CERTIFICATE FOR ORDER AMENDING ORDER SETTING WATER AND SEWER TAP FEES AND SERVICE RATES

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1 CERTIFICATE FOR ORDER AMENDING ORDER SETTING WATER AND SEWER TAP FEES AND SERVICE RATES THE STATE OF TEXAS COUNTY OF HARRIS NORTHWEST HARRIS COUNTY MUNICIPAL UTILITY DISTRICT NO. 16 We the undersigned officers of the Board of Directors (the "Board") of NORTHWEST HARRIS COUNTY MUNICIPAL UTILITY DISTRICT NO. 16 (the "District") hereby certity as follows: The Board convened in regular session, open to the public, on Monday, November 13, 2017, at 7:00 p.m., at 6606 Whimsey Court, Houston, Texas, 77084, and the roll was called of the members of the Board, to-wit: Joe Millspaugh Karen Lange Anthony Kasapis Raquel Villareal Michael Oakley President Vice President Secretary Assistant Secretary Director m l\l~p~ V) All members of the Board were present with the exception of ~. thus constituting a quorum. Whereupon other business, the following was transacted at such meeting: ORDER AMENDING ORDER SETTING WATER AND SEWER TAP FEES AND SERVICE RATES was duly introduced for the consideration of the Board. It was then duly moved and seconded that such Order be adopted; and after full discussion, such motion, carrying with it the adoption of such Order prevailed, carried, and became effective by the following vote: AYES: ~ NOES: - - A true, full and correct copy of the aforesaid Order adopted at the Meeting described in the above and foregoing paragraph is attached to and follows this Certificate; such Order has been duly recorded in the Board's minutes of such Meeting; the above and foregoing paragraph is a true, full, and correct excerpt from the Board's minutes of such Meeting pertaining to the adoption of such Order; 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 are duly and sufficiently notified officially and personally, in advance, of the time, place, and purpose of such Meeting, and that such Order would be introduced and considered for adoption at such meeting, and each of the officers and members consented, in advance, to the holding of such meeting for such purpose; and such Meeting was open to the public and public notice of the time, place, and purpose of such Meeting was given, all as required by Chapter 551 of the Texas Government Code and Section of the Texas Water Code, as amended. SIGNED this 13th day of November, {OOI83238.doc}

2 AMENDED ORDER SETTING WATER AND SEWER TAP FEES AND SERVICE RATES THE STATE OF TEXAS COUNTY OF HARRIS NORTHWEST HARRIS COUNTY MUNICIPAL UTILITY DISTRICT NO. 16 WHEREAS, NORTHWEST HARRIS COUNTY MUNICIPAL UTILITY DISTRICT NO. 16 (the "District"), is a political subdivision of the State of Texas created pursuant to Article XVI, Section 59 of the Texas Constitution and operating pursuant to Chapters 49 and 54 of the Texas Water Code; and WHEREAS, the District owns a water and sewer system designed to serve present and future inhabitants within the District; and WHEREAS, the Board of Directors (the "Board") of the District has previously adopted an Order Setting Water and Sewer Tap Fees and Service Rates (the "Order"); and WHEREAS, at a special meeting of the Board held on Tuesday, March 6, 2007, representatives of the three homeowner's associations within the boundaries of the District requested that the District provide security patrol service to its residents; and WHEREAS, the District has entered into an Interlocal Agreement with the Harris County Sheriff's Department to provide three (3) contract deputies to patrol the streets within the boundaries of the District; and WHEREAS, on April 16, 2007, the District detennined it was necessary to amend and restate its Order to add the security patrol service and increase the rates it charges for water and sewer service to offset the cost of the security patrols. WHEREAS, on June 2, 2010, the Board detennined that it is necessary to amend and restate its Rate Order to revise the sprinkler and/or irrigation rates assessed to homeowner's associations and the water service rates assessed to all customers to cover the fees assessed to the District by the City of Houston; and WHEREAS, the Board has detennined that it is necessary to amend and restate its Rate Order to increase the customer deposit to $75.00 per residence being served until such time as the deposit for such customer equals $ to insure the payment of final statements and to prevent the District from absorbing the cost of delinquent and uncollectible water and service bills; and WHEREAS, the Board has detennined that it is necessary to amend and restate its Rate Order to decrease the customer deposit to $ in the case of a residence where the home is not occupied by the owner; and { docx}- [-

3 WHEREAS, the Board has determined that it is necessary to amend and restate its Rate Order to decrease the disconnection cost to $25.00 for owners of a leased residential unit or business establishment; and WHEREAS, the Board has determined that due to the high rate of delinquencies and the amount of time it takes the District's Operator to service the accounts with the additional notices of communications required prior to termination of service for failure to pay, it is necessary to amend the Rate Order to allow the Operator to send written notice to customers by regular mail, to increase the total amount of deposit for delinquent customers to $ and to increase the charge for returned checks to $30.00; and WHEREAS, the Board has determined that due to the high rate of delinquencies and the amount of time it takes the District's Operator to service the accounts with the additional notices of communications required prior to termination of service for failure to pay, it is necessary to amend the Rate Order to add a $10.00 termination letter fee and a $5.00 door hanger fee, effective July 1,2010; and WHEREAS, the Board has determined that it is in the best interest of its Customers to amend its Rate Order to increase the civil penalties for violations of the District's Rules and Regulations Governing Water and Sanitary Sewer Facilities, Service Lines, and Connections from $5,000 to an amount up to and not exceeding $10,000 as set forth in the Texas Government Code, Section , as amended, effective July 1,2010; and WHEREAS, the Board has determined that it is in the best interest of the District to add a nonrefundable application fee of $25.00 for each customer establishing a new account for Single-family Residential, Multi-family Residential or commercial service to cover the cost of establishing a new account; and WHEREAS, the Board has determined that it is necessary to adjust various fees and charges, including the Homeowners Association and irrigation water rates, the City of Houston GRP rate, deposits and other fees; and WHEREAS, the Board has determined that it is necessary to amend its Rate Order to increase the minimum flat fee charged for residential sewer to reflect the increase in solid waste disposal fees; and WHEREAS, on June 8, 2015, the Board determined that it is necessary to amend its Rate Order to establish penalties for obstructing access to the District's facilities; and WHEREAS, on November 9, 2015, the Board has determined that it is necessary to amend its Rate Order to increase the minimum flat fee charged for residential sewer to reflect the increase in solid waste disposal fees; and WHEREAS, on December 14, 2015, the Board has determined that it is necessary to amend its Rate Order to reflect the rate increase by the City of Houston to the fees charged pursuant to the Groundwater Reduction Plan ("GRP"); and { docx }-2-

4 WHEREAS, on October 10, 2016, the Board has determined that it is necessary to amend its Rate Order to increase the minimum flat fee charged for residential sewer to reflect the increase in solid waste disposal fees; and WHEREAS, on March 13,2017, the Board reduced the grease trap inspection fee from $300 to $50; and WHEREAS, on November 13,2017, the Board has determined that it is necessary to amend its Rate Order to increase the minimum flat fee charged for residential sewer to reflect the increase in solid waste disposal fees. { docx }-3-

5 IT IS, THEREFORE, ORDERED BY THE BOARD OF DIRECTORS OF NORTHWEST HARRIS COUNTY MUNICIPAL UTILITY DISTRICT NO. 16 THAT: I. A. WATER TAPS. 1. Single Family Residential Users. Prior to connection to the District's water system, a tap fee for each Full-Service Tap in an amount equal to three (3) times the District's actual cost of installing the tap, meter, and necessary service lines, which amount will include the cost of repairing or restoring any yards, sidewalks, streets, landscaping, concrete or other improvements affected by the installation, shall be paid to the District to cover the cost of making said connection and the cost of providing a 3/4" water meter. Connections to the District's water system shall not be allowed prior to an approved sewer inspection (except for Fire Protection Service Taps and SprinklerlIrrigation Taps), and all such connections shall be inspected by the District's operator or its subcontractor. 2. Non-Single Family Users. Prior to connection to the District's water system, a tap fee for each Full-Service Tap to be made shall be paid to the District as follows: (a) In the case of a 314-inch or I-inch water meter, a Full-Service Tap fee in an amount equal to three (3) times the District's actual cost of installing the tap, meter, and necessary service line connections shall be paid to the District. If any repairs or restorations of any yards, sidewalks, streets, landscaping, concrete or other improvements ("Repair Costs") are required because of the tap installation, the District will charge three (3) times its actual cost to perform the work. Despite the fact that the Repair Costs cannot be billed prior to connection, they are part of the tap fee and will be billed to the Customer on its monthly water and sewer bill; { docx }-4-

6 (b) In the case of a water meter larger than I inch, a Full-Service Tap fee for each metered tap will be paid to the District in an amount equal to three (3) times the District's actual cost of installing the tap, meter, and necessary service lines, which amount will include the cost of repairing or restoring any yards, sidewalks, streets, landscaping, concrete or other improvements affected by the installation (the "Installation Costs"). The District's operator will notify the User of the Installation Costs. The User shall pay the Installation Costs prior to the installation of the tap. (c) For each Fire Protection Service Tap made for a Non-Single Family User, the tap fee will be an amount equal to three (3) times (i) the District's actual cost of installing the tap and necessary service lines plus (ii) any costs incurred by the District to repair or restore any yards, sidewalks, streets, landscaping, concrete or other improvements affected by the installation (the "Installation Costs"). Meters are not required by the District for Fire Protection Service Taps. The District's operator will notify the User of the estimated Installation Costs. The User shall pay the estimated Installation Costs. If the actual Installation Costs are greater than the estimated Installation Costs paid by the User, the difference will be billed to the User on the monthly water and sewer bill. If the actual Installation Costs are less than the estimated Installation Costs paid by the User, a refund for the difference shall be issued to the User. (d) No SprinklerlIrrigation Taps may be unmetered. 3. Non-Taxable Users. (a) Non-Taxable Users shall pay a tap fee equal to (i) the District's actual cost of installing {OOI91960.docx }-5- the required number of Full-Service Taps, SprinklerlIrrigation Taps or Fire Protection Service Taps, and any necessary service lines and the cost of repairing or restoring any yards, sidewalks, streets, landscaping, concrete or other improvements affected by the installation (as determined by the District's operator together with the District's consultants) plus (ii) the User's pro rata share of the District's actual cost of the facilities

7 necessary to provide District services to the Non-Taxable User that are financed or to be fully or partially financed by the District's tax bonds (as determined by the District's consultants and approved by the Board) (the "Installation Costs"). (b) The District's operator, with the help of the District's consultants, will produce an estimate of the Installation Costs, which will then be approved by the Board and sent to the User. The User shall pay the estimated Installation Costs prior to installation of the tap. If the actual Installation Costs are greater than the estimated Installation Costs paid by the User, the difference will be billed to the User on its first water and sewer bill. If the actual Installation Costs are less than the estimated Installation Costs paid by the User, a refund for the difference shall be issued to the User. (c) (d) No Sprinkler/Irrigation Taps may be un metered. Meters are not required by the District for Fire Protection Service Taps. 4. SprinklerfIrrigation U er. Prior to connection to the District's water system or use of a sprinkler/irrigation system, a fee in the amount of one-half (I12) of a Full-Service Tap for a Single Family Residential User and three (3) times the cost for a Non-Single Family User for the same size meter shall be paid to the District by the User (except Non-Taxable Users will pay a tap fee as provided in Section 2( c)( 1) above) to cover the cost of making each Sprinkler/Irrigation Tap and providing a meter for such sprinkler tapes). All SprinklerlIrrigation Taps must be metered. Connections to the District's water system, except for Sprinkler/Irrigation Taps and Fire Protection Service Taps, shall not be allowed prior to an approved sewer inspection, and all such connections shall be inspected by the District's operator or its subcontractor. B. SANITARY SEWER INSPECTION FEES. All connections to the District's sewer system shall be made in accordance with the District's Rules and Regulations Governing Water Main Connections and Sewer Service Lines and Connections. No sewer connection or house lead shall be made by any person other than the land owner's plumber at the land owner's expense. {OOI91960.docx }-6-

8 The sanitary sewer inspection fee shall be $300 per inspection. For each inspection that results in a rejection of the line inspected, an additional fee of $ will be assessed per connection for Single Family Residential Users, Homeowner's Association Users and Agricultural & Farm or Ranch Users and $ for Non-Single Family Users and Non-Taxable Users. C. PRE-CONSTRUCTION INSPECTION. All builders or contractors for property owners within the District must contact the District's operator, prior to starting any work on property within the District, to do an inspection to verify District facilities. If any District facility is either damaged or cannot be located, the District's operator will make necessary repairs or locate and make the facilities visible at the expense of the District. A copy of the inspection report will be given to the builder's or contractor's representative. After the inspection and any necessary work is completed, the builder or contractor will then be responsible for paying the costs of all damages, adjustments, relocations and repairs found during the Final Site Survey. An inspection fee of $ per connection for Single Family Residential Users, Homeowner's Association Users and Agricultural & Farm or Ranch Users, and $ per connection for Non-Single Family Users and Non-Taxable Users shall be paid to the District to cover the cost of making said inspections. The inspection fee shall be collected at the time the tap fee is paid. D. POST-CONSTRUCTION INSPECTION. After construction has been completed on the property, but before service is transferred to a User, the District's operator will conduct a Final Site Survey to reinspect the water tap, meter and all other District facilities on the property for a fee of $ per connection for Single Family Residential Users, Homeowner's Association Users and Agricultural & Farm or Ranch Users, and $ per connection for Non-Single Family Users and Non Taxable Users. This inspection fee shall be collected at the time the tap fee is paid. E. PRomBITION OF PRIVATE WATER WELLS AND SEPTIC TANKS. Unless the District otherwise agrees in writing, if the District has water and sewer service available to serve a lot or tract of land within the District, such lot or tract of land can receive water and sewer service from the District only. No private water wells or septic tanks can be installed or constructed within the boundaries of the District without the District's prior written consent. {OOI91960.docx }-7-

9 F. ENGINEER'S REVIEW OF PLANS AND SPECIFICATIONS. Before any connection, other than a single family residential connection, is made to the District's water, sewer, or drainage system, the person requesting such connection shall submit, at least 14 days prior to applying for a tap into the lines of the District, to the District's engineer for review and approval the water, sanitary sewer, and drainage plans and specifications for the property for which the connection is sought. Such plans shall clearly show the estimated volumes of water or effluent and the proposed points of connection to the District's system. The District's engineer, attorney, and Board of Directors will use reasonable efforts to review the plans and specifications within thirty (30) days of receipt of same, but no guarantee is made as to when comments to and/or approval of such documents will be provided. Two copies of such approved plans, with the District's engineer's approval indicated thereon, shall be submitted to the District's operator. Any modification of such plans shall require reapproval by the District's engineer. The District reserves the right to require removal of any connection made in violation of this Section. The fee charged for the District's engineer's review of plans and specifications shall be a minimum of $500.00, plus $50.00 per acre on any part thereof in the parcel to be served. G. PLAT REQUIREMENT. Notwithstanding anything herein to the contrary, the operator shall make no connection to the District's water or sanitary sewer collection system unless either: (a) the tract, parcel, or lot of land to be served by such connection is part of an area covered by a development plat duly approved pursuant to Section , Texas Local Government Code, as amended, or pursuant to an ordinance, rule, or regulation relating to such a development plat. (b) the operator has been presented with or otherwise holds a certificate applicable to such tract, parcel, or lot of land issued by or on behalf of the Planning Commission or City Council of the City of Houston, Texas, under Section (e), Texas Local Government Code, as amended, stating that either a plan, plat, or replat of such tract, parcel, or lot either is not required or has been revised and approved by such Commission or Council, or {OOI91960.docx }-8-

10 (c) such tract, parcel, or lot was first connected to such system prior to September 1, H. EASEMENTS. Before water or sewer service commences to any User, the User requesting services shall grant an ingress and egress easement to and from the water meter(s) appurtenant to the premises to be served for the purposes of operating, maintaining, reading, and repairing the meter(s) as the District may deem necessary. II. STANDARD RATES. The following rates for the sale of water and collection and disposal of sewage shall be in effect within said District from this date until such time as the Board amends said rates: A. DEFINITIONS. For purposes of this Order, the following terms shall have the meaning set out thereafter: 1. Agricultural & Farm or Ranch User - any User of the Dist~ict's water and sewer system that has an agricultural exemption on file with Harris County Appraisal District. 2. City of Houston Assessment - shall mean an amount added to each Customer's utility bill in an amount equal to the cost of surface water per 1000 gallon charged pursuant to the current GRP rate implemented by the City of Houston. 3. Commercial User - any User of the District's water and sewer system that is a commercial establishment. 4. Connection - each unit designed for occupancy by a separate family, including each separate unit located within a single building, each business or commercial establishment, including separate establishments within a single building, schools, recreational facilities such as swimming pools not connected with a residence, and so forth. 5. Customer - any User of the District's water and sewer system. { docx )-9-

11 6. Fire Protection Service Tap - a connection to the District's water system for the sole purpose of providing fire protection to the user's property. 7. Fire Protection Service User - a User of the District's water system for fire protection services only. 8. Full Service Tap - a connection to the District's water and sewer system to serve a single family unit, commercial establishment, apartments, recreational facilities, club, multi-family dwelling units or any other building. 9. Homeowner's Association User - a non-profit association established pursuant to the restrictions and covenants covering developed sections within the District. 10. Multi-Family Residential User - a User of the District's water and sewer system that consists of a building designed for use and occupancy by more than one family unit, such as apartment buildings, duplexes, triplexes, etc. 11. Non-Single Family User - any User of the District's water and sewer system, other than a Single Family Residential User and a Homeowner's Association User, including, but not limited to, commercial establishments, apartments, recreational facilities, clubs and multi-family dwelling units. 12. Non-Taxable User - any User of the District's water and sewer system that is exempt from ad valorem taxation by the District under the Property Tax Code, including, but not limited to, schools and churches. 13. Operator - the person, company or corporation which is under contract with the District to operate the District's water and sewer system, collect amounts owed to the District for such services, report monthly to the District on the operations of the District's system and perform any additional services set out in said contract. 14. Single Family Residential User - a User of the District's water and sewer system which consists of one residence designed for use and occupancy by a single family unit. { docx }-I 0-

12 15. Sprinkier/lrrigation Tap - a connection to the District's water system for the sole purpose of providing sprinkler or irrigation service to the user's property. 16. Sprinkier/lrrigation User - a User of the District's water system for landscaping or irrigation purposes only. 17. User - any user of the District's water and sewer system. B. WATER. Water service shall be provided at the foliowing rates per connection: TYPE OF CONNECTION Single Family Residential and all others except as specified below GALLONS USED Up to 5,000 gallons 5,00 I to 10,000 gallons 10,001 to 20,000 gallons 20,001 to 30,000 gallons Over 30,000 gallons RATE $24.25 $1.45 per 1,000 gallons $1.55 per 1,000 gallons $1.65 per 1,000 gallons $2.65 per 1,000 gallons Agricultural & Farm or Ranch Sprinkler/Irrigation, including Homeowner's Association Non-Single Family, except Apartments Up to 5,000 gallons 5,001 to 10,000 gallons 10,001 to 20,000 gallons 20,001 to 30,000 gallons 30,001 to 60,000 gallons Over 60,000 gallons Up to 10,000 gallons 10,001 to 15,000 gallons Over 15,001 gallons Up to 5,000 gallons 5,001 to 10,000 gallons 10,001 to 20,000 gallons 20,001 to 30,000 gallons 30,001 to 60,000 gallons Over 60,000 gallons $24.25 $1.45 per 1,000 gallons $1.55 per 1,000 gallons $1.65 per 1,000 gallons $1.75 per 1,000 gallons $2.65 per 1,000 gallons $11.75 $1.00 per 1,000 gallons $1.25 per 1,000 gallons $31.25 $1.55 per 1,000 gallons $1.65 per 1,000 gallons $1.75 per 1,000 gallons $1.85 per 1,000 gallons $2.85 per 1,000 gallons Non-Single Family, Apartments {OOI91960.docx }-11-

13 (1) For the first six (6) months following connection to the District's water system, each unit of a Non-Single Family User (including each unit within a building or buildings occupied as a separate dwelling or business) connected to the District's system by a separate water meter shall be billed on a monthly basis according to the water used based on the following schedule: Amount of Payment $31.25 minimum $1.55 per 1,000 gallons $1.65 per 1,000 gallons $1.75 per 1,000 gallons $2.85 per 1,000 gallons Water Usage First 5,000 gallons per month 5,001 to 10,000 gallons 10,001 to 20,000 gallons 20,001 to 30,000 gallons Over 30,000 gallons (2) Beginning in the seventh month (ih) after connection to the District's system, each unit of a Non-Single Family User (including each unit within a building or buildings occupied as a separate dwelling or business) connected to the District's system by a separate water meter shall be billed the greater of (a) the metered use computed on the schedule set forth above in Section 1 or (b) an amount determined for the appropriate billing period by multiplying the minimum monthly rate times the number of units specified below: 7th billing period 8th billing period 9th billing period 10th billing period 11th billing period and thereafter 50% of total number of units 60% of total number of units 70% of total number of units 80% of total number of units 90% of total number of units c. CHARGE FOR CITY OF HOUSTON GROUNDWATER REDUCTION PLAN Each customer's billing statement will include a line item reflected as "City of Houston Assessment" or such other similar language. Such fee will be calculated based upon the customer's actual water usage for the previous month (total number of gallons divided by 1,000), multiplied by the current cost for surface water assessed by the City of Houston GRP plus 10%, rounded to the next higher penny. D. SEWER. Sewer service shall be provided at the following rates per connection: TYPE OF CONNECTION Single Family Residential All others GALLONS USED Any quantity Up to 5,000 gallons 5,001 to 10,000 gallons 10,001 to 20,000 gallons 20,001 to 30,000 gallons 30,001 to 60,000 gallons Over 60,000 gallons RATE $33.10 $23.50 $1.75 per 1,000 gallons $1.85 per 1,000 gallons $1.95 per 1,000 gallons $2.05 per 1,000 gallons $2.25 per 1,000 gallons (1) Multi-Family Buildings. Multi-family buildings connected by a single meter shall be billed an amount determined for the appropriate billing period by multiplying $31.25 times the number of units specified in the schedule set forth below: {OOI91960.docx} -12-

14 1 st billing period 2nd billing period 3rd billing period 4th billing period 5th billing period and thereafter 50% of total residential units 60% of total residential un its 70% of total residential units 80% of total residential units 90% of total residential units (2) Commercial Centers. Commercial centers connected by a single meter shall be billed on a monthly basis according to the following schedule: Amount of Payment $31.25 minimum $1.85 per 1,000 gallons $1.95 per 1,000 gallons $2.05 per 1,000 gallons $2.15 per 1,000 gallons $3.00 per 1,000 gallons Usage First 5,000 gallons per month 5,001 to 10,000 gallons 10,001 to 20,000 gallons 20,001 to 30,000 gallons 30,001 to 60,000 gallons Over 60,000 gallons E. GARBAGE. The District provides garbage collection, recycling and disposal services to all Single Family Residential connections. There shall be no separate charge for such service. F. SECURITY PATROL. The District provides security patrol service through the Harris County Sheriffs Department. The costs for the security patrol service shall be included in the base water and sewer service rates to all connections within the District. III. A. BUILDER/COMMERCIAL DEPOSIT. Each builder of homes within the District shall deposit $50.00 per lot (the "Builder Deposit") with the District at the time the tap fee is paid. The Builder Deposit shall not bear interest and, subject to the provisions set forth below, shall be refunded to each builder at the completion of the builder's homebuilding program within the District. Each builder of all other structures in the District shall deposit $100 per commercial or apartment unit or space (the "Commercial Builder Deposit") with the District at the time the tap fee is paid. The Commercial Builder Deposit shall not bear interest and, subject to the provisions set forth below, shall be refunded to the builder within sixty (60) days after the entire construction project has been certified to be substantially complete by the architect or engineer designing the project. B. USE OF DEPOSIT. The cost of any repairs, adjustments or relocations of or to waterworks, sanitary or storm sewer lines of the District necessitated by builder negligence or damage shall be billed { docx l -13-

15 by the District's operator to the builder responsible therefore and shall be payable on or before the 30 th day after the date of the invoice for said charges ("Backcharges"). If at any time a builder is delinquent in paying such bills for repairs or any other bills of the District for water or sanitary sewer service for sixty (60) days or more or is responsible for outstanding repair or other bills in the amount of $500 or more, the District may notify the builder that no additional taps will be made for such builder and may transfer the Builder Deposit or the Commercial Builder Deposit or any part thereof to its operating fund to pay such bills and may require that such Builder Deposit or Commercial Builder Deposit be replenished by such amount transferred or require that a greater deposit be made by the builder before allowing the installation of additional taps for such builder. In addition, the District may withhold the provision of service to the property or to other property owned by an User, property owner, builder or contractor who has failed to timely pay for the Backcharges or any inspection or reinspection fee, including specifically the provision of additional taps; provided, however, that the District shall follow, the notification procedures set forth in this Rate Order prior to withholding the provision of service. IV. LOW FLOW TOILET FLAPPERS. All toilets installed within the District on or after September I, 1992, shall have low flow toilet flapper devices installed. Failure by a Customer of the District to properly install an acceptable toilet flapper devices shall be grounds for termination of water and sewer service to such Customer. V. BAN ON USE OF LEAD PIPE AND LEAD SOLDER. Lead pipe and lead solder shall not be used in the construction or repair of the District's water system or any residential or non-residential facility connected to the District's water system. The District has the right to inspect Customer's facilities for improper materials and cross-connections, as provided in Section XII below. VI. { docx} -14-

16 NO FREE SERVICE. At no time shall the District render water and/or sewer service without charge to any person, firm, corporation or organization. VII. REGULATORY ASSESSMENT. As required by the Texas Water Code, each User of the District's water and/or sanitary sewer system is hereby assessed a charge of one-half (1/2) of one percent (1 %) of the District's charge for water and/or sewer service. This assessment is included in the rate schedules listed above and will be forwarded to the Texas Commission on Environmental Quality ("TCEQ") for use in paying costs and expenses incurred in its regulation of water districts. VIII. DESTRUCTION, ABUSE OR DAMAGE TO DISTRICT FACILITIES. In the event of destruction, abuse, damage, alteration or similar misuse of any of the District's facilities, including the trails, urban forest and/or any other District amenity or facility, the District may institute suit to enjoin or restrain such defaults and/or to collect damages resulting therefrom, including interest thereon at the maximum legal rates and reasonable attorneys' fees, and, at the option and discretion of the District, and in compliance with this Rate Order, the District may disconnect the User's services, lock or remove metering devices or otherwise suspend or interrupt the provision of services to such User. In addition, the District may impose the penalties for violation of this Rate Order contained with Section XIII. IX. USER DAMAGE TO METERS. No User shall cover or otherwise obstruct or place a water meter in a condition of inaccessibility for purposes of monthly reading by the District's operator. Any costs incurred by the District in uncovering or making accessible water meters which have become obstructed because of actions of a User shall be charged to the User. Users who do not pay within thirty (30) days the amount billed to them by the operator under this Section shall be subject to any of the delinquent or penalty provisions of this Rate Order. In addition, the District, in its discretion, may refuse to install meters to any User who refuses to pay for any damages incurred by him to District facilities or District property while constructing within the District. { docx} -15-

17 x. A. SERVICE POLICY. Water and sewer service shall be provided on the following terms and conditions: 1. For purposes of this Subsection X.A., "Customer" shall mean any person, partnership, corporation, trust, or other legal entity using the District's utilities to supply water or sewer to a completed and occupied residence, business establishment, or other facility owned or occupied by such person, partnership, corporation, trust or other legal entity, unless otherwise specified. 2. Except as hereinafter set forth, each Single Family Residential Customer establishing a new account, or reestablishing an account that has been terminated for non-payment of bills, shall be required to make a security deposit equal to $75.00 per residence being served until such time as the deposit for such Customer equals $ In the case of a residence where the home is not to be occupied by the owner, but will be unoccupied or occupied by a tenant, the security deposit shall equal $ per connection being served. In the case of a Non-Single Family User, a security deposit equal to $ per apartment unit or individual business unit shall be required before receiving service up to a maximum of $ total deposit. Upon termination of service, the District shall apply the deposit to the unpaid service charges with the remainder being refunded to the Customer, except that checks for deposit balances less than $5.00 will not be issued unless requested, in writing, by Customer. No interest will be paid by the District on security deposits. 3. Any owner of a leased residential unit or business establishment who requests that service be discontinued at a vacated dwelling or business establishment shall be charged the cost charged to the District plus a $25.00 fee for each individual connection for which disconnection is requested. Said fee shall cover the service provided by the District to insure that the meter is disconnected and no free service is being derived therefrom. This fee is required to be paid prior to disconnection. If such fee is not paid or if the dwelling or business establishment is vacated and no subsequent Customer moves into said structure prior to the next billing date, service shall {OOI91960.docx} -16-

18 revert to the owner and charges for monthly water and sewer service shall be prorated from move-out and billed monthly until the account is transferred to a subsequent Customer. The District requests the owner's cooperation in notifying the District's operator of lessee or tenant move-in and move-out dates in order to insure accurate billings on such properties. 4. After a meter has been set, the Customer or owner thereof shall, at all times, keep the space occupied by the meter and the meter box free of rubbish or obstruction of any kind. 5. In addition to the security deposits required above, the Operator shall collect a nonrefundable application fee of $25.00 from each Customer establishing a new account for Singlefamily Residential, Multi-family Residential or commercial service to cover the cost of establishing a new account. Such fee shall be collected before service is initiated. B. BILLING PROCEDURE. All accounts shall be billed In accordance with the following procedures: 1. For purposes of this Subsection X.B., "reconnect fee" means that charge assessed to a Customer who, after proper warning by regular mail was provided a cut-off notice for nonpayment of his water and sewer bill, does not pay said bill by the date and under the terms hereinafter set out, and due to such delinquency necessitates an employee of the operator to cut off service to such Customer and subsequently reconnect said service upon payment by Customer of all amounts owing. 2. Charges for services shall be billed monthly. All bills shall be payable on the 20th day after the date of the statement for such charges. Unless payment is received on or before the 20th day after the date of said statement, such account shall be considered delinquent and a penalty of 10% of the unpaid balance shall become due and payable. 3. The District may, at its discretion, disconnect service for failure to pay all charges by the 60th day after the date of the statement for such charges. However, prior to disconnecting services, the District shall send written notice to the Customer by regular mail and provide the Customer with an opportunity to contest, explain or correct the charges, services, or {OOI91960.docx} -17-

19 disconnection at that meeting of the Board. The District shall charge the Customer a $10.00 Delinquent Letter fee and a $5.00 Door Hanger Fee to offset the administrative cost of providing such notice. The written notice shall inform the Customer of the amount of the delinquent payment and the amount of any additional charges should services be discontinued, the date service will be disconnected if payment is not made, the date, time and place of the next regularly scheduled meeting of the Board, and of the opportunity to contest, explain or correct the charges, services of disconnection by presenting in person or in writing such matter to the Board at the next regularly scheduled meeting as shown in the notice. The date specified for disconnection shall be within ten (10) days after the date of the next regularly scheduled meeting of the Board as shown in the notice. The notice shall be mailed by certified mail at least ten (10) days prior to the date of the next regularly scheduled meeting of the Board. If the Customer appears before the Board in person or in writing, the Board shall hear and consider the matter and inform the Customer of the Board's determination by sending written notice to the Customer by certified mail. If service to a Single Family Residential User is disconnected for any cause, a security deposit of $50.00 must be paid prior to reconnection until such time as the deposit for such Customer equals $ If service to a Non-Single Family User is disconnected for any cause, a security deposit of $ per apartment unit or individual business unit must be paid prior to reconnection. In addition, a reconnection fee equal to the cost charged to the District plus $60.00 shall be paid by all Users before service is again commenced to such Customer. If the Customer's meter must be removed to prevent unauthorized use of water following disconnection under this policy, an additional charge equal to the cost charged to the District plus $50.00 will be added for reinstallation of the meter. Service shall be reinstated only upon payment in full of all amounts due, including any late or bad check charges and the abovereferenced security deposit and reconnect fee. 4. A $30.00 charge will be charged to the Customer's account for any check returned by the bank. {OOI91960.docx} -18-

20 5. All payments of delinquent accounts or accounts which have been paid by a check being returned for insufficient funds must be made in person at the operator's office by cash, cashier's check or money order. 6. Each Customer shall be mailed a summary of these billing procedures, with the mailing address, office address and telephone number of the District's Operator set out therein. XI. QUALITY OF SEWAGE A. Domestic Waste. Only ordinary liquid and water-carried waste from domestic activities that is amenable to biological treatment and that is discharged from sanitary conveniences of buildings connected to a public sanitary sewer system shall be discharged into the District's sanitary sewer lines. Waste resulting from any process of commerce or industry may not be discharged into the District's sanitary sewer lines except as authorized pursuant to subsection (B) below. B. Commercial and Industrial Waste. All discharges other than waste described in subsection (a) are prohibited unless the user has applied to and received written authorization from the District for such discharge. The applicant must file a statement with the District containing the following information: (1) Name and address of applicant; (2) Type of industry, business, activity, or other waste-creative process; (3) Quantity of waste to be discharged; (4) Typical analysis of the waste; (5) Type of pretreatment proposed; and (6) Such other information as the District may request in writing. The District shall have the right to reject any application for discharge of non-domestic waste into the District's sanitary sewer lines if the District determines in its sole discretion that the proposed discharge may be harmful to the District's sanitary sewer system or the environment. The District also shall have the right in approving any application for the discharge of non-domestic waste to impose any limitations on such discharge that the District determines in its sole discretion to be necessary to protect the District's sanitary sewer system or the environment. {OOI91960.docx} -\9-

21 C. National Categorical Pretreatment Standard. If a user is subject to a national categorical pretreatment standard pursuant to regulations promulgated by the United States Environmental Protection Agency under Section 307 of the federal Clean Water Act, the user is prohibited from discharging pollutants into the District's sanitary sewer system in violation of applicable categorical pretreatment standards. D. District Testing; Pretreatment. The District shall have the right to sample and test any user's discharge at the discretion of the District's operator, with no limit as to the frequency of the tests, and to charge the user for the District's cost of such sampling and testing. The District also shab have the right to require pretreatment, at the user's expense, of any discharge of non-domestic waste if the District determines in its sole discretion that pretreatment of such waste is necessary to protect the District's sanitary sewer system or the environment, even if pretreatment is not otherwise required pursuant to subsection (c) above. E. Grease Trap Inspection. In order to assure the discharge of only ordinary domestic sewage into the District's system, the District may require that the discharge from any property be pre-treated or traps be installed. The District shall require the owner of any establishment that discharges certain types of waste to install an appropriate trap to filter the discharge prior to its entry into the system and a sampling web to allow for periodic sampling of the discharge from the establishment which enters the system to assure compliance with this Rate Order. Discharges requiring a trap and sampling well include, but are not limited to, grease, oil, sand, or flammable waste. Other discharges requiring a trap and sampling web shall be determined by the District's operator and engineer on a case-by-case basis based on the operator's and engineer's conclusion that the discharge in question will harm the District's facilities if allowed to enter the District's system. Any person responsible for a discharge requiring a trap and sampling well shall provide equipment and facilities of a type and capacity approved by the District, locate the trap in a manner that provides ready and easy access for cleaning and inspection, and maintain the trap in effective operating condition. For restaurants and similar developments, the District will require as a minimum one trap and { docx} -20-

22 one sampling well per restaurant. Each trap and sampling well required to be installed hereunder shall be subject to initial inspection and approval by a District representative; the fee for this initial inspection shall be $ It shall be the responsibility of the owner of the property to maintain and service the trap( s). All traps shall be cleaned a minimum of once a month. Any time an owner files a "Liquid Waste Manifest" form with the City of Houston Health and Human Services Department, a copy of the form shall be sent to the District. The District's operator shall inspect the traps on a monthly basis and may take samples and flow measurements from the sampling wells with no limit as to the frequency of the tests. The fee for such monthly inspections shall be $ If a grease trap is found in violation of this Rate Order at any time, the District may, at its sole discretion, bill to the owner of the property charges as follows: Reinspection Sampling Lab analysis $50.00 each trip $25.00 each time Cost + 15% The District has the right, in its sole discretion, to require the owner to pretreat the discharge at the owner's expense. XII. PLUMBING RULES AND REGULATIONS The following provisions rules and regulations are in addition to and intended to supplement all rules and regulations governing the District's water and sanitary sewer system heretofore adopted by the Board of the District. A. Backflow Prevention. 1. Backflow Prevention Requirement. No water connection shall be made from the District's water system to any establishment where an actual or potential contamination or system hazard exists without an air gap separation or a mechanical backflow prevention device acceptable to the District, between the District's water system and the source of potential contamination. Further, no water connection may be made from the District's water system to any condensing, cooling or industrial {OOI91960.docx} -21-

23 process or any other system of nonpotable usage over which the District does not exercise sanitary control, unless such connection is isolated from the District's water system by a containment air gap or a backflow prevention device. All sprinkler systems, spas and pools must have backflow prevention assemblies installed by the User at the User's sole cost and expense. In addition, the District, in its sole discretion, may require a Non-Single Family User to install a backflow prevention assembly at any meter(s) servicing such User's property. In the event that the District's Operator or Engineer, in their sole discretion, require a Customer to install a backflow prevention device in order to prevent possible contamination of the District's water supply, the Customer shall install a backflow prevention device that complies with a state approved plumbing code and the plumbing code, if any, required by the City of Houston, Texas, and the Customer shall, at its own expense, properly install, test and maintain, in accordance with TCEQ rules, such backflow prevention device, and shall provide all testing and maintenance records to the District. Such backflow prevention device must be tested at least annually by a recognized backflow prevention assembly tester. A list of certified backflow prevention assembly inspectors can be obtained from the local office of the TCEQ. If the Customer fails to comply with the requirements of this Section, the District may, at its option, either terminate service to the Customer until such requirements have been satisfied, or the District may properly install, test and maintain such backflow prevention device and bill the Customer all expenses relating thereto. The existence of a serious threat to the integrity of the District's water system shall be sufficient grounds for immediate termination of water service to any Customer who may cause possible contamination of the District's water supply. In the event water service to a Customer is terminated pursuant to this Section, water service shall be restored by the District only after it determines that the source of potential contamination no longer exists, or when sufficient additional safeguards have been taken. 2. Testing of Backflow Prevention Assembl ies. Effective January 1, 1996, all backflow prevention assemblies must be tested upon installation by a recognized backflow prevention assembly tester (as defined in 30 Texas Administrative Code Section (h)( 4)) certified to be operating within specifications. This test will be performed by the District's operator or its subcontractor at a cost of {OOI91960.docx} -22-

24 $75.00 for Single Family Residential Users and $ for all other Users, which is due and payable prior to the test. The User is solely responsible for the cost of this test. Further, ba~kflow prevention assemblies installed to provide protection against a High Health Hazard must be tested and certified annually by such a backflow prevention device tester. For purposes of this Section, a "High Health Hazard" shall mean a cross connection, potential cross connection or other situation involving any substance 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. For each backflow prevention assembly tested, a signed and dated original Backflow Prevention Test and Maintenance Report, in substantially the form and containing at least the information set forth in the sample Backflow Prevention Assembly Test and Maintenance Report Form attached hereto as Exhibit "A", must be completed by the recognized backflow prevention assembly tester and submitted to the District. The District shall maintain Backflow Prevention Test and Maintenance Reports submitted to it pursuant to this Section for a minimum of three (3) years. Failure to submit a properly completed Backflow Prevention Test and Maintenance Report to the District as required hereunder may result in termination of service to a Customer as provided above. B. Customer Service Inspections. Effective January 1, 1996, no continuous water service shall be provided by the District to: (I) new construction or reinstatement of service after termination; (2) any existing Customer when the District has reason to believe cross connections or other unacceptable plumbing practices exist; or (3) after any material improvement, correction or addition to the private plumbing facility of any Customer, unless a service inspection has been performed by a qualified inspector employed by the District's Operator, a service inspection certification containing at least the information contained in the sample Customer Service Inspection Certification Form attached hereto as Exhibit "B" has been received by the District and a Customer Service Agreement provided by the District's operator has been executed. "Continuous Water Service" shall be deemed to include, but not be limited to, the'date of transfer of service from a builder to the initial occupant of any new residence. The District shall recognize only those individuals specified in 30 Texas Administrative Code Section { ,docx} -23-

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