moore and second by Director Pickens, the Board voted unanimously to approve the Order Adopting Rules and Procedures for Electronic Bids for District Projects, as presented.

Mr. Bartram then stated that the Board would consider the renewal of the District’s Drainage Channel Maintenance Agreement with TexaScapes, Inc. He stated that the original agreement had expired at the end of May and that TexaScapes had proposed renewal for a

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three-year term at the current compensation. Director Johnson asked why the term was increasing from two years to three years. Mr. Bartram stated that the contractor had requested a three-year term. Director Roberts suggested that it was in the District’s interest to “lock in” for a longer term since the compensation was not changing. After discussion, upon motion by Director Moore and second by Director Mura, the Board voted unanimously to approve the renewed Drainage Channel Maintenance Agreement with TexaScapes, Inc. attached as Exhibit “E”.

Mr. Bartram then stated that the Board would consider the bond-related items on the agenda and first reported that the Texas Commission on Environmental Quality (the “TCEQ”) had recently approved the District’s next “new money” bond application, as evidenced by the Order Approving an Engineering Project and the Issuance of $5,000,000 in Unlimited Tax Bonds for Travis County Municipal Utility District No. 2 attached as Exhibit “F”. Ms. Smith then reviewed the Schedule of Events attached as Exhibit “G”, noting that the bonds, which would be designated as Series 2020A, were scheduled to sell in August and close in September. Ms. Smith recommended that the District apply for both a credit rating and bond insurance and that the Board request an updated estimate of appraised property values in the District from the appraisal district to support the applications for a credit rating and bond insurance and to help market the bonds. Ms. Smith next reviewed the draft Preliminary Official Statement (“POS”) for the sale of the bonds attached as Exhibit “H”, which she noted was under concurrent review by all of the District’s consultants. She highlighted the purposes for which the bond proceeds would be used, reviewed the cost summary for the use of proceeds, and indicated that the POS would be converted to a final Official Statement at the time of award of the sale of the bonds. Mr. Bartram then explained that applicable law required developer reimbursements to be reviewed by an independent auditor as a condition to disbursement, and he recommended that the Board go ahead and engage the auditor to prepare what was commonly referred to as a reimbursement report for the District’s 2020A bonds. At this time, Ms. Olson reviewed the engagement letter with her firm attached as Exhibit “I” for the preparation of a report on reimbursable costs. She stated that the estimated fee range was $10,000 to $12,000, which she indicated was the same fee range as the District’s last utility bond issue. Ms. Olson next advised the Board that, when an audit was included in bond offering documents, a new auditing standard, SAS No. 133, required the auditor to obtain a supplemental representation from the Board that, in essence, confirmed that there had been no material changes to the District’s financial position since audit time. She indicated that representation letter included the same knowledge and reliance qualifiers as the representation letter signed by the Board in connection with the audit itself.

No one from the District’s bond counsel firm yet being on the call to review the resolution approving the POS, Mr. Bartram suggested that the Board skip ahead on the agenda and receive the bookkeeper’s report, as Mr. Douthitt need to be off the call by 1:00 p.m. There being no objections, Mr. Douthitt directed the Board’s attention the accounting report attached as Exhibit “J” and recommended approval of two transfers and the Director and vendor payments. He explained that all payments would be run through the bookkeeper’s account, per the emergency resolution approved in April, so that checks would not need to be circulated to the Directors for manual signatures. He then referenced the District’s April financial statements, including the latest quarterly investment report, noting that the District was currently ahead of plan to date. After discussion, upon motion by Director Mura and second by Director Pickens, the Board voted unanimously to approve the transfers and the Director and vendor payments, as presented.

At this time, Hasan Mack of McCall, Parkhurst & Horton L.L.P., the District’s bond counsel, joined the call and addressed the agenda item for the Resolution Approving Preliminary Official Statement; Authorizing Distribution of Preliminary Official Statement and

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Publication of a Notice of Sale of Bonds; and Approving Other Related Matters attached Exhibit “K” (the “Bond Resolution”), which he explained would approve and authorize distribution of the POS, authorize publication of the sale of the bonds, authorize payment of the Attorney General bond review fee, and designate UMB Bank as the paying agent and registrar for the bonds. Mr. Bartram then summarized the action required on the Series 2020A bond items. After discussion, Director Moore then moved that the Board: (i) approve the Resolution Requesting Updated Appraised Value attached as Exhibit “L”; (ii) authorize the District’s financial advisor to apply for a credit rating and bond insurance for the District’s Series 2020A bonds; (iii) approve the payment of the Attorney General bond review fee for the 2020A bonds; (iv) designate UMB Bank as the paying agent/registrar for the District’s 2020A bonds; (v) approve the Bond Resolution, as presented; (vi) approve the engagement letter with McCall Gibson Swedlund Barfoot PLLC for preparation of the report on reimbursable costs for the District’s 2020A bonds; and (vii) approve the SAS No. 133 representation letter attached as Exhibit “M”. Upon second by Director Mura, the motion passed unanimously.

Ms. Smith then reviewed the final closing memorandum for the District’s 2020 refunding bonds attached as Exhibit “N”, noting that the sale of the bonds had closed on April 8th. Mr. Bartram then closed out the bond items on the agenda by directing the Board’s attention to the opinion letter attached as Exhibit “O”, and noted that Orrick, Herrington & Sutcliffe LLP, a law firm affiliated with BLX Group LLC, the District’s arbitrage rebate compliance specialist, had determined that the District’s Series 2015 refunding bonds were eligible for the small issuer exemption to the federal rebate requirement and that there were currently no yield restriction requirements associated with the issuance of the bonds.

Mr. Bartram then stated that the Board would consider the election items on the Supplemental Agenda. He reminded the Board that director elections were held in November of every even-numbered year. And he stated that it was time to call the 2020 Director election, noting that Directors Roberts and Moore were up for re-election this year. Mr. Bartram indicated that the election could be canceled if uncontested. He then directed the Board’s attention to the Order Calling Director Election attached as Exhibit “P”. He recommended that the Board approve the order calling the election and authorize his office to give notice of the election, noting that notice of the deadline to file an application for a place on the ballot was scheduled to be posted on June 12th, as required by the Texas Election Code. Mr. Bartram next reviewed the Resolution Approving Election Agreement and Joint Election Agreement, a copy of which is attached as Exhibit “Q”, and the agreements attached thereto. He stated that, under this arrangement, the County would staff and conduct early and regular voting for the District’s election at a cost that should be substantially lower than either purchasing or renting compliant voting equipment. He further stated that the District had the opportunity to conduct the November election jointly with other jurisdictions also having November elections, which would facilitate the conduct of the elections and enable District voters to vote a combined ballot for all applicable elections at a single polling location. Mr. Bartram noted that the Texas Election Code required the terms of a joint election agreement to be stated in a resolution, order, or other official action adopted by the Board and pointed out that the Resolution authorized the officers of the District to execute the agreement when finalized. Director Moore asked if notice of the election or any other information about the election was required to be posted on the District’s website. Mr. Bartram stated that he would confirm. Director Pickens then pointed out that the Order Calling Director Election indicated that three directors were being elected. Mr. Bartram confirmed that only two directors were up for re-election in 2020 and that he would correct the errors. After further discussion, upon motion by Director Mura and second by Director Pickens, the Board voted unanimously to (i) approve the Order Calling Director Election, as corrected; (ii) approve the Resolution Approving Election Agreement and Joint Election Agreement, including the form of agreements

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attached thereto, as presented; and (iii) authorize the District’s attorney to give notice of the election, as required by law.

Mr. Bartram then stated that the Board would receive a report from the developer and recognized Mr. Allison. Mr. Allison updated the Board on the status of construction and homebuilding activity in ShadowGlen, including Sections 9, 11, 12, 13, 17, and 21A & B. He stated that there were currently 34 homes under construction and 245 lots on the ground in the District. He stated that the only undeveloped section remaining in the District was Section 18 (99 lots), which he expected would be under construction by the end of the year. Mr. Allison next reported that he did not have any new information regarding commercial development; that the County was close to installing a traffic signal at the intersection of FM 973 and ShadowGlen Trace; and that he was expecting the County to issue permits for several new sections in Wilbarger Creek MUD No. 1 soon. Director Roberts asked if the HOA was still contracting with the Travis County Sheriff’s Office to manage traffic on ShadowGlen Trace. Mr. Allison stated that the Sheriff’s Office had suspended supplemental patrol contracts during COVID-19 but that it was his understanding that the deputies would be back in the District soon. Mr. Allison then closed by reporting that an amendment to the development/consent agreement for the ShadowGlen project to extend the term of the agreement as to the developers was scheduled to go to City Council on June 17th. Mr. Bartram stated that he had not yet seen the proposed draft and would carry that agenda item forward to the District’s next agenda.

Mr. Bartram then stated that the Board would receive a report on website design and management. Director Moore stated that the agenda and minutes were, for the most part, up to date. Mr. Bartram reminded the Board that there was always a lag for the minutes because the minutes were not posted until approved by the Board.

Mr. Bartram next announced that the Board would receive a report from the District’s utility operator and recognized Mr. Hendrix. Mr. Hendrix directed the Board’s attention to the operations report attached as Exhibit “R” and reviewed the latest water, water accountability, take-or-pay water purchase tracking, water usage analysis, wastewater, connection, billing, and write-off reports. He reported that water loss was estimated at -35% for the month. He stated that, last month, he had allocated 6,400,000 gallons of water for flushing related to clusters of “dirty water” complaints. He stated that, this month, the amount of unaccounted for water was about the same with little or no water quality complaints or flushing activity, which, he acknowledged, suggested a water leak. Mr. Hendrix reported that he had inspected the Master District’s 24” water transmission main, including the recently repaired “creek leak”. He stated that there was no obvious evidence of a leak and that the Master District had engaged JBS Underground for further leak detection investigation. He next reported that there were no write-offs this month. At Director Roberts’ request, Mr. Hendrix then summarized some of the changes being implemented internally at Crossroads to track usage and help predict issues, including discrepancies with the master meter. Director Roberts then asked if Mr. Hendrix had contacted Tom Gill. Mr. Hendrix confirmed that he had, noting that Mr. Gill was a salesman for a company offering an application similar to what Crossroads already had. Mr. Hendrix then concluded his report by reviewing the letter from the TCEQ attached as Exhibit “S” indicating that TCEQ staff had investigated a recent water quality complaint and that no issues had been found. A brief discussion regarding conversations about water quality in the neighborhood, including posts on Next Door, ensued. Mr. Hendrix requested that the Board members forward such matters to him so that Crossroads could help respond to and address any District-related issues. Director Pickens asked where the clusters of “dirty water” complaints were located. Mr. Hendrix stated the Master District’s GIS mapping showed that the water quality calls had clustered near the amenity center pool in the District and in an older section of Cottonwood

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Creek MUD No. 1. He suspected that re-filling the ShadowGlen Amenity Center pool in March probably stirred things up in the system.

Mr. Bartram next announced that the Board would receive a report from the District’s financial advisor and recognized Ms. Smith. Ms. Smith directed the Board’s attention to Travis Central Appraisal District’s 2020 estimate of net taxable value for the property located within the District attached as Exhibit “T”, noting that property values had increased by approximately $25 million from $234,322,762 in 2019 to $259,229,895 in 2020. She further observed that, over the same period, the average home value had increased from $274,190 to $275,537.

Mr. Bartram next announced that the Board would receive the engineer’s report. Mr. Schroeder directed the Board’s attention to the engineering memorandum report attached as Exhibit “U” and first commented on agenda item 15(a) relating to a request for release of an easement in connection with the platting of Sections 25 and 26. He asked Mr. Bartram if this was a new request or if it related to an easement previously released. Mr. Bartram referred to the email attached as Exhibit “V” and stated that it was his understanding that it was a new request. Mr. Schroeder stated that he would review the underlying easement and follow up with the developer’s design engineer. Mr. Schroeder next reported that Section 17 was essentially complete, noting that he had presented the final pay estimate in March. Mr. Bartram asked if Mr. Schroeder had received all of the close-out documentation necessary for acceptance. Mr. Schroeder stated that he would double check, adding that it was his understanding that the project had already been accepted by the City of Manor. He next reported that he had not received any further pay estimates for Sections 21A & B or 11. Mr. Schroeder then addressed items related to the Master District. He reported that the flows through the wastewater treatment plant had generally been consistent and within expected ranges; that there had been no permit excursions; and that the wastewater treatment plant continued to experience on-going maintenance challenges that the Master District consultant team was coordinating to resolve. He further reported that the Master District (i) had recently decided to convert to conventional wastewater treatment technology in connection with the planned expansion of the wastewater treatment plant, the design of which was now in progress; and (ii) was close to finalizing a wastewater interconnect agreement with the City of Manor that would allow wastewater flows from the Participant Districts to be treated at the City’s wastewater treatment plant on a temporary basis. Mr. Schroeder then closed by reporting that the design of the second elevated storage tank was essentially complete and that the Master District had recently obtained a storm sewer easement from KB Home that was necessary to complete the County plan review process for that project.

Mr. Bartram stated that the next item on the agenda was a report from the District’s attorney. Mr. Bartram first reported that, under recent legislation, the Directors were required to complete annual cybersecurity training by June 14th each year. He stated that the Texas Municipal League Intergovernmental Risk Pool, the District’s insurance carrier, had produced a 17-minute training video to satisfy the new requirements, and he directed the Board’s attention to the memorandum attached Exhibit “W” with a link to the video and other details. He then closed by announcing that the annual summer CASE conference for 2020 had been canceled due to COVID-19.

Mr. Bartram next announced that the Board would consider the Master District and Advisory Committee items on the agenda. Mr. Bartram first reported that the Master District continued to explore potential alternative water suppliers that might be interested in providing water service to the Participant Districts after the initial 20-year term of the current wholesale contract. He next reported that Metro Water Systems, Inc. (“Metro”) had agreed to calculate the number of LUEs for irrigation connections based on meter equivalency data published by the

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American Water Works Association consistent with historical practice and that the Advisory Committee had ratified such agreement per the wholesale contract with Metro on Monday. Mr. Bartram added that Metro had not yet responded to the Master District’s request for documentation supporting Metro’s intent to increase the water LUE fee. Mr. Bartram next reported that the TCEQ had approved the Master District’s application for an alternative capacity requirement exception for the regional water system and had reduced the default requirement of 0.6 gallons per minute (gpm) per connection to 0.45 gpm per connection. He stated that the Master District consultant team was discussing what effect this would have on the timing of the need for additional water storage as well as the capacity purchased (and to be purchased) under the wholesale water contract with Metro. He next reported that, as mentioned by Mr. Schroeder, the Master District continued to plan for the construction of an additional elevated water storage tank and had recently decided to convert to conventional treatment technology in connection with the expansion of the wastewater treatment plant. Mr. Bartram then closed by directing the Board’s attention to the agendas and minutes from the most recent joint meetings of the Board of Directors of Wilbarger Creek Municipal Utility District No. 2 and the Advisory Committee, which was a recurring agenda item so that the Board could stay informed of the activities of the Master District and Advisory Committee. Director Roberts asked if there had been any further activity on the request for access through the Master District’s wastewater treatment plant site for a proposed tree farm on adjacent property. Mr. Bartram stated that he had responded with a list of issues and questions and had not heard back from the owner of the adjoining property. Director Roberts then asked about the status of the ± five acres of parkland behind the medical office building on Highway 290. Messrs. Allison and Bartram both responded that they were not aware of any parkland proposed in that area. Director Roberts recalled that someone had been collecting funds for a park on that property a few years back. Director Roberts then asked Mr. Allison if anything could be done about the mosquitos around the ponds. Mr. Allison stated that he would check into it, noting that perhaps the HOA could have the areas sprayed.

Mr. Bartram then stated that the Board would conclude by reviewing its future meeting schedule and agenda items. He directed the Board’s attention to the memorandum attached as Exhibit “X”, summarizing the schedule and process for adopting a budget and setting a tax rate. He reminded everyone to calendar the August and September meetings for budget and tax purposes, and he suggested that, unless there was an urgent need to meet, the Board skip the July meeting in accordance with its regular every-other-month meeting policy. The Board generally concurred.

There being no further business to come before the Board, upon motion by Director Pickens and second by Director Moore, the meeting was adjourned at 1:43 p.m.

(Signature page follows.)

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(SEAL) ______Debora C. Pickens, Secretary Board of Directors

Date: August 5, 2020

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CERTIFICATE OF POSTING OF MEETING PACKET FOR TRAVIS COUNTY MUNICIPAL UTILITY DISTRICT NO. 2 ON https://www.abaustin.com/districtdatabase

THE STATE OF TEXAS § § COUNTY OF TRAVIS §

I, __Mary Lou Sheridan___, hereby certify that at 5:03 p.m. on May 27, 2020, I posted a copy of the digital meeting packet for the June 3, 2020 meeting of the Board of Directors of Travis County Municipal Utility District No. 2 on https://www.abaustin.com/districtdatabase.

I understand that the meeting will be held via telephone conference call pursuant to Section 551.125 of the Texas Government Code, that the meeting packet was posted in order to comply with the Open Meetings provisions of Chapter 551 of the Government Code, as modified temporarily by Governor Greg Abbott and the related guidance from the Office of the Texas Attorney General in connection with the Governor’s COVID-19 Disaster Proclamation, and that the Board of Directors of Travis County Municipal Utility District No. 2 will rely on this certificate in determining whether the provisions of Chapter 551 of the Government Code, as modified temporarily, have been satisfied.

Witness my signature this 27th day of ____May______, 2020.

Signature: /s/ Mary Lou Sheridan

Printed Name: Mary Lou Sheridan

Company: Armbrust & Brown, PLLC

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TRAVIS COUNTY MUNICIPAL UTILITY DISTRICT NO. 2

AGENDA

June 3, 2020

TO: THE BOARD OF DIRECTORS OF TRAVIS COUNTY MUNICIPAL UTILITY DISTRICT NO. 2 AND ALL OTHER INTERESTED PERSONS:

Notice is hereby given that the Board of Directors of Travis County Municipal Utility District No. 2 will hold a meeting on Wednesday, June 3, 2020, at 12:00 noon.

THIS MEETING WILL BE HELD VIA TELEPHONE CONFERENCE CALL PURSUANT TO SECTION 551.125, TEXAS GOVERNMENT CODE, AS MODIFIED TEMPORARILY BY GOVERNOR GREG ABBOTT, AND THE RELATED GUIDANCE FROM THE OFFICE OF THE TEXAS ATTORNEY GENERAL, IN CONNECTION WITH THE GOVERNOR’S COVID-19 DISASTER PROCLAMATION.

MEMBERS OF THE PUBLIC ARE ENTITLED TO PARTICIPATE IN AND TO ADDRESS THE BOARD OF DIRECTORS DURING THE MEETING. THE TOLL-FREE DIAL-IN NUMBER FOR THE MEETING IS 1-888-510-5505, AND THE PARTICIPANT CODE IS 937523. PLEASE FOLLOW THE INSTRUCTIONS PROVIDED BY THE SYSTEM TO ACCESS THE MEETING.

AN ELECTRONIC AGENDA AND PACKET FOR THE MEETING ARE AVAILABLE AT THE FOLLOWING LINK:

https://abaustin.sharefile.com/share/view/sd538f44a2d14aa28/fob55dc6-3b12-49ab-acc1-bc47d9c51f54

THIS MEETING WILL BE RECORDED, AND THE RECORDING WILL BE MADE AVAILABLE AFTER THE MEETING AT THE FOREGOING LINK.

ANYONE SPEAKING DURING THE MEETING SHOULD IDENTIFY THEMSELVES CLEARLY PRIOR TO SPEAKING.

The following matters will be considered and may be acted upon at the meeting:

PUBLIC COMMENT

1. Citizens’ communications and Board member announcements;

CONSENT ITEMS

(These items may be approved collectively or individually. Any of these items may be pulled for discussion upon the request of any board member.)

2. Minutes of April 1, 2020 Board meeting;

3. Amended Order Establishing Rates and Charges, and Adopting Rules with Respect to District Water, Wastewater and Drainage, including Water Quality, Systems;

4. Order Adopting Rules and Procedures for Electronic Bids for District Projects;

5. Renewal of Drainage Channel Maintenance Agreement with TexaScapes, Inc.;

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BOND ITEMS

6. $5,000,000 Unlimited Tax Bonds, Series 2020A, including:

(a) Texas Commission on Environmental Quality Order Approving an Engineering Project and the Issuance of $5,000,000 in Unlimited Tax Bonds for Travis County Municipal Utility District No. 2;

(b) Schedule of events;

(d) Applications and fees for credit rating and bond insurance;

(e) Payment of Attorney General bond review fee;

(f) Designation of Paying Agent/Registrar;

(g) Preliminary Official Statement;

(h) Resolution Approving Preliminary Official Statement; Authorizing Distribution of Preliminary Official Statement and Publication of a Notice of Sale of Bonds; and Approving Other Related Matters;

(i) Engagement letter with McCall Gibson Swedlund Barfoot PLLC for report on reimbursable costs;

(j) Statement on Auditing Standards No. 133 Management Representation Letter;

(k) Any other matters related to the bonds;

7. Unlimited Tax Refunding Bonds, Series 2020, including:

(a) Final Closing Memorandum from Public Finance Group LLC;

8. Arbitrage rebate review and yield restriction compliance letter from BLX Group, LLC for $3,400,000 Unlimited Tax Refunding Bonds, Series 2015 (Computation Period: April 15, 2015 – April 15, 2020);

ELECTION ITEMS

9. See Supplemental Agenda for election items;

REPORTS AND RELATED ACTION ITEMS

10. Report from developer(s) regarding status of development, construction, and homebuilding activity, including:

(a) Second Amendment to Development Agreement for the ShadowGlen Subdivision (extending term);

11. Website design and management;

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12. Report from District’s utility operator, including:

(a) Utility operations, maintenance, and repairs;

(b) Water usage and loss, including water purchase schedule and projections;

(d) Solid waste and recycling collection service;

(e) Water quality complaint to Texas Commission on Environmental Quality, including Investigation Report;

13. Report from District’s accountant, including:

(a) Bills, invoices, transfers, and investments;

14. Report from District’s financial advisor, including:

(a) Preliminary estimate of 2020 taxable value;

15. Report from District’s engineer, including:

(a) Request from SG Land Holdings LLC for termination of Temporary Drainage Easement recorded under Document No. 2016200116, Official Public Records of Travis County, Texas, in connection with platting of ShadowGlen Phase 2, Sections 25 and 26, including Release and Termination of Easement;

(b) ShadowGlen Phase 2, Section 17, including any pay estimates and change orders;

(d) ShadowGlen Phase 1, Section 11, including any pay estimates and change orders;

(e) Master District operations;

16. Report from District’s attorney, including:

(a) Annual cybersecurity training

(b) Cancellation of 2020 Capital Area Suburban Exchange (CASE) summer conference;

OTHER DISCUSSION/ACTION ITEMS

17. Master District and Advisory Committee items, including:

(a) Wholesale water supply and related matters, including wholesale water rates and capacity charges, LUE connections, contract term, alternative provider(s), and related matters;

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(b) Future wastewater treatment and water storage capacity needs, including schedule for and estimated costs of expansion of wastewater treatment plant and construction of second elevated water storage tank;

(c) Agendas for and minutes from most recent meetings of Wilbarger Creek Municipal Utility District No. 2 Board of Directors and Advisory Committee;

18. Future meeting schedule and agenda items, including schedule for adopting 2020-2021 budget and 2020 tax rate.

The Board of Directors is authorized by the Texas Open Meetings Act, Chapter 551, Texas Government Code, to convene in closed or executive session for certain purposes, including receiving legal advice from the District’s attorney (Section 551.071); discussing real property matters (Section 551.072); discussing gifts and donations (Section 551.073), discussing personnel matters (Section 551.074); discussing security personnel or devices (Section 551.076); or discussing information technology security practices (Section 551.089). If the Board of Directors determines to go into executive session to discuss any item on this agenda, the presiding officer will announce that an executive session will be held and will identify the item to be discussed and the provision of the Open Meetings Act that authorizes the closed or executive session.

(SEAL)

______Attorney for the District ****************************************************************************************** The District is committed to compliance with the Americans with Disabilities Act. Reasonable accommodations and equal access to communications will be provided upon request. Please call Armbrust & Brown, PLLC at 435-2300 for additional information. Hearing impaired or speech disabled persons equipped with telecommunications devices for the deaf may utilize the statewide Relay Texas program, 1-800-735-2988.

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TRAVIS COUNTY MUNICIPAL UTILITY DISTRICT NO. 2 SUPPLEMENTAL AGENDA

June 3, 2020

TO: THE BOARD OF DIRECTORS OF TRAVIS COUNTY MUNICIPAL UTILITY DISTRICT NO. 2 AND TO ALL OTHER INTERESTED PERSONS:

Notice is hereby given that the Board of Directors of Travis County Municipal Utility District No. 2 will hold a meeting at 12:00 p.m. on Wednesday, June 3, 2020.

AN ELECTRONIC AGENDA AND PACKET FOR THE MEETING ARE AVAILABLE AT THE FOLLOWING LINK:

https://abaustin.sharefile.com/share/view/sd538f44a2d14aa28/fob55dc6-3b12-49ab-acc1-bc47d9c51f54

THIS MEETING WILL BE RECORDED, AND THE RECORDING WILL BE MADE AVAILABLE AFTER THE MEETING AT THE FOREGOING LINK.

ANYONE SPEAKING DURING THE MEETING SHOULD IDENTIFY THEMSELVES CLEARLY PRIOR TO SPEAKING.

The following additional matters may be considered and acted upon at the meeting:

1. Order Calling Director Election for November 3, 2020;

2. Election Agreement and Joint Election Agreement with Travis County, including Resolution Approving Election Agreement and Joint Election Agreement;

3. Notice of Deadline to File Applications for Place on the Ballot;

4. Authorize the District’s attorney to give notice of November 3, 2020 Director election;

5. Any other matters relating to the District’s elections.

*************************************************************************************

{W0968463.2} 5

EL DISTRITO DE SERVICIOS PÚBLICOS MUNICIPALES NRO. 2 DEL CONDADO DE TRAVIS AVISO SUPLEMENTAL A LA AGENDA

3 DE JUNIO DE 2020

A: LA JUNTA DE DIRECTORES DEL DISTRITO DE SERVICIOS PÚBLICOS MUNICIPALES NRO. 2 DEL CONDADO DE TRAVIS Y A TODA PERSONA INTERESADA:

Se pone en conocimiento del público que la Junta Directiva del Distrito de Servicios Públicos Municipales Nro. 2 del Condado de Travis va a tener una reunión el miércoles, 3 de junio de 2020, a las 12:00 en la mediodía.

ESTA REUNIÓN SERÁ LLEVADO A CABO POR UNA TELECONFERENCIA DE CONFORMIDAD CON SECCIÓN 551.125, EL CÓDIGO DEL GOBIERNO DE TEXAS, COMO MODIFICADO TEMPORARIAMENTE POR EL GOBERNADOR GREG ABBOTT, Y LA DIRECCIÓN RELACIONADA DE LA OFICINA DEL PROCURADOR GENERAL DE TEXAS, EN RELACION CON LA PROCLAMACIÓN DEL GOBERNADOR SOBRE EL DESASTRE DE COVID-19.

LOS MIEMBROS DEL PÚBLICO TIENEN DERECHO A PARTICIPAR EN Y A DIRIGIRSE A LA JUNTA DE DIRECTORES DURANTE LA REUNIÓN. EL NÚMERO DE TELÉFONO GRATUITO PARA LA REUNIÓN ES 1-888-510-5505, Y EL CÓDIGO PARA PARTICIPAR ES 937523. POR FAVOR SIGA LAS INSTRUCCIONES QUE ESTÁN PROVEÍDO POR EL SISTEMA DE TELECONFERENCIA PARA ACCEDER A LA REUNIÓN.

HAY UN PAQUETE ELECTRÓNICO DE LA AGENDA PARA LA REUNIÓN QUE ESTÁ DISPONIBLE EN EL SIGUIENTE ENLACE:

https://abaustin.sharefile.com/share/view/sd538f44a2d14aa28/fob55dc6-3b12-49ab-acc1-bc47d9c51f54

ESTA REUNIÓN ESTARÁ GRABADA Y, DESPUES DE LA REUNIÓN, LA GRABACIÓN ESTARÁ DISPONIBLE EN EL MISMO ENLACE DESCRITO ARRIBA.

CUALQUIERA QUE QUIERA HABLAR DURANTE LA REUNIÓN DEBE IDENTIFICIARSE CON CLARIDAD ANTES DE HABLAR.

Los siguientes propósitos adicionales se consideran y pueden ser llevados a cabo en la junta:

1. Orden convocando elección de Directores para el 3 de noviembre de 2020;

2. Acuerdo electoral y acuerdo de elección conjunta con el condado de Travis, incluyendo la resolución que aprueba el acuerdo electoral y acuerdo de elección conjunta;

3. Aviso de fecha límite para presentar solicitudes para un lugar en la boleta;

4. Autorizar al Abogado del Distrito a dar aviso de la elección de Directores del 3 de noviembre de 2020;

5. Cualquier otro asunto con respecto a las elecciones del Distrito.

{W0968463.2} 6

(SEAL) (SELLO)

______Attorney for the District Abogado del Distrito

{W0968463.2} 7 Subject: Address Move Experience

From: Mary Lou Sheridan Sent: Wednesday, May 13, 2020 9:54 AM To: 'Jeremy Sheard' Cc: robertsw; Dennis Hendrix; Andrew W. Hunt Subject: RE: Address Move Experience

Good morning Mr. Sheard,

Here is a link to the District’s portal on the publicly accessible website: https://abaustin.sharefile.com/share/view/sd538f44a2d14aa28/foec777f-992e-4095-8b97-004605b619f0

You will find all kinds of information for the District at that link. I will check with the District’s website administrator on the status of posting items to the District’s stand-alone website.

The next Board meeting is scheduled for 12:00 noon on Wednesday, June 3. At this time, due to the COVID-19 pandemic and the related stay-at-home orders, the Board is meeting via telephone conference, and you are more then welcome to participate.

All of the meeting materials, including the agenda and the meeting packet, which includes backup for items on the agenda, will be posted in the “Telephone Meetings” folder at the link I provided above. I generally post the agenda and packet to the portal no later than 6 days prior to the meeting; I post updated packet items as soon as I receive them.

I’m also providing the call-in instructions here: Dial-in information for the teleconference Board meeting: a) The toll-free dial-in number for the meeting is 1-888-510-5505. b) The Participant Code is 937523. c) Please follow the instructions provided by the system to access the meeting.

Dennis Hendrix is working on the other issues you brought up in your email.

Please let me know if you have questions regarding the Board, its meetings, or the District’s portal on the publicly available website.

Best regards,

Mary Lou Sheridan Legal Assistant Armbrust & Brown, PLLC 100 Congress Avenue, Suite 1300 Austin, Texas 78701-2744 (512) 435-2390 - Direct (512) 435-2360 - Facsimile

1 @abaustin.com www.abaustin.com

THE INFORMATION CONTAINED IN THIS E-MAIL MESSAGE IS CONFIDENTIAL AND IS INTENDED ONLY FOR THE NAMED ADDRESSEE(S). THIS MESSAGE MAY BE PROTECTED BY ATTORNEY/CLIENT PRIVILEGE. IF THE READER OF THIS E-MAIL MESSAGE IS NOT AN INTENDED RECIPIENT (OR THE INDIVIDUAL RESPONSIBLE FOR THE DELIVERY OF THIS E-MAIL MESSAGE TO AN INTENDED RECIPIENT), BE ADVISED THAT ANY REUSE, DISSEMINATION, DISTRIBUTION, OR COPYING OF THIS E-MAIL MESSAGE IS PROHIBITED. IF YOU HAVE RECEIVED THIS E-MAIL MESSAGE IN ERROR, PLEASE NOTIFY THE SENDER AND DELETE THE MESSAGE. THANK YOU.

From: Jeremy Sheard Sent: Tuesday, May 12, 2020 8:54 PM To: 'Dennis Hendrix'; 'Andrew Hunt' Cc: Mary Lou Sheridan; robertsw Subject: Address Move Experience Importance: High

Hello Dennis & Andrew,

I live here in Shadowglen and recently moved addresses though still saying in TC MUD #2 (and Shadowglen). I would like to bring to your attention my unsatisfied experience during and after the process. Just like all other utilities, I had expected everything to be smooth and just transfer over but that was not the case. After trying to call customer service a couple times to get my transfer processed and completed and to answer my questions/concerns, it always said that no one was available to take your call and to email [email protected]. I did email that mailbox and while they got back to me, they did not answer all my questions and when I asked for someone to call me back after going back and forth 4-5 times via email, no one would seem to pick up the phone to call me. Finally, someone (Nancy?) did call me and she cleared up my initial questions.

Then, a couple weeks later I received two bills (one final from my previous address and second for new address) – which I was expecting. I had additional follow up questions I needed clarification on so of course, still can’t call customer service…have to email. I sent another email with all my questions and requested that someone call me back in case I had additional clarification or follow-up questions. Luckily, Miguel Garcia saw how much I’ve been contacting customer service and also due to the length of my email, he said he wanted to call me to get this all resolved instead of emailing back and forth. During all this effort and frustration, I would like to give a shout out to Miguel - his attitude, answering my questions, professionalism and doing what I feel should be the norm but was above and beyond was AWESOME!!!

With all that said, I have some recommendations from my experience moving addresses (in the same MUD) that I would like to bring up and see if they can be addressed and/or changed:

2 o I asked if my remaining balance could just be transferred to my new address which would save time for the back office team having to write a check, pay for postage/envelope and mail to me, etc. Was trying to help with not having you all incur unnecessary expenses and speed up the time.  “Base” fee still seems to be very high - $47 (your bill is minimum $47 even if you do not use any water/sewer/trash). I know other MUD’s and districts the “base” fee is was less – example: $18 (Pflugerville). I had a discussion with Andrew ~5 yrs. ago or so and he mentioned that this fee was going to be addressed and possibly reduced as more homes were built. Shadowglen has added 100’s of home out here and nothing has seemed to change.  Last, I would like to attend a Board Meeting, however, there is nothing on your website (https://www.traviscountymud2.org/) of when the next board meeting will be or where. In fact, the last time board meeting minutes and agendas posted on your website was Sept. 2019 and Dec. 2019. My understanding is the board meets monthly. Can you advise when and where the next board meeting will be?

Appreciate your time! If you would like to discuss any of this further or have questions, please give me a call. My cell# is below.

Regards, Jeremy Sheard 512- (Cell)

3 Subject: Address Move Experience

From: Dennis Hendrix Sent: Wednesday, May 13, 2020 3:33 PM To: robertsw Cc: Mary Lou Sheridan; Andrew Hunt Subject: RE: Address Move Experience

Wilmer, I had a very good conversation with Jeremy and was able to explain the difficulties with the transfer of services. I explained to him that the transfer of service within the district is not common, and that there is not a process and procedure in the rate order for a resident to move within the district. As far as his customer services concerns, we talked through the challenges during these times due to Covid and seemed have just been frustrated with the process of emailing back and forth. We talked through the MUD base fees and what those fees are for, he seemed to have a better understanding on those was well. He did have some questions as to the rates and why they were the same as other MUDs.

Jeremy did say that he may be on the board meeting call, will advise Mary Lou if he has a specific agenda item.

Please let me know if you have any questions

From: Jeremy Sheard Sent: Tuesday, May 12, 2020 8:54 PM To: Dennis Hendrix; Andrew Hunt Cc: msheridan; robertsw Subject: Address Move Experience Importance: High

Hello Dennis & Andrew,

1 With all that said, I have some recommendations from my experience moving addresses (in the same MUD) that I would like to bring up and see if they can be addressed and/or changed:

 Transferring Service to new address. Unlike all other utility companies – you cannot just move/transfer my account# to a new service address. Your process is you must cancel my original account, sign me up a new customer with a new acct# (even though I’m still an existing customer)  Deposit $100 (why am I required to pay a new deposit at my new address if I already have an account and I’m staying/moving in the same MUD?)  Admin Fee $35 (Not sure what this is for and/or I’m being charged for in addition to the deposit)  I found out after getting my final bill and new bill, I had a credit on my old account. I asked if that amount could be moved over to new address: o Was told No and that the time it will take for me to receive my refund from previous address will be up 60 days . To me 60 days seems like a LONG TIME for getting your money back. Considering, you all want $135 up front before service can even be started a new address – I don’t find this fair. o I asked if my remaining balance could just be transferred to my new address which would save time for the back office team having to write a check, pay for postage/envelope and mail to me, etc. Was trying to help with not having you all incur unnecessary expenses and speed up the time.  “Base” fee still seems to be very high - $47 (your bill is minimum $47 even if you do not use any water/sewer/trash). I know other MUD’s and districts the “base” fee is was less – example: $18 (Pflugerville). I had a discussion with Andrew ~5 yrs. ago or so and he mentioned that this fee was going to be addressed and possibly reduced as more homes were built. Shadowglen has added 100’s of home out here and nothing has seemed to change.  Last, I would like to attend a Board Meeting, however, there is nothing on your website (https://www.traviscountymud2.org/) of when the next board meeting will be or where. In fact, the last time board meeting minutes and agendas posted on your website was Sept. 2019 and Dec. 2019. My understanding is the board meets monthly. Can you advise when and where the next board meeting will be?

Appreciate your time! If you would like to discuss any of this further or have questions, please give me a call. My cell# is below.

Regards, Jeremy Sheard (Cell)

AMENDED ORDER ESTABLISHING RATES AND CHARGES, AND ADOPTING RULES WITH RESPECT TO DISTRICT WATER, WASTEWATER AND DRAINAGE, INCLUDING WATER QUALITY, SYSTEMS

(Effective June 3, 2020)

THE STATE OF TEXAS § § COUNTY OF TRAVIS §

WHEREAS, under Section 49.212, Texas Water Code, the Board of Directors (the “Board”) of Travis County Municipal Utility District No. 2 (the “District”) is authorized to adopt and enforce all necessary charges, fees or rentals for providing or making available District facilities or services; and

WHEREAS, the District is a “Participant” under the “Amended and Restated Contract for Financing and Operation of Regional Waste Collection, Treatment and Disposal Facilities; Regional Water Supply and Delivery Facilities and Regional Drainage, Including Water Quality, Facilities” (the “Master District Contract”) between Cottonwood Creek Municipal Utility District No. 1, the District, Wilbarger Creek Municipal Utility District No. 1, and Wilbarger Creek Municipal Utility District No. 2; and

WHEREAS, in its capacity as a Participant, the District is obligated to pay Wilbarger Creek Municipal Utility District No. 2, in its capacity as the “Master District” under the Master District Contract (the “Master District”), for water and wastewater services provided, as well as for certain operations and maintenance expenses incurred, by the Master District as described in the Master District Contract (the “Master District Charges”); and

WHEREAS, the District is also obligated to pay the Master District certain one-time fees (“Capacity Charges”) for reservation of living unit equivalents of capacity required by the District in the regional water supply facilities that are more fully described in the “Amended and Restated Regional Water Capacity and Supply Agreement for a Portion of Northeastern Travis County, Texas” (as amended, the “Regional Water Contract”); and

WHEREAS, the District desires to establish rates, charges and fees sufficient to provide water, wastewater and drainage facilities and services to the properties within its boundaries, and to pay the Master District Charges and the Capacity Charges;

It is, therefore, ordered by the Board as follows:

I. General Policies.

A. Definitions. For purposes of this Order, in addition to the terms defined in the preamble to this Order, the following terms will have the meanings indicated:

1. “Backflow Prevention Device” means an assembly or device that is designed to prevent backflow of water into the District’s system and meets the testing standards accepted by the American Water Works Association or the University of Southern California Foundation for Cross Connection Control and Hydraulic Research.

2. “Connection” means each residential dwelling unit occupied by a separate family or family unit, including separate apartments or dwelling units

{W0895873.4}

located within a single building, and each business unit occupied by a separate business, including separate establishments within a single building.

3. “Commission” means the Texas Commission on Environmental Quality, or its successor agency.

4. “Customer” means (a) an individual, partnership, association, firm, public or private corporation, governmental authority, or other legal entity that receives service from the District’s Systems; (b) an owner of property that is connected to the District’s Systems; or (c) a person who receives the benefit of the District’s service.

5. “District’s representative” means the District’s utility operator or another representative or employee of the District acting under the direction of the District’s operator or the Board.

6. “District’s Systems” means the water, wastewater and drainage systems located within the District’s boundaries and any approved out-of-district service areas.

7. “Homeowners’ Association” means a non-profit corporation created under a declaration of covenants, conditions and restrictions of record that is applicable to all of the residential property within the District.

8. “Industrial Wastewater Regulations” means the regulations governing the discharge of industrial wastewater attached as Exhibit “A”.

9. “Living Unit Equivalent” or “LUE” means the capacity necessary to serve a single family residential dwelling unit as establish from time to time by the rules and regulations of the Commission or, for a use other than single family residential, its equivalent as determined based on the following conversion table:

LUE CONVERSION TABLE

Bakery 0.000700 per Sq. ft. Barber Shop, General 0.480000 per Bowl Beauty Shop 0.480000 per Bowl Bowling Alley 0.635000 per Lane Car Repair 0.000160 per Sq. ft. Carwash, Tunnel, Self Serve 6.350000 per Carwash Carwash, Tunnel, w/attendants 31.430000 per Carwash Carwash, Hand Type, Self Serve 1.220000 per Carwash Bay Church 0.003200 per Seat Club, Tavern, or Lounge 0.031700 per Occupant Convenience Store 0.000200 per Sq. ft. Country Club 0.320000 x Member

{W0895873.4} 2

Day Care Center 0.031700 per Occupant Dormitory 0.286000 per Bed Fire Station 0.286000 per Capita Funeral Home 2.140000 per Service Gas Station with Carwash 9.350000 per Station Gas Station without Carwash 1.750000 per Station Grocery Store, 5,000-28,999 sq. ft. 0.000260 per Sq. ft. Grocery Store, 29,000 + sq. ft. 0.000700 per Sq. ft. Health Club 0.001210 per Sq. ft. Homeless Shelter 0.105000 per Bed Hospital 0.635000 per Bed Hotel, Motel w/Kitchenettes 0.430000 per Room Hotel, Motel 0.251000 per Room Manufacturing 0.000160 per Sq. ft. Mobile Home Park 0.880000 per Space Nursing Home 0.286000 per Bed Office 0.000335 per Sq. ft. Photo Store, One-hour Processing 3.175000 per Store Post Office, Excluding Dock 0.000254 per Sq. ft. Prison 0.290000 per Capita Racquetball Club 0.510000 per Court Recreational Vehicle Park 0.238100 per Vehicle Residence, Apartment w/Washer/Dryer 0.714000 per Unit Residence, Apartment w/o Washer/Dryer 0.635000 per Unit Residence, Condominium 0.714000 per Unit Residence, Duplex 1.000000 per Unit Residence, Single Family 1.000000 per Unit Residence, Townhouse 1.000000 per Unit Restaurant, Fast Food 0.006000 per Sq. ft. Restaurant, Full Service 0.003000 per Sq. ft. Retail 0.000223 per Sq. ft. School, High 0.047600 per Seat School, Others, Non-Residential 0.031700 per Seat School, Others, Residential 0.317000 per Capita Service Center 0.333000 per Employee Shopping Center: Mixed Tenants (>150,000 sq. ft.) 0.000900 per Sq. ft. Skating Rink 0.015900 per Capita

{W0895873.4} 3

Stadium 0.010000 per Seat Swimming Pool 0.015900 per Swimmer Theater, Indoor 0.015900 Seat Toilet 0.254000 per Toilet Transportation Terminal 0.015900 per Passenger Warehouse 0.000096 per Sq. ft. Washateria 0.517500 per Washing Machine

THE RESULTING LUES FOR ANY NEW OR ENLARGED STRUCTURE OR GROUP OF STRUCTURES APPLIED FOR AT THE SAME TIME WILL BE ROUNDED UP TO THE NEXT WHOLE LUE.

The capacity necessary to serve a use not reasonably addressed in the conversion table above will be determined based on the size of the meter as follows:

Meter Size Living Unit Equivalent 5/8” 1 3/4” 1.5 1” 2.5 1-1/2” 5 2” 8 3” 15 4” 25 6” 50 8” 80 10” 115 12” 215

10. “Master District Systems” means the Master District’s wastewater collection system, including wastewater treatment capacity, water delivery system, including water treatment capacity, and drainage system, including water quality facilities, as defined in the Master District Contract.

11. “Plumbing Code” means the International Residential Code for One and Two Family Dwellings dated 2000 and the International Plumbing Code dated 2009, as applicable, as published by the International Code Council, Inc.

12. “Rules” means any rules and regulations adopted by the Board, under Section 54.205, Texas Water Code, and in compliance with the Master District Contract and the Regional Water Contract including the provisions of this Order and the Industrial Wastewater Regulations.

13. “Systems” means the Master District’s Systems and the District’s Systems.

B. All Services Required. Except as otherwise expressly authorized by the Board, no service may be provided through the Systems unless the applicant agrees to take both water and wastewater service; however, wastewater service will not apply to irrigation meters purchased solely for the purpose of irrigating with treated water or

{W0895873.4} 4

to fire hydrant meters approved for temporary water service in accordance with this Order..

C. All Services Charged. At no time will the District provide water or wastewater service to any person, firm, corporation, organization, or entity without charge.

D. Provisions of this Order Constitute Service Agreement. All Customers receiving water and/or wastewater utility service from the District are subject to the requirements of this Order. The provisions of this Order constitute a service agreement between the District and each Customer receiving utility services from the District. By requesting and/or accepting utility service from the District, each Customer agrees to comply with the provisions of this Order.

II. Connections To and Service From District’s Systems.

A. Preconstruction Meeting. Prior to installing underground cables or other facilities or excavating in the area of the District’s Systems, representatives of developers, contractors, and/or utility companies are required to meet with the District’s representative to file their construction plans and schedules and to review the engineering plans illustrating the location of the District’s lines and other facilities. The developer, contractor, and/or utility company must determine the location of all utilities and facilities in the work area and will be responsible for the immediate repair of any damage to the utilities, services and facilities that may result from their work and all costs and expenses incurred by the District as a result of such damage. The utilities, facilities and services to which this provision applies include, but are not limited to, street lights, electric lines, boxes and transformers, natural gas facilities, television cable facilities, water lines, wastewater lines, telephone facilities, curbs and concrete flat work, and irrigation systems.

B. Applications for Connections.

1. Any party desiring to make a connection to the District’s Systems must first make an application to the District’s representative in the form approved by the Board. The applicant must, upon request, furnish the District’s representative with evidence that the party that will actually install the tap and connecting line has comprehensive general liability insurance in the minimum amounts of $300,000 for bodily injury and $500,000 for property damage, with an underground rider and a completed operations rider.

2. The District’s representative will review all applications for connections to the District’s Systems. If the District’s representative finds that the materials to be used and the procedures and methods to be followed in laying the line and making the connection are equal to or better than the standards established by the Plumbing Code, as amended from time to time, and are in compliance with all terms and conditions of the Rules, the District’s representative may approve the application and issue a permit for the proposed connection, subject to such terms or conditions as the District’s representative deems necessary or convenient to accomplish the purpose and objectives of the Rules.

C. Construction of Connecting Facilities. After authorization is granted by the Districts’ representative, the party desiring to make a connection to the District’s Systems may proceed with construction, but before the connecting line or lines and

{W0895873.4} 5

any connections to the District’s Systems are covered or enclosed with dirt or any other material, the District’s representative must inspect the construction to confirm that the lines and connection have been properly installed in accordance with the requirements of this Order, the connection permit, and the Plumbing Code. The District’s representative will also confirm whether the bedding materials used or to be used to cover or enclose the connecting line and connections are suitable under the standards required by this Order, the connection permit and the Plumbing Code. The person to whom the connection permit is issued is responsible for covering or enclosing the connecting line and connections with proper materials as authorized and approved by the District’s representative.

The person making a tap or installing a service line must backfill any cuts made in paved streets. The cuts must be filled with sand, road base and cement materials compacted to standard acceptable densities as established by the District’s representative and covered with paving material in a manner acceptable to the District.

All water and wastewater connection lines and materials, except water meters, will be furnished by the party installing the lines and making the connections. Water meters will be furnished by the District upon payment of all applicable fees and charges and will remain the property of the District.

D. Applications for Service. Any party desiring to receive service from the District’s Systems must make an application for service to the District’s representative in the form approved by the Board. All applications must be made by the resident, occupant or owner of the property for which service is being requested. Proof of ownership will be furnished to the District’s representative upon request. If the District’s representative believes that an applicant is applying for service at a service address where the current Customer is in arrears primarily to allow the current Customer to avoid payment of a past due invoice, the District may deny the application for service.

E. Grinder Pumps/Lift Stations. All private lift stations or grinder pumps required for wastewater service to an individual Customer must be installed by the Customer’s plumber at the Customer’s expense. The District’s engineer must approve the plans for any such facility prior to the time construction is initiated, and the Customer who will be served by the facilities must enter into an agreement with the District prior to initiation of utility service that sets forth applicable inspection and maintenance requirements, includes the Customer’s agreement to pay all costs associated with the inspection, operation, maintenance, repair, or replacement of the facilities, and provides for continuing access to such facilities by the District’s representative. Any pressurized sewer lines or other sewer lines located within the Customer’s house or on the Customer’s property up to and including the check valve at the street will not be a part of the grinder pump system and will be considered a part of the home plumbing. These sewer lines will not be inspected or maintained by the District, but will be the sole responsibility of the Customer as to design, installation, maintenance, and operation.

F. Scheduling Meter and Grinder Pump Installation. An applicant must schedule any new water and wastewater utility connections by notifying the District and paying all required District fees a minimum of 15 business days before the date the connection is desired to be made. An applicant must schedule its water meter installation with the District’s representative a minimum of 15 business days in advance of the date

{W0895873.4} 6

the installation is required. Installation of private lift stations or grinder pumps must be scheduled through the District’s representative a minimum of 15 business days in advance of the date the installation is required.

G. Separate Irrigation Meter Required. A separate, dedicated irrigation meter is required for any irrigation system receiving water from the District’s Systems.

H. Payment of Fees. Any party desiring to make a connection to the District’s Systems must pay all applicable fees required by this Order and the Rules to the District’s representative at the time the application for such connection is made. No connection may be made until all fees for the requested connection and any outstanding fees relating to any prior connections by the applicant are paid. In addition, any non-routine charges incurred by the District in connection with any water or wastewater tap and/or inspection will be the responsibility of the applicant for such connection and will be payable to the District upon demand. Any applicant that has any outstanding fees due to the District, including any previously back-charged but unpaid re-inspection fees, will not be permitted to make any additional connections to the District’s Systems until all outstanding fees are paid. Except as otherwise expressly provided in this Order, all fees and charges are non-refundable.

I. Manhole Coating Required. The interior surface of all wastewater manholes to be constructed as part of the District’s Systems must be coated in accordance with the City of Austin’s Standard Specifications Item No. 506, as amended or superseded from time to time, and must be included as a separate line item in the construction documents for the applicable construction project.

J. Permanent Fire Line Connections. Permanent connections to the District’s water system to provide water for facilities specifically designed for fire-protection of particular buildings in the District purposes, such as looped fire lines (“Fire Line Connections”), may be made under the same procedures and requirements applicable to regular water connections. Rates and charges applicable to Fire Line Connections will be established by the Board at the time of application. The District may, at its discretion, require a meter for a Fire Line Connection. A Fire Line Connection must have a Backflow Prevention Device with a detector meter assembly installed at the point of connection to the District’s Systems. In the absence of a fire meter, the amount of water used through a Fire Line Connection for any purpose, including fire-fighting, will be determined by the District’s representative on the basis of information and data reasonably available and billed to the Customer. In the absence of fraud, capriciousness, or grossly arbitrary action, the determination of the District’s representative will be final.

III. Fee Schedule.

A. Service Initiation and Online Customer Account Profile Fee. A party desiring to receive service from the District’s Systems must pay a $35 application fee to initiate service and establish an online customer account profile with the District’s online billing system. This fee will be assessed on the invoice for the month in which the Customer applies for service.

B. Capacity Charges. The Capacity Charges payable to the Master District for reserved capacity under the Regional Water Contract must be paid prior to a Customer’s initial connection to the District’s Systems. No tap will be issued until the required

{W0895873.4} 7

Capacity Charges for the connection or connections in question are paid. The Capacity Charges are as follows

1. Water Capacity Charge: $1,900 per LUE.

2. Wastewater Capacity Charge: No charge following Master District’s purchase of wastewater treatment plant on December 31, 2008

C. Water Meter, Tap, Initial Inspection, and Rate Stabilization Fees: The District’s fees for each water connection are as follows:

1. Meter charge: Cost of the meter

2. Initial water tap inspection fee (under 1” meter): $100

3. Non-standard water tap inspection fee (1” or larger meter): Cost to the District

4. Water tap fee: $600 per LUE

5. Rate Stabilization Fee $1,900 per LUE

Rate Stabilization Fees collected by the District will be remitted to the Master District, where they will be accounted for separately, and used to fund the wholesale water rates and related obligations under the Regional Water Contract.

In addition to the foregoing fees, a party requesting a water connection will be responsible for the cost of any excavation work or connecting facilities performed or provided by the District.

D. Wastewater Tap and Initial Inspection Fees: The District’s fees for each wastewater connection are as follows:

1. Initial wastewater tap inspection (under 1” meter size): $100

2. Non-standard wastewater tap inspection fee (1” or larger meter size): Cost to the District

3. Wastewater tap fee: $600 per LUE

In addition to the foregoing fees, a party requesting a wastewater connection will be responsible for the cost of any excavation work or connecting facilities performed or provided by the District.

E. Re-Inspection Fees. If more than one inspection is required before a tap is approved by the District, the fee for each additional inspection will be $100 for a commercial tap inspection and $50 for a residential tap inspection, which will be back-charged to the responsible Customer. Any Customer that has any outstanding fees due to the District, including any previously back- charged but unpaid re-inspection fees, will not be permitted to make any

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additional connections to the District’s Systems until all outstanding fees are paid.

F. Plumbing Inspection Fees. Plumbing inspections of all plumbing installed within the District will be conducted in accordance with the Plumbing License Law, Chapter 1301, Texas Occupations Code. Such inspections will be performed on behalf of the District by the City of Manor (the “City”) under the “Interlocal Agreement for Plumbing Inspections within the ShadowGlen Subdivision” between the City, the District, Wilbarger Creek Municipal Utility District No. 1, and Wilbarger Creek Municipal Utility District No. 2 (the “Plumbing Inspection Interlocal”). Customers will be required to pay the City directly for all applicable plumbing inspection fees in accordance with the ordinances and fee schedules adopted by the City from time to time as provided in the Plumbing Inspection Interlocal. Any Customer that has any outstanding plumbing inspection fees due to the City, including any previously back-charged but unpaid re-inspection fees, will not be permitted to make any additional connections to the District’s Systems until all outstanding fees are paid.

G. Cross-Connection and Back Flow Prevention Inspections. A $75 inspection fee will be charged to a Customer who modifies, constructs or installs additional plumbing improvements to the an existing residence or commercial Customer, including in- ground sprinkler systems, swimming pools or hot tubs, and/or water softeners.

H. Private Lift Station and Grinder Pump Inspection Fees. The District’s fee for initial inspection of any private lift station or grinder pump required for wastewater service to an individual Customer will be $50 for the initial inspection and $50 for each re- inspection or subsequent periodic inspection. Re-inspection fees will be back- charged directly to the responsible Customer. Any Customer that has any outstanding fees due to the District, including any previously back- charged but unpaid re-inspection fees, will not be permitted to make any additional connections to the District’s Systems until all outstanding fees are paid.

I. Additional Charges. Any non-routine charges incurred by the District in connection with any water or wastewater tap and/or inspection will be the responsibility of the applicant for such connection and will be paid to the District upon demand.

J. Service Calls. If a Customer requests that the District’s operator make a service call to the Customer’s residence to investigate a leak, sewer back-up, or operational issue that, after investigation, is determined to be the Customer’s responsibility, the Customer will be responsible for any costs incurred by the District in connection with the service call. With respect to water service, the Customer’s responsibility begins on the Customer’s side of the water meter. With respect to wastewater service, the Customer’s responsibility terminates at the tap. The District may add the amount of any such costs to the Customer’s utility bill, or the District may deduct the amount of such costs from the Customer’s security deposit or any other amounts held by the District and may further require that the Customer replenish the deposit by an equivalent amount.

IV. Deposits.

A. Generally. Security deposits will be held by the District to assure the prompt payment of all bills for water and wastewater services to the Customer. At its option,

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the District may apply all or any part of a Customer’s security deposit against any delinquent bill of the Customer. Upon discontinuation of service, the deposit will be applied against amounts due to the District, including any disconnection fees, whether because of the Customer’s delinquency or upon the Customer’s request. Any portion of the deposit remaining after deduction of such amounts will be refunded to the Customer. In no event will the security deposit bear interest for the benefit of the Customer. A residential Customer whose account has been paid in full may transfer his security deposit if he moves from one address to another within the District; otherwise security deposits will not be transferable.

B. Residential Security Deposits. A security deposit of $100 is required for each single- family dwelling unit (5/8 or 3/4 inch residential meter) where the residence is occupied by the owner of the residence. A security deposit of $300 is required for each single-family dwelling unit (5/8 or 3/4 inch residential meter) where the residence is occupied by a Customer who is not the owner of the residence. If a residential Customer’s service is disconnected due to late payment or non-payment, the District will require an additional $100 security deposit for each disconnection, up to a maximum total additional security deposit of $500, and this additional deposit must be paid before water service is reconnected. Residential security deposits must be in the form of cash, money order or other form acceptable to the District’s representative.

C. Commercial Security Deposits. A security deposit equivalent to 90 days’ peak water and wastewater usage is required for each commercial Customer, including an apartment complex. The amount of the security deposit will be based on historical usage when this information is available, and will be based upon an estimate of usage by the District’s representative when this information is not available. Commercial security deposits must be in the form of cash, certified check, bond or letter of credit approved by the Board as to form and issuer. All commercial security deposits will be subject to adjustment based upon annual usage patterns, which will be reviewed by the Board annually. A commercial Customer that elects to post a bond or letter of credit for its security deposit will be required to pay an additional $100 annual service charge to defray the District’s administrative expense relating to processing and monitoring the bond or letter of credit.

D. Builder Security Deposits. Each builder must make a one-time $2,000 deposit covering all houses the builder is building or intends to build within the District’s boundaries. The District’s representative will carefully monitor the building of all houses covered by this deposit to ensure that the water and wastewater service line and connection at each such house has been inspected and approved prior to its being covered. In any instance in which this procedure is violated, the District’s Representative will require the builder to uncover the water or wastewater service line and connection so that it may be inspected, and any cost to the District for additional inspections or other work resulting from the violation will be deducted from the builder’s security deposit and the builder will be billed for any amount necessary to fully restore the deposit. The District’s Representative may not approve any new connections for any builder until the builder’s security deposit has been established or, if any charges are assessed against the builder’s deposit, re- established at the full $2,000 amount. The builder’s security deposit will be refunded when the builder completes its building program within the District and all charges assessed against the builder are paid in full.

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E. Developer Deposit. Each developer of a commercial project, including an apartment complex, or a residential subdivision within the District, must deposit the sum of $2,000 with the District’s representative. This deposit will be placed in a separate account and will be refunded, without interest, to the developer on completion of the developer’s project within the District.

F. Use of Builder and Developer Security Deposits. The cost of any repairs to the District’s Systems caused by a builder’s or developer’s negligence or intentional acts, or due to the negligence or intentional acts of any contractor or subcontractor performing work associated with the builder’s or developer’s projects; the costs of any professional services incurred by the District due to builder or contractor damage, dumping or violations of the District’s Rules; and the cost of connections, inspection services, water service and wastewater service rendered to a builder or developer will be billed by the District’s representative to the responsible builder or developer, and will be due and payable upon demand. If, at any time, a builder or developer is delinquent in paying these bills for a period of 30 days, or is responsible for outstanding bills in the amount of $200 or more, the District may transfer all or any part of its builder or developer deposit to the District’s operating fund to pay these outstanding or delinquent bills and may require: (i) that the deposit be replenished by the builder or developer by the amount transferred; or (ii) that, for a homebuilder, an increased deposit of $300 multiplied by the number of estimated starts by the builder over three months or $5,000, whichever is more, or, for a developer, that an increased deposit of $5,000, be made. No additional water or sewer taps will be sold nor will any other approvals be issued to a builder or developer who is delinquent in the payment of any sums due to the District.

G. Fire Hydrant Meter and Deposit. The withdrawal of water from flushing valves, fire hydrants, or other appurtenances of the District's Systems without the prior approval of the District, except for emergency firefighting purposes, is absolutely prohibited. No builder, developer, contractor, or other person or entity may temporarily connect to the District's Systems or withdraw water from the District's Systems through a fire hydrant, flushing valve, or other appurtenance of the District’s Systems unless it utilizes a fire hydrant meter and Backflow Prevention Device issued to it by the District to measure the water withdrawn through the temporary connection. Each such person or entity must pay a deposit of $1,400 to the District for the required fire hydrant meter and Backflow Prevention Device, and the fire hydrant meter and Backflow Prevention Device must be installed by the District's representative before the builder, developer, or contractor initiates its construction, development, or building program within the District. If the District does not have a fire hydrant meter and/or Backflow Prevention Device available at the time of request, the applicant will, in addition to the deposit, be responsible for the actual cost incurred by the District to purchase the item(s) that are not available. The use of unmetered water constitutes theft and will be prosecuted as such. The required fire hydrant meter and Backflow Prevention Device must be attached directly to the fire hydrant or flushing valve and used at all times when a Customer is making a temporary water connection for any purpose, including construction, development, street cleaning, or any other construction-related activities. The Customer to whom the fire hydrant meter and Backflow Prevention Device are issued will be responsible for securing the meter and device and keeping the meter and device in good working condition. If the meter and/or device are lost, stolen, not returned, or damaged while being utilized by the Customer, the cost of the meter, device, and/or repairs as well as any

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unpaid sums due from the Customer to the District for water charges or other sums payable under this Order will be deducted from the deposit. A fire hydrant deposit will not be required if a contractor is constructing improvements under a contract with the District that requires the use of a fire hydrant or flushing valve for water; however, a fire hydrant meter and Backflow Prevention Device must still be obtained and used to measure all water utilized by the contractor. Any person or entity that fails to obtain a fire hydrant meter and Backflow Prevention Device from the District, fails to utilize the assigned fire hydrant meter when withdrawing water from the District’s Systems, fails to install and maintain in place the required Backflow Prevention Device, or takes water from an unmetered or unauthorized connection to the District's Systems will be subject to a penalty in the amount of $5,000 per violation and each day of violation will be deemed a separate violation. A violator will also be liable for all attorney's fees and costs incurred by the District due to the violation or in recovering the penalty authorized by this Section . The District may deduct the amount of any penalties imposed or costs incurred due to a builder's, developer's, or contractor's violation of this subsection from its fire hydrant meter deposit or any other deposits held by the District and may further require that the builder, developer or contractor replenish the deposit by an equivalent amount before making any additional connections to the District’s Systems. Builders and developers are responsible for compliance with the requirements of this provision by person or entity performing work on their behalf, including contractors and subcontractors. A violation by a contractor or subcontractor performing work on behalf of builder or developer will be deemed to be a violation by the builder or developer.

V. Rate Schedule.

A. In-District Water and Wastewater Retail Service Rates. The following rates and charges for the sale of water and wastewater will be in effect for all Customers of the District’s Systems from the effective date of this Order:

1. Monthly Basic Charge (Service Availability Charge).

a. Single-family Residential.

5/8” meter: $ 47.00

3/4” meter: 47.50

b. Fire Hydrant Meters: $412.50

c. Other.

5/8” meter $ 27.50 3/4” meter 41.25 1” meter 68.75 1½” meter 137.50 2” meter 220.00 3” meter 412.50 4” meter 687.50 6” meter 1,375.00 8” meter 2,200.00 10” meter 3,162.50

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12” meter 5,912.50

2. Monthly Water Commodity Charge:

Gallons used Charge per 1,000 gallons:

0 – 15,000 $6.45 over 15,000 $8.00

3. Monthly Wastewater Commodity Charge: $7.50 per 1,000 gallons. No sewer commodity charges will be assessed in connection with water used through a dedicated irrigation-only or fire hydrant water meter. The wastewater commodity charge for customers who have both a regular water service meter and a dedicated irrigation-only water meter will be calculated based on 100% of consumption registered by the regular water service meter (i.e., not the winter-average).

4. Calculation of Wastewater Charges.

a. Bills for residential wastewater service will be computed: (i) on the basis of the average amount of water used by the Customer during the winter season based upon the average of the monthly readings of the Customer’s water meter for the preceding December, January and February, unless another winter-averaging period is established by the Board (the “winter-averaging period”); or (ii) on the basis of the Customer’s current monthly water bill, whichever is less; however, any Customer who did not have an approved wastewater connection during the prior winter averaging period, will not be entitled to use the winter averaging method and will be billed on the basis of: (i) the Customer’s current monthly water usage; or (ii) on the basis of 7,000 gallons of water usage per LUE per month (based on the conversion table contained in Article I), whichever is less.

b. Bills for non-residential wastewater service, including wastewater service to an apartment complex, will be computed: (i) on the basis of the average of the monthly readings of the Customer’s water meter during the winter-averaging period or (ii) on the basis of the Customer’s current monthly water bill, whichever is less; however, if a nonresidential Customer did not have an approved wastewater connection during the prior winter averaging period, the Customer’s monthly wastewater charges will, at the District’s option: (i) be calculated based upon the Customer’s current monthly water usage; or (ii) be calculated by measuring actual sewage volume, on a basis acceptable to the District, at the expense of the Customer.

c. No wastewater charges will be assessed for water utilized through a dedicated irrigation meter approved by the District.

d. The wastewater commodity charge for customers who have both a regular water service meter and a dedicated irrigation-only water meter will be calculated based on 100% of consumption registered by the regular water service meter (i.e., not the winter-average).

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5. Regulatory Assessments. A regulatory assessment charge of ½% of retail water and sewer charges will be added to each Customer’s monthly billing commencing with all billings rendered by the District. The assessments will be remitted by the District to the Commission and are to be used by the Commission in performing its regulatory duties and in providing technical assistance and training to utilities.

6. Reconnection Charges. In the event of any discontinuation of service, whether because of Customer’s delinquency or upon a Customer’s request, the Customer will be required to pay all current charges and all past-due amounts, plus the applicable administrative fee, prior to service being reconnected. The administrative fee will be applicable regardless of whether or not service has been physically disconnected. Service will be reconnected on the same day if payment is received prior to 2:00 p.m. If payment is received after 2:00 p.m., the Customer will be required to pay the after-hours reconnect fee in order to obtain same-day reconnection of service. The following fees will apply:

a. Water System

i. Administrative fee when meter removed $ 100

ii. Administrative fee when meter not removed $ 75

iii. After-hours reconnect fee (when reconnection requested or payment above fee + made after 2:00 p.m.) $35

b. Wastewater System – Two times the cost to the District.

VI. Industrial Wastewater Regulations; Fees and Surcharges.

A. Regulations for the Discharge of Industrial Wastewater. All discharges to the District’s Systems must comply with the Industrial Wastewater Regulations.

B. Wastewater Discharge Permit; Application Fee; Annual Permit Fee.

1. No Customer may discharge a prohibited waste (as defined in the Industrial Wastewater Regulations) into the District’s Systems unless the Customer has applied for and received a wastewater discharge permit authorizing such discharge in accordance with the Industrial Wastewater Regulations. If the District’s engineer recommends against accepting a prohibited waste into the District’s Systems under any conditions, the District’s representative will deny the application. If an application is approved, the Board will establish rates and charges that cover, but are not limited to, the cost of waste treatment, taking into account the volume and character of the prohibited waste and all other waste treated, any special techniques of treatment or operation required for the prohibited waste, and any administrative expenses incurred by the District. These rates and charges must be at least sufficient to provide an equitable system of cost recovery that is sufficient to produce revenues, in proportion to the percentage of prohibited waste to be treated relative to the total waste load to be treated by the District, so as to provide for operation and maintenance of the treatment works, for the amortization

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of the District indebtedness for the cost of its waste collection and treatment system, and for any additional costs necessary to provide adequate waste treatment to meet the waste discharge requirements applicable to the District on a continuing basis.

2. An applicant for a wastewater discharge permit or a transfer of a wastewater discharge permit must pay the District an application fee of $250.

3. Each Customer who is issued a wastewater discharge permit in accordance with the Industrial Wastewater Regulations must pay the District an annual permit fee of $500 on or before January 1 of each year.

C. Prohibited Waste Surcharge. In addition to compliance with all other requirements of this Article, any person discharging extra strength wastewater to the District’s Systems must pay a monthly surcharge for the additional costs of handling and treatment of such extra strength wastewater, in addition to the District’s standard wastewater service charges, in accordance with the Industrial Wastewater Regulations. For purposes of calculating the surcharge, the current unit charges in dollars per pound used to assess the individual surcharges are:

D. Unit Charge.

Parameter Dollars/Pound BOD $0.4867 COD $0.2255 TSS $0.1049

A resampling fee of $345 will be assessed on all surcharge reassessments requested by the Customer.

E. Sampling and Analytical Fees and Rates. The then-current fees and charges established by the District’s laboratory for waste sampling and analytical services, plus a five percent administrative charge, will be paid by any Customer incurring or causing the District to incur such costs.

F. Additional Costs and Expenses. Additionally, the District will be reimbursed for all costs and expenses, including legal and engineering costs and expenses, incurred in connection with the enforcement of this Article and/or the Industrial Wastewater Regulations as well as for any testing of the waste associated with such enforcement and for any damage to the District’s Systems. The District may add such costs and expenses to the Customer’s bill, and failure to pay may result in the termination of service in accordance with this Order.

VII. Metering.

A. Meter requirements.

1. Use of Meter. All water sold by the District will be charged for by meter measurements.

2. Installation by District. The District will provide and install and will continue to own and maintain all meters necessary for the measurement of water provided to its Customers.

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3. Standard Type. The District will not furnish, install, or put in use any meter that is not reliable or of a standard type that does not meet industry standards; however, special meters not necessarily conforming to these standards may be used for investigation or experimental purposes.

B. Meter Readings.

1. Meter Unit Indication. Each meter will indicate clearly the gallons of water or other units of service based on which the Customer is to be charged.

2. Reading of Meters. As a matter of general practice, service meters will be read at monthly intervals, and as nearly as possible on the corresponding day of each meter reading period, but meters may be read at other than monthly intervals if the circumstances warrant.

C. Bill Adjustment Due to Meter Error. If any meter is found to be outside of the accuracy standards established by the American Water Works Association, the previous readings will be corrected for the two months immediately preceding the testing of the meter, or from the time the meter was in service since last tested, but not exceeding two months, and an adjusted bill will be rendered. No refund will be made from the District to any Customer except the Customer most recently served by the meter prior to the test.

D. Meter Tampering. For purposes of this Order, meter tampering, bypass, or diversion means tampering with a District’s meter or other equipment, causing damage or unnecessary expense to the meter, bypassing a meter, making an unauthorized connection to the District’s Systems, reconnecting service without authorization to do so, whether the disconnection was due to non-payment or for any other reason, or any other instance of diversion or bypass, such as physically disorienting the meter, attaching objects to the meter to divert service or to bypass, inserting objects into the meter, electrical and mechanical means of tampering with, bypassing, or diverting District service, failing to have a meter installed, or covering or physically obstructing the location of the meter. Meter tampering, bypass or diversion is prohibited. Reconnecting service without authorization will be prosecuted as theft of service. Any party who tampers with a District meter or takes water from an unmetered or other unauthorized connection to the District’s Systems will be subject to a penalty in an amount not to exceed $5,000 per violation, each day of which will constitute a separate violation, and will also be liable for all attorney’s fees incurred by the District and costs of court. The District may offset a Customer’s deposit against the amount of any penalties or costs imposed as a result of a violation of this section and may further require that the deposit be replaced and any unpaid penalties and costs paid before service is reconnected.

E. Bill Adjustment Due to Meter Tampering. If a meter is found not to have been registered for any period, to have been bypassed or tampered with, to have not been installed, or, for any reason cannot be located, the District’s representative will bill the Customer for gallons used based on amounts used under similar conditions during the preceding or subsequent period or during corresponding periods in previous years, or used by similar users under similar circumstances. There is a presumption of reasonableness of billing methodology by the District with regard to a case of meter tampering, bypassing, or other service diversion if any of the following methods of calculating such bills are used:

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1. estimated bills based upon service consumed by that Customer at that location under similar conditions during periods preceding the initiation of meter tampering or service diversion. These estimated bills will be based on at least 12 consecutive months of comparable usage history of that Customer, when available, or lesser history if the Customer has not been served at that site for 12 months; this subsection, however, does not prohibit the District from using other methods of calculating bills for unmetered water when the usage of other methods is more appropriate;

2. estimated bills based upon that Customer’s usage at that location after the service diversion has been corrected; or

3. where the amount of actual unmetered consumption can be calculated by industry-recognized testing procedures, bills may be calculated for the consumption over the entire period of meter bypassing or other service diversion.

F. Equipment Damage Charges. The District may charge for all labor, material, equipment, and other costs necessary to repair or replace equipment damaged due to meter tampering or bypassing, service diversion, or the discharge of wastes that the system cannot properly treat. The District may charge for all costs necessary to correct service diversion or unauthorized taps where there is no equipment damage, including incidents where service is reconnected without authority. An itemized bill of these charges will be provided to the Customer.

G. Meter Re-reads and Meter Tests. The District’s representative will, upon request of a Customer, re-read the Customer’s meter. If the meter re-read confirms the accuracy of the original reading, the Customer will be billed for the cost of the meter re-read. If the original reading is found to be incorrect, there will be no charge to the Customer for the re-read.

The District’s representative will, upon request of a Customer, field test the accuracy of the Customer’s meter. If the meter test confirms the accuracy of the meter, the Customer will be billed for the cost of the test. If the meter is found to be inaccurate, there will be no charge to the Customer for the test.

If a Customer requests that a meter be pulled and tested for accuracy, the Customer will be responsible for all costs incurred by the District in removing and testing the meter unless the meter registers more than two percent above or below the test result under reasonable flow quantities, in which case the costs will be borne by the District. The Customer is entitled to receive a copy of the test report upon request.

H. Leaks; Water Leak Adjustment Policy. Failure to repair a controllable leak within a reasonable time (not exceeding 30 days) after notice from the District to repair the leak will constitute a violation of the District’s Rules. If a Customer experiences a water leak, the Customer may submit a written leak adjustment request detailing the circumstances of the leak. All requests must be accompanied by a copy of all invoices and documentation evidencing the leak and confirming that the leak has been repaired. Upon receipt of a complete request, the Customer’s usage will be recalculated based upon the Customer’s prior history, as determined by the District’s representative. Water usage for the period in which the leak occurred that exceeds the base established by the Customer’s prior history will be presumed to be attributable to the leak and will be billed at the then-current wholesale water rate.

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The remaining portion of the Customer’s water usage will be billed at the District’s normal and customary rates under this Order. If the leak occurred during the winter-averaging period, the District’s representative may establish an alternative winter-averaging period for this Customer.

VIII. Rendering and Form of Bills.

A. Rendering of Bills. Bills for water and sewer service will be rendered monthly. Service initiated less than one week before the next billing cycle may be billed with the following month’s bill. Bills will be rendered as promptly as possible following the reading of meters. One bill will be rendered for each meter.

B. Information to be Included on the Bill. The Customer’s bill will show the following information, if applicable (and be arranged so as to allow the Customer to readily compute his bill using a copy of the applicable rate schedule, which will be mailed to the Customer on request):

1. the date of reading, current reading and the previous reading;

2. the number of gallons metered;

3. the total amount due for water service and separately stated, the total amount due for sewer service, and total surcharge;

4. the due date of the bill;

5. the total amount due as penalty for nonpayment within a designated period; and

6. the local telephone number or toll free number where the District’s representative can be reached.

C. Payment Obligation. If a Customer does not receive a bill or bills, his obligation to make payment for services rendered is not diminished or released.

D. Overbilling and Underbilling. If billings for services are found to differ from the District’s rates for the services, or if the District fails to bill a Customer for services, a billing adjustment will be calculated by the District’s representative. If the Customer is due a refund, an adjustment will be made for the entire period of the overcharges. If the Customer was undercharged, the District will backbill the Customer for the amount of the commodity actually used by the Customer and may backbill at the actual cost of the commodity to the District. If the underbilling is $25 or more, the District will offer the Customer a deferred payment plan option for the same length of time as that of the underbilling. In cases of meter tampering, bypass, or diversion, the District may, but is not required to, offer a Customer a deferred payment plan.

E. Prorated Charges. When a bill is issued for a period of less than one month, charges will be computed as follows: For metered service, service will be billed for the amount metered and the minimum charge will be the applicable minimum as shown in this Order prorated for the number of days service was provided.

F. Disputed Bills.

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1. A Customer may advise the District that a bill is in dispute by giving written notice to the District’s representative. A dispute must be registered with the District prior to the date of proposed discontinuance for a Customer to avoid discontinuance of service as provided by these sections.

2. Notwithstanding any other section of this Order, the Customer is not required to pay the disputed portion of a bill that exceeds the amount of that Customer’s average monthly usage at current rates pending the completion of the determination of the dispute. For purposes of this section only, the Customer’s average monthly usage at current rates is the average of the Customer’s total service for the preceding 12-month period. If no previous usage history exists, consumption for purposes of calculating the average monthly usage will be estimated on the basis of usage levels of similar Customers and under similar conditions.

3. Notwithstanding any other section of this Order, a Customer’s service is not subject to discontinuance for nonpayment of that portion of a bill under dispute pending the completion of the determination of the dispute. The Customer is obligated to pay any billings not disputed under Article IX of this Order (relating to Delinquent Accounts).

IX. Delinquent Accounts.

A. All bills will be considered past due if not paid by the third day after the date of issuance (“Due Date”). The Customer will be subject to termination of service if full payment, including any applicable late fee, is not received by the “Delinquency Date”, which will be the 26th day of the month. If the Due Date or the Delinquency Date falls on a Saturday, Sunday, or legal holiday on which banks are required to close in the State of Texas, the applicable period will be extended to the next business day.

B. A late charge of ten percent (10%) of the amount of the bill will be added on the Delinquency Date and this late fee will continue to be assessed each month while the delinquent amount remains unpaid.

C. Notwithstanding Sections A and B above, in accordance with Section 182.002 of the Texas Utilities Code, the District will, without penalty, delay the Delinquency Date of the most recent bill and/or each subsequent bill to be paid by an elderly individual until the 25th day after the date each bill is issued, if so requested by the elderly individual. An “elderly individual” means a residential Customer who is 60 years of age or older and occupies the entire premises for which a delay is requested. Prior to delaying a Delinquency Date, the District may require a Customer requesting the delay to present reasonable proof that the Customer is an “elderly individual”.

D. The District reserves the right to institute suit for the collection of any amounts due and unpaid, together with interest thereon at the maximum legal rate and reasonable attorneys’ fees.

E. The District will charge a Customer whose payment of a bill is dishonored or rejected by a financial institution a fee of $30.00. If a Customer’s payment is dishonored or rejected by the financial institution, the District’s representative will send a notice to the Customer’s email address on file. This notice will state that service will be terminated not earlier than three days from the date of the notice

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unless the account is paid in full by cash, money order, or cashier’s check. If the Customer does not have an email address on file, notice will be sent by First Class, U.S. mail and will state that service will be terminated not earlier than five days after the notice has been postmarked unless the account is paid in full by cash, money order, or cashier’s check.

F. If a Customer contacts the District’s representative to discuss his inability to pay a bill or indicates that he is in need of assistance with his bill payment, the District’s representative will inform the Customer of all available alternative payment and payment assistance programs available from the District, such as deferred payment plans, as applicable, and of the eligibility requirements and procedure for applying for them. A deferred payment plan is any arrangement or agreement between the District and a Customer in which an outstanding bill will be paid in installments that extend beyond the due date of the next bill. All deferred payment agreements must be in writing. It is understood that the District’s representative may suspend the termination of services to Customers for up to 90 days based upon the District’s representative’s determination that the Customer is making a good faith effort to pay the District’s account; however, extensions beyond 90 days must be approved by the Board.

G. In the event of bankruptcy of any District Customer, amounts due for pre- bankruptcy services will be posted to the Customer’s existing account and amounts due for post-bankruptcy services will be posted to a separate account. The Customer will be required to provide the District with adequate assurance of payment for services rendered after the date of the bankruptcy filing, in the form of a security deposit satisfying the requirements of this Order. Any existing security deposit will be held by the District as security for sums due for pre-bankruptcy services and will not be credited towards the security deposit for post-bankruptcy services. If the Customer fails to furnish the required security deposit for post-bankruptcy services to the District, the District may discontinue service to the Customer in accordance with the provisions of this Order.

X. Termination of Service.

A. Disconnection with Notice. Service may be disconnected after proper notice for any of the following reasons:

1. within 30 days from the date of the issuance of a currently delinquent bill, the Customer has neither paid the delinquent bill and all currently past due bills nor entered into, and commenced paying under, a written deferred payment agreement;

2. the Customer has defaulted in the obligations under any deferred payment agreement;

3. violation of the District’s Rules pertaining to the use of service in a manner that interferes with the service of others or the operation of non-standard equipment, if a reasonable attempt has been made to notify the Customer and the Customer is provided with a reasonable opportunity to remedy the situation;

4. failure to comply with security deposit arrangements required by Article III of this Order; or

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5. failure to repair a controllable leak within a reasonable time (not exceeding 30 days) after having been given notice to repair the leak.

B. Disconnection Without Notice. Service may be disconnected without notice where a known dangerous condition related to the type of service provided exists for as long as the condition exists or where service is connected without authority by a person who has not made application for service or who has reconnected service without authority following termination of service for nonpayment or in instances of tampering with the District’s meter or equipment, bypassing the same, or other instances of diversion. Where reasonable, given the nature of the hazardous condition, a written statement providing notice of and the reason for disconnection will be posted at the place of common entry or upon the front door of each affected structure as soon as possible after service has been disconnected.

C. Disconnection Prohibited. Service will not be disconnected in the following circumstances:

1. delinquency in payment for District service by a previous occupant of the premises; or

2. failure to pay the account of another Customer as guarantor thereof, unless the District has in writing required the guarantee as a condition precedent to service; or

3. the Customer has notified the District’s representative of the Customer’s desire to protest the disconnection, which requires the District to comply with the procedures set forth in Section E prior to disconnecting the Customer’s service.

D. Notice of Disconnection of Service. Proper notice of disconnection of service consists of a separate mailing by first class mail, postage prepaid at least 10 days prior to a stated date of disconnection, with the words “termination notice” or similar language prominently displayed on the notice. The information included in the notice will be provided in English and Spanish if necessary to adequately inform the Customer. A statement notifying the Customer that, if they are in need of assistance with payment of their bill, they may be eligible for alternative payment programs, such as deferred payment plans, and to contact the District representative for more information must be attached to or on the face of the termination. The notice will advise the Customer of the basis for the District’s decision to disconnect service and that he has the right to request a hearing on the matter by contacting the District’s representative at least 48 hours before the stated date of disconnection. The District’s representative’s telephone number must appear on the notice together with information regarding appropriate times to contact the representative. If notice is mailed, the stated date of disconnection may not fall on a holiday or weekend, but will be the next working day after the 10th day. Payment at the District’s authorized payment agency is considered payment to the District. The District will not issue a termination notice to the Customer earlier than the first day a bill becomes delinquent, so that a reasonable length of time is allowed to ascertain receipt of payment by mail or at the District’s authorized payment agency.

E. Customer Appeal Procedures.

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1. Informal Hearing. Upon receipt of a Customer’s request to protest the termination of service, the District’s representative will schedule an informal hearing with the Customer and his representative prior to disconnection. The presiding officer at the informal hearing will be an individual who did not participate in the initial decision to pursue disconnection of the Customer’s service. The Customer will be allowed to question the District’s billing representative at the informal hearing regarding the basis for the decision to terminate service and present any testimony or evidence regarding the termination of service or its basis. The presiding officer will render a decision on the matter and state reasons for the decision and the grounds upon which the decision is based.

2. Appeal. The Customer may appeal the decision of the presiding officer to the Board. If the Customer posts a bond in an amount sufficient to cover the cost determined by the presiding officer to be due, the District will not proceed with termination of the Customer’s service until a final decision is made by the Board.

F. Disconnection. If payment of all delinquent and past due amounts has not been made by 12:00 noon on the date specified by written notice to the Customer, and no other arrangements for payment have been made, service will be disconnected. In order to reconnect service, the Customer must pay all delinquent and past-due amounts, plus the applicable administrative fee. The administrative fee will be due regardless of whether or not service has been physically disconnected. If payment is tendered after 2:00 p.m. on the date of disconnection, the Customer must pay the after-hours reconnect fee in order to obtain same-day reconnection of service. If a Customer defaults under a payment plan entered into with the District, termination procedures will immediately be initiated.

G. Disconnection on Holidays or Weekends. Unless a dangerous condition related to the type of service provided exists, or unless the Customer requests disconnection, service will not be disconnected on a day, or on a day immediately preceding a day, when personnel of the District are not available to the public for the purpose of making collections and reconnecting service.

H. Disconnection for Ill and Disabled. The District may not discontinue service to a delinquent residential Customer permanently residing in an individually-metered dwelling unit when that Customer establishes that discontinuance of service will result in some person residing at the residence becoming seriously ill or more seriously ill. Each time a Customer seeks to avoid termination of service under this section, the Customer must have the attending physician (for purposes of this section, the term “physician” means any public health official, including medical doctors, doctors of osteopathy, nurse practitioners, registered nurses, and any other similar public health official) call or contact the District’s representative within 15 days of issuance of the bill. A written statement must be received by the District’s representative from the physician within 30 days of the issuance of the bill. The Customer who makes such request must enter into a deferred payment plan with the District.

I. Reconnection of Services. If service is discontinued for any reason, reconnection of services will be established within 24 hours of payment of the past due bill in its entirety and any other outstanding charges, including all reconnection and administrative fees.

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J. Meter Removal. The District’s representative will remove a Customer’s water meter if the Customer illegally restores his service without payment of his delinquent account.

XI. Continuity of Service.

A. Service Interruptions.

1. The District will make all reasonable efforts to prevent interruptions of service. When interruptions occur, the District will re-establish service within the shortest possible time.

2. The District will make reasonable provisions to meet emergencies resulting from failure of service, and the District will issue instructions to its employees covering procedures to be followed in the event of emergency in order to prevent or mitigate interruption or impairment of service.

3. In the event of national emergency or local disaster resulting in disruption of normal service, the District may, in the public interest, interrupt service to other Customers to provide necessary service to civil defense or other emergency service agencies on a temporary basis until normal service to these agencies can be restored.

B. Record of Interruption. Except for momentary interruptions due to automatic equipment operations, the District’s representative will keep a complete record of all interruptions, both emergency and scheduled. This record will show the cause for interruptions, date, time, duration, location, approximate number of Customers affected, and, in cases of emergency interruptions, the remedy and steps taken to prevent recurrence.

XII. Customer Service Agreement; Plumbing Regulations; Customer Service Inspections.

A. Authority. Under the requirements of the Chapter 341, Subchapter C of the Texas Health & Safety Code and 30 Texas Administrative Code § 290.46(i), the District is required to adopt rules to allow for proper enforcement of the requirements of the Commission. Further, Title 30 Texas Administrative Code § 290.46(j) requires the District to adopt rules providing for the conduct and certification of customer service inspections.

B. Purpose. The District is responsible for protecting the drinking water supply from contamination or pollution that could result from improper plumbing practices. The purpose of this section is to notify each Customer of the plumbing restrictions and inspections that are in place to provide this protection. The District enforces these restrictions to ensure the public health and welfare. Each Customer must agree to comply with this section as a condition to receiving water and/or wastewater services from the District.

C. Plumbing Restrictions. The following undesirable plumbing practices are prohibited:

1. No direct connection between the public drinking water supply and a potential source of contamination is permitted. Potential sources of

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contamination must be isolated from the public water system by a Code- approved air-gap or an appropriate Backflow Prevention Device.

2. No cross-connection between the public drinking water supply and a private water system is permitted. These potential threats to the public drinking water supply must be eliminated at the service connection by the installation of an air-gap or a reduced pressure-zone Backflow Prevention Device.

3. No connection that allows water to be returned to the public drinking water supply is permitted.

4. No pipe or pipe fitting that contains more than one-fourth of one percent (0.25%) lead may be used for the installation or repair of plumbing at any connection that provides water for human use.

5. No solder or flux that contains more than two-tenths of one percent (0.2%) lead can be used for the installation or repair of plumbing at any connection that provides water for human use.

D. Service Conditions. The following are the terms for the provision of service between the District and each Customer of the District:

1. The Customer must comply with the provisions of these Rules as long as the Customer is receiving service from the District.

2. The Customer must allow his or her property to be inspected for possible cross-connections and other undesirable plumbing practices as required by this Order. These inspections will be conducted by the District or its designated agent prior to initiating service and may be conducted periodically thereafter. All inspections will be conducted during the District’s normal business hours.

3. The District will notify the Customer in writing of any cross-connection or other undesirable plumbing practice that has been identified during the initial inspection or periodic re-inspection.

4. The Customer must immediately correct any undesirable plumbing practice on his premises.

5. The Customer must, at his expense, properly install, test, and maintain any Backflow Prevention Device required by the District. Copies of all testing and maintenance records must be provided to the District.

E. Backflow Prevention Devices.

1. If there is an actual or potential source of contamination, pollution or hazard to the District’s water system, no connection may be made to the District’s water system unless:

a. there is a Code-approved air gap between the potential source of contamination, pollution or hazard and the drinking water supply; or

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b. a Backflow Prevention Device is installed between the potential source of contamination, pollution or hazard and the drinking water supply.

2. A Backflow Prevention Device must be tested upon installation. The test must be conducted by an individual who has completed a Commission approved course on cross-connection control and backflow prevention and passed an exam administered by the Commission or its agent (“Recognized Tester”). The Recognized Tester must certify that the Backflow Prevention Device is operating within specifications and present evidence that the gauges used in the test have been calibrated and tested for accuracy in accordance with American Water Works Association or University of Southern California standards and that the Recognized Tester is currently certified to conduct Backflow Prevention Device Tests.

3. A Backflow Prevention Device that is installed to protect against High Health Hazards must be inspected and certified to be operating within American Water Works Association or University of Southern California specifications at least annually by a Recognized Tester. A High Health Hazard is a cross-connection, potential cross-connection, or other situation involving any substances that could cause death, illness, spread of disease, or has a high probability of causing such effects if introduced into the potable drinking water supply.

4. All test and maintenance reports must be completed using a Commission form, or a form that contains the same information, and must be filed with the District within 30 days regardless of whether the test indicates a passed or failed test.

5. The District will maintain test and maintenance reports for a period of at least 3 years.

F. Customer Service Inspections.

1. Inspections Required. Each applicant for service or Customer must submit a completed customer service inspection certification to the District in the following instances:

a. before the District provides continuous and adequate service to new construction;

b. when the District has reason to believe that cross-connections or other unacceptable plumbing practices exist on any existing service; or

c. after any material improvement, correction, or addition to any existing private plumbing facilities.

2. Certifications. A customer service inspection certification must be fully completed in the form attached as Exhibit “B”. The certification must be completed by the City under the Plumbing Inspection Interlocal at the applicant’s or Customer’s expense by a person who is:

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a. a plumbing inspector and water supply protection specialist licensed by the Texas State Board of Plumbing Examiners and in good standing at the time of the inspection;

b. a certified waterworks operator and employee of the District’s utility operator who has completed a training course, has passed an examination administered by the Commission or its designated agent, and holds an endorsement granted by the Commission or its designated agent; or

c. a licensed plumber, if the inspection and certification are for a single- family residential service.

3. Records. The District will maintain copies of completed customer service certifications for a minimum of ten years.

4. Unacceptable Plumbing Practices. If unacceptable plumbing practices are discovered, they must be promptly repaired and eliminated by the Customer or applicant for service to prevent contamination of the water supplied by the District. The existence of an unacceptable plumbing practice is sufficient grounds for immediate termination of service without notice in order to protect the health and safety of all District Customers. Service will not be restored until the potential source of contamination has been eliminated or additional safeguards have been taken and a new customer service inspection certification is provided to the District.

G. Enforcement. If a Customer fails to comply with the terms of this Section, the District may assess fines in accordance with Section 54.205 of the Texas Water Code, and may either terminate service and/or properly install, test, and maintain an appropriate backflow prevention device at the service connection. Any expenses associated with the enforcement of this Section will be billed to the Customer.

XIII. Protection of District Facilities and Property.

A. Dumping, placing, disposing of, depositing on, or discharging any foreign materials or debris, including but not limited to grass or tree clippings, trash, and construction debris onto any District property, including District greenbelts and/or District drainage facilities, is prohibited. Any person or entity that violates the terms of this Section will be subject to a penalty in the amount of $500 per violation, and will also be liable for all attorney’s fees incurred by the District and costs of court. The District may add the amount of any penalties or costs imposed by this Section to the Customer’s utility bill, or the District may deduct the amount of any penalties or costs imposed as a result of a violation of this Section from a Customer’s security deposit or any other amounts held by the District and may further require that the Customer replenish the deposit by an equivalent amount.

B. No drainage water, including roof run-off water; drainage from downspouts; water from yard drains; water from fountains and ponds; water from lawn sprays, rainwater leaders, swimming pool water; or swimming pool filter backwash water may be connected or discharged to the District’s wastewater utility system. In order to protect the District’s wastewater system from inflow, all clean-outs on Customer service lines must be securely capped at all times. If any clean-out is left uncapped or the cap is loosened or removed so as to potentially allow inflow into the District’s

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wastewater system, the District will be authorized to enter onto the responsible Customer’s property to replace the cap, and the Customer at the service address in question will be charged the sum of $100 for the replacement. This charge may be added to the Customer’s utility bill, or the District may deduct the amount of the charge from the Customer’s security deposit or any other amounts held by the District and may further require that the Customer replenish the deposit by an equivalent amount.

XIV. Water Conservation and Drought Contingency Plan.

The terms and provisions of the District’s Water Conservation and Drought Contingency Plan (as amended from time to time, the “Water Conservation and Drought Contingency Plan”) are incorporated into this Order. The District may add the amount of any fines, penalties, or costs imposed under the Water Conservation and Drought Contingency Plan to the Customer’s utility bill, or the District may deduct the amount of any fines, penalties, or costs imposed as a result of a violation of the Water Conservation and Drought Contingency Plan from a Customer’s security deposit or any other amounts held by the District and may further require that the Customer replenish the deposit by an equivalent amount.

XV. District Approvals: Escrow for Expenses.

Applicants for service commitments, out-of-district service, construction plan review and/or inspection, subdivision plan review and/or inspection, and of other types of District approvals, including utility construction agreements or other types of development agreements, are responsible for the payment of all legal, engineering, and management fees incurred by the District in reviewing their application and negotiating or preparing any related approvals or agreements. The District’s representative will establish a deposit amount equivalent to the estimated consultant fees that are expected to be incurred in connection with the application, and the applicant must deposit this amount with the District prior to any review or processing work being initiated. All consultant fees associated with the application incurred by the District will be charged against the deposit. Upon completion of the review process, the applicant must pay any fees incurred by the District in excess of the deposit. Any excess deposit remaining after payment of all fees will be returned to the applicant. No service commitment or plan approval will be issued or agreement will be effective by the District until all fees are paid.

XVI. Enforcement; Penalties.

A. Water and sanitary sewer service will not be provided by the District until all applicable requirements of this Order have been met.

B. The provisions of this Order constitute rules adopted under Section 54.205, Texas Water Code. Violation of any provision of this Order will result in the offending party being subject to the payment of a penalty in an amount per violation that does not exceed the jurisdiction of the justice court, as provided by Section 27.031, Texas Government Code, which penalty will be established by the Board. In addition, the offending party will be liable to the District for any other penalty provided by the laws of this State, and any costs incurred by the District in connection with any repairs or corrections necessitated by any violation. If the District prevails in any suit to enforce the provisions of this Order, the District may additionally recover its reasonable attorneys’ fees, expert witness fees and other costs incurred by the District before the Court.

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C. This Order supersedes all previous orders and resolutions of the District relating to the establishment of rates and charges, and adopting rules and policies with respect to the District’s Systems.

D. The attorney for the District is hereby directed to file a copy of this Order (i) with the Texas Commission on Environmental Quality and (ii) in the principal office of the District and to publish a substantive statement of the rules contained in this Order and the penalties for their violation as required by Section 54.207 of the Texas Water Code.

E. The following exhibits are attached to this Order and incorporated herein by reference.

Exhibit A - Industrial Wastewater Regulations

Exhibit B - Customer Service Inspection Certification

ADOPTED June 3, 2020.

(Signature page follows.)

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TRAVIS COUNTY MUNICIPAL UTILITY DISTRICT NO. 2

Wilmer Roberts, President Board of Directors

(SEAL)

ATTEST:

Debora C. Pickens, Secretary Board of Directors

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INDUSTRIAL WASTEWATER REGULATIONS

I. POLICY; PURPOSES; ADMINISTRATION; DEFINITIONS.

Policy. It is the District’s policy to promote the public health, safety, and welfare by:

Implementing the General Pretreatment Regulations for New and Existing Sources of Pollution promulgated by EPA and set forth in Title 40, Code of Federal Regulations, Part 403, as amended;

Establishing uniform regulations governing the disposal of wastewater containing industrial waste or other prohibited waste to the POTW;

Establishing requirements to control pollutants that pass through or cause interference with treatment processes in the POTW or that may contaminate sewage sludge; and

Ensuring the District’s compliance with the TPDES permit issued by the TCEQ for the District’s service area.

Purposes. These regulations will be construed at all times so as to achieve the following objectives:

To implement safe and environmentally sound methods for disposal of wastewater containing industrial waste or other prohibited waste to the POTW;

To prevent the introduction of pollutants into the District’s wastewater collection system and the POTW in concentrations or amounts that will damage or otherwise interfere with the operation of the POTW;

To prevent the introduction of pollutants that will pass through the POTW, inadequately treated, into receiving waters or otherwise be incompatible with the POTW;

To ensure that the quality of wastewater treatment plant sludge is maintained at a level that allows its use and disposal in compliance with applicable laws and regulations and maximize opportunities to reclaim wastewater and sludge from the POTW;

To protect District and POTW personnel who may be affected by pollutants in wastewater and sludge in the course of their employment and to protect the general public;

To implement appropriate fees for equitable distribution of the cost of operation, maintenance, and improvement of the POTW;

To enable compliance with the TPDES permit conditions, sludge use and disposal requirements and other federal or state laws to which the POTW is subject; and

To prevent damage or interference with the operation and maintenance of the POTW.

Interpretation. These regulations will be liberally interpreted to achieve the policy and purposes stated above.

Applicability. These regulations will apply to the disposal of wastewater containing industrial waste or other prohibited waste by, through, and into the POTW.

Definitions.

“BOD” means the value of the five-day test for biochemical oxygen demand as described in the latest edition of “Standard Methods for the Examination of Water & Wastewater”.

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“COD” means the value of the test for chemical oxygen demand, as described in the latest edition of “Standard Methods for the Examination of Water & Wastewater”.

“Comminuted Garbage” means garbage that has been shredded into particles less than one-half inch in diameter that are carried freely under normal flow conditions in a sanitary sewer.

“EPA” means the United States Environmental Protection Agency.

“Extra strength wastewater” means wastewater having a suspended solids, chemical oxygen demand, or biochemical oxygen demand more than that found in normal waste but otherwise acceptable for discharge to the POTW in accordance with the requirements of these regulations.

“Drainage Water” means storm water; surface water; ground water; roof run-off water; drainage from downspouts; water from yard drains; water from fountains and ponds; water from lawn sprays, rainwater leaders, and areaways; overflows from cisterns and water tanks; swimming pool water; and swimming pool filter backwash water.

“Grease” means fats, oils, greases, and other organic polar compounds derived from animal and/or plant sources that contain carbon chain triglyceride molecules, and that are detectable and measurable using analytical test procedures established in 40 CFR 136 as may be amended from time to time.

“Grease trap” means a device designed to use differences in specific gravities to separate and retain light density liquids and waterborne greases prior to the wastewater entering the POTW collection system. These devices also serve to collect settleable solids, generated by and from food preparation activities, prior to the water exiting the trap and entering the POTW.

“Grease trap waste” means material collected in and from a grease trap in the sanitary sewer service line of a commercial, institutional, or industrial food service or processing establishment, including the solids resulting from de-watering processes.

“Ground Water” means subsurface and subsoil water; artesian well water; water from groundwater remediation sites; and subsurface leachates captured from municipal landfills.

“Indirect discharge” or “discharge” means the introduction of pollutants into a POTW from any domestic or non domestic source.

“Industrial waste” means liquid waste and a waterborne liquid, gaseous, or solid substance, excluding sewage discharged from sanitary conveniences that is not commingled with wastewater containing industrial waste, discharged or disposed of from an industrial, manufacturing, trade, or commercial establishment, including a nonprofit organization, governmental agency, or business activity.

“Interference” means a discharge that, alone or in conjunction with a discharge from another source, inhibits or disrupts the POTW, its treatment processes or operations, or its sludge processes, use, or disposal, or causes a violation of the TPDES permit.

“Medical Waste” means isolation waste, an infectious agent, human blood and blood by-products, pathological waste, sharps, a body part, contaminated bedding, surgical waste, potentially contaminated laboratory waste or dialysis waste.

“Non Domestic Wastewater” means the liquid and water-carried industrial wastes from commercial buildings, industrial facilities, and institutions that enter the POTW.

“Normal wastewater” means wastewater that, after analysis, contains:

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a concentration of biochemical oxygen demand in the waste not exceeding 200 milligrams per liter average over a 24 hour period or not contributing biochemical oxygen demand at a rate exceeding 1,668 pounds of biochemical oxygen demand per million gallons of wastewater daily;

a concentration of suspended solids in the waste not exceeding 200 milligrams per liter average over a 24 hour period or not contributing suspended solids at a rate exceeding 1,668 pounds of suspended solids per million gallons of wastewater daily; or

a concentration of chemical oxygen demand in the waste not exceeding 450 milligrams per liter average over a 24 hour period or not contributing chemical oxygen demand at a rate exceeding 3,735 pounds of chemical oxygen demand per million gallons of wastewater daily.

“pH” means a measure of the acidity or alkalinity of a solution expressed in standard units.

“Pollutant” means a substance that alters the physical, thermal, chemical, radiological, or biological quality or properties of water or that contaminates water to the extent that the water is rendered harmful to public health, safety, or welfare, including: dredged soil; solid waste; incinerator residue; filter backwash; sewage; garbage; sewage sludge; munitions; medical wastes; chemical wastes; biological materials; radioactive materials; heat; wrecked or discarded equipment; rock; sand; cellar dirt; municipal, agricultural and industrial waste; and certain characteristics of wastewater (including pH, temperature, suspended solids, turbidity, color, biochemical oxygen demand, chemical oxygen demand, toxicity, or odor).

“POTW” means a publicly owned treatment works owned by the District, including:

a device or system used in the storage, treatment, recycling, or reclamation of municipal sewage or liquid industrial wastes; and

equipment, sewer lines or pipes conveying wastewater to a treatment plant; and

real property.

“Prohibited Waste” means a waste prohibited from discharge to the POTW except in accordance with these regulations.

“Sewage” means human excreta and gray water.

“TCEQ” means the Texas Commission on Environmental Quality.

“TPDES” means the Texas Pollutant Discharge Elimination System program with authority to issue, modify, revoke, terminate, reissue, and enforce permits and pretreatment standards.

“Transporter” means a person who is registered with and authorized by the TCEQ to transport sewage sludge, water treatment sludge, domestic septage, chemical toilet waste, grit trap waste, or grease trap Waste in accordance with 30 Texas Administrative Code 312.142.

“TSS” means the value of the test for total suspended solids, as described in the latest edition of “Standard Methods for the Examination of Water & Wastewater”.

“User” means any person, including those located outside the District, who contributes causes or permits the contribution or discharge of wastewater into the POTW, including persons who contribute such wastewater from mobile sources.

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“Waste” means one or more pollutants.

“Wastewater” means treated or untreated liquids and waterborne waste, drainage water, and sewage from a residential dwelling, commercial building, industrial and manufacturing facility, or institution that is discharged to the POTW.

II. PROHIBITION AGAINST DISCHARGE.

A person may not discharge pollutants to the POTW that cause:

a treatment plant upset;

pass through or contribute to pollution of the POTW’s receiving waters;

interference with the operation of the POTW;

the POTW to be in violation of the TPDES permit;

damage to the POTW;

a hazard to property, public health, or safety;

the ambient air quality of the POTW to exceed standards established by federal, state, or local law;

a violation of a permit issued under these regulations;

the concentration of pollutants in the POTW or in the POTW’s sludge to exceed allowable limits; or

a flow rate or quantity that exceeds the carrying capacity of the collection system.

Except as authorized by these regulations, a person may not discharge to the POTW the following:

a solid or viscous substance including ash, cinder, sand, concrete, mud, straw, shavings, metal, glass, rags, feathers, tar, asphalt, plastic, rubber, rubber products, wood, whole non-human blood, paunch manure, hair and flesh, entrails, lime slurry, lime residue, carbide waste, slops, chemical residue, paint residue, asbestos, bulk solids, grass clippings, or tree trimmings;

a flammable or explosive liquid, solid, or gas, and similar substance that could create a fire or explosive hazard in the collection system or the POTW, including a waste stream with a closed-cup flashpoint of less than 140 degrees Fahrenheit (60 degrees Centigrade), tested in accordance with 40 CFR 261.21;

a pollutant regulated under a categorical pretreatment standard promulgated by EPA in a concentration or amount exceeding allowable limits;

a substance causing heat in the POTW at a temperature of 120 degrees Fahrenheit (48.9 degrees Centigrade) or higher, or at a temperature that inhibits biological activity in the POTW if the discharge causes interference, or an increase in the temperature of the influent to a treatment plant to 104 degrees Fahrenheit (40 degrees Centigrade) or higher;

garbage other than comminuted garbage;

wastewater containing a noxious or malodorous liquid, gas, solid, or substance that, independently or interactively creates a public nuisance, or hazard to public health and safety, or prevents entry into the sanitary sewer for maintenance or repair;

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a pollutant that result in the presence of toxic gases, vapors, or fumes within the POTW in a quantity or concentration that creates a danger to public health or safety;

an acid, alkali, or substance with a pH value lower than 6.0 or higher than 11.5 standard units, or that corrodes or damages the POTW;

petroleum oil, non-biodegradable cutting oil, or a product of mineral oil origin in an amount that causes interference or pass through;

waste containing a prohibited pollutant trucked or hauled from its point of origin, except as approved by the District’s utility manager;

waste removed from a pretreatment facility or private sewage facility, except at discharge points designated by the District’s utility manager;

phenol or a similar substance in concentrations that produce odor or taste in the POTW’s receiving waters, if the receiving waters are used as drinking water;

wastewater containing radioactive materials in concentrations greater than allowed by current regulations of the Texas Department of Health or other agency of competent jurisdiction;

a solid or viscous pollutant in a quantity or concentration that could obstruct the flow in the POTW or result in a sanitary sewer overflow or interference;

a pollutant or oxygen demanding pollutant discharged at a flow rate or concentration that could interfere with the POTW, or is not treatable;

a pollutant, dye water, vegetable tanning solution, whole blood, or a substance that causes untreatable color in the POTW effluent;

medical wastes;

sludge, screenings or other residues from the pretreatment of industrial waste or other prohibited waste, except as authorized by the District’s utility manager;

wastewater containing pollutants that cause the POTW effluent to fail a toxicity test;

waste containing detergent, a surface active agent, or a substance that could cause excessive foaming in the POTW or its effluent;

wastewater causing a single meter reading of more than ten percent of the lower explosive limit on an explosion hazard meter;

antifreeze or a coolant solution used in a vehicle or motorized equipment;

an enzyme, chemical, or other agent that allows fat, oil, grease, or a solid to pass through a pretreatment facility;

drainage water; and

ground water.

III. PRETREATMENT REQUIREMENTS.

Pretreatment Required. A person generating wastewater containing prohibited waste discharged to the POTW must pretreat the prohibited waste in compliance with the discharge standards, local limits, and requirements established in these regulations, or otherwise lawfully dispose of the

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prohibited waste. All pretreatment facilities, methodologies, processes, technologies, and any modifications thereto, must be approved in writing in advance by the District’s utility manager.

Permit Required.

A person must obtain a permit from the District’s utility manager before discharging wastewater containing prohibited waste to the POTW. A person shall not discharge wastewater from a pretreatment facility except as allowed by a permit issued by the District’s utility manager.

A person seeking a permit must complete and file an application for a permit with the District’s utility manager on the form attached as Exhibit “A”, including any other information requested by the District utility manager or engineer, and pay the application fee established in the District’s Rate Order.

A person assuming ownership, occupancy, or management of a premises covered by an existing permit must apply for a transfer of the existing permit with the District’s utility manager on the form attached as Exhibit “A” and pay the application fee established in the District’s Rate Order no later than the 30th day before the proposed transfer.

The District’s utility manager may set permit pretreatment standards more stringent than those contained in these regulations, local, state, or federal regulation, if the District’s utility manager determines that the standards are necessary to protect the POTW.

The District’s utility manager may revoke a permit if a person violates these regulations, or other federal, state, or local wastewater pretreatment regulation.

A person is not required to obtain a permit for a location that only discharges sewage.

Pretreatment Plan. A person required to pretreat waste or wastewater before discharge to the POTW, must submit complete plans and specifications for the pretreatment system to the District’s utility manager before installation of the system. A pretreatment plan must describe the proposed pretreatment method, process, or technology, including products, chemicals, agents, or devices used for pretreatment.

Inspection; Testing. A person may not discharge wastewater to the POTW from or through a pretreatment facility until the facility’s design, size, construction plan, installation, and connection to the POTW has been inspected and approved by the District’s utility manager. The District’s utility manager may require a pretreatment facility, process, device, agent, or product to be tested prior to use or commencement of a discharge to the POTW.

Records Retention. A person discharging wastewater containing prohibited waste to the POTW or disposing of waste off-site must retain and make available for inspection and copying by the District’s utility manager all records and information required under these regulations. Unless federal or state law requires information to be retained for a longer period, records must be maintained for at least three years from the date the record is created. Records must include the date, exact place, method, and time of sampling and the name of person(s) taking the sample, the dates analyses were performed, who performed the analyses, the analytical technique or method used, and the results of the analyses.

Site Inspections and Access. It is a condition of the privilege to discharge into the POTW that Users permit the District’s utility manager to enter upon the User’s premises to examine and inspect the wastewater treatment facilities required herein and the records required to be kept by these regulations. Refusal to permit any such inspection or copying will constitute grounds for immediate revocation of permit and termination of water service.

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IV. GREASE TRAPS, INTERCEPTORS, SEPARATORS, AND HOLDING TANKS.

General.

Grease traps, interceptors, separators, or holding tanks are required for the proper handling of wastes containing grease, oil, sand, and other harmful pollutants that may interfere with the operation and maintenance of the POTW. All grease traps, interceptors, separators, or holding tanks must be constructed and maintained in accordance with all applicable laws, rules, and regulations.

All restaurants, institutions, cafeterias, or other establishments preparing or serving food to the general public must install and maintain a grease trap for the efficient removal of oil and grease from the waste stream. The design and installation of such devices is subject to review and approval by the District’s utility manager.

All vehicle wash areas must equipped with interceptors and oil separators for the removal of oils, grease, and sand and other solids. The design and installation of such devices are subject to review and approval by the District’s utility manager.

Holding tanks must be provided for waste oils and other objectionable waste that is prohibited from being discharged into the POTW, such as phosphates and vegetable debris. Holding tanks must be constructed to prevent leakage and splashing and must be equipped with secondary containment to prevent spills during operation and cleaning. Holding tanks must be maintained to preclude odor and other nuisances and must not be connected to the POTW or in any other way allowed to be discharged to the POTW.

Existing Facilities.

Existing facilities required by these or other applicable regulations to maintain a grease trap, interceptor, or separator not equipped with (a) an adequately-sized treatment unit, or (b) the required pretreatment device for the type of business or use must, within six months after the effective date of these regulations, install an adequately-sized grease trap, interceptor, or separator in accordance with these regulations.

Where, in the opinion of the District’s utility manager, an existing grease trap, separator, or interceptor or the absence of a grease trap, separator, or interceptor poses a serious threat or an on-going problem to the sanitary sewer, is a public nuisance, or poses a threat to public health or to the environment, the District’s utility manger may require a grease trap, interceptor, or separator to be installed or replaced, as applicable.

If a food establishment or any other facility requiring a grease trap, interceptor, or separator ceases operation, then such establishment or facility must be in compliance with these regulations before reopening.

New Businesses. New businesses required by these or other regulations to maintain a grease trap, interceptor, or separator must install such unit prior to commencement of discharge to the POTW.

General Specifications. The following specifications are minimum requirements only. Each User must have a grease trap, interceptor, or separator designed, installed, and maintained in such a manner that will produce an effluent in compliance with the requirements of these regulations.

Grease traps, interceptors, and separators must meet or exceed the more stringent of specifications and requirements set forth in these regulations and other applicable local, state, or federal requirements.

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An existing grease trap, interceptor, or separator that is upgraded or replaced must meet or exceed the specifications set forth in these regulations and other applicable local, state, or federal requirements.

When a Non Domestic Wastewater User required under these regulations to have a grease trap, interceptor, or separator occupies an existing building, the grease trap, interceptor, or separator must meet or exceed the requirements in these regulations and other applicable local, state, or federal requirements.

Grease traps, interceptors, and separators must be constructed of impervious materials capable of withstanding abrupt and extreme changes in temperature and capable of withstanding the traffic load where installed.

Grease traps, interceptors, and separators must be installed outside the building wherever possible. When it is impossible to locate a grease trap outside the building, the trap must be located in a mechanical room or other separate area where no food is stored or processed.

Grease traps, interceptors, and separators must be located so as to be readily and easily accessible for cleaning and inspection and must be equipped with easily removable covers.

Manhole rings and covers, not less than 24 inches in diameter, must be installed in the lid of each compartment to facilitate easy access for cleaning and inspection. Manholes must be placed so that all internal piping is accessible for maintenance and inspection. The cover must be at or near, but not below, the finished grade.

When an existing interceptor or separator is located inside a vehicle wash bay, the first chamber must be preceded by a grated catch basin with openings not greater than one-half inch in diameter or must be equipped with a grated cover with openings not greater than one-half inch in diameter so that no solid material greater than one-half inch diameter may enter the chamber. The cover on the secondary chamber must be water tight. When the interceptor or separator is preceded by a grated catch basin, all covers on the separator must be watertight.

Grease traps must have a total liquid capacity of not less than 500 gallons unless the User has demonstrated and received approval from the District’s utility manager for a smaller capacity. Interceptors must have a total liquid capacity of not less than 50 gallons. Separators must have a total liquid capacity of not less than 500 gallons. Grease traps and separators must be constructed with a minimum of two compartments. The primary compartment must have a detention time at peak flow of not less than 15 minutes. The secondary compartment must have a detention time at peak flow of not less than five minutes.

Plans for new grease traps, interceptors, and separators or modifications to existing grease traps, interceptors, and separators must be submitted to the District’s utility manager and plumbing inspector for review and approval before installation. A description of plumbing fixtures draining to the device, the number of fixture units as determined by the plumbing inspector and the calculations used to determine the proposed capacity must be included in the submittal.

All grease traps, interceptors, and separators must be equipped with an approved sampling port immediately downstream of the treatment facility. Existing facilities without an approved sampling port must be equipped with an approved sampling port within six months after the effective date of these regulations. Sampling ports must be easily accessible and safely located and must be constructed in accordance with plans approved by the District’s utility manager. Sampling ports must be inspected by the District’s utility manager prior to use. Sampling ports shall be installed by the User at its expense and must be maintained by the User so as to be safe and accessible at all times. Sampling ports must be constructed to exclude the entry of stormwater and groundwater and exit of wastewater (prevention of infiltration/inflow, exfiltration/exflow).

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Grease traps, interceptors, separators, and sampling ports must be installed by a licensed plumber. Completed grease traps, interceptors, and separators will be subject to inspection by the District’s utility manager and plumbing inspector prior to connection to the POTW.

Grease Trap Specifications.

All liquid waste lines in food preparation and dishwashing areas, except lines from rest room facilities, cooling unit condensate, ice maker, and soft drink dispenser drain lines, must discharge through the grease trap.

Grease traps will be sized according to the following criteria:

All fixtures with a potential to carry grease-bearing waste must be plumbed to the grease trap.

The following fixture unit counts will be assigned to each different kind of fixture:

Fixture Kind of Fixture trap and trap Arm Size Units 3 compartment sink 1½”, 2” 3, 4 2 compartment sink 1½” 2 Dishwasher 2” 4 Garbage grinder 2” 4 Wok Stove 2” 4 Hand Sink -- 0 Mop Sink -- 0 Floor Drains (2”, 3”, 4”) 2”, 3”, 4” 2, 3, 4 Floor sinks (3”, 4”) 3”, 4” 3, 4

Notes: Hand sinks and mop sinks are not required to be plumbed to the grease trap. For indirect waste systems where hub drains and floor sinks are used as receptors for dishwashers, 2- and 3-compartment sinks, etc., the fixture unit must be twice the floor sink or hub drain fixture unit count. In such cases, the fixture count for the indirect waste source is not counted.

The minimum flow rating of the grease trap is calculated by multiplying the total fixture unit count times three gallons/minute.

The minimum liquid holding capacity of the trap is calculated by multiplying the grease trap flow rating (in gallons per minutes) times twelve minutes.

Facilities using dishwashers, wok stoves, or garbage grinders are required to install 2-compartment traps with a 12-minute total retention time.

Upon approval from the District’s utility manager, fixtures receiving non-grease- bearing wastes may be drained through a grease trap, but will not be included for grease trap sizing (i.e., condensate for coolers).

The minimum size of grease traps will be determined according to the number of fixture units draining through the device, but will, in no case, have a total liquid capacity of less than 500 gallons unless the User has demonstrated and received approval from the District’s utility manger

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for a smaller capacity. If the District’s utility manager has not approved a smaller capacity, then the capacity will be determined as follows:

The total number of fixture units multiplied by 150 gallons will determine the minimum total liquid capacity.

The primary chamber must occupy three-fourths of the total liquid capacity.

The dividing wall between each chamber must completely divide the chambers (extend top to bottom) except when the specific design of the separator provides for underflow, in which case, the wall must not be greater than 12 inches from the bottom, between the chambers rather than the flow traveling through a pipe.

Grease traps must be designed and constructed in accordance with the following criteria:

The trap must be constructed in accordance with the Plumbing Code, as defined in the District’s rate order, and installed in a manner acceptable to the District’s utility manager (no exceptions).

The trap must have two compartments.

While operating at the trap’s rated flow capacity, the first compartment must provide a retention time of no less than seven minutes, and the second compartment must provide a retention time of no less than five minutes, for a minimum total of 12 minutes.

trap inverts and vents must be external to the compartments.

The flowline to the trap (upstream of inlet invert) must be at least three inches above the static water level of the tank.

The trap vent must be at least three inches above the static water level of the tank.

The trap inlet must be at least 24 inches below the static water level of the tank, and the trap outlet must be at least 12 inches above the floor of the tank.

Adequate flow diffusion features must be provided to distribute flow evenly throughout the grease trap. Examples of such features include a flow diverter plate in the primary compartment and “tee” piping on the tank outlet.

Each trap compartment must be accessible for cleaning and inspection purposes (no exceptions).

traps must be equipped with double cleanouts on the outside of the trap in both the influent (prior to the trap) and effluent (after the trap) pipes. The influent must enter each chamber, and the effluent must discharge from, below the static water level in accordance with the following:

The influent line into all chambers must terminate no more than 18 inches from the bottom of the chamber.

The effluent from all chambers must discharge from the lower 12 inches of the chamber.

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There must be no openings in any influent or effluent pipe that will allow liquid to enter or exit the chamber at any point other than the intake or discharge point of the pipe.

The static water level must be maintained throughout the entire trap.

Except as otherwise specified, exceptions to the foregoing criteria may be approved by the District’s utility manager prior to grease trap installation upon submittal of all applicable engineering drawings and supporting performance data. Metal grease traps of alternative designs may be approved for sites requiring grease traps of 250 gallons or less.

Interceptor and Separator Specifications.

Automatic car or truck washes and coin-operated wash bays, drive-in or drive-through wash bays, hand wash bays, and other areas where vehicles are washed must be equipped with an interceptor and a two-stage separator. The interceptor and the separator must function as separate units. An adequately-sized interceptor must be provided for the removal of sand, grit, and other objectionable solids from the waste stream. An adequately-sized, two-stage separator must be provided for the removal of oil and grease from the waste stream. Interceptors and separators must be minimally sized in accordance with the specifications outlined in these regulations. Minimum sizing for any interceptor or separator may be increased at the discretion of the District’s utility manager when necessary to protect health, safety, and property or to carry out the purposes and intents of these regulations.

Interceptors must have a minimum detention time of not less than five minutes. The minimum size will be in accordance with the specifications outlined in this section. Interceptors may be located inside the wash bay and may be equipped with a grated cover provided the openings in the cover are not greater than one-half inch diameter or per side of a rectangle. When located inside the wash bay, the District’s utility manager may require a larger capacity interceptor to be installed to facilitate efficient sand and grit removal. Covers must be easily removable for cleaning and inspection. When located outside the wash bay, the interceptor must be equipped with solid, watertight covers on each chamber and must be preceded by a catch basin, located inside the bay, equipped with a grated cover with openings not greater than one-half inch diameter or per side of a rectangle. Covers must be easily removable for cleaning and inspection. The inlet and outlet lines must be designed and installed to provide uniform flow and stilling in the interceptor and to preclude sand from passing through the interceptor. When a down pipe is provided at the inlet, the pipe must extend into the interceptor a distance not less than one-third from the static water level to the bottom. The discharge pipe must extend into the interceptor a distance not less than one-third from the static water level to the bottom.

Separators must be located outside the wash bay and must be equipped with solid, watertight covers on all chambers. Covers must be easily removable for cleaning and inspection. The influent must enter each chamber, and the effluent must discharge from, below the static water level in accordance with the specifications outlined in these regulations. The influent line into all chambers must terminate no greater than 18 inches from the bottom of the chamber. The effluent from all chambers must discharge from the lower 12 inches of the chamber. There must be no openings in any influent or effluent pipe that will allow liquid to enter or exit the chamber at any point other than the intake or discharge point of the pipe. The static water level must be maintained throughout the entire trap.

Minimum sizing for interceptors will be 50 gallons per fixture unit draining into the interceptor, but not less that the minimum sizes outlined below:

Manual hand wash bay or portable washer 50 gal/F.U. but not less than 50 gal/day Coin Operated self service wash bays 50 gal/F.U. but not less than 50 gal/bay Automatic (drive-in & drive through) 50 gal/F.U. but not less than 50 gal/bay

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Minimum sizing for separators will be 150 gallons per fixture unit draining into the separator, but not less that the minimum sizes outlined below:

Portable Washer Greater of 500 gal or 150 gal/F.U. Single coin-operated wash bay Greater of 500 gal or 150 gal/F.U. Manual hand wash, single bay only Greater of 500 gal or 150 gal/F.U. Multiple coin-operated or manual hand Greater of 1000 gal + 200 gal/bay or 150 wash bays gal/F.U. Drive-through wash bay Greater of 500 gal/bay or 150 gal/F.U.

The primary chamber of the separator must occupy three-fourths of the total liquid capacity of the separator. The dividing wall between each chamber must completely divide the chambers (extend top to bottom) except when the specific design of the separator provides for underflow not greater than 12 inches between the chambers rather than the flow traveling through a pipe.

Holding Tank Specifications. Holding tanks must be constructed and maintained to prevent discharge of waste cooking oils, motor oils and other oils and fluids that are prohibited from being discharged to the POTW. Holding tanks must not be connected to the sanitary sewer or in any other way be allowed to discharge to the POTW. Holding tanks must be provided with secondary containment capable of containing not less than 110% of the capacity of the holding tank or the capacity of the largest tank plus water from a maximum 24-hour/10-year rainfall event if exposed to rainwater, whichever is greater. Secondary containment must be constructed so as to control spills or splashes during operation and maintenance and leaks. Secondary containment must not be connected to any POTW or storm drain and must not be allowed to drain onto public or private property or to the waters of the United States.

Operation and Maintenance.

Operation and maintenance responsibilities:

Grease traps, interceptors, separators and holding tanks must be operated in a safe and secure manner at all times.

Areas surrounding grease traps, interceptors, separators, and holding tanks must be maintained to facilitate immediate access to the unit for cleaning and for inspection by the District’s utility manager at all times.

Grease traps, interceptors, and separators must be maintained in continuously efficient operation by the User at its expense and must produce an effluent in compliance with these regulations.

A User may not remove any down pipes or otherwise alter a grease trap, interceptor, or separator in any way that allows oil, grease, sand, or other objectionable materials to pass through the device into the POTW.

When the District is required to clean associated public sewers caused by inappropriate operation or maintenance, inadequate design or installation, or inappropriate alteration of a grease trap, interceptor, or separator, costs of such cleaning will be billed to the User. When several Users are discharging to the same sewer line, all of the Users will be equally liable except when a User provides written proof acceptable to the District’s utility manager that its discharge could not have been a contributing factor. Proof will include a demonstration of adequate sizing and installation; appropriate cleaning (as documented by manifests and inspection documentation) and valid analysis of a sample of the discharge collected within one week of the sewer cleaning activities. Analysis of samples collected after sewer line cleaning will be accepted only when the

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grease trap, interceptor, or separator has been properly maintained and was not cleaned within 30 days of the sewer cleaning activities.

A User may not increase the use of water or in any other way attempt to dilute the waste stream in lieu of adequate treatment.

The addition of hot water or the use of emulsifiers, chemicals, or other agents or devices that may cause oil, grease, or sand to pass through a treatment facility or into the POTW sewer collection system is strictly prohibited.

Areas surrounding a grease trap, interceptor, separator, or holding tank must be kept clean and free of grease and odors and other materials at all times. Materials must not be splashed, spilled, allowed to overflow, or otherwise placed on the area surrounding a grease trap, interceptor, or separator. In the event that materials are spilled, splashed, overflowed, or otherwise placed on the surrounding area, the User must assure that the materials are promptly cleaned from the area and properly disposed.

Grease traps, interceptors, separators, and holding tanks must be fully evacuated of all contents during cleaning. If the capacity of the grease trap, interceptor, separator, or holding tank is greater than the capacity of the transport vehicle such that full evacuation is not possible in a single load, then the Transporter and the User must assure that the contents are fully evacuated within 24 hours. No liquid waste may be returned to the grease trap, interceptor, separator, or holding tank after or during cleaning, either from the same or other grease trap, interceptor, separator, or holding tank. During cleaning, grease residue must be removed from piping and walls and the piping and walls must be inspected to assure that the integrity of the device is maintained.

Materials removed from grease traps, interceptors, separators, and holding tanks must be utilized by industry, recycled, or disposed at a facility at which the owner or operator agrees to receive the wastes and that has documentation verifying that the facility meets all requirements of the state and federal authorities. All wastes must be disposed in a suitable manner in accordance with applicable federal, state, and local laws.

Users required to maintain grease traps, interceptors, separators, or holding tanks must establish a system of training designed to provide employees with appropriate instruction on the proper use of such facilities. Such training system must provide employees at all levels of responsibility with a complete understanding of the operation and maintenance of the pretreatment device and the relation between appropriate waste disposal and efficient operation of the pretreatment device. The training system should include:

The importance and methods of good housekeeping practices;

Acceptable waste disposal practices, including proper disposal of different types of wastes;

Procedures for preventing prohibited discharges; and

The proper response to and notifications in case of spills or other accidental discharges.

Periodic training sessions must be conducted to assure that employees understands the essential elements of the system. New employees must be trained immediately upon employment. Users required to maintain grease traps, interceptors, separators, or holding tanks must keep documentation of training available for inspection.

Grease Trap Treatment Products.

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Use of grease trap treatment products, including bacteria, designed to digest the grease, is specifically prohibited without prior written consent of the District’s utility manager. Use of such products will be considered only when a valid screening test, showing the product’s ability to treat the waste and to produce an effluent in compliance with these regulations, has been performed in accordance with the methods outlined by the District’s utility manager. Screening tests for grease trap treatment products will be designed by the District’s utility manager, and the results of screening tests will be subject to technical review by the District’s utility manager. All costs of screening tests will be borne by the User regardless of whether the product is approved for use. If a product is approved for use, each User must obtain written permission from the District’s utility manager to use the product. The District’s utility manager may revoke permission to use such products when the effluent from the grease trap or basin in which the product is used fails to meet the requirements of these regulations.

Use of accepted grease trap treatment products will not relieve the User of minimum cleaning requirements set forth in these regulations.

Use of accepted grease trap treatment products may subject the User to monthly surcharge fees when such usage causes the effluent concentrations to exceed the definition of Normal Wastewater. Surcharge fees may be levied for BOD, COD, TSS, or ammonia.

Inspection and Cleaning Schedules.

Inspection, cleaning, and other necessary maintenance of grease traps, interceptors, separators, holding tanks, and other related facilities must be conducted as often as needed to assure that the discharge is in compliance with the provisions of these regulations, but in no event less than once per 90 days. In no case will accumulated grease, oil, or sand be allowed to occupy more than 25% percent of the capacity of the first stage.

The physical condition of the grease trap, interceptor, or separator (piping, internal walls, sidewalls, etc.) must be inspected by the User each time the facility is cleaned. Repairs, if needed, must be made prior to further use. Repairs or modifications must be approved by the plumbing inspector and must not be made without the appropriate governmental permits. Inspection must be conducted by the plumbing inspector after repair and prior to refilling or use. A copy of the inspection tag issued by the plumbing inspector must be maintained on-site by the User, and the User must send a separate copy to the District’s utility manager. Documentation of repairs must be submitted to the District’s utility manager within 30 days after the date of repair or earlier if specified in a notice of deficiency or other document issued by the District’s utility manager.

Grease traps, interceptors, and separators must produce an effluent in compliance with these regulations at the User’s pumping schedule. Schedules inadequate to produce compliant effluent must be upgraded as often as necessary, up to and including daily. Upgraded grease traps, separators, and interceptors must meet all requirements set forth in these regulations.

A User must have any grease trap, interceptor, or separator cleaned when directed to do so by the District’s utility manager. Failure to comply within 48 hours will be grounds for the District to perform the cleaning and to bill the User for all costs and expenses incurred by the District.

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Cleaning Schedule Extensions.

A User may apply for an extension of the cleaning schedule required by these regulations by submitting a written application to the District’s utility manager setting forth the following information:

The name and address of the facility;

Name and telephone number of the facility contact;

Normal business hours;

The type of business;

The type of treatment unit and the capacity, in gallons;

A brief description of the treatment unit;

The time(s) of day that the greatest hydraulic and organic loadings to the treatment unit normally occur;

The date of the most recent cleaning and inspection of the unit;

A statement of the physical condition of the unit;

A copy of the cleaning and maintenance records for the treatment unit for the previous 12 months;

When applicable, the name of any treatment products used and a copy of the District’s approval letter for the use of the product;

The date(s) that the User proposes to collect the samples;

The times that each sample will be collected;

The name, telephone number, and qualifications of the person who will collect the samples;

The name and telephone number of the laboratory that will analyze the samples; and

Any other information requested by the District’s utility manager.

The District’s utility manager must approve the proposed sampling schedule prior to initiation of the sampling and analyses. The User must certify that the sampling schedule will be carried out as submitted or as approved. The District’s utility manager may modify a sampling schedule as deemed necessary.

The User must provide analytical results for not less than four oil and grease analyses for samples collected during peak flow periods through the unit during the normal working hours of a 24-hour period. Samples must be collected at an approved sampling port and must be collected by a qualified person properly trained in the collection and handling of wastewater samples. Samples must be collected 70 to 75 days after the most recent cleaning. Samples must be analyzed, separately, by a reputable laboratory using approved analytical procedures. The User must submit a copy of the laboratory analytical reports, including quality control data and appropriate chains of custody. Incomplete or unverifiable results will not be considered.

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The District’s utility manager may grant a cleaning schedule extension on a case-by-case basis when the User has demonstrated, with defensible analytical results, the specific device will produce an effluent in consistent compliance with these regulations if the extension is granted. The following extensions may be granted:

A 30-day extension may be granted when the average oil and grease concentration of the analyses is less than 70% of the concentration limit and no single concentration exceeds 80% per cent of the concentration limit.

A 60-day extension may be granted when the average oil and grease concentration of the analyses is less than 55% of the concentration limit and no single concentration exceeds 65% per cent of the concentration limit.

A 90-day extension may be granted where the average oil and grease concentration of the analyses is less than 40% of the concentration limit and no single concentration exceeds 50% of the concentration limit.

In no case, will an extension greater than 90 days be granted.

Extensions granted will begin on the date that the samples for which results were submitted were collected, as documented on the chain of custody.

When an extension has been granted, the unit must consistently produce an effluent in compliance with the terms of these regulations. The District’s utility manager will have the right to collect and analyze samples of any User’s discharge and may revoke, without notice, any extension when appropriate for the proper operation of the POTW.

When an extension has been granted and the results of any sample analysis exceeds of the oil and grease limitation by 25% or more, the User must immediately clean and inspect the device and return to the original cleaning schedule.

When an extension has been granted and the results of any sample analysis exceeds of the oil and grease limitation by less than 25%, the User must immediately clean and inspect the device and increase the established cleaning frequency by at least 30 days.

When an extension has been granted and the District is required to clean associated public sewer lines and the stoppage is traceable to or known or suspected to be caused by the User’s facility, the User must immediately clean and inspect the trap and return to the original cleaning schedule.

V. SURCHARGE FOR EXTRA STRENGTH WASTEWATER.

A person discharging extra strength wastewater to the POTW must pay a monthly surcharge in addition to a usual monthly sewer service charge. The District’s utility manager will calculate the surcharge using cost factors based on the capital and operating cost of wastewater facilities necessary to treat extra strength wastewater to reduce excessive BOD, COD, and TSS, in accordance with the category formulas set out in this section.

Abbreviations and numeric values in this section mean:

S: surcharge in dollars that will appear on the customer’s monthly bills;

V: wastewater billed in millions of gallons during the billing period;

8.34: pounds per gallon of water;

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A: unit charge in dollars per pound of biochemical oxygen demand, as set forth in the District’s Rate Order;

BOD: biochemical oxygen demand strength in milligrams per liter by weight;

200 in the biochemical oxygen demand calculation in the biochemical oxygen demand formula means normal biochemical oxygen demand strength in milligrams per liter by weight;

B: unit charge in dollars per pound for suspended solids, as set forth in the District’s Rate Order;

SS: suspended solids concentration in milligrams per liter by weight;

200 in the suspended solids calculation in the biochemical oxygen demand and chemical oxygen demand formulas means normal suspended solids concentration in milligrams per liter by weight;

C: unit charge in dollars per pound for chemical oxygen demand, as set forth in the District’s Rate Order;

COD: chemical oxygen demand strength in milligrams per liter by weight; and

450: Normal chemical oxygen demand strength in milligrams per liter by weight.

The District’s utility manager will use the following BOD category formula to derive a surcharge for extra strength wastewater having a COD concentration of less than 2.25 times that of the BOD concentration: S = V x 8.34 (A [BOD - 200] + B [SS - 200]).

The District’s utility manager will use the following COD category formula to derive a surcharge for extra strength wastewater having a COD concentration of 2.25 or more times that of the BOD concentration: S = V x 8.34 (C [COD - 450] + B [SS - 200]).

The District’s utility manager may not assess a surcharge for one or more categories if the strength or concentration for BOD, TSS, or COD is lower than or equal to the normal strength wastewater for that category.

The District’s utility manager may periodically reevaluate a unit charge based on flow rate, BOD, COD, and TSS and adjust a surcharge to reflect an increase or decrease in wastewater treatment and other applicable costs.

The District’s utility manager may assess a surcharge against a person who discharges extra strength wastewater to the POTW based on the person’s site-specific wastewater discharge quality and quantity data, or a surcharge classification system.

A person discharging wastewater to the POTW must notify the District’s utility manager of major changes in operation that may affect the quantity or quality of wastewater discharged. If the person does not notify the District’s utility manager of a change that results in a lower surcharge, the District’s utility manager will base the surcharge on the data available to the District’s utility manager at the time the surcharge is billed.

A person who discharges waste with a concentration of one or more categories of BOD, COD, or TSS lower than or equal to normal strength wastewater is not entitled to credit for the total surcharge assessed by the District’s utility manager.

The District’s utility manager may periodically reevaluate flow rate, BOD, COD, or TSS data based on site-specific discharge data or a classification system and adjust a specific User’s surcharge to reflect any change in the discharge.

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EXHIBIT “A”

Wastewater Discharge Permit Application

Mail To: Crossroads Utility Services LLC 2601 Forest Creek Drive Round Rock, Texas 78665-1232

Business Name: Service Address: Mailing Address:

Operator Name:

Owner Name: Address:

Contact Person:

Phone#: Fax #:

Type of Business: (Restaurant, Laundry, Service Station, Garage, Office, Bakery, Photo Lab, Manufacturing, etc)

Waste Processes: (Equipment/Floor Washing, Cooling, Metal Finishing, X-Ray/Photo Waste, Utility Blowdown, etc.)

Major Chemicals Used: (Soaps, Detergents, Caustics, Solvents, Acids, Metal Salts, Cyanides, etc.)

Water Consumption (gallons/month): Estimate Actual

Wastewater Average (gallons/month) ): Estimate Actual

Please describe types of waste generated that are not discharged to the sanitary sewer, the amount generated, method of disposal, and location of disposal.

Waste generated Amount generated Method of disposal Location of disposal

Please provide a Responsible Corporate Officer, and/or the Duly Authorized Representative as designated signatory authority of the facility. This must be a person having legal responsibility for the overall operation of the discharging facility. The designated signatory shall be a person who is thoroughly familiar with the facts reported on this form and can be contacted by the District’s utility manager.

Responsible Corporate Officer:

Title:

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Address:

City: State: Zip:

Phone: Fax:

Duly Authorized Representative:

Title:

Address:

City: State: Zip:

Phone: Fax:

Certification Statement:

I certify, under penalty of law, that this document and all attachments were prepared under my direction or supervision in accordance with a system designed to assure that qualified personnel properly gathered and evaluated the information submitted, and is, to the best of my knowledge and belief, true, accurate, and complete. I am aware that there are significant penalties for submitting false information, including the possibility of fine and imprisonment for knowing violations.

Signed:

Name: Title:

Date:

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{W0895873.4} Exhibit “B” – Page 1 of 2

{W0895873.4} Exhibit “B” – Page 2 of 2

ORDER ADOPTING RULES AND PROCEDURES FOR ELECTRONIC BIDS FOR DISTRICT PROJECTS

THE STATE OF TEXAS § § COUNTY OF TRAVIS §

WHEREAS, Travis County Municipal Utility District No. 2 (the “District”) is a political subdivision of the State of Texas, created and operating under Chapters 49 and 54, Texas Water Code; and

WHEREAS, under Texas Water Code §49.273, the District is required to obtain bids for certain District projects; and

WHEREAS, Texas Water Code §49.2731 provides that the District is authorized to receive bids under Texas Water Code §49.273 through electronic means if the Board of Directors of the District (the “Board”) adopts rules to ensure: (i) the identification, security, and confidentiality of electronic bids; and (ii) that the electronic bids remain effectively unopened until the proper time; and

WHEREAS, the Board has determined that it would be beneficial to the District to have the ability to receive bids through electronic means and desires to adopt rules and procedures in accordance with Texas Water Code § 49.2731;

IT IS THEREFORE ORDERED BY THE BOARD AS FOLLOWS:

Section 1. Definitions.

a. “Bid” means any bid submitted to the District for a District Project (defined below) through any means, including Electronic Bids (defined below).

b. “Bidder” means any person or entity that submits a Bid to the District.

c. “Bidding Documents” means any advertisement, invitation, instructions, plans, specifications, reports, data, addenda, or any other documents prepared for prospective Bidders on a District Project.

d. “Bidding Statute” means Subchapter I of Chapter 49 of the Texas Water Code and any other provision of Chapter 49 of the Texas Water Code applicable to bids for District Projects.

e. “District Project” means any contract for the construction, repair, or renovation of District facilities or the purchase of equipment, materials, machinery, or other things that constitute or will constitute the plants, works, facilities, or improvements of the District for which bids are required under the Bidding Statute.

f. “District Representative” means the District engineer or the District engineer’s authorized designee.

g. “Electronic Bid” means any Bid received through electronic means.

h. “Order” means this Order Adopting Rules and Procedures for Electronic Bids for District Projects.

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i. “Rules” mean the rules and procedures for Electronic Bids set forth in this Order.

Section 2. Purpose; Intent. The purpose of these Rules is to ensure identification, security, and confidentiality of Electronic Bids; and ensure that Electronic Bids remain effectively unopened until the proper time. These Rules are intended to comply with the Bidding Statute and any other bidding and procurement requirements that may be applicable to the District.

Section 3. General Requirements.

a. Electronic Bids will only be permitted for District Projects for which the Board and/or the District Representative have agreed to accept Electronic Bids.

b. If Electronic Bids are permitted for a District Project, the Bidding Documents must be approved by the District Representative and must clearly establish that Electronic Bids will be allowed and state the procedure for submitting Electronic Bids, which must meet the minimum criteria set forth in Section 4 of this Order; and

c. Electronic Bids submitted for District Projects must comply with all of the requirements set forth in the Bidding Documents, the Rules set forth in this Order, the Bidding Statute, and any other requirements established by the District from time-to-time.

Section 4. Minimum Criteria for Submission of Electronic Bids. If Electronic Bids are permitted for a District Project, the procedure selected for submission of Electronic Bids must be approved by the District Representative and meet the following minimum criteria:

a. The procedure must provide a method to ensure identification of Electronic Bids by requiring Bidders to verify their identity and the validity of their Electronic Bids at the time of submission.

b. The procedure must provide for a way to ensure the security and confidentiality of Electronic Bids by requiring Electronic Bids to be submitted in a sealed format and stored in a manner that prevents tampering or modifications and ensures they remain effectively unopened until the date and time of Bid opening; provided, however, that Bidders may be permitted to modify or withdraw their own Electronic Bids in the same manner that all other Bids are permitted to be modified or withdrawn prior to the deadline for Bid submission.

c. The procedure must provide prompt written confirmation of the date and time of receipt of Electronic Bids to Bidders.

d. The procedure must provide that any Bidder that attempts to hack or tamper with Electronic Bids, the bidding system, or the bidding process will be immediately disqualified from submitting a Bid for the District Project and may potentially be disqualified from submitting Bids for all future District Projects.

e. The procedure must provide that Electronic Bids will be opened and read aloud in the same manner and fashion as any other Bids and that any non-conforming Electronic Bids will be rejected in the same manner as any other non-conforming Bids.

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f. The procedure must provide that, if conformity cannot be reasonably determined due to unreadable condition of an Electronic Bid, the Electronic Bid will be rejected as non-conforming unless the Bidder can provide clear and convincing evidence of the contents of the Electronic Bid and provide that the unreadable condition was due to an error or malfunction that was in no way caused by the Bidder.

g. The procedure must provide a method for resolving any other technological errors, malfunctions, or disputes that may arise with Electronic Bids.

Section 5. The officers and consultants of the District are authorized and directed to take all actions necessary or convenient to carry out the terms of this Order and the Rules.

Section 6. The Secretary of the Board is directed to file a copy of this Order in the official records of the District.

Section 7. This Order may be executed in one or more counterparts, each of which will be deemed an original and all of which together will constitute one and the same instrument. An electronic signature, a facsimile, or other electronic copy of an original signature, and a counterpart transmitted electronically (e.g., by fax, email, text, or similar means), will be deemed to be, and will have the same force and effect as, an original signature for all purposes.

(Signature page follows.)

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ADOPTED to be effective this 3rd day of June, 2020.

TRAVIS COUNTY MUNICIPAL UTILITY DISTRICT NO. 2

______Wilmer Roberts, President Board of Directors

ATTEST:

______Debora C. Pickens, Secretary Board of Directors

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DRAINAGE CHANNEL MAINTENANCE AGREEMENT

This DRAINAGE CHANNEL MAINTENANCE AGREEMENT (this “Agreement”) is entered into between TRAVIS COUNTY MUNICIPAL UTILITY DISTRICT NO. 2, a political subdivision of the State of Texas operating under Chapters 49 and 54 of the Texas Water Code (the “District”), and TEXASCAPES, INC., a Texas corporation (the “Contractor”), for the purposes and consideration hereinafter set forth.

RECITALS

The District previously engaged Contractor to provide drainage channel maintenance services to the District pursuant to a Drainage Channel Maintenance Agreement dated effective June 1, 2018 (the “2018 Agreement”). The primary term of the 2018 Agreement has expired, and the District and Contractor desire to renew the engagement of Contractor as the drainage channel maintenance contractor for the District.

1. Purpose of Agreement. The purpose of this Agreement is to state the terms and conditions upon which the Contractor will maintain the District’s drainage channel depicted on Exhibit “A” (the “Drainage Channel”) and the District will compensate the Contractor for those services.

2. Maintenance Services.

(a) The Contractor will perform the services described on Exhibit “B” (the “Services”) to the Drainage Channel for the compensation specified in Paragraph 4. As part of the Services:

(i) the Contractor will assure that grass growth against fences and other structures is trimmed on each service visit;

(ii) the Contractor will collect all debris resulting from its maintenance work and will remove and properly dispose of all litter and debris collected outside of the District following completion of work on each service visit; and

(iii) The Contractor will visually monitor the Drainage Channel on each service visit and report any unusual occurrences or observations to the District’s general manager.

(b) The Contractor will provide adequate reliable supervision to assure that all Services are performed in accordance with this Agreement and generally accepted good horticultural practice. The Drainage Channel must be inspected by the Contractor’s supervisory personnel on at least every other service visit.

(c) The Contractor will perform all work necessary to fulfill the intent of the Agreement. All work must be performed in a professional manner, noise kept to a minimum, and work staged from a location on the site so as to not interfere with traffic. Work around pedestrian areas must be performed with minimal interruption to people and with extreme care. The Contractor will maintain all equipment in excellent operating condition at all times. All OSHA safety devices must be in place and in

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operating condition. Gas cans must be OSHA-approved safety cans. Trucks, tractors, mowers, trimmers, blowers, and other equipment must not leak oil or fuel.

3. Reports. The Contractor will submit a written maintenance report, in a form acceptable to the District, for each month in which any work under this Agreement is performed. This report must include details on work performed; must notify the District if any dumping on the District’s property has been observed by the Contractor, including a map showing the location of the dumped material and the street addresses of the properties adjoining the affected area; and must notify the District of any non-routine maintenance, clean-up or other work not covered by this Agreement that the Contractor recommends and include information on any other observations made by the Contractor during the course of its maintenance work.

4. Compensation. Unless otherwise agreed by the District due to unusual weather or growing conditions, the Services will be performed for a fee of $850 per month. The Contractor’s invoice, together with the required maintenance report and an MS4 tally of litter and debris removal, will be submitted to the District by the fifteenth day of the month following the month in which services were performed. If the invoice is in order, the District will pay the Contractor within ten days after the first regular monthly Board meeting following receipt of the invoice. The Contractor understands that the District’s Board of Directors (the “Board”) customarily meets every-other-month. The Contractor will submit invoices to the District’s bookkeeper at the address specified on the signature page below.

5. Other Services. All work outside the express terms of this Agreement must the approved, in writing, by the Board prior to commencement of the work. The District may elect to have additional service visits performed for the same fee specified in Paragraph 4.

6. Independent Contractor. The Contractor is being retained as an independent contractor and not as an employee. The Contractor agrees it will be responsible for collecting and remitting to the federal, state and local authorities all applicable FICA and income tax withholdings, if any, based upon sums paid to it by the District.

7. Compliance with Applicable Laws. The Contractor will comply with all applicable federal, state, county, and local laws, ordinances, rules, and regulations in performing all Services.

8. Insurance. Upon the full execution of this Agreement and prior to providing any Services, the Contractor must furnish the District certificates of insurance and policies, including all endorsements, on forms acceptable to the District, confirming the following insurance coverage in at least the amounts set forth below:

1. Workers Compensation/ Statutory amounts Employer’s Liability as prescribed by law

2. Commercial General Liability $1,000,000 (per occurrence) (occurrence basis), which policy $2,000,000 (aggregate) must be on a current edition of ISO form CG 00 01 12 07 or equivalent, must not include an endorsement excluding the sole negligence of the District from the definition of “insured contract”, but must include coverage for products/completed

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operations in the amount of: $2,000,000 (aggregate)

3. Vehicle Liability (occurrence basis), $1,000,000 (each accident) which policy must include liability arising out of operation of owned, hired, and non-owned vehicles

4. Excess/Umbrella Liability (above the $3,000,000 (per occurrence) actual amounts carried by the Contractor for the policies described in (1) (with respect to Employer’s Liability), (2), and (3) above)

5. Other As required by the Texas Department of Agriculture

Policy endorsements and certificates of insurance, naming the District as an additional insured under all insurance policies other than the Workers Compensation policy, must be furnished to the District contemporaneously with the Contractor’s execution of this Agreement and thereafter promptly upon each annual renewal and/or the District’s request. Each policy of insurance must provide, in the body of the policy or in an endorsement, that the District will be notified in writing (i) at least 30 days prior to any cancellation/termination (other than for non-payment of premium), change, or non-renewal; and (ii) at least ten days prior to any cancellation/termination for non-payment of premium. Each policy must be maintained in force throughout the term of this Agreement, must be written by insurance companies that are authorized to sell insurance where work is being performed and have an A.M. Best’s rating of B++ VII or better, and must provide that they are primary and noncontributory over any insurance that may be carried by the District.

None of the requirements of this Agreement with regard to insurance will limit, qualify, or quantify the obligations and liabilities of the Contractor under this Agreement or with respect to the services provided by the Contractor under this Agreement.

9. Indemnity. AS A MATERIAL PART OF THE CONSIDERATION FOR THIS AGREEMENT, THE CONTRACTOR AGREES TO WHOLLY INDEMNIFY, DEFEND, AND HOLD HARMLESS THE DISTRICT AND ITS DIRECTORS, OFFICERS, AND AGENTS FROM ALL CLAIMS, LOSSES, EXPENSES, AND LIABILITIES, INCLUDING COSTS, LITIGATION EXPENSES, AND ATTORNEYS’ FEES (COLLECTIVELY, “LOSSES”), ARISING FROM OR RELATING TO THE SERVICES TO BE PERFORMED BY THE CONTRACTOR UNDER THIS AGREEMENT, INCLUDING LOSSES ARISING OUT OF OR RELATING TO DAMAGE TO PROPERTY, INJURY TO OR DEATH OF PERSONS (INCLUDING THE PROPERTY AND PERSONS OF THE PARTIES AND THEIR AGENTS, SERVANTS, CONTRACTORS, AND EMPLOYEES), LOSS OF USE OF PROPERTY, LOSS OF REVENUE, ECONOMIC OR OTHER LOSSES. THE OBLIGATIONS IN THIS PARAGRAPH (A) APPLY WHETHER ALLEGED OR ACTUAL NEGLIGENT OR GROSS NEGLIGENT ACTS OR OMISSIONS OR OTHER FAULT OF THE DISTRICT CAUSED THE LOSS IN WHOLE OR IN PART; PROVIDED HOWEVER, IN THE EVENT OF ANY JOINT OR CONCURRENT LIABILITY BETWEEN THE DISTRICT AND THE DEVELOPER, THE DEVELOPER’S OBLIGATIONS HEREIN WILL BE REDUCED BY THE PERCENTAGE OF NEGLIGENCE OR FAULT APPORTIONED TO THE DISTRICT; AND (B) INCLUDE WITHOUT LIMITATION, CLAIMS BY THE

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DEVELOPER’S EMPLOYEES AGAINST THE DISTRICT.

10. Term; Termination.

(a) Subject to earlier termination as provided in subparagraph (b), the term of this Agreement will be a period of three years (the “Term”) commencing on June 3, 2020 (the “Effective Date”).

(b) The Contractor may terminate this Agreement by giving 90 days’ prior written notice to the District. The District may terminate this Agreement at any time by giving 30 days’ notice of termination to the Contractor.

11. Other Provisions.

(a) This Agreement will be construed under and in accordance with the laws of the State of Texas. All obligations of the parties created hereunder are performable in Travis County, Texas.

(b) This Agreement may not be assigned by either party without the prior, written approval of the other party. The use of any subcontractor by the Contractor will be subject to the prior approval of the Board, which may be withheld for any reason or no reason.

(c) This Agreement will be binding upon and inure to the benefit of the parties and to their respective successors and permitted assigns.

(d) If any provision of this Agreement is, for any reason, held to be invalid, legal, or unenforceable, that invalidity, illegality, or unenforceability will not affect any other provision hereof and this Agreement will be construed as if the invalid, illegal, or unenforceable provision was never contained herein.

(e) This Agreement constitutes the sole and only agreement of the parties and supersedes any prior understandings or written or oral agreement between the parties regarding the subject matter hereof, including the 2018 Agreement. No alteration, amendment, change, deletion, or addition to this Agreement will be binding unless it is in writing and signed by both the District and the Contractor.

(f) Any notice or communication given under this Agreement (“Notice”) must be in writing. Notice maybe given: (i) by depositing the Notice in the United States Mail, postage paid, certified, and addressed to the party to be notified with return receipt requested; or (ii) by delivering the Notice to the party, or an agent of the party. Notice deposited in the mail in the manner specified will be effective three days after deposit. Notice given in any other manner will be effective only if and when received by the party to be notified. For the purposes of Notice, the addresses of the parties will, until changed by Notice given as provided in this subparagraph, be as specified on the attached signature pages.

(g) Contractor acknowledges that Texas Government Code Section 2252.908, as amended (“Section 2252.908”) requires disclosure of certain matters by contractors entering into a contract with a local government entity such as the District. Contractor confirms that it has reviewed Section 2252.908 and, if required to do so, will (1) complete a Form 1295, using the unique identification number specified on page 1 of the

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Contract, and electronically file it with the Texas Ethics Commission (“TEC”); and (2) submit the signed Form 1295, including the certification of filing number of the Form 1295 with the TEC, to the District at the same time the Contractor executes and submits the Contract to the District. Form 1295s are available on the TEC’s website at https://www.ethics.state.tx.us/filinginfo/1295/. The Contract is not effective until the requirements listed above are satisfied and any approval or award of the Contract by the District is expressly made contingent upon Contractor’s compliance with these requirements. The Contractor and the District agree that the signed Form 1295 may be submitted to the District in an electronic format.

(h) Contractor acknowledges that Texas Local Government Code Chapter 176, as amended (“Chapter 176”) requires the disclosure of certain matters by contractors doing business with or proposing to do business with local government entities such as the District. Contractor confirms that it has reviewed Chapter 176 and, if required to do so, will complete and return Form CIQ promulgated by the TEC, which is available on the TEC’s website at https://www.ethics.state.tx.us/forms/conflict/, within seven days of the date of submitting the Contract to the District or within seven days of becoming aware of a matter that requires disclosure under Chapter 176, whichever is applicable.

(i) If required under Chapter 2271 of the Texas Government Code, as amended, Contractor represents and warrants that, at the time of execution and delivery of the Contract, neither Contractor, nor any wholly owned subsidiary, majority-owned subsidiary, parent company, or affiliate of the same that exists to make a profit, if any, boycotts Israel or will boycott Israel during the term of the Contract. The foregoing verification is made solely to comply with Section 2271.002, Texas Government Code, as amended, and to the extent such Section does not contravene applicable Federal law. As used in the foregoing verification, “boycotts Israel” and “boycott Israel” means refusing to deal with, terminating business activities with, or otherwise taking any action that is intended to penalize, inflict economic harm on, or limit commercial relations specifically with Israel, or with a person or entity doing business in Israel or in an Israeli-controlled territory, but does not include an action made for ordinary business purposes. Contractor understands "affiliate" to mean an entity that controls, is controlled by, or is under common control with Contractor.

(j) If required under Chapter 2252 of the Texas Government Code, as amended, Contractor represents and warrants that, neither Contractor, nor any wholly owned subsidiary, majority-owned subsidiary, parent company, or affiliate of the same that exists to make a profit, if any, are companies identified on a list prepared and maintained by the Texas Comptroller of Public Accounts under Sections 2252.153 or 2270.0201, Texas Government Code, as amended, and posted on the following pages of the Texas Comptroller of Public Account’s internet website: https://comptroller.texas.gov/purchasing/docs/sudan-list.pdf, https://comptroller.texas.gov/purchasing/docs/iran-list.pdf, https://comptroller.texas.gov/purchasing/docs/fto-list.pdf. The foregoing representation is made solely to comply with Section 2252.152, Texas Government Code, as amended, and to the extent such Section does not contravene applicable Federal law and excludes Contractor and each parent company, wholly- or majority-owned subsidiaries, and other affiliates of the same that exist to make a profit, if any, that the United States government has affirmatively declared to be excluded from its federal sanctions regime relating to Sudan, Iran or a foreign terrorist organization. Contractor understands "affiliate" to mean any entity that controls, is controlled by, or is under common control with Contractor.

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(k) This Agreement may be executed in one or more counterparts, each of which will be deemed an original and all of which together will constitute one and the same instrument. An electronic signature, a facsimile, or other electronic copy of an original signature, and a counterpart transmitted electronically (e.g., by fax, email, text, or similar means), will be deemed to be, and will have the same force and effect as, an original signature for all purposes..

* * *

EXECUTED on the date or dates indicated below, to be effective as of the Effective Date.

[SIGNATURE PAGE FOLLOWS]

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COUNTERPART SIGNATURE PAGE TO

DRAINAGE CHANNEL MAINTENANCE AGREEMENT

DISTRICT:

TRAVIS COUNTY MUNICIPAL UTILITY DISTRICT NO. 2

By: Wilmer Roberts, President Board of Directors

06/11/2020 Date:

Address for Notice:

c/o Dennis Hendrix Crossroads Utility Services, LLC 2601 Forest Creek Drive Round Rock, Texas 78665 Phone: (512) 246-5921 Fax: (512) 246-1900

With required copy to:

c/o John W. Bartram Armbrust & Brown, PLLC 100 Congress Avenue, Suite 1300 Austin, Texas 78701 Phone: (512) 435-2319 Fax: (512) 435-2360

Please submit invoices to: c/o Bott & Douthitt P.O. Box 2445 Round Rock, Texas 78681

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EXHIBIT “A”

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EXHIBIT “B”

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SCHEDULE OF EVENTS

Travis County Municipal Utility District No. 2 $5,000,000 UNLIMITED TAX BONDS, SERIES 2020A

June July S M T W T F S S M T W T F S 1 2 3 4 5 6 1 2 3 4 7 8 9 10 11 12 13 5 6 7 8 9 10 11 14 15 16 17 18 19 20 12 13 14 15 16 17 18 21 22 23 24 25 26 27 19 20 21 22 23 24 25 28 29 30 26 27 28 29 30 31

August September S M T W T F S S M T W T F S 1 1 2 3 4 5 2 3 4 5 6 7 8 6 7 8 9 10 11 12 9 10 11 12 13 14 15 13 14 15 16 17 18 19 16 17 18 19 20 21 22 20 21 22 23 24 25 26 23 24 25 26 27 28 29 27 28 29 30 30 31 Financing Team

Issuer: Travis County MUD No. 2 DISTRICT General Counsel: Armbrust & Brown PLLC AB Bond Counsel: McCall, Parkhurst & Horton LLP MPH Financial Advisor: Public Finance Group LLC PFG Engineer Schroeder Engineering, Inc. SE Bookkeeper: Bott & Douthitt BD Auditor: McCall Gibson Swedlund Barfoot PLLC MGSB Paying Agent: UMB UMB

Responsible Date Action Party 3/16/2020 Bond Application submitted to Texas Commission on Environmental Quality SE ("TCEQ")

5/12/2020 First Draft of Notice of Sale and Preliminary Official Statement ("Offering Documents") PFG distributed to General Counsel, Bond Counsel, Engineer, Bookkeeper, Auditor, and Paying Agent ("District Staff") and Developer for comment

5/26/2020 PFG receives comments on the First Draft of the Offering Documents District Staff

6/3/2020 Board of Directors Regular Meeting to: District Staff Consideration and action with respect to Resolution Approving Preliminary Official Statement; Authorizing Distribution of Preliminary Official Statement and Publication of a Notice to Sale of Bonds; Engagement of Auditor for Reimbursement Audit related to bond issue. Consideration and action with respect to Resolution Requesting Estimated Assessed Valuation as of July 1, 2020; Authorize Financial Advisor to apply for municipal bond rating (investment grade rating and fees) and municipal bond insurance;

6/4/2020 Second Draft of Offering Documents distributed to District Staff PFG

6/11/2020 PFG receives comments on Second Draft of Offering Documents District Staff

6/16/2020 TCEQ distributes Staff Memorandum TCEQ 6/24/2020 TCEQ distributes Order approving issuance of the Bonds TCEQ

7/1/2020 Board of Directors Regular Meeting District Staff

7/1/2020 Third Draft of the Offering Documents sent to District Staff and Developer PFG

7/1/2020 Estimated Assessed Valuation as of 7/1/2020 requested from TCAD PFG

*7/2/2020* Due Diligence Meeting (or Conference Call) w/Bond Counsel and Developer MPH

7/8/2020 PFG receives comments on Third Draft of Offering Document District Staff

7/8/2020 Estimated Assessed Valuation as of 7/1/2020 received from TCAD PFG

7/10/2020 Informationn sent to Moody's Investors Services & Municipal Bond Insurance PFG companies to apply for municipal bond rating(s) and to apply for municipal bond insurance on the Bonds

7/16/2020 Final Draft of Offering Documents distributed to District Staff PFG

7/22/2020 Publications of advertisement of sale of Bonds for Texas Bond Reporter and MPH newspaper of major circulation in the district

7/23/2020 PFG receives comments on the Final Draft of the Offering Documents District Staff

7/24/2020 PFG receives municipal bond rating(s) & municipal bond insurance information

*7/24/2020* 30 day TCEQ Appeal Period Expires TCEQ

7/27/2020 Offering Documents electronically posted to PFG website PFG

8/3/2020 Developer reimbursement documentation provided to MLR Developer

8/4/2020 Marketing phone calls made to potential bond buyers PFG

8/5/2020 Board of Directors Meeting to: District Receive bids on $12,000,000 Unlimited Tax Bonds, Series 2020 Consider taking any necessary action regarding Order Authorizing the Issuance of Travis County Municipal Utility District No. 2 $5,000,000 Unlimited Tax Bonds, Series 2020A; Levying an Ad Valorem Tax in support of the Bonds; Approving an Official Statement; Authorizing the Execution of a Paying Agent/Registrar Agreement; Awarding the Sale of Bonds; and authorizing other matters related to the issuance of Unlimited Tax Bonds, Series 2020A.

8/6/2020 Draft copy of Final Official Statement ("OS") distributed to District Staff PFG

8/10/2020 Transcript of Proceedings filed with Attorney General MPH

8/11/2020 PFG receives comments on OS District Staff

8/12/2020 Closing Memorandum information (invoices and wiring instructions) requested from Consultants and Developers

8/14/2020 OS delivered to Initial Purchaser PFG

8/19/2020 PFG receives Closing Memo information from District Staff and Developers District Staff

8/20/2020 Closing Memorandum Draft distributed to District Staff and Developers for review PFG and comment 8/25/2020 PFG receives final comments on Closing Memorandum District Staff

8/26/2020 Attorney General approves issuance of Bonds MPH

9/2/2020 Closing: MPH Funds available to District; Bonds delivered to Initial Purchaser;

9/2/2020 Board of Directors Meeting to: District Board approves Developer Reimbursement Report; Board of Directors authorizes District consultants to make wire transfers from bond proceeds in accordance with Developer Reimbursement Report PRELIMINARY OFFICIAL STATEMENT DATED MAY 12, 2020

NEW ISSUE -BOOK-ENTRY-ONLY Ratings: Moody’s Underlying “____” See “MUNICIPAL BOND RATING AND BOND INSURANCE”

In the opinion of McCall, Parkhurst & Horton L.L.P., Bond Counsel to the District, to the effect that interest on the Bonds is excludable from gross income for federal income tax purposes under existing statutes, regulations, published rulings and court decisions existing on the date thereof of such opinion, subject to the matters described under “TAX MATTERS.”

THE DISTRICT IS EXPECTED TO DESIGNATE THE BONDS AS QUALIFIED TAX-EXEMPT OBLIGATIONS. See “TAX MATTERS - Qualified Tax-Exempt Obligations for Financial Institutions” herein.

$5,000,000 TRAVIS COUNTY MUNICIPAL UTILITY DISTRICT NO. 2 (A Political Subdivision of the State of Texas Located in Travis County, Texas) UNLIMITED TAX BONDS, SERIES 2020A

Dated: September 2, 2020 Due: September 1, as shown on the inside cover page

Interest on the $5,000,000 “Travis County Municipal Utility District No. 2 (the “District”) Unlimited Tax Bonds, Series 2020A” (the “Bonds”) will accrue from the Date of Initial Delivery (defined below), and is payable March 1, 2021 and each September 1 and March 1 thereafter until the earlier of maturity or redemption, and will be calculated on the basis of a 360-day year composed of twelve 30-day months. The Bonds will be issued in fully registered form only, without coupons, in denominations of $5,000 or any integral multiple thereof, and when issued, will be registered in the name of Cede & Co., as registered owner and nominee for The Depository Trust Company (“DTC”), New York, New York, acting as securities depository for the Bonds until DTC resigns or is discharged. The Bonds initially will be available to purchasers in

ities may not be sold nor may offers to buy be accepted prior to the time the Official Statement Statement the Official time to the prior accepted buy be to nor be offers may not sold may ities book-entry form only. So long as Cede & Co., as the nominee of DTC, is the registered owner of the Bonds, principal of and interest on the

solicitation of an offer to buy nor shall there be any sale of these securities in any jurisdiction in in jurisdiction any in securities these of sale any be there shall nor buy to offer an of solicitation Bonds will be payable by the paying agent to DTC, which will be solely responsible for making such payment to the beneficial owners of the Bonds. The initial paying agent/registrar for the Bonds is UMB Bank, N.A., Austin, Texas (the “Paying Agent” or “Paying Agent/Registrar”). The Bonds are obligations solely of the District and are not obligations of the City of Manor, Texas; Travis County, Texas; the State of Texas; or any entity other than the District.

The District has made an application for an insurance policy insuring the timely payment of the principal of and interest on the Bonds. The purchase of municipal bond insurance, if available, will be at the option and expense of the initial purchaser of the Bonds (the “Initial Purchaser”). See “MUNICIPAL BOND RATING AND INSURANCE.”

MATURITY SCHEDULE, INTEREST RATES, INITIAL YIELDS, REDEMPTION PROVISIONS AND CUSIP NUMBERS (see inside cover page)

or qualification under the securities laws of any such jurisdiction. such any of laws securities the under qualification or The Bonds, when issued, will constitute valid and legally binding obligations of the District and will be payable solely from the proceeds of an annual ad valorem tax, without legal limitation as to rate or amount, levied against all taxable property within the District. See “THE BONDS - Source of and Security for Payment.” This cover page contains information for quick reference only and is not a summary of the Bonds. Potential investors must read this entire Official Statement to obtain information essential to making an informed investment decision. INVESTMENT IN THE BONDS IS SUBJECT TO CERTAIN INVESTMENT CONSIDERATIONS DESCRIBED HEREIN. See “INVESTMENT CONSIDERATIONS.”

The Bonds are offered by the initial purchaser (the “Initial Purchaser”) subject to prior sale, when, as and if issued by the District and accepted by the Initial Purchaser, subject, among other things to the approval of the initial Bond by the Attorney General of Texas and the approval of certain legal matters by McCall, Parkhurst & Horton L.L.P., Austin, Texas, Bond Counsel to the District. Delivery of the Bonds is expected through the facilities of DTC on or about September 2, 2020 (the “Date of Initial Delivery”) in Austin, Texas.

BIDS DUE: WEDNESDAY, AUGUST 5, 2020 BY 10:00 A.M., C.D.T. AT 900 SOUTH CAPITAL OF TEXAS HIGHWAY, on or sale would be unlawful prior to registration to prior unlawful be would sale on or BUILDING IV, SUITE 475, WEST LAKE HILLS, TEXAS 78746 AWARD EXPECTED: 12:00 P.M., C.D.T.

delivered in final form. Underno circumstance shall this Preliminary Official Statement constitute an offer to sell or the This Preliminary Official Statement and the information contained herein are subject to completion or amendment. These secur These amendment. or to completion subject are herein contained and information the Statement Official Preliminary This is which such offer, solicitati

MATURITIES (Due September 1)

CUSIP Prefix: 89439D Initial Initial Principal Interest Reoffering CUS IP Principal Interest Reoffering CUS IP Due Amount Rate (a) Yield (b) Suffix (c) Due Amount Rate (a) Yield (b) Suffix (c) 2021 $ 45,000 ______% ______% ______2031 * $ 185,000 ______% ______% ______2022 45,000 ______% ______% ______2032 * 190,000 ______% ______% ______2023 50,000 ______% ______% ______2033 * 195,000 ______% ______% ______2024 50,000 ______% ______% ______2034 * 205,000 ______% ______% ______2025 50,000 ______% ______% ______2035 * 210,000 ______% ______% ______2026 * 55,000 ______% ______% ______2036 * 220,000 ______% ______% ______2027 * 55,000 ______% ______% ______2037 * 230,000 ______% ______% ______2028 * 65,000 ______% ______% ______2038 * 1,455,000 ______% ______% ______2029 * 75,000 ______% ______% ______2039 * 1,515,000 ______% ______% ______2030 * 105,000 ______% ______% ______

______* Redemption Provisions: The District reserves the right to redeem, prior to maturity, in integral multiples of $5,000, those Bonds maturing on and after September 1, 2026, in whole or from time to time in part, on September 1, 2025, or on any date thereafter at a price of par plus accrued interest from the most recent interest payment date to the date fixed for redemption. The Bonds may also be subject to mandatory sinking fund redemption if certain maturities of the Bonds are designated as term bonds (the “Term Bonds”) by the Initial Purchaser of the Bonds. See "THE BONDS - Redemption." (a) After requesting competitive bids for purchase of the Bonds, the District has accepted the lowest bid to purchase the Bonds, bearing interest as shown, at a price of ______% of par, resulting in a net effective interest rate to the District of ______%. (b) The initial reoffering yields indicated represent the lower of the yields resulting when priced to maturity or the first redemption date. The initial yields at which the Bonds will be priced will be established by and will be the sole responsibility of the Initial Purchaser. The yields may be changed at any time at the discretion of the Initial Purchaser. (c) CUSIP is a registered trademark of the American Bankers Association. CUSIP data herein is provided by CUSIP Global Services, managed by S&P Global Market Intelligence on behalf of The American Bankers Association. This data is not intended to create a database and does not serve in any way as a substitute for the CUSIP Services provided by CUSIP Global Services. None of the Initial Purchaser, the District, or the Financial Advisor is responsible for the selection or correctness of the CUSIP numbers set forth herein. The CUSIP number for a specific maturity is subject to being changed after the issuance of the Bonds as a result of various subsequent actions including, but not limited to, a refunding in whole or in part as a result of the procurement of secondary market portfolio insurance or other similar enhancements by investors that is applicable to all or a portion of certain maturities of the Bonds.

2 TABLE OF CONTENTS USE OF INFORMATION IN OFFICIAL STATEMENT ...... 4 Commercial Development ...... 36 SALE AND DISTRIBUTION OF THE BONDS ...... 4 Utility Development Agreements ...... 36 Award of the Bonds ...... 4 Agricultural Value Waiver ...... 37 Prices and Marketability ...... 4 THE SYSTEM ...... 37 Securities Laws ...... 5 Regulation ...... 37 MUNICIPAL BOND RATING AND INSURANCE...... 5 Water Supply and Distribution ...... 37 OFFICIAL STATEMENT SUMMARY ...... 6 Wastewater Collection and Treatment ...... 38 THE DISTRICT ...... 6 Drainage System ...... 38 THE BONDS ...... 7 100-Year Flood Plain ...... 39 INVESTMENT CONSIDERATIONS...... 8 Water and Wastewater Operations - Rate and Fee Schedule - Table 1 SELECTED FINANCIAL INFORMATION ...... 9 ...... 39 OFFICIAL STATEMENT ...... 11 Operating Revenues and Expenses Statement - Table 2 ...... 40 INTRODUCTION ...... 11 PROJECTED DEBT SERVICE REQUIREMENTS – TABLE 3 ...... 41 THE BONDS ...... 11 FINANCIAL STATEMENT...... 42 General Description ...... 11 Assessed Value – Table 4 ...... 42 Redemption ...... 11 Unlimited Tax Bonds Authorized but Unissued - Table 5 ...... 42 Selection of Bonds for Redemption ...... 12 Outstanding Bonds - Table 6 ...... 43 DTC Redemption Provision ...... 12 Cash and Investment Balances - Table 7 ...... 43 Termination of Book-Entry-Only System...... 12 Investment Authority and Investment Practices of the District ...... 43 Authority for Issuance ...... 13 Current Investments - Table 8 ...... 45 Source of and Security for Payment ...... 13 Estimated Overlapping Debt Statement...... 45 Payment Record ...... 14 Overlapping Taxes for 2019 ...... 46 Flow of Funds ...... 14 TAX DATA ...... 46 Paying Agent/Registrar ...... 14 Classification of Assessed Valuation - Table 9 ...... 46 Defeasance of Outstanding Bonds ...... 15 Tax Collections - Table 10 ...... 47 Record Date...... 16 District Tax Rates - Table 11 ...... 47 Issuance of Additional Debt...... 16 Tax Rate Limitation ...... 47 Legal Investment and Eligibility to Secure Public Funds in Texas....16 Maintenance Tax ...... 47 Specific Tax Covenants ...... 16 Principal Taxpayers - Table 12 ...... 48 Additional Covenants ...... 16 Tax Adequacy for Debt Service ...... 48 Remedies in Event of Default ...... 16 Debt Service Fund Management Index ...... 49 Consolidation ...... 17 TAXING PROCEDURES ...... 49 Annexation ...... 17 Authority to Levy Taxes ...... 49 Alteration of Boundaries ...... 17 Property Tax Code and County Wide Appraisal District ...... 49 Approval of the Bonds ...... 17 Property Subject to Taxation by the District ...... 49 Amendments to the Bond Order ...... 18 Valuation of Property for Taxation ...... 50 BOOK-ENTRY-ONLY SYSTEM ...... 18 District and Taxpayer Remedies ...... 50 USE AND DISTRIBUTION OF BOND PROCEEDS...... 20 Levy and Collection of Taxes ...... 51 INVESTMENT CONSIDERATIONS...... 21 Rollback of Operation and Maintenance Tax Rate ...... 51 General ...... 21 District's Rights In The Event Of Tax Delinquencies...... 52 Infectious Disease Outlook (COVID-19)...... 21 Effect of FIRREA on Tax Collections ...... 52 No Certainty of a Secondary Market ...... 21 LEGAL MATTERS ...... 52 Factors Affecting Taxable Values and Tax Payments ...... 21 Legal Opinions ...... 52 Tax Collections and Foreclosure Remedies ...... 23 No-Litigation Certificate ...... 53 Bond Insurance Risks ...... 23 No Material Adverse Change ...... 53 Registered Owners' Remedies ...... 24 TAX MATTERS ...... 53 Marketability ...... 24 Opinion ...... 53 Bankruptcy Limitation to Registered Owners' Rights...... 24 Federal Income Tax Accounting Treatment of Original Issue The Effect of the Financial Institutions Act of 1989 on Tax Discount ...... 53 Collections of the District ...... 24 Collateral Federal Income Tax Consequences ...... 54 Continuing Compliance with Certain Covenants ...... 25 State, Local and Foreign Taxes ...... 54 Future Debt ...... 25 Information Reporting and Backup Withholding ...... 55 Governmental Approval ...... 25 Qualified Tax-Exempt Obligations for Financial Institutions ...... 55 No Requirement to Build on Developed Lots ...... 25 CONTINUING DISCLOSURE OF INFORMATION ...... 55 Forward-Looking Statements ...... 25 Annual Reports ...... 55 Environmental Regulation ...... 26 Notice of Certain Events ...... 55 Future and Proposed Legislation ...... 27 Availability of Information from the MSRB ...... 56 Storm Water ...... 27 Limitations and Amendments ...... 56 THE MASTER DISTRICT ...... 27 Compliance with Prior Undertakings ...... 56 General ...... 27 FINANCIAL ADVISOR ...... 56 Master District Service Area ...... 28 OFFICIAL STATEMENT ...... 57 Contract Tax Bonds ...... 28 Preparation ...... 57 Operation and Maintenance Expenses ...... 29 Consultants ...... 57 LOCATION MAP ...... 30 Updating the Official Statement during Underwriting Period ...... 57 THE DISTRICT ...... 31 Certification as to Official Statement ...... 57 General ...... 31 Official Statement "Deemed Final" ...... 58 Management ...... 31 Annual Audits...... 58 Location ...... 32 PHOTOGRAPHS Historical Development...... 32 APPENDIX A –Audited Financial Statements of the District for the Current Status of Development ...... 33 Fiscal Year Ended September 30, 2019 Future Development ...... 34 APPENDIX B – Form of Bond Counsel Opinion Manor Agreement ...... 35 THE DEVELOPER ...... 35 APPENDIX C - Role of Developer ...... 35 Description of the Developer ...... 36 Current Development ...... 36 Homebuilders within the District ...... 36

3 USE OF INFORMATION IN OFFICIAL STATEMENT

For purposes of compliance with Rule 15c2-12 of the United States Securities and Exchange Commission (the “Rule”), this document constitutes a preliminary official statement of the District with respect to the Bonds that has been “deemed final” by the District as of its date except for the omission of the information permitted by the Rule.

No dealer, broker, salesman or other person has been authorized to give any information or to make any representations other than those contained in this Official Statement, and if given or made, such other information or representations must not be relied upon as having been authorized by the District.

This Official Statement does not alone constitute, and is not authorized by the District for use in connection with, an offer to sell or the solicitation of any offer to buy in any state in which such offer or solicitation is not authorized or in which the person making such offer or solicitation is not qualified to do so or to any person to whom it is unlawful to make such offer or solicitation.

The information set forth herein has been obtained from the District and other sources believed to be reliable, but such information is not guaranteed as to accuracy or completeness and is not to be construed as the promise or guarantee of the Financial Advisor. This Official Statement contains, in part, estimates and matters of opinion which are not intended as statements of fact, and no representation is made as to the correctness of such estimates and opinion, or that they will be realized.

Any references to website addresses presented herein are for informational purposes only and may be in the form of a hyperlink solely for the reader’s convenience. Unless specified otherwise, such websites and the information or links contained therein are not incorporated into, and are not part of, this Official Statement.

All of the summaries of the statutes, orders, contracts, records, and engineering and other related reports set forth in the Official Statement are made subject to all of the provisions of such documents. These summaries do not purport to be complete statements of such provisions, and reference is made to such documents, copies of which are available from the Financial Advisor, for further information.

This Official Statement contains, in part, estimates, assumptions and matters of opinion which are not intended as statements of fact, and no representation is made as to the correctness of such estimates, assumptions, or matters of opinion, or as to the likelihood that they will be realized. Any information and expressions of opinion herein contained 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 District or the other matters described herein since the date hereof. However, the District has agreed to keep this "Official Statement" current by amendment or sticker to reflect material changes in the affairs of the District, to the extent that information actually comes to its attention, until delivery of the Bonds to the Initial Purchaser and thereafter only as specified in “OFFICIAL STATEMENT - Updating the Official Statement During Underwriting Period” and “CONTINUING DISCLOSURE OF INFORMATION.”

NEITHER THE DISTRICT NOR THE FINANCIAL ADVISOR MAKES ANY REPRESENTATION OR WARRANTY WITH RESPECT TO THE INFORMATION CONTAINED IN THIS PRELIMINARY OFFICIAL STATEMENT REGARDING THE DEPOSITORY TRUST COMPANY OR ITS BOOK-ENTRY-ONLY SYSTEM.

THE CONTENTS OF THIS OFFICIAL STATEMENT ARE NOT TO BE CONSTRUED AS LEGAL, BUSINESS, OR TAX ADVICE, AND PROSPECTIVE INVESTORS SHOULD CONSULT THEIR OWN ATTORNEYS AND BUSINESS AND TAX ADVISORS.

SALE AND DISTRIBUTION OF THE BONDS

Award of the Bonds

After requesting competitive bids for the Bonds, the District has accepted the bid of ______(the “Initial Purchaser”) to purchase the Bonds at the interest rates shown on the inside cover page of this Official Statement at a price of _____% of par. No assurance can be given that any trading market will be developed for the Bonds after their sale by the District to the Initial Purchaser. The District has no control over the price at which the Bonds are subsequently sold, and the initial yields at which the Bonds are priced and reoffered are established by and are the sole responsibility of the Initial Purchaser.

Prices and Marketability

The delivery of the Bonds is conditioned upon the receipt by the District of a certificate executed and delivered by the Initial Purchaser on or before the date of initial delivery of the Bonds stating the prices at which a substantial amount of the Bonds of each maturity has been sold to the public. For this purpose, the term "public" shall not include any person who is a bond house, broker or similar person acting in the capacity of underwriter or wholesaler. Otherwise, the District has no understanding with the Initial Purchaser regarding the reoffering yields or prices of the Bonds. Information concerning reoffering yields or prices is the responsibility of the Initial Purchaser.

The prices and other terms with respect to the offering and sale of the Bonds may be changed from time-to time by the Initial Purchaser after the Bonds are released for sale, and the Bonds may be offered and sold at prices other than the initial offering prices, including sales to dealers who may sell the Bonds into investment accounts. In connection with the offering of the Bonds, the Initial Purchaser may over-

4 allot or effect transactions which stabilize or maintain the market prices or the Bonds at levels above those which might otherwise prevail in the open market. Such stabilizing, if commenced, may be discontinued at any time.

The District has no control over trading of the Bonds in the secondary market. Moreover, there is no guarantee that a secondary market will be made in the Bonds. In such a secondary market, the difference between the bid and asked price of utility district bonds may be greater than the difference between the bid and asked price of bonds of comparable maturity and quality issued by more traditional municipal entities, as bonds of such entities are more generally bought, sold or traded in the secondary market.

Securities Laws

NEITHER THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION (THE "SEC") NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED THE BONDS OR PASSED UPON THE ACCURACY OR ADEQUACY OF THIS OFFICIAL STATEMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

No registration statement relating to the offer and sale of the Bonds has been filed with the SEC under the Securities Act of 1933, as amended, in reliance upon the exemptions provided thereunder. The Bonds have not been registered or qualified under the Securities Act of Texas in reliance upon various exemptions contained therein; nor have the Bonds been registered or qualified under the securities laws of any other jurisdiction. The District assumes no responsibility for registration of the Bonds under the securities laws of any other jurisdiction in which the Bonds may be offered, sold or otherwise transferred. This disclaimer of responsibility for registration or qualification for sale or other disposition of the Bonds shall not be construed as an interpretation of any kind with regard to the availability of any exemption from securities registration or qualification provisions in such other jurisdiction.

The statements contained in this Official Statement and in other information provided by the District that are not purely historical are forward-looking statements, including regarding the District's expectations, hopes, intentions or strategies regarding the future. All forward-looking statements included in this Official Statement are based on information available to the District on the date hereof, and the District assumes no obligation to update any such forward-looking statements. See “INVESTMENT CONSIDERATIONS - Forward- Looking Statements.”

Subject to prevailing market conditions, the Initial Purchaser intends, but is not obligated, to make a market in the Bons. There is presently no secondary market for the Bonds and no assurance that a secondary market for the Bonds will develop or, if developed, will not be disrupted by events including, but not limited to, the current pandemic associated with the COVID-19 virus. See “INVESTMENT CONSIDSERATIONS – Infectious Disease Outlook (COVID-19).” Consequently, investors may not be able to resell the Bonds purchased should they need or wish to do so for emergency or other purposes. See “INVESTMENT CONSIDERATIONS – No Certainty of a Secondary Market.”

MUNICIPAL BOND RATING AND INSURANCE

In connection with the sale of the Bonds, the District has made application to Moody's Investors Service, Inc. (“Moody's”) for a municipal bond rating and has received a “___” underlying rating.

An explanation of the significance of a rating may be obtained from Moody’s, the company furnishing the rating. The rating reflects only the respective view of such company, and the District makes no representation as to the appropriateness of the rating. There is no assurance that such rating will continue for any given period of time or that it will not be revised downward or withdrawn entirely by such rating company, if, in the judgment of such company, circumstances so warrant. Any such downward revision or withdrawal of such rating may have an adverse effect on the market price of the Bonds.

The District has made application for an insurance policy insuring the timely payment of the principal of and interest on the Bonds. The purchase of such insurance and the payment of all associated costs, if available, will be at the option and expense of the Initial Purchaser.

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OFFICIAL STATEMENT SUMMARY

The following material is qualified in its entirety by the more detailed information and financial statements appearing elsewhere in this Official Statement. The offering of the Bonds to potential investors is made only by means of this entire Official Statement. Potential investors must read this entire Official Statement to obtain information essential to making an informed investment decision. No person is authorized to detach this summary from this Official Statement or to otherwise use it without the entire Official Statement. Investment in the Bonds is subject to certain investment considerations. See “INVESTMENT CONSIDERATIONS.”

THE DISTRICT

The District...... Travis County Municipal Utility District No. 2 (the “District”), a political subdivision of the State of Texas, was created by an order of the Texas Water Commission, predecessor to the Texas Commission on Environmental Quality (the “TCEQ” or the “Commission”), on December 13, 1983 and confirmed pursuant to an election held within the District on August 25, 1984. The District was created for the purpose of providing, operating, and maintaining facilities to control storm water, distribute potable water, and to collect and treat wastewater and operates pursuant to Chapters 49 and 54 of the Texas Water Code, as amended, and Article XVI, Section 59 of the Texas Constitution. The District contains approximately 404.1 acres. See “THE DISTRICT – General.”

The District is one of four political subdivisions, also including Cottonwood Creek Municipal Utility District No. 1, Wilbarger Creek Municipal Utility District No. 1 and Wilbarger Creek Municipal Utility District No. 2 (collectively, the “Participants” and individually a “Participant”), created to provide water, wastewater and storm drainage to approximately 1,514 acres located within eastern Travis County, Texas. See “THE MASTER DISTRICT.”

Location ...... The District, which currently encompasses approximately 404.1 acres of land, of which approximately 397.7 acres are developable, is located entirely within the extraterritorial jurisdiction of the City of Manor (the “City” or “Manor”), except for approximately 11.7 acres of commercial and retail (which is located in the city limits of Manor), and entirely located within Travis County, Texas. The District is located approximately ten miles northeast of the central business district of the City of Austin. See “LOCATION MAP” and “THE DISTRICT - Location.”

Master District Service Area...... The Participants currently comprise approximately 1,514 acres (the “Service Area”) which include two master planned communities (ShadowGlen and Presidential Meadows) designed to ultimately contain single-family, multi-family, commercial, retail and office development as well as recreational amenities. All of the Participants have designated Wilbarger Creek Municipal Utility District No. 2 (the "Master District") to serve as the master district and regional provider of all major water, wastewater and drainage facilities to serve the approximately 1,514 acres within the Service Area pursuant to the provisions of the "Amended and Restated Contract for Financing and Operation of Regional Waste Collection, Treatment, and Disposal Facilities, Regional Water Supply and Delivery Facilities, and Regional Drainage, Including Water Quality, Facilities” (the “Master District Contract”), between the Master District and the Participants. Each Participant has agreed to levy a contract tax, unlimited as to rate or amount, as necessary, to pay costs under the Master District Contract, including its pro rata share of debt service on bonds issued by the Master District for the regional water, wastewater, and drainage facilities. Each Participant is responsible for constructing and financing its own internal water, wastewater, and drainage facilities. See “THE MASTER DISTRICT” and “INVESTMENT CONSIDERATIONS.”

The Developer ...... The developer currently active within the District is SG Land Holdings LLC, a Delaware limited liability company (the “Developer”), which is owned by Southwest Shadow Holdings LLC, a Delaware limited liability company, and ColFin Shadow Investor LLC, a Delaware limited liability company. The Developer has engaged Argent Management LLC as its development manager to manage the development of the District. Southwest Shadow Holdings is a subsidiary of JNI, LLC (“JNI”), a Delaware limited liability company. JNI is a parent company of various other subsidiaries and affiliates which develop master-planned communities around the United States, often under the brand name SunCal, with development management performed by Argent Management. Some examples of master-planned communities being developed by JNI and/or its subsidiaries and affiliates, in varying stages of development, include: Potomac Shores, a 1,920-acre mixed use, master-planned resort destination located in Potomac Shores, Virginia, which, upon full development, is currently anticipated to include approximately 3,800 residences and 17 million square feet of commercial/retail/office space; The Fairways, an approximately 985-acre master-planned golf community located in Beaumont, California, which, upon full development, is currently anticipated to include approximately 3,300 residences in six villages and 30 acres of commercial/retail space; Summerwind Trails, a 2,590-acre master-planned community located in Calimesa, California, which, upon full development, is currently anticipated to include approximately 3,600 residences and an approximately 260-acrea commercial town center; and Edge-on-Hudson, a 70-acre mixed-us, transit-oriented riverfront community in Sleepy Hollow, New

York, which, upon full development, is currently anticipated to include 1,177 condominium, townhome, and apartment units, 135,000 square feet of shopping and dining and 35,000 square feet of office space. See “THE DEVELOPER.”

Status of Development ...... Development of the District commenced in May 2002, and, as of April 30, 2020, approximately 333.88 acres (or 83.95% of the approximately 397.70 developable acres within the District) have been developed with utility facilities as the single-family residential subdivisions of ShadowGlen, Sections 1A, 1B, 2A, 2B, 3A, 3B, 4A, 4B, 5, 6, 7, 8, 9, 10, 12, 13, 14A, 14B-1, 14B-2, 16, 17, 21A, and 21B encompassing a total of 1,139 developed single-family lots. According to the Developer, these developed lots include 905 completed homes, 39 homes under construction, and 195 vacant developed single-family lots. Additionally, construction of the utility facilities to serve Section 11 (17.39 acres; 52 single-family lots) and Section 13 (18.93 acres; 99 single-family lots) began in _____ and are expected to be completed in _____. Commercial development within the District includes a 15,000 square foot strip center called The Shops at ShadowGlen on approximately 2.3 acres, and a 36,000 square foot medical center on approximately 4.3 acres. The District also includes an amenity center on approximately 4 acres, which includes a 4,300 square foot recreation center, a junior Olympic swimming pool, a water spray park and two 35-foot water slides. See “THE DISTRICT - Current Status of Development.”

Homebuilders ...... According to the Developer, Gray Point Homes, Meritage Homes, Buffington Homes, and Perry Homes are currently the active homebuilders within the District. Gray Point Homes’ homes range in price from $219,990 to $269,990, with square footage ranging from 1,550 to 2,740. Meritage Homes’ homes range in price from $203,990 to $259,965, with square footage ranging from 1,250 to 2,456. Buffington Homes’ homes range in price from $296,990 to $407,999, with square footage ranging from 2,150 to 3,609. Perry Homes’ homes range in price from $269,900 to $441,900, with square footage ranging from 1,813 to 3,700. See “THE DEVELOPER – Homebuilders within the District.”

THE BONDS

Description ...... The Bonds in the aggregate principal amount of $5,000,000 mature serially in varying amounts on September 1 of each year from 2021 through 2039, inclusive, as set forth on the inside cover page hereof unless the Initial Purchaser elects to treat some maturities as Term Bonds. Interest accrues from the Date of Initial Delivery at the rates per annum set forth on the inside cover page hereof and is payable March 1, 2021, and each September 1 and March 1 thereafter until maturity or earlier redemption. The Bonds are offered in fully registered form in integral multiples of $5,000 for any one maturity. See “THE BONDS - General Description.”

Redemption ...... The District reserves the right to redeem, prior to maturity, in integral multiples of $5,000, those Bonds maturing on and after September 1, 2026, in whole or from time to time in part, on September 1, 2025, or on any date thereafter at a price of par plus accrued interest from the most recent interest payment date to the date fixed for redemption. The Bonds, if designated as Term Bonds, may also be subject to mandatory sinking fund redemption. See “THE BONDS - Redemption.”

Source of Payment ...... Principal of and interest on the Bonds are payable from the proceeds of a continuing direct annual ad valorem tax levied upon all taxable property within the District, which under Texas law is not legally limited as to rate or amount. See “TAXING PROCEDURES.” The Bonds are obligations solely of the District and are not obligations of the City of Manor, Texas; Travis County, Texas; the State of Texas; or any entity other than the District. See “THE BONDS - Source of and Security for Payment.”

Payment Record ...... The Bonds constitute the tenth (10th) installment of bonds issued by the District. The District has never defaulted in the timely payment of principal of or interest on its outstanding obligations. See “FINANCIAL STATEMENT - Outstanding Bonds – Table 6.”

Authority for Issuance ...... The Bonds are issued pursuant to Article XVI, Section 59 of the Texas Constitution and the general laws of the State of Texas including Chapters 49 and 54 of the Texas Water Code, as amended; a bond election held within the District on May 3, 2003; the approving order of the Texas Commission on Environmental Quality (the “TCEQ”); and an order adopted by the Board of Directors of the District on the date of the sale of the Bonds. See “THE BONDS - Authority for Issuance.”

Use of Proceeds………………… The proceeds of the Bonds will be used to finance the following: (i) water, wastewater, and drainage facilities within ShadowGlen Phase Two, Sections 21A and 21B; (ii) water, wastewater, and drainage facilities within ShadowGlen Phase Two, Section 17; (iii) engineering fees associated with items 1 and 2; and (vii) operating advances made by the District.

The remaining Bond proceeds will be used to: (i) capitalize approximately twenty-four (24) months' interest requirements on the Bonds; (ii) pay developer interest; and (iii) pay certain legal costs associated with the issuance of the Bonds. See “USE AND DISTRIBUTION OF BOND PROCEEDS.”

Bonds Authorized But Unissued...... At an election held within the District on May 3, 2003, voters within the District authorized a total of $38,580,000 in unlimited tax new money bonds to acquire water, wastewater, and drainage facilities. The Bonds constitute the seventh (7th) installment of unlimited tax new money bonds to acquire water, wastewater and drainage facilities issued by the District. After the issuance of the Bonds, the District will have $16,465,000 aggregate principal amount of remaining authorized but unissued unlimited tax bonds for water, wastewater, and drainage facilities. Additionally, at the May 3, 2003 election, the voters approved the issuance of unlimited tax refunding bonds in an amount not to exceed one and one-half times the amount of new money bonds issued, assuming issuance of the entire authorization, which equals $57,870,000, of which $57,015,599 of voted authorization of unlimited tax refunding bonds remain unissued. Additionally, at an election held within the District on February 7, 2004, voters within the District authorized a total of $3,500,000 in unlimited tax new money bonds for the acquisition and construction parks and recreational facilities, all of which remains authorized but unissued. See “FINANCIAL STATEMENT - Outstanding Bonds – Table 6” and “THE BONDS – Issuance of Additional Debt.”

Municipal Bond Ratings and Insurance ...... In connection with the sale of the Bonds, the District has made application to Moody's Investors Service, Inc. (“Moody's”) for a municipal bond rating and has received a “___” underlying rating. The District has made application for an insurance policy insuring the timely payment of the principal of and interest on the Bonds. The purchase of such insurance will be at the option and expense of the Initial Purchaser.

Qualified Tax-Exempt Obligations ...... The District is expected to designate the Bonds as “qualified tax-exempt obligations” pursuant to Section 265(b) of the Internal Revenue Code of 1986, as amended, and will represent that the total amount of tax- exempt obligations (including the Bonds) issued by it during calendar year 2020 is not reasonably expected to exceed $10,000,000. See “TAX MATTERS - Qualified Tax-Exempt Obligations for Financial Institutions.”

Bond Counsel and Disclosure Counsel ...... McCall, Parkhurst & Horton L.L.P., Austin, Texas

General Counsel ...... Armbrust & Brown, PLLC, Austin, Texas

Financial Advisor ...... Public Finance Group LLC, Austin, Texas

Engineer ...... Schroeder Engineering Company, Austin, Texas

Paying Agent / Registrar ...... UMB Bank, N.A., Austin, Texas

INVESTMENT CONSIDERATIONS

The purchase and ownership of the Bonds involve certain investment considerations and all prospective purchasers are urged to examine carefully the Official Statement, including particularly the section captioned “INVESTMENT CONSIDERATIONS,” with respect to investment in the Bonds.

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SELECTED FINANCIAL INFORMATION (Unaudited) 2019 Certified Assessed Valuation $ 234,322,762 (a) 2020 Preliminay Assessed Valuation $ 259,229,895 (b) Estimated Assessed Valuation as of July 1, 2020 $ - (c) Gross Debt Outstanding (after issuance of the Bonds) District Debt $ 19,170,000 Contract Debt 9,829,108 $ 28,999,108 (d ) Ratio of Gross Debt to 2019 Certified Assessed Valuation(a) 12.38% Ratio of Gross Debt to 2020 Preliminary Assessed Valuation(b) 11.19% Ratio of Gross Debt to Estimated Assessed Valuation as of July 1, 2020(c) # DIV/ 0!

2019 Tax Rate Debt Service $ 0.4167 Maintenance $ 0.1233 Contract 0.3500 Total 2019 Tax Rate $ 0.8900 (e)

Debt Service Fund Balance (as of April 1, 2020) $ 1,118,097 (f)

Percentage of current tax collections (Tax Years 2001-2019) 97.51% (g)

Percentage of total tax collections (Tax Years 2001-2019) 106.72% (g)

Projected Average Annual Debt Service Requirement of the Bonds ("Projected Average Requirement") (2021-2039, inclusive) $ 1,324,660

Tax Rate required to pay Projected Average Requirement based upon 2019 Certified Assessed Valuation(a) at 95% collections $ 0.60 /$100 AV Tax Rate required to pay Projected Average Requirement based upon 2020 Preliminary Assessed Valuation(b) at 95% collections $ 0.56 /$100 AV Tax Rate required to pay Projected Average Requirement based upon the Estimated Assessed Valuation as of July 1, 2020(c) at 95% collections /$100 AV

Projected Maximum Annual Debt Service Requirement of the Bonds ("Projected Maximum Requirement") (2039) $ 1,568,025

Tax Rate required to pay Projected Maximum Requirement based upon 2019 Certified Assessed Valuation(a) at 95% collections $ 0.71 /$100 AV

Tax Rate required to pay Projected Maximum Requirement based upon 2020 Preliminary Assessed Valuation(b) at 95% collections $ 0.64 /$100 AV

Tax Rate required to pay Projected Maximum Requirement based upon the Estimated Assessed Valuation as of July 1, 2020(c) at 95% collections /$100 AV

Number of active connections as of March 31, 2020 Single Family - Complete & Occupied 979 Single Family - Builder & Vacant 7 Total Number of Active Connections 986

(h) Estimated Population as of March 31, 2020 3,427

______(a) The certified assessed valuation as of January 1, 2019, as provided by Travis Central Appraisal District (“TCAD”). See “TAXING PROCEDURES.” (b) The preliminary assessed valuation as of January 1, 2020, as provided by TCAD, is included solely for purposes of illustration. No taxes shall be levied on such assessed valuation unless it is certified by TCAD. See “TAXING PROCEDURES.” (c) The estimated assessed valuation as of July 1, 2020, as provided by TCAD, included solely for purposes of illustration. See “TAXING PROCEDURES.” (d) Includes the Bonds. The District is a party to a contract with the Master District whereby the District is obligated to pay a pro rata share of debt service on bonds issued from time to time by the Master District to acquire, construct, purchase and maintain certain facilities to provide regional water, wastewater and drainage services to all Participants. The Master District has issued five (5) series of new money bonds and three (3) series of refunding bonds in the aggregate original principal amount of $39,375,000 of which $21,475,000 is currently outstanding. The contract debt amount reflects the District’s pro rata share (45.77% based on the 2019 Certified Assessed Valuation of $511,954,955 of the Master District Service Area). See “THE MASTER DISTRICT – Contract Tax Bonds.” (e) The District levied a 2019 total tax rate of $0.8900 at its meeting in September 2019. See “TAXING PROCEDURES.” (f) Unaudited as of April 1, 2020. Preliminary; subject to change. Does not include approximately twenty-four (24) months’ capitalized interest ($350,000) included in the Bond proceeds, which is projected to be deposited into the Debt Service Fund upon closing. Neither Texas law nor the Bond Order requires the District to maintain any particular sum in the debt service fund. (g) See “TAX DATA – Tax Collections.” (h) Based upon 3.5 residents per completed and occupied single family home as of March 31, 2020.

OFFICIAL STATEMENT relating to

$5,000,000 TRAVIS COUNTY MUNICIPAL UTILITY DISTRICT NO. 2 (A Political Subdivision of the State of Texas Located in Travis County, Texas) UNLIMITED TAX BONDS, SERIES 2020A

INTRODUCTION

This Official Statement provides certain information in connection with the issuance by the Travis County Municipal Utility District No. 2 (the “District”), a political subdivision of the State of Texas (the “State”), of its $5,000,000 Unlimited Tax Bonds, Series 2020A (the “Bonds”).

The Bonds are issued pursuant to an order adopted by the Board of Directors of the District (the “Board of Directors”) on the date of the sale of the Bonds (the “Bond Order”), Article XVI, Section 59 of the Constitution, and the general laws of the State, including Chapters 49 and 54 of the Texas Water Code, as amended; a bond election held within the District on May 3, 2003; and the approving order of the Texas Commission on Environmental Quality (the “TCEQ” or the “Commission”).

Unless otherwise indicated, capitalized terms used in this Official Statement have the same meaning assigned to such terms in the Bond Order.

Included in this Official Statement are descriptions of the Bonds and certain information about the District and its finances. ALL DESCRIPTIONS OF DOCUMENTS CONTAINED HEREIN ARE SUMMARIES ONLY AND ARE QUALIFIED IN THEIR ENTIRETY BY REFERENCE TO EACH SUCH DOCUMENT. Copies of such documents may be obtained from the District c/o Armbrust & Brown, PLLC, 100 Congress Avenue, Suite 1300, Austin, Texas, 78701 or from the District’s Financial Advisor, Public Finance Group LLC, 900 South Capital of Texas Highway, Building IV, Suite 475, West Lake Hills, Texas, 78746, upon payment of reasonable copying, mailing and handling charges.

This Official Statement speaks only as of its date, and the information contained herein is subject to change. A copy of this Official Statement will be submitted to the Municipal Securities Rulemaking Board through its Electronic Municipal Market Access (EMMA) system. See “CONTINUING DISCLOSURE OF INFORMATION” and “OFFICIAL STATEMENT – Updating the Official Statement During Underwriting Period” for a description of the District’s undertaking to provide certain information on a continuing basis.

THE BONDS General Description

The Bonds will bear interest from the date of initial delivery, currently anticipated to be September 2, 2020 (the “Date of Initial Delivery”), and will mature on September 1 of the years and in the principal amounts, and will bear interest at the rates per annum, set forth on the inside cover page hereof. Interest on the Bonds will be paid on March 1, 2021 and each September 1 and March 1 thereafter until maturity or earlier redemption and will be calculated on the basis of a 360-day year composed of twelve 30-day months. The Bonds will be issued in fully registered form only, without coupons, in denominations of $5,000 or any integral multiple thereof, and when issued, will be registered in the name of Cede & Co., as registered owner and nominee for The Depository Trust Company (“DTC”), New York, New York, acting as securities depository for the Bonds until DTC resigns or is discharged. The Bonds initially will be available to purchasers in book-entry form only. So long as Cede & Co., as the nominee of DTC, is the registered owner of the Bonds, principal of and interest on the Bonds will be payable by the paying agent to DTC, which will be solely responsible for making such payment to the beneficial owners of the Bonds. The initial paying agent and registrar for the Bonds is UMB Bank, N.A., Austin, Texas (the “Paying Agent” or “Paying Agent/Registrar”).

Redemption

Optional Redemption… The District reserves the right to redeem, prior to maturity, in integral multiples of $5,000, those Bonds maturing on and after September 1, 2026, in whole or from time to time in part, on September 1, 2025, or on any date thereafter, at a price of par plus accrued interest from the most recent interest payment date to the date fixed for redemption.

Mandatory Sinking Fund Redemption…. In addition to being subject to optional redemption, as provided above, the Bonds maturing on September 1, ____ and September 1, ____ (the “Term Bonds”) are subject to mandatory sinking fund redemption prior to maturity in the following amounts, on the following dates and at a price of par plus accrued interest to the redemption date from amounts required to be deposited in the Debt Service Fund:

Bonds Maturing Bonds Maturing September 1, ___* September 1, ___* Mandatory Mandatory Redemption Principal Redemption Principal Date Amount Date Amount

______*Stated Maturity

Notice of Redemption . . . At least 30 calendar days prior to the date fixed for any optional redemption of Bonds or portions thereof prior to maturity a written notice of such redemption shall be sent by the Paying Agent by United States mail, first-class postage prepaid to the registered owner of each Bond to be redeemed at its address as it appeared on the 45th calendar day prior to such redemption date and to major securities depositories and bond information services.

The Bonds of a denomination larger than $5,000 may be redeemed in part ($5,000 or any multiple thereof). Any Bond to be partially redeemed must be surrendered in exchange for one or more new Bonds of the same maturity for the unredeemed portion of the principal of the Bonds so surrendered. In the event of redemption of less than all of the Bonds, the particular Bonds to be redeemed shall be selected by the District, if less than all of the Bonds of a particular maturity are to be redeemed; the Paying Agent is required to select the Bonds of such maturity to be redeemed by lot.

With respect to any optional redemption of the Bonds, unless certain prerequisites to such redemption required by the Bond Order have been met and money sufficient to pay the principal of and premium, if any, and interest on the Bonds to be redeemed have been received by the Paying Agent prior to the giving of such notice of redemption, such notice will state that said redemption may, at the option of the District, be conditional upon the satisfaction of such prerequisites and receipt of such money by the Paying Agent on or prior to the date fixed for such redemption, or upon any prerequisite set forth in such notice of redemption. If a conditional notice of redemption is given and such prerequisites to the redemption are not fulfilled, such notice will be of no force and effect, the District will not redeem such Bonds, and the Paying Agent will give notice in the manner in which the notice of redemption was given, to the effect that the Bonds have not been redeemed.

The principal amount of the Bonds required to be redeemed pursuant to the operation of the mandatory sinking fund redemption provisions shall be reduced, at the option of the District, by the principal amount of any Term Bonds of the stated maturity which, at least 50 days prior to a mandatory redemption date, (1) shall have been acquired by the District, at a price not exceeding the principal amount of such Term Bonds plus accrued interest to the date of purchase thereof, and delivered to the Paying Agent for cancellation, (2) shall have been purchased and cancelled by the Paying Agent at the request of the District, with monies in the Debt Service Fund at a price not exceeding the principal amount of the Bonds plus accrued interest to the date of purchase thereof, or (3) shall have been redeemed pursuant to the optional redemption provisions and not theretofore credited against a mandatory sinking fund redemption requirement.

Selection of Bonds for Redemption

If less than all of the Bonds are called for redemption, the particular Bonds, or portions thereof, to be redeemed shall be selected and designated by the District, and if less than all of a maturity, or sinking fund installment in the case of Term Bonds, is to be redeemed, the Paying Agent/Registrar shall determine by lot or other customary random method the Bonds, or portions thereof within such maturity to be redeemed (provided that a portion of a Bond may be redeemed only in integral multiples of $5,000 principal amount); provided, that during any period in which ownership of the Bonds is determined only by a book entry at a securities depository for the Bonds, if fewer than all of the Bonds of the same maturity, or sinking fund installment in the case of Term Bonds, and bearing the same interest rate are to be redeemed, the particular Bonds of such maturity, such interest rate and sinking fund installment in the case of Term Bonds shall be selected in accordance with the arrangements between the District and the securities depository.

DTC Redemption Provision

The Paying Agent/Registrar and the District, so long as a book-entry-only system is used for the Bonds, will send any notice of redemption, notice of proposed amendment to the Bond Order or other notices with respect to the Bonds only to DTC. Any failure by DTC to advise any DTC Participant, as herein defined, or of any Direct Participant or Indirect Participant, as herein defined, to notify the beneficial owner, shall not affect the validity of the redemption of Bonds called for redemption or any other action premised on any such notice. Redemption of portions of the Bonds by the District will reduce the outstanding principal amount of such Bonds held by DTC. In such event, DTC may implement, through its book-entry-only system, a redemption of such Bonds held for the account of DTC Participants in accordance with its rules or other agreements with DTC Participants and then Direct Participants and Indirect Participants may implement a redemption of such Bonds and such redemption will not be conducted by the District or the Paying Agent/Registrar. Neither the District nor the Paying Agent/Registrar will have any responsibility to the DTC Participants. Indirect Participants or the persons for whom DTC Participants act as nominees with respect to the payments on the Bonds or the providing of notice to Direct Participants, Indirect Participants, or beneficial owners of the selection of portions of the Bonds for redemption.

Termination of Book-Entry-Only System

The District is initially utilizing the book-entry-only system of DTC (“Book-Entry-Only System”). See “BOOK-ENTRY-ONLY SYSTEM.” In the event that the Book-Entry-Only System is discontinued by DTC or the District, the following provisions will be applicable to the Bonds.

Payment . . . Principal of the Bonds will be payable at maturity to the registered owners as shown by the registration books maintained by the Paying Agent upon presentation and surrender of the Bonds to the Paying Agent at the designated office for payment of the Paying Agent in Austin, Texas (the “Designated Payment/Transfer Office”). Interest on the Bonds will be payable by check or draft, dated as of the applicable interest payment date, sent by the Paying Agent by United States mail, first-class, postage prepaid, to the registered owners at their respective addresses shown on such records, or by such other method acceptable to the Paying Agent requested by a registered owner at the risk and expense of the registered owner. If the date for the payment of the principal of or interest on the Bonds falls on a Saturday, Sunday, legal holiday, or day on which banking institutions in the city where the Designated Payment/Transfer Office of the Paying Agent is located are required or authorized by law or executive order to close,

then the date for such payment shall be the next succeeding day which is not a Saturday, Sunday, legal holiday, or day on which banking institutions are required or authorized to close, and payment on such date shall for all purposes be deemed to have been made on the original date payment was due.

Registration. . . If the Book-Entry-Only System is discontinued, the Bonds may be transferred and re-registered on the registration books of the Paying Agent only upon presentation and surrender thereof to the Paying Agent at the Designated Payment/Transfer Office. A Bond also may be exchanged for a Bond or Bonds of like maturity and interest and having a like aggregate principal amount or maturity amount, as the case may, upon presentation and surrender at the Designated Payment/Transfer Office. All Bonds surrendered for transfer or exchange must be endorsed for assignment by the execution by the registered owner or his duly authorized agent of an assignment form on the Bonds or other instruction of transfer acceptable to the Paying Agent. Transfer and exchange of Bonds will be without expense or service charge to the registered owner, except for any tax or other governmental charges required to be paid with respect to such transfer or exchange. A new Bond or Bonds, in lieu of the Bond being transferred or exchanged, will be delivered by the Paying Agent to the registered owner, at the Designated Payment/Transfer Office of the Paying Agent or by United States mail, first-class, postage prepaid. To the extent possible, new Bonds issued in an exchange or transfer of Bonds will be delivered to the registered owner not more than three (3) business days after the receipt of the Bonds to be canceled in the exchange or transfer in the denominations of $5,000 or any integral multiple thereof.

Limitation on Transfer of Bonds . . . Neither the District nor the Paying Agent shall be required to make any transfer, conversion or exchange to an assignee of the registered owner of the Bonds (i) during the period commencing on the close of business on the fifteenth (15th) (whether or not a business day) calendar day of the month preceding each interest payment date (the “Record Date”) and ending with the opening of business on the next following principal or interest payment date or (ii) with respect to any Bond called for redemption, in whole or in part, within forty-five (45) days of the date fixed for redemption; provided, however, such limitation of transfer shall not be applicable to an exchange by the registered owner of the uncalled balance of a Bond.

Replacement Bonds . . . If a Bond is mutilated, the Paying Agent will provide a replacement Bond in exchange for the mutilated bond. If a Bond is destroyed, lost or stolen, the Paying Agent will provide a replacement Bond upon (i) the filing by the registered owner with the Paying Agent of evidence satisfactory to the Paying Agent of the destruction, loss or theft of the Bond and the authenticity of the registered owner’s ownership and (ii) the furnishing to the Paying Agent of indemnification in an amount satisfactory to hold the District and the Paying Agent harmless. All expenses and charges associated with such indemnity and with the preparation, execution and delivery of a replacement Bond must be borne by the registered owner. The provisions of the Bond Order relating to the replacement Bonds are exclusive and to the extent lawful, preclude all other rights and remedies with respect to the replacement and payment of mutilated, destroyed, lost or stolen Bonds.

Authority for Issuance

At an election held within the District on May 3, 2003, voters within the District authorized a total of $38,580,000 in unlimited tax new money bonds to acquire and construct water, wastewater, and drainage facilities. The Bonds constitute the seventh (7th) installment of unlimited tax new money bonds to acquire water, wastewater and drainage facilities issued by the District. After the issuance of the Bonds, the District will have $16,465,000 aggregate principal amount of remaining authorized but unissued unlimited tax bonds for water, wastewater, and drainage facilities. Additionally, at the May 3, 2003 election, the voters approved the issuance of unlimited tax refunding bonds in an amount not to exceed one and one-half times the amount of new money bonds issued, assuming issuance of the entire authorization, which equals $57,870,000, of which $57,015,599 of voted authorization of unlimited tax refunding bonds remain unissued. Additionally, at an election held within the District on February 7, 2004, voters within the District authorized a total of $3,500,000 in unlimited tax new money bonds for the acquisition and construction parks and recreational facilities, all of which remains authorized but unissued.

The Bonds are issued pursuant to the Bond Order adopted by the Board of Directors of the District on the date of the sale of the Bonds, Article XVI, Section 59 of the Constitution, and the general laws of the State, including Chapters 49 and 54 of the Texas Water Code, as amended; a bond election held within the District on May 3, 2003; and the approving order of the Commission.

Source of and Security for Payment

The Bonds will be payable from and secured by a pledge of the proceeds of a continuing, direct, annual ad valorem tax without legal limitation as to rate or amount levied against all taxable property located within the District. The Board covenants in the Bond Order that, while any of the Bonds are outstanding and the District is in existence, it will levy an annual ad valorem tax and will undertake to collect such a tax against all taxable property within the District at a rate from year to year sufficient, full allowance being made for anticipated delinquencies, together with revenues and receipts from other sources which are legally available for such purposes, to pay interest on the Bonds as it becomes due, to provide a sinking fund for the payment of principal of the Bonds when due or the redemption price at any earlier required redemption date, to pay when due any other contractual obligations of the District payable in whole or in part from taxes, and to pay the expenses of assessing and collecting such tax. The net proceeds from taxes levied to pay debt service on the Bonds are required to be placed in a special account of the District designated its “Debt Service Fund” for the Bonds. The Bond Order provides for the termination of the pledge of taxes when and if the City annexes and dissolves the District and assumes all debts and liabilities of the District. See “Annexation.”

The Bonds are obligations solely of the District and are not obligations of the City of Manor, Texas; Travis County, Texas; the State of Texas; or any political subdivision or entity other than the District.

located within its extraterritorial jurisdiction without consent of the district or its residents. Under House Bill 347 approved during the 86th Regular Legislative Session (“HB 347”), a municipality may annex a district with a population of less than 200 residents only if: (i) the municipality obtains consent to annex the area through a petition signed by more than 50% of the registered voters of the district, and (ii) if the registered voters in the area to be annexed do not own more than 50% of the land in the area, a petition has been signed by more than 50% of the landowners consenting to the annexation; and (b) a municipality may annex a district with a population of 200 residents or more only if: (i) such annexation has been approved by a majority of those voting in an election held for that purpose within the area to be annexed, and (ii) if the registered voters in the area to be annexed do not own more than 50% of the land in the area, a petition has been signed by more than 50% of the landowners consenting to the annexation. Notwithstanding the foregoing, a municipality may annex an area if each owner of land in the area requests the annexation. As of March 31, 2020, the District had an estimated population of 3,427, thus triggering the voter approval and/or landowner consent requirements discussed in clause (b) above. The described election and petition process does not apply, however, during the term of a strategic partnership agreement between a municipality and a district specifying the procedures for annexation of all or a portion of the District.

If a municipal utility district is full purpose annexed, the municipality must assume the assets, functions, and obligations of the district, including outstanding bonds, and the pledge of taxes will terminate. No representation is made concerning the likelihood of annexation and dissolution or the ability of the City to make debt service payments on the Bonds should dissolution occur.

Payment Record

The Bonds constitute the tenth (10th) installment of new money unlimited tax bonds issued by the District. The District has never defaulted in the timely payment of principal of or interest on its previously issued obligations entitled: “$2,000,000 Unlimited Tx Bonds, Series 2004” (the “Series 2004 Bonds”); “$2,495,000 Unlimited Tax Bonds, Series 2005” (the “Series 2005 Bonds”); “$2360,000 Unlimited Tax Bonds, Series 2006” (the “Series 2006 Bonds”); “$2,000,000 Unlimited Tax Bonds, Series 2010” (the “Series 2010 Bonds”); “$4,775,000 Unlimited Tax Refunding Bonds, Series 2011” (the “Series 2011 Bonds”); “$3,400,000 Unlimited Tax Refunding Bonds, Series 2015” (the “Series 2015 Bonds”); “$5,620,000 Unlimited Tax Bonds, Series 2017” (the “Series 2017 Bonds”); “$2,640,000 Unlimited Tax Bonds, Series 2019” (the Series 2019 Bonds”); and “$2,410,000 Unlimited Tax Refunding Bonds, Series 2020 (the “Series 2020 Bonds”) (collectively, the “Previously Issued Bonds”). The proceeds of each installment of new money bonds included up to twenty-four (24) months of capitalized interest. See “FINANCIAL STATEMENT – Outstanding Bonds – Table 6.”

Flow of Funds

The Bond Order creates, or affirms, a Debt Service Fund and a Capital Projects Fund.

Each fund shall be kept separate and apart on the books and records of the District from all other funds of the District. The Debt Service Fund shall constitute a trust fund which shall be held in trust for the benefit of the registered owner of the Bonds.

Any cash balance in any fund must be continuously secured by a valid pledge to the District of securities eligible under the laws of the State of Texas to secure the funds of municipal utility districts having an aggregate market value, exclusive of accrued interest, at all times equal to the cash balance in the fund to which such securities are pledged.

Debt Service Fund… The Bond Order establishes the Debt Service Fund to be used to pay principal and interest on and Paying Agent fees in respect to the Bonds. The Bond Order requires that the District deposit to the credit of the Debt Service Fund (i) from the delivery of the Bonds to the Initial Purchaser, the amount received from proceeds of the Bonds representing accrued interest, if any, and capitalized interest on the Bonds, (ii) District ad valorem taxes (and penalties and interest thereon) levied to pay debt service requirements on (or fees and expenses of the Paying Agent with respect of) the Bonds, and (iii) such other funds as the Board shall, at its option, deem advisable. The Bond Order requires that the Debt Service Fund be applied solely to provide for the payment of the principal or redemption price of and interest on the Bonds when due, and to pay fees to Paying Agent when due.

Capital Projects Fund… The Capital Projects Fund is the capital improvements fund of the District. The Bond Order requires the District to deposit to the credit of the Capital Projects Fund the balance of the proceeds of the Bonds remaining after the deposits to the Debt Service Fund provided in the Bond Order. The Capital Projects Fund may be applied solely to (i) pay the costs necessary or appropriate to accomplish the purposes for which the Bonds are issued, (ii) pay the costs of issuing the Bonds and (iii) to the extent the proceeds of the Bonds and investment income attributable thereto are in excess of the amounts required to acquire and construct water, wastewater and drainage facilities as approved by TCEQ, then in the discretion of the Board of Directors of the District to transfer such unexpended proceeds or income to the Debt Service Fund or to utilize such funds as otherwise authorized by the TCEQ.

Paying Agent/Registrar

Principal of and semiannual interest on the Bonds will be paid by the initial Paying Agent/Registrar, UMB Bank, N.A., having an office for payment in Austin, Texas. Any Paying Agent must be either a bank, trust company, financial institution or other entity duly qualified and equally authorized to serve and perform the duties as paying agent and registrar for the Bonds.

Provision is made in the Bond Order for the District to replace the Paying Agent by a resolution of the District giving notice to the Paying Agent of the termination of the appointment, stating the effective date of the termination and appointing a successor Paying Agent. If the Paying Agent is replaced by the District, the new Paying Agent shall be required to accept the previous Paying Agent’s records and act in the same capacity as the previous Paying Agent. Any successor paying agent/registrar selected by the District shall be subject to the same qualification requirements as the Paying Agent. The successor paying agent/registrar, if any, shall be determined by the Board of Directors and written notice thereof, specifying the name and address of such successor paying agent/registrar will be sent by the District or the successor paying agent/registrar to each registered owner by first-class mail, postage prepaid.

Defeasance of Outstanding Bonds

General . . .The Bond Order provides for the defeasance of the Bonds and the termination of the pledge of taxes and all other general defeasance covenants in the Bond Order under certain circumstances. Any Bond and the interest thereon shall be deemed to be paid, retired, and no longer outstanding within the meaning of the Bond Order (a “Defeased Bond”), except to the extent provided below for the Paying Agent to continue payments, when the payment of all principal and interest payable with respect to such Bond to the due date or dates thereof (whether such due date or dates be by reason of maturity, upon redemption, or otherwise) either (i) shall have been made or caused to be made in accordance with the terms thereof (including the giving of any required notice of redemption) or (ii) shall have been provided for on or before such due date by irrevocably depositing with or making available to the Paying Agent or an eligible trust company or commercial bank for such payment (1) lawful money of the United States of America sufficient to make such payment, (2) Defeasance Securities (defined below) that mature as to principal and interest in such amounts and at such times as will ensure the availability, without reinvestment, of sufficient money to provide for such payment, or (3) any combination of (1) and (2) above, and when proper arrangements have been made by the District with the Paying Agent or an eligible trust company or commercial bank for the payment of its services until after all Defeased Bonds shall have become due and payable. At such time as a Bond shall be deemed to be a Defeased Bond, such Bond and the interest thereon shall no longer be secured by, payable from, or entitled to the benefits of, the ad valorem taxes levied and pledged, as provided in the Bond Order and such principal and interest shall be payable solely from such money or Defeasance Securities, and shall not be regarded as outstanding under the Bond Order and the District will have no further responsibility with respect to the payment of such Defeased Bonds including any insufficiency to receive payments when due on the Defeased Securities.

Any money so deposited with or made available to the Paying Agent or an eligible trust company or commercial bank also may be invested at the written direction of the District in Defeasance Securities, maturing in the amounts and times as hereinbefore set forth, and all income from such Defeasance Securities received by the Paying Agent or an eligible trust company or commercial bank that is not required for the payment of the Bonds and interest thereon, with respect to which such money has been so deposited, shall be remitted to the District or deposited as directed in writing by the District.

Until all Defeased Bonds shall have become due and payable, the Paying Agent shall perform the services of Registrar for such Defeased Bonds the same as if they had not been defeased, and the District shall make proper arrangements to provide and pay for such services as required by the Bond Order.

For purposes of these provisions, “Defeasance Securities” means (i) direct non-callable obligations of the United States of America, including obligations that are unconditionally guaranteed by the United States of America, (ii) non-callable obligations of an agency or instrumentality of the United States of America, including obligations that are unconditionally guaranteed or insured by the agency or instrumentality and that, on the date the Board of Directors adopts or approves proceedings authorizing the issuance of refunding bonds or otherwise provide for the funding of an escrow to effect the defeasance of the Bonds, are rated as to investment quality by a nationally recognized investment rating firm not less than “AAA” or its equivalent, (iii) non-callable obligations of a state or an agency or a county, municipality, or other political subdivision of a state that have been refunded and that, on the date the Board of Directors adopts or approves proceedings authorizing the issuance of refunding bonds or otherwise provide for the funding of an escrow to effect the defeasance of the Bonds, are rated as to investment quality by a nationally recognized investment rating firm not less than “AAA” or its equivalent and (iv) any other then-authorized securities or obligations under applicable State law that may be used to defease obligations such as the Bonds.

Any such obligations must be certified by an independent public accounting firm of national reputation to be of such maturities and interest payment dates and bear such interest as will, without further investment or reinvestment of either the principal amount thereof or the interest earnings therefrom, be sufficient to provide all debt service payments on the Bonds.

There is no assurance that the current law will not be changed in a manner which would permit investments other than those described above to be made without amounts deposited to defease the Bonds. Because the Bond Order does not contractually limit such investments, registered owners may be deemed to have consented to defeasance with such other investments, notwithstanding the fact that such investments may not be of the same investment quality as those currently permitted under State law. There is no assurance that the ratings for U.S. Treasury securities used as Defeasance Securities or those for any other Defeasance Securities will be maintained at any particular rating category.

Retention of Rights . . . To the extent that, upon the defeasance of any Defeased Bond to be paid at its maturity, the District retains the right under Texas law to later call the Defeased Bond for redemption in accordance with the provisions of the order authorizing its issuance, the District may call such Defeased Bond for redemption upon complying with the provisions of Texas law and upon satisfaction of the provisions set forth above regarding such Defeased Bond as though it was being defeased at the time of the exercise of the option to redeem the Defeased Bond and the effect of the redemption is taken into account in determining the sufficiency of the provisions made for the payment of the Defeased Bond.

Investments . . . Any escrow agreement or other instrument entered into between the District and the Paying Agent or an eligible trust company or commercial bank pursuant to which money and/or Defeasance Securities are held by the Paying Agent or an eligible trust company or commercial bank for the payment of Defeased Bonds may contain provisions permitting the investment or reinvestment of such moneys in Defeasance Securities or the substitution of other Defeasance Securities upon the satisfaction of certain requirements. All income from such Defeasance Securities received by the Paying Agent or an eligible trust company or commercial bank which is not required for the payment of the Bonds and interest thereon, with respect to which such money has been so deposited, will be remitted to the District or deposited as directed in writing by the District.

Record Date

The Record Date for payment of the interest on Bonds on any regularly scheduled interest payment date is defined as the close of business on the fifteenth (15th) calendar day of the month (whether or not a business day) preceding such interest payment date.

Issuance of Additional Debt

The District may issue bonds or other obligations necessary to provide those improvements and facilities for which the District was created, with the approval of the TCEQ, if applicable, and, in the case of bonds payable from taxes, the District’s voters. See “THE BONDS – Authority for Issuance” for details regarding authorized but unissued Bonds of the District. Neither Texas law nor the Bond Order imposes a limitation on the amount of additional bonds which may be issued by the District. Any additional bonds issued by the District may dilute the security for the Bonds.

The District does not employ any formula with respect to assessed valuations, tax collections or otherwise to limit the amount of parity bonds which it may issue. The issuance of additional bonds is subject to approval of the TCEQ pursuant to its rules regarding issuance and feasibility of bonds. In addition, future changes in health or environmental regulations could require the construction and financing of additional improvements without any corresponding increases in taxable value in the District.

Legal Investment and Eligibility to Secure Public Funds in Texas

Pursuant to Section 49.186 of the Texas Water Code, bonds, notes or other obligations issued by a municipal utility district “shall be legal and authorized investments for all banks, trust companies, building and loan associations, savings and loan associations, insurance companies of all kinds and types, fiduciaries, and trustees, and for all interest and sinking funds and other public funds of the State, and all agencies, subdivisions, and instrumentalities of the State, including all counties, cities, towns, villages, school districts and all other kinds and types of districts, public agencies and bodies politic.” Additionally, Section 49.186 of the Texas Water Code provides that bonds, notes or other obligations issued by a municipal utility district are eligible and lawful security for all deposits of public funds of the State and all agencies, subdivisions and instrumentalities of the State. For political subdivisions in Texas which have adopted investment policies and guidelines in accordance with the Public Funds Investment Act (Texas Government Code, Chapter 2256), the Bonds may have to be assigned a rating of not less than “A” or its equivalent as to investment quality by a national rating agency before such obligations are eligible investments for sinking funds and other public funds. See “MUNICIPAL BOND RATING AND BOND INSURANCE.”

The District makes no representation that the Bonds will be acceptable to banks, savings and loan associations or public entities for investment purposes or to secure deposits of public funds. The District has made no investigation of other laws, regulations or investment criteria which might apply to or otherwise limit the availability of the Bonds for investment or collateral purposes. Prospective purchasers are urged to evaluate carefully the investment quality of the Bonds and as to the acceptability of the Bonds for investment or collateral purposes.

Specific Tax Covenants

In the Bond Order, the District covenants with respect to, among other matters, the use of the proceeds of the Bonds and the manner in which the proceeds of the Bonds are to be invested. The District may cease to comply with any such covenant if it has received a written opinion of a nationally recognized bond counsel to the effect that regulations or rulings hereafter promulgated modify or expand provisions of the Internal Revenue Code of 1986, as amended (the “Code”), so that such covenant is ineffective or inapplicable or non-compliance with such covenant will not adversely affect the exemption from federal income taxation of interest on the Bonds under Section 103 of the Code.

Additional Covenants

The District additionally covenants in the Bond Order that it will keep accurate records and accounts and employ an independent certified public accountant to audit and report on its financial affairs at the close of each fiscal year, such audits to be in accordance with applicable law, rules and regulations and open to inspection in the office of the District.

Remedies in Event of Default

The Bond Order establishes specific events of default with respect to the Bonds. If the District defaults in the payment of the principal of or interest on the Bonds when due, or the District defaults in the observance or performance of any of the covenants, conditions, or obligations of the District, the failure to perform which materially, adversely affects the rights of the owners, including but not limited to, their prospect or ability to be repaid in accordance with the Bond Order, and the continuation thereof for a period of 60 days after notice of such default is given by any owner to the District, the Bond Order and Chapter 54 of the Texas Water Code provide that any registered owner is entitled to seek a writ of mandamus from a court of proper jurisdiction requiring the District to make such payment or observe and perform such covenants, obligations,

or conditions. The issuance of a writ of mandamus may be sought if there is no other available remedy at law to compel performance of the Bonds or the Bond Order and the District's obligations are not uncertain or disputed. The remedy of mandamus is controlled by equitable principles, subject to the discretion of the court, but may not be arbitrarily refused. There is no acceleration of maturity of the Bonds in the event of default and, consequently, the remedy of mandamus may have to be relied upon from year to year. The Bond Order does not provide for the appointment of a trustee to represent the interest of the Bondholders upon any failure of the District to perform in accordance with the terms of the Bond Order, or upon any other condition and accordingly all legal actions to enforce such remedies would have to be undertaken at the initiative of, and be financed by, the registered owners. On April 1, 2016, the Texas Supreme Court ruled in Wasson Interests, Ltd. v. City of Jacksonville, 489 S.W.3d 427 (Tex. 2016) (“Wasson I”), that governmental immunity does not imbue a city with derivative immunity when it performs a proprietary, as opposed to a governmental, function in respect to contracts executed by a city. On October 5, 2019, the Texas Supreme Court issued a second opinion to clarify Wasson I, Wasson Interests, Ltd. v. City of Jacksonville, 559 S.W.3d 142 (Tex. 2019) (“Wasson II”, and together with Wasson I, “Wasson”), ruling that to determine whether governmental immunity applies to a breach of contract claim, the proper inquiry is whether the municipality was engaged in a governmental or proprietary function at the time it entered into the contract, not at the time of the breach. In Wasson, the Court recognized that the distinction between governmental and proprietary function is not clear. Therefore, in regard to municipal contract cases (as opposed to tort claim cases), it is incumbent on the courts to determine whether a function was governmental or proprietary based upon the statutory and common law guidance at the time of the contractual relationship. Texas jurisprudence has generally held that proprietary functions are those conducted by a city in its private capacity, for the benefit only of those within its corporate limits, and not as an arm of the government or under authority or for the benefit of the State; these are usually activities that can be, and often are, provided by private persons, and therefore are not done as a branch of the State, and do not implicate the state’s immunity since they are not performed under the authority, or for the benefit, of the State as sovereign. Issues related to applicability of a governmental immunity as they relate to the issuance of municipal debt have not been adjudicated. Each situation will be evaluated based on the facts and circumstances surrounding the contract in question. On June 30, 2006, the Texas Supreme Court ruled in Tooke v. City of Mexia, 49 Tex. Sup. Ct. J. 819 (Tex. 2006), that a waiver of sovereign immunity in a contractual dispute must be provided for by statute in "clear and unambiguous" language. Because it is unclear whether the Texas legislature has effectively waived the District's sovereign immunity from a suit for money damages, Bondholders may not be able to bring such a suit against the District for breach of the Bonds or Bond Order covenants. Even if a judgment against the District could be obtained, it could not be enforced by direct levy and execution against the District's property. Further, the registered owners cannot themselves foreclose on property within the District or sell property within the District to enforce the tax lien on taxable property to pay the principal of and interest on the Bonds. Furthermore, the District is eligible to seek relief from its creditors under Chapter 9 of the U.S. Bankruptcy Code (“Chapter 9”). Although Chapter 9 provides for the recognition of a security interest represented by a specifically pledged source of revenues, the pledge of ad valorem taxes in support of a general obligation of a bankrupt entity is not specifically recognized as a security interest under Chapter 9. Additionally, Chapter 9 includes an automatic stay provision that would prohibit, without Bankruptcy Court approval, the prosecution of any other legal action by creditors or Bondholders of an entity which has sought protection under Chapter 9. Therefore, should the District avail itself of Chapter 9 protection from creditors, the ability to enforce would be subject to the approval of the Bankruptcy Court (which could require that the action be heard in Bankruptcy Court instead of other federal or state court); and the Bankruptcy Code provides for broad discretionary powers of a Bankruptcy Court in administering any proceeding brought before it. The opinion of Bond Counsel will note that all opinions relative to the enforceability of the Bonds are qualified with respect to the customary rights of debtors relative to their creditors.

Consolidation

A district (such as the District) has the legal authority to consolidate with other districts and, in connection therewith, to provide for the consolidation of its water system with the water system(s) of the district(s) with which it is consolidating. The revenues of the consolidated system may be pledged equally to all first lien bonds of the consolidating districts. No representation is made that the District will consolidate its water system with that of any other district.

Annexation

The District is located entirely within the extraterritorial jurisdiction of the City, except for approximately 11.7 acres of commercial and retail (which is located in the city limits of Manor). Under prior Texas law, a municipality could annex and dissolve a municipal utility district located within its extraterritorial jurisdiction without consent of the District or its residents; however, under HB 347, the City may not annex the District unless (i) such annexation has been approved by a majority of those voting in an election held for that purpose within the area to be annexed, and (ii) if the registered voters in the area to be annexed do not own more than 50% of land in the area, a petition has been signed by more than 50% of the landowners consenting to the annexation. See “THE BONDS – Source and Security of Payments.”

Alteration of Boundaries

In certain circumstances, under Texas law the District may alter its boundaries to: i) upon satisfying certain conditions, annex additional territory; and ii) exclude land subject to taxation within the District that does not need to utilize the service of District facilities if certain conditions are satisfied, including the District’s simultaneous annexation of land of at least equal value that may be practicably served by District facilities. Such land substitution is subject to the approval of the TCEQ. No representation is made concerning the likelihood that the District will effect any change in its boundaries.

Approval of the Bonds

The TCEQ approved the issuance of the Bonds by an order signed on ______, 2020 (the “TCEQ Order”).

The Attorney General of Texas must approve the legality of the Bonds prior to their delivery. The Attorney General of Texas does not pass upon or guarantee the quality of the Bonds as an investment, nor does he pass upon the adequacy or accuracy of the information contained in this Official Statement.

Amendments to the Bond Order

The District may, without the consent of or notice to any registered owners, amend the Bond Order in any manner not detrimental to the interest of the registered owners, including the curing of an ambiguity, inconsistency, or formal defect or omission therein. In addition, the District may, with the written consent of the owners of a majority in principal amount of the Bonds then outstanding affected thereby, amend, add to, or rescind any of the provisions of the Bond Order, except that, without the consent of the owners of all of the Bonds affected, no such amendment, addition, or rescission may (i) extend the time or times of payment of the principal of and interest on the Bonds, reduce the principal amount thereof or the rate of interest therein, change the place or places at, or the coin or currency in which, any Bond or the interest thereon is payable, or in any other way modify the terms of payment of the principal of or interest on the Bonds, (ii) give any preference to any Bond over any other Bond, or (iii) reduce the aggregate principal amount of Bonds required for consent to any such amendment, addition, or rescission. In addition, a state, consistent with federal law, may within the exercise of its police powers make such modifications in the terms and conditions of contractual covenants relating to the payment of indebtedness of its political subdivisions as are reasonable and necessary for attainment of an important public purpose.

BOOK-ENTRY-ONLY SYSTEM

This section describes how ownership of the Bonds is to be transferred and how the principal of, premium, if any, and interest on the Bonds are to be paid to and credited by the DTC while the Bonds are registered in its nominee’s name. The information in this section concerning DTC and the Book-Entry-Only System has been provided by DTC for use in disclosure documents such as this Official Statement. The District believes the source of such information to be reliable, but takes no responsibility for the accuracy or completeness thereof.

The District cannot and does not give any assurance that (i) DTC will distribute payments of debt service on the Bonds, or redemption or other notices, to DTC Participant, (ii) DTC Participants or others will distribute debt service payments paid to DTC or its nominee (as the registered owner of the Bonds), or redemption or other notices, to the Beneficial Owners, or that they will do so on a timely basis, or (iii) DTC will serve and act in the manner described in this Official Statement. The current rules applicable to DTC are on file with the Securities and Exchange Commission, and the current procedures of DTC to be followed in dealing with DTC Participants are on file with DTC.

The Depository Trust Company (“DTC”), New York, New York, will act as securities depository for the Bonds. The Bonds will be issued as fully-registered Bonds registered in the name of Cede & Co. (DTC’s partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully-registered Bond certificate will be issued for each maturity of the Bonds, each in the aggregate principal amount of such maturity, and will be deposited with DTC.

DTC, the world’s 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 a rating of AA+ from S&P Global Ratings. 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.

Purchases of Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Bonds on DTC’s records. The ownership interest of each actual purchaser of each Bond (“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 Bonds are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in Bonds, except in the event that use of the book-entry system for the Bonds is discontinued.

To facilitate subsequent transfers, all 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 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 Bonds; DTC’s records reflect only the identity of the Direct Participants to whose accounts such 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. Beneficial Owners of Bonds may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Bonds, such as redemptions, tenders, defaults, and proposed amendments to the Bond documents. For example, Beneficial Owners of Bonds may wish to ascertain that the nominee holding the Bonds for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the registrar and request that copies of notices be provided directly to them.

Redemption notices shall be sent to DTC. If less than all of the Bonds within a maturity 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 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 District 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 Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy).

All payments on the Bonds will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC’s practice is to credit Direct Participants’ accounts upon DTC’s receipt of funds and corresponding detail information from the District or the Paying Agent/Registrar, on the payable date in accordance with their respective holdings shown on DTC’s records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with Bonds 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/Registrar, or the District, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of redemption proceeds, distributions, and dividend payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the District or the Paying Agent/Registrar, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants.

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

The District may decide to discontinue use of the system of book-entry-only transfers through DTC (or a successor securities depository). In that event, Bond certificates will be printed and delivered to DTC.

The information in this section concerning DTC and DTC’s book-entry system has been obtained from sources that the District believes to be reliable, but neither the District nor the Financial Advisor take any responsibility for the accuracy thereof.

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USE AND DISTRIBUTION OF BOND PROCEEDS

The proceeds of the Bonds will be used to finance the following: (i) water, wastewater, and drainage facilities within ShadowGlen Phase Two, Sections 21A and 21B; (ii) water, wastewater, and drainage facilities within ShadowGlen Phase Two, Section 17; (iii) engineering fees associated with items nos. 1 and 2; and (vii) operating advances made by the District. The remaining Bond proceeds will be used to: (i) capitalize approximately twenty- four (24) months’ interest requirements on the Bonds, (ii) pay developer interest; and (iii) pay certain legal costs associated with the issuance of the Bonds.

The estimated use and distribution of Bond proceeds is set forth below. Of the proceeds to be received from the sale of the Bonds, $3,855,332 is estimated to be required for construction costs, and $1,144,668 is estimated to be required for non-construction costs, including $350,000 of capitalized interest (approximately twenty-four (24) months of interest estimated at 3.5%).

Construction Costs A. Developer Contribution Items 1. ShadowGlen Phase Two, Sections 21A and 21B a) Water Distribution $ 459,946 b) Wastewater Collection 602,172 c) Drainage and Erosion Control 962,494 d) Clearing and Excavation 79,550 e) Mobilization, Bonds, and Miscellaneouos 77,715 Subtotal for ShadowGlen Phase Two, Sections 21A and 21B $ 2,181,877 2. ShadowGlen Phase Two, Section 17 a) Water Distribution 260,330 b) Wastewater Collection 264,070 c) Drainage and Erosion Control 650,410 d) Clearing and Excavation 12,597 e) Mobilization, Bonds, and Miscellaneouos 81,501 Subtotal for ShadowGlen Phase 2, Section 17 $ 1,268,908 3. Engineering and Permits (Estimated at 11.7% of Items 1 - 2) $ 404,547 Total Developer Contribution Items $ 3,855,332

B. District Items 1. N/A $ -

Total Construction Costs $ 3,855,332

Non-Construction Costs A. Legal Fees (1.5%) $ 68,750 B. Bond Counsel Fees (1.25%) 68,750 C. Fiscal Agent Fees (2.0%) 100,000 D. Interest 1 Capitalized Interest (2 years @ 3.50%) 350,000 2 Developer Interest (a) 121,101 E. Bond Discount (3%) 150,000 F. Operating Advances 181,125 G. Bond Issuance Expenses 38,442 H. Bond Application Report 49,000 I. Attorney General Fee (0.10%) 12,500 J. TCEQ Bond Issuance Fee (0.25%) 5,000 (b) K. Contingency - Total Non-Construction Costs $ 1,144,668

TO TAL BO ND IS S UE REQ UIREMENT $ 5,000,000 ______(a) Preliminary; subject to change. The amount of Developer interest will be finalized in connection with the reimbursement report approved by the Board of Directors prior to disbursement of funds. (b) The TCEQ, in its approval of the Bonds, directed any surplus Bond proceeds to be shown as a contingency line item and be subject to the TCEQ rules on use of surplus Bond funds.

INVESTMENT CONSIDERATIONS

General

The Bonds, which are obligations of the District and are not obligations of the City of Manor, Texas; Travis County, Texas; the State of Texas; or any other political subdivision, will be secured by a continuing direct annual ad valorem tax, without legal limitation as to rate or amount, on all taxable property located within the District. See “THE BONDS - Source of and Security for Payment.”

The ultimate security for payment of principal of and interest on the Bonds depends on the ability of the District to collect from the property owners within the District all taxes levied against the property or, in the event of foreclosure, on the value of the taxable property with respect to taxes levied by the District and by other taxing authorities. The collection by the District of delinquent taxes owed to it and the enforcement by registered owners of the District's obligation to collect sufficient taxes may be a costly and lengthy process. Furthermore, the District cannot and does not make any representations that continued development of property within the District will occur or that the development in the District will maintain taxable values sufficient to justify continued payment by property owners or that there will be a market for the property. See “INVESTMENT CONSIDERATIONS - Registered Owners' Remedies.”

Infectious Disease Outlook (COVID-19)

The World Health Organization has declared a pandemic following the outbreak of COVID-19, a respiratory disease caused by a new strain of coronavirus (the “Pandemic”) which is currently affecting many parts of the world, including the United States and Texas. On January 31, 2020, the Secretary of the United States Health and Human Services Department declared a public health emergency for the United States in connection with COVID-19. On March 13, 2020, the President of the United States declared the Pandemic a national emergency and the Texas Governor (the “Governor”) declared COVID-19 an imminent threat of disaster for all counties in Texas (collectively, the “disaster declarations”).

Pursuant to Chapter 418 of the Texas Government Code, the Governor has broad authority to respond to disasters, including suspending any regulatory statute prescribing the procedures for conducting state business or any order or rule of a state agency that would in any way prevent, hinder, or delay necessary action in coping with the disaster and issuing executive orders that have the force and effect of law. The Governor has issued a number of executive orders relating to COVID-19 preparedness and mitigation. These include, for example, the issuance of Executive Order GA-18 on April 27, 2020, which among other things, requires Texans to minimize in-person contact with people who are not in the same household unless such people are involved in essential services or reopened services (subject to certain conditions and limitations pertaining to such reopened services) or essential daily activities and closes schools in-person classroom attendance through the 2019 – 2020 school year. Furthermore, the Governor has suspended various statutes of the Texas Open Meetings Act that require government officials and members of the public to be physically present at a specified meeting location. This temporary suspension will allow for telephonic or videoconferencing meetings of governmental bodies that are accessible to the public in an effort to reduce in-person meetings that assemble larger groups of people. In addition, Travis County, within which the District is located, has issued “stay home” orders for most citizens except when engaged in specific essential business or government functions. Travis County’s “stay home” order does not prohibit homebuilding activity or the construction of utility facilities within the District. Many of the federal, state, and local actions and policies under the aforementioned disaster declarations are focused on limiting instances where the public can congregate or interact with each other, which affect economic growth within Texas.

Since the disaster declarations were made, the Pandemic has negatively affected travel, commerce, and financial markets globally, and is widely expected to continue negatively affecting economic growth and financial markets worldwide and within Texas. These negative impacts may reduce or negatively affect property values or homebuilding activity within the District. See “INVESTMENT CONSIDERATIONS – Factors Affecting Taxable Values and Tax Payments – Dependence Upon the Developer, Lot Owners and Homebuilders.” The Bonds are secured by an unlimited ad valorem tax, and a reduction in property values may require an increase in the ad valorem tax rate required to pay the Bonds as well as the District’s share of operations and maintenance expenses payable from ad valorem taxes.

The District continues to monitor the spread of COVID-19 and is working with local, state, and national agencies to address the potential impact of COVID-19 upon the District. While the potential impact of COVID-19 on the District cannot be quantified at this time, the continued outbreak of COVID-19 could have an adverse effect on the District’s operations and financial condition. For more information regarding the District’s current fund balances, see “FINANCIAL STATEMENTS – Cash and Investment Balances – Table 7” and “ – Current Investment – Table 8.”

No Certainty of a Secondary Market

Subject to prevailing market conditions, the Initial Purchaser intends, but is not obligated, to make a market in the Bonds. There is presently no secondary market for the Bonds and no assurance that a secondary market for the Bonds will develop or, if developed, will not be disrupted by events including but not limited to, the current Pandemic associated with the COVID-19 virus. Consequently, investors may not be able to resell the Bonds purchased should they need or wish to do so for emergency or other purposes.

Factors Affecting Taxable Values and Tax Payments

Economic Factors, Interest Rates, Credit Availability and Residential Foreclosures: A substantial percentage of the taxable value of the District results from the current market value of single-family residences and developed lots. The market value of such homes and lots is related to general economic conditions affecting the demand for and taxable value of residences. Demand for lots and residential dwellings can be significantly affected by factors such as interest rates, credit availability, construction costs, energy availability and the economic prosperity and demographic

characteristics of the urban centers toward which the marketing of lots is directed. Decreased levels of construction activity would tend to restrict the growth of property values in the District or could adversely impact existing values.

Interest rates and the availability of credit, including mortgage and development funding, have a direct impact on the construction activity, particularly short-term interest rates at which developers and homebuilders are able to obtain financing for development and construction costs. Interest rate levels and the general availability of credit may affect the ability of a landowner with undeveloped property to undertake and complete development activities within the District and the ability of potential homeowners to purchase homes. Because of the changing factors affecting the availability of funds, the District is unable to assess the future availability of such funds for continued development and construction within the District. In addition, the success of development within the District and growth of District taxable property values are, to a great extent, a function of the Austin metropolitan and regional economies.

Competition: The demand for single-family homes in the District could be affected by competition from other residential developments, including other residential developments located in other utility districts located near the District. In addition to competition for new home sales from other developments, there are numerous previously-owned homes in more established neighborhoods closer to downtown Austin that are for sale. Such homes could represent additional competition for homes proposed to be sold within the District.

The competitive position of developers in the sale of developed lots and of homebuilders in the construction of single-family residential houses within the District is affected by most of the factors discussed in this section. Such a competitive position is directly related to the growth and maintenance of taxable values in the District and tax revenues to be received by the District. The District can give no assurance that building and marketing programs in the District by the Developers will be implemented or, if implemented, will be successful.

Developer under No Obligation to the District: There is no commitment from, or obligation of, any Developer to proceed at any particular rate or according to any specified plan with the development of land or the construction of homes in the District, and there is no restriction on any landowner’s right to sell its land. Failure to construct taxable improvements on developed lots and tracts and failure of landowners to develop their land would restrict the rate of growth of taxable value in the District. The District is also dependent upon the Developers and the other principal taxpayers for the timely payment of ad valorem taxes, and the District cannot predict what the future financial condition of either will be or what effect, if any, such financial conditions may have on their ability to pay taxes. See “THE DEVELOPER” and “TAX DATA - Principal Taxpayers – Table 12.”

Impact on District Tax Rates: Assuming no further development, the value of the land and improvements currently existing within the District will be the major determinant of the ability or willingness of owners of property within the District to pay their taxes. The 2019 Certified Assessed Valuation of the District is $234,322,762. After issuance of the Bonds, the Projected Maximum Requirement will be $1,568,025 (2039) and the Projected Average Requirement will be $1,324,660 (2021 through 2039, inclusive). Assuming (1) no increase or decrease from the 2019 Certified Assessed Valuation; (2) the issuance of no additional debt; and (3) no other funds available for the payment of debt service, tax rates of $0.71 and $0.60 per $100 assessed valuation at a ninety-five percent (95%) collection rate would be necessary to pay the Projected Maximum Requirement and the Projected Average Requirement, respectively. The 2020 Preliminary Assessed Valuation of the District is $259,229,895. Based upon the assumptions above, tax rates of $0.64 and $0.54 per $100 assessed valuation at a ninety-five percent (95%) collection rate would be necessary to pay the Projected Maximum Requirement and the Projected Average Requirement, respectively, based upon the 2020 Preliminary Assessed Valuation. The Estimated Assessed Valuation as of July 1, 2020 of the District is $______. Based upon the assumptions above, tax rates of $0.__ and $0.__ per $100 assessed valuation at a ninety-five percent (95%) collection rate would be necessary to pay the Projected Maximum Requirement and the Projected Average Requirement, respectively, based upon the Estimated Assessed Valuation as of July 1, 2020. See “PROJECTED DEBT SERVICE REQUIREMENTS – TABLE 3” and “TAX DATA - Tax Adequacy for Debt Service.”

Dependence Upon the Developer, Lot Owners and Homebuilders: The growth of the tax base is dependent upon additional development of lots in the District and the construction of homes thereon. The Developers are under no obligation to continue to market, or improve, or to develop tracts of land. Thus, the furnishing of information related to the proposed development by the Developers should not be interpreted as such a commitment by the Developers. The District makes no representation about the probability of development continuing in a timely manner or about the ability of the Developers, or any other subsequent landowner to whom such party may sell all or a portion of its holdings within the District, to implement any plan of development. Furthermore, there is no restriction on the Developers’ right to sell their land. The District can make no prediction as to the effects that current or future economic or governmental circumstances or regulations may have on any plans of the Developers. Failure to construct taxable improvements on developed lots and tracts or failure of the Developers to develop their land would restrict the rate of growth of taxable value in the District. See “THE DEVELOPERS.”

The 2019 principal taxpayers in the District represented $21,217,300 or 9.05% of the District’s 2019 Certified Taxable Assessed Valuation of $234,322,762. The Developers, homebuilders and related entities represented $6,305,775 or 2.69% of the District’s 2019 Certified Taxable Assessed Valuation of $234,322,762. If the Developer (or other principal taxpayer) were to default in the payment of taxes in an amount which exceeds the District’s debt service fund surplus, the ability of the District to make timely payment of debt service on the Bonds will be dependent on its ability to enforce and liquidate its tax lien, which is a time-consuming process, or to sell tax anticipation notes. Failure to recover or borrow funds in a timely fashion could result in an excessive District tax rate, hindering growth and leading to further defaults in the payment of taxes. The District is not required by law or the Bond Order to maintain any specified amount of surplus in its debt service fund. See “Tax Collection Limitations and Foreclosure Remedies” in this section, “TAX DATA – Principal Taxpayers – Table 12,” and “TAXING PROCEDURES – Levy and Collection of Taxes.”

Undeveloped Acreage . . . Approximately 27.49 acres of developable land within the District had not been provided with water, wastewater and storm drainage and detention facilities as of April 30, 2020. Such acreage excludes approximately 36.32 acres with water, wastewater, and storm

drainage and detention facilities currently under construction, with completion anticipated by ______. In the opinion of the District’s engineers, the remaining authorized but unissued bonds should be sufficient to fund water, sanitary sewer and drainage services to all areas now within the District. See “THE BONDS – Alteration of Boundaries” and “THE DISTRICT – Current Status of Development.”

Development and Home Construction in the District . . . According to the Developer, as of April 30, 2020, approximately 195 developed lots within the District remained available for construction. Failure of the Developers and/or builders to construct taxable improvements on developed lots could result in substantial increases in the rate of taxation by the District during the term of the Bonds to pay debt service on the Bonds and any other tax supported debt of the District issued in the future. Future increases in value will result primarily from the construction of homes by builders. See “Impact on District Tax Rates” above.

Tax Collections and Foreclosure Remedies

The District has a right to seek judicial foreclosure on a tax lien, but such remedy may prove to be costly and time consuming and, since the future market or resale market, if any, of the taxable real property within the District is uncertain, there can be no assurance that such property could be sold and delinquent taxes paid. Additionally, the District’s tax lien is on a parity with the liens of all other State and local taxing authorities on the property against which the taxes are levied. Registered owners of the Bonds are entitled under Texas law to a writ of mandamus to compel the District to perform its obligations. Such remedy would have to be exercised upon each separate default and may prove costly, time consuming and difficult to enforce. Furthermore, there is no trust indenture or trustee, and all legal actions would have to be taken on the initiative of, and be financed by, registered owners to enforce such remedies. The rights and remedies of the registered owners and the enforceability of the Bonds may also be limited by bankruptcy, reorganization and other similar laws affecting the enforcement of creditors' rights generally.

Bond Insurance Risks

The District has applied for a bond insurance policy to guarantee the scheduled payment of principal and interest on the Bonds. The purchase of bond insurance, if available, will be at the option and expense of the Initial Purchaser. If a bond insurance policy is purchased by the Initial Purchaser, provided below are risk factors relating to bond insurance.

In the event of default of the payment of principal or interest with respect to the Bonds when all or some become due, any owner of the Bonds shall have a claim under the applicable Bond Insurance Policy (the “Policy”) for such payments. However, in the event of any acceleration of the due date of such principal by reason of mandatory or optional redemption or acceleration resulting from default of otherwise, other than any advancement of maturity pursuant to a mandatory sinking fund payment, the payments are to be made in such amounts and at such times as such payments would have been due had there not been any such acceleration. The Policy does not insure against redemption premium, if any. The payment of principal and interest in connection with mandatory or optional prepayment of the Bonds by the issuer which is recovered by the issuer from the bond owner as a voidable preference under applicable bankruptcy law is covered by the insurance policy, however, such payments will be made by the Insurer at such time and in such amounts as would have been due absent such prepayment by the Issuer unless the Bond Insurer chooses to pay such amounts at an earlier time.

Under most circumstances, default of payment of principal and interest does not obligate acceleration of the obligations of the Bond Insurer (the “Bond Insurer”) without appropriate consent. The Bond Insurer may direct and must consent to any remedies and the Bond Insurer’s consent may be required in connection with amendments to any applicable bond documents.

In the event the Bond Insurer is unable to make payment of principal and interest as such payments become due under the Policy, the Bonds are payable solely from the moneys received pursuant to the applicable bond documents. In the event the Bond Insurer becomes obligated to make payments with respect to the Bonds, no assurance is given that such event will not adversely affect the market price of the Bonds or the marketability (liquidity) for the Bonds.

The long-term ratings on the Bonds are dependent in part on the financial strength of the Bond Insurer and its claim-paying ability. The Bond Insurer’s financial strength and claims-paying ability are predicated upon a number of factors which could change over time. No assurance is given that the long-term ratings of the Bond Insurer and of the ratings on the Bonds insured by the Bond Insurer will not be subject to downgrade and such event could adversely affect the market price of the Bonds or the marketability (liquidity) for the Bonds. See description of “MUNICIPAL BOND RATING AND BOND INSURANCE” herein.

The obligations of Bond Insurer are contractual obligations and in an event of default by the Bond Insurer, the remedies available may be limited by applicable bankruptcy law or state law related to insolvency of insurance companies.

Neither the District nor the Initial Purchaser has made independent investigation into the claims-paying ability of the Bond Insurer and no assurance or representation regarding the financial strength or projected financial strength of the Bond Insurer is given. Thus, when making an investment decision, potential investors should carefully consider the ability of the District to pay principal and interest on the Bonds and the claims-paying ability of the Bond Insurer, particularly over the life of the investment. See “MUNICIPAL BOND RATING AND BOND INSURANCE” herein for further information provided by the Bond Insurer and the Policy, which includes further instructions for obtaining current financial information concerning the Bond Insurer.

Registered Owners' Remedies

In the event of default in the payment of principal of or interest on the Bonds, the registered owners have the right to seek a writ of mandamus, requiring the District to levy adequate taxes each year to make such payments. Except for mandamus, the Bond Order does not specifically provide for remedies to protect and enforce the interest of the registered owners. There is no acceleration of maturity of the Bonds in the event of default and, consequently, the remedy of mandamus may have to be relied upon from year to year. Although the registered owners could obtain a judgment against the District, such a judgment could not be enforced by direct levy and execution against the District's property. Further, the registered owners cannot themselves foreclose on property within the District or sell property within the District in order to pay the principal of and interest on the Bonds. The enforceability of the rights and remedies of the registered owners may further be limited by laws relating to bankruptcy, reorganization or other similar laws of general application affecting the rights of creditors of political subdivisions such as the District.

Marketability

The District has no understanding with the Initial Purchaser regarding the reoffering yields or prices of the Bonds and has no control over trading of the Bonds in the secondary market. Moreover, there is no assurance that a secondary market will be made in the Bonds. If there is a secondary market, the difference between the bid and asked price for the Bonds may be greater than the difference between the bid and asked price of bonds of comparable maturity and quality issued by more traditional issuers as such bonds are more generally bought, sold or traded in the secondary market.

Bankruptcy Limitation to Registered Owners' Rights

The enforceability of the rights and remedies of registered owners may be limited by laws relating to bankruptcy, reorganization or other similar laws of general application affecting the rights of creditors of political subdivisions such as the District. Subject to the requirements of State law discussed below, a political subdivision such as the District may voluntarily file a petition for relief from creditors under Chapter 9 of the Federal Bankruptcy Code, 11 USC sections 901-946. The filing of such petition would automatically stay the enforcement of registered owners' remedies, including mandamus and the foreclosure of tax liens upon property within the District discussed above. The automatic stay would remain in effect until the federal bankruptcy judge hearing the case dismissed the petition, enters an order granting relief from the stay or otherwise allows creditors to proceed against the petitioning political subdivision. A political subdivision, such as the District, may qualify as a debtor eligible to proceed in a Chapter 9 case only if it (i) is specifically authorized to file for federal bankruptcy protection by applicable state law, (ii) is insolvent or unable to meet its debts as they mature, (iii) desires to effect a plan to adjust such debts, and (iv) has either obtained the agreement of or negotiated in good faith with its creditors or is unable to negotiate with its creditors because negotiations are impracticable. Under State law a municipal utility district, such as the District, must obtain the approval of the TCEQ as a condition to seeking relief under the Federal Bankruptcy Code. The TCEQ is required to investigate the financial condition of a financially troubled district and authorize such district to proceed under Federal bankruptcy law only if such district has fully exercised its rights and powers under State law and remains unable to meet its debts and other obligations as they mature.

Notwithstanding noncompliance by a district with State law requirements, a district could file a voluntary bankruptcy petition under Chapter 9, thereby involving the protection of the automatic stay until the bankruptcy court, after a hearing, dismisses the petition. A Federal bankruptcy court is a court of equity and Federal bankruptcy judges have considerable discretion in the conduct of bankruptcy proceedings and in making the decision of whether to grant the petitioning district relief from its creditors. While such a decision might be applicable, the concomitant delay and loss of remedies to the registered owners could potentially and adversely impair the value of the registered owner's claim.

If a petitioning district were allowed to proceed voluntarily under Chapter 9 of the Federal Bankruptcy Code, it could file a plan for an adjustment of its debts. If such a plan were confirmed by the bankruptcy court, it could, among other things, affect a registered owner by reducing or eliminating the amount of indebtedness, deferring or rearranging the debt service schedule, reducing or eliminating the interest rate, modifying or abrogating collateral or security arrangements, substituting (in whole or in part) other securities, and otherwise compromising and modifying the rights and remedies of the registered owner's claim against a district. A district may not be forced into bankruptcy involuntarily.

The Effect of the Financial Institutions Act of 1989 on Tax Collections of the District

The “Financial Institutions Reform, Recovery and Enforcement Act of 1989” (“FIRREA”), enacted on August 9, 1989, contains certain provisions which affect the time for protesting property valuations, the fixing of tax liens, and the collection of penalties and interest on delinquent taxes on real property owned by the Federal Deposit Insurance Corporation (“FDIC”) when the FDIC is acting as the conservator or receiver of an insolvent financial institution.

Under FIRREA real property held by the FDIC is still subject to ad valorem taxation, but such act states (i) that no real property of the FDIC shall be subject to foreclosure or sale without the consent of the FDIC and no involuntary liens shall attach to such property, (ii) the FDIC shall not be liable for any penalties or fines, including those arising from the failure to pay any real or personal property tax when due and (iii) notwithstanding failure of a person to challenge an appraisal in accordance with state law, such value shall be determined as of the period for which such tax is imposed.

There has been little judicial determination of the validity of the provisions of FIRREA or how they are to be construed and reconciled with respect to conflicting state laws. However, certain recent federal court decisions have held that the FDIC is not liable for statutory penalties and interest authorized by State property tax law, and that although a lien for taxes may exist against real property, such lien may not be foreclosed without the consent of the FDIC, and no liens for penalties, fines, interest, attorney’s fees, costs of abstract and research fees exist against the real

property for the failure of the FDIC or a prior property owner to pay ad valorem taxes when due. It is also not known whether the FDIC will attempt to claim the FIRREA exemptions as to the time for contesting valuations and tax assessments made prior to and after the enactment of FIRREA. Accordingly, to the extent that the FIRREA provisions are valid and applicable to any property in the District, and to the extent that the FDIC attempts to enforce the same, these provisions may affect the timeliness of collection of taxes on property, if any, owned by the FDIC in the District, and may prevent the collection of penalties and interest on such taxes.

Continuing Compliance with Certain Covenants

Failure of the District to comply with certain covenants contained in the Bond Order on a continuing basis prior to the maturity of the Bonds could result in interest on the Bonds becoming taxable retroactively to the date of original issuance. See “TAX MATTERS.”

Future Debt

As of January 1, 2020, approximately 352.81 acres of land within the District have been or are currently being developed with utility facilities by the Developers. According to information obtained by Schroeder Engineering Company, (the “Engineer”), after reimbursement of the construction costs and engineering costs for the projects proposed in this bond issue, the are no other completed projects with construction and engineering costs remaining owed to the Developers as of March 31, 2019.

The Developers will be owed additional funds as additional subdivision projects are constructed with reimbursements expected to be made from the proceeds of future installments of bonds over the next several years. Each future issue of bonds is intended to be sold at the earliest practicable date consistent with the maintenance of a reasonable tax rate in the District (assuming projected increases in the value of taxable property made at the time of issuance of the bonds are accurate) see “THE DEVELOPER – Utility Developer Agreements.” The District does not employ any formula with respect to assessed valuations, tax collections or otherwise to limit the amount of parity bonds which it may issue. The issuance of additional bonds is subject to approval by the TCEQ pursuant to its rules regarding issuance and feasibility of bonds. In addition, future changes in health or environmental regulations could require the construction and financing of additional improvements without any corresponding increases in taxable value in the District. See “THE BONDS – Issuance of Additional Debt.”

The District has reserved in the Bond Order the right to issue the remaining authorized but unissued bonds approved by the voters. See “THE BONDS – Authority for Issuance.” All of the remaining unlimited tax bonds which have heretofore been authorized by the voters of the District may be issued by the District from time to time for qualified purposes, as determined by the Board of Directors of the District, subject to the approval of the Attorney General of the State of Texas and the TCEQ.

Governmental Approval

As required by law, engineering plans, specifications and estimates of construction costs for the facilities and services to be purchased or constructed by the District with the proceeds of the Bonds have been approved, subject to certain conditions, by the TCEQ. See “USE AND DISTRIBUTION OF BOND PROCEEDS.” The TCEQ approved the issuance of the Bonds by an order signed on ______, 2020 (the “TCEQ Order”). In addition, the Attorney General of Texas must approve the legality of the Bonds prior to their delivery.

Neither the TCEQ nor the Attorney General of Texas passes upon or guarantees the security of the Bonds as an investment, nor have the foregoing authorities passed upon the adequacy or accuracy of the information contained in this Official Statement.

No Requirement to Build on Developed Lots

Currently, there is no requirement that builders owning developed lots within the District commence or complete construction of improvements within any particular time period. Failure to construct taxable improvements on developed lots would restrict the rate of growth of taxable value in the District.

Forward-Looking Statements

The statements contained in this Official Statement, and in any other information provided by the District, that are not purely historical, are forward-looking statements, including statements regarding the District’s expectations, hopes, intentions, or strategies regarding the future. Readers should not place undue reliance on forward-looking statements. All forward-looking statements included in this Official Statement are based on information available to the District on the date hereof, and the District assumes no obligation to update any such forward-looking statements.

The forward looking statements herein are necessarily based on various assumptions and estimates and are inherently subject to various risks and uncertainties, including risks and uncertainties relating to the possible invalidity of the underlying assumptions and estimates and possible changes or developments in social, economic, business, industry, market, legal and regulatory circumstances and conditions and actions taken or omitted to be taken by third parties, including customers, suppliers, business partners and competitors, and legislative, judicial and other governmental authorities and officials. Assumptions related to the foregoing involve judgments with respect to, among other things, future economic competitive, and market conditions and future business decisions, all of which are difficult or impossible to predict accurately and, therefore, there can be no assurance that the forward-looking statements included in this Official Statement would prove to be accurate.

Environmental Regulation

Wastewater treatment and water supply facilities are subject to stringent and complex environmental laws and regulations. Facilities must comply with environmental laws at the federal, state, and local levels. These laws and regulations can restrict or prohibit certain activities that affect the environment in many ways such as:

1. Requiring permits for construction and operation of water supply wells and wastewater treatment facilities; 2. Restricting the manner in which wastes are released into the air, water, or soils; 3. Restricting or regulating the use of wetlands or other property; 4. Requiring remedial action to prevent or mitigate pollution; 5. Imposing substantial liabilities for pollution resulting from facility operations.

Compliance with environmental laws and regulations can increase the cost of planning, designing, constructing and operating water production and wastewater treatment facilities. Sanctions against a water district for failure to comply with environmental laws and regulations may include a variety of civil and criminal enforcement measures, including assessment of monetary penalties, imposition of remedial requirements, and issuance of injunctions as to future compliance of and the ability to operate the District’s water supply, wastewater treatment, and drainage facilities. Environmental laws and regulations can also impact an area’s ability to grow and develop. The following is a discussion of certain environmental concerns that relate to the District. It should be noted that changes in environmental laws and regulations occur frequently, and any changes that result in more stringent and costly requirements could materially impact the District.

Air Quality Issues. The Federal Clean Air Act (“CAA”) requires the United States Environmental Protection Agency (the “EPA”) to adopt and periodically revise national ambient air quality standards (“NAAQS”) for each air pollutant that may reasonably be anticipated to endanger public health or welfare. Areas that exceed the NAAQS for a given pollutant can be designated as nonattainment by the EPA. A nonattainment designation then triggers a process by which the affected state must develop and implement a plan to improve air quality and “attain” compliance with the appropriate standard. This so called State Implementation Plan (“SIP”) entails enforceable control measures and time frames.

In 1997, the EPA adopted the “8-hour” ozone standard of 80 parts per billion (“ppb”) (the “1997 Ozone Standard”) to protect public health and welfare. In 2008, the EPA lowered the ozone standard to 75 ppb (the “2008 Ozone Standard”). The Austin area, consisting of Williamson, Hays, Travis, Bastrop and Caldwell Counties (the “Austin Area”) was not designated “nonattainment” under the 2008 Ozone Standard.

On October 1, 2015, the EPA lowered the ozone standard to 70 ppb (the “2015 Ozone Standard”). On May 1, 2019, the EPA designated the Austin Area as “attainment” under the 2015 Ozone Standards, which became effective on August 3, 2019.

Should the Austin Area fail to achieve EPA NAAQS, or should the Austin Area fail to satisfy an effective SIP (for nonattainment or otherwise), or for any other reason should a lapse in conformity with the CAA occur, the Austin Area may be subjected to sanctions pursuant to the CAA. Under such circumstances, the TCEQ would be required under the CAA to submit to the EPA a new SIP under the CAA for the Austin Area. Due to the complexity of nonattainment/conformity analysis, the status of the EPA’s implementation of any future EPA NAAQS and the incomplete information surrounding any SIP requirements for areas designated nonattainment under any future EPA NAAQS, the exact nature of sanctions or any potential SIP that may be applicable to the Austin Area in the near future is uncertain. The CAA provides for mandatory sanctions, including the suspension of federal highway funding, should the State fail to submit a proper SIP, or associated submissions, or fail to revise or implement a SIP, or fail to comply with an existing SIP. Subject to certain exceptions, if the Austin Area falls out of conformity and the mandatory highway funding suspension sanction is implemented, the United States Secretary of Transportation may be prohibited from approving or awarding transportation projects or grants within the area.

It is possible that nonattainment, a lapse in conformity under the CAA, litigation involving injunctive or other relief, or other environmental issues may impact new industrial, commercial and residential development in the Austin Area.

Water Supply & Discharge Issues. Water supply and discharge regulations that the District may be required to comply with involve: (1) public water supply systems, (2) wastewater discharges from treatment facilities, (3) storm water discharges and (4) wetlands dredge and fill activities. Each of these is addressed below:

Pursuant to the federal Safe Drinking Water Act (“SDWA”) and the EPA’s National Primary Drinking Water Regulations (“NPDWRs”), which are implemented by the TCEQ’s Water Supply Division, a municipal utility district’s provision of water for human consumption is subject to extensive regulation as a public water system.

Municipal utility districts must generally provide treated water that meets the primary and secondary drinking water quality standards adopted by the TCEQ, the applicable disinfectant residual and inactivation standards, and the other regulatory action levels established under the agency’s rules. The EPA has established NPDWRs for more than ninety (90) contaminants and has identified and listed other contaminants which may require national drinking water regulation in the future.

Texas Pollutant Discharge Elimination System (“TPDES”) permits set limits on the type and quantity of discharge, in accordance with state and federal laws and regulations. The TCEQ reissued the TPDES Construction General Permit (TXR150000), with an effective date of March 5, 2019, which is a general permit authorizing the discharge of stormwater runoff associated with small and large construction sites and certain nonstormwater discharges into surface water in the state. It has a 5-year permit term, and is then subject to renewal. Moreover, the federal Clean

Water Act (“CWA”) and Texas Water Code require municipal wastewater treatment plants to meet secondary treatment effluent limitations and more stringent water quality-based limitations and requirements with which a municipal utility district must comply may have an impact on the municipal utility district’s ability to obtain and maintain compliance with TPDES permits.

In 2015, the EPA and USACE promulgated a rule known as the Clean Water Rule (“CWR”) aimed at redefining “waters of the United States” over which the EPA and USACE have jurisdiction under the CWA. The CWR significantly expanded the scope of the federal government’s CWA jurisdiction over intrastate water bodies and wetlands.

On September 12, 2019, the EPA and USACE finalized a rule repealing the CWR, thus reinstating the regulatory text that existed prior to the adoption of the CWR. This repeal became final on December 23, 2019.

On January 23, 2020, the EPA and the USACE finalized a replacement definition of “waters of the United States.” The new definition outlines six (6) categories of waters that would be considered “waters of the United States,” including traditional navigable waters, tributaries to those waters, certain ditches, certain lakes and ponds, impoundments of jurisdictional waters, and wetlands adjacent to jurisdictional waters. The rule also details what are not “waters of the United States,” such as features that only contain water during or in response to rainfall (e.g., ephemeral features); groundwater; many ditches, including most roadside or farm ditches; prior converted cropland; stormwater control features; and waste treatment systems. The proposed rule will become effective 60 days after publication in the Federal Register, which has not yet occurred.

Operations of the District are also potentially subject to stormwater discharge permitting requirements as set forth under the CWA and regulations implementing the CWA The TCEQ adopted by reference the vast majority of the EPA regulations relating to stormwater discharges and currently has issued a general permit for stormwater discharges associated with industrial activities and two general permits for stormwater discharges associated with construction activities and municipal separate storm sewer systems (“MS-4”). The District is not currently located within an area that is subject to the MS-4 permit. The District may also be required to develop and implement stormwater pollution prevention plans and stormwater management plans. The District could incur substantial costs to develop and implement such plans as well as to install or implement best management practices to minimize or eliminate unauthorized pollutants that may otherwise be found in stormwater runoff. Failure to comply with these requirements may result in the imposition of administrative, civil, and criminal penalties as well as injunctive relief under the CWA or the Texas Water Code.

Future and Proposed Legislation

Tax legislation, administrative actions taken by tax authorities, or court decisions, whether at the Federal or state level, may adversely affect the tax-exempt status of interest on the Bonds under Federal or state law and could affect the market price or marketability of the Bonds. Any such proposal could limit the value of certain deductions and exclusions, including the exclusion for tax-exempt interest. The likelihood of any such proposal being enacted cannot be predicted. Prospective purchasers of the Bonds should consult their own tax advisors regarding the foregoing matters.

Drought Conditions

Central Texas, like other areas of the State, has experienced drought conditions. Metro Water Systems, Inc. (fka Metro H2O, Ltd.), as the wholesale water supplier to the Master District, provides water to the Participants in amounts sufficient to service the residents of the District; however, as drought conditions occur within the District, water usage and rates could be impacted.

Storm Water

In 2018, National Weather Service completed a rainfall study known as NOAA Atlas 14, Volume 11 Participation-Frequency Atlas of the United States (“Atlas 14”). Floodplain boundaries within the District may be redrawn based on the Atlas 14 study based on higher statistical rainfall amount, resulting in interim floodplain regulations applying to a larger number of properties and consequently leaving less developable property within the District. Such regulations could additionally result in higher insurance rates, increased development fees, and stricter building codes for any property located within the expanded boundaries of the floodplain. See “THE SYSTEM – 100 – Year Floodplain.”

THE MASTER DISTRICT

General

The District along with the other three Participants were created as conservation and reclamation districts for the purpose of providing water, wastewater and storm drainage facilities to the acreage within their respective boundaries. Pursuant to an election held within the boundaries of each Participant on May 3, 2003, each Participant approved the Master District Contract which designates Wilbarger Creek Municipal Utility District No. 2 as the “Master District” to serve as the regional provider of water, wastewater and storm drainage, including water quality, facilities to serve development within the Participants. The Master District Contract also authorizes the Master District to issue contract tax bonds to acquire, purchase, construct and maintain the Master District Facilities to serve the Participants. The Master District will own and operate the Master District Facilities. See “THE SYSTEM.”

Master District Service Area

The following chart more completely describes the Participants, including each Participant's acreage and projected ultimate living unit equivalents ("LUEs") based on current land use plans.

______(a) Gross acreage includes all easements, rights-of-way and any other undevelopable acreage. (b) As of March 2020. (c) Provided by the Developer and represents the existing land use plan. The District makes no representation that property within the District or within the Participants will develop as shown above.

Metro Water Systems, Inc., a Texas corporation formerly known as Metro H2O, Ltd. (“Metro”), has entered into an “Amended and Restated Regional Water Capacity and Supply Agreement for a Portion of Northeastern Travis County, Texas” (as amended, the “Water Supply Contract”) with the four Participants to provide up to 6,010 LUEs of potable water supply capacity to the Participants. Additionally, the Participants and Metro originally entered into an “Amended and Restated Sewage Disposal Capacity and Services Agreement for a Portion of Northeastern Travis County, Texas” (the “Wastewater Treatment Contract”) whereby Metro agreed to construct certain wastewater treatment facilities sufficient to serve up to 6,010 LUEs of wastewater from the Participants. In connection with its acquisition of the Wastewater Treatment Plant from Metro, the Master District acquired Metro’s interest in the Wastewater Treatment Contract. The currently estimated 6,567 LUEs projected to be developed within the Participants is in excess of the 6,010 LUEs currently included in the Participants’ reserved LUE capacity under the Water Supply Contract and Wastewater Treatment Contract. The Participants expect to commence negotiations with Metro with respect to the Water Supply Contract, and the Master District, with respect to the Wastewater Treatment Contract, regarding amending these contracts to increase the existing LUE capacity. See “THE SYSTEM – Water Supply and Distribution” and “Wastewater Collection and Treatment.” Cottonwood Creek Water Control and Improvement District No. 3 is also a party to the Water Supply Contract and Wastewater Treatment Contract but has not been allocated any capacity.

Contract Tax Bonds

The Master District Contract provides that each Participant shall pay a pro rata share of debt service on any Master District bonds, issued from time to time to acquire, construct, purchase and maintain Master District Facilities, based upon the Participant’s certified assessed valuation as a percentage of the total assessed valuation in all the Participants. The debt service requirements shall be calculated to include the charge and expenses of paying agents, registrars and trustees utilized in connection with the bonds, the principal, interest and redemption requirements of the bonds and all amounts required to establish and maintain funds required under the bond resolution or trust indenture relating to such bonds. Each Participant is obligated to pay its pro rata share of the annual debt service on such bonds from the proceeds of an annual ad valorem contract tax which is not limited as to rate or amount, revenues derived from the operation of each Participant's internal water, wastewater and drainage systems or from any other legally available funds of each Participant. Each Participant's pro rata share of debt service requirements will be calculated annually by the Master District; however, the levy of a contract tax for the purpose of paying debt service on the bonds is the sole responsibility of each Participant.

The Master District has issued $4,250,000 Unlimited Contract Tax Bonds, Series 2006; $5,660,000 Unlimited Contract Tax Bonds, Series 2008; $5,100,000 Unlimited Contract Tax Refunding Bonds, Series 2010; $4,910,000 Unlimited Contract Tax Refunding Bonds, Series 2012; $4,835,000 Unlimited Contract Tax Refunding Bonds, Series 2016; $4,160,000 Unlimited Contract Tax Bonds, Series 2017; $4,460,000 Unlimited Contract Tax Bonds, Series 2018, and $6,000,000 Unlimited Contract Tax Bonds, Series 2019 (collectively, the “Master District Bonds”). The District's pro rata share of such debt is $9,829,108 (or 45.77%) based upon the District's percentage of the cumulative assessed value of the Participants (2019 Assessed Valuation of $511,954,955) multiplied by the outstanding principal amount of Master District bonds issued ($21,475,000).

The Master District expects to issue additional unlimited contract tax bonds from time to time, as it becomes financially feasible, to expand the wastewater treatment plant and construct additional water storage facilities. The Master District recently commissioned an updated water model in order to project more specifically when the additional water storage capacity will be required. According to Jones & Carter, Inc., and based on

the Developer’s current development projects, an additional elevated water storage tank would need to be operational by 2021. This date is subject to change depending on the actual build out. The Master District also intends to finance future expansions of and for upgrades to the Wastewater Treatment Plant through the issuance of bonds, as well as any other Master District facilities which may be required in the future.

Operation and Maintenance Expenses

Pursuant to the Master District Contract, each Participant is further obligated to pay monthly charges to the Master District for water, sewer, and drainage, including water quality, services rendered pursuant to the Master District Contract (“Monthly Charges”). The Monthly Charges to be paid by each Participant to the Master District will be used to pay each Participant's share of operation and maintenance expenses for Master District Facilities and to provide for an operation and maintenance reserve equal to five months of operation and maintenance expenses for such facilities. Each Participant's share of operation and maintenance expenses and reserve requirements is calculated by the Master District based upon the following categories of costs: (i) direct costs, including LUE fee payments and other costs directly incurred by the Participant; (ii) volume-related costs, including actual usage fees related to water supply and wastewater collection and treatment; and (iii) all other costs, including administrative costs. The Master District bills the Participants monthly for such costs. Each Participant, in turn, charges retail water and wastewater rates to its customer based upon actual usage, the revenues from which are used to pay the Monthly Charges. The current Monthly Charges being charged to the District by the Master District average approximately $92,806/month, according to the District’s bookkeeper Bott & Douthitt, P.L.L.C.

Pursuant to the Master District Contract, each Participant is obligated to establish and maintain rates, fees and charges for services provided by each Participant's water distribution system, wastewater collection system, and drainage system, together with taxes levied and funds received from any other lawful sources, sufficient at all times to pay each Participant's operation and maintenance expenses, and each Participant's obligations pursuant to the Master District Contract, including each Participant's pro rata share of the Master District's debt service requirements, Monthly Charges and any expenses related to the billing and collecting of the Monthly Charges by the Master District.

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LOCATION MAP

THE DISTRICT

General

The District is a conservation and reclamation district created by an order of the Texas Water Commission, a predecessor to the Texas Commission on Environmental Quality (the “TCEQ” or the “Commission”), dated December 13, 1983. Creation of the District was confirmed by the voters of the District at an election held on August 25, 1984. The District currently operates under Chapters 49 and 54 of the Texas Water Code and is subject to Article XVI, Section 59, of the Texas Constitution. The District was created to provide water, wastewater and storm drainage for the development within its boundaries.

The District is empowered, among other things, to purchase, construct, operate and maintain all works, improvements, facilities and plants necessary for the supply and distribution of water; the collection, transportation, and treatment of wastewater; and the control and diversion of storm water. If approved by the voters within the District and the TCEQ, the District may establish, operate and maintain a fire department, independently or with one or more other conservation and reclamation districts, and provide such facilities and services to the customers of the District. Fire protection and emergency services are currently provided to the residents of the District by Travis County Emergency Services District No. 12. The District is additionally authorized pursuant to Article XVI, Section 59 of the Texas Constitution and Chapter 49 of the Texas Water Code to issue bonds, subject to voter approval and the approval of TCEQ, payable from ad valorem taxes to pay for the development and maintenance of park and recreational facilities. Pursuant to an election held within the District on February 7, 2004, the voters within the District approved the issuance of $3,500,000 in bonds for park and recreational facilities.

Management

Board of Directors

The District is governed by a board, consisting of five directors, which has control over and management supervision of all affairs of the District. Directors' terms are four years, with elections held within the District in November in each even-numbered year. All of the directors own property in the District.

Name Title Term Expires Length of Service Wilmer Roberts President 2020 8 ½ Years Michel E. Moore Vice President 2020 1 ½ Years Debora C. Pickens Secretary 2022 7 ½ Years Raymond C. Mura Assistant Secretary 2022 2 ½ Years Tracy Johnson Assistant Secretary 2022 ½ Year

Consultants

Tax Assessor/Collector

Land and improvements in the District are being appraised by the Travis Central Appraisal District. The Tax Assessor/Collector is appointed by the Board of Directors of the District. The Travis County Tax Assessor/Collector, Bruce Elfant, currently serves the District in this capacity under contract.

Operator

The District contracts with Crossroads Utility Services, LLC (“Crossroads”) to serve as operator for the District. Crossroads serves in a similar capacity for 60 other special districts in the Austin metropolitan area.

Engineer

The District’s consulting engineer is Schroeder Engineering Company (the “Engineer”). Such firm serves as consulting engineer to 11 other special districts.

Bookkeeper

Bott & Douthitt, PLLC, certified public accountants, serves as bookkeeper to the District. Such firm serves as bookkeeper to approximately 90 other special districts.

Financial Advisor

Public Finance Group LLC serves as the District's financial advisor (the “Financial Advisor”). The Financial Advisor’s fee for services rendered in connection with the issuance of the Bonds is based on the percentage of the Bonds actually issued, sold and delivered and, therefore, such fee is contingent upon the sale and delivery of the Bonds.

Bond Counsel and Disclosure Counsel

The District has engaged McCall, Parkhurst & Horton L.L.P., Austin, Texas, as Bond Counsel and Disclosure Counsel in connection with the issuance of the District's Bonds. The fees of Bond Counsel and Disclosure Counsel are contingent upon the sale of and delivery of the Bonds.

General Counsel

The District employs Armbrust & Brown, PLLC ("A&B") as General Counsel. Fees paid to A&B for work related to the issuance of the Bonds are contingent upon the sale of the Bonds.

Location

All of the property within the District, except for approximately 11.7 acres of commercial and retail (which is located in the city limits of Manor), is located entirely within the extraterritorial jurisdiction of Manor and entirely within Travis County, Texas. The District is situated approximately ten miles northeast of the central business district of Austin, lies adjacent to the city limits of Manor. A portion of the land within the District borders U.S. Highway 290. U.S. Highway 290 is currently undergoing expansion and widening due to its proximity to State Highway 130, an approximately 49 mile toll road that extends from Interstate Highway 35 near State Highway 195 north of Georgetown, Texas, southward to U.S. Highway 183, southeast of Austin.

The District, as originally created, contained a total of approximately 314.3 acres and currently encompasses approximately 404.1 acres as a result of two exclusions of property and four annexations of property.

Historical Development

The District was originally created by the Texas Water Commission (the predecessor of the TCEQ) by an order dated December 13, 1983 upon the petition of David W. Sameson, Trustee, C.B. Carpenter, Trustee and Austin-Manor Investments Joint Venture (“Austin Manor”), the original landowners. On August 15, 1994, Cottonwood Holdings, Ltd., a Texas limited partnership (“CHL”), purchased all of the acreage within the District (as the District was then configured).

Subsequently, in 2001, CHL acquired an additional 150 acre tract of land from Ben Russell Eppright, Jr., Trustee, Nancy E. Nordquist Trust, of which approximately 56 acres is located within the District, as well as the acreage in Wilbarger Creek Municipal Utility District No. 1 and Wilbarger Creek Municipal Utility District No. 2.

In September 2001, ShadowGlen Development Corporation, a Texas corporation (“SDC”), entered into an option contract with CHL (the “Option Contract”) to purchase substantially all of the remaining acres located within the District as well as approximately 454 total acres located within Wilbarger Creek Municipal Utility District No. 1 and Wilbarger Creek Municipal Utility District No. 2.

In November 2001, SDC and ShadowGlen Residential Community, Ltd., a Texas limited partnership (“SRCL”), whose general partner was McGuyer Homebuilders, Inc., a Texas corporation, and limited partners included SDC and MHI Partnership Ltd., a Texas limited partnership (“MHI”), purchased all of the acreage within the District covered by the Option Contract except approximately 95 acres which was retained by CHL.

The District contains approximately 11.7 acres of commercial reserves. In 2005, approximately 2.3 acres were sold to Spasco, Ltd. (“Spasco”), a Texas limited partnership, which constructed a 15,000 square foot mixed use commercial retail strip center called The Shops at ShadowGlen on this acreage. In September 2014, Spasco sold the strip center to HFS Brothers Investments LLC, a Texas limited liability company. In 2013, approximately 4.3 acres were sold to Shadowglen MOB Partners LLC, a Texas limited liability company, which constructed a 36,000 square foot medical center on this acreage that opened in the spring of 2014. CHL currently owns the remaining 5.1 acres of commercial acreage within the District.

In May 2009, SRCL’s remaining vacant developed lots (101 lots) and remaining undeveloped acreage (approximately 102 acres) in the District were foreclosed upon by RFC Construction Funding, LLC, a Delaware limited liability company and a subsidiary of General Motors Acceptance Corporation (“RFC”), which held various promissory notes evidencing indebtedness of SRCL. The foreclosed property also included land located in Wilbarger Creek Municipal Utility District No. 1 and Wilbarger Creek Municipal Utility District No. 2. The foreclosed property within the District, Wilbarger Creek Municipal Utility District No. 1 and Wilbarger Creek Municipal Utility District No. 2 is collectively referred to as the “Foreclosed Property”). At the foreclosure sale, the Foreclosed Property was purchased by RC Properties XIV (“RC Properties”), an affiliate of RFC.

On September 25, 2009, 2009 XIF, LLC, a Texas limited liability company (“XIF”), purchased the Foreclosed Property from RC Properties. XIF continued the development of residential property within the District until December, 2010.

In December 2010, SRCL, XIF and SDC entered into a joint venture and formed 2010 ShadowGlen LLC, a Texas limited liability company (“2010 ShadowGlen”), to own and develop the remaining residential portions of the District that have not been sold to residents or homebuilders. On December 31, 2010 and January 5, 2011, SRCL, XIF and SDC conveyed developed single family lots and undeveloped land and assigned development rights relating to property in the District to 2010 ShadowGlen. In connection with the formation of 2010 ShadowGlen, CHL conveyed its remaining residential acreage within the Participants to SDC, which, in turn, contributed that property to 2010 ShadowGlen.

In December 2012, SG Land Holdings LLC (“SG Land Holdings” or the “Developer”), a Delaware limited liability company, acquired all of the property in the ShadowGlen development owned by 2010 ShadowGlen. SG Land Holdings is owned by Southwest Shadow Holdings LLC, a Delaware limited liability company, and ColFin Shadow Investor LLC, a Delaware limited liability company. The Developer has engaged Argent Management LLC as its development manager to manage the development of the District.

Current Status of Development

According to the Developer, as of April 30, 2020, the District contained 1,139 developed single-family lots, 905 completed single-family homes, 39 homes under construction, and 195 vacant developed single-family lots, as shown in the chart below. Additionally, construction of the utility facilities to serve Section 11 (17.39 acres; 52 single-family lots) and Section 18 (18.93 acres; 99 single-family lots) began in ______and are expected to be completed in ______. Commercial development within the District includes a 15,000 square foot strip center called The Shops at ShadowGlen on approximately 2.3 acres, and a 36,000 square foot medical center on approximately 4.3 acres. The District also includes an amenity center on approximately 4 acres, which includes a 4,300 square foot recreation center, a junior Olympic swimming pool, a water spray park and two 35-foot water slides.

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The following chart reflects the status of development as of April 30, 2020:

Platted Completed Homes Under Vacant Section Acreage Lots Homes Construction Lots A. Developed with Utility Facilities ShadowGlen Phases One and Two Sections 1A, 2A, 3A, and 4A 48.800 139 139 - - Sections 1B, 2B, 3B, and 4B 55.900 208 208 - - Section 5 9.100 39 39 - - Section 6 8.400 35 35 - - Section 7 13.100 60 60 - - Section 8 12.600 55 55 - - Section 9 13.230 52 38 8 6 Section 10 12.500 54 54 - - Sections 12 and 13 24.700 52 39 8 5 Section 14A 15.100 56 56 - - Section 14B-1 10.300 43 43 - - Section 14B-2 13.200 54 53 1 - Section 16 33.630 85 85 - - Section 17 21.580 76 1 22 53 Section 21A 15.510 61 - - 61 Section 21B 15.630 70 - - 70 Commercial 6.600 - - - - Amenity Center 4.000 - - - - Total Developed with Utilities 333.880 1,139 905 39 195

B. Utility Facilities Currently Under Construction Section 11 17.39 52 Section 18 18.93 99 Total Utility Facilities Currently Under Construction 36.32 151

C. Total Developed or Currently Under Construction 370.20 1,290 905 39 195

D. Remaining Developable Acreage Single-Family 22.3900 Commercial 5.100 Total Remaining Developable Acreage 27.490

E. Undevelopable Acreage 6.41

Total District Acreage 404.100

Future Development

The instigation of any new development beyond that described in this Official Statement will be dependent on several factors including, to a great extent, the general and other economic conditions which would affect any party's ability to sell lots and/or other property and of any homebuilder to sell completed homes as described in this Official Statement under the caption “INVESTMENT CONSIDERATIONS.” If the undeveloped portion of the District is eventually developed, additions to the District's water, wastewater, and drainage systems required to service such undeveloped acreage may be financed by future issues, if any, of the District's bonds and developer contributions, if any, as required by the TCEQ. The District's Engineer estimates that the $16,465,000 remaining principal amount of voted water, wastewater, and drainage bonds which are authorized but unissued should be sufficient to reimburse the Developer for the existing utility facilities and provide utility service to remaining undeveloped but potentially developable acres within the District. See “THE BONDS - Issuance of Additional Debt.” The Developer is under no obligation to complete any development, if begun, and may modify or discontinue development plans in their sole discretion. Accordingly, the District makes no representation that future development will occur.

Manor Agreement

The District lies within the extraterritorial jurisdiction and city limits of Manor and, pursuant to a resolution adopted by the Manor City Council on May 15, 1983, Manor consented to the creation of the District. Manor’s consent is subject to several provisions, including: (i) all facilities must be constructed in accordance with plans and specifications approved by Manor; (ii) Manor has the right to inspect all facilities being constructed by the District; and (iii) except as may be approved by Manor, bonds may only be issued to provide service to the territory within the District. The consent resolution also restricted the purposes for which the District may issue bonds to the purposes of the purchase, construction, acquisition, repair, extension, and improvement of land, easements, works, improvements, facilities, plants, equipment, and appliances necessary (a) to provide a water supply for municipal uses, domestic uses, and commercial purposes, (b) to collect, transport, process, dispose of, and control all domestic, industrial, or communal wastes, whether in fluid, solid, or composite state, (c) to gather, conduct, divert, and control local storm water or other local harmful excesses of water in District, and (d) for the payment of organization expenses, operation expenses during construction, and interest during construction. Pursuant to such consent resolution, all bonds issued by the District must mature within 40 years.

Additionally, effective January 10, 2001, the District, CHL, and Manor entered into a “Development Agreement for the Cottonwood Subdivision” (the “Original Development Agreement”), which set forth various terms regarding development within the District. Wilbarger Creek Municipal Utility District No. 1 and Wilbarger Creek Municipal Utility District No. 2 subsequently joined in the execution of the Original Development Agreement. Pursuant to the Original Development Agreement, Manor consented to certain annexations into and exclusions from the District and further authorized the District to provide services authorized by State law. The Original Development Agreement also authorized the District to issue bonds and notes, including bond anticipation notes or refunding bonds, for the purpose of purchasing, constructing, acquiring, owning, operating, repairing, improving, or extending a waterworks, sanitary sewer and drainage and storm sewer system, including, but not limited to, all additions to such systems and all works, improvements, facilities, plants, equipment, appliances, interests in property, and contract rights needed therefor and administrative facilities required in connection therewith. Manor also consented to the District’s joinder in the Water Supply Contract and the Wastewater Treatment Contract, each as amended from time to time. Under the terms of the Original Development Agreement, Manor further agreed to provide solid waste disposal and collection services to all residences and businesses within the District for the same fees and upon the same terms and conditions as Manor provides such services to in-city customers. Under this arrangement, the District is required to bill all single family residences for solid waste disposal and collection services and pay such revenues over to Manor, while businesses and multifamily residences within the District are billed directly by Manor or its contract provider. The Original Development Agreement also authorized Manor to regulate and manage the use and occupancy by third parties of the streets and roadways within the District; however, Manor assumed no obligation to establish or enforce traffic regulations within the District or to design, construct, improve, or repair any street or roadway within the District. The Original Development Agreement also provided that Manor will not dissolve or abolish the District for a period of 20 years from the date of the Original Development Agreement; however, the Original Development Agreement did provide that, if the District challenged or otherwise failed to honor Manor’s rights with respect to solid waste disposal and collection services and the regulation of streets and roadways within the District and failed to cure such failure within 180 days after written notice from Manor, Manor may annex the District and dissolve and abolish it in compliance with state law, which would require Manor to assume the assets and liabilities of the District, including the Bonds. The Original Development Agreement also set forth Manor’s consent to the creation of both Wilbarger Creek Municipal Utility District No. 1 and Wilbarger Creek Municipal Utility District No. 2.

In February 2004, voters within the District authorized $3,500,000 in bonds for park and recreational facilities. In 2005, the parties to the Original Development Agreement entered into an amendment to the Original Development Agreement that, among things, expanded the purpose for which bonds may be issued to include any purpose authorized by Article 16, Section 59 of the Texas Constitution. The Original Development Agreement was further modified as between Manor, SRCL, and CHL pursuant to an Addendum dated July 5, 2007.

The term of the Original Development Agreement between Manor and the developer parties thereunder was for a period of ten years and expired on January 10, 2011. The Original Development Agreement did not expire between Manor, the District, Wilbarger Creek MUD No. 1, and Wilbarger Creek MUD No. 2. At the request of CHL and 2010 ShadowGlen, successor to the portion of the property subject to the Original Development Agreement previously owned by SRCL, the parties entered into a “Development Agreement for the ShadowGlen Subdivision” (the “Restated Development Agreement”) dated effective August 24, 2012, which (i) amended and restated the Original Development Agreement in its entirety as between Manor, the District, Wilbarger Creek MUD No. 1, and Wilbarger Creek MUD No. 2 on terms and conditions similar to those contained in the Original Development Agreement, as amended; and (ii) terminated and replaced the Original Development Agreement as between the Manor, CHL, and 2010 ShadowGlen. In December 2012, SG Land Holdings acquired all of the property in the ShadowGlen development owned by 2010 ShadowGlen. In connection with that transaction and with Manor’s consent, 2010 ShadowGlen assigned its interest in the Restated Development Agreement to SG Land Holdings pursuant to an “Assignment and Assumption of Development Agreement” dated effective December 21, 2012. SG Land Holding and Manor have since amended the Restated Development Agreement pursuant to the an “Addendum to Development Agreement for the ShadowGlen Subdivision (Phase 3 Property)” dated effective as of March 7, 2019.

THE DEVELOPER

Role of Developer

In general, the activities of a landowner or developer within a utility district, such as the District, include purchasing land within the future district, petitioning for creation of the district, designing the development, defining a marketing program, planning building schedules, securing necessary governmental approvals and permits for development, arranging for the construction of roads and the installation of utilities (including, in some cases, water, sewer, and drainage facilities) pursuant to the rules of the TCEQ, and selling improved lots or commercial reserves to builders, other developers or third parties. Ordinarily, the developer pays one hundred percent (100%) of the costs of paving and amenity design and construction while the utility district finances the costs of the water supply and distribution, wastewater collection and drainage facilities. While a landowner

or developer is required by the TCEQ to pave streets and pay for its allocable portion of the costs of utilities to be financed by the district through a specific bond issue, if any, a developer is generally under no obligation to a district to undertake development activities with respect to other property it owns within a district. Furthermore, there is no restriction on a developer's right to sell any or all of the land which the developer owns within a district. In addition, the developer is ordinarily the major taxpayer within the district during the early stages of development. The relative success or failure of the developer to perform such activities in development of the property within the utility district may have a profound effect on the security for the bonds issued by a district.

Description of the Developer

The developer currently active within the District is SG Land Holdings LLC, a Delaware limited liability company (the “Developer”), which is owned by Southwest Shadow Holdings LLC, a Delaware limited liability company, and ColFin Shadow Investor LLC, a Delaware limited liability company. The Developer has engaged Argent Management LLC as its development manager to manage the development of the District. Southwest Shadow Holdings is a subsidiary of JNI, LLC (“JNI”), a Delaware limited liability company. JNI is a parent company of various other subsidiaries and affiliates which develop master-planned communities around the United States, often under the brand name SunCal, with development management performed by Argent Management. Some examples of master-planned communities being developed by JNI and/or its subsidiaries and affiliates, in varying stages of development, include: Potomac Shores, a 1,920-acre mixed use, master-planned resort destination located in Potomac Shores, Virginia, which, upon full development, is currently anticipated to include approximately 3,800 residences and 17 million square feet of commercial/retail/office space; The Fairways, an approximately 985-acre master-planned golf community located in Beaumont, California, which, upon full development, is currently anticipated to include approximately 3,300 residences in six villages and 30 acres of commercial/retail space; Summerwind Trails, a 2,590-acre master-planned community located in Calimesa, California, which, upon full development, is currently anticipated to include approximately 3,600 residences and an approximately 260-acrea commercial town center; and Edge-on-Hudson, a 70-acre mixed-us, transit-oriented riverfront community in Sleepy Hollow, New York, which, upon full development, is currently anticipated to include 1,177 condominium, townhome, and apartment units, 135,000 square feet of shopping and dining and 35,000 square feet of office space. In addition, CHL owns approximately 5.1 acres within the District which is expected to be developed for commercial/retail purposes.

Current Development

According to the Developer, as of April 30, 2020, the District contained 1,139 developed single family lots, 905 completed single-family homes, 39 homes under construction, and 195 vacant developed single-family lots.

Homebuilders within the District

According to the Developer, Gray Point Homes, Meritage Homes, Buffington Homes, and Perry Homes are currently the active homebuilders within the District. Gray Point Homes’ homes range in price from $219,990 to $269,990, with square footage ranging from 1,550 to 2,740. Meritage Homes’ homes range in price from $203,990 to $259,965, with square footage ranging from 1,250 to 2,456. Buffington Homes’ homes range in price from $296,990 to $407,999, with square footage ranging from 2,150 to 3,609. Perry Homes’ homes range in price from $269,900 to $441,900, with square footage ranging from 1,813 to 3,700.

Commercial Development

Utility Development Agreements

The District originally entered into two development agreements that governed the construction of water, wastewater and drainage facilities on land within the District and the reimbursement for certain of the costs of such construction through the issuance of bonds by the District – the first being a “Utility Development and Purchase Agreement between Travis County Municipal Utility District No. 2 and ShadowGlen Residential Community, Ltd. for ShadowGlen Water, Wastewater and Drainage Facilities” dated effective as of May 2, 2002, as amended by “Amendment No. 1 to Utility Development and Purchase Agreement between Travis County Municipal Utility District No. 2 and ShadowGlen Residential Community, Ltd.” dated effective as of September 12, 2002, and “Amendment No. 2 to Utility Development and Purchase Agreement” dated effective as of February 3, 2006 (collectively, the “SRCL Reimbursement Agreement”); and the second being a “Utility Development and Purchase Agreement between Travis County Municipal Utility District No. 2 and Cottonwood Holdings, Ltd. for ShadowGlen Water, Wastewater and Drainage Facilities” dated effective as of April 30, 2002, as amended by “Amendment No. 1 to Utility Development and Purchase Agreement” dated effective as of February 1, 2006 (collectively, the “CHL Reimbursement Agreement”). After 2010 ShadowGlen acquired the property originally owned by SRCL following the 2009 RFC foreclosure and intervening ownership by XIF, the District entered into a “Utility Construction Agreement ShadowGlen – Travis County MUD No. 2” dated effective December 5, 2012 with 2010 ShadowGlen (the “2010 ShadowGlen Reimbursement Agreement”), which was joined in by CHL, XIF, and the partners of SRCL, which had been terminated as a partnership in June 2012. Pursuant to the provisions of the 2010 ShadowGlen Reimbursement Agreement, the SRCL Reimbursement Agreement and the CHL Reimbursement Agreement were terminated in their entirety. With the consent of the District, 2010 ShadowGlen assigned its interest in the 2010

ShadowGlen Reimbursement Agreement to SG Land Holdings pursuant to an “Assignment of Utility Construction Agreement and Consent ShadowGlen – Travis County MUD No. 2” dated effective December 21, 2012 when SG Land Holdings purchased 2010 ShadowGlen’s remaining property in the ShadowGlen development.

Agricultural Value Waiver

SRCL and CHL previously executed agreements, which are recorded in the Real Property Records of Travis County and are covenants running with the land, waiving the right to have land located within the District classified as agricultural, open space or timberland for tax purposes. In addition, SRCL, CHL and their successors have waived the right to have their lots and houses (if any) classified as business inventory. SG Land Holdings is subject to such agreements and the agreements may not be modified without the approval of the TCEQ and are binding on purchasers of such land from each developer. See “TAXING PROCEDURES - Property Subject to Taxation by the District.”

THE SYSTEM Regulation

The water, wastewater and storm drainage facilities, the purchase, acquisition and construction of which have been permanently financed by the District with the proceeds of the bonds previously issued by the District, have been designed in accordance with accepted engineering practices and the recommendation of certain governmental agencies having regulatory or supervisory jurisdiction over construction and operation of such facilities, including, among others, the Commission. According to the Engineer, the design of all such facilities has been approved by all governmental agencies which have jurisdiction over the District.

Operation of the District's waterworks and wastewater facilities is subject to regulation by, among other, the EPA and the Commission. In many cases, regulations promulgated by these agencies have become effective only recently and are subject to further development and revision.

Water Supply and Distribution

Metro has entered into the Water Supply Contract with the four Participants to provide up to 6,010 LUEs of potable water supply capacity to the Participants. Cottonwood Creek Water Control and Improvement District No. 3 is also a party to the Water Supply Contract but has not been allocated any capacity. See “THE MASTER DISTRICT- Master Service Area.” Pursuant to an “Amended and Restated Assignment and Assumption of Capacity Rights and Obligations under Regional Water and Sewer Contracts; and Capacity Reservation Agreement” dated effective October 1, 2005 (the “Capacity Assignment”), the Participants assigned all of their rights and obligations with respect to water supply capacity under the Water Supply Contract to the Master District, which, in turn, reserved water supply capacity in favor of the Participants at full build out in the amounts set forth in the Water Supply Contract and agreed to allocate water capacity on an interim basis fairly and equitably among the Participants. The Participants have also executed the Master District Contract (see “THE MASTER DISTRICT”), pursuant to which the Master District is charged with the responsibility of constructing, financing or acquiring facilities sufficient to distribute, rechlorinate and store the potable water delivered by Metro to the Participants.

Under the Water Supply Contract, as affected by the Capacity Assignment, the Master District was originally contractually obligated to purchase water capacity from Metro at the time of each connection and on a quarterly basis through the payment of water LUE fees. However, pursuant to a “First Amendment to Amended and Restated Regional Water Capacity and Supply Agreement for a Portion of Northeastern Travis County, Texas” dated August 9, 2011 (the “Water Supply Contract Amendment”), in consideration of the payment of $250,000 to Metro, the obligation to make water LUE fee payments to Metro H2O was terminated until the number of LUEs actually connected to the water system serving the Master District’s service area exceeds 2,610, at which time water LUE fees will be required to be paid on a connection by connection basis. Connections to the system now exceed 2,610 LUEs, and the Participants are collecting a water LUE fee in the amount of $1,900 per LUE. These fees are remitted to the Master District, which, in turn, pays Metro per the Water Supply Contract.

The Water Supply Contract, as amended, also obligates the Participants to pay Metro a volumetric wholesale water rate for the water used by the Participants (the “Wholesale Water Rate”) as well as an annual rate payment (the “Annual Water Rate Payment”) by August 5th of each year. A portion of the Wholesale Water Rate and the Annual Water Rate Payment increase by three percent (3%) per year. The current Wholesale Water Rate is $6.31 per 1,000 gallons of water delivered. The Annual Water Rate Payment for 2020 is $169,620.49. Under the Wholesale Water Contract Amendment, Metro H2O also has the authority to impose a surcharge for actual increases in the volumetric rate charged to Metro by its supplier as well as a surcharge to recover the cost of new capital assets necessary to serve the Participants.

Pursuant to the Water Supply Contract Amendment, Metro invoices the Master District for wholesale water service provided to the Participants using a take or pay minimum base quantity formula. Under this structure, the minimum base quantity of water for which the Participants will be charged for the year commencing March 1, 2020 is 189,060,335 gallons of water. The minimum base quantity for each year thereafter (March through February) will be the prior year’s minimum base quantity plus 90% of the amount of water used by the Participants during the prior year in excess of the minimum base quantity for that year.

Metro H2O Water Supply and Transmission Facilities

The water supplied to the Participants from Metro is obtained by Metro under an “Amended and Restated Wholesale Potable Water Supply Agreement” dated April 11, 2011 (the “EPCOR Contract”) between Metro and EPCOR. Blue Water 130 Project, LP’s assets have been acquired by EPCOR 130 Project, Inc., a wholly-owned subsidiary of EPCOR Utilities, Inc. It is the District’s understanding that Metro has sufficient water capacity available under the EPCOR Contract to serve 6,010 connections within the Participants. The point of delivery for water delivered to

Metro under the EPCOR Contract is the 500,000 gallon elevated storage tank owned by Metro adjacent to the Master District’s Service Area. The facilities necessary to deliver water under the EPCOR Contract have been constructed, and such water became available to Metro H2O (and the Participants through Metro) on July 5, 2011. Under the terms of the Water Supply Contract Amendment, Metro is required to reserve capacity to and for the benefit of the Participants in the water supply available to Metro under the EPCOR Contract equal to the number of LUEs paid for by or on behalf of the Participants up to 6,010 LUEs. To date, _____ LUEs have been paid to Metro by or on behalf of the Participants. According to the Master District’s operator, as of March 31, 2020, there were 3,016 connections within the Master District Service Area.

In addition, SWWC Services, Inc., the Master District’s prior operator and an affiliate of Metro, previously advised the Master District that there is a physical water interconnect located between the Metro facilities and the City of Manor. In the past, Manor and Metro have utilized the interconnect; however, the Master District has been advised that the agreement providing for the interconnect has expired, and the District makes no representation that such agreement will be renewed.

City of Manor Emergency Water Interconnect

The Master District and the City of Manor have entered into an “Interlocal Agreement Concerning Emergency Water Interconnect” dated effective June 6, 2014, which can provide a short term water supply to customers within the Participants in emergency situations.

Master District Distribution, Rechlorination and Storage Facilities

The Master District has constructed a 24-inch water transmission main which distributes the water delivered by Metro approximately 3.3 miles from the Metro elevated storage tank, through the District and to a terminus within Cottonwood Creek MUD No. 1. Additionally, the Master District has constructed one chlorination facility outside the boundaries of the Master District at the beginning of the Master District’s 24-inch water transmission main near the 500,000 gallon elevated storage tank owned by Metro To date, the chlorination facility has not been needed for the water supply received pursuant to the EPCOR Contract.

It is anticipated that the Master District will be required to construct one or more water storage facilities as development increases demand for water supply within the Master District’s Service Area. The Master District recently engaged Jones & Carter to commence design of an 800,000 gallon elevated storage tank that is anticipated to come on-line in 2021.

Wastewater Collection and Treatment

The Participants and Metro originally entered into the Wastewater Treatment Contract pursuant to which Metro agreed to construct certain wastewater treatment facilities sufficient to serve up to 6,010 LUEs of wastewater from the Participants. Cottonwood Creek Water Control and Improvement District No. 3 is also a party to the Wastewater Treatment Contract but has not been allocated capacity. Under the Wastewater Treatment Contract, Metro completed construction of wastewater facilities including a 500,000 gallons per day (“gpd”) wastewater treatment plant and lift station (the “Wastewater Treatment Plant”). Based upon average daily flow of 250 gpd per LUE, the 500,000 gpd Wastewater Treatment Plant is sufficient to serve 2,631 LUEs, according to the Master District’s Engineer. Pursuant to the Capacity Assignment, the Participants assigned all of their rights and obligations with respect to wastewater treatment capacity under the Wastewater Treatment Contract to the Master District, which, in turn, reserved wastewater treatment capacity in favor of the Participants at full build-out in the amounts set forth in the Wastewater Treatment Contract and agreed to allocate wastewater treatment capacity on an interim basis fairly and equitably among the Participants.

When Southwest Water Company, the parent of Metro, announced its intention to sell its wholesale operations in Texas, the Master District negotiated to purchase the Wastewater Treatment Plant from Metro pursuant to an Asset Purchase Agreement dated November 20, 2008. The closing of such transaction occurred on December 31, 2008, at which time Metro transferred ownership of the Wastewater Treatment Plant and its interest in the Wastewater Treatment Contract to the Master District. The Master District will operate and maintain the Wastewater Treatment Plant as a Master District Facility and has included the costs of the operations in its budget for the fiscal year ending September 30, 2020. The cost of operation and maintenance of the Wastewater Treatment Plant will be invoiced to each of the Participants on a monthly basis, in accordance with the Master District Contract.

Shortly after the purchase of the Wastewater Treatment Plant, the Master District experienced increased maintenance and operation costs for the Wastewater Treatment Plant. In an effort to reduce these costs, the Master District engaged Jones & Carter, Inc. to assess the Wastewater Treatment Plant and its operation and maintenance procedures and recommend appropriate changes, repairs and upgrades. The Master District has also entered into agreements with Microdyn MBR Systems, LLC, the manufacturer of the wastewater treatment technology at the Wastewater Treatment Plant, to service and replace the plant’s membrane equipment and make certain improvements recommended, Jones & Carter, Inc. and Crossroads Utility Services LLC, the Master District’s operator, have represented that operation of the Wastewater Treatment Plan has improved significantly. The Master District intends to finance future upgrades to and expansions of the Wastewater Treatment Plant through the issuance of bonds. The Master District recently engaged Jones & Carter, Inc. to design the expansion of the Wastewater Treatment Plant to a capacity of 1.0 mgd. Based on an average daily flow of 250 gpd, the 1.0 mgd expansion will be sufficient to serve 4,000 LUEs.

Drainage System

The storm drainage system that serves the District consists of curb and guttered streets and storm sewers that collect storm water runoff for outfall to two detention ponds in the District which flow into Wilbarger Creek, which, in turn, flows into the Colorado River. The facilities are designed in accordance with Travis County and Manor criteria.

100-Year Flood Plain

“Flood Insurance Rate Map” or “FIRM” means an official map of a community on which the Federal Emergency Management Agency (FEMA) has delineated the appropriate areas of flood hazards. The 1% chance of probable inundation, also known as the 100-year flood plain, is depicted on these maps. The “100-year flood plain” (or 1% chance of probable inundation) as shown on the FIRM is the estimated geographical area that would be flooded by a rain storm of such intensity to statistically have a one percent chance of occurring in any given year. Generally speaking, homes must be built above the 100-year flood plain in order to meet local regulatory requirements and to be eligible for federal flood insurance.

According to the Engineer, approximately 11 acres located within the District are located within the planned designated Flood Hazard Area as shown on the Federal Flood Insurance Administration Rate Map No. 48453C0485H.

The National Weather Service recently completed a rainfall study known as NOAA Atlas 14, Volume 11 Participation-Frequency Atlas of the United States (“Atlas 14”) which shows that severe rainfall events are now occurring more frequently. Within Texas, the Atlas 14 study showed an increased number of rainfall events in a band extending from the upper Gulf Coast in the east and running west generally along the I-10 corridor to Central Texas. In particular, the study shows that Central Texas is more likely to experience larger storms than previously thought. Based on this study, various governmental entities, including Travis County, are contemplating amendments to their regulations that will potentially increase the size of the 100-year flood plain which interim flood plain is based on the current 500-year flood plain, resulting in the interim flood plain regulations applying to a larger number of properties, and potentially increasing the size of detention ponds and drainage facilities required for future construction in all areas (not just in the flood plain). Flood plain boundaries within the District may be redrawn based on the Atlas 14 study based on the higher statistical rainfall amount and could mean higher insurance rates, increased development fees, and stricter building codes for any property located within the expanded boundaries of the flood plain.

Water and Wastewater Operations - Rate and Fee Schedule - Table 1

The Board of Directors establishes rates and fees for water and sewer service, subject to change from time to time. The following schedule sets forth the rates and fees for the District's water and sewer service which have been in effect since December 4, 2019.

Monthly Billings:

5/8” Meter ...... $ 47.00* 3/4” Meter ...... $ 47.50*

Monthly Water Commodity Charge 0-15,000 gallons ...... $ 6.45 per 1,000 gallons 15,001+ gallons ...... $ 8.00 per 1,000 gallons

Monthly Wastewater Commodity Charge ...... $ 7.50 per 1,000 gallons

Tap Connection Fees:

Water ...... $ 600.00 per LUE Wastewater ...... $ 600.00 per LUE ______* Single family residential meter includes solid waste/recycling services.

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Operating Revenues and Expenses Statement - Table 2

The following statement sets forth in condensed form the historical operations of the District. Accounting principles customarily employed in the determination of net revenues have been observed and in all instances exclude depreciation. Such summary has been prepared from information obtained from the District's financial statements and records. Reference is made to such statements for further and more complete information. Also see “Appendix A – Audited Financial Statements of the District.”

Fiscal Year End 2/29/2020(a) 9/30/2019(b) 9/30/2018(b) 9/30/2017(b) 9/30/2016(b) REVENUES Property taxes, including penalties $ 281,424 $ 288,543 $ 265,797 $ 357,170 $ 315,053 Service Accounts, including penalties 592,068 1,376,538 1,260,045 1,142,753 1,065,667 Connection/Inspection fees 42,000 146,200 134,425 64,020 55,760 Interest 18,461 54,342 37,548 9,671 4,633 Other - - - - - TOTAL REVENUES $ 933,953 $ 1,865,623 $ 1,697,815 $ 1,573,614 $ 1,441,113

EXPENDITURES Garbage Collection Fees $ 76,783 $ 168,184 $ 150,681 $ 140,408 $ 136,046 Repairs/Maintenance 18,110 34,047 43,193 53,052 55,124 Operations/Management Fee 50,527 104,611 93,424 85,131 81,336 Inspection/Review Fee 4,509 17,812 18,882 7,656 6,117 Director Fees, including payroll taxes 4,234 10,496 10,980 10,980 11,142 Legal Fees 19,217 66,325 43,273 39,094 47,805 Engineering Fees 7,033 15,014 12,934 11,818 12,131 Audit Fees 14,000 13,500 13,250 13,000 12,500 Bookkeeping Fees 14,800 32,350 32,000 32,000 32,000 Financial Advisor Fees 346 372 363 541 523 Tax Appraisal/Collection Fees 582 1,551 1,471 2,069 1,904 Insurance 439 5,257 5,070 4,252 4,493 Other Consultant Fees - 10,759 - - - Interfund Transfers (c) 517,395 679,873 837,597 711,070 715,422 Other 13,358 34,401 37,083 31,399 33,506 Capital Outlay - - - - - TOTAL EXPENDITURES $ 741,335 $ 1,194,552 $ 1,300,201 $ 1,142,470 $ 1,150,049

NET REVENUES (DEFICIT) $ 192,618 $ 671,071 $ 397,614 $ 431,144 $ 291,064

Beginning Fund Balance $ 3,098,774 $ 2,427,703 $ 2,030,089 $ 1,598,945 $ 1,157,881 Plus / (Less): Fund Transfer - - - - 150,000 Ending Fund Balance $ 3,291,392 $ 3,098,774 $ 2,427,703 $ 2,030,089 $ 1,598,945

______(a) Unaudited as of February 29, 2020. Partial year. Represents approximately five (5) months of the District's current fiscal year. (b) Audited. (c) Interfund Transfers include the costs paid to the Master District for water supply and wastewater treatment costs.

PROJECTED DEBT SERVICE REQUIREMENTS – TABLE 3

Travis County Municipal Utility District No. 2 $5,000,000 Unlimited Tax Bonds, Series 2020 Dated Date: September 2, 2020 First Interest Payment Due: March 1, 2021 Projected Year Outstanding Bonds The Bonds* Total Ending Principal Interest Principal Interest Principal Debt Service 31-Dec Due (09/01) Due (03/01) Due (09/01) Total (Due 9/01) (Due 3/01) (Due 9/01) Total and Interest Requirements 2020 $ 590,000 213,258 $ 232,404 $ 1,035,662 $ - $ - $ - $ - $ - $ 1,035,662 2021 620,000 205,950 205,950 1,031,900 45,000 87,014 87,500 174,514 219,514 1,251,414 2022 640,000 196,263 196,263 1,032,525 45,000 86,713 86,713 173,425 218,425 1,250,950 2023 660,000 187,687 187,687 1,035,375 50,000 85,925 85,925 171,850 221,850 1,257,225 2024 675,000 178,806 178,806 1,032,612 50,000 85,050 85,050 170,100 220,100 1,252,712 2025 690,000 169,344 169,344 1,028,687 50,000 84,175 84,175 168,350 218,350 1,247,037 2026 710,000 159,712 159,712 1,029,425 55,000 83,300 83,300 166,600 221,600 1,251,025 2027 730,000 149,712 149,712 1,029,425 55,000 82,338 82,338 164,675 219,675 1,249,100 2028 750,000 139,531 139,531 1,029,062 65,000 81,375 81,375 162,750 227,750 1,256,812 2029 770,000 129,075 129,075 1,028,150 75,000 80,238 80,238 160,475 235,475 1,263,625 2030 795,000 118,384 118,384 1,031,769 105,000 78,925 78,925 157,850 262,850 1,294,619 2031 840,000 106,053 106,053 1,052,106 185,000 77,088 77,088 154,175 339,175 1,391,281 2032 870,000 91,834 91,834 1,053,669 190,000 73,850 73,850 147,700 337,700 1,391,369 2033 900,000 76,891 76,891 1,053,781 195,000 70,525 70,525 141,050 336,050 1,389,831 2034 930,000 61,422 61,422 1,052,844 205,000 67,123 67,123 134,245 339,245 1,392,089 2035 965,000 45,672 45,672 1,056,344 210,000 63,525 63,525 127,050 337,050 1,393,394 2036 1,000,000 29,047 29,047 1,058,094 220,000 59,850 59,850 119,700 339,700 1,397,794 2037 1,035,000 11,644 11,644 1,058,288 230,000 56,000 56,000 112,000 342,000 1,400,288 2038 - - - - 1,455,000 51,975 51,975 103,950 1,558,950 1,558,950 2039 - - - - 1,515,000 26,513 26,513 53,025 1,568,025 1,568,025 $ 14,170,000 $ 2,270,286 $ 2,289,432 $ 18,729,718 $ 5,000,000 $ 1,381,499 $ 1,381,985 $ 2,763,484 $ 7,763,484 $ 26,493,202 ______* Interest estimated at 3.50% for purposes of illustration.

FINANCIAL STATEMENT (Unaudited)

Assessed Value – Table 4

2019 Certified Assessed Valuation $ 234,322,762 (a) 2020 Preliminay Assessed Valuation $ 259,229,895 (b) Estimated Assessed Valuation as of July 1, 2020 $ - (c) Gross Debt Outstanding (after issuance of the Bonds) District Debt $ 19,170,000 Contract Debt 9,829,108 $ 28,999,108 (d ) Ratio of Gross Debt to 2019 Certified Assessed Valuation(a) 12.38% Ratio of Gross Debt to 2020 Preliminary Assessed Valuation(b) 11.19% Ratio of Gross Debt to Estimated Assessed Valuation as of July 1, 2020(c) # DIV/ 0!

2019 Tax Rate Debt Service $ 0.4167 Maintenance $ 0.1233 Contract 0.3500 Total 2019 Tax Rate $ 0.8900 (e)

(f) Debt Service Fund Balance (as of April 1, 2020) $ 1,118,097

Area of District: 404.1 acres Estimated Population as of March 31, 2020: 3,427(g) ______(a) The certified assessed valuation as of January 1, 2019, as provided by TCAD. See “TAXING PROCEDURES.” (b) The preliminary assessed valuation as of January 1, 2020, as provided by TCAD, included solely for purposes of illustration. No taxes shall be levied on such assessed valuation unless it is certified by TCAD. See “TAXING PROCEDURES.” (c) The estimated assessed valuation as of July 1, 2020, as provided by TCAD, included solely for purposes of illustration. See “TAXING PROCEDURES.” (d) Includes the Bonds. The District is a party to a contract with the Master District whereby the District is obligated to pay a pro rata share of debt service on bonds issued from time to time by the Master District to acquire, construct, purchase and maintain certain facilities to provide regional water, wastewater and drainage services to all Participants. The Master District has issued five series of new money bonds and three series of refunding bonds in the aggregate original principal amount of $39,375,000 of which $21,475,000 is currently outstanding. The contract debt amount reflects the District’s pro rata share (45.77% based on the 2019 Certified Assessed Valuation of $511,954,955 of the Master District Service Area). See “THE MASTER DISTRICT – Contract Tax Bonds.” (e) The District levied a 2019 total tax rate of $0.8900 at its meeting in September 2019. See “TAXING PROCEDURES.” (f) Unaudited as of April 1, 2020. Preliminary; subject to change. Does not include approximately twenty-four (24) months’ capitalized interest ($350,000) included in the Bond proceeds, which is projected to be deposited into the Debt Service Fund upon closing. Neither Texas law nor the Bond Resolution requires the District to maintain any particular sum in the debt service fund. (g) Based upon 3.5 residents per completed and occupied single-family home as of March 31, 2020.

Unlimited Tax Bonds Authorized but Unissued - Table 5

Date of Issued to Authorization Purpose Authorized Date Unissued 5/3/2003 Water, Wastewater and Drainage $ 38,580,000 $ 22,115,000 (a) $ 16,465,000 2/7/2004 Parks and Recreational Facilities 3,500,000 - 3,500,000 5/3/2003 Refunding 57,870,000 854,401 57,015,599 Total $ 99,950,000 $ 22,969,401 $ 76,980,599 ______(a) Includes the Bonds.

Outstanding Bonds - Table 6

Date Purpos e Series Amount Outstanding A. New Money Bonds 11/1/2004 Water, Sanitary Sewer & Drainage 2004 $ 2,000,000 - 11/1/2005 Water, Sanitary Sewer & Drainage 2005 2,360,000 - 10/1/2006 Water, Sanitary Sewer & Drainage 2006 2,495,000 - 8/1/2020 Water, Sanitary Sewer & Drainage 2010 2,000,000 - 01/04/17 Water, Sanitary Sewer & Drainage 2017 5,620,000 5,410,000 08/07/19 Water, Sanitary Sewer & Drainage 2019 2,640,000 2,620,000 09/02/20 Water, Sanitary Sewer & Drainage 2020A 5,000,000 5,000,000 (a) Subtotal $ 22,115,000 $ 13,030,000

B. Refunding Bonds 12/01/11 Refunding 2011 $ 4,775,000 $ 625,000 04/01/15 Refunding 2015 $ 3,400,000 $ 3,105,000 04/08/20 Refunding 2020 2,410,000 2,410,000 Subtotal $ 10,585,000 $ 6,140,000

Total $ 32,700,000 $ 19,170,000

______(a) In the process of issuance.

Cash and Investment Balances - Table 7

General Fund $ 3,281,451 (a) Capital Projects Fund 549,054 (a) Special Reserve Fund - (a) (b) Debt Service Fund 1,118,097

______(a) Unaudited as of April 1, 2020. (b) Preliminary; subject to change. Does not include approximately twenty-four (24) months’ capitalized interest ($350,000) included in the Bond proceeds, which is projected to be deposited into the Debt Service Fund upon closing. Neither Texas law nor the Bond Order requires the District to maintain any particular sum in the debt service fund.

Investment Authority and Investment Practices of the District

Under Texas law, the District is authorized to invest in (1) obligations of the United States or its agencies and instrumentalities, including letters of credit; (2) direct obligations of the State of Texas or its agencies and instrumentalities; (3) collateralized mortgage obligations directly issued by a federal agency or instrumentality of the United States, the underlying security for which is guaranteed by an agency or instrumentality of the United States; (4) other obligations, the principal and interest of which is guaranteed or insured by or backed by the full faith and credit of, the State of Texas or the United States or their respective agencies and instrumentalities including obligations that are fully guaranteed or insured by the Federal Deposit Insurance Corporation (“FDIC”) or by explicit full faith and credit of the Unites States; (5) obligations of states, agencies, counties, cities, and other political subdivisions of any state rated as to investment quality by a nationally recognized investment rating firm not less than A or its equivalent; (6) bonds issued, assumed or guaranteed by the State of Israel; (7) interest-bearing banking deposits that are guaranteed or insured by the FDIC or the National Credit Union Share Insurance Fund or their respective successors; (8) certificates of deposit and share certificates meeting the requirements of the Texas Public Funds Investment Act (Chapter 2256, Texas Government Code, as amended) (the “PFIA”) (i) that are issued by or through an institution that has its main office or a branch office in Texas and are guaranteed or insured by the Federal Deposit Insurance Corporation or the National Credit Union Share Insurance Fund, or are secured as to principal by obligations described in clauses (1) through (6) or in any other manner and amount provided by law for District deposits; or (ii) that are invested by the District through a depository institution that has its main office or a branch office in the State of Texas and otherwise meets the requirements of the PFIA; (9) fully collateralized repurchase agreements that have a defined termination date, are fully secured by obligations described in clause (1), and are placed through a primary government securities dealer or a financial institution doing business in the State of Texas; (10) certain bankers' acceptances with the remaining term of 270 days or less, if the short-term obligations of the accepting bank or its parent are rated at least A-1 or P-1 or the equivalent by at least one nationally recognized credit rating agency; (11) commercial paper with a stated maturity of 270 days or less that is rated at least A-1 or P-1 or the equivalent by either (a) two nationally recognized credit rating agencies

or (b) one nationally recognized credit rating agency if the paper is fully secured by an irrevocable letter of credit issued by a U.S. or state bank; (12) no-load money market mutual funds registered with and regulated by the Securities and Exchange Commission that complies with Securities and Exchange Commission Rule 2a-7; (13) no-load mutual funds registered with the Securities and Exchange Commission that have an average weighted maturity of less than two years, and either has a duration of one year or more and is invested exclusively in obligations described in the this paragraph, or has a duration of less than one year and the investment portfolio is limited to investment grade securities, excluding asset-backed securities; and (14) local government investment pools organized in accordance with the Interlocal Cooperation Act (Chapter 791, Texas Government Code) as amended, whose assets consist exclusively of the obligations that are described above. A public funds investment pool must be continuously ranked no lower than "AAA", "AAA-m" or at an equivalent rating by at least one nationally recognized rating service. In addition, bond proceeds may be invested in guaranteed investment contracts that have a defined termination date and are secured by obligations, including letters of credit, of the United States or its agencies and instrumentalities in an amount at least equal to the amount of bond proceeds invested under such contract, other than the prohibited obligations described below.

A political subdivision such as the District may enter into securities lending programs if (i) the securities loaned under the program are 100% collateralized, a loan made under the program allows for termination at any time and a loan made under the program is either secured by (a) obligations that are described in clauses (1) through (6) above, (b) irrevocable letters of credit issued by a state or national bank that is continuously rated by a nationally recognized investment rating firm at not less than A or its equivalent or (c) cash invested in obligations described in clauses (1) through (6) above, clauses (11) through (13) above, or an authorized investment pool; (ii) securities held as collateral under a loan are pledged to the District, held in the District's name and deposited at the time the investment is made with the District or a third party designated by the District; (iii) a loan made under the program is placed through either a primary government securities dealer or a financial institution doing business in the State of Texas; and (iv) the agreement to lend securities has a term of one year or less.

The District may invest in such obligations directly or through government investment pools that invest solely in such obligations provided that the pools are rated no lower than AAA or AAAm or an equivalent by at least one nationally recognized rating service. The District may also contract with an investment management firm registered under the Investment Advisers Act of 1940 (15 U.S.C. Section 80b-1 et seq.) or with the State Securities Board to provide for the investment and management of its public funds or other funds under its control for a term up to two years, but the District retains ultimate responsibility as fiduciary of its assets. In order to renew or extend such a contract, the District must do so by order, ordinance, or resolution.

The District is specifically prohibited from investing in: (1) obligations whose payment represents the coupon payments on the outstanding principal balance of the underlying mortgage-backed security collateral and pays no principal; (2) obligations whose payment represents the principal stream of cash flow from the underlying mortgage-backed security and bears no interest; (3) collateralized mortgage obligations that have a stated final maturity of greater than 10 years; and (4) collateralized mortgage obligations the interest rate of which is determined by an index that adjusts opposite to the changes in a market index.

Under Texas law, the District is required to invest its funds under written investment policies that primarily emphasize safety of principal and liquidity; that address investment diversification, yield, maturity, and the quality and capability of investment management; and that include a list of authorized investments for District funds, the maximum allowable stated maturity of any individual investment, the maximum average dollar-weighted maturity allowed for pooled fund, groups methods to monitor the market price of investments acquired with public funds, a requirement for settlement of all transactions, except investment pool funds and mutual funds, on a delivery versus payment basis, and procedures to monitor rating changes in investments acquired with public funds and the liquidation of such investments consistent with the PFIA. All District funds must be invested consistent with a formally adopted "Investment Strategy Statement" that specifically addresses each fund's investment. Each Investment Strategy Statement will describe its objectives concerning: (1) suitability of investment type, (2) preservation and safety of principal, (3) liquidity, (4) marketability of each investment, (5) diversification of the portfolio, and (6) yield. Under Texas law, the District's investments must be made "with judgment and care, under prevailing circumstances, that a person of prudence, discretion, and intelligence would exercise in the management of the person's own affairs, not for speculation, but for investment considering the probable safety of capital and the probable income to be derived." At least quarterly the District's investment officers must submit an investment report to the Board of Directors detailing: (1) the investment position of the District, (2) that all investment officers jointly prepared and signed the report, (3) the beginning market value, and any additions and changes to market value and the ending value of each pooled fund group, (4) the book value and market value of each separately listed asset at the beginning and end of the reporting period, (5) the maturity date of each separately invested asset, (6) the account or fund or pooled fund group for which each individual investment was acquired, and (7) the compliance of the investment portfolio as it relates to: (a) adopted investment strategies and (b) Texas law. No person may invest District funds without express written authority from the Board of Directors. Under Texas law, the District is additionally required to: (1) annually review its adopted policies and strategies, (2) require any investment officers with personal business relationships or family relationships with firms seeking to sell securities to the District to disclose the relationship and file a statement with the Texas Ethics Commission and the District, (3) require the registered principal of firms seeking to sell securities to the District to: (a) receive and review the District's investment policy, (b) acknowledge that reasonable controls and procedures have been implemented to preclude imprudent investment activities, and (c) deliver a written statement attesting to these requirements; (4) in conjunction with its annual financial audit, perform a compliance audit of the management controls on investments and adherence to the District's investment policy, (5) restrict reverse repurchase agreements to not more than 90 days and restrict the investment of reverse repurchase agreement funds to no greater than the term of the reverse repurchase agreement, (6) restrict the investment in non-money market mutual funds in the aggregate to no more than 15% of the District's monthly average fund balance, excluding bond proceeds and reserves and other funds held for debt service and (7) require local government investment pools to conform to the new disclosure, rating, net asset value, yield calculation, and advisory board requirements.

Current Investments - Table 8

The District, as of April 1, 2020, was invested in TexPool. This investment portfolio is generally representative of the District’s investment practices. GASB Statement No.3 requires the District to assign risk categories for its investment, except those in which securities are not used as evidence of the investment. TexPool is a public funds investment pool. TexPool has not been assigned a risk category since the District has not issued securities, but rather it owns an undivided beneficial interest in the assets of TexPool. State law requires the District to mark its investments to market price each calendar quarter and upon the conclusion of each fiscal year, for the purpose of compliance with applicable accounting policies concerning the contents of the District’s audited financial statements.

Investment Value as of April 1, 2020 Cash $ 207,301 TexPool 4,741,302

Total Investments $ 4,948,603

Estimated Overlapping Debt Statement

Other governmental entities whose boundaries overlap the District have outstanding bonds payable from ad valorem taxes. The following statement of direct and estimated overlapping ad valorem tax debt was developed from several sources, including information contained in “Texas Municipal Reports,” published by the Municipal Advisory Council of Texas. Except for the amount relating to the District, the District has not independently verified the accuracy or completeness of such information, and no person is entitled to rely upon information as being accurate or complete. Furthermore, certain of the entities listed below may have issued additional bonds since the dates stated in this table, and such entities may have programs requiring the issuance of substantial amounts of additional bonds, the amount of which cannot be determined. Political subdivisions overlapping the District are authorized by Texas law to levy and collect ad valorem taxes for operation, maintenance and/or general revenue purposes in addition to taxes of debt service and the tax burden for operation, maintenance and/or general purposes is not included in these figures.

Total Tax Supported Debt Overlapping Overlapping Taxing Body Amount As of Net Debt Net Debt Travis County $ 992,335,000 4/30/2020 0.110% $ 1,091,569 Austin Community College 404,420,000 4/30/2020 0.090% 363,978 Travis County ESD No. 12 - 3/31/2020 0.000% - Manor Independent School District 472,354,999 4/30/2020 3.380% 15,965,599 Travis County Healthcare District 7,285,000 4/30/2020 0.110% 8,014 TOTAL ESTIMATED OVERLAPPING NET DEBT $ 17,429,159

The District (a) $ 28,999,108 9/2/2020 100.00% $ 28,999,108

TOTAL DIRECT AND ESTIMATED OVERLAPPING DEBT $ 46,428,267

Ratio of Estimated and Overlapping Debt to 2019 Certified Assessed Valuation 19.81% Ratio of Estimated and Overlapping Debt to 2020 Preliminary Assessed Valuation 17.91% Ratio of Estimated Overlapping Debt & Direct Debt to Estimated Assessed Valuation as of July 1, 2020 #DIV/0! ______(a) Includes the Bonds.

Overlapping Taxes for 2019

2019 Tax Rate Per $100 Assessed Valuation Average Tax Bill (a) Overlapping Entity Travis County Travis County Travis County $0.369293 $ 1,018 Austin Community College 0.104900 289 Travis County ESD No. 12 0.100000 276 Manor Independent School District 1.470000 4,052 Travis County Healthcare District 0.105573 291 The District 0.890000 2,453 Total $3.039766 $ 8,378

______(a) Based upon the 2019 average single-family home value of $275,625 as provided by TCAD.

TAX DATA

Classification of Assessed Valuation - Table 9

2019(a) 2018(a) 2017(a) Type Property Amount % Amount % Single Family Residential $ 219,175,688 92.77% $ 193,158,486 92.98% $ 170,115,690 91.87% Vacant Platted Lots/Tracts 1,677,325 0.71% 4,705,387 2.26% 4,023,814 2.17% Qualified Open Space Land - 0.00% - 0.00% - 0.00% Rural Land, Non-Qualified 1,375,787 0.58% 1,375,787 0.66% 2,017,403 1.09% Commercial Real Property 13,800,000 5.84% 13,200,000 6.33% 12,574,800 6.79% Commercial Personal Property 1,094,859 0.46% 1,290,663 0.63% 1,535,988 0.83% Telephone Company 9,925 0.00% 9,109 0.00% 10,672 0.01% Residential Inventory 8,497,478 3.60% 2,113,898 1.01% 1,803,013 0.97% Totally Exempt Property 472,955 0.20% 473,661 0.22% 420,581 0.23% Adjustments & Exemptions (9,847,071) -4.17% (7,900,390) -3.75% (7,341,577) -3.97% Total $236,256,946 100.00% $208,426,601 100.00% $185,160,384 100.00%

______(a) Assessed Valuation reflects the adjusted value at September 30th of each respective year as included in the audited financial statement.

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Tax Collections - Table 10

The following statement of tax collections sets forth in condensed form the historical tax collection experience of the District. Such summary has been prepared by the Financial Advisor for inclusion herein based upon information from District audits and records of the District's Tax Assessor/Collector. Reference is made to such audits and records for further and more complete information.

Tax Assessed Tax Tax Current Collections Total Collections Year Year Valuation (a) Rate Le vy Amount % Amount % Ending 2001 5,548,195 0.9500 52,708 37,265 70.70% 37,265 70.70% 9/30/2002 (b) 2002 1,647,459 0.9500 15,651 15,640 99.93% 15,640 99.93% 9/30/2003 (b) 2003 1,319,118 0.9500 12,532 12,532 100.00% 29,175 232.80% 9/30/2004 (b) 2004 16,278,223 0.9500 154,643 153,937 99.54% 153,937 99.54% 9/30/2005 (b) 2005 40,235,182 0.9500 382,234 380,521 99.55% 381,227 99.74% 9/30/2006 (b) 2006 74,354,358 0.9000 669,189 655,195 97.91% 656,821 98.15% 9/30/2007 (b) 2007 99,573,568 0.9000 896,162 887,579 99.04% 899,983 100.43% 9/30/2008 (b) 2008 127,815,229 0.8800 1,124,774 1,114,654 99.10% 1,112,468 98.91% 9/30/2009 (b) 2009 134,540,289 0.8800 1,183,955 1,181,046 99.75% 1,189,930 100.50% 9/30/2010 (b) 2010 119,867,425 0.9700 1,162,714 1,155,031 99.34% 1,170,507 100.67% 9/30/2011 (b) 2011 112,245,144 0.9700 1,088,778 1,083,926 99.55% 1,087,716 99.90% 9/30/2012 (b) 2012 107,838,981 0.9800 1,056,822 1,049,909 99.35% 1,055,420 99.87% 9/30/2013 (b) 2013 113,702,843 0.9800 1,115,619 1,114,610 99.91% 1,114,156 99.87% 9/30/2014 (b) 2014 124,233,780 0.9745 1,210,658 1,204,061 99.46% 1,209,398 99.90% 9/30/2015 (b) 2015 146,519,034 0.9585 1,404,385 1,397,209 99.49% 1,401,815 99.82% 9/30/2016 (b) 2016 165,413,872 0.9300 1,539,328 1,531,631 99.50% 1,534,710 99.70% 9/30/2017 (b) 2017 186,098,234 0.9173 1,708,007 1,690,927 99.00% 1,690,927 99.00% 9/30/2018 (b) 2018 208,426,601 0.8770 1,836,135 1,828,790 99.60% 1,828,790 99.60% 9/30/2019 (b) 2019 234,322,762 0.8900 2,125,614 2,013,989 94.75% 2,013,989 94.75% 9/30/2020 (c)

______(a) Assessed Valuation reflects the adjusted value at September 30th as included in the audited financial statement. (b) Audited. (c) Reflects tax collections through March 31, 2020. Taxes were due with no penalty by January 31, 2020.

District Tax Rates - Table 11

Tax Rates per $100 Assessed Valuaton 2019 2018 2017 2016 2015 Debt Service $ 0.4167 $ 0.3870 $ 0.4245 $ 0.3640 $ 0.3935 Maintenance 0.1233 0.1400 0.1428 0.2160 0.2150 Contract 0.3500 0.3500 0.3500 0.3500 0.3500

Total $ 0.8900 $ 0.8770 $ 0.9173 $ 0.9300 $ 0.9585

Tax Rate Limitation

The District's tax rate for debt service on the Bonds is legally unlimited as to rate and amount.

Maintenance Tax

The Board of Directors of the District has the statutory authority to levy and collect an annual ad valorem tax for planning, constructing, acquiring, maintaining, repairing or operating the District's improvements, if such maintenance tax is authorized by a vote of the District's electors. Such tax is in addition to taxes which the District is authorized to levy for paying principal of and interest on the Outstanding Bonds and the Bonds, and any tax bonds which may be issued in the future. At an election held on May 3, 2003, voters within the District authorized a maintenance tax not to exceed $1.50/$100 assessed valuation. As shown above under “District Tax Rates,” the District voted to levy a 2019 maintenance and operations tax of $0.1233/$100 assessed valuation.

Principal Taxpayers - Table 12

The following list of principal taxpayers was provided by TCAD based on the 2019, 2018, and 2017 tax rolls of the District, which reflect ownership as of January 1 of each year shown.

Name Type of Property 2019(a) 2018(a) 2017(a) ASC Medical 8 Holdings LLC Land & Improvements $ 10,000,000 $ 10,000,000 (d) HFS Brothers Investments LLC Land & Improvements 3,800,000 3,200,000 3,700,000 SG Land Holdings LLC(b) Land & Improvements 3,110,763 4,851,798 5,165,841 Buffington Texas Classic Homes LLC(c) Land & Improvements 878,755 505,551 (d) Perry Homes LLC(c) Land & Improvements 818,978 556,783 508,425 Individual Homeowner Land & Improvements 673,813 678,617 634,082 Meritage Homes of Texas LLC(c) Land & Improvements 578,563 (d) (d) Gehan Homes Ltd.(c) Land & Improvements 499,186 474,000 (d) Arise Healthcare System LLC Land & Improvements 437,712 460,651 579,690 Perry Homes LLC(c) Land & Improvements 419,530 (d) (d) Scott Felder Homes LLC(c) Land & Improvements (d) 620,747 940,321 Buffington Texas Classic(c) Land & Improvements (d) 418,263 523,224 Shadowglen MOB Partners LLC Land & Improvements (d) (d) 8,874,800 CalAtlantic Homes of Texas Inc.(c) Land & Improvements (d) (d) 629,366 (c) Scott Felder Homes LLC Land & Improvements (d) (d) 586,115 Total $ 21,217,300 $ 21,766,410 $ 22,141,864

Percent of Assessed Valuation 9.05% 10.44% 11.96% ______(a) Assessed valuation reflects the adjusted value at September 30th as included in the audited financial statement. (b) The Developer. (c) The designated taxpayer is concentrated in the homebuilding industry. See "THE DEVELOPER - Homebuilder within the District" and "INVESTMENT CONSIDERATIONS - Factors Affecting Taxable Values and Tax Payments - Dependence Upon the Developer, Lot Owners, and Builders." (d) Not a principal taxpayer in r espective year.

Tax Adequacy for Debt Service

The calculations shown below assume, solely for purposes of illustration, no increase or decrease in assessed valuation from the 2019 Certified Assessed Valuation, 2020 Preliminary Assessed Valuation, Estimated Assessed Valuation as of July 1, 2020, and utilize tax rates adequate to service the District's total projected debt service requirements, including the Bonds (at an estimated interest rate of 3.50% per annum). No available debt service funds are reflected in these computations. See “INVESTMENT CONSIDERATIONS - Impact on District Tax Rates.”

Projected Average Requirement on the Bonds (2021 through 2039) ...... $1,324,660

$0.60 Tax Rate on 2019 Certified Assessed Valuation of $234,322,762@ 95% collections produces ...... $1,355,640

$0.54 Tax Rate on 2020 Preliminary Assessed Valuation of $259,229,895 @ 95% collections produces ...... $1,329,849

$0.__ Tax Rate on Estimated Assessed Valuation as of July 1, 2020 of $______@ 95% collections produces ...... $______

Projected Maximum Requirement on the Bonds (2039) ...... $1,568,025

$0.71 Tax Rate on 2019 Certified Assessed Valuation of $234,322,762 @ 95% collections produces ...... $1,580,507

$0.64 Tax Rate on 2020 Preliminary Assessed Valuation of $259,229,895 @ 95% collections produces ...... $1,576,118

$0.__ Tax Rate on Estimated Assessed Valuation as of July 1, 2020 of $______@ 95% collections produces ...... $______

Debt Service Fund Management Index

Debt Service Requirements for year ending 12/31/2020 ...... $1,035,662 (a) Audited Debt Service Fund Balance as of 9/30/19 ...... 401,966(b) Capitalized Interest included in Bond proceeds ...... 350,000(c) 2019 Tax Levy @ 95% collections produces ...... 927,601(d) Total Available for Debt Service ...... $1,679,567 Projected Debt Service Fund Balance as of September 30, 2020 ...... $643,905 ______(a) Interest requirements on the Bonds begin July 1, 2020. See “PROJECTED DEBT SERVICE REQUIREMENTS – Table 3.” (b) Audited. Represents debt service fund balance after all 2019 debt service requirements have been paid. (c) Preliminary; subject to change. Represents approximately twenty-four (24) months of capitalized interest ($350,000) which is projected to be deposited into the Debt Service Fund from proceeds of the Bonds at closing. (d) The District levied a 2019 debt service tax rate of $0.4167/$100 assessed valuation.

TAXING PROCEDURES

Authority to Levy Taxes

The Board is authorized to levy an annual ad valorem tax on all taxable property within the District in an amount sufficient to pay the principal of and interest on the Bonds, its other remaining outstanding bonds, and any additional bonds payable from taxes which the District may hereafter issue (see “INVESTMENT CONSIDERATIONS - Future Debt”) and to pay the expenses of assessing and collecting such taxes. The District agrees in the Bond Order to levy such a tax from year-to-year as described more fully herein under “THE BONDS - Source of and Security for Payment.” Under Texas law, the Board is also authorized to levy and collect an ad valorem tax for the operation and maintenance of the District and its water and wastewater system and for the payment of certain contractual obligations, if authorized by its voters. See “TAX DATA - Tax Rate Limitation.” Property Tax Code and County Wide Appraisal District

The Texas Property Tax Code (the “Property Tax Code”) specifies the taxing procedures of all political subdivisions of the State of Texas, including the District. Provisions of the Property Tax Code are complex and are not fully summarized here.

The Property Tax Code requires, among other matters, county-wide appraisal and equalization of taxable property values and establishes in each county of the State of Texas an appraisal district with the responsibility for recording and appraising property for all taxing units within a county and an appraisal review board with responsibility for reviewing and equalizing the values established by the appraisal district. TCAD has the responsibility for appraising property for all taxing units within Travis County, including the District. Such appraisal values are subject to review and change by the Travis Central Appraisal Review Board (the “Appraisal Review Board”).

Property Subject to Taxation by the District

General: Except for certain exemptions provided by Texas law, all real property, tangible personal property held or used for the production of income, mobile homes, and certain categories of intangible personal property with a tax situs in the District are subject to taxation by the District. Principal categories of exempt property include, but are not limited to: property owned by the State of Texas or its political subdivisions if the property is used for public purposes; property exempt from ad valorem taxation by federal law; certain household goods, family supplies, and personal effects; certain goods, wares and merchandise in transit; farm products owned by the producer; certain property of charitable organizations, youth development associations, religious organizations, and qualified schools; designated historical sites; and most individually owned automobiles. In addition, the District may by its own action exempt residential homesteads of persons sixty-five (65) years of age or older and of certain disabled persons to the extent deemed advisable by the Board. The District may be required to call such an election upon petition by twenty percent (20%) of the number of qualified voters who voted in the previous election. The District is authorized by the statute to disregard exemptions for the disabled and elderly if granting the exemption would impair the District’s obligation to pay tax supported debt incurred prior to adoption of the exemption by the District. Furthermore, the District must grant exemptions to disabled veterans or certain surviving dependents of disabled veterans, if requested, of between $3,000 and $12,000 of taxable valuation depending upon the disability rating of the veteran claiming the exemption, and qualifying surviving spouses of persons 65 years of age or older will be entitled to receive a residential homestead exemption equal to the exemption received by the deceased spouse. A veteran who receives a disability rating of 100% is entitled to an exemption from taxation of the total appraised value of the same property to which the disabled veteran’s exemption applied. A partially disabled veteran or certain surviving spouse of partially disabled veterans are entitled to an exemption from taxation of a percentage of the appraised value of their residence homestead in an amount equal to the partially disabled veteran’s disability rating if the residence homestead was donated by a charitable organization. Also, the surviving spouse of a member of the armed forces who was killed in action is, subject to certain conditions, entitled to an exemption of the total appraised value of the surviving spouse’s residence homestead, and, subject to certain conditions, an exemption up to the same amount may be transferred to a subsequent residence homestead of the surviving spouse. The surviving spouse of a first responder who was killed or fatally injured in the line of duty is, subject to certain conditions, also entitled to an exemption of the total appraised value of the surviving spouse’s residence homestead, and, subject to certain conditions, an exemption up to the same amount may be transferred to a subsequent residence homestead of the surviving spouse. See “TAX DATA.”

Residential Homestead Exemptions: The Property Tax Code authorizes the governing body of each political subdivision in the State to exempt up to twenty percent (20%) of the appraised value of residential homesteads from ad valorem taxation. Where ad valorem taxes have previously

been pledged for the payment of debt, the governing body of a political subdivision may continue to levy and collect taxes against the exempt value of the homesteads until the debt is discharged, if the cessation of the levy would impair the obligations of the contract by which the debt was created. The adoption of a homestead exemption may be considered each year, but it must be adopted by July 1. The District has never adopted a general homestead exemption.

Tax Abatement: Travis County and the District may enter into tax abatement agreements with owners of real property. The tax abatement agreements may exempt from ad valorem taxation by the applicable taxing jurisdiction for a period of up to ten years, all or any part of the increase in the assessed valuation of property covered by the agreement over its assessed valuation in the year in which the agreement is executed, on the condition that the property owner make specified improvements or repairs to the property in conformity with a comprehensive plan. To date, the District has not executed any abatement agreements.

Freeport Goods and Goods-in-Transit Exemption: Article VIII, Section 1-j of the Texas Constitution provides for an exemption from ad valorem taxation for “freeport property,” which is defined as goods detained in the state for 175 days or less for the purpose of assembly, storage, manufacturing, processing or fabrication. Taxing units that took action prior to April 1, 1990 may continue to tax freeport property and decisions to continue to tax freeport property may be reversed in the future. However, decisions to exempt freeport property are not subject to reversal. A “Goods-in-Transit” Exemption is applicable to the same categories of tangible personal property which are covered by the Freeport Exemption, if, for tax year 2011 and prior applicable years, such property is acquired in or imported into Texas for assembling, storing, manufacturing, processing, or fabricating purposes and is subsequently forwarded to another location inside or outside of Texas not later than 175 days after acquisition or importation, and the location where said property is detained during that period is not directly or indirectly owned or under the control of the property owner. For tax year 2012 and subsequent years, such Goods-in-Transit Exemption is limited to tangible personal property acquired in or imported into Texas for storage purposes only is such property is stored under a contract of bailment by a public warehouse operator at one or more public warehouse facilities in Texas that are not in any way owned or controlled by the owner of such property for the account of the person who acquired or imported such property. The exemption excludes oil, natural gas, petroleum products, aircraft and special inventory, including motor vehicle, vessel and outboard motor, heavy equipment and manufactured housing inventory. After holding a public hearing, a taxing unit may take action by January 1 of the year preceding a tax year to tax goods-in- transit during the following tax year. A taxpayer may obtain only a freeport exemption or a goods-in-transit exemption for items of personal property. The District took no action prior to April 1, 1990 to tax freeport property but has acted to tax goods-in-transit.

Valuation of Property for Taxation

Generally, property in the District must be appraised by TCAD at market value as of January 1 of each year. Once an appraisal roll is prepared and formally approved by the Appraisal Review Board, it is used by the District in establishing its tax rolls and tax rate. Assessments under the Property Tax Code are to be based on one hundred percent (100%) of market value, as such is defined in the Property Tax Code.

The Property Tax Code permits land designated for agricultural use, open space or timberland to be appraised at its value based on the land's capacity to produce agricultural or timber products rather than at its fair market value. The Property Tax Code permits under certain circumstances that residential real property inventory held by a person in the trade or business be valued at the price that such property would bring if sold as a unit to a purchaser who would continue the business. Landowners wishing to avail themselves of the agricultural use, open space or timberland designation or residential real property inventory designation must apply for the designation and the appraiser is required by the Property Tax Code to act on each claimant's right to the designation individually. A claimant may waive the special valuation as to taxation by some political subdivisions while claiming it as to another. If a claimant receives the agricultural use designation and later loses it by changing the use of the property or selling it to an unqualified owner, the District can collect taxes based on the new use, including taxes for the previous three years for agricultural use and taxes for the previous five years for open space land and timberland.

The Property Tax Code requires TCAD to implement a plan for periodic reappraisal of property. The plan must provide for appraisal of all real property in TCAD at least once every three (3) years. It is not known what frequency of reappraisal will be utilized by TCAD or whether reappraisals will be conducted on a zone or county-wide basis. The District, however, at its expense has the right to obtain from the TCAD a current estimate of appraised values within the District or an estimate of any new property or improvements within the District. While such current estimate of appraised values may serve to indicate the rate and extent of growth of taxable values within the District, it cannot be used for establishing a tax rate within the District until such time as TCAD chooses formally to include such values on its appraisal roll.

District and Taxpayer Remedies

Under certain circumstances taxpayers and taxing units (such as the District), may appeal the orders of the Appraisal Review Board by filing a timely petition for review in State district court. In such event, the value of the property in question will be determined by the court or by a jury, if requested by any party. Additionally, taxing units may bring suit against TCAD to compel compliance with the Property Tax Code.

The Property Tax Code sets forth notice and hearing procedures for certain tax rate increases by the District and provides for taxpayer referenda which could result in the repeal of certain tax increases. The Property Tax Code also establishes a procedure for notice to property owners of reappraisals reflecting increased property values, appraisals which are higher than renditions, and appraisals of property not previously on an appraisal roll.

Levy and Collection of Taxes

The District is responsible for the levy and collection of its taxes unless it elects to transfer such functions to another governmental entity. The rate of taxation is set by the Board of Directors, after the legally required notice has been given to owners of property within the District, based upon: a) the valuation of property within the District as of the preceding January 1, and b) the amount required to be raised for debt service, maintenance purposes, and authorized contractual obligations. Taxes are due October 1, or when billed, whichever comes later, and become delinquent if not paid before February 1 of the year following the year in which imposed. A delinquent tax incurs a penalty of six percent (6%) of the amount of the tax for the first calendar month it is delinquent, plus one percent (1%) for each additional month or portion of a month the tax remains unpaid prior to July 1 of the year in which it becomes delinquent. If the tax is not paid by July 1 of the year in which it becomes delinquent, the tax incurs a total penalty of twelve percent (12%) regardless of the number of months the tax has been delinquent and incurs an additional penalty for collection costs of an amount established by the District and a delinquent tax attorney. A delinquent tax on personal property incurs an additional penalty, in an amount established by the District and a delinquent tax attorney, sixty (60) days after the date the taxes become delinquent. The delinquent tax accrues interest at a rate of one percent (1%) for each month or portion of a month it remains unpaid. The Property Tax Code makes provisions for the split payment of taxes, discounts for early payment and the postponement of the delinquency date of taxes under certain circumstances which, at the option of the District, may be rejected by taxing units. The District’s tax collector is required to enter into an installment payment agreement with any person who is delinquent on the payment of tax on a residence homestead for payment of tax, penalties and interest, if the person requests an installment agreement and has not entered into an installment agreement with the collector in the preceding twenty-four (24) months. The installment agreement must provide for payments to be made in monthly installments and must extend for a period of at least twelve (12) months and no more than thirty-six (36) months. Additionally, the owner of a residence homestead property who is (i) sixty-five (65) years of age or older, (ii) disabled, or (iii) a disabled veteran, is entitled by law to pay current taxes on a residential homestead in installments without penalty or to defer the payment of taxes during the time of ownership. In the instance of tax deferral, a tax lien remains on the property and interest continues to accrue during the period of deferral.

Rollback of Operation and Maintenance Tax Rate

During the 86th Regular Legislative Session, Senate Bill 2 (“SB 2”) was passed and signed by the Governor, with an effective date of January 1, 2020, and the provisions described herein are effective beginning with the 2020 tax year. See “SELECTED FINANCIAL INFORMATION” for a description of the District’s current total tax rate. Debt service and contract tax rates cannot be reduced by a rollback election held within any of the districts described below.

SB 2 classifies districts differently based on the current operation and maintenance tax rate or on the percentage of build-out that the District has completed. Districts that have adopted an operation and maintenance tax rate for the current year that is 2.5 cents or less per $100 of taxable value are classified as “Special Taxing Units.” Districts that have financed, completed and issued bonds to pay for all improvements and facilities necessary to serve at least 95% of the projected build-out of the district are classified as “Developed Districts.” Districts that do not meet either of the classifications previously discussed are classified herein as “Developing Districts.” The impact each classification has on the ability of a district to increase its operation and maintenance tax rate pursuant to SB 2 is described for each classification below.

Special Taxing Units

Special Taxing Units that adopt a total tax rate that would impose more than 1.08 times the amount of the total tax imposed by such district in the preceding tax year on a residence homestead appraised at the average appraised value of a residence homestead, subject to certain homestead exemptions, are required to hold a rollback election within the district to determine whether to approve the adopted total tax rate. If the adopted total tax rate is not approved at the election, the total tax rate for a Special Taxing Unit is the current year’s debt service and contract tax rate plus 1.08 times the previous year’s operation and maintenance tax rate.

Developed Districts

Developed Districts that adopt a total tax rate that would impose more than 1.035 times the amount of the total tax imposed by the district in the preceding tax year on a residence homestead appraised at the average appraised value of a residence homestead, subject to certain homestead exemptions for the preceding tax year, plus any unused increment rates, as calculated and described in Section 26.013 of the Tax Code, are required to hold a rollback election within the district to determine whether to approved the adopted total tax rate. If the adopted total tax rate is not approved at the election, the total tax rate for a Developed District is the current year’s debt service and contract tax rate plus 1.035 times the previous year’s operation and maintenance tax rate plus any unused increment rates. In addition, if any part of a Developed District lies within an area declared for disaster by the Governor of Texas or the President of the United States, alternative procedures and rate limitations may apply for a temporary period. If a district qualifies as both a Special Taxing Unit and a Developed District, the district will be subject to the operation and maintenance tax threshold applicable to Special Taxing Units.

Developing Districts

Districts that do not meet the classification of a Special Taxing Unit or a Developed District are classified as Developing Districts. The qualified voters of these districts, upon the Developing District’s adoption of a total tax rate that would impose more than 1.08 times the amount of the total tax rate imposed by such district in the preceding tax year on a residence homestead appraised at the average appraised value of a residence homestead, subject to certain homestead exemptions, are authorized to petition for an election to reduce the operation and maintenance tax rate. If a rollback election is called and passes, the total tax rate for Developing Districts is the current year’s debt service and contract tax rate plus 1.08 times the previous year’s operation and maintenance tax rate.

The District

A determination as to a district’s status as a Special Taxing Unit, Developed District or Developing District will be made by the Board of Directors on an annual basis, beginning with the 2020 tax rate. The District cannot give any assurances as to what its classification will be at any point in time or whether the District’s future tax rates will result in a total tax rate that will reclassify the District into a new classification and new election calculation.

District's Rights In The Event Of Tax Delinquencies

Taxes levied by the District are a personal obligation of the owner of the property on January 1 of the year for which the tax is imposed. On January 1 of each year, a tax lien attaches to property to secure the payment of all state and local taxes, penalties, and interest ultimately imposed for the year on the property. The lien exists in favor of the State of Texas and each local taxing unit, including the District, having power to tax the property. The District's tax lien is on a parity with tax liens of such other taxing units. See “FINANCIAL STATEMENT - Overlapping Taxes for 2019.” A tax lien on real property takes priority over the claim of most creditors and other holders of liens on the property encumbered by the tax lien, whether or not the debt or lien existed before the attachment of the tax lien; however, whether a lien of the United States is on a parity with or takes priority over a tax lien of the District is determined by applicable federal law. Personal property under certain circumstances is subject to seizure and sale for the payment of delinquent taxes, penalty, and interest.

At any time after taxes on property become delinquent, the District may file suit to foreclose the lien securing payment of the tax, to enforce personal liability for the tax, or both. In filing a suit to foreclose a tax lien on real property, the District must join other taxing units that have claims for delinquent taxes against all or part of the same property. Collection of delinquent taxes may be adversely affected by the amount of taxes owed to other taxing units, by the effects of market conditions on the foreclosure sale price, by taxpayer redemption rights (a taxpayer may redeem property within two years after the purchaser's deed issued at the foreclosure sale is filed in the county records) or by bankruptcy proceedings which restrict the collection of taxpayer debts. See “INVESTMENT CONSIDERATIONS - General - Tax Collections and Foreclosure Remedies.”

Effect of FIRREA on Tax Collections

The “Financial Institutions Reform, Recovery and Enforcement Act of 1989” (“FIRREA”) contains provisions which affect the time for protesting property valuations, the fixing of tax liens and the collection of penalties and interest on delinquent taxes on real property owned by the Federal Deposit Insurance Corporation (“FDIC”) when the FDIC is acting as the conservator or receiver of an insolvent financial institution.

Under FIRREA, real property held by the FDIC is still subject to ad valorem taxation, but such act states (i) that no real property of the FDIC shall be subject to foreclosure or sale without the consent of the FDIC and no involuntary lien shall attach to such property, (ii) the FDIC shall not be liable for any penalties or fines, including those arising from the failure to pay any real property taxes when due and (iii) notwithstanding the failure of a person to challenge an appraisal in accordance with state law, such value shall be determined as of the period for which such tax is imposed.

To the extent that the FIRREA provisions are valid and applicable to any property in the District, and to the extent that the FDIC attempts to enforce the same, these provisions may affect the timeliness of collection of taxes on property owned by the FDIC in the District, and may prevent the collection of penalties and interest on such taxes.

LEGAL MATTERS

Legal Opinions

Issuance of the Bonds is subject to the approving legal opinion of the Attorney General of Texas to the effect that the Bonds are valid and legally binding obligations of the District payable from the proceeds of an annual ad valorem tax levied, without legal limit as to rate or amount, upon all taxable property within the District. Issuance of the Bonds is also subject to the legal opinion of McCall, Parkhurst & Horton L.L.P. (“Bond Counsel”), based upon examination of a transcript of the proceedings incident to authorization and issuance of the Bonds, to the effect that the Bonds are valid and binding obligations of the District payable from the sources and enforceable in accordance with the terms and conditions described therein, except to the extent that the enforceability thereof may be affected by governmental immunity, bankruptcy, insolvency, reorganization, moratorium, or other similar laws affecting creditors' rights or the exercise of judicial discretion in accordance with general principles of equity. Bond Counsel's legal opinion will also address the matters described below under “TAX MATTERS.” Such opinions will express no opinion with respect to the sufficiency of the security for or the marketability of the Bonds. In connection with the issuance of the Bonds, Bond Counsel has been engaged by, and only represents, the District.

The legal fees to be paid Bond Counsel for services rendered in connection with the issuance of the Bonds are based upon a percentage of Bonds actually issued, sold and delivered, and therefore, such fees are contingent upon the sale and delivery of the Bonds.

The various legal opinions to be delivered concurrently with the delivery of the Bonds express the professional judgment of the attorneys rendering the opinions as to the legal issues explicitly addressed therein. In rendering a legal opinion, the attorney does not become an insurer or guarantor of the expression of professional judgment, of the transaction opined upon, or of the future performance of the parties to the transaction, nor does the rendering of an opinion guarantee the outcome of any legal dispute that may arise out of the transaction.

No-Litigation Certificate

The District will furnish to the Initial Purchaser a certificate, dated as of the Date of Initial Delivery of the Bonds, executed by both the President and Secretary of the Board, to the effect that no litigation of any nature has been filed or is then pending or threatened, either in state or federal courts, contesting or attacking the Bonds; restraining or enjoining the issuance, execution or delivery of the Bonds; affecting the provisions made for the payment of or security for the Bonds; in any manner questioning the authority or proceedings for the issuance, execution, or delivery of the Bonds; or affecting the validity of the Bonds.

No Material Adverse Change

The obligations of the Initial Purchaser to take and pay for the Bonds, and of the District to deliver the Bonds, are subject to the condition that, up to the time of delivery of and receipt of payment for the Bonds, there shall have been no material adverse change in the condition (financial or otherwise) of the District from that set forth or contemplated in the Official Statement.

TAX MATTERS Opinion

On the date of initial delivery of the Bonds, McCall, Parkhurst & Horton L.L.P., Austin, Texas, Bond Counsel, will render its opinion that, in accordance with statutes, regulations, published rulings and court decisions existing on the date thereof (“Existing Law”) (1) interest on the Bonds for federal income tax purposes will be excludable from the “gross income” of the holders thereof and (2) the Bonds will not be treated as “specified private activity bonds” the interest on which would be included as an alternative minimum tax preference item under section 57(a)(5) of the Internal Revenue Code of 1986 (the “Code”). Except as stated above, Bond Counsel will express no opinion as to any other federal, state or local tax consequences of the purchase, ownership or disposition of the Bonds. See “APPENDIX B -- Form of Bond Counsel Opinion.”

In rendering its opinion, Bond Counsel will rely upon (a) the District's federal tax certificate, and (b) covenants of the District relating to certain matters, including arbitrage and the use of the proceeds of the Bonds and the property financed or refinanced therewith. Failure by the District to observe the aforementioned representations or covenants could cause the interest on the Bonds to become taxable retroactively to the date of issuance.

The Code and the regulations promulgated thereunder contain a number of requirements that must be satisfied subsequent to the issuance of the Bonds in order for the interest on the Bonds to be, and to remain, excludable from gross income for federal income tax purposes. Failure to comply with such requirements may cause interest on the Bonds to be included to gross income retroactively to the date of issuance of the Bonds. The opinion of Bond Counsel is conditioned on compliance by the District with such requirements, and Bond Counsel has not been retained to monitor compliance with these requirements subsequent to the issuance of the Bonds.

Bond Counsel's opinion represents its legal judgment based upon its review of Existing Law and the reliance on the aforementioned information, representations and covenants. Bond Counsel's opinion is not a guarantee of a result. Existing Law is subject to change by the Congress and to subsequent judicial and administrative interpretation by the courts and the Department of the Treasury. There can be no assurance that such Existing Law or the interpretation thereof will not be changed in a manner which would adversely affect the tax treatment of the purchase, ownership or disposition of the Bonds.

A ruling was not sought from the Internal Revenue Service by the District with respect to the Bonds or the property financed or refinanced with the proceeds of the Bonds. Bond Counsel’s opinion represents its legal judgement based upon its review of Existing Law and the representations of the District that it deems relevant to render such opinion and is not a guarantee of result. No assurances can be given as to whether the Internal Revenue Service will commence an audit of the Bonds, or as to whether the Internal Revenue Service would agree with the opinion of Bond Counsel. If an Internal Revenue Service audit is commenced, under current procedures the Internal Revenue Service is likely to treat the District as the taxpayer and the Bondholders may have no right to participate in such procedure. No additional interest will be paid upon any determination of taxability.

Federal Income Tax Accounting Treatment of Original Issue Discount

The initial public offering price to be paid for one or more maturities of the Bonds may be less than the principal amount thereof or one or more periods for the payment of interest on the Bonds may not be equal to the accrual period or be in excess of one year (the “Original Issue Discount Bonds”). In such event, the difference between (i) the “stated redemption price at maturity” of each Original Issue Discount Bond, and (ii) the initial offering price to the public of such Original Issue Discount Bond would constitute original issue discount. The “stated redemption price

at maturity” means the sum of all payments to be made on the Bonds less the amount of all periodic interest payments. Periodic interest payments are payments which are made during equal accrual periods (or during any unequal period if it is the initial or final period) and which are made during accrual periods which do not exceed one year.

Under Existing Law, any owner who has purchased such Original Issue Discount Bond in the initial public offering is entitled to exclude from gross income (defined in section 61 of the Code) an amount of income with respect to such Original Issue Discount Bond equal to that portion of the amount of such original issue discount allocable to the accrual period. For a discussion of certain collateral federal tax consequences, see discussion set forth below.

In the event of the redemption, sale or other taxable disposition of such Original Issue Discount Bond prior to stated maturity, however, the amount realized by such owner in excess of the basis of such Original Issue Discount Bond in the hands of such owner (adjusted upward by the portion of the original issue discount allocable to the period for which such Original Issue Discount Bond was held by such initial owner) is includable in gross income.

Under Existing Law, the original issue discount on each Original Issue Discount Bond is accrued daily to the stated maturity thereof (in amounts calculated as described below for each six-month period ending on the date before the semiannual anniversary dates of the date of the Bonds and ratably within each such six-month period) and the accrued amount is added to an initial owner's basis for such Original Issue Discount Bond for purposes of determining the amount of gain or loss recognized by such owner upon the redemption, sale or other disposition thereof. The amount to be added to basis for each accrual period is equal to (a) the sum of the issue price and the amount of original issue discount accrued in prior periods multiplied by the yield to stated maturity (determined on the basis of compounding at the close of each accrual period and properly adjusted for the length of the accrual period) less (b) the amounts payable as current interest during such accrual period on such Original Issue Discount Bond.

The federal income tax consequences of the purchase, ownership, redemption, sale or other disposition of Original Issue Discount Bonds which are not purchased in the initial offering at the initial offering price may be determined according to rules which differ from those described above. All owners of Original Issue Discount Bonds should consult their own tax advisors with respect to the determination for federal, state and local income tax purposes of the treatment of interest accrued upon redemption, sale or other disposition of such Original Issue Discount Bonds and with respect to the federal, state, local and foreign tax consequences of the purchase, ownership, redemption, sale or other disposition of such Original Issue Discount Bonds.

Collateral Federal Income Tax Consequences

The following discussion is a summary of certain collateral federal income tax consequences resulting from the purchase, ownership or disposition of the Bonds. This discussion is based on existing statutes, regulations, published rulings and court decisions accumulated, all of which are subject to change or modification, retroactively.

The following discussion is applicable to investors, other than those who are subject to special provisions of the Code, such as financial institutions, property and casualty insurance companies, life insurance companies, individual recipients of Social Security or Railroad Retirement benefits, individuals allowed an earned income credit, certain S corporations with subchapter C earnings and profits, foreign corporations subject to the branch profits tax, taxpayers qualifying for the health insurance premium assistance credit, and taxpayers who may be deemed to have incurred or continued indebtedness to purchase tax-exempt obligations.

THE DISCUSSION CONTAINED HEREIN MAY NOT BE EXHAUSTIVE. INVESTORS, INCLUDING THOSE WHO ARE SUBJECT TO SPECIAL PROVISIONS OF THE CODE, SHOULD CONSULT THEIR OWN TAX ADVISORS AS TO THE TAX TREATMENT WHICH MAY BE ANTICIPATED TO RESULT FROM RECENTLY ENACTED LEGISLATION OR THE PURCHASE, OWNERSHIP AND DISPOSITION OF TAX-EXEMPT OBLIGATIONS BEFORE DETERMINING WHETHER TO PURCHASE THE BONDS.

Under section 6012 of the Code, holders of tax-exempt obligations, such as the Bonds, may be required to disclose interest received or accrued during each taxable year on their returns of federal income taxation.

Section 1276 of the Code provides for ordinary income tax treatment of gain recognized upon the disposition of a tax-exempt obligation, such as the Bonds, if such obligation was acquired at a “market discount” and if the fixed maturity of such obligation is equal to, or exceeds, one year from the date of issue. Such treatment applies to “market discount bonds” to the extent such gain does not exceed the accrued market discount of such bonds; although for this purpose, a de minimis amount of market discount is ignored. A “market discount bond” is one which is acquired by the holder at a purchase price which is less than the stated redemption price at maturity or, in the case of a bond issued at an original issue discount, the “revised issue price” (i.e., the issue price plus accrued original issue discount). The “accrued market discount” is the amount which bears the same ratio to the market discount as the number of days during which the holder holds the obligation bears to the number of days between the acquisition date and the final maturity date.

State, Local and Foreign Taxes

Investors should consult their own tax advisors concerning the tax implications of the purchase, ownership or disposition of the Bonds under applicable state or local laws. Foreign investors should also consult their own tax advisors regarding the tax consequences unique to investors who are not United States persons.

Information Reporting and Backup Withholding

Subject to certain exceptions, information reports describing interest income, including original issue discount, with respect to the Bonds will be sent to each registered holder and to the IRS. Payments of interest and principal may be subject to backup withholding under section 3406 of the Code if a recipient of the payments fails to furnish to the payor such owner's social security number or other taxpayer identification number (“TIN”), furnishes an incorrect TIN, or otherwise fails to establish an exemption from the backup withholding tax. Any amounts so withheld would be allowed as a credit against the recipient’s federal income tax. Special rules apply to partnerships, estates and trusts, and in certain circumstances, and in respect of Non-U.S. Holders, certifications as to foreign status and other matters may be required to be provided by partners and beneficiaries thereof.

Qualified Tax-Exempt Obligations for Financial Institutions

Section 265(a) of the Code provides, in pertinent part, that interest paid or incurred by a taxpayer, including a “financial institution,” on indebtedness incurred or continued to purchase or carry tax-exempt obligations is not deductible in determining the taxpayer’s taxable income. Section 265(b) of the Code provides an exception to the disallowance of such deduction for any interest expense paid or incurred on indebtedness of a taxpayer that is a “financial institution” allocable to tax-exempt obligation, other than “private activity bonds,” that are designated by a “qualified small issuer” as “qualified tax-exempt obligations.” A “qualified small issuer” is any governmental issuer (together with any “on-behalf of” and “subordinate” issuers) who issues no more than $10,000,000 of tax-exempt obligations during the calendar year. Section 265(b)(5) of the Code defines the term “financial institution” as any “bank” described in Section 585(a)(2) of the Code, or any person accepting deposits from the public in the ordinary course of such person's trade or business that is subject to federal or state supervision as a financial institution. Notwithstanding the exception to the disallowance of the deduction of interest on indebtedness related to “qualified tax- exempt obligations” provided by Section 265(b) of the Code, Section 291 of the Code provides that the allowable deduction to a “bank,” as defined in Section 585(a)(2) of the Code, for interest on indebtedness incurred or continued to purchase “qualified tax-exempt obligations” shall be reduced by twenty-percent (20%) as a “financial institution preference item.”

The District expects to designate the Bonds as “qualified tax-exempt obligations” within the meaning of section 265(b) of the Code. In furtherance of that designation, the District will covenant to take such action that would assure, or to refrain from such action that would adversely affect, the treatment of the Bonds as “qualified tax-exempt obligations.” Potential purchasers should be aware that if the issue price to the public exceeds $10,000,000, there is a reasonable basis to conclude that the payment of a de minimis amount of premium in excess of $10,000,000 is disregarded; however, the Internal Revenue Service could take a contrary view. If the Internal Revenue Service takes the position that the amount of such premium is not disregarded, then such obligations might fail to satisfy the $10,000,000 limitation and the Bonds would not be “qualified tax-exempt obligations.”

CONTINUING DISCLOSURE OF INFORMATION

In the Bond Order, the District has made the following agreement for the benefit of the registered and beneficial owners. The District is required to observe the agreement for so long as it remains obligated to advance funds to pay the Bonds. Under the agreement, the District will be obligated to provide certain updated financial information and operating data annually, and timely notice of specified events, to the Municipal Securities Rulemaking Board (“MSRB”). This information will be available free of charge by the MSRB via the Electronic Municipal Market Access (“EMMA”) system at www.emma.msrb.org.

Annual Reports

The District will provide certain updated financial information and operating data to the MSRB annually. The information to be updated includes all quantitative financial information and operating data with respect to the District of the general type included in this Official Statement under Tables 1 through 12 and in Appendix A. The District will update and provide this information within six months after the end of each fiscal year. The District will provide the updated information to the MSRB.

The District may provide updated information in full text or may incorporate by reference certain other publicly available documents, as permitted by SEC Rule 15c2-12 (the “Rule”). The updated information will include audited financial statements, if it is completed within twelve months after the District’s fiscal year end. If audited financial statements are not available within such twelve-month period, the District will file unaudited financial statements and file audited financial statements when the audit report becomes available. Any such financial statements will be prepared in accordance with the accounting principles described in Appendix A or such other accounting principles as the District may be required to employ from time to time pursuant to state law or regulation.

The District's current fiscal year end is September 30. Accordingly, it must provide updated information by March 31 of each year unless the District changes its fiscal year. If the District changes its fiscal year, it will notify the MSRB of the change.

Notice of Certain Events

The District will provide timely notices of certain events to the MSRB, but in no event will such notices be provided to the MSRB in excess of ten (10) business days after the occurrence of an event. The District will provide notice of any of the following events with respect to the Bonds: (1) principal and interest payment delinquencies; (2) non-payment related defaults, if material; (3) unscheduled draws on debt service reserves reflecting financial difficulties; (4) unscheduled draws on credit enhancements reflecting financial difficulties; (5) substitution of credit or liquidity providers, or their failure to perform; (6) adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final

determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB) or other material notices or determinations with respect to the tax status of the Bonds, or other material events affecting the tax status of the Bonds; (7) modifications to the rights of Beneficial Owners of the Bonds, if material; (8) bond calls, if material, and tender offers; (9) defeasances; (10) release, substitution, or sale of property securing repayment of the Bonds, if material; (11) rating changes; (12) bankruptcy, insolvency, receivership or similar event of the District or other obligated person within the meaning of CFR §240.15c2-12 (the “Rule”); (13) consummation of a merger, consolidation, or acquisition involving the District or other obligated person within the meaning of the Rule or the sale of all or substantially all of the assets of the District or other obligated person within the meaning of the Rule, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material; (14) appointment of a successor or additional trustee or the change of name of a trustee, if material; (15) incurrence of financial obligations of the obligated person, if material, or agreement to covenants, events of default, remedies, priority rights, or other similar terms of a financial obligation of the obligated person, any of which affect security holders, if material; and (16) default, event of acceleration, termination event, modification of terms, or other similar event under the terms of a financial obligation of the obliged person, any of which reflect financial difficulties. The terms “financial obligation” and “material” when used in this paragraph shall have the meaning ascribed to them under federal securities laws.

Availability of Information from the MSRB

The District has agreed to provide the foregoing information only to the MSRB. All documents provided by the District to the MSRB described above under “Annual Reports” and “Notice of Certain Events” will be in an electronic format and accompanied by identifying information as prescribed by the MSRB.

The address of the MSRB is 1900 Duke Street, Suite 600, Alexandria, VA 22314, and its telephone number is (703) 797-6600.

Limitations and Amendments

The District has agreed to update information and to provide notices of certain events only as described above. The District has not agreed to provide other information that may be relevant or material to a complete presentation of its financial results of operations, condition, or prospects or agreed to update any information that is provided, except as described above. The District makes no representation or warranty concerning such information or concerning its usefulness to a decision to invest in or sell Bonds at any future date. The District disclaims any contractual or tort liability for damages resulting in whole or in part from any breach of its continuing disclosure agreement or from any statement made pursuant to its agreement, although registered owners may seek a writ of mandamus to compel the District to comply with its agreement.

This continuing disclosure agreement may be amended by the District from time to time to adapt to changed circumstances that arise from a change in legal requirements, a change in law, or a change in the identity, nature, status, or type of operations of the District, but only if (1) the provisions, as so amended, would have permitted an underwriter to purchase or sell Bonds in the primary offering of the Bonds in compliance with the Rule, taking into account any amendments or interpretations of the Rule since such offering as well as such changed circumstances and (2) either (a) the holders of a majority in aggregate principal amount (or any greater amount required by any other provision of the Bond Order that authorizes such an amendment) of the outstanding Bonds consent to such amendment or (b) a person that is unaffiliated with the District (such as nationally recognized bond counsel) determined that such amendment will not materially impair the interest of the Holders and beneficial owners of the Bonds. The District may also amend or repeal the provisions of this continuing disclosure agreement if the SEC amends or repeals the applicable provision of the Rule or a court of final jurisdiction enters judgment that such provisions of the Rule are invalid, but only if and to the extent that the provisions of this sentence would not prevent an underwriter from lawfully purchasing or selling Bonds in the primary offering of the Bonds.

Compliance with Prior Undertakings

During the past five years, the District has been in compliance with all material provisions of its continuing disclosure undertakings in accordance with the Rule.

FINANCIAL ADVISOR

The Official Statement was compiled and edited under the supervision of Public Finance Group LLC (the “Financial Advisor”), which firm was employed in 2014 as Financial Advisor to the District. The fees paid to the Financial Advisor for services rendered in connection with the issuance and sale of the Bonds are based on a percentage of the Bonds actually issued, sold and delivered, and therefore such fees are contingent on the sale and delivery of the Bonds.

OFFICIAL STATEMENT

Preparation

The District has no employees but engages various professionals and consultants to assist the District in the day-to-day activities of the District. See “THE DISTRICT.” The Board of Directors in its official capacity has relied upon the below mentioned experts and sources in preparation of this Official Statement. The information in this Official Statement was compiled and edited by the Financial Advisor. In addition to compiling and editing such information, the Financial Advisor has obtained the information set forth herein under the captions indicated from the following sources:

“THE DISTRICT” and “THE SYSTEM” – Schroeder Engineering Company (“District Engineer”); “THE DEVELOPER” – Argent Management LLC; “FINANCIAL STATEMENT - Unlimited Tax Bonds Authorized But Unissued – Table 5” - Records of the District, “FINANCIAL STATEMENT – Assessed Value – Table 4” – Travis Central Appraisal District; “FINANCIAL STATEMENT - Estimated Overlapping Debt Statement” - Municipal Advisory Council of Texas and Financial Advisor; “TAX DATA” and “THE SYSTEM - Water and Wastewater Operations – Rate and Fee Schedule – Table 1” – Records of the District; “THE DISTRICT – Management” - District Directors; “Projected Debt Service Requirements – Table 3” - Financial Advisor; “THE BONDS” (except “Payment Record”), “TAXING PROCEDURES,” “LEGAL MATTERS,” “TAX MATTERS,” and “CONTINUING DISCLOSURE OF INFORMATION” - McCall, Parkhurst & Horton L.L.P.

Consultants

In approving this Official Statement, the District has relied upon the following consultants in addition to the Financial Advisor.

The Engineer: The information contained in the Official Statement relating to engineering matters and to the description of the System and, in particular, that information included in the sections entitled “THE DISTRICT” and “THE SYSTEM,” has been provided by Schroeder Engineering Company, and has been included in reliance upon the authority of said firm in the field of civil engineering.

The Auditor: The District's financial statements for the fiscal year ended September 30, 2019 were prepared by McCall Gibson Swedlund Barfoot PLLC Certified Public Accountants. See “Appendix A” for a copy of the District's September 30, 2019 final audited financial statements.

Appraisal District: The information contained in this Official Statement relating to the certified assessed valuation of property in the District and, in particular, such information contained in the section captioned “FINANCIAL STATEMENT,” has been provided by the Travis Central Appraisal District, in reliance upon their authority in the field of appraising and tax assessing.

Tax Assessor/Collector: The information contained in this Official Statement relating to tax collection rates, and principal taxpayers has been provided by Mr. Bruce Elfant in reliance upon his authority in the field of tax assessing and collecting.

Updating the Official Statement during Underwriting Period

If, subsequent to the date of the Official Statement to and including the date the Initial Purchaser is no longer required to provide and Official Statement to potential customers who request the same pursuant to the Rule (the earlier of (i) 90 days from the “end of the underwriting period” (as defined in the Rule) and (ii) the time when the Official Statement is available to any person from a nationally recognized repository but in no case less than 25 days after the “end of the underwriting period”), the District learns or is notified by the Initial Purchaser of any adverse event which causes any of the key representations in the Official Statement to be materially misleading, the District will promptly prepare and supply to the Initial Purchaser a supplement to the Official Statement which corrects such representation to the reasonable satisfaction of the Initial Purchaser, unless the Initial Purchaser elects to terminate its obligation to purchase the Bonds as described in the Notice of Sale under the heading “DELIVERY OF THE BONDS AND ACCOMPANYING DOCUMENTS - Delivery.” The obligation of the District to update or change the Official Statement will terminate when the District delivers the Bonds to the Initial Purchaser (the “end of the underwriting period” within the meaning of the Rule), unless the Initial Purchaser provides written notice to the District that less than all of the Bonds have been sold to ultimate customers on or before such date, in which case the obligation to update or change the Official Statement will extend for an additional period of time of 25 days after all of the Bonds have been sold to ultimate customers. In the event the Initial Purchaser provides written notice to the District that less than all of the Bonds have been sold to ultimate customers, the Initial Purchaser agrees to notify the District in writing following the occurrence of the “end of the underwriting period” as defined in the Rule.

Certification as to Official Statement

The District, acting by and through its Board of Directors in its official capacity in reliance upon the experts listed above, hereby certifies, as of the date hereof, that to the best of its knowledge and belief, the information, statements and descriptions pertaining to the District and its affairs herein contain no untrue statements of a material fact and do not omit to state any material fact necessary to make the statements herein, in light of the circumstances under which they were made, not misleading. The information, description and statements concerning entities other than the District, including particularly other governmental entities, have been obtained from sources believed to be reliable, but the District has made no independent investigation or verification of such matters and makes no representation as to the accuracy or completeness thereof. Except as set forth in “CONTINUING DISCLOSURE OF INFORMATION” herein, the District has no obligation to disclose any changes in the affairs of the District and other matters described in this Official Statement subsequent to the “end of the underwriting period”

which shall end when the District delivers the Bonds to the Initial Purchaser at closing, unless extended by the Initial Purchaser. All information with respect to the resale of the Bonds subsequent to the “end of the underwriting period” is the responsibility of the Initial Purchaser.

Official Statement "Deemed Final"

For purposes of compliance with the Rule, this document, as the same may be supplemented or corrected by the District from time-to-time, may be treated as an Official Statement with respect to the Bonds described herein “deemed final” by the District as of the date hereof (or of any such supplement or correction) except for the omission of certain information referred to in the succeeding paragraph.

The Official Statement, when further supplemented by adding information specifying the interest rates and certain other information relating to the Bonds, shall constitute a “FINAL OFFICIAL STATEMENT” of the District with respect to the Bonds, as that term is defined in the Rule.

Annual Audits

Under Texas Law, the District must keep its fiscal records in accordance with generally accepted accounting principles. It must also have its financial accounts and records audited by a certified or permitted public accountant within 120 days after the close of each fiscal year of the District, and must file each audit report with the TCEQ within 135 days after the close of the fiscal year so long as the District has bond outstanding. Copies of each audit report must also be filed in the office of the District. The District's fiscal records and audit reports are available for public inspection during regular business hours, and the District is required by law to provide a copy of the District's audit reports to any Registered Owner or other member of the public within a reasonable time on request, upon payment of prescribed charges.

This Official Statement was approved by the Board of Directors of Travis County Municipal Utility District No. 2, as of the date shown on the first page hereof.

______Wilmer Roberts President, Board of Directors Travis County Municipal Utility District No. 2

______Deborah Pickens Secretary, Board of Directors Travis County Municipal Utility District No. 2

PHOTOGRAPHS

The following photographs were taken in the District. The homes and commercial establishments shown in the photographs are representative of the type of construction presently located within the District, and these photographs are presented solely to illustrate such construction. The District makes no representation that any additional construction such as that as illustrated in the following photographs will occur in the District. See “THE DISTRICT.”

APPENDIX A Audited Financial Statements of the District for the Fiscal Year Ended September 30, 2019

The information contained in this appendix has been excerpted from the audited financial statements of Travis County Municipal Utility District No. 2 for the fiscal year ended September 30, 2019. Certain information not considered to be relevant to this financing has been omitted; however, complete audit reports are available upon request.

APPENDIX B Form of Bond Counsel Opinion

OFFICIAL NOTICE OF SALE

$5,000,000

TRAVIS COUNTY MUNICIPAL UTILITY DISTRICT NO. 2 (A Political Subdivision of the State of Texas Located in Travis County, Texas)

UNLIMITED TAX BONDS, SERIES 2020A

Bids Due: Wednesday, August 5, 2020 by 10:00 A.M. C.D.T.

The Bonds are obligations solely of Travis County Municipal Utility District No. 2 (the "District") and are not obligations of the City of Manor, Texas; Travis County, Texas; the State of Texas or any entity other than the District.

THE DISTRICT IS EXPECTED TO DESIGNATE THE BONDS AS "QUALIFIED TAX-EXEMPT OBLIGATIONS" FOR FINANCIAL INSTITUTIONS.

THE SALE

Bonds Offered for Sale at Competitive Bidding . . . The District is offering for sale its $5,000,000 Unlimited Tax Bonds, Series 2020A (the "Bonds"). Sealed Bids may be submitted by either of three alternative procedures: (i) written bids; (ii) electronic bids, or (iii) facsimile bids. Prospective bidders may select one of the three alternative bidding procedures in their sole discretion. Neither the District nor its Financial Advisor, Public Finance Group LLC, assumes any responsibility or liability for a prospective bidding procedure.

The District and Public Finance Group LLC assume no responsibility or liability with respect to any irregularities associated with the submission of electronic bids.

Public Finance Group LLC will not be responsible for submitting any bids received after the deadline. For the purpose of determining compliance with any and all time deadlines set forth in this Official Notice of Sale, and for all alternative bidding procedures, the official time shall be the time maintained only by the Parity Electronic Bid Submission System ("PARITY").

Procedure Number 1: Written Bids Delivered in Person. . . Bids, plainly marked "Bid for Bonds," should be addressed to the "Board of Directors of Travis County Municipal Utility District No. 2", and if delivered in person, delivered to Cheryl Allen, c/o Public Finance Group LLC, 900 South Capital of Texas Highway, Building 4, Suite 475, West Lake Hills, Texas 78746, by 10:00 A.M., C.D.T., on Wednesday, August 5, 2020 (the "date of the bid opening"). All bids must be submitted on the "Official Bid Form" without alteration or interlineations. Copies of the Official Bid Form accompany the Preliminary Official Statement.

Procedure Number 2: Electronic Bidding Procedures. . . Any prospective bidder that intends to submit an electronic bid must submit its electronic bid through the facilities of PARITY between 9:00 A.M., C.D.T. and 10:00 A.M., C.D.T., on the date of the bid opening.

Subscription to the i-Deal LLC’s BIDCOMP Competitive Bidding System is required in order to submit an electronic bid through PARITY. Further information about PARITY, including any fee charged, may be obtained from Parity Customer Support, 40 West 23rd Street, 5th Floor, New York, New York 10010, (212) 404-8102.

The District will neither confirm any subscription nor be responsible for the failure of any prospective bidder to subscribe to PARITY.

An electronic bid made through the facilities of PARITY shall be deemed a sealed irrevocable offer to purchase the Bonds on the terms provided in this Official Notice of Sale, and shall be binding upon the bidder as if made by a signed, sealed bid delivered to the District. Neither Public Finance Group LLC nor the District shall be responsible for any malfunction or mistake made by, or as a result of, the use of the facilities of PARITY, the use of such facilities being the sole risk of the prospective bidder.

All electronic bids shall be deemed to incorporate the provisions of this Official Notice of Sale and the Official Bid Form. If any provisions of this Official Notice of Sale shall conflict with information provided by PARITY as the approved provider of electronic bidding services, this Official Notice of Sale shall control.

For information purposes only, bidders are requested to state in their electronic bids the net effective interest cost to the District, as described under "Basis of Award" below.

The District and Public Finance Group LLC will not be responsible for submitting any bids received after the above deadlines.

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Procedure Number 3: Bids by Facsimile . . . Any prospective bidder that intends to submit a bid by facsimile must submit its bid between 9:00 A.M., C.D.T. and 10:00 A.M., C.D.T., on the date of the bid opening. Facsimile bids to the attention of Cheryl Allen will be accepted at (512) 382-5490. All bids must be submitted on the "Official Bid Form" without alteration or interlineations. Copies of the Official Bid Form accompany the Preliminary Official Statement.

The District and Public Finance Group LLC are not responsible if such facsimile number is busy or malfunctioning which prevents a bid or bids from being submitted on a timely basis. The District and Public Finance Group LLC will not be responsible for submitting any bids received after the above deadlines. The District and Public Finance Group LLC assume no responsibility or liability with respect to any irregularities associated with the submission of bids if the facsimile bid options are exercised.

Signed Official Bid Forms . . . The bidder whose bid is the lowest bid in accordance with this Notice of Sale will be notified immediately by Public Finance Group LLC and must submit a fax of a signed Official Bid Form by 10:00 A.M., C.D.T. in connection with the sale on the date of the bid opening to Cheryl Allen, Public Finance Group LLC, (512) 382-5490.

Place and Time of Bid Opening . . . The Board will publicly review bids for the purchase of the Bonds at the designated meeting place outside the boundaries of the District, at Armbrust & Brown, PLLC, 100 Congress Avenue, Suite 1300, Austin, Texas 78701, at 12:00 P.M. (Noon), C.D.T. on the date of the bid opening.

Award of Bonds . . . The District will take action to award the Bonds or reject all bids promptly upon receiving the bids. Upon awarding the Bonds, the District will also adopt the order authorizing issuance of the Bonds (the "Bond Order") and will approve the Official Statement, which will be an amended form of the Preliminary Official Statement. The District shall award the Bonds by executing the Official Bid Form. The award will be given to the entity submitting the best bid for the Bonds as "Bidder" (the "Purchaser" or "Initial Purchaser") as further described herein. Bidders that work with syndicates of dealers may disclose to the District members of its syndicate, but for all purposes of contracting for the sale of the Bonds, the entity signing the Official Bid Form as "Bidder" shall be solely responsible for the payment of the purchase price of the Bonds, and any information provided with respect to syndicate members shall be provided solely for informational purposes. The District reserves the right to reject any and all bids and to waive any irregularities except time of submission. Sale of the Bonds will be made subject to the terms, conditions and provisions of the Bond Order to which Bond Order reference is hereby made for all purposes. The District reserves the right to reject any and all bids and to waive any and all irregularities, except time of filing.

Withdrawal of the Bids . . . Any bid may be withdrawn by an authorized representative of the bidder at any time prior to the time set for receipt of bids. Thereafter, all bids shall remain firm for four hours after the time for receipt of the bids. The award of or rejection of bids will occur within this time period.

Extension of Sale Date . . .The District reserves the right to extend the date and/or time for the receipt of bids by giving notice, by Bond Buyer Wire Service, and by posting a notice at the place established for receipt of bids, not later than 3:00 PM, C.D.T., on Tuesday, August 4, 2020, of the new date and time for receipt of bids. Such notice shall be considered an amendment to this Official Notice of Sale.

THE BONDS

Description of Bonds . . . The Bonds will be dated September 2, 2020 and interest on the Bonds will be payable March 1, 2021, and semiannually thereafter on September 1 and March 1 until maturity or earlier redemption, and will be calculated on the basis of a 360-day year of twelve 30-day months. The Bonds will be issued in fully registered form only, without coupons, in denominations of $5,000 or any integral multiple thereof, and when issued, will be registered in the name of Cede & Co., as registered owner and nominee for The Depository Trust Company ("DTC"), New York, New York, acting as securities depository for the Bonds until DTC resigns or is discharged. The Bonds initially will be available to purchasers in book-entry form only. So long as Cede & Co., as the nominee of DTC, is the registered owner of the Bonds, principal of and interest on the Bonds will be payable by the paying agent to DTC, which will be solely responsible for making such payment to the beneficial owners of the Bonds. The initial paying agent/registrar for the Bonds is UMB Bank, N.A., Austin, Texas (the "Paying Agent").

The Bonds mature serially on September 1 in the years and amounts shown on the following page.

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Maturity Principal Maturity Principal (September 1) Amount (September 1) Amount 2021 $ 45,000 2031 $ 185,000 2022 45,000 2032 190,000 2023 50,000 2033 195,000 2024 50,000 2034 205,000 2025 50,000 2035 210,000 2026 55,000 2036 220,000 2027 55,000 2037 230,000 2028 65,000 2038 1,455,000 2029 75,000 2039 1,515,000 2030 105,000

The District reserves the right to redeem prior to maturity, in integral multiples of $5,000, those Bonds maturing on and after September 1, 2026 in whole or from time to time in part on September 1, 2025, or any date thereafter, at a price of par plus accrued interest from the most recent interest payment date to the date fixed for redemption. If less than all of the Bonds are to be redeemed, the particular Bonds thereof shall be selected and designated by the District, and if less than all of the Bonds within a maturity are redeemed, the particular Bonds or portions thereof to be redeemed shall be selected by the Paying Agent by lot.

Bidders have the right to designate one or more maturity dates for the Bonds on or after September 1, 2026 as serial or term Bonds. No sinking fund installment with respect to any term Bond shall be due on or prior to the date of the final maturity of any earlier maturity term Bond. The amount of term Bonds, if any, maturing on each maturity date shall be equal to the sum of (1) the installment specified above for such maturity date and (2) the installments specified above preceding such date (and subsequent to any earlier final maturity date of another specified term Bond, and the term Bonds of such maturity shall be retired utilizing such installments and sinking fund installments at par plus accrued interest). If and to the extent the successful bidder specifies for the Bonds a maturity date or dates of September 1, 2026 and consecutive subsequent years, the District will issue such Bonds as serial bonds maturing on such date or dates in amounts in accordance with the foregoing respective schedules. The balance of such Bonds, if any, shall be issued as term Bonds as designated by the successful bidder.

Successor Paying Agents . . . The Paying Agent may be removed from its duties as Paying Agent with or without cause by action of the Board of Directors of the District (the "Board of Directors") upon thirty (30) days notice to be effective at such time which will not disrupt orderly payment on the next principal or interest payment date, but no such removal shall become effective until a successor Paying Agent has accepted the duties of the Paying Agent by written instrument. Every Paying Agent appointed by the Board of Directors must be a competent and legally qualified bank, trust company, financial institution or other agency qualified to act as and perform the services as Paying Agent.

Source of Payment . . . The Bonds, when issued, will constitute valid and binding obligations of the District payable as to principal and interest from the proceeds of a continuing, direct, annual ad valorem tax levied against taxable property located within the District, without legal limitation as to rate or amount.

Other Terms and Covenants . . . Other terms of the Bonds and various covenants of the District contained in the Bond Order under which the Bonds are to be issued are described in the Preliminary Official Statement, to which reference is made for all purposes.

Book-Entry-Only System . . . The District intends to utilize the Book-Entry-Only System of The Depository Trust Company ("DTC"). See "BOOK-ENTRY-ONLY SYSTEM" in the Official Statement.

Municipal Bond Rating or Insurance . . . In connection with the sale of the Bonds, the District has made an application to Moody’s Investors Service, Inc. ("Moody’s") for a municipal bond rating and has received a "___" underlying rating. In addition, the District has made an application for an insurance policy insuring the timely payment of the principal of and interest on the Bonds and has qualified for such insurance. The purchase of such insurance and the payment of all associated costs, if available, will be at the option and the expense of the Initial Purchaser.

CONDITIONS OF SALE

Types of Bids and Interest Rates . . . The Bonds will be sold in one block, all or none, and no bid of less than 97% of par value plus accrued interest to the date of delivery will be considered. Bidders must specify the rate or rates of interest the Bonds will bear. The difference between the highest interest rate bid and the lowest interest rate bid shall not exceed 2%. Interest rates must be in multiples of 1/8th or 1/20th of 1%. Any number of interest rates and rate changes may be named, but graduating or declining interest rates within a maturity, split interest rates within a maturity, or supplemental or zero interest rates will not be acceptable.

Post Bid Modification of Principal Amounts Per Maturity…After selecting the winning bid, the aggregate principal amount of the Bonds per maturity and the principal amortization schedule may be adjusted as determined by the District and its Financial Advisor in $5,000 increments to reflect the actual interest rates and to create a substantially level debt service schedule for the District. Such adjustments will not change the aggregate principal amount of the Bonds and will not change the aggregate principal amount per maturity by more than 15%

Notice - 3

from the amount set forth herein. The dollar amount bid for the Bonds by the winning bidder will be adjusted proportionately to reflect any increase or decrease in the aggregate principal amount of the Bonds finally determined to be issued. The District will use its best efforts to communicate to the winning bidder any such adjustments within four (4) hours after the opening of bids. Purchaser's compensation will be based upon the final par amount after any adjustments thereto, subsequent to the receipt and tabulation of the winning bid, within the aforementioned parameters.

In the event of any adjustment of the maturity schedule for the Bonds as described above, no rebidding or recalculation of the proposals submitted will be required or permitted. The bid price for such an adjustment will reflect changes in the dollar amount per maturity of the par amount of the Bonds from the selling compensation that would have been received based on the purchase price in the winning bid and the initial reoffering terms. Any such adjustments of the aggregate principal amount of the Bonds per maturity and/or of the maturity schedule for the Bonds made by the District or its Financial Advisor shall be subsequent to the award of the Bonds to the winning bidder as determined pursuant to conditions herein and shall not affect such determination. The winning bidder may not withdraw its bid as a result of any changes made within the aforementioned limits.

Basis of Award . . . For the purpose of awarding sale of the Bonds, the total interest cost of each bid will be computed by determining, at the rate or rates specified, the total dollar value of all interest on the Bonds from the date thereof to their respective maturities and adding thereto the dollar amount of the discount bid, if any, or deducting therefrom the premium bid, if any. Subject to the right of the District to reject any or all bids, the Bonds will be awarded to the bidder whose bid, based on the above computation, produces the lowest interest cost to the District. In the event of mathematical discrepancies between the interest rates and the interest cost determined therefrom, as both appear on the "Official Bid Form," the bid will be determined solely from the interest rates shown on the "Official Bid Form."

Disclosure of Interested Party Form 1295 . . . In accordance with Texas Government Code Section 2252.908 (the "Interested Party Disclosure Act"), the District may not award the Bonds to a bidder unless the winning bidder either:

(i) submits a Certificate of Interested Parties Form 1295 (the "TEC Form 1295") to the District as prescribed by the Texas Ethics Commission ("TEC"), or

(ii) certifies in the Official Bid Form that it is exempt from filing the TEC Form 1295 by virtue of being a publicly traded business entity or a wholly owned subsidiary of a publicly traded business entity.

In the event that the bidder’s bid for the Bonds is the best bid received, the District, acting through its financial advisor, will promptly notify the winning bidder. That notification will serve as the District’s conditional verbal acceptance of the bid, and, unless the bidder is exempt from filing a TEC Form 1295, such notification will obligate the winning bidder to promptly file a completed TEC Form 1295, as described below, in order to allow the District to complete the award. The District reserves the right to reject any bid that does not comply with the requirements prescribed herein.

For purposes of completing the TEC Form 1295, box 2 is name of the governmental entity (Travis County Municipal Utility District No. 2) and box 3 is the identification number assigned to this contract by the District (TCMUD2-UTB2020A-BID) and description of the goods or services (Purchase of the Travis County MUD No. 2 Unlimited Tax Bonds, Series 2020A). The Interested Party Disclosure Act and the rules adopted by the TEC with respect thereto (the "Disclosure Rules") require certain business entities contracting with the District to complete the TEC Form 1295 electronically at https://www.ethics.state.tx.us/main/file.htm, print, complete the unsworn declaration, sign, and deliver, in physical form, the certified TEC Form 1295 that is generated by the TEC’s "electronic portal" to the District. The completed and signed TEC Form 1295 must be sent by email, to the District’s financial advisor at [email protected], as soon as possible following the notification of conditional verbal acceptance and prior to the final written award. Upon receipt of the final written award, the winning bidder must submit the TEC Form 1295 with original signatures by email to Bond Counsel as follows: [email protected].

To the extent that the bidder is not exempt from filing a TEC Form 1295 and therefor makes such filing with the District, the Interested Party Disclosure Act and the TEC Form 1295 provide that such declaration is made "under penalty of perjury. " Consequently, a bidder should take appropriate steps prior to completion of the TEC Form 1295 to familiarize itself with the Interested Party Disclosure Act, the Disclosure Rules and the TEC Form 1295. Time will be of the essence in submitting the form to the District, and no final award will be made by the District regarding the sale of the Bonds until a completed TEC Form 1295 is received. The District reserves the right to reject any bid that does not satisfy the requirement of a completed TEC Form 1295, as described herein. Neither the District nor its consultants have the ability to verify the information included in a TEC Form 1295, and neither party has an obligation nor undertakes responsibility for advising any bidder with respect to the proper completion of the TEC Form 1295. Consequently, an entity intending to bid on the Bonds should consult its own advisors to the extent it deems necessary and be prepared to submit the completed form promptly upon notification from the District that its bid is the conditional winning bid. Instructional videos on logging in and creating a certificate are provided on the TEC’s website at https://www.ethics.state.tx.us/whatsnew/elf_info_form1295.htm.

Verification Pursuant to Chapter 2271 of the Texas Government Code . . . To the extent the winning bid for the Bonds represents a contract for goods or services within the meaning of Section 2271.002 of the Texas Government Code, as amended, the winning bidder will be required to verify in this Official Bid Form, for purposes of Chapter 2271 of the Texas Government Code, as amended, that, at the time of execution and delivery of its bid, neither the bidder nor any syndicate member listed on the Official Bid Form, nor any parent company, wholly- or majority-owned subsidiaries, and other affiliates of the same, if any, boycotts Israel or will boycott Israel through the date of delivery of the Bonds. The foregoing verification is made solely to comply with Section 2271.002, Texas Government Code, and to the extent such Section does not contravene applicable Federal law. As used in the foregoing verification, "boycotts Israel" and "boycott Israel"

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means refusing to deal with, terminating business activities with, or otherwise taking any action that is intended to penalize, inflict economic harm on, or limit commercial relations specifically with Israel, or with a person or entity doing business in Israel or in an Israeli- controlled territory, but does not include an action made for ordinary business processes. The bidder understands "affiliate" to mean an entity controls, is controlled by, or is under common control with the bidder or any syndicate member listed on the Official Bid Form and exists to make a profit.

Verification Pursuant to Chapter 2252 of the Texas Government Code . . . Pursuant to Chapter 2252 of the Texas Government Code, the bidder is required to verify that neither the bidder nor any syndicate member listed on the Official Bid Form, nor any parent company, wholly- or majority-owned subsidiaries, or other affiliates of the same are companies identified on a list prepared and maintained by the Texas Comptroller of Public Accounts under Section 2252.153 or Section 2270.0201, Texas Government Code, and posted on any of the following pages of such officer’s internet website: https://comptroller.texas.gov/purchasing/docs/sudanlist.pdf, https://comptroller.texas.gov/purchasing/docs/iran-list.pdf, or https://comptroller.texas.gov/purchasing/docs/ftolist.pdf. The foregoing representation is made solely to comply with Section 2252.152, Texas Government Code, and to the extent such Section does not contravene applicable Federal law and excludes the bidder of any syndicate member listed on the Official Bid Form and each parent company, wholly- or majority-owned subsidiaries, and other affiliates, of the same, if any, that the United States government has affirmatively declared to be excluded from its federal sanctions regime relating to Sudan or Iran or any federal sanction regime relating to a foreign terrorist organization. The bidder understands "affiliates" to mean any entity that controls, is controlled by, or is under common control with the bidder of any syndicate member listed on the Official Bid Form and exists to make a profit.

Good Faith Deposit . . . Each bid must be accompanied by a Bank cashier's check payable to the order of "Travis County Municipal Utility District No. 2" in the amount of $100,000 which is 2% of the par value of the Bonds. The check will be considered as a Good Faith Deposit, and the check of the successful bidder (the "Initial Purchaser") will be retained uncashed by the District until the Bonds are delivered. Upon payment for and delivery of the Bonds, the Good Faith Deposit will be returned to the Initial Purchaser uncashed. If the Initial Purchaser should fail or refuse to make payment for or accept delivery of the Bonds in accordance with its bid, then the check will be cashed and accepted by the District as full and complete liquidated damages. Such check may accompany the Official Bid Form or it may be submitted separately. If submitted separately, it shall be made available to the District prior to the opening of the bids and shall be accompanied by instructions from the bank on which it is drawn which authorize its use as a Good Faith Deposit. The checks of the unsuccessful bidders will be returned immediately after bids are opened and sale of the Bonds has been awarded.

Texas Bond Review Board Information . . . In order to provide the District with information required to be submitted to the Texas Bond Review Board pursuant to Section 1202.008, Texas Government Code, as amended, the Initial Purchaser will be required to provide the District with a breakdown of its "underwriting spread," which consists of at minimum the following categories: takedown, management fee (if any), legal counsel fee (if any) and spread expenses (if any).

OFFICIAL STATEMENT

By accepting the winning bid, the District agrees to the following representations and covenants to assist the Initial Purchaser in complying with Rule 15c2-12 of the United States Securities and Exchange Commission ("SEC").

Final Official Statement . . . The District has prepared the accompanying Preliminary Official Statement for dissemination to potential purchasers of the Bonds, but will not prepare any other document or version for such purpose except as described below. The District will be responsible for completing the Official Statement by inserting the interest rates bid, the purchase price bid, the ratings assigned to the Bonds (if not currently included) if applicable, the purchase of municipal bond insurance, if any, the initial public offering yields as set forth in the Official Bid Form, or otherwise supplied by the Initial Purchaser, and for preparing and inserting the final debt service schedule. The District does not intend to amend or supplement the Official Statement otherwise, except to take into account certain subsequent events, if any, as described below. Accordingly, the District deems the accompanying Preliminary Official Statement to be final as of its date, within the meaning of SEC Rule 15c2-12(b)(1), except for the omission of the foregoing items. By delivering the final Official Statement or any amendment or supplement thereto in the requested quantity to the Initial Purchaser on or after the sale date, the District represents the same to be complete as of such date, within the meaning of SEC Rule 15c2-12(e)(3). Notwithstanding the foregoing, the only representations concerning the absence of material misstatements or omissions from the Official Statement which are or will be made by the District are those described in the Official Statement under "OFFICIAL STATEMENT - Certification as to Official Statement."

Changes to Official Statement During Underwriting Period . . . If, subsequent to the date of the Official Statement to and including the date the Initial Purchaser is no longer required to provide an Official Statement to potential customers who request the same pursuant to 15c2-12 of the Federal Securities Exchange Act of 1934 (the "Rule") (the earlier of (i) 90 days from the "end of the underwriting period" (as defined in the Rule) and (ii) the time when the Official Statement is available to any person from a nationally recognized repository but in no case less than 25 days after the "end of the underwriting period"), the District learns or is notified by the Initial Purchaser of any adverse event which causes any of the key representations in the Official Statement to be materially misleading, the District will promptly prepare and supply to the Initial Purchaser a supplement to the Official Statement which corrects such representation to the reasonable satisfaction of the Initial Purchaser, unless the Initial Purchaser elects to terminate its obligation to purchase the Bonds as described below. See "DELIVERY OF THE BONDS AND ACCOMPANYING DOCUMENTS - Delivery." The obligation of the District to update or change the Official Statement will terminate when the District delivers the Bonds to the Initial Purchaser (the "end of the underwriting period" within the meaning of the Rule), unless the Initial Purchaser provides written notice to the District that less than all of the Bonds have been sold to ultimate customers on or before such date, in which case the obligation to update or change the Official Statement will extend for an additional period of time of 25 days after all of the Bonds have been sold to ultimate customers. In the event the Initial Purchaser provides

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written notice to the District that less than all of the Bonds have been sold to ultimate customers, the Initial Purchaser agrees to notify the District in writing following the occurrence of the "end of the underwriting period" as defined in the Rule.

Delivery of Official Statements . . . The District will furnish the Official Statement (in electronic form) to the Initial Purchaser (and to each other participating underwriter of the Bonds, within the meaning of SEC Rule 15c2-12(a), designated by the Initial Purchaser), within seven (7) business days after the sale date. The District will also furnish (in electronic form) the Initial Purchaser any supplement or amendment prepared by the District for dissemination to potential purchasers of the Bonds as described above in "OFFICIAL STATEMENT – Updating the Official Statement During Underwriting Period." Delivery of the Official Statement will be provided in electronic form. No printed copies of the Official Statement will be provided to the Initial Purchaser unless requested in writing (in which case the District will furnish the Initial Purchaser up to 250 printed copies).

Rule G-36 Requirements . . . It is the responsibility of the Initial Purchaser to comply with the Municipal Securities Rulemaking Board's Rule G-36 within the required time frame. The Initial Purchaser must send two copies of the "Official Statement" along with two complete Form G-36's to the appropriate address.

DELIVERY OF THE BONDS AND ACCOMPANYING DOCUMENTS

Delivery . . . The Bonds will be tendered to the Initial Purchaser as a single typewritten, photocopied or otherwise reproduced bond payable in installments in fully registered form in the aggregate principal amount of $5,000,000 payable to the Initial Purchaser or its representative as designated in the Official Bid Form, manually signed by the President and Secretary of the Board of Directors, or executed by the facsimile signatures of the President and Secretary of the Board of Directors, and approved by the Attorney General of the State and registered and manually signed by the Comptroller of Public Accounts of the State of Texas. Initial delivery will be at the designated office for payment of the Paying Agent in Austin, Texas. Payment for the Bonds must be made in immediately available funds for unconditional credit to the District, or as otherwise directed by the District. The Initial Purchaser will be given five business days' notice of the time fixed for delivery of the Bonds. It is anticipated that initial delivery can be made on or about September 2, 2020 and it is understood and agreed that the Initial Purchaser will accept delivery and make payment for the Bonds not later than 11:00 A.M., C.D.T., on September 2, 2020 or thereafter on the date the Bonds are tendered for delivery up to and including October 2, 2020. If for any reason the District is unable to make delivery on or before October 2, 2020, then the District shall immediately contact the Initial Purchaser and offer to allow the Initial Purchaser to extend his offer for an additional thirty (30) days. If the Initial Purchaser does not elect to extend their offer within five (5) business days thereafter, then the Good Faith Deposit will be returned, and both the District and the Initial Purchaser shall be relieved of any further obligation.

DTC Definitive Bonds . . . The Bonds will be issued in book-entry-only form and registered in the name of Cede & Co. as the nominee for DTC. All reference herein and in the Official Statement to the bondholders or registered owners of the Bonds shall mean Cede & Co. and not the beneficial owners of the Bonds. Purchases of beneficial interests in the Bonds will be made in book-entry form in the denomination of $5,000 principal amounts or any integral multiple thereof. Under certain limited circumstances, the District may determine to forego immobilization of the Bonds at DTC, or another securities depository, in which case, such beneficial interests would become exchangeable for definitive printed obligations of like principal amount.

CUSIP Numbers . . . It is anticipated that CUSIP identification numbers will be printed or otherwise reproduced on the Bonds, but neither the failure to print such numbers on any Bond nor any error with respect thereto shall constitute cause for a failure or refusal by the Initial Purchaser to accept delivery of and pay for the Bonds in accordance with the terms of this Notice of Sale and the terms of the Official Bid Form. All expenses in relation to the printing of CUSIP numbers on the Bonds shall be paid by the District. However, the CUSIP Service Bureau charge for the assignment of the numbers shall be the responsibility of and shall be paid for by the Initial Purchaser.

Conditions to Delivery . . . The obligation of the Initial Purchaser to take up and pay for the Bonds is subject to the Initial Purchaser's receipt of the legal opinion of the Attorney General of Texas and the legal opinion of McCall, Parkhurst & Horton L.L.P., Austin, Texas, Bond Counsel for the District ("Bond Counsel"), the no-litigation certificate, all described below, and the non-occurrence of the events described below under "No Material Adverse Change" and no appeal of the TCEQ order. See "TCEQ Approval" below. In addition, if the District fails to comply with its obligations under "OFFICIAL STATEMENT" above, the Initial Purchaser may terminate its contract to purchase the Bonds by delivering written notice to the District within five (5) days thereafter.

Legal Opinions . . . The District will furnish the Initial Purchaser a transcript of certain proceedings held incident to the authorization and issuance of the Bonds, including a certified copy or original of the approving opinion of the Attorney General of Texas, as recorded in the Bond Register of the Comptroller of Public Accounts of the State of Texas, to the effect that the Bonds are valid and binding obligations of the District, payable from the proceeds of an annual ad valorem tax levied, without limit as to rate or amount, upon all taxable property within the District. The District also will furnish the legal opinion of McCall, Parkhurst & Horton L.L.P. Bond Counsel, to the effect that, based upon an examination of such transcript, (1) the Bonds are valid and legally binding obligations of the District payable from the sources and enforceable in accordance with the terms and conditions described therein, except to the extent that the enforceability thereof may be affected by governmental immunity, bankruptcy, insolvency, reorganization, moratorium, or other similar laws affecting creditors' rights or the exercise of judicial discretion in accordance with general principles of equity, (2) the Bonds are payable, both as to principal and interest, from the levy of ad valorem taxes, without limitation as to rate or amount, against taxable property within the District and (3) pursuant to the Internal Revenue Code of 1986, (the "Code") then in effect and existing regulations, published rulings, and court decisions thereunder and assuming continuing compliance by the District with the provisions of the Bond Order, the interest on the Bonds is excludable from the gross income, and will not be treated as "specified private activity bonds" the interest on which would be included as an alternative minimum tax preference item under Section 57(a)(5) of the Internal Revenue Code of 1986. The statutes, regulations, rulings, and court decisions on which

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such opinion is based are subject to change. Neither the opinion of the Attorney General nor the opinion of Bond Counsel will express any opinion or make any comment with respect to the sufficiency of the security for or the marketability of the Bonds.

Establishing The Issue Price For The Bonds…The District intends to rely on Treasury Regulation section 1.148-1(f)(3)(i) (defining "competitive sale" for purposes of establishing the issue price of municipal bonds), which require, among other things, that the District receives bids from at least three underwriters of municipal bonds who have established industry reputations for underwriting new issuances of municipal bonds (the “Competitive Sale Requirement”).

In the event that the bidding process does not satisfy the Competitive Sale Requirement bids will not be subject to cancellation and the winning bidder (i) agrees to promptly report to the District the first prices at which at least 10% of each maturity of the Bonds (the "First Price Maturity") have been sold to the Public on the Sale Date (the "10% Test") and (ii) agrees to hold-the-offering-price of each maturity of the Bonds that does not satisfy the 10% Test ("Hold-the-Price Maturity"), as described below.

In order to provide the District with information that enables it to comply with the establishment of the issue price of the Bonds under the Internal Revenue Code of 1986, as amended, the winning bidder agrees to complete, execute, and timely deliver to the District or to the District’s financial advisor, (the "District’s Financial Advisor") a certification as to the Bonds’ "issue price" (the "Issue Price Certificate") substantially in the form and to the effect accompanying this Notice of Sale, within 5 business days of the Closing Date. In the event the winning bidder will not reoffer any maturity of the Bonds for sale to the Public (as defined herein) by the Closing Date, the Issue Price Certificate may be modified in a manner approved by the District. It will be the responsibility of the winning bidder to institute such syndicate reporting requirements, to make such investigation, or otherwise to ascertain such facts necessary to enable it to make such certification with reasonable certainty. Any questions concerning such certification should be directed to Bond Counsel (identified in the Preliminary Official Statement).

For purposes of this section of this Notice of Sale:

(i) "Public" means any person (including an individual, trust, estate, partnership, association, company, or corporation) other than an Underwriter or a Related Party to the Underwriter,

(ii) "Underwriter" means (A) any person that agrees pursuant to a written contract with the District (or with the lead Underwriter to form an underwriting syndicate) to participate in the initial sale of the Bonds to the Public and (B) any person that agrees pursuant to a written contract directly or indirectly with a person described in clause (A) to participate in the initial sale of the Bonds to the Public (including a member of a selling group or a party to a retail distribution agreement participating in the initial sale of the Bonds to the Public),

(iii) "Related Party" means any two or more persons (including an individual, trust, estate, partnership, association, company, or corporation) that are subject, directly or indirectly, to (i) at least 50% common ownership of the voting power or the total value of their stock, if both entities are corporations (including direct ownership by one corporation of another), (ii) more than 50% common ownership of their capital interests or profits interests, if both entities are partnerships (including direct ownership by one partnership of another), or (iii) more than 50% common ownership of the value of the outstanding stock of the corporation or the capital interests or profit interests of the partnership, as applicable, if one entity is a corporation and the other entity is a partnership (including direct ownership of the applicable stock or interests by one entity of the other), and

(iv) "Sale Date" means the date that the Bonds are awarded by the District to the winning bidder.

All actions to be taken by the District under this Notice of Sale to establish the issue price of the Bonds may be taken on behalf of the District by the District’s Financial Advisor, and any notice or report to be provided to the District may be provided to the District’s Financial Advisor.

The District will consider any bid submitted pursuant to this Notice of Sale to be a firm offer for the purchase of the Bonds, as specified in the bid and, if so stated, in the Official Bid Form.

By submitting a bid, each bidder confirms that: (i) any agreement among underwriters, any selling group agreement and each retail distribution agreement (to which the bidder is a party) relating to the initial sale of the Bonds to the Public, together with the related pricing wires, contains or will contain language obligating each Underwriter, each dealer who is a member of the selling group, and each broker- dealer that is a party to such retail distribution agreement, as applicable, to report the prices at which it sells to the Public the unsold Bonds of each maturity allotted to it until it is notified by the winning bidder that either the 10% Test has been satisfied as to the Bonds of that maturity or all Bonds of that maturity have been sold to the Public, if and for so long as directed by the winning bidder and as set forth in the related pricing wires, and (ii) any agreement among underwriters relating to the initial sale of the Bonds to the Public, together with the related pricing wires, contains or will contain language obligating each Underwriter that is a party to a retail distribution agreement to be employed in connection with the initial sale of the Bonds to the Public to require each broker-dealer that is a party to such retail distribution agreement to report the prices at which it sells to the Public the unsold Bonds of each maturity allotted to it until it is notified by the winning bidder or such Underwriter that either the 10% Test has been satisfied as to the Bonds of that maturity or all Bonds of that maturity have been sold to the Public, if and for so long as directed by the winning bidder or such Underwriter and as set forth in the related pricing wire.

By submitting a bid, the winning bidder agrees, on behalf of each Underwriter participating in the purchase of the Bonds, that each Underwriter will neither offer nor sell any Hold-the-Price Maturity to any person at a price that is higher than the initial offering price to the Public during the period starting on the Sale Date and ending on the earlier of (1) the close of the fifth (5th) business day after the Sale Date;

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or (2) the date on which the Underwriters have sold at least 10% of that Hold-the-Price Maturity to the Public at a price that is no higher than the initial offering price to the Public. The winning bidder shall promptly advise the District when the Underwriters have sold 10% of a Hold-the-Price Maturity to the Public at a price that is no higher than the initial offering price to the Public, if that occurs prior to the close of the fifth (5th) business day after the Sale Date.

Qualified Tax-Exempt Obligations for Financial Institutions . . . Section 265(a) of the Code provides, in pertinent part, that interest paid or incurred by a taxpayer, including a "financial institution," on indebtedness incurred or continued to purchase or carry tax-exempt obligations is not deductible by such taxpayer in determining taxable income. Section 265(b) of the Code provides an exception to the disallowance of such deduction for any interest expense paid or incurred on indebtedness of a taxpayer which is a "financial institution" allocable to a tax-exempt obligation, other than "private activity bonds," which are designated by a "qualified small issuer" as "qualified tax- exempt obligations." A "qualified small issuer" is any governmental issuer (together with any subordinate issuers) who issues no more than $10,000,000 of tax-exempt obligations during the calendar year. Section 265(b)(5) of the Code defines the term "financial institution" as referring to any corporation described in section 585(a)(2) of the Code, or any person accepting deposits from the public in the ordinary course of such person's trade or business which is subject to federal or state supervision as a financial institution.

The District is expected to designate the Bonds as "qualified tax-exempt obligations" within the meaning of section 265(b) of the Code. In furtherance of that designation, the District will covenant to take such action which would assure or to refrain from such action which would adversely affect the treatment of the Bonds as "qualified tax-exempt obligations." Potential purchasers should be aware that if the issue price to the public (or, in the case of discount bonds, the amount payable at maturity) exceeds $10,000,000, then such obligations might fail to satisfy the $10,000,000 limitation and the obligations would not be "qualified tax-exempt obligations."

No Material Adverse Change . . . The obligations of the District to deliver the Bonds and of the Initial Purchaser to accept delivery of and pay for the Bonds are subject to the condition that at the time of delivery of and receipt of payment for the Bonds, there shall have been no material adverse change in the condition of the District from those set forth in or contemplated by the "Preliminary Official Statement" as it may have been supplemented or amended through the date of sale.

No-Litigation Certificate . . . On the date of delivery of the Bonds to the Initial Purchaser, the District will deliver to the Initial Purchaser a certificate, as of the same date, to the effect that to the best of the District's knowledge no litigation of any nature is pending or, to the best of the certifying officers' knowledge or belief, threatened against the District, contesting or affecting the Bonds; restraining or enjoining the authorization, execution, or delivery of the Bonds; affecting the provision made for the payment of or security for the Bonds; in any manner questioning the authority or proceedings for the issuance, execution or delivery of the Bonds; or affecting the validity of the Bonds or the title of the present officers and directors of the District.

TCEQ Approval . . . The Texas Commission on Environmental Quality ("TCEQ") approved the issuance of the Bonds by an order dated ______, 2020 (the "TCEQ Order").

CONTINUING DISCLOSURE

The District will agree in the Bond Order to provide certain periodic information and notices of certain specified events in accordance with the Rule, as described in the Preliminary Official Statement under "CONTINUING DISCLOSURE OF INFORMATION." The Initial Purchaser's obligation to accept and pay for the Bonds is conditioned upon delivery to the Initial Purchaser(s) or it’s (their) agent of a certified copy of the Bond Order containing the agreement described under such heading.

GENERAL CONSIDERATIONS

Future Registration . . . The Bonds are transferred, registered and exchanged only on the registration books of the Paying Agent, and such registration shall be at the expense of the District though the District or Paying Agent may require payment by an owner of the Bonds requesting a transfer or exchange of Bonds of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any transfer or exchange of any Bond. A Bond may be transferred or exchanged upon surrender to the Paying Agent accompanied by a written instrument of transfer acceptable to the Paying Agent duly executed by the registered owner thereof or his attorney duly authorized in writing. Upon surrender for transfer of any Bond to the Paying Agent, the District shall execute and the Paying Agent shall authenticate and deliver, in the name of the designated transferee or transferees, one or more new Bonds of the same stated maturity and of any authorized denomination, and of a like aggregate principal amount.

Record Date . . . The record date ("Record Date") for the interest payable on any interest payment date means the close of business on the fifteenth (15th) calendar day of the month (whether or not a business day) next preceding such interest payment date.

Record Date for Bonds to be Redeemed . . . Neither the District nor the Paying Agent shall be required (1) to issue, transfer, or exchange any Bond during the period commencing with the close of business on any Record Date and ending with the opening of business on the next following principal or interest payment date or (2) to transfer or exchange, in whole or in part, any Bond or any portion thereof selected for redemption prior to maturity, within forty-five (45) calendar days prior to its redemption date.

Investment Considerations . . . The Bonds involve certain investment considerations and all prospective bidders are urged to examine carefully the Preliminary Official Statement with respect to the investment considerations associated with the Bonds. Particular attention should be given to the information set forth therein under the caption "INVESTMENT CONSIDERATIONS."

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Reservation of Rights . . . The District reserves the right to reject any and all bids and to waive any and all irregularities, except time of filing.

Not an Offer to Sell . . . This Official Notice of Sale does not alone constitute an offer to sell the Bonds but is merely notice of sale of the Bonds. The invitation for bids on the Bonds is being made by means of this Official Notice of Sale, the Preliminary Official Statement and the Official Bid Form.

Registration and Qualification Under Securities Laws . . . The offer and sale of the Bonds have not been registered or qualified under the Securities Act of 1933, as amended, in reliance upon the exemptions provided thereunder; the Bonds have not been registered or qualified under the Securities Act of Texas in reliance upon various exemptions contained therein; nor have the Bonds been registered or qualified under the securities laws of any other jurisdiction. The District assumes no responsibility for registration or qualification of the Bonds under the securities laws of any jurisdiction in which the Bonds may be sold, assigned, pledged, hypothecated or otherwise transferred. This disclaimer of responsibility for registration or qualification for sale or other disposition of the Bonds shall not be construed as an interpretation of any kind with regard to the availability of any exemption from securities registration or qualification provisions.

By submission of a bid, the Initial Purchaser represents that its sale of the Bonds in states other than Texas will be made only pursuant to exemptions from registration or qualification or, where necessary, the Initial Purchaser will register and qualify the Bonds in accordance with the securities laws of any jurisdiction which so requires. The District agrees to cooperate, at the Initial Purchaser's written request and expense, in registering or qualifying the Bonds, or in obtaining exemption from registration or qualification, in any state where such action is necessary, provided that the District shall not be required to file a general or special consent to service of process in any jurisdiction.

Copies of Documents . . . Copies of the Official Notice of Sale, the Preliminary Official Statement, the Official Bid Form, audited financials, and the pro forma Bond Order may be obtained at the offices of Public Finance Group LLC, 900 South Capital of Texas Highway, Building 4, Suite 475, West Lake Hills, Texas 78746, Financial Advisor to the District.

/s/ Wilmer Roberts President, Board of Directors Travis County Municipal Utility District No. 2 July 22, 2020

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OFFICIAL BID FORM

President and Board of Directors Travis County Municipal Utility District No. 2 c/o Public Finance Group LLC 900 South Capital of Texas Highway, Building 4, Suite 475 West Lake Hills, Texas 78746

Directors:

We have read in detail the Official Notice of Sale and Preliminary Official Statement of Travis County Municipal Utility District No. 2 (the "District") relating to its $5,000,000 Unlimited Tax Bonds, Series 2020A (the "Bonds"), which by reference are made a part hereof. We recognize the special investment considerations involved in these securities, and have made such inspections and investigations as we deem necessary in order to evaluate the investment quality of the Bonds. Accordingly, we offer to purchase the District's legally issued Bonds, upon the terms and conditions set forth in the Bond Order, the Official Notice of Sale and the Preliminary Official Statement, for a cash price of $______(which represents ______% of par value), provided such Bonds mature September 1 and bear interest in each year at the following rates:

Maturity* Principal Interest Maturity* Principal Interest (September 1) Amount Rate (September 1) Amount Rate 2021 $ 45,000 ______% 2031 $ 185,000 ______% 2022 45,000 ______% 2032 190,000 ______% 2023 50,000 ______% 2033 195,000 ______% 2024 50,000 ______% 2034 205,000 ______% 2025 50,000 ______% 2035 210,000 ______% 2026 55,000 ______% 2036 220,000 ______% 2027 55,000 ______% 2037 230,000 ______% 2028 65,000 ______% 2038 1,455,000 ______% 2029 75,000 ______% 2039 1,515,000 ______% 2030 105,000 ______%

______* The District reserves the right to redeem, in integral multiples of $5,000, prior to maturity, those Bonds maturing on and after September 1, 2026 in whole or from time to time in part on September 1, 2025 or on any date thereafter at a price of par plus accrued interest from the most recent interest payment date to the date fixed for redemption.

Our calculation (which is not a part of this bid) of the interest cost from the above bid is:

Total Interest Cost ...... $______

Plus: Cash Discount ...... $______

Net Interest Cost ...... $______

Net Effective Interest Rate ...... ______%

The mandatory sinking fund installments checked above, if any, shall be applied for the redemption of term bonds maturing as follows:

Term Bond Year of First Principal Maturity Date Mandatory Amount of Interest September 1 Redemption Term Bond Rate

______% ______% ______% ______%

Bid Form - 1

The initial bond shall be registered in the name of ______(syndicate manager). We will advise the office of UMB Bank, N.A., the Registrar, on forms to be provided by the Registrar, of our registration instructions at least five business days prior to the date set for initial delivery of Bonds on the closing date. We will not ask the Registrar to accept any registration instructions after the five day period for delivery of Bonds on the closing date.

Cashier's Check No. ______, issued by ______Bank, ______, Texas and payable to your order in the amount of $100,000 (is attached hereto) (has been made available to you prior to the opening of this bid) as the Good Faith Deposit for disposition in accordance with the terms and conditions set forth in the Official Notice of Sale. Should we fail or refuse to make payment for the Bonds in accordance with the terms and conditions of such Official Notice of Sale, such check shall be cashed and the proceeds retained as complete liquidated damages against us. We hereby represent that sale of the Bonds in states other than Texas will be made only pursuant to exemptions from registration or qualification and that, where necessary, we will register or qualify the Bonds in accordance with the securities laws of the states in which the Bonds are offered or sold.

The Purchaser will purchase bond insurance from (the “Insurer”) for a fee/premium of $ (the “Fee”). The Fee is a reasonable amount payable solely for the transfer of credit risk for the payment of debt service on the Bonds and does not include any amount payable for a cost other than such guarantee, e.g., a credit rating or legal fees. The Purchaser represents that the present value of the Fee for each obligation constituting the Bonds to which such Fee is properly allocated and which are insured thereby is less than the present value of the interest reasonably expected to be saved as a result of the insurance on each obligation constituting the Bonds. The Fee has been paid to a person who is not exempt from federal income taxation and who is not a user or related to the user of any proceeds of the Bonds. In determining present value for this purpose, the yield of the Bonds (determined with regard to the payment of the guarantee fee) has been used as the discount rate. No portion of the Fee is refundable upon redemption of any of the Bonds in an amount which would exceed the portion of such Fee that has not been earned.

The undersigned agrees to complete, execute, and deliver to the District, by the date of delivery of the Bonds, a certificate relating to the "issue price" of the Bonds in the form and to the effect attached to or accompanying the Official Notice of Sale, with such changes thereto as may be acceptable to the District. The undersigned further agrees to provide the pricing wire to Public Finance Group LLC by the close such business day of the award.

The bidder hereby verifies, that at the time of execution and delivery of this bid, neither the bidder nor any syndicate member listed on the Official Bid Form, nor any parent company, wholly- or majority-owned subsidiaries, and other affiliates of the same, if any, boycotts Israel through the date of delivery of the Bonds. The foregoing verification is made solely to comply with Section 2271.002, Texas Government Code, and to the extent such Section does not contravene applicable Federal law. As used in the foregoing verification, "boycotts Israel" and "boycott Israel" means refusing to deal with, terminating business activities with, or otherwise taking any action that is intended to penalize, inflict economic harm on, or limit commercial relations, specifically with Israel, or with a person or entity doing business in Israel or in an Israeli-controlled territory, but does not include an action made for ordinary business purposes. The bidder understands "affiliate" to mean an entity that controls, is controlled by, or is under common control with the bidder or any syndicate member listed on the Official Bid Form and exits to make a profit.

By submission of a bid, and as a condition of the award and delivery of the Bonds, the bidder represents that, neither the bidder nor any syndicate member listed on the Official Bid Form, nor any parent company, wholly- or majority-owned subsidiaries, and other affiliates of the same, if any, are companies identified on a list prepared and maintained by the Texas Comptroller of Public Accounts under Section 2252.153 or Section 2270.0201, Texas Government Code, and posted on any of the following pages of such officer’s internet website: https://comptroller.texas.gov/purchasing/docs/sudanlist.pdf, https://comptroller.texas.gov/purchasing/docs/iran-list.pdf, or https://comptroller.texas.gov/purchasing/docs/ftolist.pdf. The foregoing representation is made solely to comply with Section 2252.152, Texas Government Code, and to the extent such Section does not contravene applicable Federal law and excludes the bidder or any syndicate member listed on the Official Bid Form and each parent company, wholly- or majority-owned subsidiaries, and other affiliates of the same, if any, that the United States government has affirmatively declared to be excluded from its federal sanctions regime relating to Sudan or Iran or any federal sanctions regime relating to foreign terrorist organization. The bidder understands "affiliate" to mean any entity that controls, is controlled by, or is under common control with the bidder or any syndicate member listed on the Official Bid Form and exists to make a profit.

By submission of a bid, and as a condition or the award and delivery of the Bonds, the Initial Purchaser represents that, pursuant to Section 2252.152 of the Texas Government Code, and except to the extent otherwise required for permitted by or under federal law, neither the Initial Purchaser, nor any parent company, wholly- or majority-owned subsidiaries, or other affiliate of the Initial Purchaser (i) engages in business with Iran, Sudan, or foreign terrorist organization as defined in Section 2252.151(2), Texas Government Code or (ii) is a company listed by the Texas Comptroller of Public Accounts under Section 2270.0201 or 2252.1253 of the Texas Government Code. At the request of the District, the Initial Purchaser agrees to execute further written certification as may be necessary or convenient for the District to establish compliance with these laws.

The Initial Purchaser agrees dissemination of this final Official Statement will be in electronic form only unless written request for printed Official Statements is submitted to the District (in which case the District will furnish to the Initial Purchaser up to 250 printed copies).

The undersigned certifies that the Initial Purchaser [is]/[is not] exempt from filing the TEC Form 1295 by virtue of being a publicly traded business entity or a wholly owned subsidiary of a publicly traded business entity.

Bid Form - 2

Respectfully submitted, (Syndicate members, if any) ______By:______(Authorized Representative) Phone Number: ______

ACCEPTANCE CLAUSE

The above and foregoing bid is hereby accepted by Travis County Municipal Utility District No. 2 this _____ day of ______, 2020.

ATTEST:

______Secretary, Board of Directors President, Board of Directors

Bid Form - 3

BOND YEARS

Interest Accrues From: September 2, 2020 Due: September 1

Bond Cumulative Ye ar Amount Ye ars Bond Years Ye ar 2021 $ 45,000 44.88 44.88 2021 2022 45,000 89.88 134.75 2022 2023 50,000 149.86 284.61 2023 2024 50,000 199.86 484.47 2024 2025 50,000 249.86 734.33 2025 2026 55,000 329.85 1,064.18 2026 2027 55,000 384.85 1,449.03 2027 2028 65,000 519.82 1,968.85 2028 2029 75,000 674.79 2,643.64 2029 2030 105,000 1,049.71 3,693.35 2030 2031 185,000 2,034.49 5,727.83 2031 2032 190,000 2,279.47 8,007.31 2032 2033 195,000 2,534.46 10,541.76 2033 2034 205,000 2,869.43 13,411.19 2034 2035 210,000 3,149.42 16,560.61 2035 2036 220,000 3,519.39 20,080.00 2036 2037 230,000 3,909.36 23,989.36 2037 2038 1,455,000 26,185.96 50,175.32 2038 2039 1,515,000 28,780.79 78,956.11 2039

Total Bond Years: 78,956.11 Average Maturity: 15.791222 Years

Bid Form - 4

CERTIFICATE OF ISSUE PRICE

(sales where 3 bids are received)

The undersigned, as the underwriter or the manager of the syndicate of underwriters ("Purchaser"), with respect to the purchase at competitive sale of the Unlimited Tax Bonds, Series 2020A issued by the Travis County Municipal Utility District No. 2 ("Issuer") in the principal amount of $5,000,000 ("Bonds"), hereby certifies and represents, based on its records and information, as follows:

(a) On the first day on which there was a binding contract in writing for the purchase of the Bonds by the Purchaser, the Purchaser’s reasonably expected initial offering prices of each maturity of the Bonds with the same credit and payment terms (the "Expected Offering Prices") to a person (including an individual, trust, estate, partnership, association, company, or corporation) other than an Underwriter are as set forth in the pricing wire or equivalent communication for the Bonds, as attached to this Certificate as Schedule A. The Expected Offering Prices are the prices for the Bonds used by the Purchaser in formulating its bid to purchase the Bonds.

(b) The Purchaser had an equal opportunity to bid to purchase the Bonds and it was not given the opportunity to review other bids that was not equally given to all other bidders (i.e., no last look).

For purposes of this Issue Price Certificate, the term "Underwriter" means (1) (i) a person that agrees pursuant to a written contract with the Issuer (or with the lead underwriter to form an underwriting syndicate) to participate in the initial sale of the Bonds to the Public, or (ii) any person that agrees pursuant to a written contract directly or indirectly with a person described in clause (1)(i) of this paragraph (including a member of a selling group or a party to a retail distribution agreement participating in the initial sale of the Bonds to the Public) to participate in the initial sale of the Bonds to the Public, and (2) any person who has more than 50% common ownership, directly or indirectly, with a person described in clause (1) of this paragraph.

Municipal Bond Insurance:

The Purchaser will purchase bond insurance from (the “Insurer) for a fee/premium of $ (the "Fee"). The Fee is a reasonable amount payable solely for the transfer of credit risk for the payment of debt service on the Bonds and does not include any amount payable for a cost other than such guarantee, e.g., a credit rating or legal fees. The Purchaser represents that the present value of the Fee for each obligation constituting the Bonds to which such Fee is properly allocated and which are insured thereby is less than the present value of the interest reasonably expected to be saved as a result of the insurance on each obligation constituting the Bonds. The Fee has been paid to a person who is not exempt from federal income taxation and who is not a user or related to the user of any proceeds of the Bonds. In determining present value for this purpose, the yield of the Bonds (determined with regard to the payment of the guarantee fee) has been used as the discount rate. No portion of the Fee is refundable upon redemption of any of the Bonds in an amount which would exceed the portion of such Fee that has not been earned.

The undersigned understands that the foregoing information will be relied upon by the Issuer with respect to certain of the representations set forth in the Federal Tax Certificate and with respect to compliance with the federal income tax rules affecting the Bonds, and by McCall, Parkhurst & Horton L.L.P. in connection with rendering its opinion that the interest on the Bonds is excluded from gross income for federal income tax purposes, the preparation of the Internal Revenue Service Form 8038-G, and other federal income tax advice that it may give to the Issuer from time to time relating to the Bonds. Notwithstanding anything set forth herein, the Purchaser is not engaged in the practice of law and makes no representation as to the legal sufficiency of the factual matters set forth herein.

EXECUTED and DELIVERED as of this ______.

______, as Purchaser

By:______

Name:______

Certificate - 1

SCHEDULE A PRICING WIRE OR EQUIVALENT COMMUNICATION (Attached)

Certificate - 2

CERTIFICATE OF ISSUE PRICE

(sales where 3 bids are not received)

The undersigned, as the underwriter or the manager of the syndicate of underwriters ("Purchaser"), with respect to the purchase at competitive sale of the Unlimited Tax Bonds, Series 2020Aa issued by the Travis County Municipal Utility District No. 2 ("Issuer") in the principal amount of $5,000,000 ("Bonds"), hereby certifies and represents, based on its records and information, as follows:

(a) Other than the Bonds maturing in ____ ("Hold-the-Price Maturities"), if any, the first prices at which at least ten percent ("Substantial Amount") of the principal amount of each maturity of the Bonds having the same credit and payment terms ("Maturity") was sold on the date of sale of the Bonds (the "Sale Date") to a person (including an individual, trust, estate, partnership, association, company, or corporation) other than an Underwriter ("Public") are their respective initial offering prices (the "Initial Offering Prices"), as listed in the pricing wire or equivalent communication for the Bonds that is attached to this Certificate as Schedule A.

(b) On or before the Sale Date, the Purchaser offered to the Public each Maturity of the Hold-the-Price Maturities at their respective Initial Offering Prices, as set forth in Schedule A hereto.

(c) As set forth in the Notice of Sale, the Purchaser agreed in writing to neither offer nor sell any of the Hold-the- Price Maturities to any person at any higher price than the Initial Offering Price for such Hold-the-Price Maturity until the earlier of the close of the fifth business day after the Sale Date or the date on which the Purchaser sells a Substantial Amount of a Hold-the-Price Maturity of the Bonds to the Public at no higher price than the Initial Offering Price for such Hold-the-Price Maturity.

Municipal Bond Insurance:

EXECUTED and DELIVERED as of this ______.

______, as Purchaser

Certificate - 3

By:______

Name:______

Certificate - 4

SCHEDULE A PRICING WIRE OR EQUIVALENT COMMUNICATION (Attached)

Certificate - 5

McCALL GIBSON SWEDLUND BARFOOT PLLC Certified Public Accountants

13100 Wortham Center Drive Suite 235 9600 Great Hills Trail Houston, Texas 77065-5610 Suite 150W (713) 462-0341 Austin, Texas 78759 Fax (713) 462-2708 (512) 610-2209 E-Mail: [email protected] www.mgsbpllc.com

June 3, 2020

Board of Directors Travis County Municipal Utility District No. 2 Travis County, Texas

We are pleased to confirm our understanding of the terms of our engagement and the nature and limitations of the services we are to provide for Travis County Municipal Utility District No. 2 (the “District”).

We will apply the agreed-procedures enumerated below that were specified and agreed to by the Board of Directors of the District, on the invoices and schedules submitted by SG Land Holdings LLC (the “Developer”) for payment from the District’s Series 2020A bond proceeds. These procedures will be performed solely to assist you in evaluating the reasonableness of those costs as required by the Texas Commission on Environmental Quality (the “Commission”) and the report is not to be used for any other purpose. Our engagement to apply agreed-upon procedures will be conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants. As the engaging party, the Board of Directors agrees to and acknowledges that the procedures performed are appropriate to meet the intended purposes of this engagement as acknowledged by signature below. Consequently, we will make no representation regarding the appropriateness of the procedures described herein either for the purpose of which the agreed-upon procedures report been requested or for any other purpose. The procedures we will perform are as summarized below:

A. We will review the Technical Memorandum, Order Approving the Use of Bond Proceeds as approved by the Commission and rules of the Commission relative to the reimbursement request. Our review will be for the purpose of identifying those items authorized for District participation and those items the District is specifically prohibited from purchasing. In some cases, our efforts will require review of portions of the bond application relative to this bond issue.

B. We will review for completeness certain Developer schedules, supporting invoices and contract estimates in substantiation of the costs to be reimbursed. Our review will include all documentation supporting items, amounts, and proof of payment for which reimbursement is requested.

Member of American Institute of Certified Public Accountants Texas Society of Certified Public Accountants Board of Directors June 3, 2020 Travis County Municipal Utility District No. 2 Page 2

C. We will read the development and financing agreements for particular items that might affect the reimbursement. The agreements reviewed will be referenced in our report.

D. We will foot the extensions of any engineering invoices pertaining to the reimbursement on a test basis and compare the contract amounts used in determining the fee for the design and construction phase portions of the invoice to the related construction contracts and to the engineering contract, when appropriate.

E. For construction pay estimates, we will foot and test extensions of any individual items on a test basis on payments made on behalf of the District.

F. For all payments, we will compare the payment dates to copies of cancelled checks. If cancelled checks are not available, alternate procedures will be designed to support dates and amounts of payments.

G. We will review the formulas for computation of developer interest to be reimbursed to the Developer based upon the net effective interest rate of the District’s Series 2020A bond issue and limit interest, if appropriate, in accordance with the orders and rules of the Commission.

H. We will inquire of District Management regarding current period General Fund expenditures for costs to be reimbursed to the General Fund from the Capital Projects Fund in accordance with the approval of the Commission. If necessary, we will review prior year audit work papers for items paid in the past, which can now be reimbursed from bond proceeds.

I. If possible, we will obtain verbal confirmation from construction contractors concerning whether or not the contract estimates to date have been paid in full and whether or not the contractor has any claims to be made against either the District or Developer on the project.

J. A draft of our report will be provided to the District’s Attorney, Engineer, Financial Advisor, Bookkeeper, and Developer prior to reimbursing the Developer.

K. We will prepare for submittal to the Commission our report detailing the costs payable to the Developer and a schedule reflecting the results of the payment and future costs to complete as compared with the amount approved by the Commission.

The objective of this agreed-upon procedures engagement will be to assist you in evaluating the reasonableness of the aforementioned costs. Because the above agreed- upon procedures do not constitute an examination or review, we will not express an opinion or conclusion on the aforementioned reimbursable costs. In addition, we have no obligation to perform any procedures beyond those listed above.

Board of Directors June 3, 2020 Travis County Municipal Utility District No. 2 Page 3

We will issue a written report upon completion of our engagement that lists the procedures performed and our findings. Our report will be addressed to the Board of Directors of the District. If, for any reason, we are unable to complete any of the procedures, we will describe in our report any restrictions on the performance any restrictions on the performance of the procedures, or not issue a report and withdraw from this engagement. You understand that the report is intended for the information and use of the Board of Directors of the District in compliance with certain rules of the Commission and should not be used by anyone other than these specified parties. We are aware that the report is subject to distribution under provisions of the Texas Open Records Act. Our report will contain a paragraph indicating that had we performed additional procedures, other matters might have come to our attention that would have been reported to you.

An agreed-upon procedures engagement is not designed to detect instances of fraud or noncompliance with laws or regulations; however, we will communicate to you any known and suspected fraud and noncompliance with laws or regulations affecting the aforementioned reimbursable costs from the District’s Series 2020A bond proceeds that come to our attention. In addition, if, in connection with this engagement, matters come to our attention that contradict the aforementioned reimbursable costs, we will disclose those matters in our report.

The Board of Directors has engaged an engineer to prepare and submit the bond application to the Commission. The engineer is responsible for the aforementioned reimbursable costs and that they are in accordance with certain rules of the Commission; and for selecting the criteria and procedures and determining that such criteria and procedures are appropriate for your purposes. Together with the engineer, you are responsible for providing us with or causing to be provided (1) access to all information of which you are aware that is relevant to the performance of the agreed-upon procedures on the reimbursable costs, (2) additional information that we may request for the purpose of performing the agreed-upon procedures, and (3) unrestricted access to persons and District consultants from whom we determine it necessary to obtain evidence relating to performing those procedures. At the conclusion of this agreed-upon procedures engagement, we will request from the engineer, as the responsible party who prepared and submitted the bond application to the Commission, written representations.

Chris Swedlund is the engagement partner and is responsible for supervising the engagement and signing the report or authorizing another individual to sign it.

We estimate that our fees for these services will range between $10,000 and $12,000. The fee estimate is based the assumption that unexpected circumstances will not be encountered during the engagement, and a portion of the fee for these procedures will be determined by the condition of the records submitted by the respective Developer or Developers to be reimbursed. If significant additional time is necessary, we will discuss it with you and arrive at a new fee estimate before we incur additional costs. A final billing will be made when the final report is issued.

Board of Directors June 3, 2020 Travis County Municipal Utility District No. 2 Page 4

As required by Chapter 2270, Government Code, we hereby verify that our firm does not boycott Israel and will not boycott Israel through the term of our engagement. For purposes of this verification, “boycott Israel” means refusing to deal with, terminating business activities with, or otherwise taking any action that is intended to penalize, inflict economic harm on, or limit commercial relations specifically with Israel, or with a person or entity doing business in Israel or in an Israeli-controlled territory, but does not include an action made for ordinary business purposes.

Pursuant to Chapter 2252, Texas Government Code, we represent and certify that, at the time of execution of this Agreement neither our firm, nor any wholly owned subsidiary, majority-owned subsidiary, parent company or affiliate of the same (i) engages in business with Iran, Sudan, or any foreign terrorist organization as described in Chapters 806 or 807 of the Texas Government Code, or Subchapter F of Chapter 2252 of the Texas Government Code, or (ii) is a company listed by the Texas Comptroller of Public Accounts under Sections 806.051, 807.051, or 2252.153 of the Texas Government Code. The term "foreign terrorist organization" in this paragraph has the meaning assigned to such term in Section 2252.151 of the Texas Government Code.

You agree that any dispute regarding this engagement will, prior to resorting to litigation, be submitted to mediation upon written request by either party. Both parties agree to try in good faith to settle the dispute in mediation. The American Arbitration Association will administer any such mediation in accordance with its Commercial Mediation Rules. The results of the mediation proceeding shall be binding only if each of us agrees to be bound. We will share any costs of mediation proceedings equally.

We appreciate the confidence you have placed in this firm by retaining us as your independent accountants in this matter. If you agree with the above understanding of the engagement, please sign the duplicate copy of this letter and return it at your earliest convenience. Thank you.

Sincerely yours,

McCall Gibson Swedlund Barfoot PLLC

ACKNOWLEDGEMENT:

President 06/11/2020 Signature Title Date

AUP Engagement Letter 2020A Bond Issue

Travis County Municipal Utility District No. 2

June 3, 2020

. Review Cash Activity Report, including Receipts and Expenditures

 Action Items:

 Approve director and vendor payments

 Approve funds transfer from TexPool Operating Account to Prosperity Bookkeeper’s Account for Expenditures: $313,602.89

 Approve funds transfer from TexPool Operating Account to Prosperity Bookkeeper’s Account to Replenish: $40,000.00

Travis County Municipal Utility District No. 2 Cash Activity Report March 31, 2020 - June 3, 2020

Prosperity Bank Operating Account

Cash - Balance as of March 31, 2020 $ 442,210.25

Subsequent Activity Through April 1, 2020 (374,179.82)

Transfer Approved April 1, 2020 (300,000.00) Additional Service Collections (74,179.82) Subtotal - Prosperity Operating Account (374,179.82)

Cash - Reported at April 1, 2020 Meeting (Memo Totals Only) 68,030.43

Subsequent Activity Through June 3, 2020 160,251.27

Additional Service Collections 74,179.82 Bank Service Charge (15.00) Service Collections as of June 3, 2020 86,086.45 Subtotal - Prosperity Operating Account 160,251.27

Projected Balance as of June 3, 2020 $ 228,281.70 Travis County Municipal Utility District No. 2 Cash Activity Report March 31, 2020 - June 3, 2020

Prosperity Bank Bookkeeper's Account

Cash - Balance as of March 31, 2020 $ 104,003.89 Subsequent Activity Through April 1, 2020 32,305.38

Expenditures Approved April 1, 2020 #6204 - #6216 (280,108.38) Voided Check #6205 (138.52) Voided Check #6207 (138.53) Transfer Approved April 1, 2020 310,385.43 March Credit Card Fees 2,305.38 Total Activity-Prosperity Bookkeeper's Account 32,305.38

Cash - Reported at April 1, 2020 Meeting (Memo Totals Only) 136,309.27

Subsequent Activity Through June 3, 2020 (36,882.40)

March Credit Card Fees (2,305.38) April Credit Card Fees (2,145.89) Voided Check #6205 138.52 Voided Check #6207 138.53 Adjustment to Void Attorney General Fee #6195 2,410.00 Capital Metro 6217 License Agreement WW Line 5/3/20-5/2/21 (525.26) City of Manor 6218 Garbage Service - March 2020 (15,761.20) Wilmer Roberts 6219 Director Fees - March 6, 2020 and April 6, 2020 (218.37) Andrea Garza 6220 Customer Refund (74.80) Jason T. Brockdorf 6221 Customer Refund (45.05) Jessica Harper / Natalie Harper 6222 Customer Refund (12.43) Larimen Wallace 6223 Customer Refund (11.71) Michael Sievers 6224 Customer Refund (292.13) Olga Morquecho / Habib Mashhadi 6225 Customer Refund (157.21) Rita Glass 6226 Customer Refund (190.55) US Treasury 6227 Payroll Tax 1st Quarter 2020 (903.14) City of Manor 6228 Garbage Service - April 2020 (15,813.97) City of Round Rock Environmental Services 6229 Lab fees - March 2020 (60.00) Victor O Schinnerer & Co, Inc. 6230 Director Bond Renewal (416.00) Anthony Oden 6231 Customer Refund (78.11) Jeremy Sheard 6232 Customer Refund (43.62) Perry Homes, LLC 6233 customer Refund (299.20) Sue Wilmot 6234 Customer Refund (215.43) Subtotal - Prosperity Bookkeeper's Account (36,882.40)

Expenditures to be approved at April 1, 2020 Board Meeting (313,602.89)

Debora C. Pickens 6235 Director Fees - June 3, 2020 Meeting (138.52) Michael E. Moore 6236 Director Fees - June 3, 2020 Meeting (138.52) Raymond C. Mura 6237 Director Fees - June 3, 2020 Meeting (88.53) Tracy T. Johnson 6238 Director Fees - June 3, 2020 Meeting (138.53) Wilmer Roberts 6239 Director Fees - June 3, 2020 Meeting (98.52) Michael E. Moore 6240 Director Fees - Cyber Security Training (138.53) Raymond C. Mura 6241 Director Fees - Cyber Security Training (88.52) Wilmer Roberts 6242 Director Fees - April 7, 2020/April 16, 2020/May 4, 2020 (295.58) Armbrust & Brown, P.L.L.C. 6243 Legal Fees - March and April 2020 (10,900.13) BLX Group, LLC 6244 Arbitrage Reviiew - SR2015 Refunding (1,000.00) Bott & Douthitt, P.L.L.C. 6245 Accounting Fees/Check Printing - April 2020 (3,118.71) City of Round Rock Environmental Services 6246 Lab fees - April 2020 (60.00) Crossroads Utility Services 6247 Operations and Maintenance - April and May 2020 (43,563.26) Schroeder Engineering Co 6248 Engineering Fees - April 2020 (1,350.00) Texascapes 6249 Landscape Maintenance - Drainage Channel (1,700.00) Wilbarger Creek MUD No 2 MASTER 6250 Rate Stabilization Fees/Water Capacity Fees - Mar/Apr 2020 (45,600.00) Wilbarger Creek MUD No 2 MASTER 6251 Master District Charges - March and April 2020 (179,158.04) Raymond C. Mura 6252 Director Fees - June 1, 2020 Bills & Invoice Meeting (88.53) * Tracy T. Johnson 6253 Director Fees - Cyber Security Training (138.52) * Wilmer Roberts 6254 Director Fees - June 1, 2020 Master District Meeting (98.52) * Bott & Douthitt, P.L.L.C. 6255 Accounting Fees - May 2020 (2,600.00) * City of Manor 6256 Garbage Service - May 2020 (15,901.93) * Schroeder Engineering Company 6257 Engineering Fees - May 2020 (6,350.00) * Texascapes 6258 Landscape Maintenance - Drainage Channel - June 2020 (850.00) * Total Expenditures-Prosperity Operating Account (313,602.89)

*Added after packet submission Transfers Requests to be approved June 3, 2020 353,602.89

Transfer to Replenish TexPool Operating to Prosperity Bookkeeper's 40,000.00 Transfer for Expenditures Approved April 1, 2020 TexPool Operating to Prosperity Bookkeeper's 313,602.89 ** 353,602.89 **Revised after packet submission Projected Balance as of June 3, 2020 $ 139,426.87 Travis County Municipal Utility District No. 2 Cash/Investment Activity Report April 30, 2020 - June 3, 2020

Transfers to be Projected Maturity Interest Balance Subsequent Subtotal Approved Balance Date Rates 4/30/2020 Receipts Disbursements 6/3/2020 6/3/2020 6/3/2020

General Fund - Prosperity Checking Account (Operating) n/a 0.0000% $ 228,206.43 $ 75.27 $ - $ 228,281.70 $ - $ 228,281.70

Prosperity Checking Account (Bookkeeper's) n/a 0.0000% 113,943.20 2,410.00 (330,529.22) (214,176.02) 353,602.89 (1), (2) 139,426.87

Compass - Lockbox Account n/a 0.1500% 93,198.49 17,369.00 - 110,567.49 - 110,567.49

TexPool Operating Account n/a 0.2457% 3,056,843.11 - - 3,056,843.11 (353,602.89) (1), (2) 2,703,240.22

Total - General Fund 3,492,191.23 19,854.27 (330,529.22) 3,181,516.28 - 3,181,516.28

Special Revenue Fund - TexPool - Tax Account n/a 0.2457% 12,461.13 - - 12,461.13 - 12,461.13

Total - Special Revenue Fund 12,461.13 - - 12,461.13 - 12,461.13

Debt Service Fund - TexPool Debt Service Account n/a 0.2457% 1,027,627.59 - - 1,027,627.59 - 1,027,627.59

TexPool SR2019 Capitalized Interest Account n/a 0.2457% 91,791.56 - - 91,791.56 - 91,791.56 Total - Debt Service Fund 1,119,419.15 - - 1,119,419.15 - 1,119,419.15

Capital Project Fund - TexPool Capital Projects n/a 0.2457% 23,843.93 - - 23,843.93 - 23,843.93

TexPool SR2017 Capital Projects n/a 0.2457% 245,279.81 - - 245,279.81 - 245,279.81

TexPool SR2019 Capital Projects n/a 0.2457% 280,604.04 - - 280,604.04 - 280,604.04 Total - Capital Project Fund 549,727.78 - - 549,727.78 - 549,727.78

Total - All Funds 5,173,799.29 19,854.27 (330,529.22) 4,863,124.34 - 4,863,124.34

Transfer Letter Information: (1) Transfer funds from TexPool Operating Account to Prosperity Bookkeeper's Account (Expenditures): $313,602.89 (2) Transfer funds from TexPool Operating Account to Prosperity Bookkeeper's Account (Replenish): $40,000.00 Travis County Municipal Utility District No. 2

Accounting Report

June 3, 2020

. Review Cash Activity Report, including Receipts and Expenditures

 Action Items:

 Approval of director and vendor payments.  Approval of fund transfers letters.

. Review April 30, 2020 Financial Statements.

1 of 102 2020 Notes Travis County M.U.D. No. 2

January February March Feb 05 Board Meeting Su M Tu W Th F Sa Su M Tu W Th F Sa Su M Tu W Th F Sa Mar 01 Bond Payments 1 2 3 4 1 1 2 3 4 5 6 7 Mar 04 Board Meeting 5 6 7 8 9 10 11 2 3 4 5 6 7 8 8 9 10 11 12 13 14 Apr 01 Board Meeting 12 13 14 15 16 17 18 9 10 11 12 13 14 15 15 16 17 18 19 20 21 Jun 03 Board Meeting 19 20 21 22 23 24 25 16 17 18 19 20 21 22 22 23 24 25 26 27 28 26 27 28 29 30 31 23 24 25 26 27 28 29 29 30 31

April May June Su M Tu W Th F Sa Su M Tu W Th F Sa Su M Tu W Th F Sa 1 2 3 4 1 2 1 2 3 4 5 6 5 6 7 8 9 10 11 3 4 5 6 7 8 9 7 8 9 10 11 12 13 12 13 14 15 16 17 18 10 11 12 13 14 15 16 14 15 16 17 18 19 20 19 20 21 22 23 24 25 17 18 19 20 21 22 23 21 22 23 24 25 26 27 26 27 28 29 30 24 25 26 27 28 29 30 28 29 30 31

July August September Su M Tu W Th F Sa Su M Tu W Th F Sa Su M Tu W Th F Sa 1 2 3 4 1 1 2 3 4 5 5 6 7 8 9 10 11 2 3 4 5 6 7 8 6 7 8 9 10 11 12 12 13 14 15 16 17 18 9 10 11 12 13 14 15 13 14 15 16 17 18 19 19 20 21 22 23 24 25 16 17 18 19 20 21 22 20 21 22 23 24 25 26 26 27 28 29 30 31 23 24 25 26 27 28 29 27 28 29 30 30 31

October November December Su M Tu W Th F Sa Su M Tu W Th F Sa Su M Tu W Th F Sa 1 2 3 1 2 3 4 5 6 7 1 2 3 4 5 4 5 6 7 8 9 10 8 9 10 11 12 13 14 6 7 8 9 10 11 12 11 12 13 14 15 16 17 15 16 17 18 19 20 21 13 14 15 16 17 18 19

2 of 102 18 19 20 21 22 23 24 22 23 24 25 26 27 28 20 21 22 23 24 25 26 25 26 27 28 29 30 31 29 30 27 28 29 30 31 Cash Activity Report

3 of 102 Travis County Municipal Utility District No. 2 Cash Activity Report February 29, 2020 - April 1, 2020

Prosperity Bank Operating Bookkeeper's Account Account

Cash - Balance as of February 29, 2020 $ 329,698.36 $ 128,205.99 Subsequent Activity Through March 4, 2020 (57,066.13) 2,308.32

Expenditures Approved March 4, 2020 #21531- #21548 (167,129.96) Transfer Approved March 4, 2020 Transfer from Compass Lockbox to Prosperity Operating 200,000.00 Additional Service Collections (89,936.17) Subtotal - Prosperity Operating Account (57,066.13)

February Credit Card Fees 2,308.32 Total Activity-Prosperity Bookkeeper's Account 2,308.32

Cash - Reported at March 4, 2020 Meeting (Memo Totals Only) 272,632.23 130,514.31

Subsequent Activity Through April 1, 2020 95,398.20 (24,205.04)

Additional Service Collections 89,936.17 Service Collections as of April 1, 2020 5,462.03 Subtotal - Prosperity Operating Account 95,398.20

February Credit Card Fees (2,308.32) Manuel Jimenez 6193 Reimbursement for leak repairs (600.00) City of Manor 6194 Garbage Service - February 2020 (15,638.07) Attorney General 6195 SR2020 Refunding Review Fee (2,410.00) City of Round Rock Environmental Services 6196 Lab fees - February 2020 (60.00) Travis Central Appraisal District 6197 Appraisal Fees - 2nd Quarter 2020 (2,272.42) Wilmer Roberts 6198 CASE 2020 AIrfare Reimbursement (267.96) Billy M. Speedy 6199 Customer Refund (5.80) Buffington Texas Classic Homes 6200 Customer Refund (173.23) Jose Loredo 6201 Customer Refund (38.75) Offerpad, LLC 6202 Customer Refund (57.67) Perry Homes 6203 Customer Refund (372.82) Subtotal - Prosperity Bookkeeper's Account (24,205.04)

Expenditures to be approved at April 1, 2020 Board Meeting - (280,385.43)

Debora C. Pickens 6204 Director Fees - April 1, 2020 Meeting (138.53) Michael E. Moore 6205 Director Fees - April 1, 2020 Meeting (138.52) Raymond C. Mura 6206 Director Fees - April 1, 2020 Meeting (88.53) Tracy T. Johnson 6207 Director Fees - April 1, 2020 Meeting (138.53) Wilmer Roberts 6208 Director Fees - April 1, 2020 Meeting (98.53) Armbrust & Brown, P.L.L.C. 6209 Legal Fees - February 2020 (5,981.56) Schroeder Engineering Company 6210 Engineering Fees - SR2020 Refunding and Bond Issue (6,050.89) Wilbarger Creek MUD No 2 MASTER 6211 Rate Stabilization Fees/Water Capacity Fees - Feb. 2020 (11,400.00) Wilbarger Creek MUD No 2 MASTER 6212 Master District Charges - February 2020 (235,497.37) Raymond C. Mura 6213 Director Fees - March 31, 2020 B&I Meeting (88.52) * Bott & Douthitt, P.L.L.C. 6214 Accounting Fees - March 2020 (2,950.00) * Crossroads Utility Services 6215 Operations and Maintenance - March 2020 (16,377.85) * Schroeder Engineering Company 6216 Engineering Fees - March 2020 (1,436.60) * Total Expenditures-Prosperity Operating Account (280,385.43)

*Added after packet submission Transfers Requests to be approved April 1, 2020 (300,000.00) 310,385.43

Transfer letter dated April 1, 2020 Transfer from Prosperity Operating to TexPool Operating (300,000.00) Transfer to Replenish TexPool Operating to Prosperity Bookkeeper's-Replenish 30,000.00 Transfer for Expenditures Approved April 1, 2020 TexPool Operating to Prosperity Bookkeeper's-Expenditures 280,385.43 ** 10,385.43 **Revised after packet submission Projected Balance as of April 1, 2020 $ 68,030.43 $ 136,309.27

4 of 102 Travis County Municipal Utility District No. 2 Cash Activity Report March 31, 2020 - June 3, 2020

Prosperity Bank Operating Account

Cash - Balance as of March 31, 2020 $ 442,210.25

Subsequent Activity Through April 1, 2020 (374,179.82)

Transfer Approved April 1, 2020 (300,000.00) Additional Service Collections (74,179.82) Subtotal - Prosperity Operating Account (374,179.82)

Cash - Reported at April 1, 2020 Meeting (Memo Totals Only) 68,030.43

Subsequent Activity Through June 3, 2020 160,251.27

Additional Service Collections 74,179.82 Bank Service Charge (15.00) Service Collections as of June 3, 2020 86,086.45 Subtotal - Prosperity Operating Account 160,251.27

Projected Balance as of June 3, 2020 $ 228,281.70

5 of 102 Travis County Municipal Utility District No. 2 Cash Activity Report March 31, 2020 - June 3, 2020

Prosperity Bank Bookkeeper's Account

Cash - Balance as of March 31, 2020 $ 104,003.89 Subsequent Activity Through April 1, 2020 32,305.38

Cash - Reported at April 1, 2020 Meeting (Memo Totals Only) 136,309.27

Subsequent Activity Through June 3, 2020 (36,882.40)

Expenditures to be approved at April 1, 2020 Board Meeting (287,575.39)

Debora C. Pickens 6235 Director Fees - June 3, 2020 Meeting (138.52) Michael E. Moore 6236 Director Fees - June 3, 2020 Meeting (138.52) Raymond C. Mura 6237 Director Fees - June 3, 2020 Meeting (88.53) Tracy T. Johnson 6238 Director Fees - June 3, 2020 Meeting (138.53) Wilmer Roberts 6239 Director Fees - June 3, 2020 Meeting (98.52) Michael E. Moore 6240 Director Fees - Cyber Security Training (138.53) Raymond C. Mura 6241 Director Fees - Cyber Security Training (88.52) Wilmer Roberts 6242 Director Fees - April 7, 2020/April 16, 2020/May 4, 2020 (295.58) Armbrust & Brown, P.L.L.C. 6243 Legal Fees - March and April 2020 (10,900.13) BLX Group, LLC 6244 Arbitrage Reviiew - SR2015 Refunding (1,000.00) Bott & Douthitt, P.L.L.C. 6245 Accounting Fees/Check Printing - April 2020 (3,118.71) City of Round Rock Environmental Services 6246 Lab fees - April 2020 (60.00) Crossroads Utility Services 6247 Operations and Maintenance - April and May 2020 (43,563.26) Schroeder Engineering Co 6248 Engineering Fees - April 2020 (1,350.00) Texascapes 6249 Landscape Maintenance - Drainage Channel (1,700.00) Wilbarger Creek MUD No 2 MASTER 6250 Rate Stabilization Fees/Water Capacity Fees - Mar/Apr 2020 (45,600.00) Wilbarger Creek MUD No 2 MASTER 6251 Master District Charges - March and April 2020 (179,158.04) Total Expenditures-Prosperity Operating Account (287,575.39)

Transfers Requests to be approved June 3, 2020 327,575.39

6 of 102 Travis County Municipal Utility District No. 2 Cash/Investment Activity Report April 30, 2020 - June 3, 2020

Transfers to be Projected Maturity Interest Balance Subsequent Subtotal Approved Balance Date Rates 4/30/2020 Receipts Disbursements 6/3/2020 6/3/2020 6/3/2020

General Fund - Prosperity Checking Account (Operating) n/a 0.0000% $ 228,206.43 $ 75.27 $ - $ 228,281.70 $ - $ 228,281.70

Prosperity Checking Account (Bookkeeper's) n/a 0.0000% 113,943.20 2,410.00 (304,501.72) (188,148.52) 327,575.39 (1), (2) 139,426.87

Compass - Lockbox Account n/a 0.1500% 93,198.49 17,369.00 - 110,567.49 - 110,567.49

TexPool Operating Account n/a 0.2457% 3,056,843.11 - - 3,056,843.11 (327,575.39) (1), (2) 2,729,267.72

Total - General Fund 3,492,191.23 19,854.27 (304,501.72) 3,207,543.78 - 3,207,543.78

Special Revenue Fund - TexPool - Tax Account n/a 0.2457% 12,461.13 - - 12,461.13 - 12,461.13

Total - Special Revenue Fund 12,461.13 - - 12,461.13 - 12,461.13

Debt Service Fund - TexPool Debt Service Account n/a 0.2457% 1,027,627.59 - - 1,027,627.59 - 1,027,627.59

TexPool SR2019 Capitalized Interest Account n/a 0.2457% 91,791.56 - - 91,791.56 - 91,791.56 Total - Debt Service Fund 1,119,419.15 - - 1,119,419.15 - 1,119,419.15

Capital Project Fund - TexPool Capital Projects n/a 0.2457% 23,843.93 - - 23,843.93 - 23,843.93

TexPool SR2017 Capital Projects n/a 0.2457% 245,279.81 - - 245,279.81 - 245,279.81

TexPool SR2019 Capital Projects n/a 0.2457% 280,604.04 - - 280,604.04 - 280,604.04 Total - Capital Project Fund 549,727.78 - - 549,727.78 - 549,727.78

Total - All Funds 5,173,799.29 19,854.27 (304,501.72) 4,889,151.84 - 4,889,151.84

Transfer Letter Information: (3) Transfer funds from TexPool Operating Account to Prosperity Bookkeeper's Account (Expenditures): $287,575.39 (4) Transfer funds from TexPool Operating Account to Prosperity Bookkeeper's Account (Replenish): $40,000.00 7 of 102 Travis County Municipal Utility District No. 2 Cash and Investments by Depository June 3, 2020

Prosperity Bank $ 367,708.57

Compass Bank 110,567.49

TexPool 4,410,875.78

$ 4,889,151.84

8 of 102 Travis County M.U.D. No. 2 Collateral Analysis April 30, 2020

General Fund - Checking Account (Operating) $ 224,795.04 Checking Account (Manager's) 120,897.19

Total $ 345,692.23

Collateral - FDIC Coverage $ 250,000.00 Pledged Collateral (Market Value) 1,448,146.90

Total Collateral $ 1,698,146.90

Over / (Under) Collateralized $ 1,352,454.67

9 of 102 Pledge Security Listing April 30, 2020 EL CAMPO, TX

Safekeeping Safekeeping Maturity Call Current ID CUSIP Description Location Receipt Coupon Date Date Moody S&P Fitch ASC 320 Face Amount Current Par Book Value Market Value Gain(Loss) TRAVIS COUNTY MUD #2 3342 31417DJR5 FNMA #AB6571 FHLB 2.00 10/01/2027 AAA AA+ AAA HTM 292,828 90,134.24 91,093.20 91,729.84 636.63 3617 31417FP77 FNMA #AB8545 FHLB 2.00 03/01/2028 AAA AA+ AAA HTM 3,197,223 1,103,937.03 1,107,649.23 1,124,250.42 16,601.19 4225 3138WEFF1 FNMA #AS4665 FHLB 2.50 03/01/2030 AAA AA+ AAA HTM 525,735 225,026.95 228,448.12 232,166.64 3,718.52 Total for TRAVIS COUNTY MUD #2 4,015,786 1,419,098.22 1,427,190.55 1,448,146.90 20,956.34 10 of 102

Although the information in this report has been obtained from sources believed to be reliable, its accuracy cannot be guaranteed. 5/2/2020 11:54:04 AM

Inventory | Pledge Entity | v1.2 Page 1 of 1 1.800.922.9850 | hilltopsecurities.com 11 of 102 Tax Collection Report

12 of 102 13 of 102 TRAVIS COUNTY M.U.D. #2 ANALYSIS OF TAXES COLLECTED FOR RECONCILIATION FY 2019 - 2020

TAX YEAR 2019 Prior Years TOTAL General Debt Service Special General Debt Service Special General Debt Service Special Fund Fund Rev. Fund Total Fund Fund Rev. Fund Total Fund Fund Rev. Fund Total PERCENTAGE $ 0.1233 $ 0.4167 $ 0.3500 $ 0.8900 $ -

COLLECTIONS: OCT TAX ADJUSTMENTS (430.26) (1,454.10) (1,221.34) (3,105.70) (3,451.47) (7,635.43) (6,798.30) (17,885.20) (3,881.73) (9,089.53) (8,019.64) (20,990.90) BASE TAX REV 0.00 0.00 0.00 0.00 (3,451.47) (7,635.43) (6,798.30) (17,885.20) (3,451.47) (7,635.43) (6,798.30) (17,885.20) TAXES 943.10 3,187.25 2,677.08 6,807.43 44.59 126.76 113.58 284.93 987.68 3,314.02 2,790.66 7,092.36 PENALTY 0.00 0.00 0.00 0.00 9.26 26.62 23.76 59.64 9.26 26.62 23.76 59.64

NOV TAX ADJUSTMENTS 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 BASE TAX REV 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 TAXES 18,498.07 62,515.38 52,508.72 133,522.18 0.86 5.19 3.84 9.89 18,498.93 62,520.58 52,512.56 133,532.07 PENALTY 3.60 12.16 10.21 25.97 0.29 1.76 1.30 3.35 3.89 13.92 11.51 29.32

DEC TAX ADJUSTMENTS (2,264.16) (7,651.88) (6,427.07) (16,343.11) (1,120.00) (3,096.00) (2,800.00) (7,016.00) (3,384.16) (10,747.88) (9,227.07) (23,359.11) BASE TAX REV (2,228.03) (7,529.77) (6,324.50) (16,082.30) (1,120.00) (3,096.00) (2,800.00) (7,016.00) (3,348.03) (10,625.77) (9,124.50) (23,098.30) TAXES 219,564.40 742,031.50 623,256.60 1,584,852.50 21.29 58.85 53.22 133.36 219,585.69 742,090.35 623,309.82 1,584,985.86 PENALTY 0.00 0.00 0.00 0.00 4.68 12.95 11.71 29.34 4.68 12.95 11.71 29.34

JAN TAX ADJUSTMENTS (139.75) (472.29) (396.70) (1,008.74) 55.05 145.64 126.91 327.60 (84.70) (326.65) (269.79) (681.14) BASE TAX REV (145.92) (493.13) (414.20) (1,053.24) 0.00 0.00 0.00 0.00 (145.92) (493.13) (414.20) (1,053.24) TAXES 37,581.27 127,008.23 106,678.38 271,267.88 438.75 1,212.84 1,096.88 2,748.48 38,020.02 128,221.07 107,775.26 274,016.36 PENALTY 0.00 0.00 0.00 0.00 92.48 255.65 231.21 579.35 92.48 255.65 231.21 579.35

FEB TAX ADJUSTMENTS (19.05) (64.37) (54.07) (137.49) (14.14) (40.58) (35.00) (89.72) (33.19) (104.95) (89.07) (227.21) BASE TAX REV (34.31) (115.96) (97.40) (247.68) (14.14) (40.58) (35.00) (89.72) (48.45) (156.54) (132.40) (337.40) TAXES 7,648.20 25,847.58 21,710.23 55,206.01 1.53 4.24 3.83 9.60 7,649.74 25,851.81 21,714.06 55,215.61 PENALTY 113.72 384.31 322.80 820.83 0.38 1.06 0.96 2.40 114.10 385.37 323.76 823.23

MAR TAX ADJUSTMENTS 38.11 128.80 108.19 275.10 (7.00) (19.35) (17.50) (43.85) 31.11 109.45 90.69 231.25 BASE TAX REV (6.17) (20.84) (17.50) (44.50) (7.00) (19.35) (17.50) (43.85) (13.17) (40.19) (35.00) (88.35) TAXES 1,471.88 4,974.33 4,178.10 10,624.31 6.56 18.13 16.39 41.08 1,478.44 4,992.45 4,194.49 10,665.39 PENALTY 82.38 278.40 233.84 594.61 0.92 2.54 2.29 5.75 83.29 280.94 236.13 600.36

APR TAX ADJUSTMENTS (12.33) (41.67) (35.00) (89.00) (7.00) (19.35) (17.50) (43.85) (19.33) (61.02) (52.50) (132.85) BASE TAX REV (12.33) (41.67) (35.00) (89.00) (7.00) (19.35) (17.50) (43.85) (19.33) (61.02) (52.50) (132.85) TAXES 171.81 580.66 487.71 1,240.18 0.00 0.00 0.00 0.00 171.81 580.66 487.71 1,240.18 PENALTY 6.19 20.91 17.57 44.67 0.00 0.00 0.00 0.00 6.19 20.91 17.57 44.67

MAY TAX ADJUSTMENTS 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 BASE TAX REV 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 TAXES 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 PENALTY 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

JUN TAX ADJUSTMENTS 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 BASE TAX REV 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 TAXES 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 PENALTY 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

JUL TAX ADJUSTMENTS 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 BASE TAX REV 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 TAXES 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 PENALTY 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

AUG TAX ADJUSTMENTS 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 BASE TAX REV 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 TAXES 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 PENALTY 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

SEP TAX ADJUSTMENTS 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 BASE TAX REV 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 TAXES 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 PENALTY 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

TOTAL BASE TAX REV (2,426.75) (8,201.37) (6,888.60) (17,516.72) (4,599.61) (10,810.71) (9,668.30) (25,078.62) (7,026.37) (19,012.08) (16,556.90) (42,595.34) TAXES 285,878.74 966,144.93 811,496.82 2,063,520.49 513.58 1,426.01 1,287.76 3,227.34 286,392.31 967,570.94 812,784.58 2,066,747.83 PENALTY 205.88 695.79 584.41 1,486.08 108.02 300.58 271.24 679.83 313.90 996.36 855.65 2,165.91

TOTAL DISTRIBUTION 283,657.86 958,639.35 805,192.64 2,065,006.57 (3,978.02) (9,084.12) (8,109.31) (21,171.45) 279,679.84 949,555.22 797,083.33 2,026,318.40

BEGINNING TAXES RECEIVABLE 291,735.10 985,936.86 828,120.71 2,105,792.66 3,563.15 8,610.28 7,647.67 19,821.10 295,298.25 994,547.13 835,768.38 2,125,613.76 TAX ADJUSTMENTS (2,827.44) (9,555.51) (8,025.99) (20,408.94) (4,544.56) (10,665.06) (9,541.39) (24,751.02) (7,372.01) (20,220.58) (17,567.38) (45,159.96) BASE TAX REV 2,426.75 8,201.37 6,888.60 17,516.72 4,599.61 10,810.71 9,668.30 25,078.62 7,026.37 19,012.08 16,556.90 42,595.34 LESS: COLLECTIONS (285,878.74) (966,144.93) (811,496.82) (2,063,520.49) (513.58) (1,426.01) (1,287.76) (3,227.34) (286,392.31) (967,570.94) (812,784.58) (2,066,747.83)

TAX REC @ END OF PERIOD 5,455.67 18,437.78 15,486.50 39,379.95 3,104.62 7,329.91 6,486.83 16,921.36 8,560.29 25,767.69 21,973.32 56,301.31

Plus Adjustments Reported in PY 3,451.47 7,635.43 6,798.30 17,885.20

Adjusted Distribution 283,131.31 957,190.65 803,881.63 2,044,203.60 14 of 102 Financial Statements

15 of 102 16 of 102 Travis County Municipal Utility District No. 2 Governmental Funds Balance Sheet April 30, 2020

Governmental Funds Governmental General Special Revenue Debt Service Capital Projects Funds Fund Fund Fund Fund Total Assets Cash and Cash Equivalents Cash $ 435,348.12 $ - $ - $ - $ 435,348.12 Cash Equivalents 3,056,843.11 12,461.13 1,119,419.15 549,727.78 4,738,451.17 Receivables Service Accounts, net of allowance for doubtful accounts of $ - 142,806.08 - - - 142,806.08 Accrued Service Revenue 24,126.77 - - - 24,126.77 Prepaid Expense 780.00 - - 38,650.89 39,430.89 Due from Developer 1,843.56 - - - 1,843.56 Property Taxes 8,560.30 21,973.32 25,767.69 - 56,301.31 Interfund 45,725.74 - 5,773.75 - 51,499.49 Other 1,038.80 - 185.60 - 1,224.40

Total Assets $ 3,717,072.48 $ 34,434.45 $ 1,151,146.19 $ 588,378.67 $ 5,491,031.79

Liabilities Accounts Payable $ 47,100.60 $ - $ - $ - $ 47,100.60 Review Fee Payable 1,750.00 - - - 1,750.00 Due to TCEQ 2,150.80 - - - 2,150.80 Payroll Taxes Payable 357.68 - - - 357.68 Customer Deposits 163,076.75 - - - 163,076.75 Unclaimed Property 4,471.15 - - - 4,471.15 Interfund - 8,374.65 4,473.95 38,650.89 51,499.49 Intergovernmental 224,758.04 4,086.48 - - 228,844.52

Total Liabilities 443,665.02 12,461.13 4,473.95 38,650.89 499,250.99

Deferred Inflows of Resources Property Taxes 8,560.30 21,973.32 25,767.69 - 56,301.31

Total Deferred Inflows of Resources 8,560.30 21,973.32 25,767.69 - 56,301.31

Fund Balance Fund Balances: Restricted for Debt Service - - 1,120,904.55 - 1,120,904.55 Special Revenue - - - - - Capital Projects - - - 549,727.78 549,727.78 Unassigned 3,264,847.16 - - - 3,264,847.16

Total Fund Balances 3,264,847.16 - 1,120,904.55 549,727.78 4,935,479.49

Total Liabilities and Fund Balances $ 3,717,072.48 $ 34,434.45 $ 1,151,146.19 $ 588,378.67 $ 5,491,031.79

See Accountants' Report.

17 of 102 Travis County Municipal Utility District No. 2 Statement of Revenues, Expenditures & Changes in Fund Balance-Governmental Funds October 1, 2019 - April 30, 2020

Governmental Funds Governmental General Special Revenue Debt Service Capital Projects Funds Fund Fund Fund Fund Total Revenues: Property taxes, including penalties $ 283,131.31 $ 803,881.65 $ 957,190.64 $ - $ 2,044,203.60 Service revenues, including penalties 814,603.93 - - - 814,60 3.93 Tap connection fees 50,400.00 - - - 50,400.00 Inspection fees 8,400.00 - - - 8,400.00 Interest income 22,078.38 4,373.52 4,983.19 4,498.91 35,934.00

Total Revenues 1,178,613.62 808,255.17 962,173.83 4,498.91 2,953,541.53

Expenditures: Current - Master District Charges - Operations & Maintenance - 696,552.55 - - 696,55 2.55 Debt Service - 804,725.80 - - 804,72 5.80 District Facilities - Management and Consulting 68,742.80 - - - 68,742.80 Repairs & Maintenance 26,231.13 - - - 26,231.13 Garbage Service Fees 108,358.25 - - - 108,35 8.25 Meter Sets/Inspections 8,198.74 - - - 8,198.74 Lab Fees 523.85 - - - 523.85 Joint Projects - WW Interceptor 1,730.00 - - - 1,730.00 Administrative Services - Director Fees, including payroll taxes 5,813.11 - - - 5,813.11 Director Reimbursement 1,077.14 - - - 1,077.14 Legal Notices 317.12 - - 317.12 Insurance & Surety Bond 855.10 - - - 855.10 Bank Fees 17,567.12 - - - 17,567.12 Miscellaneous Expense 693.97 - - - 693.97 Bond Issue Expense - - 140,191.61 - 140,19 1.61 Professional Fees - Legal Fees 30,116.64 - - - 30,116.64 Bookkeeping Fees 20,700.00 - - - 20,700.00 Engineering Fees 9,819.60 - - - 9,819.60 Financial Advisor Fees 346.34 983.15 1,170.51 2,500.00 Tax Appraisal/Collection Fees 897.00 2,546.22 3,031.46 - 6,474.68 Audit Fees 14,000.00 - - - 14,000.00 Debt Service Arbitrage Rebate Review Fees - - 1,000.00 - 1,000.00 Bond Interest - - 235,809.36 - 235,80 9.36 Capital Outlay - - - - -

Total Expenditures 315,987.91 1,504,807.72 381,202.94 - 2,201,998.57

Excess/(Deficiency) of Revenues over Expenditures 862,625.71 (696,552.55) 580,970.89 4,498.91 751,54 2.96

Other Financing Sources/(Uses): Proceeds from Bond Refunding - - 2,410,000.00 - 2,410,000.00 Bond Discount - - 85,119.85 - 85,119.85 Payments to Refunding Agent - - (2,357,152.64) - (2,357,152.64) Interfund Transfer (696,552.55) 696,552.55 - - - Total Other Financing Sources/(Uses) (696,552.55) 696,552.55 137,967.21 - 137,967.21

Excess/(Deficiency) of Revenues and Other Financing Sources over Expenditures and Other Financing Uses 166,073.16 - 718,938.10 4,498.91 889,51 0.17

Fund Balance, October 1, 2019 3,098,774.00 - 401,966.45 545,228.87 4,045,969.32

Fund Balance, April 30, 2020 $ 3,264,847.16 $ - $ 1,120,904.55 $ 549,727.78 $ 4,935,479.49

See Accountants' Report.

18 of 102 Supplementary Information

Index

General Fund

-- Budgetary Comparison Schedule -- Revenues & Expenditures: Actual + Budgeted -- Cash Reconciliations -- A/P Aging Summary -- Payroll Summary -- Adjustments Journal -- General Ledger Special Revenue Fund

-- Adjustments Journal

-- General Ledger

Debt Service Fund

-- Debt Service Schedule -- Adjustments Journal -- General Ledger Capital Projects Fund

-- General Ledger

19 of 102 General Fund

20 of 102 Travis County Municipal Utility District No. 2 Budgetary Comparison Schedule-General Fund April 30, 2020

CURRENT MONTH YEAR TO DATE

Actual Budget Difference Actual Budget Difference

Revenues: Property Taxes - Property Taxes $ 152.48 $ - $ 152.48 $ 282,817.40 $ 279,833.00 $ 2,984.40 Property Tax Penalties & Interest 6.19 - 6.19 313.91 - 313.91 Service Accounts - Basic Service Fees 46,392.19 39,054.00 7,338.19 314,122.51 267,168.00 46,954.51 Water Service Fees 36,397.82 33,954.00 2,443.82 282,018.46 227,408.00 54,610.46 Sewer Service Fees 30,699.00 28,380.00 2,319.00 205,353.10 194,106.00 11,247.10 Service Accounts Penalties (64.44) 1,774.00 (1,838.44) 13,109.86 12,051.00 1,058.86 Connection/Inspection Fees - Tap Connection Fees 3,600.00 8,400.00 (4,800.00) 50,400.00 56,400.00 (6,000.00) Inspections Fees 600.00 3,325.00 (2,725.00) 8,400.00 22,325.00 (13,925.00) Interest Income 1,140.43 4,250.00 (3,109.57) 22,078.38 29,750.00 (7,671.62) Miscellaneous Income - 50.00 (50.00) - 350.00 (350.00)

Total Revenues 118,923.67 119,187.00 (263.33) 1,178,613.62 1,089,391.00 89,222.62

Expenditures: Operations & Maintenance - Management and Consulting 10,009.80 9,397.00 (612.80) 68,742.80 64,679.00 (4,063.80) Repairs & Maintenance - Water 1,673.43 2,000.00 326.57 17,195.01 14,000.00 (3,195.01) Repairs & Maintenance - Sewer 681.84 2,000.00 1,318.16 3,086.12 14,000.00 10,913.88 Repairs & Maintenance - Drainage 850.00 2,500.00 1,650.00 5,950.00 17,500.00 11,550.00 Garbage 15,813.97 14,952.00 (861.97) 108,358.25 102,234.00 (6,124.25) Inspection Fees 1,116.72 1,505.00 388.28 8,198.74 10,105.00 1,906.26 Lab Fees 60.00 75.00 15.00 523.85 525.00 1.15 Joint Projects - - - 1,730.00 1,730.00 - Administrative Services - Director Fees, including Payroll Tax 968.84 1,137.00 168.16 5,813.11 5,827.00 13.89 Director Reimbursement 21.32 50.00 28.68 1,077.14 200.00 (877.14) Insurance & Surety Bond 416.00 400.00 (16.00) 855.10 800.00 (55.10) Legal Notices & Publications - - - 317.12 - (317.12) Bank Service Charges 2,178.89 2,000.00 (178.89) 17,567.12 14,000.00 (3,567.12) Website Expense - 200.00 200.00 - 1,400.00 1,400.00 Miscellaneous 168.71 300.00 131.29 693.97 2,100.00 1,406.03 Professional Fees - Legal Fees 4,487.00 4,500.00 13.00 30,116.64 31,500.00 1,383.36 Bookkeeping Fees 2,950.00 2,950.00 - 20,700.00 20,350.00 (350.00) Engineering Fees 1,350.00 1,250.00 (100.00) 9,819.60 8,750.00 (1,069.60) Financial Advisor Fees - - - 346.34 485.00 138.66 Tax Collector/Appraisal Fees - - - 897.00 1,500.00 603.00 Audit Fees - - - 14,000.00 13,750.00 (250.00)

Total Expenditures 42,746.52 45,216.00 2,469.48 315,987.91 325,435.00 9,447.09

Excess/(Deficiency) of Revenues over Expenditures 76,177.15 73,971.00 2,206.15 862,625.71 763,956.00 98,669.71

Other Financing Sources/(Uses): Operating Transfer-Master District Charges (107,745.92) (65,347.00) (42,398.92) (696,552.55) (613,806.00) (82,746.55)

Total Other Financing Sources/(Uses) (107,745.92) (65,347.00) (42,398.92) (696,552.55) (613,806.00) (82,746.55)

Excess/(Deficiency) of Revenues and Other Financing Sources over Expenditures and Other Financing Uses $ (31,568.77) $ 8,624.00 $ (40,192.77) $ 166,073.16 $ 150,150.00 $ 15,923.16

See Accountants' Report.

21 of 102 Travis County Municipal Utility District No. 2 Revenues and Expenditures - General Fund: Acutal + Budgeted Fiscal Year 2019-2020

FY 2020 Budget Actual Actual Actual Actual Actual Actual Actual Budget Budget Budget Budget Budget Actual Variance Approved Oct-19 Nov-19 Dec-19 Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 9/4/2019

Revenues: Property Taxes $ 279,833 $ 988 $ 18,499 $ 216,238 $ 37,874 $ 7,601 $ 1,465 $ 152 $ - $ - $ - $ - $ - $ 282,817 $ 2,984 Property Taxes - P&I - 9 4 5 92 114 83 6 - - - - - 314 314 Service Accounts - Basic Service Fees 467,033 42,651 43,113 45,029 45,227 45,675 46,036 46,392 39,369 39,684 39,954 40,269 40,589 513,988 46,955 Water Service Fees 550,172 70,216 36,646 39,021 36,863 30,497 32,377 36,398 53,775 64,048 64,474 69,967 70,500 604,782 54,610 Sewer Service Fees 339,371 31,880 27,866 29,603 28,531 26,083 30,692 30,699 28,611 28,842 29,040 29,271 29,501 350,618 11,247 Service Accounts Penalties 23,740 2,672 3,036 2,148 3,186 2,125 7 (64) 2,131 2,320 2,336 2,441 2,461 24,799 1,059 Connection/Inspection Fees - Tap Connection Fees 96,000 2,400 4,800 - 25,200 3,600 10,800 3,600 8,400 7,200 8,400 8,400 7,200 90,000 (6,000) Water Service Inspection 38,000 400 800 - 4,200 600 1,800 600 3,325 2,850 3,325 3,325 2,850 24,075 (13,925) Other - Developer Advance ------Interest Income 51,000 4,203 3,590 3,598 3,522 3,548 2,477 1,140 4,250 4,250 4,250 4,250 4,250 43,328 (7,672) Miscellaneous Income 600 ------50 50 50 50 50 250 (350)

Total Revenues 1,845,749 155,418 138,354 335,641 184,695 119,844 125,737 118,924 139,911 149,244 151,829 157,973 157,401 1,934,972 89,223

Expenditures: District Facilities - Management & Consulting 112,473 9,701 9,711 9,711 9,743 9,930 9,936 10,010 9,452 9,508 9,556 9,611 9,667 116,537 (4,064) Repairs & Maint. - Water 24,000 1,255 4,539 968 975 5,032 2,752 1,673 2,000 2,000 2,000 2,000 2,000 27,195 (3,195) Repairs & Maint. - Sewer 24,000 28 - - - 1,062 1,314 682 2,000 2,000 2,000 2,000 2,000 13,086 10,914 Repairs & Maint. -Drainage 30,000 850 850 850 850 850 850 850 2,500 2,500 2,500 2,500 2,500 18,450 11,550 Garbage Fees 178,785 15,058 15,269 15,269 15,550 15,638 15,761 15,814 15,075 15,198 15,303 15,426 15,549 184,909 (6,124) Inspections 17,200 186 464 372 1,594 1,489 2,977 1,117 1,505 1,290 1,505 1,505 1,290 15,294 1,906 Lab Fees 900 164 60 60 60 60 60 60 75 75 75 75 75 899 1 Joint Projects 6,015 - 1,730 ------4,285 - 6,015 - Subtotal-District Facilities 393,373 27,242 32,624 27,230 28,773 34,061 33,649 30,206 32,607 32,571 32,939 37,402 33,081 382,385 10,988

Administrative Services - Director Fees, incl. payroll tax 14,561 807 - 1,130 - 1,615 1,292 969 - 3,552 1,942 1,620 1,620 14,547 14 Director Reimbursement 10,000 69 - 464 - 149 374 21 - 8,000 1,700 50 50 10,877 (877) Election Expense 1,000 ------1,000 1,000 - Insurance & Surety Bond 6,000 - - 179 260 - - 416 - 5,200 - - - 6,055 (55) Legal Notices 5,500 - - - 317 ------5,500 5,817 (317) Bank Service Charges 24,000 2,801 2,899 2,853 2,108 2,380 2,347 2,179 2,000 2,000 2,000 2,000 2,000 27,567 (3,567) Website Expenditures 5,000 ------200 200 200 200 2,800 3,600 1,400 Miscellaneous 3,600 - - - - - 525 169 300 300 300 300 300 2,194 1,406 Subtotal-Admin. Services 69,661 3,677 2,899 4,627 2,685 4,144 4,538 3,754 2,500 19,252 6,142 4,170 13,270 71,658 (1,997)

Professional Fees - Legal Fees 54,000 2,669 2,415 3,546 4,604 5,982 6,413 4,487 4,500 4,500 4,500 4,500 4,500 52,617 1,383 Bookkeeping 34,400 2,950 2,600 2,950 3,350 2,950 2,950 2,950 2,600 2,950 2,600 2,950 2,950 34,750 (350) Engineering Fees 15,000 1,362 1,437 1,437 1,437 1,362 1,437 1,350 1,250 1,250 1,250 1,250 1,250 16,070 (1,070) Financial Advisor Fees 485 - - 346 ------346 139 Other Consulting Fees 7,500 ------7,500 7,500 - Tax Collector/Appraisal Fees 3,000 - 267 315 - - 315 - - 750 - - 750 2,397 603 Audit Fees 13,750 - - 10,500 - 3,500 ------14,000 (250) Subtotal-Professional Fees 128,135 6,981 6,719 19,094 9,391 13,793 11,115 8,787 8,350 9,450 8,350 8,700 16,950 127,680 455

Total Expenditures 591,169 37,900 42,242 50,951 40,849 51,998 49,301 42,747 43,457 61,273 47,431 50,272 63,301 581,722 9,447

Other Financing Sources (Uses) Interfund Transfers (1,113,675) (75,639) (56,596) (94,821) (54,841) (235,497) (71,412) (107,746) (65,496) (72,623) (58,269) (59,395) (244,086) (1,196,422) 82,747

Total Other Financing Sources/(Uses) (1,113,675) (75,639) (56,596) (94,821) (54,841) (235,497) (71,412) (107,746) (65,496) (72,623) (58,269) (59,395) (244,086) (1,196,422) 82,747

Excess/(Deficiency) of Revenues over Expenditures $ 140,905 $ 41,879 $ 39,516 $ 189,869 $ 89,005 $ (167,651) $ 5,024 $ (31,569) $ 30,958 $ 15,348 $ 46,129 $ 48,306 $ (149,986) $ 156,828 $ 15,923 22 of 102

See Accountants' Report.

Travis County Municipal Utility District No. 2 Cash Account Reconciliations April 30, 2020

Prosperity Bank Compass Operating Manager's Lockbox Total

Beginning Bank Balance 4/01/2020 $ 441,150.02 $ 107,200.12 $ 216,155.84 $ 764,505.98 Cleared Transactions Checks and Payments (300,147.35) (296,688.36) (190,018.00) (786,853.71) Deposits and Credits 83,792.37 310,385.43 67,060.65 461,238.45

Total Cleared Transactions (216,354.98) 13,697.07 (122,957.35) (325,615.26)

Ending Bank Balance 4/30/2020 224,795.04 120,897.19 93,198.49 438,890.72

Uncleared Transactions Deposits in Transit 3,411.39 - - 3,411.39 Checks 6195 03/12/2020 Attorney General of The State of Texas - (2,410.00) - (2,410.00) 6199 03/24/2020 Billy M. Speedy - (5.80) - (5.80) 6200 03/24/2020 Buffington Texas Classic Homes - (173.23) - (173.23) 6201 03/24/2020 Jose Loredo - (38.75) - (38.75) 6204 04/01/2020 Debora C. Pickens - (138.53) - (138.53) 6214 04/01/2020 Bott & Douthitt, P.L.L.C. - (2,950.00) - (2,950.00) 6220 04/16/2020 Andrea Garza - (74.80) - (74.80) 6221 04/16/2020 Jason T. Brockdorf - (45.05) - (45.05) 6222 04/16/2020 Jessica Harper / Natalie Harper - (12.43) - (12.43) 6223 04/16/2020 Larimen Wallace - (11.71) - (11.71) 6226 04/16/2020 Rita Glass - (190.55) - (190.55) 6227 04/20/2020 US Treasury - (903.14) - (903.14)

See Accountants' Report.

23 of 102 Travis County MUD 2 - GOF A/P Aging Summary As of April 30, 2020

Current 1 - 30 31 - 60 61 - 90 > 90 TOTAL

Armbrust & Brown, P.L.L.C. 4,487.00 6,413.13 0.00 0.00 0.00 10,900.13 BLX Group, LLC 1,000.00 0.00 0.00 0.00 0.00 1,000.00 Bott & Douthitt, P.L.L.C. 3,118.71 0.00 0.00 0.00 0.00 3,118.71 City of Manor 15,813.97 0.00 0.00 0.00 0.00 15,813.97 City of Round Rock Environmental Services 60.00 60.00 0.00 0.00 0.00 120.00 Crossroads Utility Services 13,531.79 0.00 0.00 0.00 0.00 13,531.79 Schroeder Engineering Co 1,350.00 0.00 0.00 0.00 0.00 1,350.00 Texascapes 0.00 850.00 0.00 0.00 0.00 850.00 Victor O Schinnerer & Co, Inc. 0.00 416.00 0.00 0.00 0.00 416.00

TOTAL 39,361.47 7,739.13 0.00 0.00 0.00 47,100.60

See Accountants' Report.

24 of 102 Travis County MUD 2 - GOF Payroll Summary October 2019 through April 2020

Debora C. Pickens Michael E. Moore Raymond C. Mura Tracy T. Johnson Wilmer Roberts TOTAL

Employee Wages, Taxes and Adjustments Gross Pay Director Fees 600.00 450.00 1,500.00 750.00 2,100.00 5,400.00 Toll 0.00 0.00 0.00 0.00 15.26 15.26

Total Gross Pay 600.00 450.00 1,500.00 750.00 2,115.26 5,415.26

Adjusted Gross Pay 600.00 450.00 1,500.00 750.00 2,115.26 5,415.26

Taxes Withheld Federal Withholding 0.00 0.00 (500.00) 0.00 (520.00) (1,020.00) Medicare Employee (8.70) (6.53) (21.75) (10.88) (30.45) (78.31) Social Security Employee (37.20) (27.90) (93.00) (46.50) (130.20) (334.80) Medicare Employee Addl Tax 0.00 0.00 0.00 0.00 0.00 0.00

Total Taxes Withheld (45.90) (34.43) (614.75) (57.38) (680.65) (1,433.11)

Additions to Net Pay Mileage Reimbursement 52.20 32.70 71.92 95.70 191.40 443.92

Total Additions to Net Pay 52.20 32.70 71.92 95.70 191.40 443.92

Net Pay 606.30 448.27 957.17 788.32 1,626.01 4,426.07

Employer Taxes and Contributions Medicare Company 8.70 6.53 21.75 10.88 30.45 78.31 Social Security Company 37.20 27.90 93.00 46.50 130.20 334.80

Total Employer Taxes and Contributions 45.90 34.43 114.75 57.38 160.65 413.11 25 of 102

See Accountants' Report. Travis County MUD 2 - GOF Adjustments Journal April 2020

Date Num Memo Account Debit Credit

04/30/2020 4.1 Record funds transfer 1115 · TexPool - Operating Account 7,715.39 Record funds transfer 1178 · Due From SRF 7,715.39

7,715.39 7,715.39

04/30/2020 4.2 Record tax collections 1178 · Due From SRF 158.67 Record tax collections 1150 · Taxes Receivable 171.81 Record tax collections 2800 · Deferred Taxes 171.81 Record tax collections 4320 · Property Tax 152.48 Record tax collections 4325 · Property Tax Penalty 6.19

330.48 330.48

04/30/2020 4.3 Record monthly ACH receipts 1100 · Cash - Properity Operating 10,804.25 Record monthly ACH receipts 1120 · A/R - Service Accounts 10,804.25

10,804.25 10,804.25

04/30/2020 4.4 Record adjustment for deposits applied/refu... 4100 · Service Revenue - Water 516.12 Record adjustment for deposits applied/refu... 1120 · A/R - Service Accounts 516.12

516.12 516.12

04/30/2020 4.5 Record deposit adjustment 2161 · Customer Meter Deposits 1,300.00 Record deposit adjustment 4100 · Service Revenue - Water 1,300.00

1,300.00 1,300.00

04/30/2020 4.6 Record B&C reports 1120 · A/R - Service Accounts 130,438.30 Record B&C reports 4310 · Service - Penalties & Interest 64.44 Record B&C reports 4100 · Service Revenue - Water 36,464.42 Record B&C reports 4200 · Service Revenue - Sewer 30,699.00 Record B&C reports 2139 · Due to TCEQ 563.73 Record B&C reports 4280 · Basic Services 46,392.19 Record B&C reports 2161 · Customer Meter Deposits 800.00 Record B&C reports 2001 · Master District Payable 5,700.00 Record B&C reports 2120 · Impact Fees Payable 5,700.00 Record B&C reports 4220 · Inspection Fees 600.00 Record B&C reports 1156 · A/R Other 50.00 Record B&C reports 4150 · Water Tap Connections 1,800.00 Record B&C reports 4160 · Wastewater Tap Connections 1,800.00 Record B&C reports 4100 · Service Revenue - Water 66.60

130,569.34 130,569.34

04/30/2020 4.7 Reclass water capacity fees 2120 · Impact Fees Payable 5,700.00 Reclass water capacity fees 2001 · Master District Payable 5,700.00

5,700.00 5,700.00

04/30/2020 4.8 Returned Check 1100 · Cash - Properity Operating 132.35 Returned Check 1157 · Returned Items 132.35

132.35 132.35

04/30/2020 4.9 Record master district charges 8050 · Interfund Trans PART GOF To... 107,745.92 Record master district charges 2001 · Master District Payable 107,745.92

107,745.92 107,745.92

04/30/2020 4.10 Record SR2020 Refunding 1156 · A/R Other 900.00 Record SR2020 Refunding 1173 · Due From DSF 900.00

900.00 900.00

TOTAL 265,713.85 265,713.85

See Accountants' Report.

26 of 102 Travis County MUD 2 - GOF General Ledger As of April 30, 2020

Type Date Num Source Name Memo Amount Balance

1100 · Cash - Properity Operating 442,210.25 Deposit 04/01/2020 ECheck 326.56 442,536.81 Deposit 04/01/2020 Credit Card 1,599.36 444,136.17 Deposit 04/02/2020 Credit Card 984.98 445,121.15 Deposit 04/03/2020 Credit Card 1,045.47 446,166.62 Deposit 04/03/2020 ECheck 89.29 446,255.91 Deposit 04/05/2020 ECheck 123.82 446,379.73 Deposit 04/06/2020 Credit Card 502.53 446,882.26 Deposit 04/06/2020 Credit Card 146.62 447,028.88 Deposit 04/06/2020 Credit Card 103.31 447,132.19 Transfer 04/07/2020 Funds Transfer (300,000.00) 147,132.19 Deposit 04/07/2020 Credit Card 787.83 147,920.02 Deposit 04/08/2020 Credit Card 191.81 148,111.83 Deposit 04/09/2020 ECheck 510.97 148,622.80 Deposit 04/10/2020 Credit Card 5,296.31 153,919.11 Deposit 04/12/2020 ECheck 209.86 154,128.97 Deposit 04/13/2020 ECheck 258.86 154,387.83 Deposit 04/13/2020 Credit Card 1,010.18 155,398.01 Deposit 04/13/2020 Credit Card 666.80 156,064.81 Deposit 04/13/2020 Credit Card 1,741.12 157,805.93 Deposit 04/14/2020 ECheck 582.24 158,388.17 Deposit 04/14/2020 Credit Card 3,432.91 161,821.08 Deposit 04/15/2020 ECheck 586.52 162,407.60 Deposit 04/15/2020 Credit Card 1,646.84 164,054.44 Deposit 04/16/2020 ECheck 103.31 164,157.75 Deposit 04/16/2020 Credit Card 3,035.50 167,193.25 Deposit 04/17/2020 ECheck 213.26 167,406.51 Deposit 04/17/2020 Credit Card 3,379.29 170,785.80 Deposit 04/19/2020 ECheck 131.35 170,917.15 Deposit 04/20/2020 ECheck 965.33 171,882.48 Deposit 04/20/2020 Credit Card 2,418.01 174,300.49 Deposit 04/20/2020 Credit Card 1,483.79 175,784.28 Deposit 04/20/2020 Credit Card 848.30 176,632.58 Deposit 04/21/2020 Credit Card 1,560.72 178,193.30 Deposit 04/22/2020 Credit Card 1,029.67 179,222.97 Deposit 04/23/2020 Credit Card 992.73 180,215.70 Deposit 04/24/2020 ECheck 75.27 180,290.97 Deposit 04/24/2020 Credit Card 2,156.24 182,447.21 Deposit 04/26/2020 ECheck 246.64 182,693.85 Deposit 04/27/2020 ECheck 265.25 182,959.10 Deposit 04/27/2020 Credit Card 2,565.57 185,524.67 Deposit 04/27/2020 Credit Card 1,685.98 187,210.65 Deposit 04/27/2020 Credit Card 1,309.29 188,519.94 Deposit 04/28/2020 Credit Card 11,502.79 200,022.73 Deposit 04/28/2020 Credit Card 10,905.06 210,927.79 Deposit 04/28/2020 Credit Card 1,849.19 212,776.98 Deposit 04/29/2020 Credit Card 1,361.16 214,138.14 Deposit 04/30/2020 ECheck 2,309.17 216,447.31 Deposit 04/30/2020 Credit Card 1,102.22 217,549.53 General Journal 04/30/2020 4.3 Record monthly ACH receipts 10,804.25 228,353.78 General Journal 04/30/2020 4.8 Returned Check (132.35) 228,221.43 Check 04/30/2020 Service Charge (15.00) 228,206.43

Total 1100 · Cash - Properity Operating (214,003.82) 228,206.43

1110 · Cash - Prosperity Bookkeeper's 104,003.89 Paycheck 04/01/2020 6204 Debora C. Pickens (138.53) 103,865.36 Paycheck 04/01/2020 6205 Michael E. Moore VOID: 0.00 103,865.36 Paycheck 04/01/2020 6206 Raymond C. Mura (88.53) 103,776.83 Paycheck 04/01/2020 6207 Tracy T. Johnson VOID: 0.00 103,776.83 Paycheck 04/01/2020 6208 Wilmer Roberts (98.53) 103,678.30 Bill Pmt -Check 04/01/2020 6209 Armbrust & Brown, P.L.L.C. Legal Fees - February 2020 (5,981.56) 97,696.74 Bill Pmt -Check 04/01/2020 6210 Schroeder Engineering Co (6,050.89) 91,645.85 Bill Pmt -Check 04/01/2020 6211 Wilbarger Creek MUD No 2 MASTER (11,400.00) 80,245.85 Bill Pmt -Check 04/01/2020 6212 Wilbarger Creek MUD No 2 MASTER Record master district charges (235,497.37) (155,251.52) Paycheck 04/01/2020 6213 Raymond C. Mura (88.52) (155,340.04) Bill Pmt -Check 04/01/2020 6214 Bott & Douthitt, P.L.L.C. Accounting Fees - March 2020 (2,950.00) (158,290.04) Bill Pmt -Check 04/01/2020 6215 Crossroads Utility Services Operations & Management - March 2020 (16,377.85) (174,667.89) Bill Pmt -Check 04/01/2020 6216 Schroeder Engineering Co Engineering Fees - March 2020 (1,436.60) (176,104.49) Transfer 04/03/2020 Funds Transfer 280,385.43 104,280.94 Transfer 04/03/2020 Funds Transfer 30,000.00 134,280.94 Bill Pmt -Check 04/06/2020 6217 Capital Metro 5/3/20-5/2/21 License Agreement WW Line (525.26) 133,755.68 Bill Pmt -Check 04/06/2020 6218 City of Manor Garbage Service - March 2020 (15,761.20) 117,994.48 Paycheck 04/08/2020 6219 Wilmer Roberts Director Fees - March 6, 2020 and April 6, 2020 (218.37) 117,776.11 Bill Pmt -Check 04/16/2020 6220 Andrea Garza Customer Refund (74.80) 117,701.31 Bill Pmt -Check 04/16/2020 6221 Jason T. Brockdorf Customer Refund (45.05) 117,656.26 Bill Pmt -Check 04/16/2020 6222 Jessica Harper / Natalie Harper Customer Refund (12.43) 117,643.83 Bill Pmt -Check 04/16/2020 6223 Larimen Wallace Customer Refund (11.71) 117,632.12 Bill Pmt -Check 04/16/2020 6224 Michael Sievers Customer Refund (292.13) 117,339.99 Bill Pmt -Check 04/16/2020 6225 Olga Morquecho / Habib Mashhadi Customer Refund (157.21) 117,182.78 Bill Pmt -Check 04/16/2020 6226 Rita Glass Customer Refund (190.55) 116,992.23 Liability Check 04/20/2020 6227 US Treasury 74-2852060 Form 941 Qtr ended 3/31/20 (903.14) 116,089.09 Check 04/30/2020 Service Charge (2,145.89) 113,943.20

Total 1110 · Cash - Prosperity Bookkeeper's 9,939.31 113,943.20

1112 · Cash - Compass Lockbox 216,155.84 Deposit 04/01/2020 Lockbox 123.60 216,279.44 Deposit 04/02/2020 Deposit 100.00 216,379.44 Deposit 04/02/2020 Lockbox 247.45 216,626.89 Transfer 04/03/2020 Funds Transfer (190,000.00) 26,626.89 Deposit 04/03/2020 Lockbox 129.00 26,755.89 Deposit 04/06/2020 Deposit 5,252.73 32,008.62 Deposit 04/06/2020 Deposit 5,252.73 37,261.35 Deposit 04/06/2020 Deposit 10,505.46 47,766.81 Deposit 04/06/2020 Deposit 21,010.92 68,777.73 Deposit 04/06/2020 Deposit 5,252.73 74,030.46 Deposit 04/06/2020 Lockbox 304.27 74,334.73 Deposit 04/07/2020 Lockbox 142.61 74,477.34 Deposit 04/10/2020 Lockbox 255.94 74,733.28 Deposit 04/13/2020 Lockbox 256.57 74,989.85 Deposit 04/14/2020 Lockbox 383.26 75,373.11 Deposit 04/15/2020 Lockbox 85.00 75,458.11 Deposit 04/16/2020 Lockbox 1,857.26 77,315.37 Deposit 04/17/2020 Lockbox 2,144.50 79,459.87 Deposit 04/20/2020 Lockbox 3,112.78 82,572.65

See Accountant's Report.

27 of 102 Travis County MUD 2 - GOF General Ledger As of April 30, 2020

Type Date Num Source Name Memo Amount Balance

Deposit 04/21/2020 Lockbox 1,976.86 84,549.51 Deposit 04/22/2020 Lockbox 684.60 85,234.11 Deposit 04/23/2020 Deposit 872.69 86,106.80 Deposit 04/23/2020 Lockbox 3,095.46 89,202.26 Deposit 04/24/2020 Lockbox 2,578.66 91,780.92 Deposit 04/27/2020 Lockbox 756.63 92,537.55 Deposit 04/28/2020 Lockbox 180.68 92,718.23 Deposit 04/29/2020 Lockbox 469.17 93,187.40 Check 04/30/2020 Service Charge (18.00) 93,169.40 Deposit 04/30/2020 Interest 29.09 93,198.49

Total 1112 · Cash - Compass Lockbox (122,957.35) 93,198.49

1115 · TexPool - Operating Account 2,868,401.81 Transfer 04/03/2020 Funds Transfer 190,000.00 3,058,401.81 Transfer 04/03/2020 Funds Transfer (280,385.43) 2,778,016.38 Transfer 04/03/2020 Funds Transfer (30,000.00) 2,748,016.38 Transfer 04/07/2020 Funds Transfer 300,000.00 3,048,016.38 General Journal 04/30/2020 4.1 Record funds transfer 7,715.39 3,055,731.77 Deposit 04/30/2020 Interest 1,111.34 3,056,843.11

Total 1115 · TexPool - Operating Account 188,441.30 3,056,843.11

1120 · A/R - Service Accounts 166,058.99 Deposit 04/01/2020 ECheck (326.56) 165,732.43 Deposit 04/01/2020 Credit Card (1,599.36) 164,133.07 Deposit 04/01/2020 Lockbox (123.60) 164,009.47 Deposit 04/02/2020 Deposit (100.00) 163,909.47 Deposit 04/02/2020 Credit Card (984.98) 162,924.49 Deposit 04/02/2020 Lockbox (247.45) 162,677.04 Deposit 04/03/2020 Credit Card (1,045.47) 161,631.57 Deposit 04/03/2020 Lockbox (129.00) 161,502.57 Deposit 04/03/2020 ECheck (89.29) 161,413.28 Deposit 04/05/2020 ECheck (123.82) 161,289.46 Deposit 04/06/2020 Deposit (5,252.73) 156,036.73 Deposit 04/06/2020 Deposit (5,252.73) 150,784.00 Deposit 04/06/2020 Deposit (10,505.46) 140,278.54 Deposit 04/06/2020 Deposit (21,010.92) 119,267.62 Deposit 04/06/2020 Deposit (5,252.73) 114,014.89 Deposit 04/06/2020 Credit Card (502.53) 113,512.36 Deposit 04/06/2020 Credit Card (146.62) 113,365.74 Deposit 04/06/2020 Credit Card (103.31) 113,262.43 Deposit 04/06/2020 Lockbox (304.27) 112,958.16 Deposit 04/07/2020 Credit Card (787.83) 112,170.33 Deposit 04/07/2020 Lockbox (142.61) 112,027.72 Deposit 04/08/2020 Credit Card (191.81) 111,835.91 Deposit 04/09/2020 ECheck (510.97) 111,324.94 Deposit 04/10/2020 Credit Card (5,296.31) 106,028.63 Deposit 04/10/2020 Lockbox (255.94) 105,772.69 Deposit 04/12/2020 ECheck (209.86) 105,562.83 Deposit 04/13/2020 ECheck (258.86) 105,303.97 Deposit 04/13/2020 Credit Card (1,010.18) 104,293.79 Deposit 04/13/2020 Credit Card (666.80) 103,626.99 Deposit 04/13/2020 Credit Card (1,741.12) 101,885.87 Deposit 04/13/2020 Lockbox (256.57) 101,629.30 Deposit 04/14/2020 ECheck (582.24) 101,047.06 Deposit 04/14/2020 Credit Card (3,432.91) 97,614.15 Deposit 04/14/2020 Lockbox (383.26) 97,230.89 Deposit 04/15/2020 ECheck (586.52) 96,644.37 Deposit 04/15/2020 Credit Card (1,646.84) 94,997.53 Deposit 04/15/2020 Lockbox (85.00) 94,912.53 Deposit 04/16/2020 ECheck (103.31) 94,809.22 Deposit 04/16/2020 Credit Card (3,035.50) 91,773.72 Deposit 04/16/2020 Lockbox (1,857.26) 89,916.46 Deposit 04/17/2020 ECheck (213.26) 89,703.20 Deposit 04/17/2020 Credit Card (3,379.29) 86,323.91 Deposit 04/17/2020 Lockbox (2,144.50) 84,179.41 Deposit 04/19/2020 ECheck (131.35) 84,048.06 Deposit 04/20/2020 ECheck (965.33) 83,082.73 Deposit 04/20/2020 Credit Card (2,418.01) 80,664.72 Deposit 04/20/2020 Credit Card (1,483.79) 79,180.93 Deposit 04/20/2020 Credit Card (848.30) 78,332.63 Deposit 04/20/2020 Lockbox (3,112.78) 75,219.85 Deposit 04/21/2020 Credit Card (1,560.72) 73,659.13 Deposit 04/21/2020 Lockbox (1,976.86) 71,682.27 Deposit 04/22/2020 Credit Card (1,029.67) 70,652.60 Deposit 04/22/2020 Lockbox (684.60) 69,968.00 Deposit 04/23/2020 Credit Card (992.73) 68,975.27 Deposit 04/23/2020 Deposit (872.69) 68,102.58 Deposit 04/23/2020 Lockbox (3,095.46) 65,007.12 Deposit 04/24/2020 ECheck (75.27) 64,931.85 Deposit 04/24/2020 Credit Card (2,156.24) 62,775.61 Deposit 04/24/2020 Lockbox (2,578.66) 60,196.95 Deposit 04/26/2020 ECheck (246.64) 59,950.31 Deposit 04/27/2020 ECheck (265.25) 59,685.06 Deposit 04/27/2020 Credit Card (2,565.57) 57,119.49 Deposit 04/27/2020 Credit Card (1,685.98) 55,433.51 Deposit 04/27/2020 Credit Card (1,309.29) 54,124.22 Deposit 04/27/2020 Lockbox (756.63) 53,367.59 Deposit 04/28/2020 Credit Card (11,502.79) 41,864.80 Deposit 04/28/2020 Credit Card (10,905.06) 30,959.74 Deposit 04/28/2020 Credit Card (1,849.19) 29,110.55 Deposit 04/28/2020 Lockbox (180.68) 28,929.87 Deposit 04/29/2020 Credit Card (1,361.16) 27,568.71 Deposit 04/29/2020 Lockbox (469.17) 27,099.54 Deposit 04/30/2020 ECheck (2,309.17) 24,790.37 Deposit 04/30/2020 Credit Card (1,102.22) 23,688.15 General Journal 04/30/2020 4.3 Record monthly ACH receipts (10,804.25) 12,883.90 General Journal 04/30/2020 4.4 Record adjustment for deposits applied/refunded (516.12) 12,367.78 General Journal 04/30/2020 4.6 Record B&C reports 114,064.06 126,431.84 General Journal 04/30/2020 4.6 Record B&C reports 16,374.24 142,806.08

Total 1120 · A/R - Service Accounts (23,252.91) 142,806.08

1157 · Returned Items (41.12)

See Accountant's Report.

28 of 102 Travis County MUD 2 - GOF General Ledger As of April 30, 2020

Type Date Num Source Name Memo Amount Balance

General Journal 04/30/2020 4.8 Returned Check 132.35 91.23

Total 1157 · Returned Items 132.35 91.23

1151 · Accrued Service Revenue 24,126.77 Total 1151 · Accrued Service Revenue 24,126.77

1150 · Taxes Receivable 8,732.11 General Journal 04/30/2020 4.2 Record tax collections (171.81) 8,560.30

Total 1150 · Taxes Receivable (171.81) 8,560.30

1156 · A/R Other 47.57 Bill 04/20/2020 6946 Crossroads Utility Services 13116 Craven 50.00 97.57 General Journal 04/30/2020 4.6 Record B&C reports (50.00) 47.57 General Journal 04/30/2020 4.10 Record SR2020 Refunding 900.00 947.57

Total 1156 · A/R Other 900.00 947.57

1173 · Due From DSF 4,373.95 Bill 04/22/2020 42182-... BLX Group, LLC Arbitrage Reviiew - SR2015 Refunding 1,000.00 5,373.95 General Journal 04/30/2020 4.10 Record SR2020 Refunding (900.00) 4,473.95

Total 1173 · Due From DSF 100.00 4,473.95

1174 · Due From CPF 38,650.89 Total 1174 · Due From CPF 38,650.89

1178 · Due From SRF 10,157.62 General Journal 04/30/2020 4.1 Record funds transfer (7,715.39) 2,442.23 General Journal 04/30/2020 4.2 Record tax collections 158.67 2,600.90

Total 1178 · Due From SRF (7,556.72) 2,600.90

1620 · Prepaid Insurance 780.00 Total 1620 · Prepaid Insurance 780.00

1840 · Due From Developer 1,843.56 Total 1840 · Due From Developer 1,843.56

2000 · Accounts Payable (55,556.49) Bill Pmt -Check 04/01/2020 6209 Armbrust & Brown, P.L.L.C. Legal Fees - February 2020 5,981.56 (49,574.93) Bill Pmt -Check 04/01/2020 6210 Schroeder Engineering Co 6,050.89 (43,524.04) Bill Pmt -Check 04/01/2020 6214 Bott & Douthitt, P.L.L.C. Accounting Fees - March 2020 2,950.00 (40,574.04) Bill Pmt -Check 04/01/2020 6215 Crossroads Utility Services Operations & Management - March 2020 16,377.85 (24,196.19) Bill Pmt -Check 04/01/2020 6216 Schroeder Engineering Co Engineering Fees - March 2020 1,436.60 (22,759.59) Bill 04/01/2020 25262 Texascapes Landscape Maintenance - Drainage Channel (850.00) (23,609.59) Bill Pmt -Check 04/06/2020 6217 Capital Metro 5/3/20-5/2/21 License Agreement WW Line 525.26 (23,084.33) Bill Pmt -Check 04/06/2020 6218 City of Manor Garbage Service - March 2020 15,761.20 (7,323.13) Bill 04/09/2020 072-05... Michael Sievers Customer Refund (292.13) (7,615.26) Bill 04/09/2020 072-10... Andrea Garza Customer Refund (74.80) (7,690.06) Bill 04/09/2020 072-10... Jessica Harper / Natalie Harper Customer Refund (12.43) (7,702.49) Bill 04/09/2020 072-33... Olga Morquecho / Habib Mashhadi Customer Refund (157.21) (7,859.70) Bill 04/09/2020 072-53... Rita Glass Customer Refund (190.55) (8,050.25) Bill 04/09/2020 072-61... Jason T. Brockdorf Customer Refund (45.05) (8,095.30) Bill 04/09/2020 072-63... Larimen Wallace Customer Refund (11.71) (8,107.01) Bill Pmt -Check 04/16/2020 6220 Andrea Garza Customer Refund 74.80 (8,032.21) Bill Pmt -Check 04/16/2020 6221 Jason T. Brockdorf Customer Refund 45.05 (7,987.16) Bill Pmt -Check 04/16/2020 6222 Jessica Harper / Natalie Harper Customer Refund 12.43 (7,974.73) Bill Pmt -Check 04/16/2020 6223 Larimen Wallace Customer Refund 11.71 (7,963.02) Bill Pmt -Check 04/16/2020 6224 Michael Sievers Customer Refund 292.13 (7,670.89) Bill Pmt -Check 04/16/2020 6225 Olga Morquecho / Habib Mashhadi Customer Refund 157.21 (7,513.68) Bill Pmt -Check 04/16/2020 6226 Rita Glass Customer Refund 190.55 (7,323.13) Bill 04/17/2020 13547... Victor O Schinnerer & Co, Inc. Director Bond Renewal 6/1/20-6/1-23 Policy #61... (416.00) (7,739.13) Bill 04/20/2020 6946 Crossroads Utility Services Operations & Management - April 2020 (13,531.79) (21,270.92) Bill 04/22/2020 42182-... BLX Group, LLC Arbitrage Reviiew - SR2015 Refunding (1,000.00) (22,270.92) Bill 04/30/2020 April 2... City of Manor Garbage Service - April 2020 (15,813.97) (38,084.89) Bill 04/30/2020 8945 Bott & Douthitt, P.L.L.C. Accounting Fees - April 2020 (3,118.71) (41,203.60) Bill 04/30/2020 April 2... Schroeder Engineering Co Engineering Fees - April 2020 (1,350.00) (42,553.60) Bill 04/30/2020 163528 Armbrust & Brown, P.L.L.C. Legal Fees - April 2020 (4,487.00) (47,040.60) Bill 04/30/2020 218-04... City of Round Rock Environmental Services Lab fees - April 2020 (60.00) (47,100.60)

Total 2000 · Accounts Payable 8,455.89 (47,100.60)

2001 · Master District Payable (352,509.49) Bill Pmt -Check 04/01/2020 6211 Wilbarger Creek MUD No 2 MASTER 11,400.00 (341,109.49) Bill Pmt -Check 04/01/2020 6212 Wilbarger Creek MUD No 2 MASTER Record master district charges 235,497.37 (105,612.12) General Journal 04/30/2020 4.6 Record B&C reports (5,700.00) (111,312.12) General Journal 04/30/2020 4.7 Reclass water capacity fees (5,700.00) (117,012.12) General Journal 04/30/2020 4.9 Record master district charges (107,745.92) (224,758.04)

Total 2001 · Master District Payable 127,751.45 (224,758.04)

2100 · Payroll Liabilities (903.14) Paycheck 04/01/2020 6204 Debora C. Pickens 0.00 (903.14) Paycheck 04/01/2020 6204 Debora C. Pickens 0.00 (903.14) Paycheck 04/01/2020 6204 Debora C. Pickens (9.30) (912.44) Paycheck 04/01/2020 6204 Debora C. Pickens (9.30) (921.74) Paycheck 04/01/2020 6204 Debora C. Pickens (2.17) (923.91) Paycheck 04/01/2020 6204 Debora C. Pickens (2.17) (926.08) Paycheck 04/01/2020 6205 Michael E. Moore VOID: 0.00 (926.08) Paycheck 04/01/2020 6205 Michael E. Moore VOID: 0.00 (926.08) Paycheck 04/01/2020 6205 Michael E. Moore VOID: 0.00 (926.08) Paycheck 04/01/2020 6205 Michael E. Moore VOID: 0.00 (926.08) Paycheck 04/01/2020 6205 Michael E. Moore VOID: 0.00 (926.08) Paycheck 04/01/2020 6205 Michael E. Moore VOID: 0.00 (926.08) Paycheck 04/01/2020 6206 Raymond C. Mura 0.00 (926.08) Paycheck 04/01/2020 6206 Raymond C. Mura (50.00) (976.08) Paycheck 04/01/2020 6206 Raymond C. Mura (9.30) (985.38) Paycheck 04/01/2020 6206 Raymond C. Mura (9.30) (994.68) Paycheck 04/01/2020 6206 Raymond C. Mura (2.17) (996.85) Paycheck 04/01/2020 6206 Raymond C. Mura (2.17) (999.02) Paycheck 04/01/2020 6207 Tracy T. Johnson VOID: 0.00 (999.02) Paycheck 04/01/2020 6207 Tracy T. Johnson VOID: 0.00 (999.02) Paycheck 04/01/2020 6207 Tracy T. Johnson VOID: 0.00 (999.02) Paycheck 04/01/2020 6207 Tracy T. Johnson VOID: 0.00 (999.02) Paycheck 04/01/2020 6207 Tracy T. Johnson VOID: 0.00 (999.02) Paycheck 04/01/2020 6207 Tracy T. Johnson VOID: 0.00 (999.02) Paycheck 04/01/2020 6208 Wilmer Roberts 0.00 (999.02)

See Accountant's Report.

29 of 102 Travis County MUD 2 - GOF General Ledger As of April 30, 2020

Type Date Num Source Name Memo Amount Balance

Paycheck 04/01/2020 6208 Wilmer Roberts (40.00) (1,039.02) Paycheck 04/01/2020 6208 Wilmer Roberts (9.30) (1,048.32) Paycheck 04/01/2020 6208 Wilmer Roberts (9.30) (1,057.62) Paycheck 04/01/2020 6208 Wilmer Roberts (2.17) (1,059.79) Paycheck 04/01/2020 6208 Wilmer Roberts (2.17) (1,061.96) Paycheck 04/01/2020 6213 Raymond C. Mura 0.00 (1,061.96) Paycheck 04/01/2020 6213 Raymond C. Mura (50.00) (1,111.96) Paycheck 04/01/2020 6213 Raymond C. Mura (9.30) (1,121.26) Paycheck 04/01/2020 6213 Raymond C. Mura (9.30) (1,130.56) Paycheck 04/01/2020 6213 Raymond C. Mura (2.18) (1,132.74) Paycheck 04/01/2020 6213 Raymond C. Mura (2.18) (1,134.92) Paycheck 04/08/2020 6219 Wilmer Roberts Director Fees - March 6, 2020 and April 6, 2020 0.00 (1,134.92) Paycheck 04/08/2020 6219 Wilmer Roberts Director Fees - March 6, 2020 and April 6, 2020 (80.00) (1,214.92) Paycheck 04/08/2020 6219 Wilmer Roberts Director Fees - March 6, 2020 and April 6, 2020 (18.60) (1,233.52) Paycheck 04/08/2020 6219 Wilmer Roberts Director Fees - March 6, 2020 and April 6, 2020 (18.60) (1,252.12) Paycheck 04/08/2020 6219 Wilmer Roberts Director Fees - March 6, 2020 and April 6, 2020 (4.35) (1,256.47) Paycheck 04/08/2020 6219 Wilmer Roberts Director Fees - March 6, 2020 and April 6, 2020 (4.35) (1,260.82) Liability Check 04/20/2020 6227 US Treasury 74-2852060 Form 941 Qtr ended 3/31/20 490.00 (770.82) Liability Check 04/20/2020 6227 US Treasury 74-2852060 Form 941 Qtr ended 3/31/20 39.17 (731.65) Liability Check 04/20/2020 6227 US Treasury 74-2852060 Form 941 Qtr ended 3/31/20 39.17 (692.48) Liability Check 04/20/2020 6227 US Treasury 74-2852060 Form 941 Qtr ended 3/31/20 167.40 (525.08) Liability Check 04/20/2020 6227 US Treasury 74-2852060 Form 941 Qtr ended 3/31/20 167.40 (357.68)

Total 2100 · Payroll Liabilities 545.46 (357.68)

2120 · Impact Fees Payable 0.00 General Journal 04/30/2020 4.6 Record B&C reports (5,700.00) (5,700.00) General Journal 04/30/2020 4.7 Reclass water capacity fees 5,700.00 0.00

Total 2120 · Impact Fees Payable 0.00 0.00

2139 · Due to TCEQ (1,587.07) General Journal 04/30/2020 4.6 Record B&C reports (561.21) (2,148.28) General Journal 04/30/2020 4.6 Record B&C reports (2.52) (2,150.80)

Total 2139 · Due to TCEQ (563.73) (2,150.80)

2161 · Customer Meter Deposits (163,576.75) General Journal 04/30/2020 4.5 Record deposit adjustment 1,300.00 (162,276.75) General Journal 04/30/2020 4.6 Record B&C reports (800.00) (163,076.75)

Total 2161 · Customer Meter Deposits 500.00 (163,076.75)

2626 · Review Fee - Medical Center (1,750.00) Total 2626 · Review Fee - Medical Center (1,750.00)

2770 · Unclaimed Property (4,471.15) Total 2770 · Unclaimed Property (4,471.15)

2800 · Deferred Taxes (8,732.11) General Journal 04/30/2020 4.2 Record tax collections 171.81 (8,560.30)

Total 2800 · Deferred Taxes 171.81 (8,560.30)

3010 · Unallocated Fund Balance (3,098,774.00) Total 3010 · Unallocated Fund Balance (3,098,774.00)

Property Tax Revenue (282,972.64) 4320 · Property Tax (282,664.92) General Journal 04/30/2020 4.2 Record tax collections (152.48) (282,817.40)

Total 4320 · Property Tax (152.48) (282,817.40)

4325 · Property Tax Penalty (307.72) General Journal 04/30/2020 4.2 Record tax collections (6.19) (313.91)

Total 4325 · Property Tax Penalty (6.19) (313.91)

Total Property Tax Revenue (158.67) (283,131.31)

Service Revenue (701,179.36) 4280 · Basic Services (267,730.32) General Journal 04/30/2020 4.6 Record B&C reports (46,295.37) (314,025.69) General Journal 04/30/2020 4.6 Record B&C reports (96.82) (314,122.51)

Total 4280 · Basic Services (46,392.19) (314,122.51)

4100 · Service Revenue - Water (245,620.64) Bill 04/09/2020 072-05... Michael Sievers Customer Refund 292.13 (245,328.51) Bill 04/09/2020 072-10... Andrea Garza Customer Refund 74.80 (245,253.71) Bill 04/09/2020 072-10... Jessica Harper / Natalie Harper Customer Refund 12.43 (245,241.28) Bill 04/09/2020 072-33... Olga Morquecho / Habib Mashhadi Customer Refund 157.21 (245,084.07) Bill 04/09/2020 072-53... Rita Glass Customer Refund 190.55 (244,893.52) Bill 04/09/2020 072-61... Jason T. Brockdorf Customer Refund 45.05 (244,848.47) Bill 04/09/2020 072-63... Larimen Wallace Customer Refund 11.71 (244,836.76) General Journal 04/30/2020 4.4 Record adjustment for deposits applied/refunded 516.12 (244,320.64) General Journal 04/30/2020 4.5 Record deposit adjustment (1,300.00) (245,620.64) General Journal 04/30/2020 4.6 Record B&C reports (36,026.23) (281,646.87) General Journal 04/30/2020 4.6 Record B&C reports (158.19) (281,805.06) General Journal 04/30/2020 4.6 Record B&C reports (105.00) (281,910.06) General Journal 04/30/2020 4.6 Record B&C reports (175.00) (282,085.06) General Journal 04/30/2020 4.6 Record B&C reports 66.60 (282,018.46)

Total 4100 · Service Revenue - Water (36,397.82) (282,018.46)

4200 · Service Revenue - Sewer (174,654.10) General Journal 04/30/2020 4.6 Record B&C reports (30,685.86) (205,339.96) General Journal 04/30/2020 4.6 Record B&C reports (13.14) (205,353.10)

Total 4200 · Service Revenue - Sewer (30,699.00) (205,353.10)

4310 · Service - Penalties & Interest (13,174.30) General Journal 04/30/2020 4.6 Record B&C reports 18.56 (13,155.74) General Journal 04/30/2020 4.6 Record B&C reports 45.88 (13,109.86)

Total 4310 · Service - Penalties & Interest 64.44 (13,109.86)

Total Service Revenue (113,424.57) (814,603.93)

4150 · Water Tap Connections (24,600.00)

See Accountant's Report.

30 of 102 Travis County MUD 2 - GOF General Ledger As of April 30, 2020

Type Date Num Source Name Memo Amount Balance

General Journal 04/30/2020 4.6 Record B&C reports (1,800.00) (26,400.00)

Total 4150 · Water Tap Connections (1,800.00) (26,400.00)

4160 · Wastewater Tap Connections (22,200.00) General Journal 04/30/2020 4.6 Record B&C reports (1,800.00) (24,000.00)

Total 4160 · Wastewater Tap Connections (1,800.00) (24,000.00)

4220 · Inspection Fees (7,800.00) General Journal 04/30/2020 4.6 Record B&C reports (600.00) (8,400.00)

Total 4220 · Inspection Fees (600.00) (8,400.00)

5391 · Interest Earned on Temp. Invest (20,937.95) Deposit 04/30/2020 Interest (29.09) (20,967.04) Deposit 04/30/2020 Interest (1,111.34) (22,078.38)

Total 5391 · Interest Earned on Temp. Invest (1,140.43) (22,078.38)

District Facilities 183,579.01 6100 · Management & Operations 58,733.00 Bill 04/20/2020 6946 Crossroads Utility Services Operations & Management - April 2020 10,009.80 68,742.80

Total 6100 · Management & Operations 10,009.80 68,742.80

6130 · Maintenance & Repairs - Water 15,521.58 Bill 04/20/2020 6946 Crossroads Utility Services Operations & Management - April 2020 1,673.43 17,195.01

Total 6130 · Maintenance & Repairs - Water 1,673.43 17,195.01

6230 · Maintenance & Repairs - Sewer 2,404.28 Bill 04/20/2020 6946 Crossroads Utility Services Operations & Management - April 2020 681.84 3,086.12

Total 6230 · Maintenance & Repairs - Sewer 681.84 3,086.12

6250 · Maintenance & Repairs-Drainage 5,100.00 Bill 04/01/2020 25262 Texascapes Landscape Maintenance - Drainage Channel 850.00 5,950.00

Total 6250 · Maintenance & Repairs-Drainage 850.00 5,950.00

6410 · Garbage Expense 92,544.28 Bill 04/30/2020 April 2... City of Manor Garbage Service - April 2020 15,813.97 108,358.25

Total 6410 · Garbage Expense 15,813.97 108,358.25

6210 · Inspection Expense 7,082.02 Bill 04/20/2020 6946 Crossroads Utility Services Operations & Management - April 2020 1,116.72 8,198.74

Total 6210 · Inspection Expense 1,116.72 8,198.74

6150 · Laboratory Fees 463.85 Bill 04/30/2020 218-04... City of Round Rock Environmental Services Lab fees - April 2020 60.00 523.85

Total 6150 · Laboratory Fees 60.00 523.85

6582 · Joint Project-Wastewater Int 1,730.00 Total 6582 · Joint Project-Wastewater Int 1,730.00

Total District Facilities 30,205.76 213,784.77

Administrative Expense 22,569.80 6600 · Payroll Expenses 4,844.27 Paycheck 04/01/2020 6204 Debora C. Pickens 150.00 4,994.27 Paycheck 04/01/2020 6204 Debora C. Pickens 9.30 5,003.57 Paycheck 04/01/2020 6204 Debora C. Pickens 2.17 5,005.74 Paycheck 04/01/2020 6205 Michael E. Moore VOID: 0.00 5,005.74 Paycheck 04/01/2020 6205 Michael E. Moore VOID: 0.00 5,005.74 Paycheck 04/01/2020 6205 Michael E. Moore VOID: 0.00 5,005.74 Paycheck 04/01/2020 6206 Raymond C. Mura 150.00 5,155.74 Paycheck 04/01/2020 6206 Raymond C. Mura 9.30 5,165.04 Paycheck 04/01/2020 6206 Raymond C. Mura 2.17 5,167.21 Paycheck 04/01/2020 6207 Tracy T. Johnson VOID: 0.00 5,167.21 Paycheck 04/01/2020 6207 Tracy T. Johnson VOID: 0.00 5,167.21 Paycheck 04/01/2020 6207 Tracy T. Johnson VOID: 0.00 5,167.21 Paycheck 04/01/2020 6208 Wilmer Roberts 150.00 5,317.21 Paycheck 04/01/2020 6208 Wilmer Roberts 9.30 5,326.51 Paycheck 04/01/2020 6208 Wilmer Roberts 2.17 5,328.68 Paycheck 04/01/2020 6213 Raymond C. Mura 150.00 5,478.68 Paycheck 04/01/2020 6213 Raymond C. Mura 9.30 5,487.98 Paycheck 04/01/2020 6213 Raymond C. Mura 2.18 5,490.16 Paycheck 04/08/2020 6219 Wilmer Roberts Director Fees - March 6, 2020 and April 6, 2020 300.00 5,790.16 Paycheck 04/08/2020 6219 Wilmer Roberts Director Fees - March 6, 2020 and April 6, 2020 18.60 5,808.76 Paycheck 04/08/2020 6219 Wilmer Roberts Director Fees - March 6, 2020 and April 6, 2020 4.35 5,813.11

Total 6600 · Payroll Expenses 968.84 5,813.11

6610 · Director Reimbursement 705.82 Paycheck 04/01/2020 6213 Raymond C. Mura 0.00 705.82 Paycheck 04/08/2020 6219 Wilmer Roberts Director Fees - March 6, 2020 and April 6, 2020 19.14 724.96 Paycheck 04/08/2020 6219 Wilmer Roberts Director Fees - March 6, 2020 and April 6, 2020 2.18 727.14

Total 6610 · Director Reimbursement 21.32 727.14

6440 · Seminar Expense 350.00 Total 6440 · Seminar Expense 350.00

6530 · Insurance & Surety Bond 439.10 Bill 04/17/2020 13547... Victor O Schinnerer & Co, Inc. Director Bond Renewal 6/1/20-6/1-23 Policy #61... 416.00 855.10

Total 6530 · Insurance & Surety Bond 416.00 855.10

6450 · Legal Notices & Other Publ. 317.12 Total 6450 · Legal Notices & Other Publ. 317.12

6570 · Bank Service Charges 15,388.23 Check 04/30/2020 Service Charge 15.00 15,403.23 Check 04/30/2020 Service Charge 2,145.89 17,549.12 Check 04/30/2020 Service Charge 18.00 17,567.12

Total 6570 · Bank Service Charges 2,178.89 17,567.12

See Accountant's Report.

31 of 102 Travis County MUD 2 - GOF General Ledger As of April 30, 2020

Type Date Num Source Name Memo Amount Balance

6560 · Miscellaneous Expense 525.26 Bill 04/30/2020 8945 Bott & Douthitt, P.L.L.C. Check Printing Charge 168.71 693.97

Total 6560 · Miscellaneous Expense 168.71 693.97

Total Administrative Expense 3,753.76 26,323.56

Professional Fees 67,092.58 6330 · Legal Fees 25,629.64 Bill 04/30/2020 163528 Armbrust & Brown, P.L.L.C. Legal Fees - April 2020 4,487.00 30,116.64

Total 6330 · Legal Fees 4,487.00 30,116.64

6430 · Bookkeeping Fees 17,750.00 Bill 04/30/2020 8945 Bott & Douthitt, P.L.L.C. Accounting Fees - April 2020 2,950.00 20,700.00

Total 6430 · Bookkeeping Fees 2,950.00 20,700.00

6350 · Engineering Fees 8,469.60 Bill 04/30/2020 April 2... Schroeder Engineering Co Engineering Fees - April 2020 1,350.00 9,819.60

Total 6350 · Engineering Fees 1,350.00 9,819.60

6490 · Financial Advisor Fees 346.34 Total 6490 · Financial Advisor Fees 346.34

6320 · Tax Assessor/Appraisal 897.00 Total 6320 · Tax Assessor/Appraisal 897.00

6340 · Auditing Fees 14,000.00 Total 6340 · Auditing Fees 14,000.00

Total Professional Fees 8,787.00 75,879.58

8050 · Interfund Trans PART GOF To SRF 588,806.63 General Journal 04/30/2020 4.9 Record master district charges 107,745.92 696,552.55

Total 8050 · Interfund Trans PART GOF To SRF 107,745.92 696,552.55

TOTAL 0.00 0.00

See Accountant's Report.

32 of 102 Special Revenue Fund

33 of 102 Travis County MUD 2 - SRF Adjustments Journal April 2020

Date Num Memo Account Debit Credit

04/30/2020 4.1 Record funds transfer 2730 · Due To GOF 7,715.39 Record funds transfer 2745 · Due to Debt Service Fund 26,080.64 Record funds transfer 2760 · Due to MASTER DSF 22,658.83 Record funds transfer 1130 · TexPool - Tax Account 56,454.86

56,454.86 56,454.86

04/30/2020 4.2 Record tax collections 2730 · Due To GOF 158.67 Record tax collections 2745 · Due to Debt Service Fund 540.55 Record tax collections 1150 · A/R Taxes 487.71 Record tax collections 2610 · Deferred Revenue - Taxes 487.71 Record tax collections 4320 · Property Tax 435.21 Record tax collections 4325 · Property Tax Penalty 17.57 Record tax collections 1130 · TexPool - Tax Account 1,152.00

1,639.71 1,639.71

04/30/2020 4.3 Record master district tax payable 7480 · Interfund Trans SRF to MAST DSF 459.89 Record master district tax payable 2760 · Due to MASTER DSF 459.89

459.89 459.89

04/30/2020 4.4 Record fixed and variable expenses 7380 · Master District Expense 107,745.92 Record fixed and variable expenses 5340 · Interfund Trans PART GOF To SRF 107,745.92

107,745.92 107,745.92

TOTAL 166,300.38 166,300.38

See Accountants' Report.

34 of 102 Travis County MUD 2 - SRF General Ledger As of April 30, 2020

Type Date Num Memo Amount Balance

1130 · TexPool - Tax Account 67,756.88 General Journal 04/30/2020 4.1 Record funds transfer (56,454.86) 11,302.02 General Journal 04/30/2020 4.2 Record tax collections 1,152.00 12,454.02 Deposit 04/30/2020 Interest 7.11 12,461.13

Total 1130 · TexPool - Tax Account (55,295.75) 12,461.13

1150 · A/R Taxes 22,461.03 General Journal 04/30/2020 4.2 Record tax collections (487.71) 21,973.32

Total 1150 · A/R Taxes (487.71) 21,973.32

2610 · Deferred Revenue - Taxes (22,461.03) General Journal 04/30/2020 4.2 Record tax collections 487.71 (21,973.32)

Total 2610 · Deferred Revenue - Taxes 487.71 (21,973.32)

2730 · Due To GOF (10,157.62) General Journal 04/30/2020 4.1 Record funds transfer 7,715.39 (2,442.23) General Journal 04/30/2020 4.2 Record tax collections (158.67) (2,600.90)

Total 2730 · Due To GOF 7,556.72 (2,600.90)

2745 · Due to Debt Service Fund (31,313.84) General Journal 04/30/2020 4.1 Record funds transfer 26,080.64 (5,233.20) General Journal 04/30/2020 4.2 Record tax collections (540.55) (5,773.75)

Total 2745 · Due to Debt Service Fund 25,540.09 (5,773.75)

2760 · Due to MASTER DSF (26,285.42) General Journal 04/30/2020 4.1 Record funds transfer 22,658.83 (3,626.59) General Journal 04/30/2020 4.3 Record master district tax payable (459.89) (4,086.48)

Total 2760 · Due to MASTER DSF 22,198.94 (4,086.48)

Property Taxes (803,428.87) 4320 · Property Tax (802,590.77) General Journal 04/30/2020 4.2 Record tax collections (435.21) (803,025.98)

Total 4320 · Property Tax (435.21) (803,025.98)

4325 · Property Tax Penalty (838.10) General Journal 04/30/2020 4.2 Record tax collections (17.57) (855.67)

Total 4325 · Property Tax Penalty (17.57) (855.67)

Total Property Taxes (452.78) (803,881.65)

5391 · Interest On Temp Investments (4,366.41) Deposit 04/30/2020 Interest (7.11) (4,373.52)

Total 5391 · Interest On Temp Investments (7.11) (4,373.52)

7340 · Tax Assessor/Appraisal 2,546.22 Total 7340 · Tax Assessor/Appraisal 2,546.22

7380 · Master District Expense 586,628.63 General Journal 04/30/2020 4.4 Record fixed and variable expenses 107,745.92 694,374.55

Total 7380 · Master District Expense 107,745.92 694,374.55

7385 · Master District - Reserve 2,178.00 Total 7385 · Master District - Reserve 2,178.00

7480 · Interfund Trans SRF to MAST DSF 804,265.91 General Journal 04/30/2020 4.3 Record master district tax payable 459.89 804,725.80

Total 7480 · Interfund Trans SRF to MAST DSF 459.89 804,725.80

7490 · Financial Advisory Fees 983.15 Total 7490 · Financial Advisory Fees 983.15

5340 · Interfund Trans PART GOF To SRF (588,806.63) General Journal 04/30/2020 4.4 Record fixed and variable expenses (107,745.92) (696,552.55)

Total 5340 · Interfund Trans PART GOF To SRF (107,745.92) (696,552.55)

TOTAL 0.00 0.00

See Accountant's Report.

35 of 102

Debt Service Fund

36 of 102 Travis County M.U.D. No. 2 Debt Service Schedule

Series 2011 Series 2015 Series 2017 Series 2019 Series 2020 Total Due Date Principal Interest Principal Interest Principal Interest Principal Interest Principal Interest Principal Interest

3/1/2015 ------9/1/2015 - - 25,000 43,138 ------25,000 43,138 FY 2015 - - 25,000 43,138 ------25,000 43,138 3/1/2016 - - - 51,516 ------51,516 9/1/2016 - - 25,000 51,516 ------25,000 51,516 FY 2016 - - 25,000 103,032 ------25,000 103,032 3/1/2017 - - - 51,266 - 29,910 - - - - - 81,176 9/1/2017 - - 80,000 51,266 - 94,453 - - - - 80,000 145,719 FY 2017 - - 80,000 102,532 - 124,363 - - - - 80,000 226,895 3/1/2018 - - - 50,466 - 94,453 - - - - - 144,919 9/1/2018 - - 80,000 50,466 100,000 94,453 - - - - 180,000 144,919 FY 2018 - - 80,000 100,932 100,000 188,906 - - - - 180,000 289,838 3/1/2019 - - - 49,666 - 93,453 - - - - - 143,119 9/1/2019 - - 85,000 49,666 110,000 93,453 20,000 5,415 - - 215,000 148,534 FY 2019 - - 85,000 99,332 110,000 186,906 20,000 5,415 - - 215,000 291,653 3/1/2020 - - - 48,391 - 92,353 - 40,188 - - - 180,932 9/1/2020 305,000 9,775 90,000 48,391 110,000 92,353 75,000 40,188 10,000 19,146 590,000 209,853 FY 2020 305,000 9,775 90,000 96,782 110,000 184,706 75,000 80,375 10,000 19,146 590,000 390,784 3/1/2021 - 5,200 - 47,041 - 91,116 - 38,594 - 24,000 - 205,950 9/1/2021 320,000 5,200 90,000 47,041 110,000 91,116 80,000 38,594 20,000 24,000 620,000 205,950 FY 2021 320,000 10,400 90,000 94,082 110,000 182,231 80,000 77,188 20,000 48,000 620,000 411,901 3/1/2022 - - - 45,691 - 89,878 - 36,894 - 23,800 - 196,263 9/1/2022 - - 200,000 45,691 110,000 89,878 80,000 36,894 250,000 23,800 640,000 196,263 FY 2022 - - 200,000 91,382 110,000 179,756 80,000 73,788 250,000 47,600 640,000 392,526 3/1/2023 - - - 42,691 - 88,503 - 35,194 - 21,300 - 187,688 9/1/2023 - - 215,000 42,691 100,000 88,503 85,000 35,194 260,000 21,300 660,000 187,688 FY 2023 - - 215,000 85,382 100,000 177,006 85,000 70,388 260,000 42,600 660,000 375,376 3/1/2024 - - - 39,466 - 87,253 - 33,388 - 18,700 - 178,807 9/1/2024 - - 220,000 39,466 105,000 87,253 85,000 33,388 265,000 18,700 675,000 178,807 FY 2024 - - 220,000 78,932 105,000 174,506 85,000 66,775 265,000 37,400 675,000 357,613 3/1/2025 - - - 36,166 - 85,547 - 31,581 - 16,050 - 169,344 9/1/2025 - - 230,000 36,166 100,000 85,547 85,000 31,581 275,000 16,050 690,000 169,344 FY 2025 - - 230,000 72,332 100,000 171,094 85,000 63,163 275,000 32,100 690,000 338,688 3/1/2026 - - - 32,716 - 83,922 - 29,775 - 13,300 - 159,713 9/1/2026 - - 240,000 32,716 100,000 83,922 90,000 29,775 280,000 13,300 710,000 159,713 FY 2026 - - 240,000 65,432 100,000 167,844 90,000 59,550 280,000 26,600 710,000 319,426 3/1/2027 - - - 29,116 - 82,234 - 27,863 - 10,500 - 149,713 9/1/2027 - - 245,000 29,116 110,000 82,234 90,000 27,863 285,000 10,500 730,000 149,713 FY 2027 - - 245,000 58,232 110,000 164,469 90,000 55,725 285,000 21,000 730,000 299,426 3/1/2028 - - - 25,441 - 80,378 - 26,063 - 7,650 - 139,532 9/1/2028 - - 250,000 25,441 110,000 80,378 95,000 26,063 295,000 7,650 750,000 139,532 FY 2028 - - 250,000 50,882 110,000 160,756 95,000 52,125 295,000 15,300 750,000 279,063 3/1/2029 - - - 21,691 - 78,522 - 24,163 - 4,700 - 129,075 9/1/2029 - - 265,000 21,691 105,000 78,522 95,000 24,163 305,000 4,700 770,000 129,075 FY 2029 - - 265,000 43,382 105,000 157,044 95,000 48,325 305,000 9,400 770,000 258,151 3/1/2030 - - - 17,550 - 76,684 - 22,500 - 1,650 - 118,384 9/1/2030 - - 275,000 17,550 255,000 76,684 100,000 22,500 165,000 1,650 795,000 118,384 FY 2030 - - 275,000 35,100 255,000 153,369 100,000 45,000 165,000 3,300 795,000 236,769 3/1/2031 - - - 13,081 - 72,222 - 20,750 - - - 106,053 9/1/2031 - - 285,000 13,081 455,000 72,222 100,000 20,750 - - 840,000 106,053 FY 2031 - - 285,000 26,162 455,000 144,444 100,000 41,500 - - 840,000 212,106 3/1/2032 - - - 8,450 - 64,259 - 19,125 - - - 91,834 9/1/2032 - - 120,000 8,450 645,000 64,259 105,000 19,125 - - 870,000 91,834 FY 2032 - - 120,000 16,900 645,000 128,519 105,000 38,250 - - 870,000 183,669 3/1/2033 - - - 6,500 - 52,972 - 17,419 - - - 76,891 9/1/2033 - - 120,000 6,500 675,000 52,972 105,000 17,419 - - 900,000 76,891 FY 2033 - - 120,000 13,000 675,000 105,944 105,000 34,838 - - 900,000 153,781 3/1/2034 - - - 4,550 - 41,159 - 15,713 - - - 61,422 9/1/2034 - - 130,000 4,550 695,000 41,159 105,000 15,713 - - 930,000 61,422 FY 2034 - - 130,000 9,100 695,000 82,319 105,000 31,425 - - 930,000 122,844 3/1/2035 - - - 2,275 - 28,997 - 14,400 - - - 45,672 9/1/2035 - - 130,000 2,275 730,000 28,997 105,000 14,400 - - 965,000 45,672 FY 2035 - - 130,000 4,550 730,000 57,994 105,000 28,800 - - 965,000 91,344 3/1/2036 - - - - - 16,222 - 12,825 - - - 29,047 9/1/2036 - - - - 895,000 16,222 105,000 12,825 - - 1,000,000 29,047 FY 2036 - - - - 895,000 32,444 105,000 25,650 - - 1,000,000 58,094 3/1/2037 ------11,644 - - - 11,644 9/1/2037 ------1,035,000 11,644 - - 1,035,000 11,644 FY 2037 ------1,035,000 23,288 - - 1,035,000 23,288

Total - All Series $ 625,000 $ 20,175 $ 3,400,000 $ 1,290,598 $ 5,620,000 $ 2,924,620 $ 2,640,000 $ 921,565 $ 2,410,000 $ 302,446 $ 14,695,000 $ 5,436,116 37 of 102

See Accountants' Report. Travis County MUD 2 - DSF Adjustments Journal April 2020

Date Num Memo Account Debit Credit

04/30/2020 4.1 Record funds transfer 1115 · TexPool - Debt Service ... 26,080.64 Record funds transfer 1178 · Due from SRF 26,080.64

26,080.64 26,080.64

04/30/2020 4.2 Record arbitrage review fees 7365 · Arbitrage Rebate Review 1,000.00 Record arbitrage review fees 2730 · Due To GOF 1,000.00

1,000.00 1,000.00

04/30/2020 4.3 Record tax collections 1178 · Due from SRF 540.55 Record tax collections 1150 · A/R Taxes 580.66 Record tax collections 2610 · Def Rev-Taxes 580.66 Record tax collections 4320 · Property Tax 519.64 Record tax collections 4325 · Property Tax Penalty 20.91

1,121.21 1,121.21

04/30/2020 4.4 Record SR2020 Refunding Bond Issue 7400 · Bond Proceeds 2,410,000.00 Record SR2020 Refunding Bond Issue 7500 · Original Issue Discount 85,119.85 Record SR2020 Refunding Bond Issue 2730 · Due To GOF 900.00 Record SR2020 Refunding Bond Issue 7425 · Payment to Refunding ... 2,357,152.64 Record SR2020 Refunding Bond Issue-Underwriter's ... 7420 · Bond Issue Expense 25,718.81 Record SR2020 Refunding Bond Issue 7420 · Bond Issue Expense 31,358.57 Record SR2020 Refunding Bond Issue 7420 · Bond Issue Expense 28,510.00 Record SR2020 Refunding Bond Issue 7420 · Bond Issue Expense 25,000.00 Record SR2020 Refunding Bond Issue 7420 · Bond Issue Expense 1,500.00 Record SR2020 Refunding Bond Issue 7420 · Bond Issue Expense 13,000.00 Record SR2020 Refunding Bond Issue 7420 · Bond Issue Expense 1,200.00 Record SR2020 Refunding Bond Issue 7420 · Bond Issue Expense 10,594.23 Record SR2020 Refunding Bond Issue 1760 · A/R Other 185.60

2,495,119.85 2,495,119.85

TOTAL 2,523,321.70 2,523,321.70

See Accountants' Report.

38 of 102 Travis County MUD 2 - DSF General Ledger As of April 30, 2020

Type Date Num Memo Amount Balance

1115 · TexPool - Debt Service Account 1,001,163.43 General Journal 04/30/2020 4.1 Record funds transfer 26,080.64 1,027,244.07 Deposit 04/30/2020 Interest 383.52 1,027,627.59

Total 1115 · TexPool - Debt Service Account 26,464.16 1,027,627.59

1117 · TexPool - SR2019 Cap Interest 91,757.23 Deposit 04/30/2020 Interest 34.33 91,791.56

Total 1117 · TexPool - SR2019 Cap Interest 34.33 91,791.56

1760 · A/R Other 0.00 General Journal 04/30/2020 4.4 Record SR2020 Refunding Bond Issue 185.60 185.60

Total 1760 · A/R Other 185.60 185.60

1150 · A/R Taxes 26,348.35 General Journal 04/30/2020 4.3 Record tax collections (580.66) 25,767.69

Total 1150 · A/R Taxes (580.66) 25,767.69

1178 · Due from SRF 31,313.84 General Journal 04/30/2020 4.1 Record funds transfer (26,080.64) 5,233.20 General Journal 04/30/2020 4.3 Record tax collections 540.55 5,773.75

Total 1178 · Due from SRF (25,540.09) 5,773.75

2610 · Def Rev-Taxes (26,348.35) General Journal 04/30/2020 4.3 Record tax collections 580.66 (25,767.69)

Total 2610 · Def Rev-Taxes 580.66 (25,767.69)

2730 · Due To GOF (4,373.95) General Journal 04/30/2020 4.2 Record arbitrage review fees (1,000.00) (5,373.95) General Journal 04/30/2020 4.4 Record SR2020 Refunding Bond Issue 900.00 (4,473.95)

Total 2730 · Due To GOF (100.00) (4,473.95)

3010 · Unallocated Fund Balance (401,966.45) Total 3010 · Unallocated Fund Balance (401,966.45)

Property Taxes (956,650.09) 4320 · Property Tax (955,674.64) General Journal 04/30/2020 4.3 Record tax collections (519.64) (956,194.28)

Total 4320 · Property Tax (519.64) (956,194.28)

4325 · Property Tax Penalty (975.45) General Journal 04/30/2020 4.3 Record tax collections (20.91) (996.36)

Total 4325 · Property Tax Penalty (20.91) (996.36)

Total Property Taxes (540.55) (957,190.64)

5391 · Interest On Temp Investments (4,565.34) Deposit 04/30/2020 Interest (383.52) (4,948.86) Deposit 04/30/2020 Interest (34.33) (4,983.19)

Total 5391 · Interest On Temp Investments (417.85) (4,983.19)

7310 · Bond Interest Expense 235,809.36 Total 7310 · Bond Interest Expense 235,809.36

7340 · Tax Assessor/Appraisal 3,031.46 Total 7340 · Tax Assessor/Appraisal 3,031.46

7365 · Arbitrage Rebate Review 0.00 General Journal 04/30/2020 4.2 Record arbitrage review fees 1,000.00 1,000.00

Total 7365 · Arbitrage Rebate Review 1,000.00 1,000.00

7380 · Financial Advisory Fee 1,170.51 Total 7380 · Financial Advisory Fee 1,170.51

7420 · Bond Issue Expense 3,310.00 General Journal 04/30/2020 4.4 Record SR2020 Refunding Bond Issue-Underwriter'... 25,718.81 29,028.81 General Journal 04/30/2020 4.4 Record SR2020 Refunding Bond Issue 31,358.57 60,387.38 General Journal 04/30/2020 4.4 Record SR2020 Refunding Bond Issue 28,510.00 88,897.38 General Journal 04/30/2020 4.4 Record SR2020 Refunding Bond Issue 25,000.00 113,897.38 General Journal 04/30/2020 4.4 Record SR2020 Refunding Bond Issue 1,500.00 115,397.38

See Accountants' Report.

39 of 102 Travis County MUD 2 - DSF General Ledger As of April 30, 2020

Type Date Num Memo Amount Balance

General Journal 04/30/2020 4.4 Record SR2020 Refunding Bond Issue 13,000.00 128,397.38 General Journal 04/30/2020 4.4 Record SR2020 Refunding Bond Issue 1,200.00 129,597.38 General Journal 04/30/2020 4.4 Record SR2020 Refunding Bond Issue 10,594.23 140,191.61

Total 7420 · Bond Issue Expense 136,881.61 140,191.61

7425 · Payment to Refunding Agent 0.00 General Journal 04/30/2020 4.4 Record SR2020 Refunding Bond Issue 2,357,152.64 2,357,152.64

Total 7425 · Payment to Refunding Agent 2,357,152.64 2,357,152.64

7400 · Bond Proceeds 0.00 General Journal 04/30/2020 4.4 Record SR2020 Refunding Bond Issue (2,410,000.00) (2,410,000.00)

Total 7400 · Bond Proceeds (2,410,000.00) (2,410,000.00)

7500 · Original Issue Discount 0.00 General Journal 04/30/2020 4.4 Record SR2020 Refunding Bond Issue (85,119.85) (85,119.85)

Total 7500 · Original Issue Discount (85,119.85) (85,119.85)

TOTAL 0.00 0.00

See Accountants' Report.

40 of 102 Capital Projects Fund

41 of 102 Travis County MUD 2 - CPF General Ledger As of April 30, 2020

Type Date Num Memo Amount Balance 1300 · TexPool - Capital Projects 23,834.98 Deposit 04/30/2020 Interest 8.95 23,843.93

Total 1300 · TexPool - Capital Projects 8.95 23,843.93

1310 · TexPool-SR2017 Capital Projects 245,188.08 Deposit 04/30/2020 Interest 91.73 245,279.81

Total 1310 · TexPool-SR2017 Capital Projects 91.73 245,279.81

1315 · TexPool - SR2019 Capital Proj 280,499.12 Deposit 04/30/2020 Interest 104.92 280,604.04

Total 1315 · TexPool - SR2019 Capital Proj 104.92 280,604.04

1900 · Prepaid Bond Cost 38,650.89 Total 1900 · Prepaid Bond Cost 38,650.89

2710 · Due to GOF (38,650.89) Total 2710 · Due to GOF (38,650.89)

3010 · Unallocated Fund Balance (545,228.87) Total 3010 · Unallocated Fund Balance (545,228.87)

5391 · Interest On Temp Investments (4,293.31) Deposit 04/30/2020 Interest (8.95) (4,302.26) Deposit 04/30/2020 Interest (91.73) (4,393.99) Deposit 04/30/2020 Interest (104.92) (4,498.91)

Total 5391 · Interest On Temp Investments (205.60) (4,498.91)

TOTAL 0.00 0.00

See Accountants' Report.

42 of 102

CERTIFICATE FOR RESOLUTION

THE STATE OF TEXAS § § COUNTY OF TRAVIS §

The undersigned officer of the Board of Travis County Municipal Utility District No 2 hereby certifies as follows:

1. The Board convened in a meeting on the 3rd day of June, 2020, via telephone conference call pursuant to Section 551.125 of the Texas Government Code, as modified temporarily by Governor Greg Abbott, and the related guidance from the Office of the Texas Attorney General, in connection with the Governor’s COVID-19 Disaster Proclamation, and the roll was called of the duly constituted officers and members of the Board, to wit::

Wilmer Roberts - President Michael E. Moore - Vice President Debora C. Pickens - Secretary Raymond C. Mura - Assistant Secretary Tracy T. Johnson - Assistant Secretary and all of said Directors participated in the teleconference meeting, thus constituting a quorum. Whereupon, among other business, the following was transacted at the meeting: a

RESOLUTION APPROVING PRELIMINARY OFFICIAL STATEMENT; AUTHORIZING DISTRIBUTION OF PRELIMINARY OFFICIAL STATEMENT AND PUBLICATION OF A NOTICE OF SALE OF BONDS; AND APPROVING OTHER RELATED MATTERS

(the “Resolution”) was introduced for the consideration of the Board. It was then duly moved and seconded that the Resolution be approved, and, after due discussion, the motion, carrying with it the approval of the Resolution, prevailed and carried by majority of the Board.

2. A true, full, and correct copy of the Resolution adopted at the meeting described in the above paragraph is attached to this certificate; approval of the Resolution has been duly recorded in the Board’s minutes of the meeting; the persons named in the paragraph above are the duly chosen, qualified, and acting officers and members of the Board as indicated therein; each of the officers and members of the Board was duly and sufficiently notified officially and personally, in advance, of the date, time, toll-free dial-in number, electronic agenda packet, and purpose of the meeting, and that the Resolution would be introduced and considered for adoption during the meeting; and each of the officers and members of the Board consented, in advance, to the holding of the meeting for such purpose; the meeting was audible to members of the public and allowed for their two-way communication, as required by law; and public notice of the date, time, toll-free dial-in number, electronic agenda packet, and subject of the meeting was given as required by Chapter 551 of the Texas Government Code, as modified temporarily by Governor Greg Abbott, and the related guidance from the Office of the Texas Attorney General, in connection with the Governor’s COVID-19 Disaster Proclamation.

* * * * *

Certificate for Resolution Approving Preliminary Official Statement {W0981050.1}

SIGNED AND SEALED this 3rd day of June, 2020.

TRAVIS COUNTY MUNICIPAL UTILITY DISTRICT NO. 2

(SEAL)

______Debora Pickens, Secretary Board of Directors

Certificate for Resolution Approving Preliminary Official Statement {W0981050.1} CERTIFICATE FOR RESOLUTION

THE STATE OF TEXAS ' COUNTY OF TRAVIS ' TRAVIS COUNTY MUNICIPAL UTILITY DISTRICT NO. 2 '

We, the undersigned officers of the Board of Directors of the Travis County Municipal Utility District No. 2, (the "District") hereby certify as follows: 1. The Board of Directors of the District convened in a meeting on the 3rd DAY OF JUNE, 2020, via telephone conference call pursuant to Section 551.125 of the Texas Government Code, as modified temporarily by Governor Greg Abbott, and the related guidance from the Office of the Texas Attorney General, in connection with the Governor’s COVID-19 Disaster Proclamation, and the roll was called of the duly constituted officers and members of the Board, to wit: Wilmer Roberts - President Michael E. Moore - Vice President Debora C. Pickens - Secretary Raymond C. Mura - Asst. Secretary Tracy T. Johnson - Asst. Secretary and all of said persons were present, except the following absentees: ______, thus constituting a quorum. Whereupon, among other business, the following was transacted at the Meeting: a written RESOLUTION APPROVING PRELIMINARY OFFICIAL STATEMENT; AUTHORIZING DISTRIBUTION OF PRELIMINARY OFFICIAL STATEMENT AND PUBLICATION OF A NOTICE OF SALE OF BONDS; AND APPROVING OTHER RELATED MATTERS was duly introduced for the consideration of the Board. It was then duly moved and seconded that the Resolution be passed; and, after due discussion, the motion, carrying with it the passage of the Resolution, prevailed and carried by the following vote: AYES: __ NOES: __ 2. A true, full and correct copy of the aforesaid Resolution passed at the Meeting described in the above and foregoing paragraph is attached to and follows this Certificate; that the Resolution has been duly recorded in the Board's minutes of the Meeting; that the above and foregoing paragraph is a true, full and correct excerpt from the Board's minutes of the Meeting pertaining to the passage of the Resolution; that the persons named in the above and foregoing paragraph are the duly chosen, qualified and acting officers and members of the Board as indicated therein; that each of the officers and members of the Board was duly and sufficiently notified officially and personally, in advance, of the time, place and purpose of the aforesaid Meeting, and that the Resolution would be introduced and considered for passage at the Meeting, and each of the officers and members consented, in advance, to the holding of the Meeting for such purpose; that the Meeting was open to the public and public notice of the time, place and purpose of the Meeting was given, all as required by Chapter 551, Government Code, as amended and Section 49.064, Texas Water Code, as amended. 1 TravisCoMUD2 UTB2020: POSApprvlResCert SIGNED AND SEALED this 3rd day of June, 2020.

______Secretary, Board of Directors President, Board of Directors

(SEAL)

2 TravisCoMUD2 UTB2020: POSApprvlResCert RESOLUTION APPROVING PRELIMINARY OFFICIAL STATEMENT; AUTHORIZING DISTRIBUTION OF PRELIMINARY OFFICIAL STATEMENT AND PUBLICATION OF A NOTICE OF SALE OF BONDS; AND APPROVING OTHER RELATED MATTERS

WHEREAS, Travis County Municipal Utility District No. 2 (the "District") has submitted an application to the Texas Commission on Environmental Quality ("TCEQ") requesting approval of the issuance of its $5,000,000 Unlimited Tax Bonds, Series 2020 (the "Bonds") for the purpose or purposes of construction of, acquisition of and/or reimbursement for certain water, wastewater and storm water drainage facilities serving the District; and

WHEREAS, the Board of Directors of the District (the "Board") has authorized the District's financial advisor, Public Finance Group LLC (the "Financial Advisor"), to prepare a Preliminary Official Statement, Official Notice of Sale and Official Bid Form (collectively the "Preliminary Official Statement") for the Bonds; and

WHEREAS, the Board has reviewed the Preliminary Official Statement; and

WHEREAS, the Board deems it appropriate to approve the Preliminary Official Statement and authorize the distribution of the Preliminary Official Statement and publication of the Notice of Sale, as further set forth below.

NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF DIRECTORS OF TRAVIS COUNTY MUNICIPAL UTILITY DISTRICT NO. 2 THAT:

Section 1. APPROVAL AND DISTRIBUTION OF PRELIMINARY OFFICIAL STATEMENT. The Board hereby approves the Preliminary Official Statement substantially in the form attached hereto as Exhibit "A" with such changes, additions or deletions as directed by the Board. Subject to the receipt of the approval of TCEQ, the District's Financial Advisor is hereby authorized and directed to distribute the Preliminary Official Statement to potential purchasers of the Bonds and to do all things necessary to market the Bonds.

Section 2. PUBLICATION OF NOTICE OF SALE. Subject to the receipt of the approval of TCEQ, the District's Bond Counsel is hereby authorized to publish a Notice of Sale of the Bonds in substantially the form attached hereto as Exhibit "B" with such changes as approved by General Counsel to the District.

Section 3. CONDITION OF SALE. Subject to the receipt of the approval of TCEQ, the District's Financial Advisor, General Counsel and Bond Counsel are hereby authorized to take all actions necessary in connection with Sections 1 and 2 of this Resolution including changing the dates and times in Exhibit "B" attached hereto.

Section 4. OTHER MATTERS. The President or Vice President and the Secretary or Assistant Secretary of the Board are authorized to do all things proper and necessary to carry out the intent hereof, including the approval of appropriate changes to the Preliminary Official

1 TravisCoMUD2 UTB 2020: POS Approval Resolution Statement and the Notice of Sale. In particular, the President or Vice President is authorized to execute rating agency applications and bond insurance commitment letters, if applicable.

Section 5. PAYMENT OF ATTORNEY GENERAL FEE. The District hereby authorizes the disbursement of a fee equal to the lesser of (i) one-tenth of one percent of the principal amount of the Bonds or (ii) $9,500, provided that such fee shall not be less than $750, to the Attorney General of Texas Public Finance Division for payment of the examination fee charged by the State of Texas for the Attorney General's review and approval of public securities and credit agreements, as required by Section 1202.004 of the Texas Government Code. The appropriate member of the District's staff is hereby instructed to take the necessary measures to make this payment. The District is also authorized to reimburse the appropriate District funds for such payment from proceeds of the Bonds.

2 TravisCoMUD2 UTB 2020: POS Approval Resolution

PASSED AND APPROVED this 3rd day of June, 2020.

TRAVIS COUNTY MUNICIPAL UTILITY DISTRICT NO. 2

(SEAL)

Wilmer Roberts, President Board of Directors

ATTEST:

Debora Pickens, Secretary Board of Directors

Signature Page for Resolution Approving Preliminary Official Statement {W0981050.1} EXHIBIT "A"

Preliminary Official Statement

[Please See Separate Tab of Transcript]

A-1 TravisCoMUD2 UTB 2020: POS Approval Resolution

EXHIBIT "B" NOTICE OF SALE TRAVIS COUNTY MUNICIPAL UTILITY DISTRICT NO. 2 UNLIMITED TAX BONDS, SERIES 2020 (A political subdivision of the State of Texas located in Travis County, Texas) $5,000,000 Selling: Wednesday, August 5, 2020 Bids Due 10:00 a.m., C.D.T.

Place and Time of Award: The District will consider the award of the sale of the Bonds on Wednesday, August 5, 2020 at 12:00 p.m., C.D.T., at the designated meeting place outside the boundaries of the District, at Armbrust & Brown PLLC, 100 Congress Avenue, Suite 1300, Austin, Texas 78701. Action will be taken immediately by the Board of Directors of the District to accept or reject the best bid. Each bidder must deliver a Bank Cashier's Check in the amount of $100,000 payable to the order of Travis County Municipal Utility District No. 2 as a good faith deposit to: Public Finance Group LLC, 900 South Capital of Texas Highway, Building IV, Suite 475, West Lake Hills, Texas 78746, by 10:00 a.m., C.D.T. on the date of the sale.

Address of the Bids/Bids Delivered in Person: Written bids, plainly marked "Bid for Bonds" should be addressed to the Board of Directors of Travis County Municipal Utility District No. 2, and if delivered in person, delivered to Cheryl Allen, Public Finance Group LLC, 900 South Capital of Texas Highway, Building IV, Suite 475, West Lake Hills, Texas 78746, by 10:00 a.m., C.D.T., on Wednesday, August 5, 2020. All bids must be signed and submitted on the "Official Bid Form."

Electronic Bidding Procedures: Any prospective bidder that intends to submit an electronic bid must submit its electronic bid through the facilities of PARITY between 9:00 a.m., C.D.T. and 10:00 a.m., C.D.T., on Wednesday, August 5, 2020, as described in the "Official Notice of Sale" described below.

Bids by Facsimile: Facsimile bids will be accepted at (512) 382-5490 between 9:00 a.m. and 10:00 a.m., C.D.T., to the attention of Cheryl Allen, on Wednesday, August 5, 2020, all as described in the "Official Notice of Sale" described below.

Information: The Bonds are more completely described in the "Official Notice of Sale," "Official Bid Form" and the "Preliminary Official Statement" which may be obtained from Public Finance Group LLC, 900 South Capital of Texas Highway, Building IV, Suite 475, West Lake Hills, Texas 78746, Financial Advisor to the District.

The bidder whose bid is the winning bid in accordance with the Notice of Sale will be notified immediately and must submit a SIGNED Official Bid Form in connection with the sale by 10:00 a.m., C.D.T. on Wednesday, August 5, 2020, to Cheryl Allen, Public Finance Group LLC at (512) 382-5490. Additionally, pursuant to Texas Government Code Section 2252.908, the District may not award the Bonds to the winning bidder unless the bidder either (i) submits a Certificate of Interested Parties Form 1295 (the "TEC Form 1295"), as prescribed by the Texas Ethics Commission, to the District, before the Board of Directors of the District formally votes to award the Bonds to the winning bidder, or (ii) certifies in the Official Bid Form that it is exempt from filing the TEC Form 1295 by virtue of being a publicly traded business entity or wholly owned subsidiary of a publicly traded business entity, in accordance with the "Official Notice of Sale."

The District reserves the right to reject any or all bids for the Bonds and to waive any and all irregularities except time of filing. This notice does not constitute an offer to sell the Bonds but is merely notice of sale of the Bonds as required by law. The offer to sell the Bonds will be made only by means of the "Official Notice of Sale," the "Preliminary Official Statement" and the "Official Bid Form."

Board of Directors Travis County Municipal Utility District No. 2

B-1 TravisCoMUD2 UTB 2020: POS Approval Resolution

CERTIFICATE FOR RESOLUTION

THE STATE OF TEXAS § § COUNTY OF TRAVIS §

The undersigned officer of the Board of Directors of Travis County Municipal Utility District No. 2 hereby certifies as follows:

1. The Board of Directors of Travis County Municipal Utility District No. 2 convened in regular session on the 3rd day of June, 2020, via telephone conference call pursuant to Section 551.025, Texas Government Code, as modified temporarily by Governor Greg Abbott, and pursuant to the related guidance from the office of the Texas Attorney General in connection with the Governor’s COVID-19 Disaster Proclamation, and the roll was called of the duly constituted officers and members of the Board, to-wit:, and the roll was called of the duly constituted officers and members of the Board, to-wit:

RESOLUTION REQUESTING UPDATED APPRAISED VALUE

(the “Resolution”) was introduced for consideration of the Board. It was then duly moved and seconded that the Resolution be adopted, and, after due discussion, the motion prevailed and carried unanimously.

2. A true, full, and correct copy of the Resolution adopted at the meeting described in the above paragraph is attached to this certificate; approval of the Resolution has been duly recorded in the Board’s minutes of the meeting; the persons named in the above and foregoing paragraph are the duly chosen, qualified, and acting officers and members of the Board, as indicated therein; each of the officers and members of the Board was duly and sufficiently notified officially and personally, in advance, of the date, time, toll-free dial-in number, electronic agenda packet, and purpose of the aforesaid meeting, and that the Resolution would be introduced and considered for adoption during the meeting; and each of the officers and members consented, in advance, to the holding of the meeting for such purpose; the meeting was audible to members of the public and allowed for their two-way communication, as required by law; and public notice of the date, time, toll-free dial-in number, electronic agenda packet, and subject to the meeting was given as required by Chapter 551 of the Government Code, as modified temporarily by Governor Greg Abbott, and the related guidance from the Office of the Texas Attorney General, in connection with the Governor’s COVID-19 Disaster Proclamation.

* * * *

{W0975618.1}

SIGNED AND SEALED the 3rd day of June, 2020.

TRAVIS COUNTY MUNICIPAL UTILITY DISTRICT NO. 2

(SEAL)

Debora C. Pickens, Secretary Board of Directors

{W0975618.1}

RESOLUTION REQUESTING UPDATED APPRAISED VALUE

THE STATE OF TEXAS § § COUNTY OF TRAVIS §

WHEREAS, Travis County Municipal Utility District No. 2 (the “District”) contemplates the sale of District bonds in the near future; and

WHEREAS, in order to determine the principal amount of bonds that may prudently be sold by the District, the Board of Directors of the District (the “Board”) must know the current appraised value of the property within the District; and

WHEREAS, Section 25.18 of the Texas Property Tax Code provides that a taxing unit, by resolution adopted by its governing body, may require the appraisal office to appraise all property within the unit, including new improvements;

NOW THEREFORE, BE IT RESOLVED BY THE BOARD THAT:

Section 1. The Board hereby authorizes and requires Travis Central Appraisal District to provide the District with an estimate of the current total appraised value of all property taxable by the District as of on or about July 1, 2020 within 30 days after receipt of this Resolution.

Section 2. The Secretary of the Board is hereby directed to file this Resolution with Travis Central Appraisal District and to file a copy in the District’s official records.

Section 3. This Resolution may be executed in multiple counterparts, each of which will be deemed an original and all of which together will constitute one and the same instrument. An electronic signature, a facsimile or other electronic copy of an original signature, and a counterpart transmitted electronically (e.g., by fax, email, text, or similar means), will be deemed to be, and will have the same force and effect as, an original signature for all purposes.

PASSED AND APPROVED this 3rd day of June, 2020.

[signature page follows]

{W0975618.1} 1

TRAVIS COUNTY MUNICIPAL UTILITY DISTRICT NO. 2

(SEAL) By: ______Wilmer Roberts, President Board of Directors

ATTEST:

Debora C. Pickens Secretary Board of Directors

{W0975618.1} TRAVIS COUNTY MUNICIPAL UTILITY DISTRICT NO. 2 TRAVIS COUNTY, TEXAS MAY 12, 2020

McCall Gibson Swedlund Barfoot PLLC Certified Public Accountants 13100 Wortham Center Drive, Suite 235 Houston, Texas 77065-5610

Ladies and Gentlemen:

In connection with your audit of the financial statements of Travis County Municipal Utility District No. 2, (the “District”), which comprise the respective financial position of the governmental activities and each major fund as of September 30, 2019, and the respective changes in financial position for the year then ended, and the related notes to the financial statements, for the purpose of expressing opinions as to whether the financial statements are presented fairly, in all material respects, in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP), you were previously provided with a representation letter under date of February 5, 2020. No information has come to our attention that would cause us to believe that any of those previous representations should be modified. We confirm, to the current actual knowledge of the Board of Directors and in reliance on the representations of the District’s bookkeeper, the following representations to you: 1) No information has come to management’s attention that would cause management to believe that any of the representations made in the previously provided letter dated February 5, 2020 should be modified. 2) No events have occurred subsequent to the date of the auditor’s report that would require adjustment to, or disclosure in, the aforementioned financial statements. 3) We have provided or caused to be provided minutes of the District’s meetings since February 5, 2020. 4) We have provided or caused to be provided communications, if any, from regulatory agencies concerning noncompliance with, or deficiencies in, financial reporting practices since February 5, 2020. The District’s Board of Directors has retained various consultants, including Bott & Douthitt, PLLC, to perform services on the District’s behalf. The Board has relied on its consultants’ advice and representations in making the representations contained in this letter.

TRAVIS COUNTY MUNICIPAL UTILITY DISTRICT NO. 2

Signatures of the Board of Directors

______

Date: April 8, 2020 To: Distribution List From: Cheryl Allen, Linda Hubble, and Lauren Smith Final Subject: Closing Memorandum $2,410,000 Travis County Municipal Utility District No. 2(the “District”) Unlimited Tax Refunding Bonds, Series 2020 (the “Bonds”)

Delivery of the referenced Bonds is scheduled for Wednesday, April 8, 2020, at 10:30 a.m. at the offices of McCall, Parkhurst & Horton L.L.P. (“MPH”), 600 Congress Avenue, Suite 1800, Austin, Texas 78701 and through the Depository Trust Company (“DTC”). Closing instructions are outlined below:

1. MPH, Bond Counsel, will handle all legal matters and provide the Legal Opinion and Transcript of Proceedings.

2. The Good Faith Check in the amount of $21,450 from the Underwriter, SAMCO Capital Markets (“SAMCO”), is being held by Public Finance Group LLC, the District’s Financial Advisor. This check will be returned uncashed to SAMCO after the closing.

3. UMB Bank, N.A., (“UMB”) will coordinate delivery of the registered Bonds in accordance with DTC’s Fast System.

4. Prior to 10:30 a.m. on Wednesday, April 8, 2020, SAMCO will wire in immediately available funds to UMB the purchase price of the Bonds, which has previously been agreed upon as specified below:

Par Amount of Bonds $2,410,000.00 Plus: Original Issue Premium 85,119.85 Less: Underwriter’s Discount (25,718.81) Total Funds Received from SAMCO $2,469,401.04

Wire Instructions: UMB Bank, N.A. 928 Grand Blvd., 4th Floor Kansas City, MO 64106 ABA 101-000-695; Account: 980-000-6823 Account Name: Trust Clearance Attn.: Jose Gaytan (512) 582-5851 Re: Travis County MUD No. 2 UTR 2020

5. UMB will coordinate a conference call with SAMCO (Steve Sledge @ (312) 443-1560, MPH (Crystal Lightfield @ (512) 478-3805) and DTC to release the Bonds. Only after the release of the Bonds can UMB disburse funds.

(The remainder of the page intentionally left blank.)

6. UMB will disburse funds as follows upon authorization:

A. UMB: To disburse funds for cost of issuance as outlined on pages 3 and 4 of closing memorandum $100,268.57

B. To Assured Guaranty Municipal Corp. (Municipal Bond Insurance): 10,594.23 Wire Instructions: Bank of Texas; ABA # 021-000-018; Acct. Name: Assured Guaranty Municipal Corp.; Account No. 8900297263; Policy No. 220040-N; Reference: Travis County MUD No. 2 Series 2020; Confirm with Closing Coordinator: Erika Paredes (212) 893-2706 Municipal bond insurance policy fee: $7,459.23 S&P Insured Ratings Fee: $3,135.00 Total: $10,594.23 C. To the District’s Escrow Fund: 2,357,152.64 Wire Instructions: UMB Bank, N.A.; ABA 101-000-6956; Acct. No. 98-0000-6823 / Trust Operations; Attn.: Jose Gaytan (512) 582-5851; Re: Travis County MUD No. 2 Series 2020 Escrow Fund

D. To the District’s Debt Service Fund Account (rounding amount): 185.60 Wire Instructions: State Street Bank and Trust Company; Boston MA; Amount (2000): $185.60; BNF (4200) = Attn: TexPool #67573774 RFB (4320) = Location ID # 79163; OBI (6000) = Pool # 449, Account # 7916300003; Participant Name: Travis County MUD No. 2; Account Name: Debt Service Account; ABA (3400) 011000028

E. To UMB: First Year Paying Agent Fee: $400.00 Call Fee (Series 2011) 300.00 Escrow Agent Fee: 500.00 Total $1,200.00 1,200.00 Total Funds Disbursed: $2,469,401.04

7. Invoices for services rendered in connection with the bond issue should be sent to Bott & Douthitt, PLLC (“B&D”), PO Box 2445, Round Rock, Texas 78680; attention Allen Douthitt.

8. B&D will ensure the Bond proceeds deposited into the Debt Service Fund are collateralized and invested until disbursement.

Disbursement of Cost of Issuance is expected to occur on Wednesday, April 8, 2020, simultaneously with all other wire transfers.

Should you have any questions concerning the above, please call me at (512) 382-5420 or email at [email protected]. It has been a pleasure working with all of you on this transaction, and we look forward to a successful closing.

Sincerely,

Lauren Smith Analyst Public Finance Group LLC Financial Advisor to the District

Date: April 8, 2020 To: Allen Douthitt and Jose Gaytan From: Cheryl Allen, Linda Hubble, and Lauren Smith Subject: Closing Memorandum $2,410,000 Travis County Municipal Utility District No. 2 (the “District”) Unlimited Tax Refunding Bonds, Series 2020 (the “Bonds”)

On Wednesday, April 8, 2020, upon closing, please make wire transfers for Cost of Issuance as outlined below.

UMB TO WIRE: $100,268.57

Reimburse General Fund: Wire Instructions: State Street Bank and Trust Company; Boston MA; Amount (2000): $900.00; BNF (4200) = Attn: TexPool #67573774; RFB (4320) = Location ID # 79163; OBI (6000) = Pool # 449, Account # 7916300001; Participant Name: Travis County MUD No. 2; Account Name: Operating Account; ABA (3400) 011000028

Reimbursement to Schroeder Engineering Co. for Bond Review 900.00 Total $900.00

McCall, Parkhurst & Horton L.L.P. : Wire Instructions: Plains Capital Bank, 325 N. St. Paul Street, Suite 175, Dallas, Texas 75201, (214) 525-4651, ABA # 1113-2299-4, Acct # 7542113500(For Credit to: McCall, Parkhurst & Horton L.L.P. Operating Account), Reference # 4613.010– Travis County MUD No. 2 UTRB Series 2020 Bond Counsel Fee $24,100.00 Disbursements and Expenses: IRS 8038G Tax Return Preparation 500.00 BRB Preparation Fee 500.00 Bond Preparation Fee 250.00 750.00 Attorney General Filing Fee 2,410.00 Total $28,510.00

Armbrust & Brown, PLLC: Wire Instructions, Plains Capital Bank, Austin, Texas (512) 494-8000 ABA # 111322994, Acct. Name: Armbrust & Brown, PLLC IOLTA Account Acct #. 4100005562; Upon wiring, please confirm with Connie Wright at (512) 435-2311 Reference: Travis County MUD No. 2 Series 2020; Invoice #: 83410.0118JWB General Counsel Fee $25,000.00 Total $25,000.00

Public Finance Group LLC: Wire Instructions: Broadway Bank, 1177 NE Loop 410, San Antonio, Texas 78209; ABA # 114 021 933; Account # 4300004383; Account Name: Public Finance Group LLC; Ref: Travis County MUD No. 2 Series 2020 Financial Advisory Fee $25,000.00 Reimbursable Expenses: Structuring Fee 2,500.00 Word Processing Fee 2,500.00 Copies 88.00 Capital Printing Co. (printing & delivery of OS) 1,270.57 Total $31,358.57

Public Finance Partners, LLC : Wire Instructions: Bank Name: Wells Fargo Bank, NA, 420 Montgomery, San Francisco, CA 94104.; Beneficiary: Public Finance Partners LLC; Federal EIN: 83-3263042; RTN: 121000248; Account Number: 8718885562; Reference Number: BV.00373 (Transaction: Travis County MUD No. 2 Refunding, Series 2020) Verification Services $1,500.00 Total $1,500.00

Moody’s Investors Service, Inc. Wire Instructions: SunTrust Bank; Transit Routing #061000104; ACH #: 061000104; Moody’s

Account #: 8801939847; Invoice #______; Customer #: 9000005960; Re: Travis County MUD No. 2, Series 2020 $13,000.00

TOTAL EXPENSES TO BE WIRED $100,268.57

Additional out-of-pocket expenses related to preparation and distribution of Transcript of Proceedings, as well as any other out-of-pocket expenses for which invoices have not yet been received will be billed subsequent to closing and can be paid from rounding amount.

Sincerely,

Lauren Smith Analyst Public Finance Group LLC Financial Advisor to the District

Travis County Municipal Utility District No. 2 c/o Armbrust & Brown 100 Congress Avenue, Suite 1300 Austin, Texas 78701-2744

Re: $3,400,000 Travis County Municipal Utility District No. 2 (A Political Subdivision of the State of Texas Located in Travis County, Texas) Unlimited Tax Refunding Bonds, Series 2015 Issue Date: April 15, 2015 Small Issuer Exception

Ladies and Gentlemen:

SMALL ISSUER EXCEPTION. The above-captioned issuance (the "Bonds") is eligible for the Small Issuer Exception to the rebate requirement. The general requirements for the Small Issuer Exception as described in Section 148(f)(4)(D) of the Internal Revenue Code and Section 1.148-8 of the Treasury Regulations are as follows:

(1) the issue is issued by a governmental unit with general taxing powers; (2) no bond which is part of the issue is a private activity bond; (3) at least 95% of the issue's net proceeds are to be used for local governmental activities of the issuer (or of a governmental unit whose jurisdiction is entirely within that of the issuer); (4) the aggregate face amount of all tax-exempt bonds (other than private activity bonds) issued by such unit during the calendar year in which such issue is issued is not reasonably expected, as of the Issue Date, to exceed $5 million; (5) in applying the $5,000,000 size limitations, amounts utilized to currently refund an issue are not taken into account to the extent that the stated principal amount of the refunding bond does not exceed the portion of the outstanding stated principal amount of the refunded bond paid with proceeds of the refunding bond; and, (6) the advance refunded bonds were issued as part of an issue which was treated as qualifying for the small issuer exception as outlined in 148(f)(4)(D)(v)(II).

We have determined that all such requirements appear to be satisfied. Therefore, no arbitrage rebate calculation is required with respect to the Bonds. Please note, the Bonds are NOT EXEMPT from any yield restriction requirements.

YIELD RESTRICTION COMPLIANCE. We have determined that the proceeds of the Bonds deposited into the refunding escrow were invested below the yield on the Bonds and although all of the proceeds of the refunded bonds that would become transferred proceeds of the Bonds had not been expended prior to the refunding date, they qualified as a minor portion and are therefore not subject to yield restriction. Furthermore, when amounts invested the debt service fund constituted either a reasonably required reserve or bona fide debt service fund they were allowed to be invested without yield restriction implications.

1824259 Travis County Municipal Utility District No. 2 April 22, 2020 Page 2

No other proceeds should give rise to a yield restriction liability, as long as (1) the Debt Service Fund continues to constitute a bona fide debt service fund, (2) the reserve portion of the Debt Service Fund, if any, is not in excess of a reasonably required reserve, (3) if the reserve portion is in excess of a reasonably required reserve, such excess is invested at a weighted average yield below the yield on the Bonds of 3.1876%, and (4) no other funds and accounts that would constitute pledged or replacement proceeds are created.

ONGOING COMPLIANCE. The Debt Service Fund will continue to be monitored for the remaining life of the Bonds. Any future yield reduction payments, if applicable, would need to be paid no later than 60 days of April 15, 2025, the second installment computation date.

This opinion is not to be used, circulated, quoted, referred to, or relied upon by any other person without our express written permission.

Very truly yours,

ORRICK, HERRINGTON & SUTCLIFFE LLP

1824259 Arbitrage Rebate Compliance Summary for Travis County Municipal Utility District No. 2 Last Cumulative Yield Next Next Final Client Delivery Calculation Bond Rebate Restriction Calculation Payment Calculation # Matter # Issue Name Status Date Date Yield Liability Liability Date Date Date 1 42182-3548 Unlimited Tax Bonds 2004 Inactive 12/16/2004 09/01/2013 4.9679 $0 $0 01/01/3000 09/01/2013 09/01/2013 2 42182-3549 Unlimited Tax Bonds 2005 Inactive 12/06/2005 09/01/2013 4.8659 $0 $0 01/01/3000 09/01/2013 09/01/2013 3 42182-3550 Unlimited Tax Bonds 2006 Inactive 11/01/2006 05/21/2015 4.4305 $0 $0 01/01/3000 05/21/2015 05/21/2015 4 42182-3551 Unlimited Tax Bonds 2010 Inactive 08/05/2010 09/01/2016 4.9129 $0 $0 01/01/3000 09/01/2016 09/01/2016 5 42182-3552 Unlimited Tax Refunding Bonds 2011 Active 12/14/2011 12/14/2016 3.868 $0 $0 09/01/2021 09/01/2021 09/01/2021 6 42182-4259 Unlimited Tax Refunding Bonds 2015 Active 04/15/2015 04/15/2020 3.1876 $0 $0 04/15/2025 04/15/2025 09/01/2035 7 42182-4553 Unlimited Tax Bonds, Series 2017 Active 01/04/2017 01/01/1901 3.5388 01/04/2022 01/04/2022 09/01/2036 8 42182-5066 Unlimited Tax Bonds, Series 2019 Active 08/07/2019 01/01/1901 2.904 08/07/2024 08/07/2024 09/01/2037

Wednesday, April 22, 2020 Page 1 of 1

ORDER CALLING DIRECTOR ELECTION

THE STATE OF TEXAS § § COUNTY OF TRAVIS §

WHEREAS, Travis County Municipal Utility District No. 2 (the “District”) is a political subdivision of the State of Texas, operating under Chapters 49 and 54, Texas Water Code; and

WHEREAS, the Board desires to order an election to be held on November 3, 2020 for the election of two directors, each of whom will serve a four-year term;

NOW THEREFORE, IT IS ORDERED BY THE BOARD THAT:

Section 1. The matters and facts set out in the preamble of this order are found and declared to be true and complete.

Section 2. An election will be held within the District on November 3, 2020, between the hours of 7:00 a.m. and 7:00 p.m., at the Travis County precinct polling place locations that serve the District, at which there will be submitted the question of the election of two directors, each of whom will serve a four-year term.

Section 3. Early voting in the election by personal appearance will begin on Monday, October 19, 2020, and end on Friday, October 30, 2020. The regular early voting clerk is Dana DeBeauvoir. Early voting by personal appearance will be conducted at the times, dates, and polling places established by Travis County for early voting, as set forth on Exhibit “A”. The regular early voting clerk’s official mailing address to which requests for applications for early voting ballots to be voted by mail may be sent is P.O. Box 149325, Austin, Texas 78714-9325, and the email address is [email protected].

Section 4. Voting in the election will be by the use of electronic or paper ballots printed in both English and Spanish and conforming to the requirements of the Texas Election Code. Oral bilingual assistance will be available during the election and may be obtained by contacting the presiding judge or the alternate presiding judge. The ballots used in the election will have printed on them the names of all candidates for the office of director who filed applications to have their names printed on the ballot at least 78 days before the election, and one blank space for write-in votes for any candidate for the office of director who has filed a declaration of write-in candidacy at least 74 days before the election. Each voter may vote for none, one, or two persons for director by placing an “X” in the square beside the person’s name or persons’ names or by writing the name or names of a person or persons in the blank space(s) provided.

Section 5. The District is divided into one election precinct as established by Travis County. The polling places for such election precinct will be the polling places established by Travis County for such election precinct in Travis County.

Section 6. The presiding judges, alternate presiding judges, and clerks for the election selected and appointed by Travis County in compliance with the requirements of state law are hereby designated and appointed election officers for the holding of this election. The presiding judges, alternate presiding judges, and clerks will perform the functions and duties of their respective positions that are provided by State law.

Section 7. The election will be held and conducted and returns made to the Board in accordance with the Texas Election Code, as modified by Chapter 49 of the Texas Water Code.

{W0976808.1}

Section 8. All qualified resident electors of the District will be entitled to vote in the election.

Section 9. The Secretary of the Board and the attorney for the District are directed to cause notice of this election to be published or posted in both English and Spanish in accordance with the requirements of the Texas Election Code. The notice will be substantially in the form attached as Exhibit “B”.

Section 10. This Order may be executed in one or more counterparts, each of which will be deemed an original and all of which together will constitute one and the same instrument. An electronic signature, a facsimile, or other electronic copy of an original signature, and a counterpart transmitted electronically (e.g., by fax, email, text, or similar means), will be deemed to be, and will have the same force and effect as, an original signature for all purposes.

PASSED AND APPROVED this 3rd day of June, 2020.

(Signature page follows.)

{W0976808.1} 2

TRAVIS COUNTY MUNICIPAL UTILITY DISTRICT NO. 2 (SEAL)

Wilmer Roberts, President Board of Directors

ATTEST:

Debora C. Pickens, Secretary Board of Directors

{W0976808.1} 3

NOTICE OF DIRECTOR ELECTION

Notice is hereby given that Travis County Municipal Utility District No. 2 (the “District”) will hold an election on November 3, 2020, between the hours of 7:00 a.m. and 7:00 p.m., at the polling place for each election precinct established by Travis County, Texas, for the purpose of electing two directors, each of whom will serve a four-year term.

The ballots used in the election will have printed on them the names of all candidates for the office of director who have filed applications to have their names printed on the ballot at least 78 days before the election, and one blank space for write-in votes for any candidate for the office of director who has filed a declaration of write-in candidacy at least 74 days before the election.

The presiding judges, alternate presiding judges, and clerks for the election selected and appointed by Travis County in compliance with the requirements of State law are designated and appointed as election officers for the holding of the election. The presiding judges, alternate presiding judges, and clerks will perform the functions and duties of their respective positions that are provided by State law.

The Election Day polling places will be the polling places designated by Travis County for the election, as set forth on Exhibit “1”.

Early voting in the election by personal appearance will begin on October 19, 2020 and continue through October 30, 2020. The regular early voting clerk is Dana DeBeauvoir, Travis County Elections Administrator. Early voting by personal appearance will be conducted at the times, dates and polling places established by Travis County for early voting, as set forth on Exhibit “2”. The regular early voting clerk’s official mailing address to which requests for applications for early voting ballots to be voted by mail may be sent is Travis County Elections Administrator, P.O. Box 149325, Austin, Texas 78714-9325. The email address is [email protected].

Main Early Voting Polling Place: ACC Highland, Building 4000, 6101 Airport Boulevard, Austin, Texas 78752. Hours: _____ until ____, [days of week].

Any voter who is entitled to vote an early ballot by personal appearance may do so at the Main Early Voting Polling Place listed above or any temporary branch site.

An application for early voting ballot by mail should be mailed to:

Travis County Elections Administrator P.O. Box 149325 Austin, Texas 78714-9325

Applications for early voting ballots by mail must be received by the close of business on Friday, October 23, 2020. Early voting ballots by mail must be received no later than 7:00 p.m. on Tuesday, November 3, 2020. In certain circumstances, the deadline to receive early voting ballots by mail may be different. Please refer to Texas Election Code, Sections 86.007, 101.057, and 101.001.

The election is being held pursuant to an order adopted by the Board of Directors of the District on June 3, 2020.

{W0976936.1}

AVISO DE ELECCIÓN DE DIRECTOR

Se notifica por el presente que el Distrito de Servicios Públicos Municipales No. 2 del Condado de Travis (el “Distrito”) va a tener una elección el día 3 de noviembre 2020, entre las horas de 7:00 a.m. y las 7:00 p.m., en los lugares de votación establecidos por el Condado de Travis para el propósito de elegir a dos directores, cada uno de los cuales tendrá un mandato de cuatro años.

Las boletas que se utilizarán en la elección tendrán los nombres de los candidatos postulados para el puesto de director que han registrado aplicaciones para tener sus nombres impresos en las boletas no menos de 78 días antes de la elección, y un espacio en blanco para votos por escrito para el puesto de director para cualquier candidato que ha archivado una declaración de candidato por escrito por lo menos 74 días antes de la elección.

Los jueces presidentes, jueces presidentes alternos, y los oficiales para la elección seleccionados y designados por el Condado de Travis en conformidad con los requisitos de la ley del estado por este medio son los oficiales designados para la elección. Los jueces presidentes, jueces presidentes alternos, y los oficiales para la elección realizarán las funciones y los deberes de sus posiciones respectivas en la manera prevista por la ley estatal.

Los centros de votación para el día de la elección será los centros de votación designado por el Condado de Travis para la elección, como sigue en el Anexo “1”.

La votación temprana en la elección en persona comenzará el día 19 de octubre de 2020 y continuará hasta el día 30 de octubre de 2020. La secretaria regular de votación temprana es Dana DeBeauvoir, administradora de votación del Condado de Travis. La votación temprana en persona se llevará a cabo en los horarios, fechas y lugares de votación establecidos por el Condado de Travis para la votación temprana, como sigue en el Anexo “2”. La dirección de la secretaria regular de votación temprana, a la cual se le pide la solicitud para boletas de votación temprana para votar por correo, es administradora de votación del Condado de Travis, P.O. Box 149325, Austin, Texas 78714-9325. La dirección de correo electrónico: [email protected].

Lugar principal de votación temprana: ACC Highland, Edificio 4000, 6101 Airport Boulevard, Austin, Texas 78752. Horario: [____] hasta las [____] [days of week].

Cualquier votante con derecho a votar durante la votación temprana en persona puede hacerlo en la localidad principal de votación temprana mencionada anteriormente o en cualquier sucursal provisional.

Una solicitud de boleta de votación temprana para votar por correo debe ser enviada a:

Administradora de votación del Condado de Travis P.O. Box 149325 Austin, Texas 78714-9325

Las solicitudes para las boletas de votación temprana por correo deben ser recibidas antes del cierre del día laboral viernes, 23 de octubre de 2020. Las boletas de votación temprana por correo deben ser recibidas antes de las 7:00 p.m. martes, 3 de noviembre 2020. En ciertas circunstancias, la fecha límite para recibir boletas de votación anticipada por correo puede ser diferente. Consulte el Código Electoral de Texas, Secciones 86.007, 101.057, y 101.001.

La elección se lleva a cabo en cumplimiento de una orden adoptada por la Junta Directiva del Distrito el día 3 de junio de 2020.

{W0976936.1}

RESOLUTION APPROVING ELECTION AGREEMENT AND JOINT ELECTION AGREEMENT (Travis County)

WHEREAS, Travis County Municipal Utility District No. 2 (the “District”) is a political subdivision of the State of Texas, operating under Chapters 49 and 54 of the Texas Water Code and located within Travis County, Texas (the “County”); and

WHEREAS, the District desires to enter into a contract for election services with the County’s election officer as authorized by Section 31.092 of the Texas Election Code, pursuant to which the County will provide and administer election services at the District’s elections; and

WHEREAS, the District and various other political subdivisions located entirely or partially within the County (collectively, the “Participating Entities”) are each holding elections on November 3, 2020; and

WHEREAS, Chapter 271 of the Texas Election Code provides that, if the elections ordered by the authorities of two or more political subdivisions are to be held on the same day in all or part of the same county, the governing bodies of the political subdivisions may enter into an agreement to hold the elections jointly in the election precincts that can be served by common polling places; and

WHEREAS, Chapter 271 of the Texas Election Code further provides that the regular county polling places may be used as the common polling places in a joint election; and

WHEREAS, the Board of Directors of the District (the “Board”) has determined that it is in the best interest of the District and its voters to conduct its November 3, 2020 election jointly with the Participating Entities that have called or will call an election to be held on November 3, 2020 in all or part of the same county, in that a joint election will best assist the voters of the District by maintaining consistency and accessibility in voting practices, polling places, and election procedures; and

WHEREAS, Section 271.002 of the Texas Election Code requires the terms of a joint election agreement to be stated in a resolution, order, or other official action adopted by the governing body of the political subdivision participating in the joint election;

NOW, THEREFORE, BE IT RESOLVED BY THE BOARD THAT:

Section 1. The findings and facts recited in the preamble of this Resolution are made a part hereof and found to be true and correct.

Section 2. The form of “Election Agreement” between the County’s election officer and the District attached as Exhibit “A” is hereby approved, and the officers and directors of the District are authorized to carry out the negotiation and execution of such agreement.

Section 3. The form of the “Joint Election Agreement” attached as Exhibit “B” between the District and one or more of the Participating Entities that have called or will call an election to be held on November 3, 2020 in all or part of the same county is hereby approved, and the officers and directors of the District are authorized to carry out the negotiation and execution of such agreement.

{W0976935.1}

Section 4. The officers, directors, and consultants of the District are authorized and directed to take all actions necessary or convenient to carry out the terms of this Resolution.

Section 5. This Order may be executed in one or more counterparts, each of which will be deemed an original and all of which together will constitute one and the same instrument. An electronic signature, a facsimile, or other electronic copy of an original signature, and a counterpart transmitted electronically (e.g., by fax, email, text, or similar means), will be deemed to be, and will have the same force and effect as, an original signature for all purposes.

PASSED AND APPROVED this 3rd day of June, 2020.

TRAVIS COUNTY MUNICIPAL UTILITY DISTRICT NO. 2

Wilmer Roberts, President (SEAL) Board of Directors

ATTEST:

______Debora C. Pickens, Secretary Board of Directors

{W0976935.1} 2

ELECTION AGREEMENT BETWEEN TRAVIS COUNTY AND TRAVIS COUNTY MUNICIPAL UTILITY DISTRICT NO. 2

Pursuant to Chapter 31, Subchapter D, Chapter 123, and Chapter 271 of the Texas Election Code and Chapter 791 of the Texas Government Code, Travis County (the “County”) and Travis County Municipal Utility District No. 2 (“Participating Entity”) enter into this agreement (this “Agreement”) for the Travis County Clerk, as the County’s election officer (the “Election Officer”), to conduct the Participating Entity’s elections, including runoffs, and for the Participating Entity’s use of the County’s current or future- acquired election equipment for any voting system that the County adopts, as authorized under Title 8 of the Texas Election Code, for all Participating Entity elections. The purpose of this Agreement is to maintain consistency and accessibility in voting practices, polling places, and election procedures in order to best assist the voters of the Participating Entity.

Section 1. GENERAL PROVISIONS

(A) Except as otherwise provided in this Agreement, the term “election” refers to any Participating Entity election, occurring on any uniform election date prescribed by the Texas Election Code or a primary election date, along with any resulting runoff, if necessary, within all Participating Entity’s territory located in Travis County. If a runoff is necessary, the Participating Entity shall work with the Election Officer to determine a mutually acceptable run-off date. In the event that the Participating Entity (and any other entity for which the County is providing election services or for which the County is conducting a joint election) do not agree on a run-off date, the Participating Entity agrees to whichever run-off date is selected by the Election Officer.

(B) If the Participating Entity determines it is necessary to conduct an election during a time other than that specified in Section 1(A), the Election Officer and a representative designated by the Participating Entity will meet as soon as possible thereafter to determine the feasibility of the Election Officer conducting such an election. If both parties agree that the Election Officer will administer the election, the new election will be based on all other applicable provisions of this Agreement except provisions that are inconsistent and cannot be feasibly applied.

(1) The term “Election Officer” refers to the Travis County Clerk; (2) The term “precinct” means all precincts in the territory of the Participating Entity located within Travis County.

{W0981987.1} 1 Revised February 2020

(3) The term “election services” refers to services used to perform or supervise any or all of the duties and functions that the Election Officer determines necessary for the conduct of an election. (4) The term “cost for election services” includes the costs for personnel, supplies, materials, or services needed for providing these services as permitted by the Texas Election Code but does not refer to costs relating to the use of the voting equipment.

(D) Except as otherwise provided in this Agreement, the cost for “use of voting equipment” for a particular election is the amount the County will charge the Participating Entity for use of the County’s voting equipment in use at the time of that election.

(E) The Participating Entity agrees to commit the funds necessary to pay for all election-related expenses for Participating Entity elections in accordance with this Agreement.

(F) The Election Officer has the right to enter into agreements with other entities at any time, including during the dates listed in Section 1(A).

(G) As a condition for providing election services and equipment usage, the Election Officer may require authorities of political subdivisions holding elections on the same day in all or part of the same territory to enter into a joint election agreement as authorized in Chapter 271 of the Texas Election Code, and the Participating Entity agrees to enter into any joint election agreement required by the County.

SECTION 2. PARTICIPATING ENTITY’S USE OF VOTING EQUIPMENT; DUTIES OF THE ELECTION OFFICER AND OF THE PARTICIPATING ENTITY

The County shall make available to the Participating Entity the County’s current voting system and any future-acquired voting system as authorized under Title 8 of the Texas Election Code, subject to restrictions and conditions imposed by the Election Officer to ensure availability of the equipment for County-ordered elections, primary elections, special elections, and subsequent runoff elections, if applicable. The Election Officer may also impose restrictions and conditions to protect the equipment from misuse or damage.

SECTION 3. APPOINTMENT OF ELECTION OFFICER

(A) The Travis County Election Officer (“Election Officer”) is appointed to serve as the Participating Entity’s Election Officer and Early Voting Clerk to conduct the Participating Entity’s elections described in Section 1.

(B) As the Participating Entity’s Election Officer and Early Voting Clerk, the Election Officer shall coordinate, supervise, and conduct all aspects of administering voting

{W0981987.1} 2 Revised February 2020

in Participating Entity elections in compliance with all applicable laws, subject to Section 3(C) below.

(C) The Participating Entity shall continue to perform those election duties listed in (1) through (7) below and any other election duties, such as receipt of candidate applications, that are not allowed to be delegated to another governmental entity:

(1) preparing, adopting, and publishing all required election orders, resolutions, notices, and other documents, including bilingual materials, evidencing action by the governing authority of the Participating Entity necessary to the conduct of an election, except that: a. The Election Officer may provide newspaper notices on behalf of the Participating Entity with respect to a specific election if: i. Not later than 60 days before election day for that election, the Participating Entity submits a written request to the Election Officer to provide newspaper notices on behalf of the Participating Entity, provides the Election Officer the content of the notices and information as which newspapers those notices are to be published and the dates of publication and any other information required by the Election Officer for providing newspaper notices, and ii. The Participating Entity pays the Election Officer all costs associated with providing the newspaper notices. b. With respect to each debt obligation election the Election Officer conducts for the Participating Entity pursuant to this Agreement: i. The Election Officer, after receiving from the Participating Entity a copy of the debt obligation election order, shall post the notice required by and in accordance with Texas Election Code Section 4.003(f)(1) on election day and during early voting by personal appearance, in a prominent location at each polling place; ii. The Election Officer shall provide written confirmation that to the Participating Entity that the debt obligation election order was posted in accordance with Texas Election Code Section 4.003(f)(1); and iii. The Participating Entity shall pay any applicable expenses incurred by the Election Officer that directly relates to the posting required by Texas Election Code Section 4.003(f)(1).

(2) Preparing the text for the Participating Entity’s official ballot in English and Spanish and any other languages as required by law;

(3) Providing the Election Officer with a list of candidates or propositions showing the order and the exact manner in which the candidates’ names

{W0981987.1} 3 Revised February 2020

and the propositions are to appear on the official ballot;

(4) Conducting the official canvass of a Participating Entity election;

(5) administering the Participating Entity’s duties under state and local campaign finance laws;

(6) having a Participating Entity representative serve as the custodian of its election records; and

(7) Filing the Participating Entity’s annual voting system report to the Secretary of State as required under Texas Election Code Chapter 123.

(D) The Participating Entity shall also be responsible for proofing and attesting to the accuracy of all ballot language, including any required language translations, and format information programmed by the County. This includes any information programmed for use with the audio or tactile button features of the equipment. The Participating Entity will also monitor and review all logic and accuracy testing and mandatory tabulations. The Participating Entity will complete its duties within timeframes as prescribed by the County. If the Participating Entity finds any discrepancies or concerns, it will immediately report them to the Election Officer and work with her to resolve any issues so that final approval can be reached. The Participating Entity shall be responsible for any and all actual costs associated with correcting the ballot and ballot programming if the error is discovered after the Participating Entity has signed off on its final proof containing the error.

(E) The legal assistant to the attorney for the Participating Entity will assist the County whenever possible when the conduct of the election requires assistance from Participating Entity departments and staff. The legal assistant to the attorney for the Participating Entity will serve as the Regular Early Voting Clerk for the Participating Entity to receive requests for applications for early voting ballots and forward these applications to the Joint Early Voting Clerk. The legal assistant to the attorney for the Participating Entity will serve as the Custodian of Records for the Participating Entity to complete those tasks in the Texas Election Code that the Election Officer will not perform.

SECTION 4. ELECTION WORKERS AND POLLING PLACES

(A) For presentation to the governing body of the Participating Entity, the County shall provide a list containing the locations, times, and dates of early voting polling places suitable for consideration and adoption by the governing body in accordance with Texas Election Code Chapter 85. The Election Officer will designate and confirm all Election Day polling place locations.

{W0981987.1} 4 Revised February 2020

(B) The Election Officer will assume the responsibility for recruiting election personnel; however, if by the 5th day before the Election, the Election Officer reports vacancies in positions for election judges, alternate judges, election day clerks, early voting ballot board, receiving substation clerks, or any other key election personnel, the Participating Entity shall provide emergency personnel in these positions.

(C) The Election Officer shall notify each of the election judges and alternates of their appointment and the eligibility requirements that pertain to them and to the selection of Election Day clerks. Included in this notification will be the number of clerks that each precinct should have in addition to the election judge and alternate judge. The election judges and/or the alternates are responsible for recruiting and supervising their clerks.

(D) All election workers must agree to attend training sessions as determined by the Election Officer. Costs for these training sessions and compensation for attendees will be included as part of the election services costs.

(E) During any election and any subsequent runoff election that involve entities in addition to the Participating Entity, the Election Officer will work with all parties to find a plan that can be agreed upon regarding the designation of polling places. If agreement cannot be reached, the Election Officer will resolve the differences. In all cases, the Election Officer has sole discretion to determine whether polling place changes are necessary.

SECTION 5. PAYMENTS FOR ELECTION SERVICES

(A) Costs and payments for the use of voting equipment are addressed separately in Section 6 of this Agreement.

(B) Requests for Election Services. For each election the Participating Entity desires the Election Officer to conduct, the Participating Entity must submit a written request to the Election Officer that describes the general nature of the election and specifies the date of the election. Each request for election services, including each request for the Election Officer to conduct a runoff election, must be accompanied by a non-refundable payment of $150 to the Election Officer.

(C) Cancellations. On or before 11:59 p.m. on the 68th day before an election for which the Participating Entity has requested election services, the Participating Entity shall notify the Election Officer as to whether the Participating Entity anticipates the cancellation of its election, and on or before 11:59 p.m. on the 60th day before the election the Participating Entity shall notify the Election Officer as to whether the Participating Entity will cancel that election. If the Election Officer receives

{W0981987.1} 5 Revised February 2020

written notice from the Participating Entity on or before 11:59 p.m. of the 60th day before an election that the Participating Entity’s election will be cancelled, the Participating Entity will accrue no further costs relating to that cancelled election.

(D) Notice, Cost Estimate, Initial Invoicing, and Initial Payment. (1) Notwithstanding the provisions in Section 9(B), the County and the Participating Entity agree that notice under Section 5 can be provided via e- mail. The following e-mail address will be used for e-mail communications to or from the County pursuant to Section 5: [email protected], with a copy to [email protected]. The Participating Entity has designated the legal assistant to the attorney for the Participating Entity as the Participating Entity’s representative for sending and receiving e-mail communications under Section 5, and the Participating Entity designates the following e-mail address as the Participating Entity’s email address for sending and receiving e-mail communications pursuant to Section 5: [email protected].

(2) Initial Cost Estimate. On or before the 60th day before an election for which the Participating Entity has requested election services, the Election Officer will mail and/or email to the Participating Entity a cost estimate for conducting the election. The cost estimate will include an administrative fee that is equal to 10% of the total estimated cost of conducting the Participating Entity’s election, excluding the costs of voting equipment. In the event of a joint election, the cost estimate will reflect that election costs will be divided on a pro rata basis among all entities involved in the election in the manner set forth in this Section 5. The proportional cost for the Election Officer to conduct each participating entity’s election will be calculated by dividing the number of registered voters in the territorial jurisdiction of each participating entity by the total number of registered voters for all of the participating entities involved in the joint election and multiplying that quotient by the total cost of the election. The product of these numbers is the pro rata cost share for each participating entity. The Participating Entity acknowledges and understands that if any other participating entity listed in the cost estimate cancels its election, each remaining participating entity’s pro rata cost (including the Participating Entity’s pro rata cost share) will result in a proportionate cost increase.

(3) Initial Invoice and Initial Payment. Along with the initial cost estimate, the Election Officer will also include an initial invoice for the Participating Entity to pay 75% of the initial cost estimate. The Participating Entity must pay the County the amount specified in each invoice no later than 30 days after the Participating Entity’s receipt of the invoice.

{W0981987.1} 6 Revised February 2020

(4) Runoff Elections. For each runoff election the Participating Entity has requested that the Election Officer conduct, the Participating Entity must make a payment equal to 75% of the projected costs for the runoff election no later than three business days after receiving that cost estimate from the Election Officer. The projected share of election costs will include an administrative fee that is equal to 10% of the total estimated cost of conducting the Participating Entity’s runoff election, excluding the costs of voting equipment.

(5) Each party may change its respective email addresses for e-mail communications under this Section 5, without the need to amend this Agreement, by sending notice to the other party in accordance with Section 9(B).

(F) Final Accounting and Final Invoice. The County will send the Participating Entity a final invoice of election expenses not later than 90 day unless the Election Officer notifies the Participating Entity during that 90-day period following the election that the Election Officer requires additional time to send a final invoice to the Participating Entity. The final invoice will include a listing of additional costs incurred at the Participating Entity’s behalf and specify the total payment due from the Participating Entity for any unpaid portion of the Participating Entity’s costs.

(1) Within thirty days after receipt of an election cost invoice setting forth the Election Officer’s actual contract expenses and charges incurred in the conduct of the election, the Participating Entity shall pay the Election Officer the balance due on each final invoice no later than 30 days after the Participating Entity’s receipt of that invoice.

(2) A refund may be due from the County to the Participating Entity if the final costs are lower than the amount already paid by the Participating Entity or if, at the end of the calendar year, the County Auditor’s Office makes adjustments to the election workers’ payroll and the amount already paid by the Participating Entity for election worker payroll costs exceeds the payroll amounts calculated by the County Auditor’s Office.

(G) The Participating Entity shall promptly review an election invoice and any supporting documentation when received from the County. The Participating Entity may audit, during the County’s normal business hours, relevant County election or accounting records upon reasonable notice to the County. The Participating Entity shall pay the entire final invoice or the undisputed portion of the final invoice not later than the 30th day after receiving the invoice. Failure by the Participating Entity to timely pay an invoice in full may impact the Election Officer’s participation in future elections with the Participating Entity.

{W0981987.1} 7 Revised February 2020

SECTION 6. PAYMENTS FOR USE OF VOTING EQUIPMENT

(A) The Election Officer shall conduct elections using a voting system certified by the Secretary of State in accordance with the Texas Election Code and that has been approved for use by the Travis County Commissioners Court unless otherwise agreed upon by the Participating Entity, the Travis County Clerk, and the Travis County Commissioners Court.

(B) The Participating Entity shall make payments to Travis County as consideration for the use of the County’s voting equipment. (1) For each election the Election Officer conducts for the Participating Entity after June 30, 2020 through January 1, 2021, the Participating Entity shall pay one half of one percent of the cost of the electronic voting system equipment installed at a polling place and one-half of one percent for each unit of other electronic equipment used by the Travis County Clerk’s Office to conduct the election or provide election services. (2) In this Agreement “other electronic equipment” includes ballot marking devices, ballot scanners, ballot printers, ballot tabulators, and ballot programming software.

(C) Payment by the Participating Entity to the County for voting equipment is due no later than 30 days after the Participating Entity’s receipt of an invoice from the County.

(D) If the County acquires additional equipment, different voting equipment, or upgrades to existing equipment during the term of this Agreement, the charge for the use of the equipment may be renegotiated.

SECTION 7. ADDITIONAL EARLY VOTING LOCATIONS (A) All of the Participating Entity’s voters within Travis County will have access to all of the Travis County Early Voting sites in each election at no additional cost.

(B) If the Participating Entity desires to have one or more early voting sites that are in addition to those sites the Election Officer has already selected for a specific election, the Participating Entity must submit the request to the Election Officer no later than 60 days before the election, and the Election Officer will thereafter provide a written estimate to the Participating Entity that sets forth the estimated cost for providing the additional early voting location(s) and the deadline by which the cost estimate must be paid. If, after receiving the cost estimate, the Participating Entity desires to move forward with having the additional early voting location(s), the Participating Entity will notify the Election Officer and include payment of the cost estimate with the Participating Entity’s notice to the Election Officer no later than the deadline specified in the Election Officer’s cost estimate.

{W0981987.1} 8 Revised February 2020

Pursuant to Texas Election Code Section 85.064(b) and notwithstanding any provision to the contrary, the Election Officer has sole discretion to determine whether to provide any additional early voting sites requested by the Participating Entity.

SECTION 8. COMMUNICATIONS

(A) The Participating Entity and the Election Officer shall each designate a member of their staff to serve as the primary contact for the respective offices under this Agreement and provide the name and contact information for that individual to the other party. Each party may change their designated staff members by sending notice to the other party without the further need to amend this Agreement.

(B) Throughout the term of this Agreement, the Participating Entity and the County will engage in ongoing communications on issues related to Participating Entity elections, the use of County’s voting equipment, and the delivery of services under this Agreement and, when necessary, the County Clerk, elections division staff members, and other election workers shall meet with the Participating Entity to discuss and resolve any problems which might arise under this Agreement.

(C) The Election Officer shall be the main point of media contact for election information related to election administration. The Participating Entity shall designate a contact to be the main point of contact for matters related to the content of the Participating Entity’s ballot or candidates.

SECTION 9. MISCELLANEOUS PROVISIONS

(A) Amendment/Modification

Except as otherwise provided, this Agreement may not be amended, modified, or changed in any respect whatsoever, except by a further Agreement in writing and duly executed by the parties hereto. No official, representative, agent, or employee of the County has any authority to modify this Agreement except pursuant to such expressed authorization as may be granted by the Commissioners Court of Travis County, Texas. No official, representative, agent, or employee of the Participating Entity has any authority to modify this Agreement except pursuant to such expressed authorization as may be granted by the governing body of the Participating Entity. Dana DeBeauvoir, Travis County Clerk, may propose necessary amendments or modifications to this Agreement in writing in order to conduct a joint election smoothly and efficiently, except that any such proposals must be approved by the Commissioners Court of the County and the governing body of the Participating Entity.

{W0981987.1} 9 Revised February 2020

(B) Notice

Unless otherwise provided herein, any notice to be given hereunder by any party to the other shall be in writing and may be affected by personal delivery, by certified mail, or by common carrier. Notice to a party shall be addressed as follows:

TRAVIS COUNTY MUNICIPAL UTILITY DISTRICT NO. 2 John W. Bartram c/o Armbrust & Brown, PLLC 100 Congress Avenue, Suite 1300 Austin, Texas 78701

TRAVIS COUNTY Honorable Dana DeBeauvoir, Travis County Clerk 1000 Guadalupe Street, Room 222 Austin, Texas 78701

Cc: Honorable David Escamilla, Travis County Attorney (or his successor) 314 West 11th Street, 5th Floor Austin, Texas 78701

Notice by hand-delivery is deemed effective immediately, notice by certified mail is deemed effective three days after deposit with a U.S. Postal Office or in a U.S. Mail Box, and notice by a common carrier, is deemed effective upon receipt. Each party may change the address for notice to it by giving notice of such change in accordance with the provisions of this Section. When notices by e-mail are permitted by this Agreement, (1) the notice is deemed effective upon the day it is sent if the e-mail is received before 5:00 p.m. on a business day; (2) the notice is deemed effective on the first business day after the e-mail was received if the email was received after 5:00 p.m. on a business day or anytime on a Saturday or Sunday. In this Agreement, “business day” means any weekday that is not a holiday designated by the Travis County Commissioners Court.

In the event that the performance by the County of any of its obligations or undertakings hereunder shall be interrupted or delayed by any occurrence not occasioned by its own conduct, whether such occurrence be an act of God or the result of war, riot, civil commotion, sovereign conduct, or the act or condition of any persons not a party hereto or in privity thereof, then it shall be excused from such performance for such period of time as is reasonably necessary after such occurrence to remedy the effects thereof.

(D) Venue and Choice of Law

{W0981987.1} 10 Revised February 2020

The Participating Entity agrees that venue for any dispute arising under this Agreement will lie in the appropriate courts of Austin, Travis County, Texas. This Agreement shall be governed by and construed in accordance with the laws of the State of Texas and the United States of America.

(E) Entire Agreement

This Agreement contains the entire agreement of the parties relating to the rights herein granted and the obligations herein assumed and also supersedes all prior agreements, including prior election services contracts and prior agreements to conduct joint elections. Any prior agreements, promises, negotiations, or representations not expressly contained in this Agreement are of no force or effect. Any oral representations or modifications concerning this Agreement shall be of no force or effect, excepting a subsequent modification in writing as provided herein.

(F) Severability

If any provision of this Agreement is found to be invalid, illegal or unenforceable by a court of competent jurisdiction, such invalidity, illegality or unenforceability shall not affect the remaining provisions of this Agreement. Parties to this Agreement shall perform their obligations under this Agreement in accordance with the intent of the parties to this Agreement as expressed in the terms and provisions of this Agreement.

(G) Breach

In the event that Participating Entity or County breaches any of its obligations under this Agreement, the non-breaching party shall be entitled to pursue any and all rights and remedies allowed by law.

(H) Payments from Current Revenues

Payments made by the Participating Entity in meeting its obligations under this Agreement shall be made from current revenue funds available to the governing body of the Participating Entity. Payments made by the County in meeting its obligations under this Agreement shall be made from current budget or revenue available to the County.

(I) Other Instruments

{W0981987.1} 11 Revised February 2020

The County and the Participating Entity agree that they will execute other and further instruments or any documents as may become necessary or convenient to effectuate and carry out the purposes of this Agreement.

(J) Third Party Beneficiaries

Except as otherwise provided herein, nothing in this Agreement, expressed or implied, is intended to confer upon any person, other than the parties hereto, any benefits, rights or remedies under or by reason of this Agreement.

(K) Joint Election Agreements

The County and the Participating Entity expressly understand and acknowledge that each may enter into other joint election agreements with other jurisdictions, to be held on Election Day and at common polling places covered by this Agreement.

When mediation is acceptable to both parties in resolving a dispute arising under this Agreement, the parties agree to use a mutually agreed upon mediator, or a person appointed by a court of competent jurisdiction, for mediation as described in Section 154.023 of the Texas Civil Practice and Remedies Code. Unless both parties are satisfied with the result of the mediation, the mediation will not constitute a final and binding resolution of the dispute. All communications within the scope of the mediation shall remain confidential as described in Section 154.053 of the Texas Civil Practice and Remedies Code unless both parties agree, in writing, to waive the confidentiality. Notwithstanding the foregoing, the parties intend to fully comply with the Texas Open Meetings Act and the Texas Public Information Act whenever applicable. The term “confidential” as used in this Agreement has the same meaning as defined and construed under the Texas Public Information Act and the Texas Open Meetings Act.

(L) Addresses for Payments Payments made to the County or the Participating Entity under this Agreement shall be addressed to following respective addresses:

Travis County Clerk – Elections Division P.O. Box 149325 Austin, Texas 78714

TRAVIS COUNTY MUNICIPAL UTILITY DISTRICT NO. 2 John W. Bartram c/o Armbrust & Brown, PLLC 100 Congress Avenue, Suite 1300 Austin, Texas 78701

{W0981987.1} 12 Revised February 2020

(M) This Agreement is effective upon execution by both parties and remains in effect until either party terminates this agreement for any reason upon providing 60 days written notice to the other party.

(N) All times referenced in this Agreement are to Central Time, and in all instances, the time-stamp clock used by the Travis County Clerk’s Office at 5501 Airport Boulevard in Austin, Texas is the official clock for determining the correct time.

(O) The individuals below have been authorized to sign this Agreement.

IN TESTIMONY WHEREOF, the parties hereto have executed this Agreement in multiple copies, each of equal dignity, and this Agreement takes effect on the date it is fully executed by the Participation Entity, the Travis County Judge (on behalf of the Travis County Commissioners Court), and the Travis County Clerk.

[Signatures on following pages]

{W0981987.1} 13 Revised February 2020

GENERAL MANAGER’S REPORT

Travis County Municipal Utility District #2 Board of Directors Meeting

June 3, 2020

1 WILBARGER CREEK MUNICIPAL UTILITY DISTRICT No. 2 - MASTER Water Report April 2020

Regulatory Report

Maximum Daily Flow Date Average Daily Flow Month 0.866 03/09/20 0.708 Mar 1.034 04/06/20 0.769 April

Total Water Flows

Month 2012 2013 2014 2015 2016 2017 2018 2019 2020 January 6,419.0 6,462.0 6,988.0 7,088.0 8,888.0 10,289.0 10,291.0 12,321.0 18,045.0 February 5,899.0 6,438.0 6,444.0 6,100.0 9,851.0 8,775.0 8,687.0 12,482.0 18,329.0 March 6,852.0 8,496.0 7,892.0 7,137.0 12,848.0 10,812.0 13,140.0 14,311.0 21,949.0 April 10,373.0 8,242.0 10,029.0 8,726.0 13,217.0 11,939.0 14,046.0 16,804.0 23,067.0 May 10,848.0 9,420.0 10,614.0 8,514.0 9,633.0 13,375.0 19,097.0 19,257.0 June 14,181.0 11,599.0 10,505.0 9,109.0 11,704.0 15,244.0 19,741.0 18,340.0 July 12,051.0 12,560.0 13,337.0 16,478.0 17,451.0 20,052.0 22,306.0 23,327.0 August 14,304.0 13,936.0 16,220.0 23,357.0 17,037.0 19,618.0 23,872.0 30,051.0 September 11,447.0 12,335.0 11,399.0 18,766.0 13,772.0 16,819.0 15,899.0 29,947.0 October 9,406.0 8,399.0 11,558.0 17,048.0 13,047.0 14,866.0 13,600.0 24,099.0 November 9,088.0 7,808.0 8,323.0 10,335.0 9,980.0 12,573.0 13,093.0 17,239.0 December 8,052.0 6,532.0 7,205.0 8,774.0 9,330.0 10,483.0 12,360.0 17,538.0 Yearly Totals 118,920.0 112,227.0 120,514.0 141,432.0 146,758.0 164,845.0 186,132.0 235,716.0 81,390.0

TRAVIS COUNTY MUD NO. 2

Bacteriological Report

2 Samples Taken 4/6/20 - Satisfactory

(2 Samples Required)

Chlorine Residual

Mar April Average 1.6 1.2 Maximum (4.0) 2.3 1.7 Minimum (0.2) 1.3 0.6

2 TRAVIS COUNTY MUNICIPAL UTILITY DISTRICT NO. 2 Billing Report Apr-20

Connections March April Active 986 989 Inactive 7 6 Occupied 979 983

Billing Recap March April Current Billing $ 109,716.95 $ 114,064.06 Basic Service $ 46,119.99 $ 46,392.19 Water $ 32,098.95 $ 36,094.65 Sewer $ 30,954.00 $ 30,961.50 State Assessment $ 544.01 $ 565.72 Deposit $ - $ - Miscellaneous $ - $ 50.00

Collections Mar April Letters 0 0 Terminations 0 0

Taps (FY 19-20) Oct Nov Dec Jan Feb Mar April May June July Aug Sept Total Actual 3 4 0 14 3 9 3 36 Budget 4 4 4 4 4 4 4 4 4 4 4 4 44

COTTONWOOD CREEK MUNICIPAL UTILITY DISTRICT NO. 1

Connections March April Active 1184 1185 Inactive 6 11 Occupied 1178 1174

WILBARGER CREEK MUNICIPAL UTILITY DISTRICT NO. 1

Connections March April Active 475 473 Inactive 0 4 Occupied 475 469

3 Travis County MUD #2, Wilbarger Creek #1, Cottonwood Creek #1 Water Accountability Chart

CTN1 WC#1 Master TCM2 TCM2 CTN1 WC#1 Total CTN1 Contractor Gallons Percent Mtr. Mtr. TCM2 WC#1 Total TCM2 CTN1 WC#1 Meter Read Billed Mtr. Billed Billed Billings flushing flushing/ Unacct For Gain/Loss Read Read flushing flushing flushing Connects Connects Connects Read Adj Creek Leak From To 1,000 gal. 1,000 gal. 1,000 gal. Adj 1,000 gal. Adj 1,000 gal. 28-Aug-17 27-Sep-17 17,360.0 10,000.0 -108.0 4,911.0 -63.0 1,786.0 -12.0 16,514.0 33.0 27.0 7.5 0.0 67.5 -778.5 748 810 148 -4.48% 28-Sep-17 26-Oct-17 13,763.0 6,909.0 -1,405.0 5,402.0 -50.0 965.0 0.0 11,821.0 33.0 0.0 0.0 0.0 33.0 -1,909.0 751 815 148 -13.87% 27-Oct-17 28-Nov-17 12,758.0 6,688.0 -93.0 4,074.0 -29.0 930.0 -75.0 11,495.0 130.0 30.0 7.5 0.0 167.5 -1,095.5 753 824 148 -8.59% 29-Nov-17 29-Dec-17 10,545.0 5,500.0 -39.0 4,074.0 0.0 765.0 0.0 10,300.0 39.6 30.0 7.5 0.0 77.1 -167.9 767 829 172 -1.59% 30-Dec-17 29-Jan-18 9,876.0 3,955.0 -34.0 3,675.0 -20.0 832.0 -34.0 8,374.0 33.0 30.0 7.5 0.0 70.5 -1,431.5 773 831 182 -14.49% 30-Jan-18 27-Feb-18 9,004.3 3,222.0 -9.0 3,404.0 -9.0 671.0 0.0 7,279.0 33.0 38.5 8.5 100.0 180.0 -1,545.3 776 839 190 -17.16% 28-Feb-18 26-Mar-18 11,642.0 5,413.0 -17.0 4,295.0 -41.0 1,420.0 0.0 11,070.0 33.0 33.0 7.5 0.0 73.5 -498.5 785 864 197 -4.28% 27-Mar-18 23-Apr-18 12,194.0 5,428.0 -85.0 3,978.0 -109.0 999.0 -8.0 10,203.0 44.0 49.5 10.5 0.0 104.0 -1,887.0 804 878 197 -15.47% 24-Apr-18 25-May-18 18,724.0 9,253.0 -17.0 5,157.0 -10.0 2,410.0 0.0 16,793.0 110.0 110.0 25.0 0.0 245.0 -1,686.0 809 889 214 -9.00% 26-May-18 27-Jun-18 21,005.0 11,823.0 0.0 4,780.0 -17.0 1,956.0 0.0 18,542.0 115.0 115.0 25.0 0.0 255.0 -2,208.0 817 922 224 -10.51% 28-Jun-18 27-Jul-18 21,402.0 11,088.0 0.0 5,279.0 0.0 2,919.0 0.0 19,286.0 33.0 33.0 7.5 0.0 73.5 -2,042.5 829 939 225 -9.54% 28-Jul-18 28-Aug-18 24,202.0 13,496.0 0.0 6,352.0 6.0 3,045.0 2.0 22,901.0 115.0 115.0 25.0 0.0 255.0 -1,046.0 837 950 225 -4.32% 29-Aug-18 26-Sep-18 16,483.0 8,095.0 0.0 4,526.0 0.0 1,130.0 0.0 13,751.0 37.5 39.0 9.0 0.0 85.5 -2,646.5 842 963 239 -16.06% 27-Sep-18 29-Oct-18 14,773.0 8,483.4 0.0 4,313.0 0.0 1,269.0 0.0 14,065.4 115.0 115.0 25.0 0.0 255.0 -452.7 848 977 250 -3.06% 30-Oct-18 28-Nov-18 11,593.0 5,367.0 0.0 4,366.0 0.0 1,165.0 0.0 10,898.0 41.0 37.5 4.5 0.0 83.0 -612.0 848 977 254 -5.28% 29-Nov-18 26-Dec-18 11,393.0 4,561.0 0.0 4,041.0 0.0 921.0 0.0 9,523.0 115.0 34.5 15.0 0.0 164.5 -1,705.5 848 990 275 -14.97% 27-Dec-18 27-Jan-19 12,656.0 4,628.0 0.0 4,355.0 0.0 1,120.0 0.0 10,103.0 115.0 34.5 15.0 0.0 164.5 -2,388.5 864 992 275 -18.87% 28-Jan-19 25-Feb-19 12,818.0 4,669.0 0.0 4,031.0 0.0 1,410.0 0.0 10,110.0 115.0 34.5 15.0 0.0 164.5 -2,543.5 887 1008 303 -19.84% 26-Feb-19 26-Mar-19 11,735.0 4,906.0 0.0 4,381.0 0.0 1,137.0 0.0 10,424.0 115.0 34.5 15.0 345.6 510.1 -800.9 892 1009 308 -6.82% 27-Mar-19 25-Apr-19 16,263.0 6,691.0 0.0 5,484.0 0.0 2,260.0 0.0 14,435.0 115.0 34.5 15.0 345.6 510.1 -1,317.9 909 1029 308 -8.10% 26-Apr-19 28-May-19 19,187.0 9,142.0 0.0 4,508.0 0.0 2,712.0 0.0 16,362.0 115.0 34.5 15.0 345.6 510.1 -2,314.9 920 1043 329 -12.06% 29-May-19 26-Jun-19 18,540.0 8,416.0 0.0 5,591.0 0.0 2,721.0 0.0 16,728.0 330.0 31.5 4.5 345.6 711.6 -1,100.4 923 1043 364 -5.94% 27-Jun-19 24-Jul-19 18,196.0 8,633.0 0.0 6,173.0 0.0 2,133.0 0.0 16,939.0 33.0 34.5 4.5 345.6 417.6 -839.4 929 1074 376 -4.61% 25-Jul-19 26-Aug-19 30,261.0 15,391.0 0.0 7,835.0 0.0 3,957.0 0.0 27,183.0 39.0 34.5 4.5 345.6 423.6 -2,654.4 935 1084 394 -8.77% 27-Aug-19 24-Sep-19 28,661.0 14,790.0 0.0 7,214.0 0.0 4,377.0 0.0 26,381.0 33.0 31.5 4.5 345.6 414.6 -1,865.4 945 1096 420 -6.51% 25-Sep-19 25-Oct-19 24,710.0 11,435.0 0.0 6,410.0 10.0 4,208.0 0.0 22,063.0 33.0 34.5 4.5 345.6 417.6 -2,229.4 948 1111 435 -9.02% 26-Oct-19 22-Nov-19 14,639.0 6,369.0 32.0 4,751.0 0.0 2,422.0 50.0 13,624.0 33.0 34.5 4.5 345.6 417.6 -597.4 949 1113 439 -4.08% 23-Nov-19 26-Dec-19 15,384.0 5,882.0 0.0 5,377.0 0.0 2,797.0 0.0 14,056.0 33.0 33.0 4.5 345.6 416.1 -911.9 952 1123 442 -5.93% 27-Dec-19 27-Jan-20 18,636.0 5,360.0 0.0 5,022.0 0.0 2,946.0 0.0 13,328.0 33.0 33.0 15.0 81.0 -5,227.0 974 1145 468 -28.05% 28-Jan-20 26-Feb-20 12,493.0 4,591.0 21.0 4,080.0 42.0 2,457.0 0.0 11,191.0 33.0 33.0 15.0 81.0 -1,221.0 977 1164 474 -9.77% 27-Feb-20 26-Mar-20 20,585.0 4,929.0 29.0 4,647.0 22.0 2,828.0 0.0 12,455.0 1,700.0 3,000.0 1,700.0 6,400.0 -1,730.0 980 1170 475 -8.40% 27-Mar-20 23-Apr-20 19,854.0 5,483.0 29.0 5,146.0 0.0 2,138.0 0.0 12,796.0 30.0 23.0 53.0 -7,005.0 989 1185 476 -35.28%

2020 Total 81,737.0 27,131.0 82.0 23,877.0 64.0 13,450.0 50.0 64,654.0 1,832.0 3,133.5 1,739.0 691.2 7,395.7 -9,687.3 2020 Monthly Average 16,347.4 5,426.2 16.4 4,775.4 12.8 2,690.0 10.0 12,930.8 366.4 626.7 347.8 345.6 1,479.1 -1,937.5 -11.85%

2019 Total 317,604.0 131,243.0 111.0 93,412.0 74.0 43,709.0 50.0 268,599.0 3,061.0 3,567.5 1,856.0 3,456.0 11,940.5 -37,064.5 2019 Monthly Average 17,644.7 7,291.3 6.2 5,189.6 4.1 2,428.3 2.8 14,922.2 170.1 198.2 109.2 246.9 663.4 -2,059.1 -11.67%

2018 Total 182,608.3 92,444.4 -294.0 53,907.0 -229.0 18,346.0 -115.0 164,059.4 838.1 738.0 165.5 100.0 1,841.6 -16,707.4 2018 Monthly Average 15,217.4 7,703.7 -24.5 4,492.3 -19.1 1,528.8 -9.6 13,671.6 69.8 61.5 13.8 8.3 153.5 -1,392.3 -9.15%

2017 Total 161,496.0 82,618.0 -1,773.0 50,565.0 -891.0 15,707.0 -26.0 146,200.0 400.9 264.9 65.5 0.0 731.3 -14,564.7 2017 Monthly Average 13,458.0 6,884.8 -147.8 4,213.8 -74.3 1,308.9 -2.2 12,183.3 33.4 22.1 5.5 0.0 60.9 -1,213.7 -9.02%

FY 14-15 -5.23% 4 FY 15-16 -13.41% FY 16-17 -9.02% Wilbarger Creek MUD No. 2 Water Purchases from Metro H2O

FY16 FY17 FY18 FY19 Gallons (in 000's) FY20

Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb

FY16 FY17 FY18 FY19 FY20 Avg. Usage Take or Pay Water Purchases: Mar 12,848 10,812 13,140 14,311 21,949 14,612 21,949 Apr 13,217 11,939 14,046 16,804 23,067 16,804 23,067 May 9,633 13,375 19,097 19,257 19,257 - Jun 11,704 15,244 19,741 18,340 18,340 - Jul 17,451 20,052 22,306 23,327 23,327 - Aug 17,037 19,618 23,872 30,051 30,051 - Sep 13,772 16,819 15,899 29,947 29,947 - Oct 17,048 14,866 13,600 24,099 24,099 - Nov 10,335 12,573 13,093 17,239 17,239 - Dec 8,774 10,483 12,360 17,538 17,538 - Jan 8,888 10,291 12,321 18,045 18,045 - Feb 9,851 8,687 12,482 18,329 18,329 - 150,558 164,759 191,957 247,287 45,016 247,588 45,016

# of connections: TCM2 647 736 887 977 989 Trend Notes: CCN1 507 786 1,008 1,164 1,185 February 2019 - March 2020 241,464,333 WC1 138 148 303 474 476 Actual + Rem Avg 254,925 1,292 1,670 2,198 2,615 2,650 CY Take or Pay 45,016 Avg/ GPD/Connection 0.319 0.270 0.239 0.259 0.047 Amount Under/Over 241,419,317

5 Travis County MUD No. 2 Water Usage Analysis By Fiscal Year

Billing Builder # Commercial # Irrigation # Non-Profit # Residential # Fire Hyd # Monthly Totals # of Res # of Average Period (gallons) (gallons) (gallons) (gallons) (gallons) (gallons) (gallons) Conn Occupied Usage Letters Terms

Oct 17 242,000 25 158,000 2 1,373,000 11 58,000 1 5,065,000 702 4,000 1 6,900,000 723 696 7.3 102 6 Nov 17 196,000 26 144,000 2 1,197,000 10 41,000 1 4,910,000 703 0 1 6,488,000 724 700 7.1 138 7 Dec 17 112,000 34 96,000 2 210,000 10 63,000 1 3,801,000 708 0 1 4,282,000 732 706 5.3 84 2 Jan 18 73,000 26 41,000 2 354,000 10 16,000 1 3,461,000 710 0 0 3,945,000 738 707 4.8 118 2 Feb 18 84,000 32 49,000 5 78,000 10 44,000 1 2,882,000 714 0 1 3,137,000 745 707 4.0 127 6 Mar 18 220,000 38 81,000 3 656,000 11 54,000 1 4,345,000 720 57,000 1 5,413,000 752 713 6.1 95 3 April 18 220,000 45 49,000 2 511,000 11 55,000 1 4,573,000 729 20,000 1 5,428,000 773 715 6.2 164 4 May 18 366,000 49 112,000 2 2,573,000 11 108,000 1 5,877,000 728 211,000 1 9,247,000 728 723 8.6 109 4 June 18 478,000 53 174,000 3 2,938,000 11 192,000 1 7,949,000 739 92,000 1 11,823,000 735 729 11.5 104 4 July 18 493,000 46 98,000 3 2,498,000 11 157,000 1 8,006,000 749 15,000 1 11,267,000 782 742 10.9 110 9 Aug 18 727,000 37 115,000 3 2,124,000 11 162,000 1 10,513,000 757 0 1 13,641,000 783 748 14.4 112 2 Sept 18 447,000 62 161,000 3 1,985,000 11 80,000 1 5,524,000 767 0 1 8,197,000 817 756 7.3

2018 Fiscal Total 3,658,000 1,278,000 16,497,000 1,030,000 66,906,000 399,000 89,768,000

Oct 18 10,211,000 56 207,000 3 1,791,000 11 58,000 1 6,187,000 764 0 1 18,454,000 823 762 19.9 110 6 Nov 18 342,000 52 183,000 3 831,000 11 57,000 1 3,954,000 780 0 1 5,367,000 829 771 5.2 81 0 Dec 18 306,000 55 56,000 3 610,000 11 62,000 1 3,527,000 787 0 1 4,561,000 839 782 4.6 94 5 Jan 19 176,000 55 70,000 3 171,000 11 70,000 1 4,141,000 794 0 1 4,628,000 849 789 5.1 87 4 Feb 19 222,000 61 115,000 3 406,000 11 212,000 1 3,727,000 798 0 1 4,682,000 862 787 4.6 91 2 Mar 19 228,000 71 119,000 3 418,000 11 69,000 1 4,094,000 800 1 1 4,928,001 868 792 5.0 78 4 April 19 344,000 67 70,000 3 1,413,000 11 87,000 1 4,853,000 812 0 1 6,767,000 884 804 5.9 97 4 May 19 371,000 66 166,000 3 3,204,000 11 98,000 1 5,303,000 830 0 1 9,142,000 896 818 6.3 86 5 June 19 464,000 65 148,000 3 1,796,000 11 111,000 1 5,897,000 839 0 1 8,416,000 899 828 7.1 111 5 July 19 627,000 63 218,000 3 1,004,000 11 142,000 1 6,642,000 846 0 1 8,633,000 905 836 8.0 131 11 Aug 19 940,000 65 187,000 3 2,251,000 11 139,000 1 11,874,000 860 0 1 15,391,000 911 845 14.1 83 3 Sept 19 861,000 68 141,000 3 2,527,000 11 176,000 1 11,085,000 866 0 1 14,790,000 921 856 13.0 97 11

2019 Fiscal Total 15, 092,000 1,680,000 16,422,000 1,281,000 71,284,000 9,776 1 105,759,001

6 WILBARGER CREEK MUNICIPAL UTILITY DISTRICT NO. 2 - MASTER

Wastewater Report

Effluent Daily Avg Flow Daily Max Flow Daily Min Flow Monthly Total Flow Month Parameters (1K gal.) (1K gal.) (1K gal.) (1K gal.) Within Permit October 2019 Yes 228.8 764.0 113.0 7,092.0 November 2019 Yes 275.9 613.0 22.0 8,278.0 December 2019 Yes 283.4 394.0 177.0 8,785.0 January 2020 Yes 367.0 551.0 213.0 11,379.0 February 2020 Yes 425.9 1,258.0 270.0 12,352.0 March 2020 Yes 375.5 738.0 241.0 11,639.0 April 2020 Yes 417.9 764.0 173.0 12,536.0 May 2020 August 2020

7 2601 Forest Creek Drive Round Rock, Texas 78665-1232 512.246.1400

TO: Travis County MUD #2 Board of Directors FROM: Dennis Hendrix, Manager SUBJECT: Write Off Request DATE: April 2020

(There are no write offs for this period)

8 TRAVIS COUNTY MUNICIPAL UTILITY DISTRICT NO. 2 Status of Collections by Fiscal Year

Month 2016/17 2017/18 2018/19 2019/20 AUGUST $ 83.97 $ - $ - $ 125.06 COLLECTED $ - $ - $ - $ -

SEPTEMBER $ - $ - $ - $ - COLLECTED $ - $ - $ - $ -

OCTOBER $ - $ - $ - $ - COLLECTED $ - $ - $ - $ -

NOVEMBER $ - $ - $ - $ - COLLECTED $ - $ - $ - $ -

DECEMBER $ - $ - $ 321.11 $ - COLLECTED $ - $ - $ -

JANUARY $ - $ - $ - $ 495.84 COLLECTED $ - $ - $ - $ -

FEBRUARY $ - $ - $ - $ 485.01 COLLECTED $ - $ - $ - $ -

MARCH $ - $ - $ - $ 636.71 COLLECTED $ - $ - $ - $ -

APRIL $ - $ - $ - $ - COLLECTED $ - $ - $ - $ -

MAY $ - $ - $ - COLLECTED $ - $ - $ -

JUNE $ - $ - $ 469.27 COLLECTED $ - $ - $ -

JULY $ - $ - $ - COLLECTED $ - $ - $ - AUGUST $ - $ - $ 868.40 COLLECTED $ - $ - $ -

SEPTEMBER $ - $ 811.44 $ 208.37 COLLECTED $ - $ -

OCTOBER $ - $ - COLLECTED $ - $ -

TOTAL TO COLLECTIONS: $ 622.71 $ 811.44 $ 1,867.15 $ 1,742.62 TOTAL COLLECTED: $ (96.48) $ - $ - $ -

TRAVIS CENTRAL APPRAISAL DISTRICT BOARD OFFICERS BOARD MEMBERS James Valacez Tom Buckle Chairperson Bruce Elfant Bruce Grube Anthony Nguyen Vice Chairperson Eleanor Powell Theresa Bastian Ryan Steglich Secretary/Treasurer Felipe Ulloa Marya Crigler Blanca Zamora-Garcia Chief Appraiser

April 01, 2020 April 1, 2020 TRAVIS CO MUD NO 2 WILMER ROBERTS, PRESIDENT C\O JOHN W BARTRAM 100 CONGRESS AVE STE 1300 AUSTIN,TX 78701-2744

TRAVIS CO MUD NO 2 - Juris. No. 70 The appraisal district has substantially completed the 2020 valuation of properties in your jurisdiction. We have not yet received or processed any protests. Per Section 26.01(e) of the Texas Property Tax Code, I am supplying you with the estimate of taxable value of your jurisdiction. Please note that this estimate is based on the January 1 assessment date and historic protest trends. The COVID-19 pandemic is an unprecedented event and the financial impact on real estate markets and appraised values is unknown at this time. However, there is a possiblity that this situation may substantially effect future estimates and value certifications.

2019 Certified Net Taxable $234,322,762

2020 Preliminary Net Taxable $262,915,710 Estimate of value loss due to protests $(3,685,815)

2020 Estimate of Net Taxable $259,229,895

Included in the above estimate of taxable value is new value of approximately: $24,863,458

Sincerely,

Marya Crigler Chief Appraiser [email protected] (512) 834-9317 ext. 337 70 1106

P O Box 149012 8314 Cross Park Drive Austin, Texas 78714-9012 (512) 834-9317 TDD (512) 836-3328 Fax (512) 835-5371 WWW.TRAVISCAD.ORG April 1, 2020 2020 Preliminary Estimate Information TRAVIS CO MUD NO 2 Juris: 70 Entity 1106

A. 2019 total taxable value 234,322,762 B. 2019 tax ceiling C. 2019 taxable value lost because of court appeals 1,800,000 D. The amount of taxable value lost due to deannexation E1. The amount exempt for the first time in 2020 705,700 E2. The amount exempt due to an increased exemption F. The amount of 2019 taxable value lost due to new productivity valuation in 2020 G. The amount of 2020 taxable value exempted for pollution control H. 2020 tax ceiling I. The amount of taxable value added to the roll since Jan 1, 2019 by annexation J. The 2020 taxable value of new improvements added to the appraisal roll since Jan 1, 2019 24,863,458 K. 2020 average appraised value of properties with a homestead exemption 275,545 L. 2020 average taxable value of properties with a homestead exemption 275,537 M. 2019 average appraised value of properties with a homestead exemption 274,374 N. 2019 average taxable value of properties with a homestead exemption 274,190 O. 2020 tax base reduction due to frozen taxes P. 2020 Over-65 collectible levy Q1. Tax Increment Finance captured value Q2. Tax Increment Finance levy R1. 2020 taxable value of Chapter 313 limitation (ECO exemption) R2. 2019 taxable value of Chapter 313 limitation (ECO exemption)

2020 Total appraised value of all property 274,020,924 2020 Total appraised value of all new property 25,738,321 2020 Total taxable value of all property 259,229,895 2020 Total taxable value of all new property 24,863,458

2019 Total appraised value of all property 244,340,003 2019 Total appraised value of all new property 23,657,903 2019 Total taxable value of all property 234,322,762 2019 Total taxable value of all new property 22,721,965

P O Box 149012 8314 Cross Park Drive Austin, Texas 78714-9012 (512) 834-9317 TDD (512) 836-3328 Fax (512) 835-5371 WWW.TRAVISCAD.ORG TRAVIS County 2020 PRELIMINARY TOTALS 70 - TRAVIS CO MUD NO 2 Property Count: 1,113 Grand Totals 3/31/2020 1:01:15PM

Land Value Homesite: 27,226,236 Non Homesite: 8,269,117 Ag Market: 0 Timber Market: 0 Total Land (+) 35,495,353

Improvement Value

Homesite: 226,056,773 Non Homesite: 11,362,041 Total Improvements (+) 237,418,814

Non Real Count Value

Personal Property: 34 1,106,757 Mineral Property: 00 Autos: 00Total Non Real (+) 1,106,757 Market Value = 274,020,924 Ag Non Exempt Exempt

Total Productivity Market: 00 Ag Use: 00Productivity Loss (-) 0 Timber Use: 00Appraised Value = 274,020,924 Productivity Loss: 0 0 Homestead Cap (-) 5,037

Assessed Value = 274,015,887

Total Exemptions Amount (-) 11,100,177 (Breakdown on Next Page)

Net Taxable = 262,915,710

APPROXIMATE TOTAL LEVY = NET TAXABLE * (TAX RATE / 100) 2,339,949.82 = 262,915,710 * (0.890000 / 100)

Tax Increment Finance Value: 0 Tax Increment Finance Levy: 0.00

70/1106 Page 554 of 781 TRAVIS County 2020 PRELIMINARY TOTALS 70 - TRAVIS CO MUD NO 2 Property Count: 1,113 Grand Totals 3/31/2020 1:02:39PM

Exemption Breakdown

Exemption Count Local State Total DP 15 65,000 0 65,000 DV1 5 0 25,000 25,000 DV2 4 0 34,500 34,500 DV3 11 0 75,080 75,080 DV4 21 0 120,000 120,000 DV4S 1 0 12,000 12,000 DVHS 31 0 9,129,093 9,129,093 DVHSS 1 0 329,641 329,641 EX-XV 4 0 470,084 470,084 OV65 160 740,000 0 740,000 OV65S 1 5,000 0 5,000 SO 9 94,779 0 94,779

Totals 904,779 10,195,398 11,100,177

70/1106 Page 555 of 781 TRAVIS County 2020 PRELIMINARY TOTALS 70 - TRAVIS CO MUD NO 2 Property Count: 1,113 Grand Totals 3/31/2020 1:02:39PM

State Category Breakdown

State Code Description CountAcres New Value Market Value Taxable Value

A SINGLE FAMILY RESIDENCE 901 $21,649,069 $247,973,387 $237,338,257 C1 VACANT LOTS AND LAND TRACTS 47 $0 $357,325 $357,325 E RURAL LAND, NON QUALIFIED OPE 699.8569 $0 $2,030,796 $2,030,796 F1 COMMERCIAL REAL PROPERTY 2 $0 $12,972,099 $12,972,099 J4 TELEPHONE COMPANY (INCLUDI 3 $0 $9,925 $9,925 L1 COMMERCIAL PERSONAL PROPE 28 $33,117 $1,077,970 $1,077,970 O RESIDENTIAL INVENTORY 120 $4,056,135 $9,129,338 $9,129,338 X TOTALLY EXEMPT PROPERTY 4 $0 $470,084 $0 Totals 99.8569 $25,738,321 $274,020,924 $262,915,710

70/1106 Page 556 of 781 TRAVIS County 2020 PRELIMINARY TOTALS 70 - TRAVIS CO MUD NO 2 Property Count: 1,113 Effective Rate Assumption 3/31/2020 1:02:39PM

New Value

TOTAL NEW VALUE MARKET: $25,738,321 TOTAL NEW VALUE TAXABLE: $25,216,975

New Exemptions

Exemption Description Count

ABSOLUTE EXEMPTIONS VALUE LOSS

Exemption Description Count Exemption Amount DV4 Disabled Veterans 70% - 100% 3 $36,000 DVHS Disabled Veteran Homestead 2 $594,700 OV65 Over 65 15 $75,000 PARTIAL EXEMPTIONS VALUE LOSS 20 $705,700 NEW EXEMPTIONS VALUE LOSS $705,700

Increased Exemptions

Exemption Description Count Increased Exemption Amount

INCREASED EXEMPTIONS VALUE LOSS

TOTAL EXEMPTIONS VALUE LOSS $705,700

New Ag / Timber Exemptions

New Annexations

New Deannexations

Average Homestead Value

Category A and E

Count of HS Residences Average Market Average HS Exemption Average Taxable

638 $275,545 $8 $275,537 Category A Only

Count of HS Residences Average Market Average HS Exemption Average Taxable

638 $275,545 $8 $275,537

Lower Value Used

Count of Protested Properties Total Market Value Total Value Used

70/1106 Page 557 of 781

SCHROEDER ENGINEERING COMPANY Texas Board of Professional Engineers Firm Registration # F-5803 1015 Bee Cave Woods, Suite 203 Austin, Texas 78701 Phone (512) 469-7990 Fax (512) 347-0998

MEMORANDUM

To: Board of Directors, Travis County M. U. D. No. 2 From: Ken Schroeder, P.E. Date: May 26, 2020 Subject: Status Report for June 3, 2020 Meeting

I have reviewed the invoice from Crossroads Utility Services. The total invoice is for $30,031.47, which is more than double the usual amount. There were two repairs of water service line leaks, one of which started in October 2019. Both were unusually deep and located in and near the street and other utilities. The total for these two was about $12,000. There were also two wastewater line repairs for a total of about $4,000.

I have reviewed and recommend approval of the following pay estimates:

1. Project: Shadowglen Phase 2 Sections 21A and 21B (131 SF lots in 51.8 acres) Contractor: JL Gray Construction, Inc. Pay Estimate # - NONE THIS MONTH

3. Project: Shadowglen Phase 1 Section 11 (57 SF lots in 15.4 acres) Contractor: JL Gray Construction, Inc. Pay Estimate # - NONE THIS MONTH

MASTER DISTRICT ITEMS

The monthly Discharge Monitoring Report for the WWTP for April 2020 showed an average daily flow of 417,900 gallons per day (gpd) and a maximum day of 764,000 gpd. All effluent parameters were within permit limits. Dennis Hendrix with Crossroads and Jason Baze with Jones │Carter are coordinating with Microdyn MBR for repair and replacement of equipment.

At the meeting on May 4, 2020, the Master District terminated the proposed expansion of the WWTP with MBR technology and authorized Jones | Carter to begin the design of a WWTP with conventional technology with an average flow capacity of 1.0 million gallons per day. The Master District is also negotiating with the City of Manor for an agreement for interim and emergency wastewater treatment service if needed before completion of the 1.0 mgd WWTP. The plans for a second elevated water storage tank with a capacity of 800,000 gallons are pending final review by Travis County.

Subject: ShGLen 25/26: Vacation of Temporary Drainage Easement 2016200116

From: Ken Schroeder Sent: Friday, May 15, 2020 10:03 PM To: Kennaugh, Allison; John Bartram Cc: Reece, Jason; Mary Lou Sheridan; Burke, Brett Subject: Re: ShGLen 25/26: Vacation of Temporary Drainage Easement 2016200116

OK with me.

Ken

From: Kennaugh, Allison Sent: Friday, May 15, 2020 4:45 PM To: John Bartram; Ken Schroeder Cc: Reece, Jason; Mary Lou Sheridan; Burke, Brett Subject: RE: ShGLen 25/26: Vacation of Temporary Drainage Easement 2016200116

John / Ken,

Okay there was a mislabel on the 25/26 plat that we are processing with County. It is NOT 2017030066 that I need to bring up (which was, correctly, vacated earlier this year in conjunction with 21A/B plat construction and plat). The one we need to discuss NOW is doc no 2016200116. It’s attached. See sheet from the 25/26 plat that shows its location with respect to the rest of shadowglen.

We havent even started construction yet; at this time I just need an email from the MUD stating you all are prepared to vacate it once the drainage facilities are in place and the easement is no longer needed. Could you send that over pretty quickly? A “yes” reply would do it!

Thank you, gentleman.

Allison Kennaugh, P.E. Direct: 512-782-0614 | Mobile: 469-338-9203 COVID-19 Alternate Work Schedule: M-F 1:00PM-6:00PM

My email and and voicemails at my direct desk line are still the best way to reach me.

From: Kennaugh, Allison Sent: Saturday, April 11, 2020 8:23 AM To: John Bartram Cc: Reece, Jason; Ken Schroeder; Mary Lou Sheridan Subject: RE: ShGLen 25/26: Vacation of Temporary Drainage Easement 2017030066

Here is a recorded copy of the release for your files.

2 Allison Kennaugh, P.E. Direct: 512-782-0614 | Mobile: 469-338-9203 COVID-19 Alternate Work Schedule: M-F 1:00PM-6:00PM

My email and and voicemails at my direct desk line are still the best way to reach me.

From: Kennaugh, Allison Sent: Thursday, April 9, 2020 5:49 AM To: John Bartram Cc: Reece, Jason; Ken Schroeder; Mary Lou Sheridan Subject: Re: ShGLen 25/26: Vacation of Temporary Drainage Easement 2017030066

Oh —this is the one that goes all the way into 21ab! I am with you. Yes okay I have all that is needed. Thanks so much, sorry for the confusion.

Get Outlook for iOS

From: John Bartram Sent: Wednesday, April 8, 2020 8:19:02 PM To: Kennaugh, Allison Cc: Reece, Jason; Ken Schroeder; Mary Lou Sheridan Subject: RE: ShGLen 25/26: Vacation of Temporary Drainage Easement 2017030066

Allison, release of this easement was approved in January. See attached. Prior correspondence (also attached) indicates that the original was sent to you for recording. I am copying Mary Lou in my office to see if she has any further paper trail. We are working remotely, so may not have a definite answer immediately.

From: Kennaugh, Allison Sent: Wednesday, April 8, 2020 4:02 PM To: John Bartram Cc: Reece, Jason; Ken Schroeder Subject: ShGLen 25/26: Vacation of Temporary Drainage Easement 2017030066

John / Ken,

In response to a county comment, I am looking to see about the status of the below temporary drainage easement located along the north side of existing Section 20, within proposed sections 25/26. Can you speak to 1)whether this easement is already vacated or 2)will be vacated once storm infrastructure is complete and in use with Section 25/26.

In either case, The County is asking for a copy of the vacation document (blank would be okay) for their files.

Scenario 1 or 2 is fine with County – just need an email from the MUD stating which it is and a copy of the existing/future vacation document.

It’s this one here:

From: Mary Lou Sheridan Sent: Friday, May 15, 2020 4:13 PM Cc: Mary Lou Sheridan Subject: REMINDER: Travis County MUD No. 2 - Cybersecurity Awareness Training (Required) Attachments: Cybersecurity Awareness Training Assessment.pdf

Importance: High

Good afternoon Directors,

Just a reminder that the deadline to complete the training outlined in the email below and provide the completed assessment form (attached) is June 14, 2020.

You will receive a per diem payment for taking this required training; however, please note that directors can only receive one per diem payment per day, so please make a point to take this on a different date than a Board meeting.

Just let me know if you have any questions.

Thank you, Mary Lou Sheridan

From: Mary Lou Sheridan Sent: Tuesday, April 14, 2020 3:22 PM Cc: Mary Lou Sheridan Subject: Travis County MUD No. 2 - Cybersecurity Awareness Training (Required) Importance: High

Good afternoon Directors,

This is a reminder that all Board members are required to complete a cybersecurity training course certified by the Department of Information Resources (the “DIR”) by June 14th.

If you have not yet completed the required course, you may be interested in taking the Texas Municipal League Intergovernmental Risk Pool’s (“TML’s”) free, DIR-certified program. This can be done by:

(i) watching the 17-minute training video available at this link: https://www.youtube.com/watch?v=ZmZ9fxxyCok&feature=youtu.be;

(ii) completing and self-grading the assessment attached to this email; and

(iii) sending a copy of corrected assessment to me at [email protected].

A list of other certified training programs is available on the DIR’s website at https://dir.texas.gov/View-About- DIR/Information-Security/Pages/Content.aspx?id=154. 1 Board members will be entitled to a fee of office for completing the certified cybersecurity training course. When you provide me with proof of course completion, I will forward confirmation that you have done so to the District’s bookkeeper.

The training must be completed by June 14, 2020.

Please let me or John Bartram know if you have any questions.

Thank you,

Mary Lou Sheridan Legal Assistant Armbrust & Brown, PLLC 100 Congress Avenue, Suite 1300 Austin, Texas 78701-2744 (512) 435-2390 - Direct (512) 435-2360 - Facsimile [email protected] www.abaustin.com

MEMORANDUM

To: Board of Directors – Travis County Municipal Utility District No. 2

From: Armbrust & Brown, PLLC

Re: Schedule for Establishing District Tax Rate for 2019

Date: June 3, 2020

Before the Board adopts the District’s 2020 tax rate, it is required to give notice of “each meeting at which the adoption of the tax rate will be considered.” The notice must be published at least once in a newspaper of general circulation in the District at least seven days before the date of the meeting.

The District’s 2020-2021 budget must be adopted before the 2020 tax rate is set. However, these can be approved at the same meeting if the Resolution Adopting Budget is approved prior to adoption of the tax rate. A timetable for adopting the District’s tax rate, which will require no special meetings and only one publication, follows:

July 25 Travis County chief appraiser to certify tax rolls to District. August 5 Regular meeting. Discuss proposal to set tax rate and take record vote on proposed tax rate. Announce the date, time and place of the September 2 meeting, at which the Board will vote on and adopt the proposed tax rate. NOTE: The Travis County Tax Office has notified us that certifications may not be available until August 30 this year. August 25 Deadline for publication in the Austin American-Statesman of the Notice of Public Hearing on Tax Rate. September 2 Regular meeting. Adopt the District’s 2019-2020 budget. Hold a public hearing on the District’s proposed tax rate. Take a record vote on the District’s tax rate. Adopt an Order Levying Taxes and authorize filing the Order Levying Taxes with Travis County Tax Assessor-Collector. September 30 Deadline to submit District’s tax rate to Travis County Tax Assessor-Collector.

NOTE: If the District adopts a combined tax rate that would impose more than 1.035 times the amount of tax imposed by the District in the preceding year on a home appraised at the average appraised value of the homes within the District in that year (disregarding disabled and over-65 exemptions) plus the “unused increment rate” (defined below), an election must be held to determine whether to approve the adopted tax rate. If the adopted tax rate is not approved at the election, the District’s tax rate will be reduced to the “voter-approval tax rate”, which is the current year’s debt service and contract tax rate, plus the operation and maintenance tax rate that would impose 1.035 times the amount of operations and maintenance tax imposed by the District in the preceding year on a home appraised at the average appraised value of the homes within the District that year (disregarding disabled and over-65 exemptions) and the “unused increment rate”. The “unused increment rate” means the amount, if any, that the adopted tax rate was below the “voter-approval tax rate” (less the unused increment rate) for the prior three years.

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