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HomeMy WebLinkAbout06-09-2026 Executive Session & Regular Meeting Packet AGENDA City Council Executive Session Tuesday, June 9, 2026 @ 5:30 PM Anna Municipal Complex - Council Chambers 120 W. 7th Street, Anna, Texas 75409 The City Council of the City of Anna will meet in an Executive Session on Tuesday, June 9, 2026, at 5:30 PM, in the Anna Municipal Complex – Council Chambers, located at 120 W. 7th Street, to consider the following items. 1. Call to Order, Roll Call, and Establishment of Quorum. 2. Executive Session (Exceptions). Under Tex. Gov't Code Chapter 551, the City Council may enter into Executive Session to discuss any items listed or referenced on this Agenda under the following exceptions: a. Consult with legal counsel regarding pending or contemplated litigation and/or on matters in which the duty of the attorney to the governmental body under the Texas Disciplinary Rules of Professional Conduct of the State Bar of Texas clearly conflicts with Chapter 551 of the Government Code (Tex. Gov’t Code §551.071). Bonds and Financing b. Discuss or deliberate the purchase, exchange, lease, or value of real property (Tex. Gov’t Code §551.072). c. Discuss or deliberate Economic Development Negotiations: (1) To discuss or deliberate regarding commercial or financial information that the City has received from a business prospect that the City seeks to have locate, stay, or expand in or near the territory of the City of Anna and with which the City is conducting economic development negotiations; or (2) To deliberate the offer of a financial or other incentive to a business prospect described by subdivision (1). (Tex. Gov’t Code §551.087). d. Discuss or deliberate personnel matters (Tex. Gov’t Code §551.074). City Council, Boards and Commissions, City Secretary. The Council further reserves the right to enter into Closed Session at any time throughout any duly noticed meeting under any applicable exception to the Open Meetings Act. 3. Consider/Discuss/Action on any items listed on any agenda - executive session, regular meeting, or closed session - that is duly posted by the City of Anna for any City Council meeting occurring on the same date as the meeting noticed in this agenda. 4. Adjourn. This is to certify that I, Carrie L. Land, City Secretary, posted this Agenda on the City’s Website (www.annatexas.gov) and at the Anna Municipal Complex bulletin board at or before 5:00 p.m. on 06/03/2026. Carrie L. Land, City Secretary 1. The Council may vote and/or act upon each of the items listed on this Agenda. 2. The Council reserves the right to retire into executive session concerning any of the items listed on this Agenda, whenever it is considered necessary and legally justified under the Open Meetings Act. 3. In accordance with the Americans with Disabilities Act, it is the policy of the City of Anna to offer its public programs, services, and meetings in a manner that is readily accessible to everyone, including individuals with disabilities. If you are a person with a disability and require information or materials in an appropriate alternative format, or if you require any other accommodation, please contact the ADA Coordinator at least 48 working hours in advance of the event by emailing adacompliance@annatexas.gov. Advance notification within this guideline will enable the City to make reasonable arrangements to ensure accessibility. AGENDA City Council Meeting Tuesday, June 9, 2026 @ 6:00 PM Anna Municipal Complex - Council Chambers 120 W. 7th Street, Anna, Texas 75409 The City Council of the City of Anna will meet on Tuesday, June 9, 2026, at 6:00 PM, in the Anna Municipal Complex – Council Chambers, located at 120 W. 7th Street, to consider the following items. Welcome to the City Council meeting. If you wish to speak on an Open Session agenda item, please fill out the Opinion/Speaker Registration Form and turn it in to the City Secretary before the meeting starts. 1. Call to Order, Roll Call, and Establishment of Quorum. 2. Invocation and Pledge of Allegiance. American Pledge: I pledge allegiance to the flag of the United States of America, and to the Republic for which it stands, one nation under God, indivisible, with liberty and justice for all. Texas Pledge: Honor the Texas flag; I pledge allegiance to thee, Texas, one state under God, one and indivisible. 3. Neighbor Comments. At this time, any person may address the City Council regarding an item on this meeting Agenda that is not scheduled for public hearing. Also, at this time, any person may address the City Council regarding an item that is not on this meeting Agenda. Each person will be allowed up to three (3) minutes to speak. No discussion or action may be taken at this meeting on items not listed on this Agenda, other than to make statements of specific information in response to a citizen's inquiry or to recite existing policy in response to the inquiry. 4. Presentations. Receive reports from Staff or the City Council about items of community interest. Items of community interest include: expression of thanks, congratulations, or condolence; information regarding holiday schedules; an honorary or salutary recognition of a public official, public employee, or other citizen (but not including a change in status of a person's public office or public employment); a reminder about an upcoming event organized or sponsored by the governing body; information regarding a social, ceremonial, or community event organized or sponsored by an entity other than the governing body that was attended or is scheduled to be attended by a member of the governing body or an official or employee of the municipality; and announcements involving an imminent threat to the public health and safety of people in the municipality that has arisen after the posting of the Agenda. a. Proclamation recognizing June as Safety Awareness Month. 5. Work Session. 6. Consent Items. These items consist of non-controversial or "housekeeping" items required by law. Items may be considered individually by any Council Member making such request prior to a motion and vote on the Consent Items. a. Approve the City Council Meeting Minutes for May 26, 2026. (City Secretary Carrie Land) b. Approve a Resolution approving a Preliminary Limited Offering Memorandum for the sale of "City of Anna, Texas Special Assessment Revenue Bonds, Series 2026 (Liberty Hills Public Improvement District No. 2 Improvement Area #1 Project)" (Director of Public Works Joseph Cotton) c. Approve a Resolution authorizing the City Manager to submit an application to the Texas Water Development Board, requesting financial assistance from the Texas Water Development Board for the Sherley Farms 3-million-gallon elevated storage tank. (City Engineer Kevin Bates, P.E.) d. Consider/Discuss/Action an Ordinance adopting the 2026 Water Conservation Plan for the City of Anna, Texas. (City Engineer Kevin Bates P.E.) (Assistant Director of Public Works Steven Smith) 7. Items For Individual Consideration and Public Hearings. At the time and place of any public hearing held during this meeting, all persons who desire will have an opportunity to be heard in opposition to or in favor of the ordinance, application, or other proposed item. a. Consider/Discuss/Action to approve a Resolution directing Publication of Notice of Intention to Issue up to $54,000,000 Combination Tax and Revenue Certificates of Obligation to Provide Funds for Water Improvements and Wastewater Treatment Plant Expansion Projects; and Resolving other Matters relating to the Subject. (Director of Finance Terri Doby) b. Consider/Discuss/Action on the appointment of President of the Anna Public Facility Corporation (PFC) and the Anna Housing Finance Corporation (HFC). (Director of Economic Development Natasha Roach) c. Consider/Discuss/Action on appointments to Boards and Commissions and/or associated liaisons. 8. Future Agenda Items. Requests from the City Council for items to be placed on upcoming agendas by a vote of three or more. 9. Closed Session (Exceptions). Under Tex. Gov't Code Chapter 551, the City Council may enter into Closed Session to discuss any items listed or referenced on this Agenda under the following exceptions: a. Consult with legal counsel regarding pending or contemplated litigation and/or on matters in which the duty of the attorney to the governmental body under the Texas Disciplinary Rules of Professional Conduct of the State Bar of Texas clearly conflicts with Chapter 551 of the Government Code (Tex. Gov’t Code §551.071). Bonds and Financing b. Discuss or deliberate the purchase, exchange, lease, or value of real property (Tex. Gov’t Code §551.072). c. Discuss or deliberate Economic Development Negotiations: (1) To discuss or deliberate regarding commercial or financial information that the City has received from a business prospect that the City seeks to have locate, stay, or expand in or near the territory of the City of Anna and with which the City is conducting economic development negotiations; or (2) To deliberate the offer of a financial or other incentive to a business prospect described by subdivision (1). (Tex. Gov’t Code §551.087). d. Discuss or deliberate personnel matters (Tex. Gov’t Code §551.074). City Council, Boards and Commissions, City Secretary. The Council further reserves the right to enter into Closed Session at any time throughout any duly noticed meeting under any applicable exception to the Open Meetings Act. 10. Consider/Discuss/Action on any items listed on any agenda - executive session, regular meeting, or closed session - that is duly posted by the City of Anna for any City Council meeting occurring on the same date as the meeting noticed in this agenda. 11. Adjourn. This is to certify that I, Carrie L Land, City Secretary, posted this Agenda on the City’s website (www.annatexas.gov) and at the Anna Municipal Complex bulletin board at or before 5:00 p.m. on 06/03/2026. Carrie L. Land, City Secretary 1. The Council may vote and/or act upon each of the items listed in this Agenda. Notwithstanding the foregoing or any other statement in this Agenda, the Council shall not take action on any item until after providing an opportunity for public testimony under the "Neighbor Comments" item or after any public hearing held under applicable law. 2. The Council reserves the right to retire into closed executive session concerning any of the items listed on this agenda, whenever it is considered necessary and legally justified under the Open Meeting Act. 3. In accordance with the Americans with Disabilities Act, it is the policy of the City of Anna to offer its public programs, services, and meetings in a manner that is readily accessible to everyone, including individuals with disabilities. If you are a person with a disability and require information or materials in an appropriate alternative format, or if you require any other accommodation, please contact the ADA Coordinator at least 48 working hours in advance of the event by emailing adacompliance@annatexas.gov. Advance notification within this guideline will enable the City to make reasonable arrangements to ensure accessibility. Item No. 4.a. City Council Agenda Staff Report Meeting Date: 6/9/2026 Staff Contact: Stephanie Beitelschies AGENDA ITEM: Proclamation recognizing June as Safety Awareness Month. SUMMARY: National Safety Month is observed each June and emphasizes ongoing education to help people stay safe and healthy throughout their lifetimes. Mayor Cain and City Council call upon all neighbors to observe June 2026 as National Safety Month. FINANCIAL IMPACT: This item has no financial impact. BACKGROUND: Since its establishment by the National Safety Council in June 1996, organizations and individuals across the country have come together to join NSC in observance of National Safety Month, a dedication each June to bring extra attention to the safety issues faced from the workplace to anyplace. STRATEGIC CONNECTIONS: This item has no strategic connection. ATTACHMENTS: 1. Proclamation National Safety Awareness Month 2026 City of Anna, Texas Proclamation Safety Awareness Month June 2026 WHEREAS, the daily demonstrations of safe and healthy behaviors and habits can reduce the risk of injuries at home and work; and WHEREAS, National Safety Month, observed each June, emphasizes ongoing education to help people stay safe and healthy throughout their lifetimes; and WHEREAS, providing safety and health resources and information helps reduce workplace injuries and supports the goal of all municipal agencies to protect the health and safety of our residents and city employees; and WHEREAS, comprehensive, ongoing risk management efforts at workplaces promote hazard reduction and avoidance of injuries and illnesses; and WHEREAS, workplace safety and health surveys, training, and safety committees encourage ongoing, proactive employee engagement in hazard identification, hazard mitigation, and risk management; and THEREFORE, BE IT RESOLVED that I, Mayor Cain and the City Council for the City of Anna, Texas call upon all people to observe June 2026, as National Safety Awareness Month. In witness, whereof I have hereunto set my hand this 9th day of June 2026 and called this seal to be affixed. ________________________________________ Pete Cain, Mayor Item No. 6.a. City Council Agenda Staff Report Meeting Date: 6/9/2026 Staff Contact: Carrie Land AGENDA ITEM: Approve the City Council Meeting Minutes for May 26, 2026. (City Secretary Carrie Land) SUMMARY: FINANCIAL IMPACT: BACKGROUND: STRATEGIC CONNECTIONS: This item supports the City of Anna Strategic Plan, specifically advancing the strategic outcome area: Excellent. Anna is a high-performing City that implements best practices and pursues accreditation, demonstrating its commitment to: • Ethical and collaborative decision-making • Continuous improvement and achieving measurable outcomes • Ensuring a positive work environment for Council, staff, and neighbors ATTACHMENTS: 1. 05-26-2026 Executive Session Minutes 2. 05-26-2026 Regular Meeting Minutes City Council Executive Session Meeting Minutes Tuesday, May 26, 2026 @ 5:30 PM Anna Municipal Complex - Council Chambers 120 W. 7th Street, Anna, Texas 75409 The City Council of the City of Anna met in an Executive Session on Tuesday, May 26, 2026, at 5:30 PM, in the Anna Municipal Complex – Council Chambers, located at 120 W. 7th Street, to consider the following items. 1. Call to Order, Roll Call, and Establishment of Quorum. Mayor Cain called the meeting to order at 5:30 PM. Members Present: Mayor Pete Cain Mayor Pro Tem Kevin Toten Deputy Mayor Pro Tem Stan Carver II Council Member Nathan Bryan Council Member Kelly Herndon Council Member Elden Baker Council Member Manny Singh Members Absent: None 2. Executive Session (Exceptions). a. Consult with legal counsel regarding pending or contemplated litigation and/or on matters in which the duty of the attorney to the governmental body under the Texas Disciplinary Rules of Professional Conduct of the State Bar of Texas clearly conflicts with Chapter 551 of the Government Code (Tex. Gov’t Code §551.071). b. Discuss or deliberate the purchase, exchange, lease, or value of real property (Tex. Gov’t Code §551.072). c. Discuss or deliberate Economic Development Negotiations: (1) To discuss or deliberate regarding commercial or financial information that the City has received from a business prospect that the City seeks to have locate, stay, or expand in or near the territory of the City of Anna and with which the City is conducting economic development negotiations; or (2) To deliberate the offer of a financial or other incentive to a business prospect described by subdivision (1). (Tex. Gov’t Code §551.087). d. Discuss or deliberate personnel matters (Tex. Gov’t Code §551.074). City Council MOTION: Council Member Herndon moved to enter Executive Session. Mayor Pro Tem Toten seconded. Motion carried 4 - 0. Mayor Cain recessed the meeting at 5:33 PM. Mayor Cain reconvened the meeting at 6:04 PM. 3. Consider/Discuss/Action on any items listed on any agenda - executive session, regular meeting, or closed session - that is duly posted by the City of Anna for any City Council meeting occurring on the same date as the meeting noticed in this agenda. No action taken. 4. Adjourn. Mayor Cain adjourned the meeting at 6:04 PM. APPROVED this 9th day of June 2026. _________________________________ Mayor Pete Cain ATTEST: _______________________________ City Secretary Carrie L. Land Regular City Council Meeting Minutes Tuesday, May 26, 2026 @ 6:00 PM Anna Municipal Complex - Council Chambers 120 W. 7th Street, Anna, Texas 75409 The City Council of the City of Anna met on Tuesday, May 26, 2026, at 6:00 PM, in the Anna Municipal Complex – Council Chambers, located at 120 W. 7th Street, to consider the following items. 1. Call to Order, Roll Call, and Establishment of Quorum. Mayor Cain called the meeting to order at 6:04 PM. Members Present: Mayor Pete Cain Mayor Pro Tem Kevin Toten Deputy Mayor Pro Tem Stan Carver II Council Member Nathan Bryan Council Member Kelly Herndon Council Member Elden Baker Council Member Manny Singh Members Absent: None 2. Invocation and Pledge of Allegiance. Deputy Mayor Pro Tem Carver led the Invocation and Pledge of Allegiance. 3. Neighbor Comments. Mr. Martin Matuszak requested a meeting with Mayor Cain. Ms. Sheri Sachs spoke about a section of road at the intersection of Leonard and Finley. Ms. Sachs also spoke about Data Centers. 4. Presentations. a. Recognize exemplary performance during a recent EMS call. This item was postponed. b. Recognition of out going Deputy Mayor Pro Tem Stan Carver II. Mayor Cain recognized Deputy Mayor Pro Tem Carver for his six years of service to the City of Anna. Council took a ten-minute break. c. Administer Oath of Office to Newly Elected City Council Members. City Secretary Carrie Land administered the Oath of Office to the newly elected Council Members: City Council Member Place 3 Jessica Walden, and City Council Member Place 5 Elden Baker. Council Member Walden took her seat at the Dais. d. Break 5. Work Session. a. Discussion and staff direction on an ordinance requiring minors (17 and under) to wear helmets when riding bicycles, scooters, or skateboards, or when operating any electric or motorized vehicles. Council discussed a possible requirement for lights and helmets, enforceability, and applicable ages. Council directed staff to research the topic and bring it back to Council at a later date. b. Presentation to Council on Collin County Regional Trails Master Plan and Trail Planning & Implementation. Lenny Hughes and Kendall Howard, with The Halff Team, presented on the Trail Planning and Implementation of the Collin County Regional Trails Master Plan. c. Presentation to Council on Anna 2050 Parks, Open Space, Trails, & Recreation Master Plan Implementation Plan and an Update on Community Services Programs and Operations. Director of Community Services Jeff Freeth presented an update on the Community Services Programs and Operations, discussing each division and its goals. 6. Consent Items. Mayor Pro Tem Toten requested that Item 6f. be pulled for individual consideration. MOTION: Council Member Herndon moved to approve Consent Items 6a. - 6e, 6g, and 6h. Council Member Baker seconded. Motion carried 7 - 0. a. Approve City Council Meeting Minutes for May 12, 2026. (City Secretary Carrie Land) b. Review Minutes of the April 2, 2026, Joint Community Development Corporation and Economic Development Corporation Board Meeting. (Director of Economic Development Natasha Roach) c. Review Minutes of the April 6, 2026, Planning & Zoning Commission Meeting. (Director of Development Services Kaleb Kentner) d. Review Monthly Financial Report for the Month Ending April 30, 2026. (Director of Finance Terri Doby) e. Approve a Resolution determining the costs of certain Authorized Improvements to be financed by the Liberty Hills Public Improvement District No. 2 for Improvement Area #1 thereof; approving a Preliminary Service Plan and Assessment Plan, including the proposed Assessment Roll for Improvement Area #1; calling a regular meeting and noticing a Public Hearing for June 23, 2026 to consider an ordinance Levying Assessments on property located within Improvement Area #1 of said District; directing the filing of the proposed Assessment Roll with the City Secretary to make available for public inspection; directing City staff to publish and mail notice of said Public Hearing; and resolving other matters incident and related thereto. (Director of Public Works Joseph Cotton) The development agreement for Liberty Hills was passed by the City Council in 2025. The creation and selling of PID bonds for Improvement Area #1 is the next logical step in this process, per the development agreement. A RESOLUTION OF THE CITY OF ANNA, TEXAS, DETERMINING THE COSTS OF CERTAIN AUTHORIZED IMPROVEMENTS TO BE FINANCED BY THE LIBERTY HILLS PUBLIC IMPROVEMENT DISTRICT NO. 2 FOR IMPROVEMENT AREA #1 THEREOF; APPROVING A PRELIMINARY SERVICE PLAN AND ASSESSMENT PLAN, INCLUDING THE PROPOSED ASSESSMENT ROLL FOR IMPROVEMENT AREA #1; CALLING A REGULAR MEETING AND NOTICING A PUBLIC HEARING FOR JUNE 23, 2026, TO CONSIDER AN ORDINANCE LEVYING ASSESSMENTS ON PROPERTY LOCATED WITHIN IMPROVEMENT AREA #1 OF SAID DISTRICT; DIRECTING THE FILING OF THE PROPOSED ASSESSMENT ROLL WITH THE CITY SECRETARY TO MAKE AVAILABLE FOR PUBLIC INSPECTION; DIRECTING CITY STAFF TO PUBLISH AND MAIL NOTICE OF SAID PUBLIC HEARING; AND RESOLVING OTHER MATTERS INCIDENT AND RELATED THERETO. f. Approve a Resolution of the City of Anna, Texas, Approving the First Amendment to Meadow Vista Development Agreement. (Director of Public Works Joseph Cotton) The bonds for Meadow Vista PID have been sold, and after all the reimbursements, additional funds are available due to reductions in the actual construction costs in the zone. The excess funds are being allocated to other project-related items, including the right-of-way and infrastructure construction along Hackberry. MOTION: Mayor Pro Tem Toten moved to approve. Council Member Place 6 Singh seconded. Motion carried 7 - 0. A RESOLUTION OF THE CITY OF ANNA, TEXAS, APPROVING FIRST AMENDMENT TO MEADOW VISTA DEVELOPMENT AGREEMENT. g. Approve a Resolution of the City Council of the City of Anna approving the Anna Community Development Corporation's execution and delivery of a First Amendment to Leaseback Agreement with Bengal Anna Plaza, LLC; authorizing related actions; and providing an effective date. (Director of Economic Development Natasha Roach) The CDC/EDC approved a Resolution at its Joint Board Meeting on May 7, 2026, authorizing the execution and delivery of a First Amendment to the Leaseback Agreement with Bengal Anna Plaza, LLC, subject to three additional conditions. 1. The Bengal Anna Plaza, LLC's owner and manager fully executes and delivers said First Amendment to the Leaseback Agreement; and 2. Bengal Anna Plaza, LLC delivers to City staff an executed amendment to a sublease with the Vape Shop owners in a form acceptable to the Anna CDC's legal counsel; and 3. The CDC will not approve any additional extension requests after December 31, 2026. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ANNA, TEXAS, APPROVING THE ANNA COMMUNITY DEVELOPMENT CORPORATION'S EXECUTION AND DELIVERY OF A FIRST AMENDMENT TO LEASEBACK AGREEMENT WITH BENGAL ANNA PLAZA, LLC; AUTHORIZING RELATED ACTIONS; AND PROVIDING AN EFFECTIVE DATE. h. Approve a Resolution Authorizing the Anna Police Department to apply for the Motor Vehicle Crime Prevention Authority Grant. (Chief of Police Terry Eoff) The program provides grant funding to law enforcement agencies and task forces to support specialized enforcement, investigation, and public awareness efforts aimed at preventing vehicle theft and recovering stolen vehicles. MVCPA grants help agencies fund personnel, equipment, and training to combat organized auto theft rings and improve coordination among local, state, and federal partners. The authority is funded through a small fee collected from automobile insurance policies issued in Texas and is administered through the Texas Department of Motor Vehicles. A RESOLUTION OF THE CITY OF ANNA, TEXAS, APPROVING AN APPLICATION FOR THE MOTOR VEHICLE CRIME PREVENTION AUTHORITY GRANT PROGRAM AND AUTHORIZING CITY STAFF TO EXECUTE SAME. 7. Items For Individual Consideration and Public Hearings. a. Conduct a Public Hearing/Consider/Discuss/Action on a recommendation to amend Article 9.04 (Zoning Ordinance) adopting regulations as it pertains to drone delivery infrastructure. (TA 26-0002) (Development Services Director Kaleb Kentner) The purpose of this request is to establish regulations pertaining to drone delivery infrastructure. These regulations apply only to site planning for the associated ground infrastructure. Municipalities in Texas have limited authority to regulate unmanned aircraft, and all drone operators must comply with federal requirements. It should be noted that Zipline has no plans for additional drone infrastructure at this time, nor does any other drone operating company within Anna's city limits. This is a new land use that does not currently exist in the Zoning Ordinance, except for the Walmart property. Mayor Cain opened the public hearing at 8:41 PM. Development Services Director Kaleb Kentner presented the item. No public comments were made. Mayor Cain closed the public hearing at 8:43 PM. MOTION: Mayor Pro Tem Toten moved to approve. Council Member Bryan seconded. Motion carried 7 - 0. AN ORDINANCE OF THE CITY OF ANNA, TEXAS AMENDING THE CITY’S CODE OF ORDINANCES BY AMENDING CHAPTER 9 (PLANNING AND DEVELOPMENT REGULATIONS); PROVIDING FOR AN EFFECTIVE DATE; PROVIDING FOR A PENALTY CLAUSE NOT TO EXCEED $2,000 OR THE HIGHEST PENALTY AMOUNT ALLOWED BY LAW, WHICHEVER IS LESS; AND PROVIDING FOR THE PUBLICATION OF THE CAPTION HEREOF. b. Conduct a Public Hearing and take testimony on the proposed levy of assessments on property located within Improvement Area #2, Improvement Area #3, and Improvement Area #4 of the Sherley Tract Public Improvement District No. 2 pursuant to Chapter 372, Texas Local Government Code. (Director of Public Works Joseph Cotton) Mayor Cain opened the public hearing at 8:48 PM. Director of Public Works Joseph Cotton presented the item. No public comments were made. Mayor Cain closed the public hearing at 8:49 PM. MOTION: Council Member Herndon moved to approve. Council Member Baker seconded. Motion carried 7 - 0. c. Consider/Discuss/Action on an Ordinance accepting and approving a 2026 Amended and Restated Service and Assessment Plan and Assessment Rolls for the Sherley Tract Public Improvement District No. 2, making a finding of special benefit to such property; Levying special assessments against property within Improvement Area #2, Improvement Area #3, and Improvement Area #4 of the District and establishing a Lien on such property; providing for the method of assessment and the payment of the assessments in accordance with Chapter 372, Texas Local Government Code. (Director of Public Works Joseph Cotton) MOTION: Council Member Herndon moved to approve. Council Member Baker seconded. Motion carried 7 - 0. AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF ANNA, TEXAS, ACCEPTING AND APPROVING A 2026 AMENDED AND RESTATED SERVICE AND ASSESSMENT PLAN AND ASSESSMENT ROLLS FOR THE SHERLEY TRACT PUBLIC IMPROVEMENT DISTRICT NO. 2; MAKING A FINDING OF SPECIAL BENEFIT TO THE PROPERTY IN THE DISTRICT; LEVYING SPECIAL ASSESSMENTS AGAINST PROPERTY WITHIN IMPROVEMENT AREA #2, IMPROVEMENT AREA #3, AND IMPROVEMENT AREA #4 OF THE DISTRICT AND ESTABLISHING A LIEN ON SUCH PROPERTY; PROVIDING FOR THE METHOD OF ASSESSMENT AND THE PAYMENT OF THE ASSESSMENTS IN ACCORDANCE WITH CHAPTER 372, TEXAS LOCAL GOVERNMENT CODE, AS AMENDED, PROVIDING PENALTIES AND INTEREST ON DELINQUENT ASSESSMENTS, PROVIDING FOR SEVERABILITY, AND PROVIDING AN EFFECTIVE DATE. d. Consider/Discuss/Action on an Ordinance authorizing the issuance of the "City of Anna, Texas, Special Assessment Revenue Bonds, Series 2026 (Sherley Tract Public Improvement District No. 2 Improvement Areas #2-4 Projects)" in a principal amount of up to $11,000,000; and approving various documents related to such Bonds. (Director of Public Works Joseph Cotton) MOTION: Council Member Herndon moved to approve. Mayor Pro Tem Toten seconded. Motion carried 7 - 0. AN ORDINANCE AUTHORIZING THE ISSUANCE OF “CITY OF ANNA, TEXAS, SPECIAL ASSESSMENT REVENUE BONDS, SERIES 2026 (SHERLEY TRACT PUBLIC IMPROVEMENT DISTRICT NO. 2 IMPROVEMENT AREAS #2-4 PROJECTS)” IN A PRINCIPAL AMOUNT NOT TO EXCEED $11,000,000 PAYABLE FROM SPECIAL ASSESSMENTS LEVIED UPON IMPROVEMENT AREA #2, IMPROVEMENT AREA #3, AND IMPROVEMENT AREA #4 OF SAID DISTRICT TO FUND PUBLIC IMPROVEMENTS IN SAID DISTRICT; APPROVING AND AUTHORIZING AN INDENTURE OF TRUST, A BOND PURCHASE AGREEMENT, A LIMITED OFFERING MEMORANDUM, A CONTINUING DISCLOSURE AGREEMENT, AND OTHER AGREEMENTS AND DOCUMENTS IN CONNECTION THEREWITH; MAKING FINDINGS WITH RESPECT TO THE ISSUANCE OF SUCH BONDS; AND PROVIDING AN EFFECTIVE DATE. Mayor Cain called to enter Closed Session under Tex. Gov't Code §551.071, Tex Gov't Code §551.072, Tex Gov't Code §551.087, and Tex Gov't Code §551.074. MOTION: Council Member Herndon moved to enter closed session. Council Member Walden seconded. Motion carried 7 - 0. Mayor Cain recessed the meeting at 8:52 PM. Mayor Cain reconvened the meeting at 9:42 PM. e. Conduct a first reading of a Resolution approving a joint project of the Anna Community Development Corporation and the City of Anna to enter into an Economic Development Incentive Agreement among the City, the Corporation, and BVE Anna NEC SPE LLC for the Rosamond Town Center Development. (Director of Economic Development Natasha Roach) Two readings of the Resolution are required prior to authorizing a joint project of the Anna Community Development Corporation and the City of Anna. This was the first reading of the Resolution. Mayor Cain read the following: A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ANNA, TEXAS, APPROVING AND AUTHORIZING A JOINT PROJECT OF THE CITY OF ANNA AND THE ANNA COMMUNITY DEVELOPMENT CORPORATION RELATING TO THE PROPOSED ROSAMOND TOWN CENTER DEVELOPMENT AND TARGET RETAIL STORE; AUTHORIZING RELATED ACTIONS; AND PROVIDING AN EFFECTIVE DATE. f. Conduct a second reading of a Resolution approving a joint project of the Anna Community Development Corporation and the City of Anna to enter into an Economic Development Incentive Agreement among the City, the Corporation, and BVE Anna NEC SPE LLC for the Rosamond Town Center Development. (Director of Economic Development Natasha Roach) Two readings of the Resolution are required prior to authorizing a joint project of the Anna Community Development Corporation and the City of Anna. This was the second reading of the Resolution. Mayor Cain read the following: A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ANNA, TEXAS, APPROVING AND AUTHORIZING A JOINT PROJECT OF THE CITY OF ANNA AND THE ANNA COMMUNITY DEVELOPMENT CORPORATION RELATING TO THE PROPOSED ROSAMOND TOWN CENTER DEVELOPMENT AND TARGET RETAIL STORE; AUTHORIZING RELATED ACTIONS; AND PROVIDING AN EFFECTIVE DATE. g. Consider/Discuss/Action on a Resolution approving a joint project of the Anna Community Development Corporation and the City of Anna to enter into an Economic Development Incentive Agreement among the City, the Corporation, and BVE Anna NEC SPE LLC for the Rosamond Town Center Development. (Director of Economic Development Natasha Roach) Consideration for approval of an Economic Development Incentive Agreement between the City of Anna, the Anna Community Development Corporation (CDC), and BVE Anna NEC SPE LLC for the development of a major retail project (anticipated to be a Target or similar anchor retailer) on approximately 25.67 acres located near the northeast corner of US 75 and Rosamond Parkway. The agreement provides performance-based incentives to support the construction of: Stage 1: A minimum 140,000-square-foot anchor retail store Stage 2: An additional 90,000 square feet of retail space Incentives include: -Annual Sales Tax Grants -Performance Bonus -Impact Fee Credits Key Performance Requirements: -Certificate of Occupancy for the anchor store by April 30, 2028 (with a potential 12-month extension) -Completion of additional retail space by September 30, 2029 (with extension option) -Continued operation as a qualifying anchor retail store during the incentive term Protective Provisions: -Incentives are performance-based and tied to actual sales tax generation -Reductions or termination of incentives if construction deadlines are not met -Repayment provisions if tax revenues are later disallowed or reallocated by the State -Security required for impact fee credits MOTION: Council Member Singh moved to approve. Council Member Herndon seconded. Motion carried 7 - 0. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ANNA, TEXAS, APPROVING AND AUTHORIZING A JOINT PROJECT OF THE CITY OF ANNA AND THE ANNA COMMUNITY DEVELOPMENT CORPORATION RELATING TO THE PROPOSED ROSAMOND TOWN CENTER DEVELOPMENT AND TARGET RETAIL STORE; AUTHORIZING RELATED ACTIONS; AND PROVIDING AN EFFECTIVE DATE. h. Consider/Discuss/Action on Appointment of Mayor Pro Tem and Deputy Mayor Pro Tem. (City Secretary Carrie Land) Pursuant to the conditions provided for in the City Charter, SECTION 3.04 (b) and (c), it is required that the City Council appoint the positions of Mayor Pro Tem and Deputy Mayor Pro Tem, respectively, at the first regular meeting after an election of a new council member. MOTION: Council Member Singh moved to appoint Council Member Elden Baker as Mayor Pro Tem. Council Member Herndon seconded. Motion carried 5 - 2. Mayor Pro Tem Toten and Council Member Bryan opposed. MOTION: Council Member Singh moved to appoint Council Member Kelly Herndon as Deputy Mayor Pro Tem. Council Member Baker seconded. Motion carried 5 - 2. Mayor Pro Tem Toten and Mayor Cain opposed. 8. Closed Session (Exceptions). a. Consult with legal counsel regarding pending or contemplated litigation and/or on matters in which the duty of the attorney to the governmental body under the Texas Disciplinary Rules of Professional Conduct of the State Bar of Texas clearly conflicts with Chapter 551 of the Government Code (Tex. Gov’t Code §551.071). b. Discuss or deliberate the purchase, exchange, lease, or value of real property (Tex. Gov’t Code §551.072). c. Discuss or deliberate Economic Development Negotiations: (1) To discuss or deliberate regarding commercial or financial information that the City has received from a business prospect that the City seeks to have locate, stay, or expand in or near the territory of the City of Anna and with which the City is conducting economic development negotiations; or (2) To deliberate the offer of a financial or other incentive to a business prospect described by subdivision (1). (Tex. Gov’t Code §551.087). d. Discuss or deliberate personnel matters (Tex. Gov’t Code §551.074). City Council The Closed Session was held earlier in the meeting. 9. Consider/Discuss/Action on any items listed on any agenda - executive session, regular meeting, or closed session - that is duly posted by the City of Anna for any City Council meeting occurring on the same date as the meeting noticed in this agenda. No action taken. 10. Adjourn. Mayor Cain adjourned the meeting at 9:48 PM. APPROVED this 9th day of June 2026. ____________________________________ Mayor Pete Cain ATTEST: _______________________________ City Secretary Carrie L. Land Item No. 6.b. City Council Agenda Staff Report Meeting Date: 6/9/2026 Staff Contact: Joseph Cotton AGENDA ITEM: Approve a Resolution approving a Preliminary Limited Offering Memorandum for the sale of "City of Anna, Texas Special Assessment Revenue Bonds, Series 2026 (Liberty Hills Public Improvement District No. 2 Improvement Area #1 Project)" (Director of Public Works Joseph Cotton) SUMMARY: Resolution approving a Preliminary Limited Offering Memorandum (PLOM) for the sale of "City of Anna, Texas Special Assessment Revenue Bonds, Series 2026 (Liberty Hills Public Improvement District No. 2 Improvement Area #1 Project)" The approval of this item is the next step in the PID Bond process. FINANCIAL IMPACT: BACKGROUND: During the City Council meeting on May 26, 2026, the council approved the Texas Special Assessment Revenue Bond, Series 2026 (Liberty Hills Public Improvement District No. 2 IA #1 Project). The approval of this item is the next step in the PID Bond process. STRATEGIC CONNECTIONS: This item supports the City of Anna Strategic Plan, specifically advancing the strategic outcome area: Unique. Anna is designed to be unique as it transforms from a bedroom community to a thriving city, with: • Deliberate planning for the future • A vision for innovative development and positive growth • A variety of housing, jobs, and educational opportunities ATTACHMENTS: 1. Resolution Approving PLOM (LH PID No. 2) v2 CITY OF ANNA, TEXAS RESOLUTION NO. 2026-06-____ RESOLUTION APPROVING A PRELIMINARY LIMITED OFFERING MEMORANDUM FOR THE SALE OF “CITY OF ANNA, TEXAS SPECIAL ASSESSMENT REVENUE BONDS, SERIES 2026 (LIBERTY HILLS PUBLIC IMPROVEMENT DISTRICT NO. 2 IMPROVEMENT AREA #1 PROJECT)” WHEREAS, the City of Anna, Texas (the “City”) intends to issue its City of Anna, Texas Special Assessment Revenue Bonds, Series 2026 (Liberty Hills Public Improvement District No. 2 Improvement Area #1 Project) (the “Bonds”) to finance certain public improvements within the City; WHEREAS, FMSbonds, Inc. (the “Underwriter”), with assistance from its counsel, City Staff, the City’s Bond Counsel, and City’s Financial Advisor, has prepared a Preliminary Limited Offering Memorandum for dissemination to potential purchasers of the Bonds prior to the availability of the final Limited Offering Memorandum for the Bonds. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF CITY OF ANNA, TEXAS: 1. The Preliminary Limited Offering Memorandum for the Bonds, substantially in the form attached hereto as Exhibit A, is hereby approved with such changes, addenda, supplements or amendments as may be approved by the Finance Director in consultation with the City’s consultants retained by the City to assist in the issuance of the Bonds including Bond Counsel and the Financial Advisor, and the Underwriter is hereby authorized to distribute such document among potential purchasers of the Bonds and other interested persons in connection with the initial marketing and placement of the Bonds; provided that such Preliminary Limited Offering Memorandum shall not be released to the public without the approval of the Finance Director, which approval shall be made in consultation with the City’s consultants retained by the City to assist in the issuance of the Bonds including Bond Counsel and the Financial Advisor. 2. Pursuant to Rule 15c2-12 of the United States Securities and Exchange Commission (17 C.F.R. § 240.15c2-12) (“Rule 15c2-12”), the City hereby deems the Preliminary Limited Offering Memorandum to be final as of its date, except for the omission of no more than the following information as permitted by Rule 15c2-12: the offering prices of the Bonds, interest rates for the Bonds, selling compensation of the Underwriter, the aggregate principal amount of the Bonds, the principal amount per maturity of the Bonds, the delivery date for the Bonds, ratings for the Bonds, and the identity of the ultimate purchasers. PASSED AND APPROVED THIS 9TH DAY OF JUNE, 2026. ______________________________ Pete Cain, Mayor ATTEST: City of Anna, Texas ______________________________ (CITY SEAL) Carrie Land, City Secretary City of Anna, Texas EXHIBIT A PRELIMINARY LIMITED OFFERING MEMORANDUM Draft 06.01.2026 NEW ISSUE NOT RATED PRELIMINARY LIMITED OFFERING MEMORANDUM DATED JUNE 10, 2026 THE BONDS ARE INITIALLY OFFERED ONLY TO “ACCREDITED INVESTORS” (AS DEFINED IN RULE 501 OF REGULATION D PROMULGATED UNDER THE SECURITIES ACT OF 1933) AND “QUALIFIED INSTITUTIONAL BUYERS” (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT OF 1933). SEE “LIMITATIONS APPLICABLE TO INITIAL PURCHASERS.” In the opinion of Bond Counsel, interest on the Bonds will be excludable from gross income for federal income tax purposes under statutes, regulations, published rulings, and court decisions existing on the date hereof, subject to the matters described under “TAX MATTERS” herein, including the alternative minimum tax on certain corporations. $18,659,000* CITY OF ANNA, TEXAS, (a municipal corporation of the State of Texas located in Collin County) SPECIAL ASSESSMENT REVENUE BONDS, SERIES 2026 (LIBERTY HILLS PUBLIC IMPROVEMENT DISTRICT NO. 2 IMPROVEMENT AREA #1 PROJECT) Sale Date: June 23, 2026 Interest to Accrue from Delivery Date (defined below) Due: September 15, as shown on the inside cover The City of Anna, Texas, Special Assessment Revenue Bonds, Series 2026 (Liberty Hills Public Improvement District No. 2 Improvement Area #1 Project) (the “Bonds”), are being issued by the City of Anna, Texas (the “City”). The Bonds will be issued in fully registered form, without coupons, in authorized denominations of $100,000 of principal amount and any integral multiple of $1,000 in excess thereof. The Bonds will bear interest at the rates set forth on the inside cover page hereof, and such interest will be calculated on the basis of a 360-day year of twelve 30-day months, and will be payable on each March 15 and September 15, commencing March 15, 2027, until maturity or earlier redemption. The Bonds will be registered in the name of Cede & Co., as nominee of The Depository Trust Company (“DTC”), New York, New York. No physical delivery of the Bonds will be made to the beneficial owners thereof. For so long as the book-entry only system is maintained, the principal of and interest on the Bonds will be paid from the sources described herein by Regions Bank, an Alabama state banking corporation, as trustee (the “Trustee”), to DTC as the registered owner thereof. See “BOOK-ENTRY ONLY SYSTEM.” The Bonds are being issued by the City pursuant to the Public Improvement District Assessment Act, Subchapter A of Chapter 372, Texas Local Government Code, as amended (the “PID Act”), an ordinance expected to be adopted by the City Council of the City (the “City Council”), and an Indenture of Trust between the City and the Trustee (the “Indenture”). Capitalized terms not otherwise defined herein shall have the meanings assigned to them in the Indenture. Proceeds of the Bonds will be used for the purposes of (i) paying a portion of the costs of the Improvement Area #1 Improvements, (ii) paying a portion of the interest on the Bonds during and after the period of acquisition and construction of the Improvement Area #1 Improvements, (iii) funding a reserve fund for the payment of principal of and interest on the Bonds, (iv) paying a portion of the costs incidental to the organization of the District, and (v) paying the costs of issuance of the Bonds. See “THE IMPROVEMENT AREA #1 IMPROVEMENTS” and “APPENDIX B – Form of Indenture.” The Bonds, when issued and delivered, will constitute valid and binding special, limited obligations of the City secured by a first lien on, security interest in, and pledge of the Trust Estate, consisting primarily of revenue from Improvement Area #1 Assessments levied against Improvement Area #1 Assessed Property in accordance with the Service and Assessment Plan, all to the extent and upon the conditions described in the Indenture. The Bonds are not payable from funds raised or to be raised from taxation. See “SECURITY FOR THE BONDS.” The Bonds are subject to redemption at the times, in the amounts, and at the redemption prices more fully described under the subcaption “DESCRIPTION OF THE BONDS – Redemption Provisions.” The Bonds involve a significant degree of risk and are not suitable for all investors. See “BONDHOLDERS’ RISKS.” The Underwriter is limiting this offering to Qualified Institutional Buyers and Accredited Investors. The limitation of the initial offering to Qualified Institutional Buyers and Accredited Investors does not denote restrictions on transfers in any secondary market for the Bonds. Prospective purchasers should carefully evaluate the risks and merits of an investment in the Bonds, should consult with their legal and financial advisors before considering a purchase of the Bonds, and should be willing to bear the risks of loss of their investment in the Bonds. The Bonds are not credit enhanced or rated and no application has been made for a rating on the Bonds. THE BONDS ARE SPECIAL, LIMITED OBLIGATIONS OF THE CITY PAYABLE SOLELY FROM A FIRST LIEN ON, SECURITY INTEREST IN, AND PLEDGE OF THE TRUST ESTATE, AS AND TO THE EXTENT PROVIDED IN THE INDENTURE. THE BONDS DO NOT GIVE RISE TO A CHARGE AGAINST THE GENERAL CREDIT OR TAXING POWER OF THE CITY AND ARE PAYABLE SOLELY FROM THE TRUST ESTATE IDENTIFIED IN THE INDENTURE. THE OWNERS OF THE BONDS SHALL NEVER HAVE THE RIGHT TO DEMAND PAYMENT THEREOF OUT OF MONEY RAISED OR TO BE RAISED BY TAXATION, OR OUT OF ANY ASSETS OF THE CITY OTHER THAN THE TRUST ESTATE, AS AND TO THE EXTENT PROVIDED IN THE INDENTURE. NO OWNER OF THE BONDS SHALL HAVE THE RIGHT TO DEMAND ANY EXERCISE OF THE CITY’S TAXING POWER TO PAY THE PRINCIPAL OF THE BONDS OR THE INTEREST OR REDEMPTION PREMIUM, IF ANY, THEREON. THE CITY SHALL HAVE NO LEGAL OR MORAL OBLIGATION TO PAY THE BONDS OUT OF ANY ASSETS OF THE CITY OTHER THAN THE TRUST ESTATE. SEE “SECURITY FOR THE BONDS.” This cover page contains certain information for quick reference only. It is not a summary of the Bonds. Investors must read this entire Limited Offering Memorandum to obtain information essential to the making of an informed investment decision. The Bonds are offered for delivery when, as, and if issued by the City and accepted by FMSbonds, Inc. (the “Underwriter”), subject to, among other things, the approval of the Bonds by the Attorney General of Texas and the receipt of the opinion of McCall, Parkhurst & Horton L.L.P., Bond Counsel, as to the validity of the Bonds and the excludability of interest thereon from gross income for federal income tax purposes. See “APPENDIX D – Form of Opinion of Bond Counsel.” Certain legal matters will be passed upon for the City by its counsel, Wolfe, Tidwell & McCoy, LLP, for the Underwriter by its counsel, Orrick, Herrington & Sutcliffe LLP, and for the Developer by its counsel, Greenberg Traurig, LLP. It is expected that the Bonds will be delivered in book-entry form through the facilities of DTC on or about July 22, 2026 (the “Delivery Date”). FMSbonds, Inc. Th i s P r e l i m i n a r y L i m i t e d O f f e r i n g M e m o r a n d u m a n d t h e i n f o r m a t i o n c o n t a i n e d h e r e i n a r e s u b j e c t t o c o m p l e t i o n a n d a m e n d m e n t w i t h o ut n o t i c e . U n d e r n o c i r c u m s t a n c e s s h a l l t h i s P r e l i m i n a r y L i m i t e d Of f e r i n g M e m o r a n d u m co n s t i t u t e a n o f f e r t o s e l l o r t h e so l i c i t a t i o n o f a n o f f e r t o b u y n o r s h a l l t h e r e b e a n y s a l e o f t h e s e s e c u r i t i e s i n a n y j u r i s d i c t i o n i n w h i c h s u c h o f f e r , s o l i c i ta t i o n , o r s a l e w o u l d b e u n l a w f u l p r i o r t o r e g i s t r a t i o n o r q u a l i f i c a t i o n u n d e r t h e s e c u r i t i e s l a w s o f a n y s u c h j u r i s d i c t i o n . * Preliminary, subject to change. MATURITIES, PRINCIPAL AMOUNTS, INTEREST RATES, PRICES, YIELDS, AND CUSIP NUMBERS CUSIP Prefix: (a) $18,659,000* CITY OF ANNA, TEXAS, (a municipal corporation of the State of Texas located in Collin County) SPECIAL ASSESSMENT REVENUE BONDS, SERIES 2026 (LIBERTY HILLS PUBLIC IMPROVEMENT DISTRICT NO. 2 IMPROVEMENT AREA #1 PROJECT) $ % Term Bonds, Due September 15, 20__, Priced to Yield %; CUSIP Suffix: (a) (b) (c) $ % Term Bonds, Due September 15, 20__, Priced to Yield %; CUSIP Suffix: (a) (b) (c) $ % Term Bonds, Due September 15, 20__, Priced to Yield %; CUSIP Suffix: (a) (b) (c) (a) CUSIP numbers are included solely for the convenience of owners of the Bonds. CUSIP is a registered trademark of the American Bankers Association. CUSIP data herein is provided by CUSIP Global Services, managed by FactSet Research Systems Inc. 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. CUSIP numbers are provided for convenience of reference only. None of the City, the City’s Municipal Advisor, or the Underwriter takes any responsibility for the accuracy of such numbers. (b) The Bonds maturing on or after September 15, 20__, are subject to redemption before their respective scheduled maturity dates, in whole or in part, at the option of the City, on any date on or after September 15, 20__, at the redemption prices set forth herein under “DESCRIPTION OF THE BONDS – Redemption Provisions.” (c) The Bonds are also subject to mandatory sinking fund redemption and extraordinary optional redemption as described herein under “DESCRIPTION OF THE BONDS – Redemption Provisions.” THE REMAINDER OF THIS PAGE IS LEFT BLANK INTENTIONALLY. * Preliminary, subject to change. i CITY OF ANNA, TEXAS CITY COUNCIL ame Place Term Expires (Ma ) Pete Cain Ma o 2027 Kevin Toten Place 1 2027 athan Br an Place 2 2028 Jessica Walden Place 3 2030 Kell Patterson-Herndon Place 4, Deput Ma or Pro Tem 2028 Elden Bake Place 5, Ma or Pro Te 2030 Mann Sin h Place 6 2028 CITY MANAGER FINANCE DIRECTOR CITY SECRETARY Ronda Perez Terri Dob Carrie Lan ASSESSMENT CONSULTANT P3Works, LLC MUNICIPAL ADVISOR TO THE CITY Hilltop Securities Inc. BOND COUNSEL McCall, Parkhurst & Horton L.L.P. UNDERWRITER’S COUNSEL Orrick, Herrington & Sutcliffe LLP For additional information regarding the City, please contact: Ronda Perez Jim Sabonis Andre A ala Cit Mana e Hilltop Securities Inc. Hilltop Securities Inc. Cit of Anna, Texas 717 N. Harwood Street 717 N. Harwood Street 120 W. 7th Stree Suite 3400 Suite 3400 Anna, Texas 75409 Dallas, Texas 75201 Dallas, Texas 75201 (972) 924-3325 (214) 953-4000 (214) 953-4000 rperez annatexas.ov Jim.Sabonis hilltopsecurities.co Andre.A ala hilltopsecurities.co ii REGIONAL LOCATION MAP OF THE DISTRICT iii AREA LOCATION MAP OF THE DISTRICT iv MAP SHOWING BOUNDARIES OF THE DISTRICT, IMPROVEMENT AREA #1, AND FUTURE IMPROVEMENT AREA v CONCEPT PLAN vi USE OF LIMITED OFFERING MEMORANDUM FOR PURPOSES OF COMPLIANCE WITH RULE 15C2-12 OF THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION AS AMENDED AND IN EFFECT ON THE DATE OF THIS PRELIMINARY LIMITED OFFERING MEMORANDUM (THE “RULE” OR “RULE 15C2-12”), THIS DOCUMENT CONSTITUTES AN “OFFICIAL STATEMENT” OF THE CITY WITH RESPECT TO THE BONDS THAT HAS BEEN “DEEMED FINAL” BY THE CITY AS OF ITS DATE EXCEPT FOR THE OMISSION OF NO MORE THAN THE INFORMATION PERMITTED BY RULE 15C2-12. NO DEALER, BROKER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED BY THE CITY OR THE UNDERWRITER TO GIVE ANY INFORMATION OR MAKE ANY REPRESENTATIONS, OTHER THAN THOSE CONTAINED IN THIS LIMITED OFFERING MEMORANDUM, AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY EITHER OF THE FOREGOING. THIS LIMITED OFFERING MEMORANDUM DOES NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY AND THERE SHALL BE NO OFFER, SOLICITATION OR SALE OF THE BONDS BY ANY PERSON IN ANY JURISDICTION IN WHICH IT IS UNLAWFUL FOR SUCH PERSON TO MAKE SUCH OFFER, SOLICITATION OR SALE. THE INITIAL PURCHASERS ARE ADVISED THAT THE BONDS BEING OFFERED PURSUANT TO THIS LIMITED OFFERING MEMORANDUM ARE BEING OFFERED AND SOLD ONLY TO “ACCREDITED INVESTORS” AS DEFINED IN RULE 501 OF REGULATION D PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT OF 1933”), AND “QUALIFIED INSTITUTIONAL BUYERS” AS DEFINED IN RULE 144A PROMULGATED UNDER THE SECURITIES ACT OF 1933. SEE “LIMITATIONS APPLICABLE TO INITIAL PURCHASERS.” EACH PROSPECTIVE INITIAL PURCHASER IS RESPONSIBLE FOR ASSESSING THE MERITS AND RISKS OF AN INVESTMENT IN THE BONDS, MUST BE ABLE TO BEAR THE ECONOMIC AND FINANCIAL RISK OF SUCH INVESTMENT IN THE BONDS, AND MUST BE ABLE TO AFFORD A COMPLETE LOSS OF SUCH INVESTMENT. CERTAIN RISKS ASSOCIATED WITH THE PURCHASE OF THE BONDS ARE SET FORTH UNDER “BONDHOLDERS’ RISKS.” EACH INITIAL PURCHASER, BY ACCEPTING THE BONDS, AGREES THAT IT WILL BE DEEMED TO HAVE MADE THE ACKNOWLEDGMENTS AND REPRESENTATIONS DESCRIBED UNDER THE HEADING “LIMITATIONS APPLICABLE TO INITIAL PURCHASERS.” THE UNDERWRITER HAS REVIEWED THE INFORMATION IN THIS LIMITED OFFERING MEMORANDUM IN ACCORDANCE WITH, AND AS PART OF, ITS RESPONSIBILITIES TO INVESTORS UNDER THE UNITED STATES FEDERAL SECURITIES LAWS AS APPLIED TO THE FACTS AND CIRCUMSTANCES OF THIS TRANSACTION. THE INFORMATION SET FORTH HEREIN HAS BEEN FURNISHED BY THE CITY AND OBTAINED FROM SOURCES, INCLUDING THE DEVELOPER, WHICH ARE BELIEVED BY THE CITY AND THE UNDERWRITER TO BE RELIABLE, BUT IT IS NOT GUARANTEED AS TO ACCURACY OR COMPLETENESS, AND IS NOT TO BE CONSTRUED AS A REPRESENTATION OF THE UNDERWRITER. THE INFORMATION AND EXPRESSIONS OF OPINION HEREIN ARE SUBJECT TO CHANGE WITHOUT NOTICE, AND NEITHER THE DELIVERY OF THIS LIMITED OFFERING MEMORANDUM, NOR ANY SALE MADE HEREUNDER, SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE CITY OR THE DEVELOPER SINCE THE DATE HEREOF. NEITHER THE CITY NOR THE UNDERWRITER MAKE ANY REPRESENTATION AS TO THE ACCURACY, COMPLETENESS, OR ADEQUACY OF THE INFORMATION SUPPLIED BY THE DEPOSITORY TRUST COMPANY FOR USE IN THIS LIMITED OFFERING MEMORANDUM. THE BONDS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, NOR HAS THE INDENTURE BEEN QUALIFIED UNDER THE TRUST INDENTURE ACT OF 1939, IN RELIANCE UPON EXEMPTIONS CONTAINED IN SUCH LAWS. THE REGISTRATION OR QUALIFICATION OF THE BONDS UNDER THE SECURITIES LAWS OF ANY JURISDICTION IN WHICH THEY MAY HAVE BEEN REGISTERED OR QUALIFIED, IF ANY, SHALL NOT BE REGARDED AS A RECOMMENDATION THEREOF. NONE OF SUCH JURISDICTIONS, OR ANY OF THEIR AGENCIES, HAVE PASSED UPON THE vii MERITS OF THE BONDS OR THE ACCURACY OR COMPLETENESS OF THIS LIMITED OFFERING MEMORANDUM. CERTAIN STATEMENTS INCLUDED OR INCORPORATED BY REFERENCE IN THIS LIMITED OFFERING MEMORANDUM CONSTITUTE “FORWARD-LOOKING STATEMENTS” WITHIN THE MEANING OF THE UNITED STATES PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995, SECTION 21E OF THE UNITED STATES EXCHANGE ACT OF 1934, AS AMENDED, AND SECTION 27A OF THE SECURITIES ACT OF 1933. SUCH STATEMENTS ARE GENERALLY IDENTIFIABLE BY THE TERMINOLOGY USED, SUCH AS “PLAN,” “EXPECT,” “ESTIMATE,” “PROJECT,” “ANTICIPATE,” “BUDGET” OR OTHER SIMILAR WORDS. THE ACHIEVEMENT OF CERTAIN RESULTS OR OTHER EXPECTATIONS CONTAINED IN SUCH FORWARD-LOOKING STATEMENTS INVOLVE KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND OTHER FACTORS WHICH MAY CAUSE ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS DESCRIBED TO BE MATERIALLY DIFFERENT FROM ANY FUTURE RESULTS, PERFORMANCE OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING STATEMENTS. NEITHER THE CITY NOR THE DEVELOPER PLAN TO ISSUE ANY UPDATES OR REVISIONS TO THOSE FORWARD-LOOKING STATEMENTS IF OR WHEN ANY OF THEIR EXPECTATIONS OR EVENTS, CONDITIONS OR CIRCUMSTANCES ON WHICH SUCH STATEMENTS ARE BASED OCCUR, OTHER THAN AS DESCRIBED UNDER “CONTINUING DISCLOSURE – THE CITY” AND “– THE DEVELOPER,” RESPECTIVELY. THE TRUSTEE HAS NOT PARTICIPATED IN THE PREPARATION OF THIS LIMITED OFFERING MEMORANDUM AND ASSUMES NO RESPONSIBILITY FOR THE ACCURACY OR COMPLETENESS OF ANY INFORMATION CONTAINED IN THIS LIMITED OFFERING MEMORANDUM OR THE RELATED TRANSACTIONS AND DOCUMENTS OR FOR ANY FAILURE BY ANY PARTY TO DISCLOSE EVENTS THAT MAY HAVE OCCURRED AND MAY AFFECT THE SIGNIFICANCE OR ACCURACY OF SUCH INFORMATION. NEITHER THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THE BONDS OR PASSED UPON THE ADEQUACY OR ACCURACY OF THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. 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 LIMITED OFFERING MEMORANDUM FOR PURPOSES OF, AND AS THAT TERM IS DEFINED IN, THE RULE. THE REMAINDER OF THIS PAGE IS LEFT BLANK INTENTIONALLY. viii TABLE OF CONTENTS INTRODUCTION .................................................... 1 PLAN OF FINANCE ............................................... 2 Overview ........................................................... 2 Development Plan ............................................. 2 Lot Purchase and Sale Agreements ................... 4 The Bonds ......................................................... 4 LIMITATIONS APPLICABLE TO INITIAL PURCHASERS ........................................................ 4 DESCRIPTION OF THE BONDS ........................... 5 General Description ........................................... 5 Redemption Provisions ...................................... 6 BOOK-ENTRY ONLY SYSTEM ........................... 8 SECURITY FOR THE BONDS ............................. 10 General ............................................................ 10 Pledged Revenues ............................................ 11 Collection and Deposit of Improvement Area #1 Assessments ................................ 13 Amount of Assessments May be Reduced by TIRZ No. 7 Annual Credit Amount .......................................... 13 Unconditional Levy of Improvement Area #1 Assessments ................................ 14 Perfected Security Interest ............................... 15 Pledged Revenue Fund .................................... 15 Bond Fund ....................................................... 16 Project Fund .................................................... 17 Reserve Fund (Reserve Account and Delinquency and Prepayment Reserve Account) ..................................... 18 Administrative Fund ........................................ 19 Defeasance....................................................... 20 Events of Default ............................................. 20 Remedies in Event of Default .......................... 21 Restriction on Owner’s Actions ...................... 22 Application of Revenues and Other Moneys After Event of Default ................ 22 Investment or Deposit of Funds ....................... 23 Against Encumbrances .................................... 23 Other Obligations or Other Liens; Refunding Bonds ...................................... 23 SOURCES AND USES OF FUNDS* .................... 25 DEBT SERVICE REQUIREMENTS* ................... 26 OVERLAPPING TAXES AND DEBT .................. 27 Overlapping Taxes ........................................ 27 Overlapping Debt .......................................... 28 Agricultural Use .............................................. 28 Homeowners’ Association Dues ..................... 28 ASSESSMENT PROCEDURES ............................ 29 General ............................................................ 29 Assessment Methodology ................................ 29 Collection and Enforcement of Assessment Amounts ............................... 30 Assessment Amounts....................................... 32 Prepayment of Assessments ............................ 34 Priority of Lien ................................................ 35 Foreclosure Proceedings .................................. 35 THE CITY .............................................................. 36 Background ..................................................... 36 City Government ............................................. 36 Water and Wastewater ..................................... 36 THE DISTRICT ..................................................... 37 General ............................................................ 37 Powers and Authority ...................................... 37 THE IMPROVEMENT AREA #1 IMPROVEMENTS ................................................. 38 General ............................................................ 38 Ownership and Maintenance of Improvement Area #1 Improvements ........................................... 39 THE IMPROVEMENT AREA #1 MAJOR IMPROVEMENTS ................................................. 39 Ownership and Maintenance of Improvement Area #1 Major Improvements ........................................... 40 THE DEVELOPMENT .......................................... 40 Development Plan ........................................... 40 Lot Purchase and Sale Agreements ................. 40 Expected Buildout, Absorption, and Home Prices in the District ...................... 43 Amenities and Private Improvements .............. 44 Future Improvement Area Bonds .................... 45 Development Agreement ................................. 45 CFA Agreement .............................................. 47 Zoning/Permitting ........................................... 47 Education ......................................................... 48 Environmental ................................................. 48 Existing Mineral Rights and Other Third-Party Property Rights ..................... 48 Flood Zone ...................................................... 48 Utilities ............................................................ 48 THE DEVELOPER ................................................ 49 General ............................................................ 49 Description of the Developer ........................... 49 Description of Past and Current Projects of the Developer Principals ...................... 49 Executive Biographies ..................................... 50 History and Financing of the District .............. 50 THE ADMINISTRATOR ...................................... 51 APPRAISAL .......................................................... 51 BONDHOLDERS’ RISKS ..................................... 52 Deemed Representations and Acknowledgment by Initial Purchasers ................................................ 53 General Factors relating to Payment of the Bonds .................................................. 53 Assessment Limitations ................................... 53 Direct and Overlapping Indebtedness, Assessments, and Taxes ........................... 54 ix Depletion of Accounts of the Reserve Fund; No Prefunding of Delinquency and Prepayment Reserve Account ...................................... 55 Lien Foreclosure and Bankruptcy .................... 55 Bondholders’ Remedies and Bankruptcy ............................................... 55 Judicial Foreclosures ....................................... 57 No Acceleration ............................................... 57 Bankruptcy Limitation to Bondholders’ Rights ....................................................... 57 State Law Requiring Notice of Assessment; Failure of Developer and Homebuilders to Deliver Required Notice Pursuant to Texas Property Code ........................................... 57 Potential Future Changes in State Law Regarding Public Improvement Districts .................................................... 58 Limited Secondary Market for the Bonds........................................................ 58 No Credit Rating ............................................. 58 Adverse Developments Affecting the Financial Services Industry ...................... 58 General Risks of Real Estate Investment and Development ...................................... 59 Risks Related to the Current Residential Real Estate Market ................................... 60 Risks Related to Recent Increase in Costs of Building Materials and Labor Shortages ........................................ 60 Completion of Homes ...................................... 60 Absorption Rate ............................................... 60 Competition ..................................................... 61 Hazardous Substances ..................................... 61 Regulation ....................................................... 62 Availability of Utilities .................................... 62 Flood Plains ..................................................... 62 Risk from Weather Events ............................... 62 Exercise of Third-Party Rights ........................ 62 Tax-Exempt Status of the Bonds ..................... 63 Management and Ownership ........................... 63 Dependence Upon Developer .......................... 64 Use of Appraisal .............................................. 64 Agricultural Use Valuation and Redemption Rights ................................... 64 TIRZ No. 7 Annual Credit Amount and Marketing of the Development ................. 65 Cybersecurity Risks ......................................... 65 2026 Iran War .................................................. 65 TAX MATTERS .................................................... 66 Opinion ............................................................ 66 Federal Income Tax Accounting Treatment of Original Issue Discount ................................................... 66 Collateral Federal Income Tax Consequences ........................................... 67 State, Local And Foreign Taxes ...................... 68 Information Reporting and Backup Withholding .............................................. 68 Future and Proposed Legislation ..................... 68 LEGAL MATTERS ............................................... 68 Legal Proceedings ........................................... 68 Legal Opinions ................................................ 69 Litigation – The City ....................................... 69 Litigation – The Developer ............................. 69 ENFORCEABILITY OF REMEDIES ................... 70 NO RATING .......................................................... 70 CONTINUING DISCLOSURE .............................. 70 The City ........................................................... 70 The City’s Compliance with Prior Undertakings ............................................ 70 The Developer ................................................. 71 The Developer’s Compliance with Prior Undertakings ............................................ 71 UNDERWRITING ................................................. 71 REGISTRATION AND QUALIFICATION OF BONDS FOR SALE ............................................... 71 LEGAL INVESTMENT AND ELIGIBILITY TO SECURE PUBLIC FUNDS IN TEXAS ................. 71 INVESTMENTS .................................................... 72 INFORMATION RELATING TO THE TRUSTEE ................................................................................ 74 SOURCES OF INFORMATION ........................... 75 General ............................................................ 75 Source of Certain Information ......................... 75 Experts ............................................................. 75 Updating of Limited Offering Memorandum ........................................... 75 FORWARD-LOOKING STATEMENTS .............. 76 AUTHORIZATION AND APPROVAL ................ 76 APPENDIX A General Information Regarding the City and Surrounding Areas APPENDIX B Form of Indenture APPENDIX C Form of Service and Assessment Plan APPENDIX D Form of Opinion of Bond Counsel APPENDIX E-1 Form of Disclosure Agreement of Issuer APPENDIX E-2 Form of Disclosure Agreement of Developer APPENDIX F Development Agreement APPENDIX G Form of CFA Agreement APPENDIX H Appraisal THIS PAGE IS LEFT BLANK INTENTIONALLY. 1 PRELIMINARY LIMITED OFFERING MEMORANDUM $18,659,000* CITY OF ANNA, TEXAS, (a municipal corporation of the State of Texas located in Collin County) SPECIAL ASSESSMENT REVENUE BONDS, SERIES 2026 (LIBERTY HILLS PUBLIC IMPROVEMENT DISTRICT NO. 2 IMPROVEMENT AREA #1 PROJECT) INTRODUCTION The purpose of this Limited Offering Memorandum, including the cover page, inside cover, and appendices hereto, is to provide certain information in connection with the issuance and sale by the City of Anna, Texas (the “City”), of its $18,659,000* aggregate principal amount of Special Assessment Revenue Bonds, Series 2026 (Liberty Hills Public Improvement District No. 2 Improvement Area #1 Project) (the “Bonds”). INITIAL PURCHASERS ARE ADVISED THAT THE BONDS BEING OFFERED PURSUANT TO THIS LIMITED OFFERING MEMORANDUM ARE BEING OFFERED INITIALLY TO AND ARE BEING SOLD ONLY TO “ACCREDITED INVESTORS” AS DEFINED IN RULE 501 OF REGULATION D PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT OF 1933”) AND “QUALIFIED INSTITUTIONAL BUYERS” AS DEFINED IN RULE 144A PROMULGATED UNDER THE SECURITIES ACT OF 1933. THE LIMITATION OF THE INITIAL OFFERING TO QUALIFIED INSTITUTIONAL BUYERS AND ACCREDITED INVESTORS DOES NOT DENOTE RESTRICTIONS ON TRANSFERS IN ANY SECONDARY MARKET FOR THE BONDS. PROSPECTIVE INVESTORS SHOULD BE AWARE OF CERTAIN RISK FACTORS, ANY OF WHICH, IF MATERIALIZED TO A SUFFICIENT DEGREE, COULD DELAY OR PREVENT PAYMENT OF PRINCIPAL OF, PREMIUM, IF ANY, AND/OR INTEREST ON THE BONDS. THE BONDS ARE NOT A SUITABLE INVESTMENT FOR ALL INVESTORS. SEE “LIMITATIONS APPLICABLE TO INITIAL PURCHASERS” AND “BONDHOLDERS’ RISKS.” The Bonds are being issued by the City pursuant to the Public Improvement District Assessment Act, Subchapter A of Chapter 372, Texas Local Government Code, as amended (the “PID Act”), an ordinance expected to be adopted by the City Council of the City (the “City Council”) authorizing the issuance of the Bonds (the “Bond Ordinance”), and an Indenture of Trust (the “Indenture”), between the City and Regions Bank, an Alabama state banking corporation with offices in Houston, Texas, as trustee (the “Trustee”). Reference is made to the Indenture for a full statement of the authority for, and the terms and provisions of, the Bonds. All capitalized terms used in this Limited Offering Memorandum that are not otherwise defined herein shall have the meanings set forth in the Indenture. See “APPENDIX B – Form of Indenture.” The Bonds will be secured by a first lien on, security interest in, and pledge of the Trust Estate, consisting primarily of revenue from Improvement Area #1 Assessments levied against Improvement Area #1 Assessed Property pursuant to the Assessment Ordinance, all to the extent and upon the conditions described in the Indenture. Set forth herein are brief descriptions of the City, the District, the Developer, the Administrator, the Assessment Ordinance, the Bond Ordinance, the Service and Assessment Plan, the Development Agreement (defined herein), the Church Tract Development Agreement (defined herein), the CFA Agreement, and the Appraisal (defined herein), together with summaries of terms of the Bonds and the Indenture and certain provisions of the PID Act. All references herein to such documents and the PID Act are qualified in their entirety by reference to such documents or such PID Act and all references to the Bonds are qualified by reference to the definitive forms thereof and the information with respect thereto contained in the Indenture. Copies of these documents may be obtained during the period of the offering of the Bonds from the Underwriter, FMSbonds, Inc., 5 Cowboys Way, Suite 300-25, Frisco, Texas, 75034, Phone: (214) 302-2246. The form of Indenture appears in APPENDIX B and the form of Service and Assessment Plan appears in APPENDIX C. The information provided under this caption “INTRODUCTION” is intended to provide a brief overview of the information provided in the other captions herein and is not intended, and should not be considered, fully representative or complete as to the subjects discussed hereunder. * Preliminary, subject to change. 2 PLAN OF FINANCE Overview Following receipt of a petition from the Developer in accordance with the PID Act, the City created the District on December 9, 2025. The District is composed of approximately 405.578 acres within the corporate boundaries of the City. It is located approximately 3 miles west of U.S. Highway 75, generally near the intersection of County Road 289 and County Road 1101, west of the Hurricane Creek Country Club. Maps of the District and the surrounding region are included on pages ii – v. Development Plan Development of the District is being undertaken pursuant to the Liberty Hills Development Agreement, by and among the City, Liberty 800, LP, Liberty 75, LP, The Thornton Family Trust, Janis Real Estate, LLC, and Jay P. and Irene C. Janis, effective as of May 14, 2024 (the “Liberty Hills Development Agreement”), and the Church Tract Development Agreement, by and between the City and the Developer, effective as of December 9, 2025 (the “Church Tract Development Agreement” and, together with the Liberty Hills Development Agreement, the “Development Agreement”). The Liberty Hills Development Agreement governs development of the land within the District and additional land outside the boundaries of and unrelated to the District, including an adjacent public improvement district referred to herein as “Liberty Hills PID No. 1” being developed by an unrelated entity. See “THE DEVELOPMENT – Development Agreement.” The Developer (VC Liberty Hills, LLC, a Delaware limited liability company) is developing the District as an approximately 405-acre master-planned community. The land within the District is partially owned by the Developer and partially owned by The Thornton Family Trust. The Developer purchased (i) 341.162 acres of land from Liberty 800, LP, including the 97.281 acres of land in Improvement Area #1 (described below), on December 3, 2024, at a purchase price of $13,400,000, which purchase was funded partially with cash and partially with a seller note (the “Liberty 800 Seller Note”), (ii) 69.119 acres of land from Old Prosper Partners Acquisitions, LLC, at a purchase price of $11,000,000 on December 3, 2024, which purchase was funded with cash, and (iii) approximately 10.8 acres (the “Church Tract”) from Delmore A. Church and Joyce Church at a purchase price of $1,238,500 on January 23, 2026, which purchase was funded with cash. The Developer owns approximately 303 acres of land in the District, including all 97.281 acres in Improvement Area #1 (consisting of Phase 3 and Phase 4 as shown on the Concept Plan on page v) and approximately 206 acres in the Future Improvement Area (identified in the map on page iv). The Thornton Family Trust owns approximately 103 acres of land in the District, all of which is located in the Future Improvement Area. Veritas Communities, LLC (“Veritas”), a Texas limited liability company and managing member of the Developer, as assignee of Old Prosper Partners, LLC, is under contract with The Thornton Family Trust pursuant to a Contract of Sale (the “Thornton PSA”) to purchase the remaining approximately 103 acres of land within the District at a price of $80,000 per acre. Pursuant to the Thornton PSA, closing of such property is to occur by January 31, 2027. See “THE DEVELOPER – History and Financing of the District – Property Acquisition and Thornton PSA.” The Developer expects to develop the District in ten phases, as shown in the Concept Plan on page v, to include a total of approximately 1,412 single-family residential lots, in a mix of 40’, 50’, 60’, and 70’ front footages, as well as two amenity centers with swimming pools and related facilities, and other amenities throughout the District. See “THE DEVELOPMENT – Amenities and Private Improvements” and “– Development Agreement.” Improvement Area #1 is the first area of the District to be developed. Improvement Area #1 is expected to include 244 single-family residential lots, as follows: Lot Size Improvement Area #1 40’ 39 50’ 125 60’ 77 70’ 3 Total 244 3 The Developer began development of Improvement Area #1 in the first quarter of 2026 and expects it to be completed in April 2027. See “THE IMPROVEMENT AREA #1 IMPROVEMENTS,” “THE DEVELOPMENT – Expected Build-out, Absorption, and Home Prices in the District,” and “APPENDIX C – Form of Service and Assessment Plan.” A portion of the proceeds of the Bonds will be used to reimburse the Developer for the Actual Costs of the Improvement Area #1 Improvements, consisting of public improvements that benefit only the Improvement Area #1 Assessed Property. The total cost of the Improvement Area #1 Improvements is expected to be approximately $14,115,068*. Proceeds of the Bonds in the approximate amount of $13,733,022* are expected to be used to pay the Developer for a portion of such costs. The remaining costs in the approximate amount of $382,046* will be paid by the Developer, without reimbursement by the City. As of May 31, 2026, the Developer has spent approximately $ on the costs of construction of the Improvement Area #1 Improvements using cash on hand and proceeds of the Development Loan (defined herein). See “SOURCES AND USES OF FUNDS,” “THE IMPROVEMENT AREA #1 IMPROVEMENTS,” “THE DEVELOPER – History and Financing of the District,” and “APPENDIX C – Form of Service and Assessment Plan.” The City and the Developer expect to enter into the CFA Agreement, which provides, in part, for the use of proceeds from the issuance and sale of the Bonds and the payment of costs of the Improvement Area #1 Improvements within the District, including payment to the Developer for funds expended by the Developer and used to pay costs of Improvement Area #1 Improvements. See “APPENDIX G – Form of CFA Agreement.” The Developer is also expected to construct certain road and water improvements and has acquired certain water and sewer line easements all of which will benefit the entire District (the “Major Improvements”). The Developer has acquired the water and sewer line easements and will construct the major water line portion and a portion of the road-related Major Improvements (collectively, the “Improvement Area #1 Major Improvements”) concurrently with the development of the Improvement Area #1 Improvements. The costs of the Improvement Area #1 Major Improvements are expected to be approximately $21,958,924. The costs of the Improvement Area #1 Major Improvements may be reimbursed to the Developer from impact fees collected in Improvement Area #1 of the District pursuant to the Eligible Infrastructure Grant 380 Agreement (defined herein). As of May 31, 2026, the Developer has spent approximately $ on the costs of construction of the Improvement Area #1 Major Improvements using cash on hand and the Development Loan. See “THE IMPROVEMENT AREA #1 MAJOR IMPROVEMENTS,” “THE DEVELOPMENT – Payment of Costs of the Improvement Area #1 Major Improvements,” and “– Development Agreement.” In addition to costs to construct the Improvement Area #1 Improvements and the Major Improvements, the Developer is responsible for paying, without reimbursement by the City, for the Private Improvements (defined herein) in the approximate amount of $4,752,478, and the cost of Amenity Center #1 (defined herein) in the approximate amount of $3,500,000. As of May 31, 2026, the Developer has spent approximately $____________ on the costs of construction of the Private Improvements using cash on hand and proceeds of the Development Loan. No money has been spent to date on Amenity Center #1. See “THE DEVELOPMENT – Amenities and Private Improvements” and “THE DEVELOPER – History and Financing of the District.” On December 9, 2025, pursuant to the Tax Increment Financing Act, Chapter 311, Texas Tax Code, as amended (the “TIRZ Act”), the City Council adopted Ordinance No. 1181-2025 creating TIRZ No. 7 (defined in the Service and Assessment Plan) with boundaries coterminous with those of the District and authorizing the use of ad valorem tax increment attributable to the new development within TIRZ No. 7/the District for project costs as defined in the TIRZ Act, including the Improvement Area #1 Improvements, as provided for in the TIRZ No. 7 Plan (defined in the Service and Assessment Plan) and the Development Agreement, as described in more detail under “SECURITY FOR THE BONDS – Amount of Assessments May be Reduced by TIRZ No. 7 Annual Credit Amount.” See also “THE DEVELOPMENT – Development Plan,” “– Development Agreement,” “BONDHOLDERS’ RISKS – TIRZ No. 7 Annual Credit Amount and Marketing of the Development,” and “APPENDIX C – Form of Service and Assessment Plan.” The Developer expects to request the City to issue in the future one or more series of bonds (collectively, the “Future Improvement Area Bonds”) to finance the costs of the public improvements benefitting the Future * Preliminary, subject to change. 4 Improvement Area. The estimated costs of the public improvements benefiting the Future Improvement Area will be determined as development progresses, and the Service and Assessment Plan will be updated accordingly. Such Future Improvement Area Bonds will be secured by separate assessments levied pursuant to the PID Act on assessable property within the portion of the Future Improvement Area benefitted thereby. The Developer anticipates that Future Improvement Area Bonds will be issued over a six-year period. See “THE DEVELOPMENT – Future Improvement Area Bonds.” Lot Purchase and Sale Agreements The Developer has 224 of the 244 lots in Improvement Area #1 under contract with homebuilders, with the remaining 20 lots being held back by the Developer for model home lots for builders in the Future Improvement Area. The Developer expects home construction in Improvement Area #1 to begin in the second quarter of 2027. Homebuilders in Improvement Area #1 include Weekley Homes, LLC (“Weekley”), William Ryan Homes Texas, Inc. (“William Ryan”), and Sandlin Homes, LLC (“Sandlin” and, collectively with William Ryan and Weekley, the “Homebuilders”). The Homebuilders have deposited a combined total of $8,517,510 in earnest money (the “Earnest Money Deposits”) with the Developer. See “THE DEVELOPMENT – Lot Purchase and Sale Agreements.” The Bonds Proceeds of the Bonds will be used for the purposes of (i) paying a portion of the costs of the Improvement Area #1 Improvements, (ii) paying a portion of the interest on the Bonds during and after the period of acquisition and construction of the Improvement Area #1 Improvements, (iii) funding a reserve fund for the payment of principal of and interest on the Bonds, (iv) paying a portion of the costs incidental to the organization of the District, and (v) paying the costs of issuance of the Bonds. See “SOURCES AND USES OF FUNDS,” “THE IMPROVEMENT AREA #1 IMPROVEMENTS,” and “APPENDIX B – Form of Indenture.” Payment of the Bonds is secured by a first lien on, security interest in, and pledge of the Trust Estate, consisting primarily of revenues from Improvement Area #1 Assessments to be levied against the Improvement Area #1 Assessed Property, all to the extent and upon the conditions described herein and in the Indenture. See “SECURITY FOR THE BONDS,” “ASSESSMENT PROCEDURES,” and “APPENDIX B – Form of Indenture.” The Bonds, any Refunding Bonds, and any Future Improvement Area Bonds shall never constitute an indebtedness or general obligation of the City, the State of Texas (the “State”), or any other political subdivision of the State within the meaning of any constitutional provision or statutory limitation whatsoever, but the Bonds are limited and special obligations of the City payable solely from a first lien on, security interest in, and pledge of the Trust Estate, as provided in the Indenture. Neither the faith and credit nor the taxing power of the City, the State, or any other political subdivision of the State is pledged to the payment of the Bonds. Neither any Refunding Bonds nor any Future Improvement Area Bonds to be issued by the City are offered pursuant to this Limited Offering Memorandum. LIMITATIONS APPLICABLE TO INITIAL PURCHASERS Each initial purchaser is advised that the Bonds being offered pursuant to this Limited Offering Memorandum are being offered and sold only to “qualified institutional buyers” as defined in Rule 144A promulgated under the Securities Act of 1933, and “accredited investors” as defined in Rule 501 of Regulation D promulgated under the Securities Act of 1933. The limitation of the initial offering to qualified institutional buyers and accredited investors does not denote restrictions on transfers in any secondary market for the Bonds. Each initial purchaser of the Bonds (each, an “Investor”) will be deemed to have acknowledged, represented, and warranted to the City as follows: 1. The Investor has authority and is duly authorized to purchase the Bonds and to execute any instruments and documents required to be executed by the Investor in connection with the purchase of the Bonds. 2. The Investor is an “accredited investor” under Rule 501 of Regulation D of the Securities Act of 1933 or a “qualified institutional buyer” under Rule 144A of the Securities Act of 1933 and therefore has sufficient 5 knowledge and experience in financial and business matters, including purchase and ownership of municipal and other tax-exempt obligations, to be able to evaluate the risks and merits of the investment represented by the Bonds. 3. The Bonds are being acquired by the Investor for investment and not with a view to, or for resale in connection with, any distribution of the Bonds, and the Investor intends to hold the Bonds solely for its own account for investment purposes for an indefinite period of time and does not intend at this time to dispose of all or any part of the Bonds. However, the Investor may sell the Bonds at any time the Investor deems appropriate. The Investor understands that it may need to bear the risks of this investment for an indefinite time, since any sale prior to maturity may not be possible. 4. The Investor understands that the Bonds are not registered under the Securities Act of 1933 and that such registration is not legally required as of the date hereof; and further understands that the Bonds (a) are not being registered or otherwise qualified for sale under the “Blue Sky” laws and regulations of any state, (b) will not be listed in any stock or other securities exchange, and (c) will not carry a rating from any rating service. 5. The Investor acknowledges that it has either been supplied with or been given access to information, including financial statements and other financial information, and the Investor has had the opportunity to ask questions and receive answers from knowledgeable individuals concerning the City, the Improvement Area #1 Improvements, the Bonds, the security therefor, and such other information as the Investor has deemed necessary or desirable in connection with its decision to purchase the Bonds (collectively, the “Investor Information”). The Investor has received a copy of this Limited Offering Memorandum relating to the Bonds. The Investor acknowledges that it has assumed responsibility for its review of the Investor Information, and it has not relied upon any advice, counsel, representation, or information from the City in connection with the Investor’s purchase of the Bonds. The Investor agrees that none of the City, its councilmembers, officers, or employees shall have any liability to the Investor whatsoever for or in connection with the Investor’s decision to purchase the Bonds except for gross negligence, fraud, or willful misconduct. For the avoidance of doubt, it is acknowledged that the Underwriter is not deemed an officer or employee of the City. 6. The Investor acknowledges that the obligations of the City under the Indenture are special, limited obligations payable solely from amounts paid by the City to the Trustee pursuant to the terms of the Indenture and the City shall not be directly or indirectly or contingently or morally obligated to use any other moneys or assets of the City for amounts due under the Indenture. The Investor understands that the Bonds are not secured by any pledge of any moneys received or to be received from taxation by the City, the State, or any political subdivision or taxing district thereof; that the Bonds will never represent or constitute a general obligation or a pledge of the full faith and credit of the City, the State, or any political subdivision thereof; that no right will exist to have taxes levied by the City, the State, or any political subdivision thereof for the payment of principal of and interest on the Bonds; and that the liability of the City and the State with respect to the Bonds is subject to further limitations as set forth in the Bonds and the Indenture. 7. The Investor has made its own inquiry and analysis with respect to the Bonds and the security therefor. The Investor is aware that the development of the District involves certain economic and regulatory variables and risks that could adversely affect the security for the Bonds. 8. The Investor acknowledges that the sale of the Bonds to the Investor is made in reliance upon the certifications, representations, and warranties described in items 1-7 above. DESCRIPTION OF THE BONDS General Description The Bonds will mature on the dates and in the amounts set forth on the inside cover page of this Limited Offering Memorandum. Interest on the Bonds will accrue from the Delivery Date and will be computed on the basis of a 360-day year of twelve 30-day months. Interest on the Bonds will be payable on each March 15 and September 15, commencing March 15, 2027 (each an “Interest Payment Date”), until maturity or prior redemption. Regions Bank is the initial Trustee, Paying Agent, and Registrar for the Bonds. 6 The Bonds will be issued in fully registered form, without coupons, in Authorized Denominations of $100,000 of principal and any integral multiple of $1,000 in excess thereof. The City prohibits any Bond to be issued in a denomination of less than $100,000 and further prohibits the assignment of a CUSIP number to any Bond with a denomination of less than $100,000, and any attempt to accomplish either of the foregoing shall be void and of no effect. Upon initial issuance, the ownership of the Bonds will be registered in the name of Cede & Co., as nominee for The Depository Trust Company, New York, New York (“DTC”), and purchases of beneficial interests in the Bonds will be made in book-entry only form. See “BOOK-ENTRY ONLY SYSTEM.” Redemption Provisions Optional Redemption. The City reserves the right and option to redeem the Bonds before their scheduled maturity date, in whole or in part, on any date on or after September 15, 20 , such redemption date or dates to be fixed by the City, at the Redemption Price. Extraordinary Optional Redemption. The City reserves the right and option to redeem Bonds before their respective scheduled maturity dates, in whole or in part, at the Redemption Price, from amounts on deposit in the Redemption Fund as a result of Prepayments (including related transfers to the Redemption Fund from the Reserve Account of the Reserve Fund made pursuant to the Indenture) under the terms of the Indenture. The City will provide the Trustee a City Certificate directing the Bonds to be redeemed pursuant to the Indenture. No redemption shall be made which results in a Bond remaining outstanding in a principal amount less than an Authorized Denomination. See “ASSESSMENT PROCEDURES – Prepayment of Improvement Area #1 Assessments” for the definition and description of Prepayments and “APPENDIX B – Form of Indenture.” Mandatory Sinking Fund Redemption. The Bonds maturing on September 15 in the years 20 , 20 , and 20_ (the “Term Bonds”) are subject to mandatory sinking fund redemption prior to their respective maturities and will be redeemed by the City in part at the Redemption Price from moneys available for such purpose in the Principal and Interest Account of the Bond Fund pursuant to the Indenture, on the dates and in the respective Sinking Fund Installments as set forth in the following schedules: $ Term Bonds Maturing September 15, 20 Redemption Date Sinking Fund Installment Amount September 15, 20 $ September 15, 20 September 15, 20 September 15, 20 September 15, 20 † $ Term Bonds Maturing September 15, 20 Redemption Date Sinking Fund Installment Amount September 15, 20 $ September 15, 20 September 15, 20 September 15, 20 September 15, 20 September 15, 20 September 15, 20 September 15, 20 September 15, 20 † __________________________ † Stated maturity. At least thirty (30) days prior to each mandatory sinking fund redemption date, and subject to any prior reduction authorized by the Indenture, the Trustee will select by lot, or any by any other customary method that 7 results in random selection, a principal amount of Bonds of such maturity equal to the Sinking Fund Installment amount of such Bonds to be redeemed, shall call such Bonds for redemption on such scheduled mandatory sinking fund redemption date, and shall give notice of such mandatory sinking fund redemption, as provided in the Indenture. The principal amount of Bonds required to be redeemed on any mandatory sinking fund redemption date shall be reduced, at the option of the City, by the principal amount of any Bonds of such maturity which, at least 30 days prior to the mandatory sinking fund redemption date shall have been acquired by the City at a price not exceeding the principal amount of such Bonds plus accrued unpaid interest to the date of purchase thereof, and delivered to the Trustee for cancellation. The Sinking Fund Installments of Term Bonds required to be redeemed on any mandatory sinking fund redemption date shall be reduced in integral multiples of $1,000 by any portion of such Bonds, which, at least 30 days prior to the mandatory sinking fund redemption date, shall have been redeemed pursuant to the optional redemption or extraordinary optional redemption provisions in the Indenture and not previously credited to a mandatory sinking fund redemption. Notice of Redemption. Upon written notification by the City to the Trustee of the exercise of any redemption, the Trustee shall give notice of any redemption of Bonds by sending notice by first class United States mail, postage prepaid, not less than 30 days before the date fixed for redemption, to the Owner of each Bond or portion thereof to be redeemed, at the address shown in the Register. Any such notice shall be conclusively presumed to have been duly given, whether or not the Owner receives such notice. Notice of redemption having been given as provided in the Indenture, the Bonds or portions thereof called for redemption shall become due and payable on the date fixed for redemption provided that funds for the payment of the Redemption Price of such Bonds to the date fixed for redemption are on deposit with the Trustee; thereafter, such Bonds or portions thereof shall cease to bear interest from and after the date fixed for redemption, whether or not such Bonds are presented and surrendered for payment on such date. With respect to any optional redemption of the Bonds, unless the Trustee has received funds sufficient to pay the Redemption Price of the Bonds to be redeemed before giving of a notice of redemption, the notice may state the City may condition redemption on the receipt of such funds by the Trustee on or before the date fixed for the redemption, or on the satisfaction of any other prerequisites set forth in the notice of redemption. If a conditional notice of redemption is given and such prerequisites to the redemption are not satisfied and sufficient funds are not received, the notice shall be of no force and effect, the City shall not redeem the Bonds, and the Trustee shall give notice, in the manner in which the notice of redemption was given, that the Bonds have not been redeemed. The City has the right to rescind any optional redemption or extraordinary optional redemption by written notice to the Trustee on or prior to the date fixed for redemption. Any notice of redemption shall be cancelled and annulled if for any reason funds are not available on the date fixed for redemption for the payment in full of the Bonds then called for redemption, and such cancellation shall not constitute an Event of Default under the Indenture. Upon written direction from the City, the Trustee shall mail notice of rescission of redemption in the same manner notice of redemption was originally provided. Partial Redemption. If less than all of the Bonds are to be redeemed pursuant to the Indenture, Bonds may be redeemed in minimum principal amounts of $1,000 or any integral thereof. Each Bond will be treated as representing the number of Bonds that is obtained by dividing the principal amount of such Bond by $1,000. No redemption will result in a Bond in a denomination of less than an Authorized Denomination; provided, however, if the amount of Outstanding Bonds is less than an Authorized Denomination after giving effect to such partial redemption, a Bond in the principal amount equal to the unredeemed portion, but not less than $1,000, may be issued. If less than all of the Bonds are called for optional redemption pursuant to the Indenture, the Trustee will rely on directions provided in a City Certificate in selecting the Bonds to be redeemed. 8 If less than all of the Bonds are called for extraordinary optional redemption pursuant to the Indenture, the Bonds or portion of a Bond to be redeemed will be allocated on a pro rata basis (as nearly as practicable) among all Outstanding Bonds. If less than all Bonds within a Stated Maturity are called for extraordinary optional redemption pursuant to the Indenture, the Trustee shall call randomly by lot the Bonds, or portions thereof, within such Stated Maturity and in such principal amounts, for redemption. Upon surrender of any Bond for redemption in part, the Trustee in accordance with the Indenture, will authenticate and deliver an exchange Bond or Bonds in an aggregate principal amount equal to the unredeemed portion of the Bond so surrendered, such exchange being without charge. 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 DTC while the Bonds are registered in its nominee 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 Limited Offering Memorandum. The information in this section concerning DTC and DTC’s book-entry-only system has been obtained from sources that the City believes to be reliable, but none of the City, the City’s Municipal Advisor or the Underwriter takes any responsibility for the accuracy or completeness thereof. The City cannot and does not give any assurance that (1) DTC will distribute payments of debt service on the Bonds, or redemption or other notices, to DTC participants, (2) 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 (3) DTC will serve and act in the manner described in this Limited Offering Memorandum. The current rules applicable to DTC are on file with the United States Securities and Exchange Commission, and the current procedures of DTC to be followed in dealing with DTC participants are on file with DTC. DTC will act as securities depository for the Bonds. The Bonds will be issued as fully registered securities registered in the name of Cede & Co. (DTC’s partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully registered security 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 registered 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 Standard & Poor’s rating of “AA+.” 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 9 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 affect 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 for the Bonds shall be sent to DTC. If less than all Bonds of the same maturity are being redeemed, DTC’s practice is to determine by lot the amount of the interest of each Direct Participant of 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 City 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). Principal, interest, and all other 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 detailed information from the City or 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 securities held for the accounts of customers in bearer form or registered in “street name,” and will be the responsibility of such Participant and not of DTC nor its nominee, the Trustee, the Paying Agent/Registrar, or the City, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of principal, interest, and all other payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the Trustee, the Paying Agent/Registrar or the City, 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 securities depository with respect to the Bonds at any time by giving reasonable notice to the City, the Trustee, 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 City 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. Thereafter, Bond certificates may be transferred and exchanged as described in the Indenture. 10 The information in this section concerning DTC and DTC’s book-entry system has been obtained from sources that the City believes to be reliable, but none of the City, the City’s Municipal Advisor, or the Underwriter take any responsibility for the accuracy thereof. NONE OF THE CITY, THE TRUSTEE, THE PAYING AGENT/REGISTRAR, THE CITY’S MUNICIPAL ADVISOR, OR THE UNDERWRITER WILL HAVE ANY RESPONSIBILITY OR OBLIGATION TO THE DTC PARTICIPANTS OR THE PERSONS FOR WHOM THEY ACT AS NOMINEE WITH RESPECT TO THE PAYMENTS TO OR THE PROVIDING OF NOTICE FOR THE DTC DIRECT PARTICIPANTS, THE INDIRECT PARTICIPANTS OR THE BENEFICIAL OWNERS OF THE BONDS. THE CITY CANNOT AND DOES NOT GIVE ANY ASSURANCES THAT DTC, THE DIRECT PARTICIPANTS, THE INDIRECT PARTICIPANTS, OR OTHERS WILL DISTRIBUTE PAYMENTS OF PRINCIPAL OF OR INTEREST ON THE BONDS PAID TO DTC OR ITS NOMINEE, AS THE REGISTERED OWNER, OR PROVIDE ANY NOTICES TO THE BENEFICIAL OWNERS OR THAT THEY WILL DO SO ON A TIMELY BASIS, OR THAT DTC WILL ACT IN THE MANNER DESCRIBED IN THIS LIMITED OFFERING MEMORANDUM. 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. Use of Certain Terms in Other Sections of this Limited Offering Memorandum. In reading this Limited Offering Memorandum it should be understood that while the Bonds are in the Book-Entry-Only System, references in other sections of this Limited Offering Memorandum to registered owners should be read to include the person for which the participant acquires an interest in the Bonds, but (i) all rights of ownership must be exercised through DTC and the Book-Entry-Only System and (ii) except as described above, notices that are to be given to registered owners under the Indenture will be given only to DTC. SECURITY FOR THE BONDS The following is a summary of certain provisions contained in the Indenture. Reference is made to the Indenture for a full statement of the terms and provisions of the Bonds. Investors must read the entire Indenture to obtain information essential to the making of an informed investment decision. See “APPENDIX B – Form of Indenture.” General THE BONDS ARE SPECIAL, LIMITED OBLIGATIONS OF THE CITY PAYABLE SOLELY FROM A FIRST LIEN ON, SECURITY INTEREST IN, AND PLEDGE OF THE TRUST ESTATE, AS AND TO THE EXTENT PROVIDED IN THE INDENTURE. THE BONDS DO NOT GIVE RISE TO A CHARGE AGAINST THE GENERAL CREDIT OR TAXING POWER OF THE CITY AND ARE PAYABLE SOLELY FROM THE SOURCES IDENTIFIED IN THE INDENTURE. THE OWNERS OF THE BONDS SHALL NEVER HAVE THE RIGHT TO DEMAND PAYMENT THEREOF OUT OF MONEY RAISED OR TO BE RAISED BY TAXATION, OR OUT OF ANY ASSETS OF THE CITY OTHER THAN THE TRUST ESTATE, AS AND TO THE EXTENT PROVIDED IN THE INDENTURE. NO OWNER OF THE BONDS SHALL HAVE THE RIGHT TO DEMAND ANY EXERCISE OF THE CITY’S TAXING POWER TO PAY THE PRINCIPAL OF THE BONDS OR THE INTEREST OR REDEMPTION PREMIUM, IF ANY, THEREON. THE CITY SHALL HAVE NO LEGAL OR MORAL OBLIGATION TO PAY THE BONDS OUT OF ANY ASSETS OF THE CITY OTHER THAN THE TRUST ESTATE. SEE “APPENDIX B – FORM OF INDENTURE.” The principal of, premium, if any, and interest on the Bonds are secured by a first lien on, security interest in, and pledge of the Trust Estate, consisting primarily of Assessment Revenues expected to be levied against Improvement Area #1 Assessed Property, all to the extent and upon the conditions described herein and in the Indenture. See “APPENDIX B – Form of Indenture.” In accordance with the PID Act, the City has caused the preparation of a Service and Assessment Plan in connection with the levy of assessments in the District (including the Improvement Area #1 Assessments) and expects to adopt a final Service and Assessment Plan in connection with the authorization of the issuance of the Bonds. The Service and Assessment Plan describes the special benefit received by the property within the District, including Improvement Area #1, provides the basis and justification for the determination of special benefit on such property, establishes the methodology for the levy of Improvement Area 11 #1 Assessments, and provides for the allocation of Pledged Revenues for payment of principal of, premium, if any, and interest on the Bonds. The Service and Assessment Plan is reviewed and updated annually for the purpose of determining the annual budget for improvements and the Improvement Area #1 Annual Installments of Improvement Area #1 Assessments due in a given year. The determination by the City of the assessment methodology set forth in the Service and Assessment Plan is the result of the discretionary exercise by the City Council of its legislative authority and governmental powers and is conclusive and binding on all current and future landowners within the District, including Improvement Area #1. See “APPENDIX C – Form of Service and Assessment Plan.” Pledged Revenues The City is authorized by the PID Act, the Assessment Ordinance, and other provisions of law to finance the Improvement Area #1 Improvements by levying Improvement Area #1 Assessments upon properties in Improvement Area #1 of the District benefitted thereby. For a description of the assessment methodology and the amounts of Improvement Area #1 Assessments expected to be levied on the Improvement Area #1 Assessed Property, see “ASSESSMENT PROCEDURES” and “APPENDIX C – Form of Service and Assessment Plan.” Pursuant to the Indenture: “Additional Interest” means the amount collected by the application of the Additional Interest Rate. “Additional Interest Rate” means the up to 0.50% additional interest charged on the Improvement Area #1 Assessments pursuant to Section 372.018 of the PID Act. “Annual Collection Costs” mean the actual or budgeted costs and expenses related to the operation of the District, including, but not limited to, costs and expenses for: (1) the Administrator; (2) City staff; (3) legal counsel, engineers, accountants, financial advisors, and other consultants engaged by the City; (4) calculating, collecting, and maintaining records with respect to Improvement Area #1 Assessments and Improvement Area #1 Annual Installments; (5) preparing and maintaining records with respect to the Improvement Area #1 Assessment Roll and Annual Service Plan Updates; (6) paying and redeeming Bonds; (7) investing or depositing Improvement Area #1 Assessments and Improvement Area #1 Annual Installments; (8) complying with the Service and Assessment Plan, the PID Act, and the Indenture, with respect to the Bonds, including the City’s continuing disclosure requirements; and (9) the paying agent/registrar and Trustee in connection with the Bonds, including their respective legal counsel. Annual Collection Costs collected but not expended in any year shall be carried forward and applied to reduce Annual Collection Costs for subsequent years. “Annual Service Plan Update” means an update to the Service and Assessment Plan prepared no less frequently than annually by the Administrator and approved by the City Council. “Assessment Revenues” means the revenues received by the City from the collection of Improvement Area #1 Assessments, including Prepayments, Improvement Area #1 Annual Installments, and Foreclosure Proceeds. “Delinquent Collection Costs” means costs related to the foreclosure on Improvement Area #1 Assessed Property and the costs of collection of delinquent Improvement Area #1 Assessments, delinquent Improvement Area #1 Annual Installments, or any other delinquent amounts due under the Service and Assessment Plan, including penalties and reasonable attorney’s fees actually paid, but excluding amounts representing interest and penalty interest. “Foreclosure Proceeds” means the proceeds, including interest and penalty interest, received by the City from the enforcement of the Improvement Area #1 Assessments against any Improvement Area #1 Assessed Property, whether by foreclosure of lien or otherwise, but excluding and net of all Delinquent Collection Costs. “Improvement Area #1 Annual Installments” means, with respect to each Parcel of Improvement Area #1 Assessed Property, each annual payment of (i) the principal of and interest on the Improvement Area #1 Assessments as shown on the Improvement Area #1 Assessment Roll or in an Annual Service Plan Update, as 12 shown in Exhibit F-2 to the Service and Assessment Plan, and calculated as provided in Section VI of the Service and Assessment Plan, (ii) Annual Collection Costs, and (iii) the Additional Interest. “Improvement Area #1 Assessed Property” means the property located in Improvement Area #1 that benefits from the Improvement Area #1 Improvements. “Improvement Area #1 Assessment Roll” means the “Improvement Area #1 Assessment Roll,” which document is attached to the Service and Assessment Plan as Exhibit F-1, as updated, modified, or amended from time to time. “Improvement Area #1 Assessments” means an assessment levied against Improvement Area #1 Assessed Property based on the special benefit conferred on such Improvement Area #1 Assessed Property by the Improvement Area #1 Improvements. “Pledged Funds” means, collectively, the Pledged Revenue Fund, the Bond Fund, the Project Fund, the Reserve Fund, and the Redemption Fund. “Pledged Revenues” mean, collectively, the (i) Assessment Revenues (excluding the portion of the Improvement Area #1 Assessments and Improvement Area #1 Annual Installments collected for the payment of Annual Collection Costs and Delinquent Collection Costs, as set forth in the Service and Assessment Plan), (ii) the moneys held in any of the Pledged Funds, and (iii) any additional revenues that the City may pledge to the payment of the Bonds. “Prepayment” means the payment of all or a portion of an Improvement Area #1 Assessment before the due date thereof. Amounts received at the time of a Prepayment which represent a payment of principal, interest, or penalties on a delinquent installment of an Improvement Area #1 Assessment are not to be considered a Prepayment but rather are to be treated as the payment of the regularly scheduled Improvement Area #1 Annual Installment. “Trust Estate” means the Trust Estate described in the granting clauses of the Indenture, and the Trust Estate shall only include Pledged Revenues related to the Improvement Area #1 Assessments levied on the Improvement Area #1 Assessed Property, unless the City pledges additional revenues to the payment of the Bonds, which additional pledge may only be created in a Supplemental Indenture. The City covenants in the Indenture that it will take and pursue all actions permissible under Applicable Laws to cause the Improvement Area #1 Assessments to be collected and the liens thereof to be enforced continuously. See “SECURITY FOR THE BONDS – Pledged Revenue Fund,” “APPENDIX B – Form of Indenture,” and “APPENDIX C – Form of Service and Assessment Plan.” The PID Act provides that the Improvement Area #1 Assessments (including any reassessment, with interest, the expense of collection and reasonable attorney’s fees, if incurred) are a first and prior lien (the “Assessment Lien”) against the Improvement Area #1 Assessed Property, superior to all other liens and claims, except liens or claims for State, county, school district, or municipality ad valorem taxes and are a personal liability of and charge against the owners of property, regardless of whether the owners are named. Pursuant to the PID Act, the Assessment Lien is effective from the date of adoption of the Assessment Ordinance until the Improvement Area #1 Assessments are paid (or otherwise discharged) and is enforceable by the City Council in the same manner that an ad valorem property tax levied against real property may be enforced by the City Council. See “ASSESSMENT PROCEDURES.” The Assessment Lien is superior to any homestead rights of a property owner that were properly claimed after the adoption of the Assessment Ordinance. However, an Assessment Lien may not be foreclosed upon if any homestead rights of a property owner were properly claimed prior to the adoption of the Assessment Ordinance (“Pre-existing Homestead Rights”) for as long as such rights are maintained on the property. See “BONDHOLDERS’ RISKS – Assessment Limitations.” 13 Collection and Deposit of Improvement Area #1 Assessments The Improvement Area #1 Assessments shown on the Improvement Area #1 Assessment Roll, together with the interest thereon, shall first be applied to the payment of the principal of and interest on the Bonds as and to the extent provided in the Service and Assessment Plan and the Indenture. In the event the City owes Rebatable Arbitrage to the United States Government, the Improvement Area #1 Assessments shall first be applied to pay the full amount of Rebatable Arbitrage owed by the City, prior to any transfers to the Bond Fund. The Improvement Area #1 Assessments assessed to pay debt service on the Bonds, together with interest thereon, are payable in Improvement Area #1 Annual Installments established by the Assessment Ordinance and the Service and Assessment Plan to correspond, as nearly as practicable, to the debt service requirements for the Bonds. An Improvement Area #1 Annual Installment of an Improvement Area #1 Assessment has been made payable in the Assessment Ordinance in each fiscal year of the City preceding the date of final maturity of the Bonds which, if collected, will be sufficient to pay debt service requirements attributable to Improvement Area #1 Assessments in the Service and Assessment Plan. Each Improvement Area #1 Annual Installment is payable as provided in the Service and Assessment Plan and the Assessment Ordinance. A record of the Improvement Area #1 Assessments on each parcel, tract, or lot which are to be collected in each year during the term of the Bonds is shown on the Improvement Area #1 Assessment Roll. Sums received from the collection of the Improvement Area #1 Assessments to pay the debt service requirements (including delinquent installments, Foreclosure Proceeds, and penalties) and of the interest thereon shall be deposited into the Bond Pledged Revenue Account of the Pledged Revenue Fund. Promptly after the deposit of Foreclosure Proceeds into the Pledged Revenue Fund, the Trustee shall transfer such Foreclosure Proceeds first, to the Reserve Fund to restore any transfers from the Accounts within the Reserve Fund made with respect to the particular Improvement Area #1 Assessed Property to which the Foreclosure Proceeds relate (first, to replenish the Reserve Account Requirement and second, to replenish the Delinquency and Prepayment Reserve Account Requirement), and second, to the Redemption Fund. See “SECURITY FOR THE BONDS – Pledged Revenue Fund” and “APPENDIX B – Form of Indenture.” The portions of the Improvement Area #1 Annual Installments of Improvement Area #1 Assessments collected to pay Annual Collection Costs and Delinquent Collection Costs shall be deposited in the Administrative Fund and shall not constitute Pledged Revenues. Amount of Assessments May be Reduced by TIRZ No. 7 Annual Credit Amount The City Council expects to adopt the TIRZ No. 7 Ordinance authorizing the use of a portion of ad valorem tax increment attributable to the new development within TIRZ No. 7 (the “TIRZ Increment”) for Project Costs, as provided for and defined in the TIRZ No. 7 Plan, including costs of the Improvement Area #1 Improvements. Pursuant to the Development Agreement and the TIRZ No. 7 Plan, the City will agree to contribute a portion of the TIRZ Increment attributable to development within the District (such portion, the “TIRZ No. 7 Annual Credit Amount”) into a tax increment fund created by the City (the “TIRZ Fund”) to pay Project Costs within TIRZ No. 7, including the costs of the Improvement Area #1 Improvements and financing costs related thereto. The TIRZ No. 7 Annual Credit Amount for each lot for each year will equal fifty percent (50%) of the ad valorem taxes collected and received by the City on the Captured Taxable Value (defined below) of each lot in Improvement Area #1 of the District, less administration costs; provided, however, that the TIRZ No. 7 Annual Credit Amount for each Lot Type (defined in the Service and Assessment Plan) in any year shall not exceed an amount that results in an equivalent tax rate equal to $0.9940 per $100 of assessed value for such Lot Type, taking into consideration the equivalent tax rate of the applicable Improvement Area #1 Annual Installment, based on the Estimated Buildout Value (defined in the Service and Assessment Plan) of such Lot Type at the time of adoption of the Assessment Ordinance (such amount, the “TIRZ No. 7 Maximum Annual Credit Amount”). See “ASSESSMENT PROCEDURES – Assessment Amounts – TIRZ No. 7 Annual Credit Amount.” With respect to Improvement Area #1 of the District, the “Captured Taxable Value” for each year means that year’s taxable assessed value of each lot of taxable real property within Improvement Area #1 less the Tax Increment Base for each such lot. The “Tax Increment Base” for each lot within Improvement Area #1 of the 14 District is the taxable value of such lot as of January 1, 2025. See “APPENDIX C – Form of Service and Assessment Plan.” In the Development Agreement, the City has agreed to use the TIRZ No. 7 Annual Credit Amount to offset all or a portion of the principal and interest portion of such lot’s Improvement Area #1 Annual Installment of Improvement Area #1 Assessments due the following year, as calculated by the Administrator in collaboration with the City, in accordance with the Service and Assessment Plan. The Improvement Area #1 Annual Installment will be calculated by taking into consideration any TIRZ No. 7 Annual Credit Amount applicable to such lot. Pursuant to the TIRZ No. 7 Ordinance and TIRZ No. 7 Plan, the TIRZ No. 7 Annual Credit Amount generated by each lot in any given year shall be used to calculate such lot’s TIRZ No. 7 Annual Credit Amount in the following year (e.g., the TIRZ No. 7 Annual Credit Amount collected in 2027 shall be used to calculate the TIRZ No. 7 Annual Credit Amount applicable to Annual Installments to be collected in 2028). The TIRZ No. 7 Annual Credit Amount may be generated only from ad valorem taxes levied and collected by the City on the Captured Taxable Value on the applicable lot in any year. Consequently, the TIRZ No. 7 Annual Credit Amount will be generated only if the appraised value of such lot in any year is greater than the Tax Increment Base for such lot. Any delay or failure of the Developer or the Homebuilders to develop Improvement Area #1 may result in a reduced amount of the TIRZ No. 7 Annual Credit Amount being available to credit the Improvement Area #1 Annual Installments. See “ASSESSMENT PROCEDURES – Assessment Amounts – TIRZ No. 7 Annual Credit Amount” and “APPENDIX C – Form of Service and Assessment Plan.” TIRZ No. 7 will terminate, unless the City elects to extend the term, upon the earlier to occur of (i) December 31, 2065, or (ii) the date that all Project Costs have been paid (whether through the District or TIRZ No. 7). The City expects to contribute the TIRZ No. 7 Annual Credit Amount for Improvement Area #1 for the last year in calendar year 2065 and apply it to the TIRZ No. 7 Annual Credit Amount in 2066. THE TIRZ NO. 7 REVENUES, IF AVAILABLE, WILL NOT BE PLEDGED TO THE PAYMENT OF THE BONDS AND THERE IS NO GUARANTEE THAT THERE WILL EVER BE SUFFICIENT TIRZ NO. 7 REVENUES TO GENERATE THE TIRZ NO. 7 MAXIMUM ANNUAL CREDIT AMOUNT. THE TIRZ NO. 7 ANNUAL CREDIT AMOUNT WILL NOT BE APPLIED IN ANY MANNER THAT WOULD AFFECT THE COLLECTION AND CONTINUOUS ENFORCEMENT OF THE IMPROVEMENT AREA #1 ASSESSMENTS COLLECTED FOR THE PAYMENT OF DEBT SERVICE ON THE BONDS AND ANNUAL COLLECTION COSTS AND THE FUNDING OF THE DELINQUENCY AND PREPAYMENT RESERVE REQUIREMENT, IN THE MANNER AND TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAWS. THE TIRZ NO. 7 ANNUAL CREDIT AMOUNT IS NOT EXPECTED TO BE AVAILABLE TO REDUCE THE PRINCIPAL AND INTEREST PORTION OF THE IMPROVEMENT AREA #1 ANNUAL INSTALLMENT FOR ANY IMPROVEMENT AREA #1 ASSESSED PARCEL UNTIL 2028, AND PERHAPS LATER. Unconditional Levy of Improvement Area #1 Assessments The City will impose Improvement Area #1 Assessments on the Improvement Area #1 Assessed Property to pay the principal of and interest on the Bonds scheduled for payment from Pledged Revenues as described in the Indenture and in the Service and Assessment Plan and coming due during each Fiscal Year. The Improvement Area #1 Assessments are effective on the date of adoption of, and strictly in accordance with the terms of, the Assessment Ordinance. Each Improvement Area #1 Assessment may be paid in full or in part at any time, or in periodic Improvement Area #1 Annual Installments over a period of time equal to the term of the Bonds, which installments shall include interest on the Improvement Area #1 Assessments. Pursuant to the Assessment Ordinance, interest on the Improvement Area #1 Assessments for each lot within Improvement Area #1 of the District will begin to accrue on the date specified in the Service and Assessment Plan will accrue at a rate specified in the Assessment Ordinance but may not exceed the interest rate on the Bonds plus the Additional Interest. Such interest rates may be adjusted as described in the Service and Assessment Plan. Each Improvement Area #1 Annual Installment, including the interest on the unpaid amount of an Improvement Area #1 Assessment, shall be calculated annually and shall be due on October 1 of each year. Each Improvement Area #1 Annual Installment together with interest thereon shall be delinquent if not paid prior to February 1 of the following year. The initial Improvement Area #1 Annual Installments of the Improvement Area #1 Assessments will be due on or about October 1, 2026, and will be delinquent if not paid prior to February 1, 2027. 15 As authorized by Section 372.018(b) of the PID Act, the City will calculate and collect, each year while the Bonds are Outstanding and unpaid, a portion of each Improvement Area #1 Annual Installment to pay the annual costs incurred by the City in the administration and operation of the District. The portion of each Improvement Area #1 Annual Installment used to pay such annual costs shall remain in effect from year to year until all Bonds are finally paid or until the City adjusts the amount after an annual review in any year pursuant to Section 372.013 of the PID Act. The amount collected to pay Annual Collection Costs shall be due in the manner set forth in the Assessment Ordinance on October 1 of each year and shall be delinquent if not paid by February 1 of the following year. Amounts collected to pay Annual Collection Costs do not secure repayment of the Bonds. There is no discount for the early payment of Improvement Area #1 Assessments. Improvement Area #1 Assessments, together with interest, penalties, and expense of collection and reasonable attorneys’ fees, as permitted by the Texas Tax Code, shall be a first and prior lien against the Improvement Area #1 Assessed Property, superior to all other liens and claims, except liens or claims for State, county, school district, or municipality ad valorem taxes and shall be a personal liability of and charge against the owner of the Improvement Area #1 Assessed Property regardless of whether the owners are named, and runs with the land. The lien for Improvement Area #1 Assessments and penalties and interest will begin on the date of adoption of the Assessment Ordinance and continue until the Improvement Area #1 Assessments are paid or until all Bonds are finally paid. Failure to pay an Improvement Area #1 Annual Installment when due will not accelerate the payment of the remaining Improvement Area #1 Annual Installments of the Improvement Area #1 Assessments and such remaining Improvement Area #1 Annual Installments (including interest) shall continue to be due and payable at the same time and in the same amount and manner as if such default had not occurred. Perfected Security Interest The lien on and pledge of the Trust Estate to secure the Bonds shall be valid and binding and fully perfected from and after the Delivery Date, without physical delivery or transfer of control of the Trust Estate, the filing of the Indenture or any other act; all as provided in Texas Government Code, Chapter 1208, as amended, which applies to the issuance of the Bonds and the pledge of the Trust Estate granted by the City under the Indenture, and such pledge is therefore valid, effective, and perfected. If Texas law is amended at any time while the Bonds are Outstanding such that the pledge of the Trust Estate granted by the City under the Indenture is to be subject to the filing requirements of Texas Business and Commerce Code, Chapter 9, as amended, then in order to preserve to the registered owners of the Bonds the perfection of the security interest in said pledge, the City agrees to take such measures as it determines are reasonable and necessary under Texas law to comply with the applicable provisions of Texas Business and Commerce Code, Chapter 9, as amended, and enable a filing to perfect the security interest in said pledge to occur. See “APPENDIX B – Form of Indenture.” Pledged Revenue Fund Periodically upon receipt thereof, the City shall transfer or cause to be transferred, pursuant to a City Certificate provided to the Trustee for deposit to the Pledged Revenue Fund the Improvement Area #1 Assessments and Improvement Area #1 Annual Installments, other than the portion of the Improvement Area #1 Assessments and Improvement Area #1 Annual Installments allocated to the payment of Annual Collection Costs and Delinquent Collection Costs, which shall be deposited to the Administrative Fund in accordance with the Indenture. Following such deposit to the Pledged Revenue Fund, the City shall transfer or cause to be transferred pursuant to a City Certificate provided to the Trustee the following amounts from the Pledged Revenue Fund to the following Accounts: (i) first, to the Bond Pledged Revenue Account of the Pledged Revenue Fund, an amount sufficient to pay debt service on the Bonds next coming due, and (ii) second, if necessary, to the Reserve Account of the Reserve Fund, an amount to cause the amount in the Reserve Account to equal the Reserve Account Requirement. Notwithstanding the foregoing, the Additional Interest shall only be utilized for the purposes set forth in the Indenture and, immediately following the initial deposit to the Pledged Revenue Fund, prior to any other transfers or deposits being made as described in this paragraph, if the Delinquency and Prepayment Reserve Account of the Reserve Fund does not contain the Delinquency and Prepayment Reserve Requirement and Additional Interest is collected, then all such Additional Interest will be transferred into the Delinquency and Prepayment Reserve 16 Account until the Delinquency and Prepayment Reserve Requirement is met. In addition, in the event the City owes Rebatable Arbitrage to the United States Government pursuant to the Indenture, the City shall provide a City Certificate to the Trustee to transfer to the Rebate Fund, prior to any other transfer described in this paragraph, the full amount of Rebatable Arbitrage owed by the City, as further described in the Indenture. If any funds remain on deposit in the Pledged Revenue Fund after the foregoing deposits are made, the City shall have the option, in its sole and absolute discretion, to use such excess funds for any one or more of the following purposes: (i) to pay costs of the Improvement Area #1 Improvements, (ii) to pay other costs permitted by the PID Act, or (iii) to deposit such excess into the Redemption Fund to redeem Bonds as provided in the Indenture. Along with each transfer to the Trustee, the City shall provide a certificate as to the funds, accounts, and payments into which the amounts are to be deposited or paid. From time to time as needed to pay the obligations relating to the Bonds, but no later than five (5) Business Days before each Interest Payment Date, the Trustee shall withdraw from the Pledged Revenue Fund and transfer to the Principal and Interest Account of the Bond Fund, an amount, taking into account any amounts then on deposit in such Principal and Interest Account and any expected transfers from the Capitalized Interest Account to the Principal and Interest Account, such that the amount on deposit in the Principal and Interest Account equals the principal (including any Sinking Fund Installments) and interest due on the Bonds on the next Interest Payment Date. If, after the foregoing transfers and any transfer from the Reserve Fund as provided in the Indenture, there are insufficient funds to make the payments provided in the preceding paragraph above, the Trustee shall apply the available funds in the Principal and Interest Account first to the payment of interest, then to the payment of principal (including any Sinking Fund Installments) on the Bonds. The Trustee shall transfer Prepayments to the Redemption Fund to be used to redeem Bonds pursuant the Indenture promptly after deposit of such amounts into the Pledged Revenue Fund. Promptly after the deposit of Foreclosure Proceeds into the Pledged Revenue Fund, the Trustee shall transfer such Foreclosure Proceeds first to the Reserve Fund to restore any transfers from the Accounts within the Reserve Fund made with respect to the particular Improvement Area #1 Assessed Property to which the Foreclosure Proceeds relate (first, to replenish the Reserve Account Requirement and second, to replenish the Delinquency and Prepayment Reserve Requirement), and second, to the Redemption Fund to be used to redeem Bonds pursuant to the Indenture. After satisfaction of the requirement to provide for the payment of the principal and interest on the Bonds and to fund any deficiency that may exist in the Reserve Fund, the Trustee shall transfer any Pledged Revenues remaining in the Pledged Revenue Fund for the purposes set forth in the Indenture as directed by the City in a City Certificate. Bond Fund On each Interest Payment Date, the Trustee shall withdraw from the Principal and Interest Account and transfer to the Paying Agent/Registrar the principal (including any Sinking Fund Installments) and interest then due and payable on the Bonds, less any amount to be used to pay interest on the Bonds on such Interest Payment Date from the Capitalized Interest Account as provided below. If amounts in the Principal and Interest Account are insufficient for the purposes set forth above, the Trustee shall withdraw from the Reserve Fund amounts to cover the amount of such insufficiency. Amounts so withdrawn from the Reserve Fund shall be deposited in the Principal and Interest Account and transferred to the Paying Agent/Registrar. If, after the foregoing transfers and any transfer from the Reserve Fund as provided in the Indenture, there are insufficient funds to make the payments provided above, the Trustee shall apply the available funds in the Principal and Interest Account first to the payment of interest, then to the payment of principal (including any Sinking Fund Installments) on the Bonds. 17 Moneys in the Capitalized Interest Account shall be used for the payment of interest on the Bonds on the following dates and in the following amounts: Date Amount March 15, 2027 $ September 15, 2027 March 15, 2028 Any amounts on deposit in the Capitalized Interest Account after the payment of interest on the dates and in the amounts listed above shall be transferred shall be transferred, at the direction of the City, to the Improvement Area #1 Bond Improvement Account of the Project Fund, or to the Redemption Fund to be used to redeem Bonds, and the Capitalized Interest Account shall be closed. Project Fund Money on deposit in the Project Fund shall be used for the purposes specified in the Indenture. Disbursements from the Costs of Issuance Account of the Project Fund shall be made by the Trustee to pay costs of issuance of the Bonds pursuant to one or more City Certificates or the final closing memorandum for the Bonds prepared by the City’s municipal advisor, Hilltop Securities Inc. Disbursements from the Improvement Area #1 Bond Improvement Account of the Project Fund to pay costs of the Improvement Area #1 Improvements shall be made by the Trustee upon receipt by the Trustee of a properly executed and completed Certification for Payment. The funds from the Improvement Area #1 Bond Improvement Account of the Project Fund shall be disbursed in accordance with a Certification for Payment for Improvement Area #1 Improvements as described in the CFA Agreement. Except as provided in the succeeding paragraphs below, money on deposit in the Improvement Area #1 Bond Improvement Account of the Project Fund shall be used solely to pay costs of the Improvement Area #1 Improvements. If the City Representative determines in his or her sole discretion that certain amounts then on deposit in the Improvement Area #1 Bond Improvement Account are not expected to be expended for purposes of the Project Fund due to the abandonment, or constructive abandonment, of one or more of the Improvement Area #1 Improvements such that, in the opinion of the City Representative, it is unlikely that the amounts in the Improvement Area #1 Bond Improvement Account will ever be expended for the purposes of the Project Fund, the City Representative shall file a City Certificate with the Trustee which identifies the amounts then on deposit in the Improvement Area #1 Bond Improvement Account that are not expected to be used for purposes of the Project Fund. If such City Certificate is so filed, the identified amounts on deposit in the Improvement Area #1 Bond Improvement Account shall be transferred to the Bond Fund or to the Redemption Fund to be used to redeem Bonds pursuant to the Indenture as directed by the City Representative in a City Certificate filed with the Trustee. Upon such transfer, the Improvement Area #1 Bond Improvement Account of the Project Fund shall be closed. In making any determination regarding the Project Fund pursuant to the Indenture, the City Representative may conclusively rely upon a certificate of an Independent Financial Consultant. Upon the filing of a City Certificate stating that all Improvement Area #1 Improvements have been completed and that all costs of the Improvement Area #1 Improvements have been paid, or that any Improvement Area #1 Improvements are not required to be paid from the Project Fund pursuant to a Certification for Payment, the Trustee shall transfer the amount, if any, remaining within the Improvement Area #1 Bond Improvement Account of the Project Fund to the Bond Fund or to the Redemption Fund to be used to redeem Bonds pursuant to the Indenture as directed by the City Representative in a City Certificate filed with the Trustee. Upon such transfer, the Improvement Area #1 Bond Improvement Account of the Project Fund shall be closed. Upon a determination by the City Representative that all costs of issuance of the Bonds have been paid, any amounts remaining in the Costs of Issuance Account shall be transferred to the Improvement Area #1 Bond Improvement Account of the Project Fund and used to pay the costs of Improvement Area #1 Improvements or to 18 the Principal and Interest Account and used to pay interest on the Bonds, as directed in a City Certificate filed with the Trustee, and the Costs of Issuance Account shall be closed. In the event the Developer has not completed the Improvement Area #1 Improvements by July 22, 2031, then the City shall provide written direction to the Trustee to transfer all funds on deposit in the Improvement Area #1 Bond Improvement Account to the Redemption Fund to redeem Bonds pursuant to the Indenture. Upon such transfer, the Improvement Area #1 Bond Improvement Account of the Project Fund shall be closed. Reserve Fund (Reserve Account and Delinquency and Prepayment Reserve Account) Pursuant to the Indenture, a Reserve Account will be created within the Reserve Fund, held by the Trustee for the benefit of the Bonds, and initially funded with proceeds of the Bonds in the amount of the Reserve Account Requirement. Pursuant to the Indenture, the “Reserve Account Requirement” for the Bonds shall be 100% of average Annual Debt Service on the Bonds as of the Delivery Date; provided, however, that such amount shall be reduced by the amount of any transfers made to the Redemption Fund as a result of Prepayments; and provided further that as a result of (1) an optional redemption or (2) an extraordinary optional redemption, the Reserve Account Requirement shall be reduced by a percentage equal to the pro rata principal amount of Bonds redeemed by such redemption divided by the total principal amount of the Outstanding Bonds prior to such redemption. As of the Delivery Date, the Reserve Account Requirement is $ *. The City agrees with the Owners of the Bonds to accumulate and, when accumulated, maintain in the Reserve Account, an amount equal to not less than the Reserve Account Requirement. All amounts deposited in the Reserve Account shall be used and withdrawn by the Trustee for the purpose of making transfers to the Principal and Interest Account of the Bond Fund as provided in the Indenture. The Trustee will transfer from the Bond Pledged Revenue Account of the Pledged Revenue Fund to the Delinquency and Prepayment Reserve Account on March 15 of each year, commencing March 15, 2028, an amount the City confirms to the Trustee is equal to the Additional Interest until the Delinquency and Prepayment Reserve Requirement has been accumulated in the Delinquency and Prepayment Reserve Account; provided, however, that at any time the amount on deposit in the Delinquency and Prepayment Reserve Account is less than Delinquency and Prepayment Reserve Requirement, the Trustee shall resume depositing the Additional Interest into the Delinquency and Prepayment Reserve Account until the Delinquency and Prepayment Reserve Requirement has reaccumulated in the Delinquency and Prepayment Reserve Account. In transferring the amounts pursuant to the Indenture, the Trustee may conclusively rely on a City Certificate (which shall be based on the Improvement Area #1 Annual Installments as shown on the Improvement Area #1 Assessment Roll in the Service and Assessment Plan) unless and until it receives a City Certificate directing that a different amount be used. Whenever a transfer is made from the Reserve Account to the Bond Fund due to a deficiency in the Bond Fund, the Trustee shall provide written notice thereof to the City, specifying the amount withdrawn and the source of said funds. The Additional Interest shall continue to be collected and deposited pursuant to the Indenture until the Bonds are no longer Outstanding. “Delinquency and Prepayment Reserve Requirement” means an amount equal to 5.00% of the principal amount of the Outstanding Bonds to be funded from the Additional Interest deposited to the Pledged Revenue Fund and transferred to the Delinquency and Prepayment Reserve Account. In the event of an extraordinary optional redemption of Bonds from the proceeds of a Prepayment pursuant to the Indenture, the Trustee, pursuant to a City Certificate, shall transfer from the Reserve Account of the Reserve Fund to the Redemption Fund the amount specified in such directions, which shall be an amount equal to the principal amount of Bonds to be redeemed multiplied by the lesser of: (i) the amount required to be in the Reserve Account of the Reserve Fund divided by the principal amount of Outstanding Bonds prior to the redemption, and (ii) the amount actually in the Reserve Account of the Reserve Fund divided by the principal amount of Outstanding Bonds prior to the redemption. If after such transfer, and after applying investment earnings on the Prepayment toward payment of accrued interest, there are insufficient funds to pay the principal amount plus accrued and unpaid interest on such Bonds to the date fixed for redemption of the Bonds to be redeemed as a result of such Prepayment, the Trustee shall transfer an amount equal to the shortfall, or any additional amounts necessary to permit the Bonds to be redeemed in minimum principal amounts of $1,000, from the Delinquency and Prepayment Reserve Account to the Redemption Fund to be applied to the redemption of the Bonds. * To be completed upon pricing of the Bonds. 19 Whenever, on any Interest Payment Date, or on any other date at the written request of a City Representative, the value of cash and Value of Investment Securities on deposit in the Reserve Account exceeds the Reserve Account Requirement, the Trustee shall provide written notice to the City Representative of the amount of the excess. Such excess shall be transferred to the Principal and Interest Account to be used for the payment of interest on the Bonds on the next Interest Payment Date in accordance with the Indenture, unless within thirty days of such notice to the City Representative, the Trustee receives a City Certificate instructing the Trustee to apply such excess: (i) to pay amounts due to the U.S. Government in accordance with the Code, (ii) to the Administrative Fund in an amount not more than the Annual Collection Costs for the Bonds, (iii) to the Improvement Area #1 Bond Improvement Account of the Project Fund to pay costs of the Improvement Area #1 Improvements if such application and the expenditure of funds is expected to occur within three years of the Delivery Date, or (iv) to the Redemption Fund to be applied to the redemption of Bonds. Whenever, on any Interest Payment Date, or on any other date at the written request of a City Representative, the amounts on deposit in the Delinquency and Prepayment Reserve Account exceed the Delinquency and Prepayment Reserve Requirement, the Trustee shall provide written notice to the City of the amount of the excess, and such excess shall be transferred, at the direction of the City pursuant to a City Certificate, to the Administrative Fund for the payment of Annual Collection Costs or to the Redemption Fund to be used to redeem Bonds pursuant to the Indenture. In the event that the Trustee does not receive a City Certificate directing the transfer of such excess to the Administrative Fund within 45 days of providing notice to the City of such excess, the Trustee shall transfer such excess to the Redemption Fund to redeem Bonds pursuant to the Indenture and provide the City with written notification of the transfer. The Trustee shall incur no liability for the accuracy or validity of the transfer so long as the Trustee made such transfer in full compliance with the Indenture. Whenever, on any Interest Payment Date, the amount on deposit in the Bond Fund is insufficient to pay the debt service on the Bonds due on such date, the Trustee shall transfer first from the Delinquency and Prepayment Reserve Account of the Reserve Fund and second from the Reserve Account of the Reserve Fund to the Bond Fund the amounts necessary to cure such deficiency. At the final maturity of the Bonds, the amount on deposit in the Reserve Account and the Delinquency and Prepayment Reserve Account shall be transferred to the Principal and Interest Account and applied to the payment of the principal of the Bonds. If, after a Reserve Account withdrawal, the amount on deposit in the Reserve Account is less than the Reserve Account Requirement, the Trustee shall transfer from the Pledged Revenue Fund to the Reserve Account the amount of such deficiency, but only to the extent that such amount is not required for the timely payment of principal, interest, or Sinking Fund Installments. If the amount held in the Reserve Fund together with the amount held in the Pledged Revenue Fund, the Bond Fund, and Redemption Fund is sufficient to pay the principal amount and of all Outstanding Bonds on the next date the Bonds may be optionally redeemed by the City at a redemption price of par, together with the unpaid interest accrued on such Bonds as of such date, the moneys shall be transferred to the Redemption Fund and thereafter used to redeem all Bonds on such date. Administrative Fund The City will create under the Indenture an Administrative Fund held by the Trustee. Periodically upon receipt thereof, the City shall deposit or cause to be deposited to the Administrative Fund the portion of the Improvement Area #1 Assessments and Improvement Area #1 Annual Installments allocated to the payment of Annual Collection Costs and Delinquent Collection Costs, as set forth in the Service and Assessment Plan. Moneys in the Administrative Fund shall be held by the Trustee separate and apart from the other Funds created and administered under the Indenture and used as directed by a City Certificate solely for the purposes set forth in the Service and Assessment Plan, including payment of the Annual Collection Costs and Delinquent Collection Costs. See “APPENDIX C – Form of Service and Assessment Plan.” THE ADMINISTRATIVE FUND IS NOT PART OF THE TRUST ESTATE AND IS NOT SECURITY FOR THE BONDS. 20 Defeasance Any Outstanding Bonds shall, prior to the Stated Maturity or redemption date thereof, be deemed to have been paid and no longer Outstanding within the meaning of the Indenture (a “Defeased Debt”), when payment of the principal of, premium, if any, on such Defeased Debt, plus interest thereon to the due date thereof (whether such due date be by reason of maturity, redemption, or otherwise), either (i) shall have been made in accordance with the terms thereof, or (ii) shall have been provided by irrevocably depositing with the Trustee, in trust, and irrevocably set aside exclusively for such payment, (A) money sufficient to make such payment, or (B) Defeasance Securities that mature as to principal and interest in such amount and at such times as will insure the availability, without reinvestment, of sufficient money to make such payment, and all necessary and proper fees, compensation, and expenses of the Trustee pertaining to the Bonds with respect to which such deposit is made shall have been paid or the payment thereof provided for to the satisfaction of the Trustee. Neither Defeasance Securities nor moneys deposited with the Trustee nor principal or interest payments on any such Defeasance Securities shall be withdrawn or used for any purpose other than, and shall be held in trust for, the payment of the principal of and interest on the Bonds and shall not be part of the Trust Estate. Any cash received from such principal of and interest on such Defeasance Securities deposited with the Trustee, if not then needed for such purpose, shall be reinvested in Defeasance Securities as directed by the City maturing at times and in amounts sufficient to pay when due the principal of and interest on the Bonds on and prior to such redemption date or maturity date thereof, as the case may be. Any payment for Defeasance Securities purchased for the purpose of reinvesting cash as aforesaid shall be made only against delivery of such Defeasance Securities. “Defeasance Securities” means Investment Securities then authorized by applicable law for the investment of funds to defease public securities. “Investment Securities” means those authorized investments described in the Public Funds Investment Act, Chapter 2256, Texas Government Code, as amended, which investments are, at the time made, included in and authorized by the City’s official investment policy as approved by the City Council from time to time. Under current State law, Investment Securities that are authorized for the investment of funds to defease public securities are (a) direct, noncallable obligations of the United States of America, including obligations that are unconditionally guaranteed by the United States of America; (b) noncallable 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 governing body of the City adopts or approves the proceedings authorizing the issuance of refunding bonds, are rated as to investment quality by a nationally recognized investment rating firm not less than “AAA” or its equivalent; and (c) noncallable 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 governing body of the City adopts or approves the proceedings authorizing the issuance of refunding bonds, are rated as to investment quality by a nationally recognized investment rating firm not less than “AAA” or its equivalent. 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 with amounts deposited to defease the Bonds. Because the Indenture does not contractually limit such investments, 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 that for any other Defeasance Security will be maintained at any particular rating category. Events of Default Each of the following occurrences or events constitutes an “Event of Default” under the Indenture: i. The failure of the City to deposit the Pledged Revenues to the Pledged Revenue Fund; ii. The failure of the City to enforce the collection of the Improvement Area #1 Assessments, including the prosecution of foreclosure proceedings, in accordance with the Indenture; iii. Default in the performance or observance of any covenant, agreement, or obligation of the City under the Indenture, other than a default under (iv) below, and the continuation thereof for a period of ninety (90) days after written notice specifying such default and requiring same to be 21 remedied shall have been given to the City by the Trustee, which may give notice in its discretion and which shall give such notice at the written request of the Owners of not less than 51% in aggregate Outstanding principal amount of the Bonds; provided, however, if the default stated in the notice is capable of cure but cannot reasonably be cured within the applicable period, the City shall be entitled to a further extension of time reasonably necessary to remedy such default so long as corrective action is instituted by the City within the applicable period and is diligently pursued until such failure is corrected, but in no event for a period of time of more than one hundred eighty (180) days after such notice; and iv. The failure to make payment of the principal of or interest on any of the Bonds when the same becomes due and payable and such failure is not remedied within thirty (30) days thereafter. The Trustee shall not be charged with knowledge of (a) any events or other information, or (b) any default under the Indenture or any other agreement unless a responsible officer of the Trustee shall have actual knowledge thereof. Remedies in Event of Default Upon the happening and continuance of any Event of Default, then and in every such case the Trustee may proceed, and upon the written request of the Owners of not less than fifty-one percent (51%) in aggregate Outstanding principal amount of the Bonds under the Indenture shall proceed, to protect and enforce the rights of the Owners under the Indenture by action seeking mandamus or by other suit, action, or special proceeding in equity or at law in any court of competent jurisdiction for any relief to the extent permitted by Applicable Laws including, but not limited to, the specific performance of any covenant or agreement contained in the Indenture, or injunction; provided, however, that no action for money damages against the City may be sought or shall be permitted. THE PRINCIPAL OF THE BONDS SHALL NOT BE SUBJECT TO ACCELERATION UNDER ANY CIRCUMSTANCES. If the assets of the Trust Estate are sufficient to pay all amounts due with respect to all Outstanding Bonds, in the selection of Trust Estate assets to be used in the payment of Bonds due in an Event of Default, the City shall determine, in its absolute discretion, and shall instruct the Trustee by City Certificate, which Trust Estate assets shall be applied to such payment and shall not be liable to any Owner or other Person by reason of such selection and application. In the event that the City shall fail to deliver to the Trustee such City Certificate, the Trustee shall select and liquidate or sell Trust Estate assets as provided in the following paragraph, and shall not be liable to any Owner, or other Person, or the City by reason of such liquidation or sale. The Trustee shall have no liability for its selection of Trust Estate assets to liquidate or sell. Whenever moneys are to be applied pursuant to the Indenture, irrespective of and whether other remedies authorized under the Indenture shall have been pursued in whole or in part, the Trustee may cause any or all of the assets of the Trust Estate, including Investment Securities, to be sold. The Trustee may so sell the assets of the Trust Estate and all right, title, interest, claim, and demand thereto and the right of redemption thereof, in one or more parts, at any such place or places, and at such time or times and upon such notice and terms the Trustee may deem appropriate, and as may be required by law and apply the proceeds thereof in accordance with the provisions of the Indenture. Upon such sale, the Trustee may make and deliver to the purchaser or purchasers a good and sufficient assignment or conveyance for the same, which sale shall be a perpetual bar both at law and in equity against the City, and all other Persons claiming such properties. No purchaser at any sale shall be bound to see to the application of the purchase money proceeds thereof or to inquire as to the authorization, necessity, expediency, or regularity of any such sale. Nevertheless, if so requested by the Trustee, the City shall ratify and confirm any sale or sales by executing and delivering to the Trustee or to such purchaser or purchasers all such instruments as may be necessary or, or in the reasonable judgment of the Trustee, proper for the purpose which may be designated in such request. 22 Restriction on Owner’s Actions No Owner shall have any right to institute any action, suit, or proceeding at law or in equity for the enforcement of the Indenture or for the execution of any trust thereof or any other remedy thereunder, unless (i) a default has occurred and is continuing of which the Trustee has been notified in writing or of which the Trustee is deemed to have notice, (ii) such default has become an Event of Default and the Owners of not less than 51% in aggregate principal amount of the Bonds then Outstanding have made written request to the Trustee and offered it reasonable opportunity either to proceed to exercise the powers granted in the Indenture or to institute such action, suit, or proceeding in its own name, (iii) the Owners have furnished to the Trustee written evidence of indemnity as provided in the Indenture, (iv) the Trustee has for 60 days after such notice failed or refused to exercise the powers granted in the Indenture, or to institute such action, suit, or proceeding in its own name, (v) no written direction inconsistent with such written request has been given to the Trustee during such 60-day period by the Owners of a majority of the aggregate principal amount of the Bonds then Outstanding, and (vi) notice of such action, suit, or proceeding is given to the Trustee in writing; however, no one or more Owners of the Bonds shall have any right in any manner whatsoever to affect, disturb, or prejudice the Indenture by its, his, or their action or to enforce any right under the Indenture except in the manner provided in the Indenture, and that all proceedings at law or in equity shall be instituted and maintained in the manner provided in the Indenture and for the equal benefit of the Owners of all Bonds then Outstanding. The notification, request, and furnishing of indemnity set forth in the Indenture shall, at the option of the Trustee as advised by its counsel, be conditions precedent to the execution of the powers and trusts of the Indenture and to any action or cause of action for the enforcement of the Indenture or for any other remedy under the Indenture. Subject to provisions of the Indenture with respect to certain liabilities of the City, nothing in the Indenture shall affect or impair the right of any Owner to enforce, by action at law, payment of any Bond at and after the maturity thereof, or on the date fixed for redemption, or the obligation of the City to pay each Bond issued thereunder to the respective Owners thereof at the time and place, from the source, and in the manner expressed therein and in the Bonds. In case the Trustee or any Owners shall have proceeded to enforce any right under the Indenture and such proceedings shall have been discontinued or abandoned for any reason or shall have been determined adversely to the Trustee or any Owners, then and in every such case the City, the Trustee, and the Owners shall be restored to their former positions and rights thereunder, and all rights, remedies, and powers of the Trustee shall continue as if no such proceedings had been taken. Application of Revenues and Other Moneys After Event of Default All moneys, securities, funds, Pledged Revenues, and other assets of the Trust Estate and the income therefrom received by the Trustee pursuant to any right given or action taken under the provisions of the Indenture with respect to Events of Default shall, after payment of the cost and expenses of the proceedings resulting in the collection of such amounts, the expenses (including Trustee’s counsel fees, costs, and expenses), liabilities, and advances incurred or made by the Trustee, and the fees of the Trustee in carrying out the Indenture, be applied by the Trustee, on behalf of the City, to the payment of interest and principal or Redemption Price then due on Bonds, as follows: FIRST: To the payment to the Owners entitled thereto all installments of interest then due in the direct order of maturity of such installments, and, if the amount available shall not be sufficient to pay in full any installment, then to the payment thereof ratably, according to the amounts due on such installment, to the Owners entitled thereto, without any discrimination or preference; and SECOND: To the payment to the Owners entitled thereto of the unpaid principal of Outstanding Bonds, or Redemption Price of any Bonds which shall have become due, whether at maturity or by call for redemption, in the direct order of their due dates and, if the amounts available shall not be sufficient to pay in full all the Bonds due on any date, then to the payment thereof ratably, according to the amounts of principal due or Redemption Price and to the Owners entitled thereto, without any discrimination or preference. 23 The Trustee shall make payments to the Owners pursuant to the provisions above within thirty (30) days of receipt of such good and available funds, and the record date shall be the date the Trustee receives such good and available funds. In the event funds are not adequate to cure any of the Events of Default described above, the available funds shall be allocated to the Bonds that are Outstanding in proportion to the quantity of Bonds that are currently due and in default under the terms of the Indenture. The restoration of the City to its prior position after any and all defaults have been cured, as provided above, shall not extend to or affect any subsequent default under the Indenture or impair any right consequent thereon. Investment or Deposit of Funds Money in any Fund or Account established pursuant to the Indenture, other than the Reserve Fund, shall be invested by the Trustee as directed by the City pursuant to a City Certificate filed with the Trustee in Investment Securities; provided that all such deposits and investments shall be made in such manner that the money required to be expended from any Fund or Account will be available at the proper time or times. Money in the Reserve Fund shall be invested in such Investment Securities as directed by the City pursuant to a City Certificate filed with the Trustee, provided that the final maturity of any individual Investment Security shall not exceed 270 days and the average weighted maturity of any investment pool or no-load money market mutual fund shall not exceed 90 days. Obligations purchased as an investment of moneys in any Fund or Account shall be deemed to be part of such Fund or Account, subject, however, to the requirements of the Indenture for transfer of interest earnings and profits resulting from investment of amounts in Funds and Accounts. Whenever in the Indenture any moneys are required to be transferred by the City to the Trustee, such transfer may be accomplished by transferring a like amount of Investment Securities as directed by the City in writing. Against Encumbrances Other than Refunding Bonds, the City shall not create and, to the extent Pledged Revenues are received, shall not suffer to remain, any lien, encumbrance, or charge upon the Trust Estate or upon any other property pledged under the Indenture, except the pledge created for the security of the Bonds, and other than a lien or pledge subordinate to the lien and pledge of such property related to the Bonds. So long as Bonds are Outstanding under the Indenture, the City shall not issue any bonds, notes, or other evidences of indebtedness other than the Bonds and any Refunding Bonds issued to refund all or a portion of the Bonds, secured by any pledge of or other lien or charge on the Trust Estate or other property pledged under the Indenture, other than a lien or pledge subordinate to the lien and pledge of such property related to the Bonds. Other Obligations or Other Liens; Refunding Bonds The City reserves the right, subject to the provisions contained in the Indenture, to issue Other Obligations under other indentures, assessment ordinances, or similar agreements or other obligations which do not constitute or create a lien on the Trust Estate and are not payable from the Trust Estate, or any portion thereof. Other than Refunding Bonds, or subordinate lien obligations permitted under the Indenture, the City will not create or voluntarily permit to be created any debt, lien, or charge on the Trust Estate, or any portion thereof, and will not do or omit to do or suffer to be done or omit to be done any matter or things whatsoever whereby the lien of the Indenture or the priority thereof might or could be lost or impaired; provided, however, that the City has reserved the right to issue bonds or other obligations secured by and payable from the Trust Estate so long as such pledge is subordinate to the pledge of the Trust Estate securing payment of the Bonds. Notwithstanding any contrary provision of the Indenture, the City shall not issue additional bonds, notes, or other obligations under the Indenture, secured by any pledge of or other lien or charge on the Trust Estate or other property pledged under the Indenture, other than Refunding Bonds and subordinate lien obligations permitted 24 thereunder. The City reserves the right to issue Refunding Bonds, the proceeds of which would be utilized to refund all or any portion of the Outstanding Bonds or Outstanding Refunding Bonds and to pay all costs incident to the Refunding Bonds, as authorized by the laws of the State. THE REMAINDER OF THIS PAGE IS LEFT BLANK INTENTIONALLY. 25 SOURCES AND USES OF FUNDS* The table that follows summarizes the expected sources and uses of proceeds of the Bonds: Sources of Funds: Principal Amoun Total Sources Uses of Funds: Deposit to Improvement Area #1 Bond Improvement Account of the Pro ect Fun Deposit to Costs of Issuance Account of the Pro ect Fun Deposit to Capitalized Interest Account of the Bond Fun Deposit to Reserve Account of the Reserve Fun Deposit to Administrative Fun Underwriter’s Discount (1) Total Uses (1) Includes the fee of counsel to the Underwriter. THE REMAINDER OF THIS PAGE IS LEFT BLANK INTENTIONALLY. * To be completed upon pricing of the Bonds. 26 DEBT SERVICE REQUIREMENTS* The following table sets forth the debt service requirements for the Bonds: Year Ending (September 30) Principal Interest (1) Total 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 2046 2047 2048 2049 2050 2051 2052 2053 2054 2055 2056 Total (1) A portion of the proceeds of the Bonds will be used to pay interest due on the Bonds on March 15, 2027, September 15, 2027, and a portion of the interest due on March 15, 2028. See “SECURITY FOR THE BONDS – Bond Fund” and “SOURCES AND USES OF FUNDS.” THE REMAINDER OF THIS PAGE IS LEFT BLANK INTENTIONALLY. * To be completed upon pricing of the Bonds. 27 OVERLAPPING TAXES AND DEBT Overlapping Taxes The District is located within the corporate boundaries of the City. The land within Improvement Area #1 of the District has been, and is expected to continue to be, subject to taxes and assessments imposed by taxing entities other than the City. Such taxes are payable in addition to the Improvement Area #1 Assessments levied by the City. In addition to the City, Collin County, Texas, the Collin County Community College District, and the Anna Independent School District (“Anna ISD”) may each levy ad valorem taxes upon land in Improvement Area #1 of the District for payment of debt incurred by such governmental entities and/or for payment of maintenance and operations expenses. The City has no control over the level of ad valorem taxes or special assessments levied by such other taxing authorities. The following table shows the overlapping ad valorem tax rates currently levied on property located in Improvement Area #1 of the District. Taxin Entit Without application of TIRZ No. 7 Tax Year 2025 Annual Credit Amoun (1) With application of TIRZ No. 7 Tax Year 2025 Annual Credit Amoun (1) The Cit $0.525073 $0.525073 Collin Count 0.149343 0.149343 Collin Count Communit Colle e District 0.081220 0.081220 Anna ISD 1.239900 1.239900 Total Current Tax Rate $1.995536 $1.995536 Estimated Average Improvement Area #1 Annual Installment of Improvement Area #1 Assessment as an Equivalent Tax Rate (2) $1.256531 $1.256531 TIRZ No. 7 Annual Credit Amount applicable to Estimated Average Improvement Area #1 Annual Installment of Improvement Area #1 Assessment as an Equivalent Tax Rate (3) $ $0.262537 (3) Estimated Net Average Improvement Area #1 Annual Installments of Improvement Area #1 Assessments as an Equivalent Tax Rate $ $0.993995 (3) Estimated Total Tax Rate and Estimated Average Improvement Area #1 Annual Installments of Improvement Area # 1 Assessments as an Equivalent Tax Rate (2) $3.252067 $2.989531 (3) ________________________________ (1) As reported by the taxing entities. Per $100 in taxable assessed value. (2) Preliminary, subject to change. Derived from information presented in the Service and Assessment Plan. See “APPENDIX C – Form of Service and Assessment Plan. Assumes completion of homes at values estimated by the Developer. See “THE DEVELOPMENT – Expected Build-out, Absorption, and Home Prices in the District.” (3) The City has agreed to contribute the TIRZ No. 7 Annual Credit Amount generated from each lot within Improvement Area #1 in an amount equal to 50% of the City’s ad valorem tax collected on the Captured Taxable Value for such lot for such year to offset all or a portion of such lot’s Improvement Area #1 Annual Installment of Improvement Area #1 Assessments due the following year, subject to the TIRZ No. 7 Maximum Annual Credit Amount. Derived from information in the Service and Assessment Plan. See “ASSESSMENT PROCEDURES – Assessment Amounts – TIRZ No. 7 Annual Credit Amount.” Sources: Collin Central Appraisal District, the City, and the Administrator. THE REMAINDER OF THIS PAGE IS LEFT BLANK INTENTIONALLY. 28 Overlapping Debt As noted above, Improvement Area #1 of the District includes territory located in other governmental entities that may issue or incur debt secured by the levy and collection of ad valorem taxes or assessments. Set forth below is an overlapping debt table showing the outstanding indebtedness payable from ad valorem taxes with respect to the Improvement Area #1 Assessed Property, as of June 1, 2026, and City debt secured by the Improvement Area #1 Assessments: Taxin or Assessin Entit Gross Outstanding Debt as of June 1, 2026 Estimated Percentage Applicable (1) Direct and Estimated Overlappin Deb (1) The City (The Bonds) $ 18,659,000* 100.000% $ 18,659,000* The Cit (Ad Valorem Taxes) 257,590,000 0.752% 1,938,331 Collin Count , Texas 910,405,000 0.012% 111,850 Collin Count Communit Colle e Distric 438,250,000 0.014% 59,553 Anna Independent School Distric 437,458,846 0.782% 3,422,259 TOTAL $2,062,362,846 $24,190,993 * Preliminary; subject to change. (1) Based on the $33,294,200 prospective market value for Improvement Area #1 of the District set forth in the Appraisal and the tax year 2025 net taxable assessed valuations for the taxing entities as certified by the Collin Central Appraisal District. See “APPRAISAL” and “APPENDIX H – Appraisal.” Sources: Collin Central Appraisal District, Municipal Advisory Council of Texas, and Preliminary Service and Assessment Plan Agricultural Use If land is devoted principally to agricultural use, a landowner can apply for an agricultural valuation on the property and pay ad valorem taxes based on the land’s agricultural value. Agricultural use includes production of crops or livestock. It also can include leaving the land idle for a government program or for normal crop or livestock rotation. If land qualified for an agricultural valuation but the land use changes to a non-agricultural use, “rollback taxes” are assessed for each of the previous three years in which the land received the lower agricultural valuation. The rollback tax is the difference between taxes paid on land’s agricultural value and the taxes that the landowner would have paid if the land had been taxed on a higher market value plus interest charged for each year from the date on which taxes would have been due. If the land use changes to a non-agricultural use on only a portion of a larger tract, the landowner can fence off the remaining land and maintain the agricultural valuation on the remaining land. In this scenario, the landowner would only be responsible for rollback taxes on that portion of the land where use changed and not the entire tract. Beginning in 2027, Improvement Area #1 will no longer be subject to an agricultural valuation. Homeowners’ Association Dues In addition to the Improvement Area #1 Assessments, the Developer anticipates that each property owner in Improvement Area #1 of the District will pay a fee to a homeowners’ association (the “HOA”) in the approximate amount of $1,200 per year. THE REMAINDER OF THIS PAGE IS LEFT BLANK INTENTIONALLY. 29 ASSESSMENT PROCEDURES Capitalized terms used under this caption and not otherwise defined in the Indenture or this Limited Offering Memorandum shall have the meanings given in the Service and Assessment Plan. See “APPENDIX C – Form of Service and Assessment Plan.” General As required by the PID Act, when the City determines to defray a portion of the costs of the Improvement Area #1 Improvements through Improvement Area #1 Assessments, it must adopt a resolution generally describing the Improvement Area #1 Improvements and the land within Improvement Area #1 of the District to be subject to Improvement Area #1 Assessments to pay the cost therefor. The City has caused the Improvement Area #1 Assessment Roll to be prepared, which shows the land within Improvement Area #1 of the District to be assessed, the amount of the benefit to and the Improvement Area #1 Assessment against each lot or parcel of land within Improvement Area #1, and the number of Improvement Area #1 Annual Installments in which the Improvement Area #1 Assessment is divided. The Improvement Area #1 Assessment Roll was or will be filed with the City Secretary and made available for public inspection. Statutory notice was or will be given to the owners of the Improvement Area #1 Assessed Property and a public hearing will be conducted to hear testimony from affected property owners as to the propriety and advisability of undertaking the Improvement Area #1 Improvements and funding a portion of the same with Improvement Area #1 Assessments. The City expects to adopt the Assessment Ordinance and levy the Improvement Area #1 Assessments on June 23, 2026. After adoption of the Assessment Ordinance, the Improvement Area #1 Assessments will become legal, valid, and binding liens upon the Improvement Area #1 Assessed Property. Pursuant to the PID Act, the Actual Costs of the Improvement Area #1 Improvements may be assessed by the City against the Improvement Area #1 Assessed Property so long as the special benefit conferred upon the Improvement Area #1 Assessed Property by the Improvement Area #1 Improvements equals or exceeds the amount of the Improvement Area #1 Assessments. The costs of the Improvement Area #1 Improvements may be assessed using any methodology that results in the imposition of equal shares of cost on Improvement Area #1 Assessed Property similarly benefited. The allocation of benefits and assessments to the benefitted land within the District, including land in Improvement Area #1, is set forth in the Service and Assessment Plan, which should be read in its entirety. See “APPENDIX C – Form of Service and Assessment Plan.” Assessment Methodology The Service and Assessment Plan describes the special benefit to be received by each Parcel of Improvement Area #1 Assessed Property as a result of the Improvement Area #1 Improvements, provides the basis and justification for the determination that such special benefit exceeds the amount of the Improvement Area #1 Assessments being levied, and establishes the methodology by which the City allocates the special benefit of the Improvement Area #1 Improvements to Parcels of Improvement Area #1 Assessed Property in a manner that results in equal shares of costs being apportioned to Parcels of Improvement Area #1 Assessed Property similarly benefited. As described in the Service and Assessment Plan, a portion of the costs of the Improvement Area #1 Improvements are being funded with proceeds of the Bonds, which are payable from Pledged Revenues, including Assessment Revenues, and other assets comprising the Trust Estate. As set forth in the Service and Assessment Plan, the City Council has determined that the Actual Costs of the Improvement Area #1 Improvements will be allocated initially to the Improvement Area #1 Initial Parcels based on the ratio of the acreage of each such Parcel to the total acreage of the Improvement Area #1 Initial Parcels. Upon subdivision of the Improvement Area #1 Initial Parcels, the Actual Costs of the Improvement Area #1 Improvements will be reallocated based on the Estimated Buildout Value of each Lot Type, as provided in the Service and Assessment Plan. See “APPENDIX C – Form of Service and Assessment Plan.” THE REMAINDER OF THIS PAGE IS LEFT BLANK INTENTIONALLY. 30 The following table provides additional analysis with respect to assessment methodology, including the value to Improvement Area #1 Assessment burden ratio per Lot Type, equivalent tax rate per Lot Type, and leverage per Lot Type related to the Improvement Area #1 Assessments applicable to the Improvement Area #1 Assessed Property. The information in the table was obtained from and calculated using information provided in the Service and Assessment Plan. See “APPENDIX C – Form of Service and Assessment Plan.” Lien to Value Analysis, Improvement Area #1 Assessment Allocation, Equivalent Tax Rate, and Leverage per Lot Type in Improvement Area #1 * Lot Type Planned No. of Lots Estimated Finished Value per Lot Type (1) Estimated Buildout Value per Lot Type (2) Estimated Improvement Area #1 Assessment per Lot Type Average Improvement Area #1 Annual Installment of Improvement Area #1 Assessment per Lot Type Tax Rate Equivalent of Average Improvement Area #1 Annual Installment of Improvement Area #1 Assessment per Lot Type (3) Estimated Ratio of Estimated Finished Value per Lot Type to Improvement Area #1 Assessment (1) Estimated Ratio of Estimated Buildout Value per Lot Type to Improvement Area #1 Assessment (2) 40’ 39 $106,000 $390,000 $ 60,365.08 $4,900.47 $1.2565 1:76 : 1 6.46 : 1 50’ 125 $130,000 $460,000 $ 71,199.83 $5,780.04 $1.2565 1:83 : 1 6.46 : 1 60’ 77 $153,000 $595,000 $ 92,095.44 $7,476.36 $1.2565 1:66 : 1 6.46 : 1 70’ 3 $180,000 $675,000 $104,478.02 $8,481.58 $1.2565 1:72 : 1 6.46 : 1 * Preliminary, subject to change. (1) Based on the Lot Purchase and Sale Agreements. May differ from the prices in the Appraisal. See “THE DEVELOPMENT – Lot Purchase and Sale Agreements” and “APPRAISAL.” (2) Estimated Buildout Value derived from the Service and Assessment Plan. Provided by the Developer. (3) Per $100 of home value. Source: Derived from information presented in the Service and Assessment Plan. For further explanation of the Improvement Area #1 Assessment methodology, see “APPENDIX C – Form of Service and Assessment Plan.” The City has determined that the foregoing method of allocation will result in the imposition of equal shares of the Improvement Area #1 Assessments on parcels of Improvement Area #1 Assessed Property similarly situated within Improvement Area #1 of the District. The Improvement Area #1 Assessments and interest thereon are expected to be paid in Improvement Area #1 Annual Installments as described above. The determination by the City of the assessment methodology set forth in the Service and Assessment Plan is the result of the discretionary exercise by the City Council of its legislative authority and governmental powers and is conclusive and binding on the Developer and all future owners and developers within Improvement Area #1 of the District. See “APPENDIX C – Form of Service and Assessment Plan.” Collection and Enforcement of Assessment Amounts Pursuant to the PID Act, the Improvement Area #1 Annual Installments may be collected in the same manner and at the same time as ad valorem taxes of the City. The Improvement Area #1 Assessments may be enforced by the City in the same manner that an ad valorem tax lien against real property is enforced. Delinquent installments of the Improvement Area #1 Assessments incur interest, penalties, and attorney’s fees in the same manner as delinquent ad valorem taxes. Under the PID Act, the Assessment Lien is a first and prior lien against the Improvement Area #1 Assessed Property, superior to all other liens and claims except liens or claims for State, county, school district, or municipality ad valorem taxes. See “BONDHOLDERS’ RISKS – Assessment Limitations.” 31 In the Indenture, the City covenants to collect, or cause to be collected, Improvement Area #1 Assessments as provided in the Assessment Ordinance. No less frequently than annually, City staff or a designee of the City shall prepare, and the City Council shall approve, an Annual Service Plan Update to allow for the billing and collection of Improvement Area #1 Annual Installments. Each Annual Service Plan Update shall include an updated Improvement Area #1 Assessment Roll and a calculation of the Improvement Area #1 Annual Installment for each Parcel. Annual Collection Costs shall be allocated among all Parcels of Improvement Area #1 Assessed Property in proportion to the amount of the Improvement Area #1 Annual Installments for such Parcels. In the Indenture, the City covenants, agrees, and warrants that, for so long as any Bonds are Outstanding it will take and pursue all actions permissible under Applicable Laws to cause the Improvement Area #1 Assessments to be collected and the liens thereof enforced continuously, in the manner and to the maximum extent permitted by Applicable Laws, and, to the extent permitted by Applicable Laws, to cause no reduction, abatement, or exemption in the Improvement Area #1 Assessments. To the extent permitted by law, notice of the Improvement Area #1 Annual Installments will be sent by, or on behalf of, the City to the affected property owners on the same statement or such other mechanism that is used by the City so that such Improvement Area #1 Annual Installments are collected simultaneously with ad valorem taxes and shall be subject to the same penalties, procedures, and foreclosure sale in case of delinquencies as are provided for ad valorem taxes of the City. The City will determine or cause to be determined, no later than February 15 of each year, whether or not any Improvement Area #1 Annual Installment is delinquent and, if such delinquencies exist, the City will order and cause to be commenced as soon as practicable any and all appropriate and legally permissible actions to obtain such Improvement Area #1 Annual Installment, and any delinquent charges and interest thereon, including diligently prosecuting an action in district court to foreclose the currently delinquent Improvement Area #1 Annual Installment. Notwithstanding the foregoing, the City shall not be required under any circumstances to purchase or make payment for the purchase of the delinquent Improvement Area #1 Assessment, or the corresponding Improvement Area #1 Assessed Property. The City will implement the basic timeline and procedures for Improvement Area #1 Assessment collections and pursuit of delinquencies set forth in Exhibit D to the Continuing Disclosure Agreement of Issuer set forth in APPENDIX E-1 and to comply therewith to the extent that the City reasonably determines that such compliance is the most appropriate timeline and procedures for enforcing the payment of delinquent Improvement Area #1 Assessments. The City shall not be required under any circumstances to expend any funds for Delinquent Collection Costs in connection with its covenants and agreements under the Indenture or otherwise other than funds on deposit in the Administrative Fund. Improvement Area #1 Annual Installments will be paid to the City or its agent. Improvement Area #1 Annual Installments are due on October 1 of each year and become delinquent on February 1 of the following year. In the event Improvement Area #1 Assessments are not timely paid, there are penalties and interest as set forth below: Date Payment Receive Cumulative Penalt Cumulative Interes Total Februar 6% 1% 7% March 7% 2% 9% April 8% 3% 11% Ma 9% 4% 13% June 10% 5% 15% Jul 12% 6% 18% After July, the penalty remains at 12%, and interest accrues at the rate of 1% each month. In addition, if an account is delinquent in July, a 20% attorney’s collection fee may be added to the total penalty and interest charge. In general, property subject to lien may be sold, in whole or in parcels, pursuant to court order to collect the amounts 32 due. An automatic stay by creditors or other entities, including governmental units, could prevent governmental units from foreclosing on property and prevents liens for post-petition taxes from attaching to property and obtaining secured creditor status unless, in either case, an order lifting the stay is obtained from the bankruptcy court. In most cases, post-petition Improvement Area #1 Assessments are paid as an administrative expense of the estate in bankruptcy or by order of the bankruptcy court. Assessment Amounts Improvement Area #1 Assessment Amounts. The maximum amounts of the Improvement Area #1 Assessments will be established by the methodology described in the Service and Assessment Plan. The Improvement Area #1 Assessment Roll sets forth for each year the Improvement Area #1 Annual Installment for each Improvement Area #1 Assessed Property consisting of the annual payment allocable to the Bonds and the Improvement Area #1 Improvements for each Improvement Area #1 Assessed Property, which amount includes (i) the Additional Interest, and (ii) the annual payment allocable to Annual Collection Costs. The Improvement Area #1 Annual Installments for the Improvement Area #1 Assessments may not exceed the amounts shown on the Improvement Area #1 Assessment Roll. The Improvement Area #1 Assessments will be levied against the Parcels comprising the Improvement Area #1 Assessed Property as indicated on the Improvement Area #1 Assessment Roll. See “APPENDIX C – Form of Service and Assessment Plan” and “APPENDIX G – Form of CFA Agreement.” The Improvement Area #1 Annual Installments shown on the Improvement Area #1 Assessment Roll will be reduced to equal the actual costs of repaying the Bonds (which amount will include Additional Interest) and actual Annual Collection Costs (as provided for in the definition of such term), taking into consideration any other available funds for these costs, such as interest income on account balances. If the debt service on issued and Outstanding Bonds is reduced as the result of an economic refunding of the Bonds, the Prepayment of the Improvement Area #1 Assessments, or the redemption of the Bonds, then there would be a corresponding reduction in the Improvement Area #1 Assessments and the Improvement Area #1 Annual Installments. See “APPENDIX C – Form of Service and Assessment Plan.” In such case, the reduced Improvement Area #1 Assessment and Improvement Area #1 Annual Installment, as shown on the Improvement Area #1 Assessment Roll, shall be reflected in the next Annual Service Plan Update and approved by City Council. Method of Apportionment of Improvement Area #1 Assessments. For purposes of the Service and Assessment Plan, the City Council has determined that the Improvement Area #1 Assessments shall be initially allocated to the Parcels consisting of the Improvement Area #1 Assessed Property based on the ratio of the Estimated Buildout Value of each Parcel in Improvement Area #1 to the Estimated Buildout Value of all Parcels in Improvement Area #1. Division Prior to Recording of Subdivision Plat. Upon the division of any Improvement Area #1 Assessed Property prior to the recording of a subdivision plat, the Administrator shall reallocate the Improvement Area #1 Assessment for the Improvement Area #1 Assessed Property prior to the division among the newly divided Improvement Area #1 Assessed Properties according to the following formula: A = B x (C ÷ D) Where the terms have the following meanings: A = the Improvement Area #1 Assessment for the newly divided Improvement Area #1 Assessed Property B = the Improvement Area #1 Assessment for the Improvement Area #1 Assessed Property prior to division C = the Estimated Buildout Value of the newly divided Improvement Area #1 Assessed Property 33 D = the sum of the Estimated Buildout Value for all of the newly divided Improvement Area #1 Assessed Properties The calculation of the Improvement Area #1 Assessment of an Improvement Area #1 Assessed Property shall be performed by the Administrator and shall be based on the Estimated Buildout Value of that Improvement Area #1 Assessed Property, relying on information from homebuilders, market studies, appraisals, official public records of the County, and any other relevant information regarding the Improvement Area #1 Assessed Property. The calculation as confirmed by the City Council shall be conclusive and binding. The sum of the Improvement Area #1 Assessments for all newly divided Improvement Area #1 Assessed Properties shall equal the Improvement Area #1 Assessment for the Improvement Area #1 Assessed Property prior to subdivision. The calculation shall be made separately for each newly divided Improvement Area #1 Assessed Property. The reallocation of an Improvement Area #1 Assessment for an Improvement Area #1 Assessed Property that is a homestead under Texas law may not exceed the Improvement Area #1 Assessment prior to the reallocation. Any reallocation shall be reflected in the next Annual Service Plan Update and approved by the City Council. Upon Subdivision by a Recorded Subdivision Plat. Upon the subdivision of any Improvement Area #1 Assessed Property based on a recorded subdivision plat, the Administrator shall reallocate the Improvement Area #1 Assessment for the Improvement Area #1 Assessed Property prior to the subdivision among the new subdivided Lots based on Estimated Buildout Value according to the following formula: A = [B x (C ÷ D)]/E Where the terms have the following meanings: A = the Improvement Area #1 Assessment for the newly subdivided Lot B = the Improvement Area #1 Assessment for the Parcel prior to subdivision C = the sum of the Estimated Buildout Value of all newly subdivided Lots of the same Lot Type D = the sum of the Estimated Buildout Value for all of the newly subdivided Lots excluding Non-Benefitted Property E= the number of newly subdivided Lots of the same Lot Type Prior to the recording of a subdivision plat, the Developer shall provide the City an Estimated Buildout Value for each Lot to be created after recording the subdivision plat as of the date the subdivision plat is anticipated to be recorded. The calculation of the Improvement Area #1 Assessment for a Lot shall be performed by the Administrator and confirmed by the City Council based on Estimated Buildout Value information provided by the Developer, homebuilders, third party consultants, and/or the official public records of the County regarding the Lot. The calculation as confirmed by the City Council shall be conclusive and binding. The sum of the Improvement Area #1 Assessments for all newly subdivided Lots shall not exceed the Improvement Area #1 Assessment for the portion of the Improvement Area #1 Assessed Property subdivided prior to subdivision. The calculation shall be made separately for each newly subdivided Improvement Area #1 Assessed Property. The reallocation of an Improvement Area #1 Assessment for an Improvement Area #1 Assessed Property that is a homestead under Texas law may not exceed the Improvement Area #1 Assessment prior to the reallocation. Any reallocation pursuant 34 to this section shall be reflected in the next Annual Service Plan Update and approved by the City Council. Upon Consolidation. If two or more Lots or Parcels are consolidated into a single Parcel or Lot, the Administrator shall allocate the Improvement Area #1 Assessments against the Lots or Parcels before the consolidation to the consolidated Lot or Parcel, which allocation shall be reflected in the next Annual Service Plan Update and approved by the City Council. The Improvement Area #1 Assessment for any resulting Lot may not exceed the Maximum Assessment for the applicable Lot Type and compliance may require a mandatory prepayment of Improvement Area #1 Assessments. Maximum Assessment. Notwithstanding the foregoing, the Service and Assessment Plan establishes a “Maximum Assessment” for each Lot Type in Improvement Area #1 of the District, which Maximum Assessment is shown in Exhibit E of the Service and Assessment Plan. See “APPENDIX C – Form of Service and Assessment Plan.” Prior to the City approving a final subdivision plat, the Administrator will certify that such plat will not result in the Improvement Area #1 Assessment per Lot for any Lot Type exceeding the Maximum Assessment. If the Administrator determines that the resulting Improvement Area #1 Assessment per Lot for any Lot Type will exceed the Maximum Assessment, then (i) the Improvement Area #1 Assessment applicable to each Lot Type shall each be reduced to the Maximum Assessment, and (ii) the person or entity filing the plat shall pay, as a mandatory prepayment of the Improvement Area #1 Assessment, to the City the amount the Improvement Area #1 Assessment was reduced, plus Prepayment Costs and Delinquent Collection Costs, prior to the City approving the final plat. In addition, if the Improvement Area #1 Assessed Property is transferred to a person or entity that is exempt from payment of the Improvement Area #1 Assessment, the owner transferring the Improvement Area #1 Assessed Property shall pay to the City the full amount of the Improvement Area #1 Assessment, plus Prepayment Costs and Delinquent Collection Costs, prior to the transfer. If the owner of the Improvement Area #1 Assessed Property causes the Improvement Area #1 Assessed Property to become Non-Benefited Property, the owner causing the change in status shall pay to the City the full amount of the Improvement Area #1 Assessment, plus Prepayment Costs and Delinquent Collection Costs, prior to the change in status. For further information about apportionment of the Improvement Area #1 Assessments, See “APPENDIX C – Form of Service and Assessment Plan.” TIRZ No. 7 Annual Credit Amount. Pursuant to the Service and Assessment Plan and the TIRZ No. 7 Ordinance, the City agreed to use the TIRZ No. 7 Annual Credit Amount generated from each Improvement Area #1 Assessed Property to offset a portion of such Parcel’s Improvement Area #1 Annual Installment related to the Improvement Area #1 Improvements. The Improvement Area #1 Annual Installment of the Improvement Area #1 Assessments for each Parcel within Improvement Area #1 will be calculated by taking into consideration any TIRZ No. 7 Annual Credit Amount applicable to such Parcel, as described under “SECURITY FOR THE BONDS – Amount of Assessments May be Reduced by TIRZ No. 7 Annual Credit Amount” and in “APPENDIX C – Form of Service and Assessment Plan.” The TIRZ No. 7 Annual Credit Amount is generated only from ad valorem taxes levied and collected by the City on the Captured Taxable Value on the applicable Parcel in any year. Consequently, the TIRZ No. 7 Annual Credit Amount is generated only if the appraised value of such Parcel in any year is greater than the TIRZ Base Value of such Parcel. See “APPENDIX C – Form of Service and Assessment Plan.” TIRZ NO. 7 REVENUES ARE NOT PLEDGED AS SECURITY FOR THE BONDS. Prepayment of Assessments Pursuant to the PID Act and the Indenture, the owner of any Improvement Area #1 Assessed Property may voluntarily prepay (a “Prepayment”), at any time, all or part of an Improvement Area #1 Assessment levied against such owner’s Improvement Area #1 Assessed Property, together with accrued interest to the date of payment. Upon receipt of such Prepayment, such amounts will be applied towards the redemption or payment of the Bonds. Amounts received at the time of a Prepayment which represent a payment of principal, interest, or penalties on a 35 delinquent installment of an Improvement Area #1 Assessment are not to be considered a Prepayment, but rather are to be treated as payment of regularly scheduled Improvement Area #1 Assessments. Priority of Lien The Improvement Area #1 Assessments or any reassessment, the expense of collection, and reasonable attorney’s fees, if incurred, constitute a first and prior lien against the property assessed, superior to all other liens and claims except liens or claims for the State, county, school district, or municipality ad valorem taxes, and are a personal liability of and charge against the owners of the property regardless of whether the owners are named. The lien is effective from the date of the Assessment Ordinance until the Improvement Area #1 Assessment is paid and may be enforced by the City in the same manner as an ad valorem tax levied against real property may be enforced by the City. The owner of any property assessed may pay the entire Improvement Area #1 Assessment levied against any lot or parcel, together with accrued interest to the date of payment, at any time. Foreclosure Proceedings In the event of delinquency in the payment of any Improvement Area #1 Annual Installment, except for unpaid Improvement Area #1 Assessments on homestead property (unless the lien associated with the assessment attached prior to the date the property became a homestead), the City is empowered to order institution of an action in state district court to foreclose the lien of such delinquent Improvement Area #1 Annual Installment. In such action the real property subject to the delinquent Improvement Area #1 Annual Installments may be sold at judicial foreclosure sale for the amount of such delinquent Improvement Area #1 Annual Installments, plus penalties and interest. Any sale of property for nonpayment of an installment or installments of an Improvement Area #1 Assessment will be subject to the lien established for remaining unpaid installments of the Improvement Area #1 Assessment against such property and such property may again be sold at a judicial foreclosure sale if the purchaser thereof fails to make timely payment of the non-delinquent installments of the Improvement Area #1 Assessments against such property as they become due and payable. Judicial foreclosure proceedings are not mandatory. In the event a foreclosure is necessary, there could be a delay in payments to owners of the Bonds pending prosecution of the foreclosure proceedings and receipt by the City of the proceeds of the foreclosure sale. It is possible that no bid would be received at the foreclosure sale, and in such event there could be an additional delay in payment of the principal of and interest on Bonds or such payment may not be made in full. The City is not required under any circumstance to purchase the property or to pay the delinquent Improvement Area #1 Assessment on the corresponding Improvement Area #1 Assessed Property. In the Indenture, the City will covenant to take and pursue all actions permissible under Applicable Laws to cause the Improvement Area #1 Assessments to be collected and the liens thereof enforced continuously, in the manner and to the maximum extent permitted by Applicable Laws, and to cause no reduction, abatement, or exemption in the Improvement Area #1 Assessments, provided that the City is not required to expend any funds for collection and enforcement of Improvement Area #1 Assessments other than funds on deposit in the Administrative Fund. Pursuant to the Indenture, Foreclosure Proceeds (excluding Delinquent Collection Costs) constitute Pledged Revenues to be deposited into the Pledged Revenue Fund upon receipt by the City and distributed in accordance with the Indenture. See “APPENDIX B – Form of Indenture.” See also “APPENDIX E-1 – Form of Disclosure Agreement of Issuer” for a description of the expected timing of certain events with respect to collection of the delinquent Improvement Area #1 Assessments. In the Indenture, the City creates the Delinquency and Prepayment Reserve Account under the Reserve Fund and will fund such account as provided in the Indenture. The City will not be obligated to fund foreclosure proceedings out of any funds other than in the Administrative Fund. If funds in the Administrative Fund are insufficient to pay foreclosure costs, the owners of the Bonds may be required to pay amounts necessary to continue foreclosure proceedings. See “SECURITY FOR THE BONDS – Reserve Fund (Reserve Account and Delinquency and Prepayment Reserve Account),” “APPENDIX B – Form of Indenture,” and “APPENDIX C – Form of Service and Assessment Plan.” 36 THE CITY Background The City is located in north central Collin County, 40 miles north of Dallas and 12 miles northwest of the City of McKinney. Access to the City is provided by State Highway 121, State Highway 5, US-75, and Farm Road 455. The City covers approximately 15 square miles. Some of the services that the City provides are public safety (police and fire protection), streets, water and sanitary sewer utilities, planning and zoning, and general administrative services. The 2020 Census population for the City was 16,896. The City estimates the population as of January 1, 2026, was 36,935. City Government The City is a political subdivision and municipal corporation of the State, duly organized and existing under the laws of the State, including the City’s Home Rule Charter. The City was incorporated in 1913 and first adopted its Home Rule Charter on May 7, 2005. The City operates under a Council/Manager form of government with a City Council comprised of the Mayor and six Councilmembers elected for staggered three-year terms. The City Manager is the Chief Administrative Officer for the City. The current members of the City Council and principal administrators of the City are listed on page i hereof. For more information regarding the City and surrounding areas, see “APPENDIX A – General Information Regarding the City and Surrounding Areas.” Water and Wastewater The City will provide both water and wastewater service to the District. The City’s existing water and wastewater systems are sufficient to serve all of the property in Improvement Area #1 of the District. The City is currently served by ground water through nine water wells located at five different sites. These nine wells produce a total of 3.4 million gallons per day. The City has a total elevated storage capacity of 1,500,000 gallons of water and five ground storage tanks with total storage capacity of 2,500,000 gallons. In partnership with the cities of Melissa, Van Alstyne, and Howe, Texas, the City is connected to a large diameter water transmission line managed by the Greater Texoma Utility Authority (“GTUA”). The GTUA line provides a connection to the North Texas Municipal Water District’s (“NTMWD”) water distribution system, providing the City with access to treated surface water. This surface water line is part of the City’s long term water supply plan. Currently the City has a maximum allowable take of 5,040 gallons per minute (“gpm”) from the GTUA connection, providing the City with a maximum peak flow of treated water supply of 6,706 gpm. Both GTUA and the City are working on capital projects which will increase the maximum treated water supply and storage. GTUA expanded its Bloomdale Pump Station vault, which increased the GTUA total maximum flow to over 9,000 gpm. The City has completed an expansion of its Collin Pump Station site, which brought the existing 1- million-gallon ground storage tank and new pumps online with adjacent wells to maximize storage and flow. The City is currently constructing a 4-million-gallon ground storage tank at the Collin Pump Station site to further increase storage capacity to a total of 6.5 million gallons. Additional water system expansion projects are identified in the City’s capital improvement plan and the GTUA/CGMA capital improvement plan. A development agreement applicable to a development on the east side of the City requires the dedication to the City of a 1.5-3 acre site to be used as a site for a water tower and/or a fire station. The site will be dedicated to the City in 2026 and, assuming it is used for a water tower, will increase storage capacity by 3 million gallons. The City’s sanitary sewer system consists of seven lift stations and two wastewater treatment facilities, being the John R. Geren (Slayter Creek) Wastewater Treatment Plant on the east side of US 75 and the newly constructed Hurricane Creek Regional Wastewater Treatment Plant on the west side of US 75. In addition, the City 37 has two large diameter sewer transmission lines that transport wastewater directly into the NTMWD’s wastewater system to the South (Wilson Creek plant). The Slayter Creek Wastewater Treatment Plant is located on Slayter Creek, just north of the confluence of Slayter Creek and Throckmorton Creek. The total treatment capacity of the City’s facility is approximately 0.50 million gallons per day (“gpd”). A portion of the NTMWD regional sewer is located along Throckmorton Creek, in the south-central part of the City and the other is located near Clemmons Creek in the southeastern part of the City. The Slayter Creek Wastewater Treatment Plant is currently near capacity. The transmission lines will soon be near capacity. The City recently completed the Slayter Creek Interceptor Sewer project which now conveys wastewater flows in excess of the Slayter Creek Wastewater Treatment capacity to the NTMWD regional wastewater system. A sewer lift station and force main will be constructed to take flows west to Slayter Creek. The City recently completed the initial phase of a new Hurricane Creek Regional Wastewater Treatment Plant (“Hurricane Creek”), which will significantly expand the City’s ability to collect and treat wastewater required for new development west of US 75. The temporary treatment plant has been operational since March 2025 and can treat up to 0.5 mgd while the remaining phases are finished. In July 2025, the City issued certificates of obligation to fund the first expansion of the plant to increase the expected treatment capacity to 2 mgd of wastewater. The City intends to issue additional certificates of obligation in the fall of 2026 to fund the expansion of the treatment capacity of the plant to approximately 4 mgd, with plans to gradually expand the plant’s treatment capacity to 16 mgd. The City will use the new Hurricane Creek plant to treat wastewater for its own residents as well as provide wholesale treatment for the cities of Van Alstyne and Weston and various water districts in the area. THE DISTRICT General The PID Act authorizes municipalities, such as the City, to create public improvement districts within their boundaries or extraterritorial jurisdiction, and to impose assessments within the public improvement district to pay for certain improvements. The District was created by Resolution No. 2025-123-1868 of the City adopted on December 7, 2025 (the “Creation Resolution”), for the purpose of undertaking and financing the cost of certain public improvements within the District, including the Improvement Area #1 Improvements, authorized by the PID Act and approved by the City Council that confer a special benefit on the District property being developed. The District is not a separate political subdivision of the State and is governed by the City Council. A map of the property within the District is included on page v hereof. Powers and Authority Pursuant to the PID Act, the City may establish and create the District and undertake, or reimburse a developer for the costs of, improvement projects that confer a special benefit on property located within the District, whether located within the City limits or the City’s extraterritorial jurisdiction. The PID Act provides that the City may levy and collect assessments on property in the District, or portions thereof, payable in periodic installments based on the benefit conferred by an improvement project to pay all or part of its cost. Pursuant to the PID Act and the Creation Resolution, the City has the power to undertake, or reimburse a developer for the costs of, the financing, acquisition, construction, or improvement of the Improvement Area #1 Improvements. See “THE IMPROVEMENT AREA #1 IMPROVEMENTS.” Pursuant to the authority granted by the PID Act and the Creation Resolution, the City has determined to undertake the construction, acquisition, or purchase of the Improvement Area #1 Improvements and to finance a portion of the costs thereof through the issuance of the Bonds. The City has further determined to provide for the payment of debt service on the Bonds through Pledged Revenues and other assets comprising the Trust Estate. See “ASSESSMENT PROCEDURES” and “APPENDIX C – Form of Service and Assessment Plan.” THE REMAINDER OF THIS PAGE IS LEFT BLANK INTENTIONALLY. 38 THE IMPROVEMENT AREA #1 IMPROVEMENTS General The Improvement Area #1 Improvements will be dedicated to the City. Pursuant to the Development Agreement, the Developer is responsible for the completion of the construction, acquisition, or purchase of the Improvement Area #1 Improvements. Pursuant to the CFA Agreement and the Indenture, the City will reimburse the Developer for a portion of the Actual Costs of the Improvement Area #1 Improvements from proceeds of the Bonds. See “THE DEVELOPMENT – Development Plan.” The Improvement Area #1 Improvements, a portion of which are being financed with proceeds of the Bonds, include street, water, sewer, storm drainage, right of way, and soft costs benefitting only Improvement Area #1 Assessed Property, as described below. Streets: Street improvements consist of residential streets, collector streets, and a divided collector street which provide a benefit to Improvement Area #1 and include subgrade stabilization, concrete and reinforcing steel or roadways, testing, handicapped ramps, sidewalks, barricades, platting, staking, streetlights, related signage, lighting, excavation, embankment, erosion controls, and re-vegetation of all disturbed areas within the right-of-way. Water: Water improvements consist of 8” PVC. Improvements include trench excavation and embedment, trench safety, PVC piping, PVC encasement, valves, fire hydrants, service connections, testing, related earthwork, excavation, erosion control, and all necessary appurtenances required to provide water service to all Lots within Improvement Area #1. Sewer: Sewer improvements consist of 8” and 12” PVC. Improvements include trench excavation and embedment, trench safety, PVC piping, cleanouts, manholes, service connections, testing, related earthwork, excavation, erosion control, and all necessary appurtenances required to provided wastewater service to all Lots within Improvement Area #1. Drainage: Drainage improvements include curb and drop inlets, RCP piping and RCB culverts, manholes, headwalls, concrete flumes, rock rip rap, retention pond, and testing as well as all related earthwork, excavation, erosion control, and all necessary appurtenances required to provide storm drainage for all Lots within Improvement Area #1. Right of Way Acquisition: Includes right-of-way required to provide street improvements for all Lots within Improvement Area #1. District Formation Costs: Costs associated with forming the District, including, but not limited to, attorney fees, engineering fees, and any other cost or expense incurred by the City or the Developer directly associated with the establishment of the District. Soft Costs: Costs related to designing, constructing, and installing the Improvement Area #1 Improvements, including land planning and design, City fees, engineering, soil testing, survey, construction management, contingency, legal fees, appraisal fees, and consultant fees. The total cost of the Improvement Area #1 Improvements is expected to be approximately $14,115,068*. Proceeds of the Bonds in the approximate amount of $13,733,022* are expected to be used to pay the Developer for a portion of such costs. The remaining costs in the approximate amount of $382,046* will be paid by the Developer, without reimbursement by the City. As of May 31, 2026, the Developer has spent approximately $____________ on costs of the construction of the Improvement Area #1 Improvements using cash on hand and proceeds of the Development Loan. * Preliminary, subject to change. 39 See “SOURCES AND USES OF FUNDS,” “THE IMPROVEMENT AREA #1 IMPROVEMENTS,” “THE DEVELOPMENT – Amenities and Private Improvements,” and “APPENDIX C – Form of Service and Assessment Plan.” The following table reflects the estimated total costs of the Improvement Area #1 Improvements. Type of Improvement Area #1 Improvement Costs Streets $3,062,756 Wate 1,049,869 Sewe 1,413,936 Draina e 1,595,746 Landscapin 657,282 Ri ht of Wa Acquisition 1,500,000 Soft Costs 4,835,480 Total $14,115,068 Ownership and Maintenance of Improvement Area #1 Improvements The Improvement Area #1 Improvements will be dedicated to and accepted by the City and will constitute a portion of the City’s infrastructure improvements. The City will provide for the ongoing operation, maintenance, and repair of the Improvement Area #1 Improvements constructed and conveyed, as outlined in the Service and Assessment Plan. THE IMPROVEMENT AREA #1 MAJOR IMPROVEMENTS The Improvement Area #1 Major Improvements include the following public improvements, the costs of which are expected to be reimbursed to the Developer from impact fees collected within the District pursuant to the Eligible Infrastructure Grant 380 Agreement. See “THE DEVELOPMENT – Payment of Costs of the Improvement Area #1 Major Improvements” and “APPENDIX F – Development Agreement.” Street. Portion of Mantua Parkway from the southbound US 75 service road to the western boundary of Phases 3 and 4, as depicted on Exhibit I to the Liberty Hills Development Agreement. Water. Major off-site water lines, as depicted on Exhibit H-2 to the Liberty Hills Development Agreement, and related easements. Drainage. [Drainage improvements constructed in connection with Mantua Parkway.] Landscaping. [Landscaping improvements along Mantua Parkway.] Soft Costs. Costs related to designing, constructing, and installing the Improvement Area #1 Major Improvements, including land planning and design, City fees, engineering, soil testing, survey, construction management, contingency, legal fees, and consultant fees. The total cost of the Improvement Area #1 Major Improvements is expected to be approximately $21,958,924. As of May 31, 2026, the Developer has spent approximately $ on the costs of construction of the Improvement Area #1 Major Improvements using cash on hand and the Development Loan. 40 The following table reflects the expected costs of the Improvement Area #1 Major Improvements. T pe of Improvement Area #1 Ma or Improvemen Expected Cos Stree $ 14,115,132 Wate 2,461,898 Draina e 1,086,295 Landscapin 44,000 Soft Costs 4,251,600 Total $21,958,924 Source: The Developer Ownership and Maintenance of Improvement Area #1 Major Improvements The Improvement Area #1 Major Improvements will be dedicated to and accepted by the City and will constitute a portion of the City’s infrastructure improvements. The City will provide for the ongoing operation, maintenance, and repair of the Improvement Area #1 Major Improvements constructed and conveyed. THE DEVELOPMENT The following information has been provided by the Developer. Certain of the following information is beyond the direct knowledge of the City, the City’s Municipal Advisor, and the Underwriter, and none of the City, the City’s Municipal Advisor, or the Underwriter have any way of guaranteeing the accuracy of such information. Development Plan The District is expected to be an approximately 405-acre master-planned community developed by the Developer. The Developer owns approximately 303 acres of land in the District, including all of the land in Improvement Area #1, and approximately 206 acres in the Future Improvement Area of the District. The Thornton Family Trust owns approximately 103 acres of land in the District, all of which is located in the Future Improvement Area. Veritas is expected to purchase the remaining approximately 103 acres of land within the District from the Thornton Family Trust at a price of $80,000 per acre pursuant to the Thornton PSA. Closing of such purchase is expected to occur by January 31, 2027. See “THE DEVELOPER – History and Financing of the District – Property Acquisition and Thornton PSA.” The Developer expects to develop the District in ten phases, as shown in the Concept Plan on page v, to include a total of approximately 1,412 single-family residential lots, in a mix of 40’, 50’, 60’, and 70’ front footages, as well as two amenity centers and other amenities throughout the District. See “– Amenities and Private Improvements” and “– Development Agreement.” The Developer began development of Improvement Area #1 in the first quarter of 2026 and expects it to be completed in April 2027. See “THE IMPROVEMENT AREA #1 IMPROVEMENTS,” “– Expected Build-out, Absorption, and Home Prices in the District,” and “APPENDIX C – Form of Service and Assessment Plan.” Lot Purchase and Sale Agreements Improvement Area #1 is expected to include 244 single-family residential lots, as follows: Lot Size Improvement Area #1 40’ 39 50’ 125 60’ 77 70’ 3 Total 244 41 Pursuant to the Lot Purchase and Sale Agreements, the Developer has 224 of the 244 lots in Improvement Area #1 under contract with the Homebuilders, with the remaining 20 lots being held back by the Developer for model home lots for builders in the Future Improvement Area. The Lot Purchase Agreements also provide for the purchase by the Homebuilders of all 115 lots planned for development in phase 5A in the Future Improvement Area. The Homebuilders have made combined Earnest Money Deposits in the total amount of $8,517,510. The Earnest Money Deposits are secured by earnest money deeds of trust secured, in part, by all land within Improvement Area #1, which are subordinate to the deed of trust securing the Development Loan. The Earnest Money Deposits will be credited towards the purchase prices at lot closings. There are circumstances described in the Lot Purchase and Sale Agreements the occurrence of which may result in the termination of such agreements. The Developer expects to complete sales of lots to the Homebuilders in Improvement Area #1 in the fourth quarter of 2028. The Developer expects the Homebuilders will commence construction of homes in the second quarter of 2027. See “– Expected Buildout, Absorption, and Home Prices in the District.” The following table reflects the terms of the Lot Purchase and Sale Agreements with the Homebuilders, which provide for the purchase of all lots in Improvement Area #1 and planned phase 5A in the Future Improvement Area. Purchaser/Contracted Lots Purchase Price Fees Takedown Schedule William Ryan Improvement Area #1 Phase 3 33 x 50’ lots 25 x 60’ lots Phase 4 27 x 50’ lots 11 x 60’ lots (includes 1 50’ and 1 60’ model) Future Improvement Area Phase 5A 23 x 50’ lots 17 x 60’ lots $2,600/FF for 50’ lots $2,550/FF for 60’ lots (7% annual escalator) $5,000 Amenity/Marketing Fee $300 Mowing Fee $60/ft fence reimbursement fee for any perimeter lot • 12 x 50’ lots and 8 x 60’ lots at initial closing • 9 x 50’ lots and 6 x 60’ lots every 90 days thereafter for next 7 closings • 8 x 50’ lots and 3 x 60’ for final closing Weekley Improvement Area #1 Phase 3 33 x 40’ lots 24 x 60’ lots Phase 4 1 x 40’ lot (model) 11 x 60’ lots Future Improvement Area Phase 5A 35 x 40’ lots 17 x 60’ lots $2,650/FF for 40’ lots $2,550/FF for 60’ lots (7% annual escalator) $5,000 Amenity/Marketing Fee $300 Mowing Fee $60/ft fence reimbursement fee for any perimeter lot • 10 x 40’ lots and 8 x 60’ lots at initial closing • 10 x 40’ lots and 6 x 60’ lots every 90 days thereafter for next 5 closings • 9 x 40’ lots and 6 x 60’ lots 90 days thereafter for 6th subsequent closing • 6 x 60’ lots 90 days thereafter for 7th subsequent closing • 2 x 60’ lots 90 days thereafter for 8th subsequent closing Sandlin Improvement Area #1 $2,600/FF for 50’ lots (7% annual escalator) $5,000 Amenit /Marketin • 12 x 50’ lots at initial closing 42 Phase 3 33 x 50’ lots Phase 4 26 x 50’ lots (includes one model lot) Future Improvement Area Phase 5A 23 x 50’ lots Fee $60/ft fence reimbursement fee for any perimeter lot • 9 x 50’ lots every 90 days thereafter for next 7 closings • 7 x 50’ lots 90 days thereafter for 8th subsequent closing The expected schedule for sale of lots to the Homebuilders pursuant to the Lot Purchase and Sale Agreements are shown in the following table. Expected Absorption of Lots to Homebuilders by Lot Type in Improvement Area #1 Expected Sale Date 40’ Lo 50’ Lo 60’ Lo 70’ Lo Total Lots 2027 30 60 40 0 130 2028 4 59 31 0 94 2029 0 0 0 0 0 2030 0 0 0 0 0 2031 0 0 0 0 0 2032 (1) 5 6 6 3 20 39 125 77 3 244 (1) Absorption for model home lots held back by the Developer. The Developer’s expectations regarding absorption of homes in Improvement Area #1 are shown in the following table: Expected Absorption of Homes to Homeowners by Lot Type in Improvement Area #1 Expected Sale Date 40’ Lo 50’ Lo 60’ Lo 70’ Lo Total Lots 2027 20 42 28 0 90 2028 14 72 43 0 129 2029 0 5 0 0 5 2030 0 0 0 0 0 2031 0 0 0 0 0 2032 (1) 5 6 6 3 20 39 125 77 3 244 (1) Absorption for model home lots held back by the Developer. THE REMAINDER OF THIS PAGE IS LEFT BLANK INTENTIONALLY. 43 Expected Buildout, Absorption, and Home Prices in the District The following table reflects the Developer’s expectations with respect to the timing of lot buildout and absorption in the District. Expected Buildout and Absorption of Lots in the District Lot Size Number of Lots Expected Infrastructure Completion Date Expected Initial Sale Date of Single-Family Lots to Homebuilders Expected Final Sale Date of Single-Family Lots to Homebuilders Expected Initial Sale Date of Single- Family Homes to Homeowners Improvement Area #1 Phase 3 40’, 50’, 60’ 148 April 2027 Q2 2027 Q3 2028 (1) Q3 2027 Phase 4 40’, 50’, 60’, 70’ 96 April 2027 Q2 2028 Q3 2028 (1) Q3 2027 Future Improvement Area Phase 5A 40’, 50’, 60’ 115 Q3 2028 Q3 2028 Q2 2029 Q4 2028 Phase 5B 40’, 50’, 60’ 115 Q2 2029 Q2 2029 Q1 2030 Q3 2029 Phase 6 50’, 60’ 93 Q4 2029 Q4 2029 Q2 2030 Q1 2030 Phase 7 40’, 50’, 60’ 145 Q2 2030 Q2 2030 Q1 2031 Q3 2030 Phase 8 40’, 50’, 60’ 137 Q2 2031 Q2 2031 Q3 2032 Q3 2031 Phase 9 50’, 60’ 117 Q4 2031 Q4 2031 Q3 2032 Q1 2032 Phase 10 40’, 50’ 198 Q3 2028 Q3 2028 Q4 2029 Q3 2028 Phase 11 40’, 50’ 248 Q4 2029 Q4 2029 Q1 2031 Q1 2030 1,412 (1) Excludes 20 lots held back by the Developer for model home lots for homebuilders in the Future Improvement Area. THE REMAINDER OF THIS PAGE IS LEFT BLANK INTENTIONALLY. 44 The following table reflects the Developer’s expectations regarding base lot prices and home prices in the District. Improvement Area/Phase Lot Size Number of Lots Expected Base Lot Price Expected Home Price Improvement Area #1 Phase 3 40’ 33 $106,000 $460,000 50’ 66 $130,000 $550,000 60’ 49 $153,000 $625,000 Phase 4 40’ 6 $106,000 $460,000 50’ 59 $130,000 $550,000 60’ 28 $153,000 $625,000 70’ 3 $180,000 $675,000 Future Improvement Area Phase 5A 40’ 36 $106,000 $460,000 50’ 45 $130,000 $550,000 60’ 34 $153,000 $625,000 Phase 5B 40’ 46 $115,000 $500,000 50’ 42 $140,000 $590,000 60’ 27 $163,000 $660,000 Phase 6 50’ 53 $140,000 $590,000 60’ 40 $163,000 $660,000 Phase 7 40’ 46 $115,000 $500,000 50’ 84 $140,000 $590,000 60’ 15 $163,000 $660,000 Phase 8 40’ 71 $125,000 $540,000 50’ 40 $150,000 $630,000 60’ 26 $173,000 $700,000 Phase 9 50’ 79 $150,000 $630,000 60’ 38 $173,000 $700,000 Phase 10 40’ 81 $106,000 $460,000 50’ 117 $130,000 $550,000 Phase 11 40’ 172 $106,000 $460,000 50’ 76 $130,000 $550,000 1,412 Amenities and Private Improvements In addition to the Improvement Area #1 Improvements, the Development Agreement obligates the Developer to construct certain amenities (collectively, the Amenities”), as follows: • Swimming pool (minimum 1,000 square foot surface areas) with cooling deck (minimum ten feet wide in all areas); • Jacuzzi or hot tub area (minimum 50 square foot area); • At least four barbeque grills or one grill per 100 units, whichever is greater, with shaded seating areas; • Ramada(s), arbor(s), and/or trellis(es) covering at least 400 square feet of recreation space; • Child play lot (minimum 1,000 square foot area); 45 • A splash pad (water play amenity for children) that is a minimum of 1,000 square feet; • A dog park that is at least 2,500 square feet with waste station and waste receptacles; • Regulation-size volleyball, basketball, tennis, or similarly related playing court; • Golf putting green (minimum 1,000 square feet); • Fitness center/weight room (minimum 500 square feet); • Business center (minimum 500 square feet); and • Media room (minimum 500 square feet). The Liberty Hills Development Agreement requires the construction of two amenity centers within the property covered by the Liberty Hills Development Agreement (the “Project”), including property outside the boundaries of the District. The first amenity center must be constructed before the 350th building permit for the Project is issued, and the City may thereafter withhold additional building permits until the first amenity center is constructed. The second amenity center shall be constructed before the 1,000th building permit for the Project is issued, and the City may thereafter withhold additional building permits until the second amenity center is constructed. The Developer expects to meet such timelines. The Amenities will be owned, operated, and maintained by the HOA. The HOA will provide for the ongoing operation, maintenance, and repair of the Amenities through the administration of a property owner’s association fee to be paid by each lot owner within the District. See “OVERLAPPING TAXES AND DEBT – Homeowners’ Association Dues.” The Developer expects to construct two amenity centers in the District, with construction of the first amenity center starting at or around the completion of Improvement Area #1 (“Amenity Center #1”). Amenity Center #1 is expected to include a pool, playgrounds, bathroom facility, trails around open spaces, and fishing dock in pond. The expected cost of Amenity Center #1 is approximately $3,500,000, which is expected to be funded with the Development Loan. Amenity Center #1 is expected to be completed in the second quarter 2028. In addition, the Developer is responsible for paying, without reimbursement by the City, for costs of excavation, retaining walls, and landscaping (the “Private Improvements”). The Private Improvements are expected to cost approximately $4,752,478 and be funded by the Development Loan. The Private Improvements will be owned, operated, and maintained by the HOA. Future Improvement Area Bonds The Developer expects to request the City to issue Future Improvement Area Bonds to finance the costs of the public improvements benefitting the Future Improvement Area. The estimated costs of the public improvements benefitting the Future Improvement Area will be determined as development progresses, and the Service and Assessment Plan will be updated accordingly. Such Future Improvement Area Bonds will be secured by separate assessments levied pursuant to the PID Act on assessable property within the Future Improvement Area. The Developer anticipates that Future Improvement Area Bonds will be issued over a six-year period. The Bonds and any Future Improvement Area Bonds issued by the City are separate and distinct issues of securities. The City reserves the right to issue Future Improvement Area Bonds for any purpose permitted by the PID Act, including those described above. Development Agreement In addition to development of the District, the Liberty Hills Development Agreement governs development of additional property owned by the Developer expected to be located in separate public improvement district, property located in Liberty Hills PID No. 1 which is being developed by PH Land Holdings, LLC (“Perry Homes”), LH Residential Development, LLC (a Grand Homes affiliated entity), and SH Dev Liberty Hills Anna, LLC (a Shaddock Homes affiliated entity), and additional commercially zoned tracts located east and west of US 75 not owned or being developed by the Developer. 46 Pursuant to the Development Agreement, the Developer has the right to construct public improvements for the District, including the Improvement Area #1 Improvements, according to certain rules and regulations of the City, and to be reimbursed for a portion of the costs of such construction through the proceeds of assessments and/or PID Bonds (defined below). The Development Agreement provides certain requirements to be met for the issuance of the Bonds and any additional bonds issued for the payment of additional Authorized Improvements (defined in the Development Agreement and the PID Act) (collectively, “PID Bonds”), including (i) the maximum equivalent tax rate, including the PID Assessments associated with the PID Bonds and all overlapping taxing jurisdictions, may not exceed $1.35 per $100 taxable assessed valuation without prior written consent of the City; and (ii) the ratio of the appraised value of the property being financed, as confirmed by an independent appraisal, to the par amount of the PID Bonds proposed to be issued with respect to such property must be at least 2:1, unless a lower ratio is approved by the City. See “APPENDIX F – Development Agreement.” In addition to construction of the Improvement Area #1 Improvements, the Development Agreement obligates the Developer to construct the Major Improvements and the Amenities. See “– Amenities and Private Improvements” and “APPENDIX F – Development Agreement.” The Development Agreement obligates the City to construct certain water and sewer infrastructure as described below. See “THE CITY – Water and Wastewater.” • The City will construct, at its cost, off-site sewer trunk lines (the “Off-Site Sewer Trunk Lines”). The Developer was required to acquire any necessary easements for the Off-Site Sewer Trunk Lines (the “Trunk Line Easements”). The Trunk Line Easements have been acquired, and the City expects to complete the portion of the Off-Site Sewer Trunk Lines to serve the property in the District in July 2026. • The City shall construct, at its cost, a stub sewer line to connect to the southern boundary of the residential property in the District (the “City Stub Line”) prior to the initial Phase of the Development (“Phase 1”) being complete. If the City does not complete the City Stub Line prior to the completion of Phase 1 of the Project and/or the City does not complete the Off-Site Sewer Trunk Lines by April 1, 2026, the City is required to provide pump and haul service at its cost until such time as the City Stub Line is complete or the Off-Site Sewer Trunk Lines are complete, as applicable, and shall approve plats and allow the issuance of building permits in the Project. Construction of the Off-Site Sewer Trunk Lines did not meet the April 1, 2026 deadline; however, the Off-Site Sewer Trunk Lines are expected to be completed in sufficient time to provide service to Improvement Area #1. Pursuant to the Development Agreement, the Developer shall construct certain major infrastructure improvements, all of which constitute the Major Improvements: • The Developer shall construct the three lane portion of the roadway identified as Mantua Parkway immediately adjacent to the Property, including any applicable bridges necessary for such three lane portion (such roadway and bridges, the “Mantua Parkway Road Improvements”). • The Developer shall construct its portion of Standridge Boulevard consisting of a 4-lane divided roadway consisting of 12-foot-wide concrete lanes in a 90-foot-wide right-of-way from Rosamond Parkway to Mantua Parkway (“Standridge Boulevard”). • The Developer shall construct certain major water lines (the “Major Water Lines”) as set forth in the Development Agreement and acquire the necessary easements for such Major Water Lines (the “Major Water Line Easements”). The Developer has acquired the Major Water Line Easements. The Development Agreement provides that the City shall initially collect certain City PID Fees ($3,400 per lot) at the time of issuance of any PID Bonds issued to fund infrastructure relating to the Project and that fifty percent (50%) of the City PID Fees collected by the City (the “PID Fee Contribution”) shall be placed in a separate and identifiable interest-bearing account held by the City (the “City PID Fee Account”) and used to reimburse the Developer in an amount up to the actual cost to design and construct Standridge Boulevard and the Mantua Parkway Road Improvements to the extent such costs have not been paid pursuant to the Eligible Infrastructure Grant. If the Developer completes the required extensions of Standridge Boulevard by December 31, 2029, the amount of the City PID Fee will be reduced to $1,700 per lot. 47 In addition, the Development Agreement provides that the City will provide the Developer a grant (the “Eligible Infrastructure Grant”) to reimburse the Developer for the costs of the Mantua Parkway Road Improvements, Standridge Boulevard, the Major Water Lines, the Major Water Line Easements, and the Trunk Line Easements (collectively, the “Eligible Infrastructure”) in an amount up to the same amount of the total impact fees collected from all portions of the Property covered by the Development Agreement (except impact fees collected on commercial acreage east of US 75) to the extent the costs of such Eligible Infrastructure are not reimbursed or otherwise funded by the PID Fee Contribution described above. See “– Payment of Costs of the Improvement Area #1 Major Improvements” below. It is expected that a portion of Standridge Boulevard will be constructed by Perry Homes in connection with its development of Liberty Hills PID No. 1; however, Perry Homes has assigned its rights to reimbursement from the Eligible Infrastructure Grant and the PID Fee Contribution to the Developer. In the Development Agreement, the City also agreed to create TIRZ No. 7 and dedicate the TIRZ No. 7 Annual Credit Amount on a lot for a period of up to 30 years from the date the Improvement Area #1 Assessments are levied to reduce the amount of the Improvement Area #1 Assessments levied on property within TIRZ No. 7. See “SECURITY FOR THE BONDS – Amount of Assessments May be Reduced by TIRZ No. 7 Annual Credit Amount.” Payment of Costs of the Improvement Area #1 Major Improvements The Developer and the City have entered into the Liberty Hills Economic Development Agreement, effective as of December 9, 2025 (the “Eligible Infrastructure Grant 380 Agreement”), which sets forth the terms pursuant to which the City will provide the Eligible Infrastructure Grant for reimbursement of eligible infrastructure, which may include costs of the Improvement Area #1 Major Improvements, to be funded with impact fees collected within the District. Reimbursements pursuant to the Eligible Infrastructure Grant 380 Agreement shall be payable to the Developer on a quarterly basis after the City’s approval of the submission of evidence of costs of the eligible infrastructure. The costs of the Improvement Area #1 Major Improvements are expected to be approximately $21,958,924. As of May 31, 2026, the Developer has spent approximately $ on such costs from cash on hand and proceeds of the Development Loan. See “THE IMPROVEMENT AREA #1 MAJOR IMPROVEMENTS,” and “– Development Agreement.” In the future, the Developer may assign or sell its rights under the Eligible Infrastructure Grant 380 Agreement relating to the portion of the Eligible Infrastructure Grant to provide additional funds to fund development in the District. CFA Agreement The City and the Developer expect to enter into the CFA Agreement, effective June 23, 2026, which will provide, in part, for the deposit of a portion of the proceeds of the Bonds for payment of costs of the Improvement Area #1 Improvements, and other matters related thereto. Pursuant to the CFA Agreement, the Developer is responsible for overseeing the construction and development of the Improvement Area #1 Improvements in accordance with the Development Agreement and the CFA Agreement. The City’s obligation to pay or reimburse the Developer for the costs of the Improvement Area #1 Improvements is limited to the lesser of the Actual Costs or Budgeted Costs, and any Cost Overruns (as each of such terms are defined in the CFA Agreement) are the Developer’s responsibility. See “APPENDIX G – Form of CFA Agreement.” Zoning/Permitting The District is currently zoned as a planned development district pursuant to Ordinance No. 1137-2025-02 adopted by the City Council on February 25, 2025, [as amended by Ordinance No. -2026-03] (the “PDD Ordinance”). The PDD Ordinance allows certain restricted commercial, multi-use, multifamily residential, single- family residential, and single-family residential zero lot line uses and establishes guidelines pertaining to purpose, height, area, setbacks, aesthetics, landscaping, and use. Because the District lies within the city limits of the City, the City’s zoning and subdivision regulations control the aspects of development not specifically set forth in the PDD Ordinance or the Development Agreement. 48 Education Students in the District will attend schools in Anna ISD which encompasses 64 square miles. Anna ISD serves the City and other portions of Collin County. Anna ISD enrolls more than 6,000 students in one high school, two middle schools, four elementary schools, and one special programs center. Students in the District will attend Sue Evelyn Rattan Elementary School (5 miles from the District), Clemons Creek Middle School (8 miles from the District), and Anna High School (6 miles from the District). According to the Texas Education Agency (“TEA”), Anna ISD, Sue Evelyn Rattan Elementary School, and Clemons Creek Middle School each received an accountability rating of “C” and Anna High School received an accountability rating of “A” from the TEA for the 2024-2025 school year. Greatschools.org rates Anna High School a 5/10, Clemons Creek Middle School a 4/10, and Sue Evelyn Rattan Elementary School a 7/10. Environmental Phase One Environmental Site Assessments (the “Phase One ESAs”) of property in the District, each dated December 11, 2025, were completed by Kimley Horn and Associates, Inc. (the “Reports”). According to the Reports, no recognized environmental conditions, controlled recognized environmental conditions, or significant data gaps were revealed in connection with such property. According to the website for the Texas Parks and Wildlife Department, the whooping crane is a federally recognized endangered species and the rufa red knot, piping plover, and black rail are federally recognized threatened species in Collin County. The Developer is not aware of any endangered or threatened species located on property within the District. Existing Mineral Rights and Other Third-Party Property Rights There are certain mineral rights reservations of prior owners of real property within the Property (the “Mineral Owners”) pursuant to one or more deeds in the chain of title for the Property. While there is currently no drilling or exploration of minerals, the Developer cannot predict whether the Mineral Owners will take new action in the future to explore or develop the above-described mineral rights. The Developer is not aware of any real property (including mineral rights) owned by the Mineral Owners adjacent to the District. Certain rules and regulations of the Texas Railroad Commission may restrict the ability of the Mineral Owners to explore or develop the property due to well density, acreage, or location issues. Although the Developer does not expect the rights of the Mineral Owners to have a material adverse effect on the Development, the property within the District, or the ability of landowners within the District to pay Improvement Area #1 Assessments, the Developer makes no guarantee as to such expectation. See “BONDHOLDERS’ RISKS – Exercise of Third-Party Property Rights.” Flood Zone According to the Federal Emergency Management Agency (“FEMA”) Flood Insurance Rate Map (“FIRM”) Community Panel numbers 48085C0155J and 48085C0065J (June 2, 2009), approximately 8.137 acres in Improvement Area #1 lies in the 100-year floodplain. Such land is expected to be used for open space. Utilities Water and Wastewater. The City will provide both water and wastewater service to the District. The City’s water distribution system and wastewater collection and treatment system currently have sufficient capacity to provide water and wastewater service to Improvement Area #1 of the District. See “THE CITY – Water and Wastewater.” Other Utilities. The Developer expects additional utilities to be provided by: (1) Phone/Data/Cable – AT&T; (2) Electric – Grayson Collin Electric Cooperative; and (3) Natural Gas – Atmos Energy. 49 THE DEVELOPER The following information has been provided by the Developer. Certain of the following information is beyond the direct knowledge of the City, the City’s Municipal Advisor, and the Underwriter, and none of the City, the City’s Municipal Advisor, or the Underwriter have any way of guaranteeing the accuracy of such information. General In general, the activities of a developer in a development such as the District include purchasing the land, designing the subdivision, including the utilities and streets to be installed and any community facilities to be built, defining a marketing program and building schedule, 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, as well as telephone and electric service) and selling improved lots and commercial reserves, if any, to builders, developers, or other third parties. The relative success or failure of a developer to perform such activities within a development may have a material effect on the security of revenue bonds, such as the Bonds, issued by a municipality for a public improvement district. A developer is generally under no obligation to a public improvement district, such as the District, to develop the property which it owns in a development. Furthermore, there is no restriction on the developer’s right to sell any or all of the land which the developer owns within a development. In addition, a developer is ordinarily the major tax and assessment payer within a district during its development. Description of the Developer The Developer was created to own and manage development of the property in the District. Under the Developer’s company agreement, the Developer has the duty and obligation to, among other things, develop, manage, operate, and maintain the property within the District as it is purchased. The Developer is a Texas limited liability company, the primary assets of which are approximately 411 acres of real property in the City, including approximately 303 acres in the District. The Developer will have no source of funds with which to pay Improvement Area #1 Assessments or taxes levied by the City or any other taxing entity other than funds resulting from the sale of lots within Improvement Area #1, reimbursements from the City pursuant to the CFA Agreement, contributions from its equity partners, and third-party banking sources. The Developer’s ability to make full and timely payments of Improvement Area #1 Assessments will directly affect the City’s ability to meet its obligation to make payments on the Bonds. The members of the Developer are [(i) Ryan Building Group, Inc., an Illinois corporation, with 83% ownership, (ii) four trusts and one individual with a combined 17% ownership, and (iii) Veritas as the carry member with 0% ownership]. Ryan Building Group, Inc., is an affiliate corporate entity of William Ryan Homes. The manager of the Developer is Veritas. Kevin Lazares is the managing member of Veritas. Description of Past and Current Projects of the Developer Principals The following is a brief sampling of past and current development projects of the executive team of the Developer: Name of Project Location Description (SF, MF, Commercial) Status of Development Eagle Creek Denton, TX SF 80% built out – 757 lots Trails of Elizabeth Creek Fort Worth, TX SF Built out – 1181 lots Watersbend Fort Worth, TX SF Built out – 763 lots Saddleside Ponder, TX SF Phase 1 under development – 1,275 lots Hickory Grove Denton, TX SF 30% built out – 1500 lots 50 Executive Biographies Kevin Lazares, Co-Founder, Managing Member, President. Kevin Lazares serves as Co-Founder, Managing Member, and President of Veritas. Kevin brings over a decade of industry experience to Veritas, most recently serving as Dallas–Fort Worth Division President of Forestar (USA) Group Inc. (“Forestar”) for six and a half years. While at Forestar, Kevin grew the team to 18 employees and increased the division pre-tax income from $9 million to $26 million in four years. Prior to Forestar, Kevin served in various land acquisition and development roles at Lennar and CalAtlantic Homes. Kevin holds a BBA in Real Estate Finance from Southern Methodist University. Ryan Gaughan, Co-Founder, Vice President of Land Acquisition. Ryan Gaughan serves as Vice President of Land Acquisition for Veritas Communities. Ryan previously was Director of Land Acquisition at Forestar, where he oversaw the $300 million division allocation and helped facilitate the sourcing, entitling, and closing of 14 projects in the Dallas–Fort Worth area. Ryan holds a bachelor’s degree in construction science and a master’s degree in Land and Property Development from Texas A&M University. History and Financing of the District Property Acquisition and Thornton PSA. The land within the District is partially owned by the Developer and partially owned by The Thornton Family Trust. All of the property in Improvement Area #1 is owned by the Developer. The Developer purchased (i) 341.162 acres of land from Liberty 800, LP, including all 97.281 acres of land in Improvement Area #1, on December 3, 2024 at a purchase price of $13,400,000, which purchase was funded partially with cash and partially with the Liberty 800 Seller Note, (ii) 69.119 acres of land from Old Prosper Partners Acquisitions, LLC, at a purchase price of $11,000,000 on December 3, 2024, which purchase was funded with cash, and (iii) approximately 10.8 acres from Delmore A. Church and Joyce Church at a purchase price of $1,238,500 on January 23, 2026, which purchase was funded with cash. Portions of the land purchased from Liberty 800, LP, outside the boundaries of the District in an adjacent public improvement district unrelated to the District. Veritas, as assignee of Old Prosper Partners, LLC, is under contract with The Thornton Family Trust pursuant to the Thornton PSA to purchase the remaining approximately 103 acres of land within the District at a price of $80,000 per acre. Under the Thornton PSA, closing of the remaining land in the District is to occur by January 31, 2027. Development Financing. To provide funds to refinance the Liberty 800 Seller Note and for development in the District, the Developer obtained a loan (the “Development Loan”) from Anchor Loans, LP (“Anchor”), in the maximum principal amount of $66,368,000. The Liberty 800 Seller Note was paid off using the Earnest Money Deposits received from Weekley and William Ryan and proceeds of the Development Loan and the lien has been released. The Development Loan is secured by a deed of trust on all of the land owned by the Developer, including all land in Improvement Area #1, and matures on February 1, 2029. As of May 31, 2026, the outstanding balance of the Development Loan was $___________. The Developer may repay the outstanding portion of the Development Loan from any available resources, including revenue generated from sales of developed lots in the District. The loan agreement for the Development Loan imposes a number of conditions upon the Developer’s right to obtain development draws. If the Developer were unable to satisfy such conditions, release of funds from the Development Loan and the construction of the Improvement Area #1 Improvements could be delayed or prevented entirely, which would adversely affect the security for the Bonds. The PID Act provides that the Assessment Lien is a first and prior lien against the Improvement Area #1 Assessed Property and is superior to all other liens and claims except liens or claims for State, county, school district, or municipality ad valorem taxes. Additionally, at or prior to delivery of the Bonds, Anchor will acknowledge the creation of the District, the levy of the Improvement Area #1 Assessments, and the subordination of the liens securing the Development Loan to the Assessment Lien. As provided by the PID Act and acknowledged by Anchor, the Assessment Lien will have priority over the liens on the property within Improvement Area #1 of the 51 District securing the Development Loan and the earnest money deeds of trust, which are subordinate to the Development Loan. Sufficiency of Developer’s Financing. According to the Developer, the Developer’s available financing sources are sufficient to fund the total budgeted costs of the Improvement Area #1 Improvements in the approximate amount of $14,115,068*, the costs of the Improvement Area #1 Major Improvements in the approximate amount of $21,958,924, the costs of Amenity Center #1 in the approximate amount of $3,500,000, and the costs of the Private Improvements in the approximate amount of $4,752,478. The Developer’s financing sources include the Development Loan, $2,025,400 earnest money received from Sandlin, the net proceeds of the Bonds in the approximate amount of $13,733,022*, and Developer equity. See “THE IMPROVEMENT AREA #1 IMPROVEMENTS,” “THE IMPROVEMENT AREA #1 MAJOR IMPROVEMENTS,” and “THE DEVELOPMENT – Amenities and Private Improvements.” THE ADMINISTRATOR The following information has been provided by the Administrator. Certain of the following information is beyond the direct knowledge of the City, the City’s Municipal Advisor, and the Underwriter, and none of the City, the City’s Municipal Advisor, or the Underwriter have any way of guaranteeing the accuracy of such information. The Administrator has reviewed this Limited Offering Memorandum and warrants and represents that the information herein under the caption “THE ADMINISTRATOR” does not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made herein, in the light of the circumstances under which they are made, not misleading. The City has selected P3Works, LLC, as the Administrator for the District. The City has entered into an agreement with the Administrator to provide specialized services related to the administration of the District needed to support the issuance of the Bonds. The Administrator will primarily be responsible for preparing the annual update to the Service and Assessment Plan. The Administrator is a consulting firm focused on providing district services relating to the formation and administration of public improvement districts, and is based in Austin, Houston, and North Richland Hills, Texas. The Administrator’s duties will include: • Preparation of the annual update to the Service and Assessment Plan • Preparation of assessment rolls for City billing and collection • Establishing and maintaining a database of all City parcel IDs within the District • Trust account analysis and reconciliation • Property owner inquires • Determination of Prepayment amounts • Preparation and review of disclosure notices with Dissemination Agent • Review of developer draw requests for reimbursement of authorized improvement costs. The information regarding the Service and Assessment Plan in this Limited Offering Memorandum has been provided by P3Works and has been included in reliance upon the authority of such firm as an expert in the field formation and administration of public improvement districts. APPRAISAL General. Peyco Southwest Realty, Inc. (the “Appraiser”), prepared an appraisal report for the City dated , 2026, and effective as of June 1, 2027, based upon a physical inspection of Improvement Area #1 of the District conducted on March 20, 2026 (the “Appraisal”). The Appraisal was prepared at the request of the City and the Underwriter. The description herein of the Appraisal is intended to be a brief summary only of the Appraisal as it relates to Improvement Area #1 of the District. The Appraisal is attached hereto as APPENDIX H and should be * Preliminary, subject to change. 52 read in its entirety. The conclusions reached in the Appraisal are subject to certain assumptions, hypothetical conditions, and qualifications, which are set forth therein. See “APPENDIX H – Appraisal.” Value Estimates. The Appraiser estimated the prospective market value “upon completion” of the fee simple interests of the Improvement Area #1 Assessed Property as of June 1, 2027, assuming completion of the Improvement Area #1 Improvements. See “THE IMPROVEMENT AREA #1 IMPROVEMENTS.” The Appraisal does not reflect the value of Improvement Area #1 of the District as if sold to a single purchaser in a single transaction. The Appraisal provides the fee simple estate values “upon completion” for Improvement Area #1 of the District. See “APPENDIX H – Appraisal.” The prospective market value estimate for the Improvement Area #1 Assessed Property using the methodologies described in the Appraisal and subject to the limiting conditions and assumptions set forth in the Appraisal, as of June 1, 2027, is $33,294,200. None of the City, the Developer, the Municipal Advisor, or the Underwriter makes any representation as to the accuracy, completeness assumptions or information contained in the Appraisal. The assumptions and qualifications with respect to the Appraisal are contained therein. There can be no assurance that any such assumptions will be realized and the City, the Developer and the Underwriter make no representation as to the reasonableness of such assumptions. See “BONDHOLDERS’ RISKS – Use of Appraisal.” Prospective investors should read the complete Appraisal in order to make an informed decision regarding any contemplated purchase of the Bonds. The complete Appraisal is attached as APPENDIX H. BONDHOLDERS’ RISKS Before purchasing any of the Bonds, prospective investors and their professional advisors should carefully consider all of the risk factors described below which may create possibilities wherein interest may not be paid when due or that the Bonds may not be paid at maturity or otherwise as scheduled, or, if paid, without premium, if applicable. The following risk factors (which are not intended to be an exhaustive listing of all possible risks associated with an investment in the Bonds) should be carefully considered prior to purchasing any of the Bonds. Moreover, the order of presentation of the risks summarized below does not necessarily reflect the significance of such investment risks. THE BONDS ARE SPECIAL, LIMITED OBLIGATIONS OF THE CITY PAYABLE SOLELY FROM A FIRST LIEN ON, SECURITY INTEREST IN, AND PLEDGE OF THE TRUST ESTATE, AS AND TO THE EXTENT PROVIDED IN THE INDENTURE. THE BONDS DO NOT GIVE RISE TO A CHARGE AGAINST THE GENERAL CREDIT OR TAXING POWER OF THE CITY AND ARE PAYABLE SOLELY FROM THE TRUST ESTATE IDENTIFIED IN THE INDENTURE. THE OWNERS OF THE BONDS SHALL NEVER HAVE THE RIGHT TO DEMAND PAYMENT THEREOF OUT OF MONEY RAISED OR TO BE RAISED BY TAXATION, OR OUT OF ANY ASSETS OF THE CITY OTHER THAN THE TRUST ESTATE, AS AND TO THE EXTENT PROVIDED IN THE INDENTURE. NO OWNER OF THE BONDS SHALL HAVE THE RIGHT TO DEMAND ANY EXERCISE OF THE CITY’S TAXING POWER TO PAY THE PRINCIPAL OF THE BONDS OR THE INTEREST OR REDEMPTION PREMIUM, IF ANY, THEREON. THE CITY SHALL HAVE NO LEGAL OR MORAL OBLIGATION TO PAY THE BONDS OUT OF ANY ASSETS OF THE CITY OTHER THAN THE TRUST ESTATE. The Underwriter is not obligated to make a market in or repurchase any of the Bonds, and no representation is made by the Underwriter, the City, or the City’s Municipal Advisor that a market for the Bonds will develop and be maintained in the future. If a market does develop, no assurance can be given regarding future price maintenance of the Bonds. See “– Limited Secondary Market for the Bonds.” The City has not applied for or received a rating on the Bonds. The absence of a rating could affect the future marketability of the Bonds. There is no assurance that a secondary market for the Bonds will 53 develop or that holders who desire to sell their Bonds prior to the stated maturity will be able to do so. See “– No Credit Rating.” Deemed Representations and Acknowledgment by Initial Purchasers Each Initial Purchaser will be deemed to have acknowledged and represented to the City the matters set forth under the heading “LIMITATIONS APPLICABLE TO INITIAL PURCHASERS” which include, among others, a representation and acknowledgment that the purchase of the Bonds involves investment risks, certain of which are set forth under this heading “BONDHOLDERS’ RISKS” and elsewhere herein, and each Initial Purchaser, either alone or with its purchaser representative(s) (as defined in Rule 501(h) of Regulation D under the Securities Act of 1933), has sophisticated knowledge and experience in financial and business matters and the capacity to evaluate such risks in making an informed investment decision to purchase the Bonds, and the Initial Purchaser can afford a complete loss of its investment in the Bonds. General Factors relating to Payment of the Bonds The ability of the City to pay debt service on the Bonds as due is subject to various factors that are beyond the City’s control. These factors include, among others, (a) the ability or willingness of property owners within Improvement Area #1 to pay Improvement Area #1 Assessments levied by the City, (b) cash flow delays associated with the institution of foreclosure and enforcement proceedings against property within Improvement Area #1, (c) general and local economic conditions which may impact real property values, the ability to liquidate real property holdings and the overall value of real property development projects, and (d) general economic conditions which may impact the general ability to market and sell the property within the District, including Improvement Area #1, it being understood that poor economic conditions within the City, State, and region may slow the assumed pace of sales of such property. The rate of development of the property in the District, including Improvement Area #1, is directly related to the vitality of the residential housing industry. In the event that the sale of the land within Improvement Area #1 should proceed more slowly than expected and the Developer is unable to pay the Improvement Area #1 Assessments, only the value of the Improvement Area #1 Assessed Property, with improvements, will be available for payment of the debt service on the Bonds, and such value can only be realized through the foreclosure or expeditious liquidation of the lands within Improvement Area #1. There is no assurance that the value of such lands will be sufficient for that purpose and the expeditious liquidation of real property through foreclosure or similar means is generally considered to yield sales proceeds in a lesser sum than might otherwise be received through the orderly marketing of such real property. Assessment Limitations Improvement Area #1 Annual Installments of Improvement Area #1 Assessments are billed to owners of Improvement Area #1 Assessed Property. Improvement Area #1 Annual Installments are due and payable, and bear the same penalties and interest for non-payment, as ad valorem taxes as described under “ASSESSMENT PROCEDURES.” Additionally, Improvement Area #1 Annual Installments established by the Service and Assessment Plan correspond in number and proportionate amount to the number of installments and principal amounts of the Bonds maturing in each year, interest, and the Annual Collection Costs for such year. See “ASSESSMENT PROCEDURES.” The unwillingness or inability of a property owner to pay regular property tax bills as evidenced by property tax delinquencies may also indicate an unwillingness or inability to make regular property tax payments and Improvement Area #1 Annual Installments of Improvement Area #1 Assessments in the future. In order to pay debt service on the Bonds, it is necessary that Improvement Area #1 Annual Installments are paid in a timely manner. Due to the lack of predictability in the collection of Improvement Area #1 Annual Installments, the City has established a Reserve Account in the Reserve Fund, to be funded from the proceeds of the Bonds, to cover delinquencies. The Improvement Area #1 Annual Installments are secured by the Assessment Lien. However, there can be no assurance that foreclosure proceedings will occur in a timely manner so as to avoid depletion of the Reserve Account and delay in payments of debt service on the Bonds. See “BONDHOLDERS’ RISKS – Bondholders’ Remedies and Bankruptcy.” 54 Upon an ad valorem tax lien foreclosure event of a property within Improvement Area #1, any Improvement Area #1 Assessment that is delinquent will be foreclosed upon in the same manner as the ad valorem tax lien (assuming all necessary conditions and procedures for foreclosure are duly satisfied). To the extent that a foreclosure sale results in insufficient funds to pay in full both the delinquent ad valorem taxes and the delinquent Improvement Area #1 Assessments, the liens securing such delinquent ad valorem taxes and delinquent Improvement Area #1 Assessments would likely be extinguished. Any remaining unpaid balance of the delinquent Improvement Area #1 Assessments would then be an unsecured personal liability of the original property owner. Based upon the language of Texas Local Government Code, Section 372.017(b), case law relating to other types of assessment liens, and opinions of the Texas Attorney General, the Assessment Lien as it relates to Improvement Area #1 Annual Installments that are not yet due should remain in effect following an ad valorem tax lien foreclosure, with future installment payments not being accelerated. Texas Local Government Code Section 372.018(d) supports this position, stating that an Assessment Lien runs with the land and the portion of an assessment payment that has not yet come due is not eliminated by foreclosure of an ad valorem tax lien. The Assessment Lien is superior to any homestead rights of a property owner that were properly claimed after the adoption of the Assessment Ordinance. However, an Assessment Lien may not be foreclosed upon if any Pre-existing Homestead Rights were properly claimed prior to the adoption of the Assessment Ordinance for as long as such rights are maintained on the property. It is unclear under State law whether or not Pre-existing Homestead Rights would prevent the Assessment Lien from attaching to such homestead property or instead cause the Assessment Lien to attach, but remain subject to, the Pre-existing Homestead Rights. Under State law, in order to establish homestead rights, the claimant must show a combination of both overt acts of homestead usage and intention on the part of the owner to claim the land as a homestead. Mere ownership of the property alone is insufficient and the intent to use the property as a homestead must be a present one, not an intention to make the property a homestead at some indefinite time in the future. As of the date of adoption of the Assessment Ordinance, no such homestead rights will have been claimed. Furthermore, the Developer is not eligible to claim homestead rights and the Developer has represented that it will own all property within Improvement Area #1 of the District as of the date of adoption of the Assessment Ordinance. Consequently, there are and can be no Pre-existing Homestead Rights on the Improvement Area #1 Assessed Property superior to the Assessment Lien and, therefore, the Assessment Liens may be foreclosed upon by the City. Failure by owners of the Improvement Area #1 Assessed Property to pay Improvement Area #1 Annual Installments when due, depletion of the Reserve Fund, delay in foreclosure proceedings, or the inability of the City to sell parcels of Improvement Area #1 Assessed Property which have been subject to foreclosure proceedings for amounts sufficient to cover the delinquent installments of Improvement Area #1 Assessments levied against such parcels may result in the inability of the City to make full or punctual payments of debt service on the Bonds. THE IMPROVEMENT AREA #1 ASSESSMENTS CONSTITUTE A FIRST AND PRIOR LIEN AGAINST THE IMPROVEMENT AREA #1 ASSESSED PROPERTY, SUPERIOR TO ALL OTHER LIENS AND CLAIMS EXCEPT LIENS AND CLAIMS FOR STATE, COUNTY, SCHOOL DISTRICT, OR MUNICIPALITY AD VALOREM TAXES AND ARE A PERSONAL OBLIGATION OF AND CHARGE AGAINST THE OWNERS OF IMPROVEMENT AREA #1 ASSESSED PROPERTY. Direct and Overlapping Indebtedness, Assessments, and Taxes The ability of an owner of Improvement Area #1 Assessed Property to pay Improvement Area #1 Assessments could be affected by the existence of other taxes and assessments imposed upon the property. Public entities whose boundaries overlap those of Improvement Area #1 currently impose ad valorem taxes on the property within Improvement Area #1 and will likely do so in the future. Such entities could also impose assessment liens on the property within Improvement Area #1. The imposition of additional liens, whether from taxes, assessments, or private financing, may reduce the ability or willingness of the landowners to pay the Improvement Area #1 Assessments. See “OVERLAPPING TAXES AND DEBT.” 55 Depletion of Accounts of the Reserve Fund; No Prefunding of Delinquency and Prepayment Reserve Account Failure of the owners of Improvement Area #1 Assessed Property to pay the Improvement Area #1 Assessments when due could result in the rapid, total depletion of the Reserve Account and the Additional Interest Account of the Reserve Fund prior to replenishment from the resale of property upon a foreclosure or otherwise or delinquency redemptions after a foreclosure sale, if any. There could be a default in payments of the principal of and interest on the Bonds if sufficient amounts are not available in the Reserve Fund. The Reserve Account of the Reserve Fund will be fully funded from the proceeds of the Bonds; however, funding of the Delinquency and Prepayment Reserve Account is accumulated over time, by the mechanism described in “SECURITY FOR THE BONDS – Reserve Fund (Reserve Account and Delinquency and Prepayment Reserve Account).” The Indenture provides that if after a withdrawal from the Reserve Account the amounts therein are less than the Reserve Account Requirement, the Trustee shall transfer from the Pledged Revenue Fund to the Reserve Account the amount of such deficiency, but only to the extent that such amount is not required for the timely payment of principal, interest, or Sinking Fund Installments. The Indenture also provides that if the amount on deposit in the Delinquency and Prepayment Reserve Account shall at any time be less than the Delinquency and Prepayment Reserve Requirement, the Trustee shall resume depositing the Additional Interest into the Delinquency and Prepayment Reserve Account until the Delinquency and Prepayment Reserve Requirement has been accumulated in the Delinquency and Prepayment Reserve Account. See “SECURITY FOR THE BONDS – Reserve Fund (Reserve Account and Delinquency and Prepayment Reserve Account).” Lien Foreclosure and Bankruptcy The payment of Improvement Area #1 Assessments and the ability of the City to foreclose on the lien of a delinquent unpaid Improvement Area #1 Assessment may be limited by bankruptcy, insolvency, or other laws generally affecting creditors’ rights or by the laws of the State relating to judicial foreclosure. Although bankruptcy proceedings would not cause the Improvement Area #1 Assessments to become extinguished, bankruptcy of a property owner in all likelihood would result in a delay in prosecuting foreclosure proceedings. Such a delay would increase the likelihood of a delay or default in payment of the principal of and interest on the Bonds, and the possibility that delinquent Improvement Area #1 Assessments might not be paid in full. See “OVERLAPPING TAXES AND DEBT.” Bondholders’ Remedies and Bankruptcy In the event of default in the payment of principal of or interest on the Bonds or the occurrence of any other Event of Default under the Indenture, the Trustee may, and at the written direction of the Owners of not less than 51% in aggregate Outstanding principal amount of the Bonds shall, proceed against the City for the purpose of protecting and enforcing the rights of the Owners under the Indenture, to protect and enforce the rights of the Owners under the Indenture by action seeking mandamus or by other suit, action, or special proceeding in equity or at law, in any court of competent jurisdiction, for any relief to the extent permitted by Applicable Laws, including, but not limited to, the specific performance of any covenant or agreement contained therein, or injunction; provided, however, that no action for money damages against the City may be sought or shall be permitted. The issuance of a writ of mandamus may be sought if there is no other available remedy at law to compel performance of the City’s obligations under the Bonds or the Indenture and such obligations are not uncertain or disputed. The remedy of mandamus is controlled by equitable principles, so its use rests within 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 owners of the Bonds cannot themselves foreclose on property within Improvement Area #1 or sell property within Improvement Area #1 in order to pay the principal of and interest on the Bonds. The enforceability of the rights and remedies of the owners of the Bonds further 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 City. In this regard, should the City file a petition for protection from creditors under federal bankruptcy laws, the remedy of mandamus or the right of the City to seek judicial foreclosure of its Assessment Lien would be automatically stayed and could not be pursued unless authorized by a federal bankruptcy judge. See “BONDHOLDERS’ RISKS – Bankruptcy Limitation to Bondholders’ Rights.” 56 Any bankruptcy court with jurisdiction over bankruptcy proceedings initiated by or against a property owner within Improvement Area #1 of the District pursuant to the Federal Bankruptcy Code could, subject to its discretion, delay or limit any attempt by the City to collect delinquent Assessments, or delinquent ad valorem taxes, against such property owner. In addition, in 2006, the Texas Supreme Court ruled in Tooke v. City of Mexia, 197 S.W.3d 325 (Tex. 2006) (“Tooke”) that a waiver of sovereign immunity must be provided for by statute in “clear and unambiguous” language. In so ruling, the Court declared that statutory language such as “sue and be sued,” in and of itself, did not constitute a clear and unambiguous waiver of sovereign immunity. In Tooke, the Court noted the enactment in 2005 of sections 271.151-.160, Texas Local Government Code (the “Local Government Immunity Waiver Act”), which, according to the Court, waives “immunity from suit for contract claims against most local governmental entities in certain circumstances.” The Local Government Immunity Waiver Act covers cities and relates to contracts entered into by cities for providing goods or services to cities. In Wasson Interests, Ltd. v. City of Jacksonville, 489 S.W.3d 427 (Tex. 2016) (“Wasson”), the Texas Supreme Court (the “Court”) addressed whether the distinction between governmental and proprietary acts (as found in tort-based causes of action) applies to breach of contract claims against municipalities. The Court analyzed the rationale behind the Proprietary-Governmental Dichotomy to determine that “a city’s proprietary functions are not done pursuant to the ‘will of the people’” and protecting such municipalities “via the [S]tate’s immunity is not an efficient way to ensure efficient allocation of [S]tate resources.” While the Court recognized that the distinction between governmental and proprietary functions is not clear, the Wasson opinion held that the Proprietary- Governmental Dichotomy applies in a contract-claims context. The Court reviewed Wasson for a second time and issued an opinion on October 5, 2018, clarifying 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 when it entered into the contract, not at the time of the alleged breach. Therefore, in regard to municipal contract cases (as in tort claims), it is incumbent on the courts to determine whether a function was proprietary or governmental based upon the statutory and common law guidance at the time of inception 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. Notwithstanding the foregoing new case law issued by the Court, such sovereign immunity issues have not been adjudicated in relation to bond matters (specifically, in regard to the issuance of municipal debt). Each situation will be prospectively evaluated based on the facts and circumstances surrounding the contract in question to determine if a suit, and subsequently, a judgment, is justiciable against a municipality. The City is not aware of any State court construing the Local Government Immunity Waiver Act in the context of whether contractual undertakings of local governments that relate to their borrowing powers are contracts covered by such act. Because it is unclear whether the Texas legislature has effectively waived the City’s sovereign immunity from a suit for money damages in the absence of City action, the Trustee or the Owners of the Bonds may not be able to bring such a suit against the City for breach of the Bonds or the Indenture covenants. As noted above, the Indenture provides that owners of the Bonds may exercise the remedy of mandamus to enforce the obligations of the City under the Indenture. Neither the remedy of mandamus nor any other type of injunctive relief was at issue in Tooke, and it is unclear whether Tooke will be construed to have any effect with respect to the exercise of mandamus, as such remedy has been interpreted by State courts. In general, State courts have held that a writ of mandamus may be issued to require public officials to perform ministerial acts that clearly pertain to their duties. State courts have held that a ministerial act is defined as a legal duty that is prescribed and defined with a precision and certainty that leaves nothing to the exercise of discretion or judgment, though mandamus is not available to enforce purely contractual duties. However, mandamus may be used to require a public officer to perform legally imposed ministerial duties necessary for the performance of a valid contract to which the State or a political subdivision of the State is a party (including the payment of moneys due under a contract). 57 Judicial Foreclosures Judicial foreclosure proceedings are not mandatory; however, the City has covenanted (subject to provisions set forth in the Indenture) to order and cause such actions to be commenced. In the event a foreclosure is necessary, there could be a delay in payments to Owners of the Bonds pending prosecution of the foreclosure proceedings and receipt by the City of the proceeds of the foreclosure sale. It is possible that no bid would be received at the foreclosure sale, and, in such event, there could be an additional delay in payment of the principal of and interest on the Bonds or such payment may not be made in full. Moreover, in filing a suit to foreclose, the City must join other taxing units that have claims for delinquent taxes against all or part of the same property; the proceeds of any sale of property within Improvement Area #1 available to pay debt service on the Bonds may be limited by the existence of other tax liens on the property. See “OVERLAPPING TAXES AND DEBT.” Collection of delinquent taxes, assessments, and the Improvement Area #1 Assessments may be adversely affected by the effects of market conditions on the foreclosure sale price, and by other factors, including taxpayers’ right to redeem property within two years of foreclosure for residential and agricultural use property and six months for other property, and by a time-consuming and expensive collection procedure. No Acceleration The Indenture expressly denies the right of acceleration in the event of a payment default or other default under the terms of the Bonds or the Indenture. Bankruptcy Limitation to Bondholders’ Rights The enforceability of the rights and remedies of the Owners of the Bonds 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 City. The City is authorized under State law to voluntarily proceed under Chapter 9 of the Federal Bankruptcy Code, 11 U.S.C. 901-946 (“Chapter 9”). The City may proceed under Chapter 9 if it (1) is generally not paying its debts, or unable to meet its debts, as they become due, (2) desires to effect a plan to adjust such debts, and (3) has either obtained the agreement of or negotiated in good faith with its creditors, is unable to negotiate with its creditors because negotiation is impracticable, or reasonably believes that a creditor may attempt to obtain a preferential transfer. If the City decides in the future to proceed voluntarily under Chapter 9, the City would develop and file a plan for the adjustment of its debts, and the Bankruptcy Court would confirm the plan if (1) the plan complies with the applicable provisions of Chapter 9, (2) all payments to be made in connection with the plan are fully disclosed and reasonable, (3) the City is not prohibited by law from taking any action necessary to carry out the plan, (4) administrative expenses are paid in full, (5) all regulatory or electoral approvals required under State law are obtained, and (6) the plan is in the best interests of creditors and is feasible. The rights and remedies of the Owners of the Bonds would be adjusted in accordance with the confirmed plan of adjustment of the City’s debt. The City cannot predict a Bankruptcy Court’s treatment of the Owners’ creditor claim and whether an Owner would be repaid in full. State Law Requiring Notice of Assessment; Failure of Developer and Homebuilders to Deliver Required Notice Pursuant to Texas Property Code The 87th Legislature passed HB 1543, which became effective September 1, 2021, and requires a person who proposes to sell or otherwise convey real property within a public improvement district to provide to the purchaser of the property, before the execution of a binding contract for the purchase of such real property, written notice of the obligation to pay public improvement district assessments, in accordance with Section 5.014, Texas Property Code, as amended. In the event a purchase contract is entered into without the seller providing the notice, the intended purchaser is entitled to terminate the purchase contract. If the Developer or the Homebuilders within Improvement Area #1 do not provide the required notice and prospective purchasers of Improvement Area #1 Assessed Property within Improvement Area #1 terminate a purchase contract, the anticipated absorption schedule may be affected. In addition to the right to terminate the purchase contract, a property owner who did not receive the required notice is entitled, after sale, to sue for damages for (i) all costs relative to the purchase, plus interest and reasonable attorney’s fees, or (ii) an amount not to exceed $5,000, plus reasonable attorney’s fees. In a suit filed 58 pursuant to clause (i), any damages awarded must go first to pay any outstanding liens on the Improvement Area #1 Assessed Property. In such an event, the outstanding Improvement Area #1 Assessments on such Improvement Area #1 Assessed Property should be prepaid. In the event of such prepayment, a partial redemption of the Bonds could occur. See “DESCRIPTION OF THE BONDS – Redemption Provisions.” On payment of all damages respectively to the lienholders and purchaser pursuant to clause (i), the purchaser is required to reconvey the property to the seller. Further, if the Developer or a Homebuilder does not provide the required notice and becomes liable for monetary damages, the anticipated buildout and absorption schedule may be affected. No assurances can be given that the projected buildout and absorption schedules presented in this Limited Offering Memorandum will be realized. The forms of notice to be provided to homebuyers are attached to the Service and Assessment Plan and will be included in each Annual Service Plan Update. See “APPENDIX C – Form of Service and Assessment Plan.” Potential Future Changes in State Law Regarding Public Improvement Districts During Texas legislative sessions and interim business of the Texas legislature, various proposals and reports have been presented by committees of Texas Senate and Texas House of Representative which suggest or recommend changes to the PID Act relating to oversight of bonds secured by special assessments including adopting requirements relating to levels of build out or adding State level oversight in connection with the issuance of bonds secured by special assessments under the PID Act. The 89th Legislative Session of the State, including two special sessions, ended on September 4, 2025. When the regular Legislature is not in session, the Governor of Texas may call one or more special sessions, at the Governor’s direction, each lasting no more than 30 days, and for which the Governor sets the agenda. It is impossible to predict what new proposals may be presented regarding the PID Act and the issuance of special assessment bonds during any upcoming legislative sessions, whether such new proposals or any previous proposals regarding the same will be adopted by the Texas Senate and House of Representatives and signed by the Governor, and, if adopted, the form thereof. It is impossible to predict with certainty the impact that any such future legislation will or may have on the security for the Bonds. Limited Secondary Market for the Bonds The Bonds may not constitute a liquid investment, and there is no assurance that a liquid secondary market will exist for the Bonds in the event an Owner thereof determines to solicit purchasers for the Bonds. Even if a liquid secondary market exists, there can be no assurance as to the price for which the Bonds may be sold. Such price may be lower than that paid by the current Owners of the Bonds, depending on the progress of development of Improvement Area #1, existing real estate and financial market conditions, and other factors. No Credit Rating The City has not applied for or received a rating on the Bonds. Even if a credit rating had been sought for the Bonds, it is not anticipated that such a rating would have been investment grade. The absence of a rating could affect the future marketability of the Bonds. There is no assurance that a secondary market for the Bonds will develop or that holders who desire to sell their Bonds prior to the stated maturity will be able to do so. Occasionally, because of general market conditions or because of adverse history or economic prospects connected with a particular issue, secondary market trading in connection with a particular issue is suspended or terminated. Additionally, prices of issues for which a market is being made will depend upon then generally prevailing circumstances. Such prices could be substantially different from the original purchase price. Adverse Developments Affecting the Financial Services Industry Actual events involving limited liquidity, defaults, non-performance, or other adverse developments that affect financial institutions, transactional counterparties, or other companies in the financial services industry or the financial services industry generally, or concerns or rumors about any events of these kinds or other similar risks, have in the past and may in the future lead to market-wide liquidity problems. In the recent past troubled financial institutions have been closed and/or swept into receivership by the Federal Deposit Insurance Corporation (“FDIC”) or acquired by or received cash rescue packages from more solvent financial institutions. Borrowers under credit agreements, letters of credit, and certain other financial instruments with any financial institution that is placed into receivership by the FDIC may be unable to access undrawn amounts for an unspecified period. 59 The Developer expects to finance the costs of the Improvement Area #1 Improvements not paid from proceeds of the Bonds with the Development Loan. If the Developer is unable to access funds under the Development Loan, the Developer’s ability to complete the Improvement Area #1 Improvements could be adversely affected. If a Homebuilder uses a line of credit or other financial instrument to finance home construction and is unable to access funds under such line of credit or other financial instrument, the Homebuilder’s ability to take down lots and complete homes could be adversely affected. Additionally, confidence in the safety and soundness of regional banks specifically, or the banking system generally, could impact where customers choose to maintain deposits, which could materially adversely impact the homebuilder’s liquidity and access loan funding capacity, and results in an impact to operations. Similar impacts to the development industry have occurred in the past. General Risks of Real Estate Investment and Development Investments in undeveloped or developing real estate are generally considered to be speculative in nature and to involve a high degree of risk. The Development will be subject to the risks generally incident to real estate investments and development. Many factors that may affect the Development, including the schedule for and/or the costs of the various improvements to be constructed within the District necessary to serve residents therein, as well as the operating revenues of the Developer, including those derived from the Development, are not within the control of the Developer. Such factors include changes in national, regional, and local economic conditions; changes in long and short term interest rates; changes in the climate for real estate purchases; changes in demand for or supply of competing properties; changes in local, regional, and national market and economic conditions; unanticipated development costs, market preferences, and architectural trends; unforeseen environmental risks and controls; the adverse use of adjacent and neighboring real estate; changes in interest rates and the availability of mortgage funds to buyers of the homes to be built in the Development, which may render the sale of such homes difficult or unattractive; acts of war, terrorism, or other political instability; delays or inability to obtain governmental approvals; changes in laws; moratorium; acts of God (which may result in uninsured losses); strikes; labor shortages; energy shortages; material shortages; inflation; adverse weather conditions; contractor or subcontractor defaults; and other unknown contingencies and factors beyond the control of the Developer. Furthermore, the operating revenues of the Developer may be materially adversely affected if specific conditions in the lot purchase contracts are not met. Contracts that the Developer may have with individual homebuilders are subject to a myriad of contractual conditions and contingencies, all or some of which if not complied with, could precipitate a termination or winding up of such contractual arrangement for the sale of lots, causing the Developer to possibly need to execute a different strategy for the development and sale of lots and residential units within the Development. As described herein, the Improvement Area #1 Assessments are an imposition against the land only. Neither the Developer nor any other subsequent landowner is a guarantor of the Improvement Area #1 Assessments and the recourse for the failure of the Developer or any other landowner to pay the Improvement Area #1 Assessments is limited to the collection proceedings against the land as described herein. Failure to meet any lot purchase contract’s conditions may allow the applicable lot purchaser to terminate its obligation to purchase lots from the Developer and obtain its Earnest Money Deposit. See “THE DEVELOPMENT – Expected Build-out, Absorption, and Home Prices in the District.” The Development cannot be completed without the Developer obtaining a variety of governmental approvals and permits, some of which have already been obtained. Certain permits are necessary to initiate construction of each phase of the Development and to allow the occupancy of residences and to satisfy conditions included in the approvals and permits. There can be no assurance that all of these permits and approvals can be obtained or that the conditions to the approvals and permits can be fulfilled. The failure to obtain any of the required approvals or fulfill any one of the conditions could cause materially adverse financial results for the Developer. A slowdown of the development process and the related absorption rate within the Development because of any or all of the foregoing could affect adversely land values. The timely payment of the Bonds depends on the willingness and ability of the Developer and any subsequent owners to pay the Improvement Area #1 Assessments when due. Any or all of the foregoing could reduce the willingness and ability of such owners to pay the Improvement Area #1 Assessments and could greatly reduce the value of the property within Improvement Area #1 the District in the event such property has to be foreclosed. If Improvement Area #1 Annual Installments of 60 Improvement Area #1 Assessments are not timely paid and there are insufficient funds in the accounts of the Reserve Fund, a nonpayment could result in a payment default under the Indenture. Risks Related to the Current Residential Real Estate Market The real estate market is currently experiencing a slowing of new home sales and new home closings due in part to rising inflation and mortgage interest rates. It is difficult to determine what effects the on-again, off-again tariffs imposed by the federal administration and retaliatory tariffs against the United States will have on inflation and mortgage interest rates. Downturns in the real estate market, mortgage rates, and other factors beyond the control of the Developer, including general economic conditions, may impact the timing of lot and home sales within Improvement Area #1. No assurances can be given that projected home prices and buildout values presented in this Limited Offering Memorandum will be realized. Risks Related to Recent Increase in Costs of Building Materials and Labor Shortages As a result of low supply and high demand, shipping constraints, and the ongoing trade war (including tariffs and retaliatory tariffs), there have been substantial increases in the cost of lumber and other materials, causing many homebuilders and general contractors to experience budget overruns. Further, the federal administration’s on- again, off-again tariffs, threatened impositions of tariffs, and the imposition or threatened imposition of retaliatory tariffs against the United States will impact the ability of the Developer to estimate costs. If the Actual Costs of the Improvement Area #1 Improvements are substantially greater than the estimated costs or if the Developer is unable to access building materials in a timely manner, it may affect the ability of the Developer to complete the Improvement Area #1 Improvements or pay the Improvement Area #1 Assessments when due. See “THE DEVELOPER – History and Financing of the District.” If the cost of materials remains high or increases, it may affect the ability of the Homebuilders to construct homes within Improvement Area #1 of the District. The federal administration’s immigration policies may impact the State’s workforce. Undocumented construction workers make up a large percentage of construction workers in the State. Mass deportations or immigration policies that make it challenging for foreign workers to work in the United States may result in labor shortages, particularly in construction. Labor shortages will impact the Developer’s ability to estimate costs and to complete the Improvement Area #1 Improvements and the Homebuilders’ ability to construct homes within Improvement Area #1 of the District. Completion of Homes The cost and time for completion of homes by the Homebuilders is uncertain and may be affected by changes in national, regional, and local economic conditions; changes in long and short term interest rates; changes in the climate for real estate purchases; changes in demand for or supply of competing properties; changes in local, regional, and national market conditions; unanticipated development costs, market preferences, and architectural trends; unforeseen environmental risks and controls; the adverse use of adjacent and neighboring real estate; changes in interest rates and the availability of mortgage funds to buyers of the homes yet to be built in the Development, which may render the sale of such homes difficult or unattractive; acts of war, terrorism or other political instability; delays or inability to obtain governmental approvals; changes in laws; moratorium; force majeure (which may result in uninsured losses); strikes; labor shortages; energy shortages; material shortages; inflation; adverse weather conditions; subcontractor defaults; and other unknown contingencies and factors beyond the control of the Developer. Absorption Rate There can be no assurance that the Developer will be able to achieve its anticipated absorption rates. Failure to achieve the absorption rate estimates may adversely affect the estimated value of property within Improvement Area #1 of the District, could impair the economic viability of the District and the Development, and could reduce the ability or desire of property owners in Improvement Area #1 of the District to pay the Improvement Area #1 Assessments. 61 Competition The housing industry in the Dallas-Fort Worth-Arlington area is very competitive, and none of the Developer, the City, the City’s Municipal Advisor, or the Underwriter can give any assurance that the building programs of the single-family residential development within the District which are planned will be completed in accordance with the Developer’s expectations. The competitive position of the Developer in the sale of developed lots or any Homebuilder in the construction and sale of single-family residential units is affected by most of the factors discussed in this section, and such competitive position is directly related to maintenance of market values in the District and the Development. Competitive projects in the area include, but are not limited to the following: Project Name # of Units/SF Proximity to Dev Developer Prices Sherle Farms 2,600 lots 4 miles Tellus Group $475 -960K The Villages of Hurricane Creek 1,800 lots .5 miles Centurion American $330K-$650K Hi hpoint Villa e 2,000 lots .1 miles Centurion American TBD Mantua Poin 3,000 lots 1 miles Risland $425K-$750K Woods at Lindsey Place 858 SF/91 TH 2 miles DR Horton $315K-$400K Meadow Vista 764 lots 2 miles Bloomfield Homes $400-600K There can be no assurances that other similar single-family residential projects will not be developed in the future or that existing projects will not be upgraded or otherwise able to compete with the Development. Hazardous Substances While governmental taxes, assessments, and charges are a common claim against the value of a parcel, other less common claims may be relevant. One of the most serious in terms of the potential reduction in the value that may be realized to the assessment is a claim with regard to a hazardous substance. In general, the owners and operators of a parcel may be required by law to remedy conditions relating to releases or threatened releases of hazardous substances. The federal Comprehensive Environmental Response, Compensation and Liability Act of 1980, sometimes referred to as “CERCLA” or “Superfund Act,” is the most well-known and widely applicable of these laws. It is likely that, should any of the parcels of land located in the District be affected by a hazardous substance, the marketability and value of parcels would be reduced by the costs of remedying the condition, because the purchaser, upon becoming owner, will become obligated to remedy the condition just as is the seller. The value of the land within Improvement Area #1 of the District does not consider the possible liability of the owner (or operator) for the remedy of a hazardous substance condition of the parcel. The City has not independently verified, and is not aware, that the owner (or operator) of any of the parcels within the District has such a current liability with respect to such parcel; however, it is possible that such liabilities do currently exist and that the City is not aware of them. Further, it is possible that liabilities may arise in the future with respect to any of the land within Improvement Area #1 of the District resulting from the existence, currently, of a substance presently classified as hazardous but which has not been released or the release of which is not presently threatened, or may arise in the future resulting from the existence, currently, on the parcel of a substance not presently classified as hazardous but which may in the future be so classified. Further, such liabilities may arise not simply from the existence of a hazardous substance but from the method of handling it. These possibilities could significantly affect the value of a parcel that is realizable upon a foreclosure. See “THE DEVELOPMENT – Environmental” for discussion of the Phase One ESAs performed on the property within the District. 62 Regulation Development within the District and the Development may be subject to future federal, state, and local regulations. Approval may be required from various agencies from time to time in connection with the layout and design of development in the District and the Development, the nature and extent of public improvements, land use, zoning, and other matters. Failure to meet any such regulations or obtain any such approvals in a timely manner could delay or adversely affect development in the District and the Development and property values. Availability of Utilities The progress of development within the District is also dependent upon the City providing an adequate supply of water and sufficient capacity for the collection and treatment of wastewater, as applicable. If the City fails to supply water and wastewater services to the property in the District, the development of the land in the District could be adversely affected. See “THE DEVELOPMENT – Utilities.” Portions of the State, including the City and its surrounding area, are experiencing significant growth, which has produced and is expected to continue to produce a growing demand for water and wastewater service. The ability of the City to provide an adequate supply of water and sufficient capacity for treatment of wastewater, as applicable, is dependent on many factors, including, but not limited to, supply and demand of materials to complete necessary water and wastewater improvements, compliance with the Texas Commission on Environmental Quality regulations, the effects of extreme weather events on such entities’ water and wastewater systems, and the construction of developments competing with the District. See “THE CITY – Water and Wastewater,” “BONDHOLDERS’ RISKS – General Risks of Real Estate Investment and Development,” “– Risks Related to Current Increase in Costs of Building Materials and Labor Shortages, “– Competition,” “– Regulation,” and “– Risk from Weather Events.” None of the City, the Municipal Advisor, the Underwriter, or the Developer can predict the impact that such growing demand may have on the City, the District, the projected buildout schedule, availability of water and wastewater service to the District, or an investment in the Bonds. Flood Plains According to the FEMA FIRM Community Panel numbers 48085C0155J and 48085C0065J (June 2, 2009), approximately 8.137 acres in Improvement Area #1 lies in the 100-year floodplain. Such land is expected to be used for open space. FEMA will from time to time revise its FIRMs. None of the City, the Underwriter, or the Developer makes any representation as to whether FEMA may revise its FIRMs, whether such revisions may result in homes that are currently outside of the 500-year or 100-year flood plain from being included in the 500-year or 100-year flood plain in the future, or whether extreme flooding events may occur more often than assumed in creating the rate maps. Risk from Weather Events All of the State, including the City, is subject to extreme weather events that can cause loss of life and damage to property through strong winds, wildfires, hurricanes, tropical storms, flooding, heavy rains and freezes, including events similar to the severe winter storm that the continental United States experienced in February 2021, which resulted in disruptions in the Electric Reliability Council of Texas power grid and prolonged blackouts throughout the State. It is impossible to predict whether similar events will occur in the future and the impact they may have on the City, including land within the District. Exercise of Third-Party Rights As described herein under “THE DEVELOPMENT– Existing Mineral Rights and Other Third-Party Property Rights” there are certain mineral rights reservations located within Improvement Area #1 of the District not owned by the Developer. There may also be additional mineral rights and related real property rights reflected in 63 the chain of title for the real property within Improvement Area #1 of the District recorded in the real property records of Collin County. The Developer does not expect the existence or exercise of any mineral rights or related real property rights in or around the District to have a material adverse effect on the Development, the property within the District, or the ability of landowners within Improvement Area #1 of the District to pay Improvement Area #1 Assessments. However, none of the City, the Municipal Advisor, or the Underwriter provide any assurances as to such expectations. Tax-Exempt Status of the Bonds The Indenture contains covenants by the City intended to preserve the exclusion from gross income of interest on the Bonds for federal income tax purposes. As discussed under the caption “TAX MATTERS,” interest on the Bonds could become includable in gross income for purposes of federal income taxation retroactive to the date the Bonds were issued as a result of future acts or omissions of the City in violation of its covenants in the Indenture. 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. As further described in “TAX MATTERS” below, failure of the City to comply with the requirements of the Internal Revenue Code of 1986 (the “Code”) and the related legal authorities, or changes in the federal tax law or its application, could cause interest on the Bonds to be included in the gross income of owners of the Bonds for federal income tax purposes, possibly from the date of original issuance of the Bonds. Further, the opinion of Bond Counsel is based on current legal authority, covers certain matters not directly addressed by such authorities, and represents Bond Counsel’s judgment as to the proper treatment of interest on the Bonds for federal income tax purposes. It is not binding on the Internal Revenue Service (“IRS”) or the courts. The IRS has an ongoing program of auditing obligations that are issued and sold as bearing tax-exempt interest to determine whether, in the view of the IRS, interest on such obligations is included in the gross income of the owners thereof for federal income tax purposes. In the past, the IRS announced audit efforts focused in part on “developer-driven bond transactions,” including certain tax increment financings and certain assessment bond transactions. It cannot be predicted if this IRS focus could lead to an audit of the Bonds or what the result would be of any such audit. If an audit of the Bonds is commenced, under current procedures parties other than the City would have little, if any, right to participate in the audit process. Moreover, because achieving judicial review in connection with an audit of tax-exempt obligations is difficult, obtaining an independent review of IRS positions with which the City legitimately disagrees may not be practicable. Any action of the IRS, regardless of the outcome, including but not limited to selection of the Bonds for audit, or the course or result of such audit, or an audit of obligations presenting similar tax issues, may affect the market price for, or the marketability of, the Bonds. Finally, if the IRS ultimately determines that the interest on the Bonds is not excluded from the gross income of Owners for federal income tax purposes, the City may not have the resources to settle with the IRS, the Bonds are not required to be redeemed, and the interest rate on the Bonds will not increase. Management and Ownership The management and ownership of the Developer and related property owners could change in the future. Purchasers of the Bonds should not rely on the management experience of such entities. There are no assurances that such entities will not sell the subject property or that officers will not resign or be replaced. In such circumstances, a new developer or new officers in management positions may not have comparable experience in projects comparable to the Development. 64 Dependence Upon Developer Upon adoption of the Assessment Ordinance, the Developer will have the obligation for payment of 100% of the Improvement Area #1 Assessments. The ability of the Developer to make full and timely payment of the Improvement Area #1 Assessments will directly affect the ability of the City to meet its debt service obligations with respect to the Bonds. The only assets of the Developer are land within the District, related permits and development rights, and minor operating accounts. There can be no assurances given as to the financial ability of the Developer to advance any funds to the City to supplement revenues from the Improvement Area #1 Assessments if necessary, or as to whether the Developer will advance such funds. See “THE DEVELOPER – Description of the Developer.” None of the Developer or the Homebuilders will guarantee or otherwise be obligated to pay debt service on the Bonds. Payment of the Assessments on the Assessed Property will initially be the responsibility of the Developer and/or the Homebuilders, as the case may be, as the owners of such Assessed Property prior to purchase by homeowners. Use of Appraisal Caution should be exercised in the evaluation and use of valuations included in the Appraisal. The Appraisal is an estimate of market value as of a specified date based upon assumptions and limiting conditions and any extraordinary assumptions specific to the relevant valuation and specified therein. The estimated market value specified in the Appraisal is not a precise measure of value but is based on a subjective comparison of related activity taking place in the real estate market. The valuation set forth in the Appraisal is based on various assumptions of future expectations and while the Appraiser’s forecasts for properties in Improvement Area #1 of the District is considered to be reasonable at the current time, some of the assumptions may not materialize or may differ materially from actual experience in the future. The Bonds will not necessarily trade at values determined solely by reference to the underlying value of the properties in Improvement Area #1 of the District. In performing its analysis, the Appraiser makes numerous assumptions with respect to general business, economic and regulatory conditions and other matters, many of which are beyond the Appraiser’s, Underwriter’s and City’s control, as well as certain factual matters. Furthermore, the Appraiser’s analysis, opinions and conclusions are necessarily based upon market, economic, financial and other circumstances and conditions existing prior to the valuation and date of the Appraisal. The intended use and user of the Appraisal are specifically identified in the Appraisal as agreed upon in the contract for services and/or reliance language found in the Appraisal. The Appraiser has consented to the use of the Appraisal in this Limited Offering Memorandum in connection with the issuance of the Bonds. No other use or user of the Appraisal is permitted by any other party for any other purpose. Agricultural Use Valuation and Redemption Rights The property in Improvement Area #1 is currently entitled to valuation for ad valorem tax purposes based upon its agricultural use. The Developer expects that property within Improvement Area #1 will be removed from agricultural valuation in the 2027 tax year. Under State law, an owner of land that is entitled to an agricultural valuation has the right to redeem such property after a tax sale for a period of two years after the tax sale by paying to the tax sale purchaser a 25% premium, if redeemed during the first year, or a 50% premium, if redeemed during the second year, over the purchase price paid at the tax sale and certain qualifying costs incurred by the purchaser. Although the Improvement Area #1 Assessments are not considered a tax under State law, the PID Act provides that the lien for the Improvement Area #1 Assessments may be enforced in the same manner as a lien for ad valorem taxes. This shared enforcement mechanism raises a possibility that the right to redeem agricultural valuation property may be available following a foreclosure of a lien for the Improvement Area #1 Assessments, though there is no indication in State law that such redemption rights would be available in such a case. 65 TIRZ No. 7 Annual Credit Amount and Marketing of the Development The TIRZ No. 7 Revenues are generated only from ad valorem taxes levied and collected by the City on the captured appraisal value in TIRZ No. 7 in any year. Any delay or failure by the Developer to develop Improvement Area #1 may result in a reduced amount of the TIRZ No. 7 Revenues being available to credit against the Improvement Area #1 Assessments. TIRZ No. 7 Revenues generated from the Captured Appraised Value for each parcel in Improvement Area #1 during the development of such parcel will not result in a TIRZ No. 7 Annual Credit Amount which is sufficient to equal the TIRZ No. 7 Maximum Annual Credit Amount. The ability of the TIRZ No. 7 Annual Credit Amount to equal the TIRZ No. 7 Maximum Annual Credit Amount for parcels within Improvement Area #1 is dependent on the actual buildout values in Improvement Area #1 meeting the projections for the estimated buildout value described in the Service and Assessment Plan. If the buildout values in Improvement Area #1 do not reach the expected values, the TIRZ No. 7 Revenues will not be sufficient to produce the TIRZ No. 7 Maximum Annual Credit Amount. See “OVERLAPPING TAXES AND DEBT” and “APPENDIX C – Form of Service and Assessment Plan.” The City’s contribution of the TIRZ No. 7 Revenues as a credit against Improvement Area #1 Annual Installments of the Improvement Area #1 Assessments results in less tax revenue being deposited into its general fund for use on public services, such as police and fire protection. Application of the TIRZ No. 7 Annual Credit Amount may affect the City’s ability to provide for such basic services. The TIRZ No. 7 Revenues constitute revenues collected by the City from a portion of its ad valorem tax rate levied on parcels within the Improvement Area #1 of the District. Effective September 1, 2025, if the Attorney General of the State determines that a municipality has not had its records and accounts audited, has not had an annual financial statement prepared based on such audit, and has not filed such financial statement and auditor’s opinion on such statement in the office of the municipal secretary or clerk before the 180th day of such municipality’s fiscal year end, as required by Section 103.003, Texas Local Government Code, as amended, the municipality may not adopt an ad valorem tax rate that exceeds its no-new-revenue tax rate for the tax year that begins on or after the date of the Attorney General’s determination and any subsequent tax year that begins before such statement and opinion are filed. The adoption of a no-new-revenue tax rate could result in a reduction of the TIRZ No. 7 Annual Credit Amount for such year. For the five most recently completed fiscal years for which the filing has come due pursuant to Section 103.003 (fiscal years ending 2020-2025), the City has made its filing beyond the 180-day deadline three times. It is uncertain what impact, if any, the TIRZ No. 7 Annual Credit Amount application to the Improvement Area #1 Annual Installments will have on the underwriting of residential mortgages. If the underwriter of residential mortgages does not recognize the TIRZ No. 7 Annual Credit Amount, it may make it more difficult for a borrower to qualify for a home mortgage which could have a negative impact on home sales and projected absorption. Cybersecurity Risks The City, like other municipalities in the State, utilizes technology in conducting its operations. As a user of technology, the City potentially faces cybersecurity threats (e.g., hacking, phishing, viruses, malware, and ransomware) on its technology systems. Accordingly, the City may be the target of a cyber-attack on its technology systems that could result in adverse consequences to the City. The City employs a multi-layered approach to combating cybersecurity threats. While the City deploys layered technologies and requires employees to receive cybersecurity training, as required by State law, among other efforts, cybersecurity breaches could cause material disruptions to the City’s finances or operations. The costs of remedying such breaches or protecting against future cyber-attacks could be substantial. Further, cybersecurity breaches could expose the City to litigation and other legal risks, which could cause the City to incur other costs related to such legal claims or proceedings. 2026 Iran War Global stability has become more uncertain following the February 28, 2026, military strikes launched by the United States and Israel that resulted in the death of Supreme Leader Ayatollah Ali Khamenei and other members of Iran’s leadership. Generally, early stages of any war are unstable and unpredictable, but this particular conflict is further burdened by unclear and shifting objectives, and no clear exit strategy or defined victory. 66 Retaliatory attacks by the Islamic Revolutionary Guard Corps present a risk that the war may broaden to surrounding countries, or that internal power struggles could produce an Iranian civil war. A lengthy conflict would disrupt global shipping, disturb trade routes and supply chains, and reduce global output. The impact of war in the Middle East on the national economy will depend on the extent of rising oil prices and the disruption to global oil supplies. Increased energy prices are likely to create higher inflation, slower growth, and higher unemployment in the United States. TAX MATTERS Opinion On the date of initial delivery of the Bonds, McCall, Parkhurst & Horton L.L.P., Dallas, Texas, Bond Counsel to the City, 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 to the City 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 D – FORM OF OPINION OF BOND COUNSEL.” In rendering its opinion, Bond Counsel to the City will rely upon (a) certain information and representations of the City, including information and representations contained in the City’s federal tax certificate, and (b) covenants of the City contained in the Bond documents 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 City 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 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 in gross income retroactively to the date of issuance of the Bonds. The opinion of Bond Counsel to the City is conditioned on compliance by the City with such requirements, and Bond Counsel to the City 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 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 City with respect to the Bonds or the property financed or refinanced with proceeds of the Bonds. 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 City 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 67 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 (as 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, 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 THE PURCHASE, OWNERSHIP AND DISPOSITION OF TAX-EXEMPT OBLIGATIONS BEFORE DETERMINING WHETHER TO PURCHASE THE BONDS. 68 Interest on the Bonds may be includable in certain corporation’s “adjusted financial statement income” determined under section 56A of the Code to calculate the alternative minimum tax imposed by section 55 of the Code. 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 Internal Revenue Service. 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 foreign investors, certifications as to foreign status and other matters may be required to be provided by partners and beneficiaries thereof. 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. LEGAL MATTERS Legal Proceedings Delivery of the Bonds will be accompanied by (i) the unqualified approving legal opinion of the Attorney General to the effect that the Bonds are valid and legally binding obligations of the City under the Constitution and laws of the State, payable from the Trust Estate and, (ii) based upon their examination of a transcript of certified proceedings relating to the issuance and sale of the Bonds, the legal opinion of Bond Counsel, to a like effect. McCall, Parkhurst & Horton L.L.P., serves as Bond Counsel to the City. Orrick, Herrington and Sutcliffe LLP serves as Underwriter’s Counsel. The legal fees paid to Bond Counsel and Underwriter’s Counsel are 69 contingent upon the sale and delivery of the Bonds. Legal Opinions The City will furnish the Underwriter a transcript of certain certified proceedings incident to the authorization and issuance of the Bonds. Such transcript will include a certified copy 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, to the effect that the Bonds are valid and binding special obligations of the City. The City will also furnish the legal opinion of Bond Counsel, to the effect that, based upon an examination of such transcript, the Bonds are valid and binding special obligations of the City under the Constitution and laws of the State. The legal opinion of Bond Counsel will further state that the Bonds, including principal thereof and interest thereon, are payable from and secured by a first lien on, security interest in, and pledge of the Trust Estate. Bond Counsel will also provide a legal opinion to the effect that interest on the Bonds will be excludable from gross income for federal income tax purposes under Section 103(a) of the Code, subject to the matters described above under the caption “TAX MATTERS,” including the alternative minimum tax consequences for corporations. A copy of the opinion of Bond Counsel is attached hereto as “APPENDIX D – FORM OF OPINION OF BOND COUNSEL.” Except as noted below, Bond Counsel did not take part in the preparation of the Limited Offering Memorandum, and such firm has not assumed any responsibility with respect thereto or undertaken independently to verify any of the information contained therein, except that, in its capacity as Bond Counsel, such firm has reviewed the information describing the Bonds in the Limited Offering Memorandum under the captions or subcaptions “PLAN OF FINANCE – The Bonds,” “DESCRIPTION OF THE BONDS,” “SECURITY FOR THE BONDS” (except for the last paragraph under the subcaption “General”), “ASSESSMENT PROCEDURES” (except for the subcaptions “Assessment Methodology” and “Assessment Amounts”), “THE DISTRICT,” “TAX MATTERS,” “LEGAL MATTERS – Legal Proceedings” (first paragraph only), “LEGAL MATTERS – Legal Opinions” (except for the final paragraph hereof), “CONTINUING DISCLOSURE – The City,” “REGISTRATION AND QUALIFICATION OF BONDS FOR SALE,” “LEGAL INVESTMENTS AND ELIGIBILITY TO SECURE PUBLIC FUNDS IN TEXAS” and APPENDIX B and such firm is of the opinion that the information relating to the Bonds, the Bond Ordinance, the Assessment Ordinance, and the Indenture contained therein fairly and accurately describes the laws and legal issues addressed therein and, with respect to the Bonds, such information conforms to the Bond Ordinance, the Assessment Ordinance and the Indenture. 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 that 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. Litigation – The City At the time of delivery and payment for the Bonds, the City will certify that, except as disclosed herein, there is no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, regulatory agency, public board or body, pending or overtly threatened against the City affecting the existence of the District, or seeking to restrain or to enjoin the sale or delivery of the Bonds, the application of the proceeds thereof, in accordance with the Indenture, or the collection or application of Improvement Area #1 Assessments securing the Bonds, or in any way contesting or affecting the validity or enforceability of the Bonds, the Assessment Ordinance, the Indenture, any action of the City contemplated by any of the said documents, or the collection or application of the Pledged Revenues, or in any way contesting the completeness or accuracy of this Limited Offering Memorandum or any amendment or supplement thereto, or contesting the powers of the City or its authority with respect to the Bonds or any action of the City contemplated by any documents relating to the Bonds. Litigation – The Developer At the time of delivery and payment for the Bonds, the Developer will certify that, except as disclosed herein, there is no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, regulatory body, public board or body pending, or, to the best knowledge of the Developer, threatened against or 70 affecting the Developer wherein an unfavorable decision, ruling or finding would have a material adverse effect on the financial condition or operations of the Developer or its officers or would adversely affect (1) the transactions contemplated by, or the validity or enforceability of, the Bonds, the Indenture, the Bond Ordinance, the Service and Assessment Plan, the Development Agreement, or the Bond Purchase Agreement, or otherwise described in this Limited Offering Memorandum, or (2) the tax-exempt status of interest on the Bonds (individually or in the aggregate, a “Material Adverse Effect”). Principals of the Developer and their affiliated entities may in the future be parties to pending and/or threatened litigation related to their commercial and real estate development activities. Such litigation occurs in the ordinary course of business and is not expected to have a Material Adverse Effect. ENFORCEABILITY OF REMEDIES The remedies available to the owners of the Bonds upon an event of default under the Indenture are in many respects dependent upon judicial actions, which are often subject to discretion and delay. See “BONDHOLDERS’ RISKS – Bondholders’ Remedies and Bankruptcy.” Under existing constitutional and statutory law and judicial decisions, including the federal bankruptcy code, the remedies specified by the Indenture and the Bonds may not be readily available or may be limited. The various legal opinions to be delivered concurrently with the delivery of the Bonds will be qualified, as to the enforceability of the remedies provided in the various legal instruments, by limitations imposed by governmental immunity, bankruptcy, reorganization, insolvency or other similar laws affecting the rights of creditors and enacted before or after such delivery. NO RATING No application for a rating on the Bonds has been made to any rating agency, nor is there any reason to believe that the City would have been successful in obtaining an investment grade rating for the Bonds had application been made. CONTINUING DISCLOSURE The City Pursuant to Rule 15c2-12 of the United States Securities and Exchange Commission (the “Rule”), the City, the Administrator, and Regions Bank (in such capacity, the “Dissemination Agent”) will enter into a Continuing Disclosure Agreement of Issuer (the “Disclosure Agreement of Issuer”) for the benefit of the Owners of the Bonds (including owners of beneficial interests in the Bonds), to provide, by certain dates prescribed in the Disclosure Agreement of Issuer, certain financial information and operating data relating to the City (collectively, the “City Reports”). The specific nature of the information to be contained in the City Reports is set forth in “APPENDIX E- 1 – Form of Disclosure Agreement of Issuer.” Under certain circumstances, the failure of the City to comply with its obligations under the Disclosure Agreement of Issuer constitutes an event of default thereunder. Such a default will not constitute an event of default under the Indenture, but such event of default under the Disclosure Agreement of Issuer would allow the Owners of the Bonds (including owners of beneficial interests in the Bonds) to bring an action for specific performance. The City has agreed to update information and to provide notices of certain specified events only as provided in the Disclosure Agreement of Issuer. The City 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 in this Limited Offering Memorandum, except as provided in the Disclosure Agreement of Issuer. The City makes no representation or warranty concerning such information or concerning its usefulness to a decision to invest in or sell the Bonds at any future date. The City disclaims any contractual or tort liability for damages resulting in whole or in part from any breach of the Disclosure Agreement of Issuer or from any statement made pursuant to the Disclosure Agreement of Issuer. The City’s Compliance with Prior Undertakings The City believes it has substantially complied in all material respects with its continuing disclosure undertakings pursuant to the Rule during the last 5 years. 71 The Developer The Developer, the Administrator, and the Dissemination Agent will enter into a Continuing Disclosure Agreement of Developer (the “Disclosure Agreement of Developer”) for the benefit of the Owners of the Bonds (including owners of beneficial interests in the Bonds), to provide, by certain dates prescribed in the Disclosure Agreement of Developer, certain information regarding the Development and the Improvement Area #1 Improvements (collectively, the “Developer Reports”). The specific nature of the information to be contained in the Developer Reports is set forth in “APPENDIX E-2 – Form of Disclosure Agreement of Developer.” Under certain circumstances, the failure of the Developer or the Administrator to comply with its obligations under the Disclosure Agreement of Developer constitutes an event of default thereunder. Such a default will not constitute an event of default under the Indenture, but such event of default under the Disclosure Agreement of Developer would allow the Owners of the Bonds (including owners of beneficial interests in the Bonds) to bring an action for specific performance. The Disclosure Agreement of Developer is a voluntary agreement made for the benefit of the holders of the Bonds and is not entered into pursuant to the Rule. The Developer has agreed to provide (i) certain updated information to the Administrator, which consultant will prepare and provide such updated information in report form and (ii) notices of certain specified events, only as provided in the Disclosure Agreement of Developer. The Developer 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 in this Limited Offering Memorandum, except as provided in the Disclosure Agreement of Developer. The Developer makes no representation or warranty concerning such information or concerning its usefulness to a decision to invest in or sell the Bonds at any future date. The Developer disclaims any contractual or tort liability for damages resulting in whole or in part from any breach of the Disclosure Agreement of Developer or from any statement made pursuant to the Disclosure Agreement of Developer. The Developer’s Compliance with Prior Undertakings The Developer has not made any previous continuing disclosure agreements. UNDERWRITING FMSbonds, Inc. (the “Underwriter”) has agreed to purchase the Bonds from the City at a purchase price of $ (the par amount of the Bonds, less an underwriting discount of $ ). The Underwriter’s obligations are subject to certain conditions precedent and if obligated to purchase any of the Bonds the Underwriter will be obligated to purchase all of the Bonds. The Bonds may be offered and sold by the Underwriter at prices lower than the initial offering prices stated on the inside cover page hereof, and such initial offering prices may be changed from time to time by the Underwriter. REGISTRATION AND QUALIFICATION OF BONDS FOR SALE The sale of the Bonds has not been registered under the federal Securities Act of 1933, as amended, in reliance upon the exemption provided thereunder by Section 3(a)(2); and the Bonds have not been qualified under the Securities Act of Texas in reliance upon various exemptions contained therein; nor have the Bonds been qualified under the securities acts of any other jurisdiction. The City assumes no responsibility for 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 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 provisions. LEGAL INVESTMENT AND ELIGIBILITY TO SECURE PUBLIC FUNDS IN TEXAS The PID Act and Section 1201.041 of the Public Security Procedures Act (Chapter 1201, Texas Government Code, as amended) provide that the Bonds are negotiable instruments and investment securities governed by Chapter 8, Texas Business and Commerce Code, as amended, and are legal and authorized investments for insurance companies, fiduciaries, trustees, or for the sinking funds of municipalities or other political 72 subdivisions or public agencies of the State. With respect to investment in the Bonds by municipalities or other political subdivisions or public agencies of the State, the PFIA requires that the Bonds be assigned a rating of at least “A” or its equivalent as to investment quality by a national rating agency. See “NO RATING” above. In addition, the PID Act and various provisions of the Texas Finance Code provide that, subject to a prudent investor standard, the Bonds are legal investments for state banks, savings banks, trust companies with capital of one million dollars or more, and savings and loan associations. The Bonds are eligible to secure deposits to the extent of their market value. No review by the City has been made of the laws in other states to determine whether the Bonds are legal investments for various institutions in those states. No representation is made that the Bonds will be acceptable to public entities to secure their deposits or acceptable to such institutions for investment purposes. The City made no investigation of other laws, rules, regulations or investment criteria which might apply to such institutions or entities or which might limit the suitability of the Bonds for any of the foregoing purposes or limit the authority of such institutions or entities to purchase or invest in the Bonds for such purposes. INVESTMENTS The City invests its funds in investments authorized by Texas law in accordance with investment policies approved by the City Council. Both Texas law and the City’s investment policies are subject to change. Under Texas law, the City 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 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 are unconditionally guaranteed or insured by or backed by the full faith and credit of, the State or the United States or their respective agencies and instrumentalities, including obligations that are fully guaranteed or insured by the Federal Deposit Insurance Corporation or by the explicit full faith and credit of the United 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 Federal Deposit Insurance Corporation or its successor or the National Credit Union Share Insurance Fund or its successor, (8) certificates of deposit and share certificates (i) issued by or through an institution that either has its main office or a branch office in the State, and are guaranteed or insured by the Federal Deposit Insurance Corporation or the National Credit Union Insurance Fund, or are secured as to principal by obligations described in the clauses (1) through (6) or in any other manner and amount provided by law for City deposits, or (ii) where (a) the funds are invested by the City through (I) a broker that has its main office or a branch office in the State and is selected from a list adopted by the City as required by law or (II) a depository institution that has its main office or a branch office in the State that is selected by the City; (b) the broker or the depository institution selected by the City arranges for the deposit of the funds in certificates of deposit in one or more federally insured depository institutions, wherever located, for the account of the City; (c) the full amount of the principal and accrued interest of each of the certificates of deposit is insured by the United States or an instrumentality of the United States, and (d) the City appoints the depository institution selected under (a) above, a custodian as described by Section 2257.041(d) of the Texas Government Code, or a clearing broker-dealer registered with the Securities and Exchange Commission and operating pursuant to Securities and Exchange Commission Rule 15c3-3 (17 C.F.R. Section 240.15c3-3) as custodian for the City with respect to the certificates of deposit; (9) fully collateralized repurchase agreements that have a defined termination date, are fully secured by a combination of cash and obligations described in clause (1) which are pledged to the City, held in the City’s name, and deposited at the time the investment is made with the City or with a third party selected and approved by the City and are placed through a primary government securities dealer, as defined by the Federal Reserve, or a financial institution doing business in the State; (10) 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 (12) through (14) below, or an authorized investment pool; (ii) securities held as collateral under a loan are pledged to the City, held in the City’s name and deposited at the time the investment is made with the City or a third party designated by the City; (iii) a loan made under the program is placed through either a primary government 73 securities dealer or a financial institution doing business in the State; and (iv) the agreement to lend securities has a term of one year or less, (11) 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, (12) 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, (13) no-load money market mutual funds registered with and regulated by the Securities and Exchange Commission that comply with federal Securities and Exchange Commission Rule 2a-7, and (14) no-load mutual funds registered with the Securities and Exchange Commission that have an average weighted maturity of less than two years, and have a duration of one year or more and are invested exclusively in obligations described in this paragraph or have a duration of less than one year and the investment portfolio is limited to investment grade securities, excluding asset-backed securities. 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 in the next succeeding paragraph. The City 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 “AAA-m” or an equivalent by at least one nationally recognized rating service. The City 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 City retains ultimate responsibility as fiduciary of its assets. In order to renew or extend such a contract, the City must do so by order, ordinance, or resolution. The City 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. Political subdivisions such as the City are authorized to implement 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) of the first paragraph under this subcaption, (b) irrevocable letters of credit issued by a state or national bank that is continuously rated by a nationally recognized investment rating firm not less than “A” or its equivalent, or (c) cash invested in obligations that are described in clauses (1) through (6) and (10) through (12) of the first paragraph under this subcaption, or an authorized investment pool; (ii) securities held as collateral under a loan are pledged to the governmental body, held in the name of the governmental body and deposited at the time the investment is made with the City or a third party designated by the City; (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; and (iv) the agreement to lend securities has a term of one year or less. Under Texas law, the City 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 includes a list of authorized investments for City 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 City 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. 74 Under Texas law, City 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 investment officers of the City shall submit an investment report detailing: (1) the investment position of the City, (2) that all investment officers jointly prepared and signed the report, (3) the beginning market value, the ending market value and the fully accrued interest for the reporting period of each pooled fund group, (4) the book value and market value of each separately listed asset and fund type invested at the beginning and end of the reporting period by the type of asset and fund type invested, (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 strategy statements and (b) state law. No person may invest City funds without express written authority from the City Council. Under Texas law the City is additionally required to: (1) annually review its adopted policies and strategies; (2) adopt a rule, order, ordinance or resolution stating that it has reviewed its investment policy and investment strategies and records any changes made to either its investment policy or investment strategy in the respective rule, order, ordinance or resolution; (3) require any investment officers’ with personal business relationships or relatives with firms seeking to sell securities to the City to disclose the relationship and file a statement with the Texas Ethics Commission and the City Council; (4) require the registered principal of firms seeking to sell securities to the City to: (a) receive and review the City’s investment policy, (b) acknowledge that reasonable controls and procedures have been implemented to preclude investment transactions conducted between the City and the business organization that are not authorized by the City’s investment policy (except to the extent that this authorization is dependent on an analysis of the makeup of the City’s entire portfolio or requires an interpretation of subjective investment standards), and (c) deliver a written statement attesting to these requirements; (5) perform an annual audit of the management controls on investments and adherence to the City’s investment policy; (6) provide specific investment training for the officers of the City; (7) 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; (8) restrict the investment in no-load mutual funds in the aggregate to no more than 15% of the entity’s monthly average fund balance, excluding bond proceeds and reserves and other funds held for debt service; (9) require local government investment pools to conform to the new disclosure, rating, net asset value, yield calculation, and advisory board requirements; and (10) at least annually review, revise, and adopt a list of qualified brokers that are authorized to engage in investment transactions with the City. INFORMATION RELATING TO THE TRUSTEE The City has appointed Regions Bank, an Alabama state banking corporation, to serve as Trustee. The Trustee is to carry out those duties assignable to it under the Indenture. Except for the contents of this section, the Trustee has not reviewed or participated in the preparation of this Limited Offering Memorandum and assumes no responsibility for the contents, accuracy, fairness, or completeness of the information set forth in this Limited Offering Memorandum or for the recitals contained in the Indenture or the Bonds, or for the validity, sufficiency, or legal effect of any of such documents. Furthermore, the Trustee has no oversight responsibility, and is not accountable, for the use or application by the City of any of the Bonds authenticated or delivered pursuant to the Indenture or for the use or application of the proceeds of such Bonds by the City. The Trustee has not evaluated the risks, benefits, or propriety of any investment in the Bonds and makes no representation, and has reached no conclusions, regarding the value or condition of any assets or revenues pledged or assigned as security for the Bonds, the technical or financial feasibility of the project, or the investment quality of the Bonds, about all of which the Trustee expresses no opinion and expressly disclaims the expertise to evaluate. Additional information about the Trustee may be found at its website at www.regions.com. Neither the information on the Trustee’s website, nor any links from that website, is a part of this Limited Offering Memorandum, nor should any such information be relied upon to make investment decisions regarding the Bonds. 75 SOURCES OF INFORMATION General The information contained in this Limited Offering Memorandum has been obtained primarily from the City’s records, the Developer and its representatives and other sources believed to be reliable. In accordance with its responsibilities under the federal securities law, the Underwriter has reviewed the information in this Limited Offering Memorandum in accordance with, and as part of, its responsibilities to investors under the federal securities laws as applied to the facts and circumstances of the transaction, but the Underwriter does not guarantee the accuracy or completeness of such information. The information and expressions of opinion herein are subject to change without notice, and neither the delivery of this Limited Offering Memorandum or any sale hereunder will create any implication that there has been no change in the financial condition or operations of the City or the Developer described herein since the date hereof. This Limited Offering Memorandum contains, in part, estimates and matters of opinion that are not intended as statements of fact, and no representation or warranty is made as to the correctness of such estimates and opinions or that they will be realized. The summaries of the statutes, resolutions, ordinances, indentures and engineering and other related reports set forth herein are included 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 for further information. Source of Certain Information The information contained in this Limited Offering Memorandum relating to the description of the Improvement Area #1 Improvements, the Improvement Area #1 Major Improvements, the Amenities, the Private Improvements, the Development, and the Developer generally and, in particular, the information included in the sections captioned “PLAN OF FINANCE” (except the subcaption “– The Bonds”), “THE IMPROVEMENT AREA #1 IMPROVEMENTS,” “THE IMPROVEMENT AREA #1 MAJOR IMPROVEMENTS,” “THE DEVELOPMENT,” “THE DEVELOPER,” “BONDHOLDERS’ RISKS” (only as it pertains to the Developer, the Improvement Area #1 Improvements, the Improvement Area #1 Major Improvements, and the Development), “LEGAL MATTERS – Litigation – The Developer,” “CONTINUING DISCLOSURE – The Developer” and “– The Developer’s Compliance with Prior Undertakings,” APPENDIX F, and APPENDIX G have been provided by the Developer. Experts The information regarding the Service and Assessment Plan in this Limited Offering Memorandum has been provided by the Administrator and has been included in reliance upon the authority of such firm as experts in the field of development planning and finance. The information regarding the Appraisal in this Limited Offering Memorandum has been provided by the Appraiser and has been included in reliance upon the authority of such firm as experts in the field of the appraisal of real property. Updating of Limited Offering Memorandum If, subsequent to the date of the Limited Offering Memorandum, the City learns, through the ordinary course of business and without undertaking any investigation or examination for such purposes, or is notified by the Underwriter, of any adverse event which causes the Limited Offering Memorandum to be materially misleading, and unless the Underwriter elects to terminate its obligation to purchase the Bonds, the City will promptly prepare and supply to the Underwriter an appropriate amendment or supplement to the Limited Offering Memorandum satisfactory to the Underwriter; provided, however, that the obligation of the City to so amend or supplement the Limited Offering Memorandum will terminate when the City delivers the Bonds to the Underwriter, unless the Underwriter notifies the City on or before such date that less than all of the Bonds have been sold to ultimate customers; in which case the City’s obligations hereunder will extend for an additional period of time (but not more than 90 days after the date the City delivers the Bonds) until all of the Bonds have been sold to ultimate customers. 76 FORWARD-LOOKING STATEMENTS Certain statements included or incorporated by reference in this Limited Offering Memorandum constitute “forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995, Section 21E of the United States Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933. Such statements are generally identifiable by the terminology used such as “plan,” “expect,” “estimate,” “project,” “anticipate,” “budget” or other similar words. THE ACHIEVEMENT OF CERTAIN RESULTS OR OTHER EXPECTATIONS CONTAINED IN SUCH FORWARD-LOOKING STATEMENTS INVOLVE KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND OTHER FACTORS WHICH MAY CAUSE ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS DESCRIBED HEREIN TO BE MATERIALLY DIFFERENT FROM ANY FUTURE RESULTS, PERFORMANCE OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY SUCH FORWARD- LOOKING STATEMENTS. THE CITY DOES NOT PLAN TO ISSUE ANY UPDATES OR REVISIONS TO THOSE FORWARD-LOOKING STATEMENTS IF OR WHEN ANY OF ITS EXPECTATIONS, OR EVENTS, CONDITIONS OR CIRCUMSTANCES ON WHICH SUCH STATEMENTS ARE BASED OCCUR, OTHER THAN AS DESCRIBED UNDER “CONTINUING DISCLOSURE” HEREIN. AUTHORIZATION AND APPROVAL The City Council has approved by resolution this Preliminary Limited Offering Memorandum and the City Council has authorized this Preliminary Limited Offering Memorandum to be used by the Underwriter in connection with the marketing and sale of the Bonds. In the Bond Ordinance, the City Council will approve the form and content of the final Limited Offering Memorandum. THE REMAINDER OF THIS PAGE IS LEFT BLANK INTENTIONALLY. APPENDIX A – Page 1 APPENDIX A GENERAL INFORMATION REGARDING THE CITY AND SURROUNDING AREAS The following information has been derived from various sources, including the U.S. Census and the Municipal Advisory Council of Texas. While such sources are believed to be reliable, no representation is made as to the accuracy thereof. Location and Population The City is located in north central Collin County, 40 miles north of Dallas and 12 miles northwest of the City of McKinney. Access to the City is provided by State Highway 121, State Highway 5, US-75, and Farm Road 455. The City covers approximately 15 square miles. Some of the services that the City provides are public safety (police and fire protection), streets, water and sanitary sewer utilities, planning and zoning, and general administrative services. The 2020 Census population for the City was 16,896. The City estimates the population as of January 1, 2026, was 36,935. Historical Employment in Collin County Average Annual 2026 (1) 2025 2024 2023 2022 Civilian Labor Force 703,207 703,565 691,133 665,876 636,637 Total Emplo e 676,211 676,281 664,644 641,544 615,503 Total Unemplo e 26,996 27,284 26,489 24,332 21,134 Unemplo ment Rate 3.8% 3.9% 3.8% 3.7% 3.3% _____________ (1) Data through March 2026. Source: Texas Workforce Commission, Department of Economic Research and Analysis. Major Employers The major employers in the City are set forth in the table below. Emplo e Emplo ees Anna Independent School District 1,057 Walmar 453 Cit of Anna 203 Pate Rehab 168 Texas Roadhouse 143 Home Depo 134 Chic -Fil-A 97 Brookshire’s 94 Love’s Travel Shop 56 McDonald’s 49 Source: City’s Annual Comprehensive Financial Report for Fiscal Year Ended September 30, 2025 APPENDIX A – Page 2 Surrounding Economic Activity The major employers of certain municipalities in the Dallas–Fort Worth–Arlington metropolitan area are set forth in the table below. Source: Municpal Advisory Council of Texas City of McKinney (2024) City of Frisco (2024) City of Plano (2024) Approximately 14 miles from the City Approximately 28 miles from the City Approximately 27 miles from the City Employer Employees Employer Employees Employer Employees Raytheon Space & Airborne Systems 4,200 Frisco ISD 8,850 JP Morgan Chase 10,530 McKinney ISD 2,920 Dallas Cowboys 2,000 Bank of America 6,318 Collin County 2,000 City of Frisco 1,813 Capital One Finance 5,578 Globe Life 1,700 HCL Technologies Ltd. 1,500 Toyota Motor North America, Inc. 4,960 Encore Wire Corp. 1,653 ICS 1,300 PepsiCo 3,759 City of McKinney 1,565 Keurig Dr Pepper Inc. 1,213 Ericsson 3,346 Medical City McKinney 1,434 merisource Bergen Specialty Group 749 AT&T Foundry 2,500 Baylor Scott & White Medical Center 1,171 Baylor Scott White/Centennial Hosp. 567 Medical City Plano 2,332 Collin College 794 Mario Sinacola & Sons Excavating 500 Liberty Mutual Insurance Company 2,184 Simpson Strong-Tie 650 Goodman Networks Inc. 463 USAA 2,092 City of Grapevine (2023) Approximately 49 miles from the City Employe Employees Gaylord Texas Resort & Conv Ctr 2,000 Dallas/Ft. Worth Int’l Airport 1,970 Grapevine-Colleyville ISD 1,870 Paycom 990 Baylor Medical 660 Great Wolf Lodge 600 City of Grapevine 590 Boeing Distribution 500 Hyatt Regency DFW 500 Kubota 450 City of Dallas (2025) Approximately 32 miles from the City Employer Employees UT Southwestern Medical Ctr. 22,721 Dallas ISD 22,162 Southwest Airlines Co. 17,324 Parkland Health & Hosp Sys 14,000 City of Dallas 13,000 AT&T Inc. 10,868 Texas Instruments Inc. 7,704 Baylor Scott & White Health 7,284 Methodist Dallas Medical Center 6,752 Dallas County 6,500 THIS PAGE IS LEFT BLANK INTENTIONALLY. APPENDIX B FORM OF INDENTURE THIS PAGE IS LEFT BLANK INTENTIONALLY. APPENDIX C FORM OF SERVICE AND ASSESSMENT PLAN THIS PAGE IS LEFT BLANK INTENTIONALLY. APPENDIX D FORM OF OPINION OF BOND COUNSEL THIS PAGE IS LEFT BLANK INTENTIONALLY. APPENDIX E-1 FORM OF DISCLOSURE AGREEMENT OF ISSUER THIS PAGE IS LEFT BLANK INTENTIONALLY. APPENDIX E-2 FORM OF DISCLOSURE AGREEMENT OF DEVELOPER THIS PAGE IS LEFT BLANK INTENTIONALLY. APPENDIX F DEVELOPMENT AGREEMENT THIS PAGE IS LEFT BLANK INTENTIONALLY. APPENDIX G FORM OF CFA AGREEMENT THIS PAGE IS LEFT BLANK INTENTIONALLY. APPENDIX H APPRAISAL THIS PAGE IS LEFT BLANK INTENTIONALLY. Item No. 6.c. City Council Agenda Staff Report Meeting Date: 6/9/2026 Staff Contact: Kevin Bates AGENDA ITEM: Approve a Resolution authorizing the City Manager to submit an application to the Texas Water Development Board, requesting financial assistance from the Texas Water Development Board for the Sherley Farms 3-million-gallon elevated storage tank. (City Engineer Kevin Bates, P.E.) SUMMARY: The City of Anna seeks financial assistance in the form of a grant from the Texas Water Development Board (TWDB) to support the planning, design, and construction of a new 3.0 million-gallon elevated storage tank at Sherley Farms to meet current and future water system demands. The grant request is for approximately $21 million for design and construction related to the elevated storage tank. The grant application is due by early July to the TWDB along with our updated Water Conservation Plan, which will be required to be approved by ordinance during this meeting. FINANCIAL IMPACT: N/A BACKGROUND: The City of Anna continues to experience significant growth, increasing the demand on the City's water distribution and storage system. To ensure reliable water service and maintain adequate system capacity for existing and future development, the City has identified the need for a new 3.0-million-gallon elevated storage tank in the Sherley Farms development area. The proposed project will include the planning, design, and construction of the elevated storage tank and associated infrastructure necessary to improve system pressure, storage capacity, and operational reliability. The City is pursuing financial assistance through the Texas Water Development Board (TWDB) following the passage of HB 500, which appropriates a $1.038 billion grant to help fund water supply and water infrastructure improvement projects for local agencies. The grant award is based on the population of the local agency applying for the grant, and Anna's current population, which is between 10,001 and 150,000, is seeking the maximum amount of $21 million. Approval of this item authorizes the submission of an application to the TWDB, which is required by the board for municipalities seeking financial assistance, and designates the City Manager as the City's authorized representative for all matters related to the application. STRATEGIC CONNECTIONS: This item supports the City of Anna Strategic Plan, specifically advancing the strategic outcome area: Resilient. Anna's mobility and utility infrastructure consistently meets community needs by: • Focusing on resiliency and the City's ability to recover from upsets • Having a robust multi-modal transportation network • Dependably delivering utility services to the City's neighbors and businesses ATTACHMENTS: 1. Resolution - Authorizing City Manager to Execute an App with WSIG CITY OF ANNA, TEXAS , the City of Anna seeks financial assistance from the Texas Water Development Board for the planning, design, and/or construction of the 3.0 MG Elevated Storage Tank Project; and , the City of Anna is hereby approved and authorized to be filed with the Texas Water Development Board seeking financial assistance in an amount not to exceed $21 Million to provide for the costs of; and , the City Manager is hereby designated as the authorized representative of the City of Anna for purposes of furnishing such information and executing such documents as may be required in connection with the preparation and filing of such application for financial assistance and the rules of the Texas Water Development Board; and , Freese and Nichols Engineering is hereby authorized and directed to aid and assist in the preparation and submission of such application and appear on behalf of and represent the City of Anna before any hearing held by the Texas Water Development Board on such application; and , the Texas Water Development Board requires the adoption of a Resolution authorizing the submission of an application for financial assistance and designating an authorized representative of the City. Section 1. Recitals Incorporated The recitals above are incorporated herein as if set forth in full for all purposes. Section 2. Authorization of Application for Financial Assistance. The City Council of the City of Anna, Texas, hereby approves the submission of an application to the Texas Water Development Board for financial assistance in an amount not to exceed $21 Million for the 3.0 MG Elevated Storage Tank Project and authorizes, ratifies, and approves the City Manager's execution of the application and all related documents on behalf of the City of Anna, Texas. PASSED AND APPROVED by the City Council of the City of Anna, Texas, on this 9th day of June 2026. Item No. 6.d. City Council Agenda Staff Report Meeting Date: 6/9/2026 Staff Contact: Kevin Bates Steven Smith AGENDA ITEM: Consider/Discuss/Action an Ordinance adopting the 2026 Water Conservation Plan for the City of Anna, Texas. (City Engineer Kevin Bates P.E.) (Assistant Director of Public Works Steven Smith) SUMMARY: The City must update and submit its Water Conservation Plan (WCP) every five years to the Texas Commission on Environmental Quality (TCEQ) and Texas Water Development Board (TWDB). FINANCIAL IMPACT: This item has no financial impact. BACKGROUND: Staff has used TCEQ's guidance and model to update the WCP for 2026. STRATEGIC CONNECTIONS: This item supports the City of Anna Strategic Plan, specifically advancing the strategic outcome area: Resilient. Anna's mobility and utility infrastructure consistently meets community needs by: • Focusing on resiliency and the City's ability to recover from upsets • Having a robust multi-modal transportation network • Dependably delivering utility services to the City's neighbors and businesses ATTACHMENTS: 1. WCP Ordinance 2. 2026 WCP Update CITY OF ANNA, TEXAS the City of Anna, Texas (the “City”), recognizes that the amount of water available to its water customers is limited; and , the City recognizes that due to natural limitations, drought conditions, system failures, and other acts of God which may occur, the City cannot guarantee an uninterrupted water supply for all purposes at all times; and , the Texas Water Code and the regulations of the Texas Commission on Environmental Quality (the “Commission”) require that the City adopt a Water Conservation Plan; and , the City has determined an urgent need in the best interests of the public to adopt a Water Conservation Plan; and , pursuant to Chapter 54 of the Texas Local Government Code, the City is authorized to adopt such Ordinance necessary to preserve and conserve its water resources; and The City Council of the City of Anna, Texas (the “City Council”) desires to adopt the 2026 Water Conservation Plan and all of its appendices (collectively, the “Plan”) attached hereto as Exhibit A, as if recited verbatim herein. The City commits to implement the requirements and procedures set forth in the adopted plan. Any customer, defined under Title 30 Tex. Admin. Code Chapter 291, failing to comply with the provisions of the Plan shall be subject to a fine of up to two thousand dollars ($2,000.00) and/or discontinuance of water service by the City. Proof of a culpable mental state is not required for a conviction of an offense under this section. Each day a customer fails to comply with the Plan is a separate violation. The City’s authority to seek injunctive or civil relief available under the law is not limited by this section. The City Council does hereby find and declare that sufficient written notice of the date, hour, place and subject of the meeting adopting this ordinance was posted at the designated place convenient to the public for the time required by law preceding the meeting, that such place of posting was readily accessible at all times to the general public, and that all of the foregoing was done as required by law at all times during which the ordinance and the subject matter thereof has been discussed, considered and formally acted upon. The City Council further ratifies, approves, and confirms such written notice and posting thereof. Section 4. All ordinances of the City in conflict with the provisions of this ordinance are repealed to the extent of that conflict. In any section, subsection, sentence, clause, or phrase of this ordinance, or its application to a particular set of persons or circumstances, is declared invalid or adjudged unconstitutional by a court of competent jurisdiction, it does not affect the remaining portions of this ordinance, as the various portions and provisions of this ordinance are severable. The City Council declares that it would have passed each and every part of this ordinance, notwithstanding the omission of any part that is declared invalid or unconstitutional. Section 5. The City Manager or designee is hereby directed to file a copy of the Plan and this ordinance with the Commission in accordance with Title 30 Tex. Admin. Code Chapter 288. Section 6. The City Secretary is hereby authorized and directed to cause publication of the descriptive caption of this ordinance as an alternative method of publication provided by law. Section 7. This ordinance shall become effective after its passage and upon the posting and/or publication, if required by law. APPROVED AND ADOPTED by the City Council of the City of Anna, Texas, on this the 9th day of June 2026. WATER CONSERVATION PLAN FOR THE CITY OF ANNA MAY 19, 2026 2026 Water Conservation Plan City of Anna i TABLE OF CONTENTS 1. INTRODUCTION AND OBJECTIVES .............................................................................. 1-1 2. DEFINITIONS AND ABBREVIATIONS ............................................................................ 2-1 3. REGULATORY BASIS FOR WATER CONSERVATION PLAN ............................................. 3-1 3.1 TCEQ Rules Governing Conservation Plans ................................................................. 3-1 3.2 Guidance and Methodology for Reporting on Water Conservation and Water Use .... 3-3 4. WATER UTILITY PROFILE ............................................................................................. 4-1 5. SPECIFICATION OF WATER CONSERVATION GOALS .................................................... 5-1 6. BASIC WATER CONSERVATION STRATEGIES ............................................................... 6-2 6.1 Metering, Water Use Records, Control of Water Loss, and Leak Detection and Repair 6-2 6.1.1 Accurate Metering of Treated Water Deliveries ................................................... 6-2 6.1.2 Metering of Customer and Public Uses and Meter Testing, Repair, and Replacement 6-2 6.1.3 Determination and Control of Water Loss ............................................................ 6-2 6.1.4 Leak Detection and Repair ................................................................................... 6-3 6.1.5 Record Management System ............................................................................... 6-3 6.2 Continuing Public Education and Information Campaign ............................................ 6-4 6.3 Reservoir System Operation Plan ............................................................................... 6-4 6.4 Coordination with Regional Water Planning Group and GTUA .................................... 6-4 6.5 Requirement for Water Conservation Plans by Wholesale Customers ........................ 6-5 6.6 Increasing Block Water Rate Structure ....................................................................... 6-5 7. ENHANCED WATER CONSERVATION STRATEGIES ....................................................... 7-6 7.1 Ordinances, Plumbing Codes, or Rules on Water-Conserving Fixtures ........................ 7-6 7.2 Reuse and Recycling of Wastewater ........................................................................... 7-6 7.3 Interactive Weather Stations / “Water My Yard” Program ......................................... 7-6 7.4 Compulsory Landscape and Water Management Measures ....................................... 7-7 7.5 Monitoring of Effectiveness and Efficiency - GTUA Annual Water Conservation Report 7- 8 8. IMPLEMENTATION AND ENFORCEMENT OF THE WATER CONSERVATION PLAN ........ 8-1 9. REVIEW AND UPDATE OF WATER CONSERVATION PLAN ............................................ 9-1 LIST OF TABLES Table 5-1 Five-Year and Ten-Year Per Capita Water Use Goals (GPCD) ......................................... 2026 Water Conservation Plan City of Anna ii APPENDICES APPENDIX A List of References APPENDIX B Texas Commission on Environmental Quality Rules on Water Conservation Plans for Municipal Uses by Public Water Suppliers • Texas Administrative Code Title 30, Chapter 288, Subchapter A, Section 288.1 – Definitions • Texas Administrative Code Title 30, Chapter 288, Subchapter A, Rule Section 288.2 – Water Conservation Plans for Municipal Uses by Public Water Suppliers APPENDIX C TCEQ Water Utility Profile APPENDIX D GTUA Customer Water Conservation Report APPENDIX E Considerations for Landscape Water Management Regulations APPENDIX F Letters to Region C Water Planning Group and GTUA APPENDIX G Adoption of Water Conservation Plan • Municipal Ordinance Adopting Water Conservation Plan APPENDIX H Illegal Water Connections and Theft of Water • Municipal Ordinance Pertaining to Illegal Water Connections and Theft of Water APPENDIX I Sample Landscape Ordinance APPENDIX J Water Resource and Emergency Management Plan 2026 Water Conservation Plan City of Anna 2-1 1. INTRODUCTION AND OBJECTIVES This 2026 Water Conservation Plan was prepared utilizing the 2024 Water Conservation Plan for North Texas Municipal Water District (NTMWD) Member Cities and Customers, prepared by Freese and Nichols, Inc. for NTMWD.1 The City of Anna has developed this Water Conservation Plan to be consistent with TCEQ guidelines and requirements. The best management practices established by the Water Conservation Implementation Task Force3 were also considered in the development of the water conservation measures. This Water Conservation Plan includes measures that are intended to result in ongoing, long -term water savings. This plan replaces the previous plan dated February 2019. The objectives of this water conservation plan are as follows: • To reduce water consumption from the levels that would prevail without conservation efforts. • To reduce the loss and waste of water. • To improve efficiency in the use of water. • Encourage efficient outdoor water use. • To maximize the level of recycling and reuse in the water supply. • To extend the life of current water supplies by reducing the rate of growth in demand. *Superscripted numbers match references listed in Appendix A. 2. DEFINITIONS AND ABBREVIATIONS 1. ATHLETIC FIELD means a public sports competition field, the essential feature of which is turf grass, used primarily for organized sports practice, competition or exhibition events for schools ; professional sports and league play sanctioned by the utility providing retail water supply. 2. COOL SEASON GRASSES are varieties of turf grass that grow best in cool climates primarily in northern and central regions of the U.S. Cool season grasses include perennial and annual rye grass, Kentucky blue grass and fescues. 2026 Water Conservation Plan City of Anna 2-2 3. DRIP IRRIGATION is a type of micro-irrigation system that operates at low pressure and delivers water in slow, small drips to individual plants or groups of plants through a network of plastic conduits and emitters; also called trickle irrigation. 4. EVAPOTRANSPIRATION (ET) represents the amount of water lost from plant material to evaporation and transpiration. The amount of ET can be estimated based on the temperature, wind, and relative humidity. 5. ET/SMART CONTROLLERS are irrigation controllers that adjust their schedule and run times based on weather (ET) data. These controllers are designed to replace the amount of water lost to evapotranspiration. 6. IRRIGATION SYSTEM means a permanently installed, custom-made, site-specific system of delivering water generally for landscape irrigation via a system of pipes or other conduits installed below ground. 7. LANDSCAPE means any plant material on a property, including any tree, shrub, vine, herb, flower, succulent, ground cover, grass or turf species, that is growing or has been planted out of doors. 8. MUNICIPAL USE means the use of potable water provided by a public water supplier as well as the use of treated wastewater effluent for residential, commercial, industrial, agricultural, institutional, and wholesale uses. 9. NORTH TEXAS MUNICIPAL WATER DISTRICT means the wholesale water supplier of water to Greater Texoma Utility Authority. 10. REGULATED IRRIGATION PROPERTY means any (customer class, i.e. commercial) property that uses (over a certain amount) of water or more for irrigation purposes in a single calendar year or is greater than (certain size). 11. RESIDENTIAL GALLONS PER CAPITA PER DAY means (Residential GPCD) the total gallons sold for residential use by a public water supplier divided by the residential population served and then divided by the number of days in the year. 12. RETAIL CUSTOMERS include those customers to whom the utility provides retail water from a water meter. 2026 Water Conservation Plan City of Anna 2-3 13. TOTAL GALLONS PER CAPITA PER DAY (Total GPCD) means the total amount of water diverted and/or pumped for potable use divided by the total permanent population divided by the days of the year. Diversion volumes of reuse as defined in TAC 288.1 shall be credited against total diversion volumes for the purposes of calculating GPCD for targets and goals. 14. WATER CONSERVATION PLAN means the Customer water conservation plan approved and adopted by the utility. Abbreviations Abbreviation Full Nomenclature BMP Best Management Practices GTUA Greater Texoma Utility Authority NTMWD or District North Texas Municipal Water District TCEQ Texas Commission on Environmental Quality TWDB Texas Water Development Board WCAC Water Conservation Advisory Council WCP Water Conservation Plan 2026 Water Conservation Plan City of Anna 3-1 3. REGULATORY BASIS FOR WATER CONSERVATION PLAN 3.1 TCEQ Rules Governing Conservation Plans The TCEQ rules governing development of water conservation plans for municipal uses by public water suppliers are contained in Title 30, Chapter 288, Subchapter A, Section 288.2 of the Texas Administrative Code, which is included in Appendix B. For the purpose of these rules, a water conservation plan is defined as “[a] strategy or combination of strategies for reducing the volume of water withdrawn from a water supply source, for reducing the loss or waste of water, for maintaining or improving the efficiency in the use of water, for increasing the recycling and reuse of water, and for preventing the pollution of water.” 2 The water conservation plan elements required by the TCEQ water conservation rules that are covered in this Water Conservation Plan are listed below. Minimum Conservation Plan Requirements The minimum requirements in the Texas Administrative Code for Water Conservation Plans for Municipal Uses by Public Water Suppliers are covered in this Water Conservation Plan as follows: • 288.2(a)(1)(A) – Utility Profile – Section 4 and Appendix C • 288.2(a)(1)(B) – Record Management System – Section 6.1.5 • 288.2(a)(1)(C) – Specific, Quantified Goals – Section 5 • 288.2(a)(1)(D) – Accurate Metering – Section 6.1.1 • 288.2(a)(1)(E) – Universal Metering – Section 6.1.2 • 288.2(a)(1)(F) – Determination and Control of Water Loss – Sections 6.1.3 and 6.1.4 • 288.2(a)(1)(G) – Public Education and Information Program – Section 6.2 • 288.2(a)(1)(H) – Non-Promotional Water Rate Structure – Section 6.6 • 288.2(a)(1)(I) – Reservoir System Operation Plan – Section 6.3 • 288.2(a)(1)(J) – Means of Implementation and Enforcement – Section 8 • 288.2(a)(1)(K) – Coordination with Regional Water Planning Group – Section 6.4 and Appendix F • 288.2(c) – Review and Update of Plan – Section 9 2026 Water Conservation Plan City of Anna 3-2 Conservation Additional Requirements • The Texas Administrative Code includes additional requirements for water conservation plans for drinking water supplies serving a population over 5,000 • 288.2(a)(2)(A) – Leak Detection, Repair, and Water Loss Accounting – Sections 6.1.4 • 288.2(a)(2)(B) – Requirement for Water Conservation Plans by Wholesale Customers – Section 6.5 Additional Conservation Strategies In addition to the TCEQ required elements of a water conservation plan the following water conservation strategies are included in the City of Anna Water Conservation Plan, as required by GTUA/NTMWD: • 288.2(a)(3)(A) – Conservation Oriented Water Rates – Section 6.6 • 288.2(a)(3)(F) – Considerations for Landscape Water Management Regulations – Section 7.4 and Appendix E TCEQ rules also include options of conservation measures that may be adopted by public water suppliers but are not required. The following strategies are included in the City of Anna Water Conservation Plan: • 288.2(a)(3)(B) – Ordinances, Plumbing Codes or Rules on Water-Conserving Fixtures – Section 7.1 • 288.2(a)(3)(C) – Replacement or Retrofit of Water-Conserving Plumbing Fixtures – Section 7.5 • 288.2(a)(3)(D) – Reuse and Recycling of Wastewater – Section 7.2 • 288.2(a)(3)(F) – Considerations for Landscape Water Management Regulations – Section 7.3, 7.4 • 288.2(a)(3)(G) – Monitoring Method – Section 7.5 • 288.2(a)(3)(H) – Additional Conservation Practices – Section 7.5 2026 Water Conservation Plan City of Anna 3-3 3.2 Guidance and Methodology for Reporting on Water Conservation and Water Use In addition to TCEQ rules regarding water conservation, this plan also incorporates elements of the Guidance and Methodology for Reporting on Water Conservation and Water Use developed by TWDB and TCEQ3, in consultation with the WCAC (the “Guidance”). The Guidance was developed in response to a charge by the 82nd Texas Legislature to develop water use and calculation methodology and guidance for preparation of water use reports and water conservation plans in accordance with TCEQ rules. 2026 Water Conservation Plan City of Anna 4-1 4. WATER UTILITY PROFILE Appendix C to this Water Conservation Plan is a water utility profile based on the format recommended by the TCEQ. Upon completion, a final water utility profile will be provided to GTUA as well as to TCEQ. 2026 Water Conservation Plan City of Anna 5-1 5. SPECIFICATION OF WATER CONSERVATION GOALS TCEQ rules require the adoption of specific water conservation goals for a water conservation plan. As part of plan adoption, the City of Anna has developed 5-year and 10-year goals for water savings, including goals for per capita municipal use and for water loss programs. The goals for this water conservation plan include the following: • Maintain the total and residential per capita water use below the specified amount in gallons per capita per day in a dry year, as shown in the completed Table 5-1. • Maintain the water loss percentage in the system below 20 percent annually in 2026 and subsequent years, as discussed in Section 6.1.3. • Implement and maintain a program of universal metering and meter replacement and repair, as discussed in Section 6.1.2. • Increase efficient water usage through a water conservation ordinance, order or resolution as discussed in Section 7.4 and Appendix E. (This ordinance is required by GTUA/NTMWD.) • Decrease waste in lawn irrigation by implementation and enforcement of landscape water management regulations, as discussed in Section 7.5. • Raise public awareness of water conservation and encourage responsible public behavior by a public education and information program, as discussed in Section 6.2. • Development of a system specific strategy to conserve water during peak demands, thereby reducing the peak use. 2026 Water Conservation Plan City of Anna 6-2 Table 5.1 Water Conservation Plan 5- and 10- Year Goals for Water Savings Facility Name: City of Anna Water Conservation Plan Year: 2026 Historic 5 Year Average Baseline 5 Year Goal for Year 2024 10 Year Goal for Year 2029 Total GPCD1 66 110 100 95 Residential GPCD2 66 80 65 65 Water Loss (GPCD)3 25 10 10 10 Water Loss (Percentage)4 28 % 20 % 20% 18% 1. Total GPCD = (Total Gallons in System /Permanent Population) / 365 2. Residential GPCD = (Gallons used for Residential Use/ Residential Population) / 365 3. Water Loss GPCD = (Total Water Loss / Permanent Population) / 365 4. Water Loss Percentage = (Total Water Los / Total Gallons in System) X 100; or (Water Loss GPCD / Total GPCD) X 100 6. BASIC WATER CONSERVATION STRATEGIES 6.1 Metering, Water Use Records, Control of Water Loss, and Leak Detection and Repair One of the key elements of water conservation is tracking water use and controlling losses through illegal diversions and leaks. The City of Anna carefully meters water use, detects and repairs leaks in the distribution system and provides for regular monitoring of real losses. 6.1.1 Accurate Metering of Treated Water Deliveries Water deliveries from the City of Anna are metered by the City using meters with accuracy of ±5%. These meters are calibrated on an annual basis by the City of Anna to maintain the required accuracy. 6.1.2 Metering of Customer and Public Uses and Meter Testing, Repair, and Replacement The provision of water to all customers, including publi c and governmental users, is metered by the City of Anna. All customer meters are replaced on a minimum of a 10-year cycle. 6.1.3 Determination and Control of Water Loss 2026 Water Conservation Plan City of Anna 6-3 Total water loss is the difference between the water delivered from GTUA and any other source, and the metered water sales to customers plus water authorized for use but not sold. (Authorized for use but not sold would include use for fire-fighting, releases for flushing of lines, uses associated with new construction, etc.) Total water loss includes two categories: • Apparent Losses – Includes inaccuracies in customer meters (customer meters tend to run more slowly as they age and under-report actual use); Losses due to illegal connections and theft. (included in Appendix H); accounts that are being used but have not yet been added to the billing system. • Real Losses – Includes physical losses from the system or mains, reported breaks and leaks, storage overflow and unreported losses. Measures to control water loss are part of the routine operations of the City of Anna. City maintenance crews and personnel look for and report evidence of leaks in the water distribution system. A leak detection and repair program is described in Section 6.1.4 below. Meter readers watch for and report signs of illegal connections so that they can be quickly addressed. With the measures described in this plan, the City of Anna maintains a water loss percentage below 9 percent each year. If total water loss exceeds this goal, the City of Anna will implement a more intensive audit to determine the source(s) of loss and to reduce the water loss. The annual conservation report described below is the primary tool that is used to monitor water loss. 6.1.4 Leak Detection and Repair Water utility crews and personnel look for and report evidence of leaks in the water distribution system. Areas of the water distribution system in which numerous leaks and line breaks occur are targeted for replacement as funds are available. 6.1.5 Record Management System The City of Anna record management system allows for the separation of water sales and uses into residential, commercial, public/institutional, and industrial categories. This information is included in an annual water conservation report. 2026 Water Conservation Plan City of Anna 6-4 6.2 Continuing Public Education and Information Campaign The continuing public education and information campaign on water conservation includes the following elements: • Utilize the “Water IQ: Know Your Water” and other public education materials produced by NTMWD. • Utilize the NTMWD “Water4Otter” campaign for students. • Insert water conservation information with water bills. Inserts will include material developed by the City of Anna staff and material obtained from the TWDB, TCEQ, and other sources. • Encourage local media coverage of water conservation issues and the importance of water conservation. • Notify local organizations, schools, and civic groups that City staff is available to make presentations on the importance of water conservation and ways to save water. • Promote the Texas Smartscape website (www.txsmartscape.com) and provide water conservation brochures and other water conservation materials available to the public at City Hall and other public places. • Make information on water conservation available on the City’s website and include links to the “Water IQ: Know Your Water” website, Texas Smartscape website and to information on water conservation on the TWDB and TCEQ web sites and other resources. • Utilize the NTMWD Water My Yard website and encourage customers to sign-up to receive weekly watering advice. 6.3 Reservoir System Operation Plan The City of Anna does not operate a reservoir system. 6.4 Coordination with Regional Water Planning Group and GTUA Appendix F includes letters to be forwarded to the Chair of the Region C Water Planning Group and GTUA accompanied by this Water Conservation Plan. The adopted ordinance(s) and the adopted water conservation plan will be sent to the Chair of the regional water planning group and GTUA. 2026 Water Conservation Plan City of Anna 6-5 6.5 Requirement for Water Conservation Plans by Wholesale Customers Every contract for the wholesale sale of water by the City of Anna that is entered into, renewed, or extended after the adoption of this water conservation plan will include a requirement that the wholesale customer and any wholesale customers of that wholesale customer develop and implement a water conservation plan meeting the requirements of Title 30, Chapter 288, of the Texas Administrative Code. This requirement extends to each successive wholesale customer in the resale of the water. The City of Anna is not currently a wholesale water provider. 6.6 Increasing Block Water Rate Structure The City of Anna has adopted the following water rate structure: Meter Size Base Water Rate ¾” $35.10 1” $78.17 1 ½” $149.96 2” $236.11 3” $437.27 4” $724.27 6” $1,442.18 8” $2,877.97 10” $7,185.38 Water Rates Price per 1,000 gallons 2,001 – 10,000 $8.38 10,001 – 15,000 $10.48 15,001 – 20,000 $12.57 Over 20,001 $16.74 2026 Water Conservation Plan City of Anna 7-6 7. ENHANCED WATER CONSERVATION STRATEGIES 7.1 Ordinances, Plumbing Codes, or Rules on Water-Conserving Fixtures The state has required water-conserving fixtures in new construction and renovations since 1992. The state standards call for flows of no more than 2.5 gallons per minute (gpm) for faucets, 2.5 gpm for showerheads. As of January 1, 2014, the state requires maximum average flow rates of 1.28 gallons per flush (gpf) for toilets and 0.5 gpf for urinals. Similar standards are now required under federal law. These state and federal standards assure that all new construction and renovations will use water-conserving fixtures. Rebate programs to encourage replacement of older fixtures with water conservation programs are discussed in Section 7.5. 7.2 Reuse and Recycling of Wastewater Currently the City of Anna does not recycle wastewater. Research regarding reuse of treated effluent for irrigation purposes at the plant site will be conducted, if practical. Other alternatives for reuse of recycled wastewater effluent will also be researched, in practical. 7.3 Interactive Weather Stations / “Water My Yard” Program NTMWD has developed the Water My Yard program to install weather stations throughout its service area in order to provide consumers with a weekly e-mail and information through the “Water My Yard” website to assist consumers in determining an adequate amount of supplemental water to maintain healthy grass in a specific location. This service represents the largest network of weather stations providing ET-based irrigation recommendations in the State of Texas, and provides the public advanced information reg arding outdoor irrigation needs, thereby reducing water use. Through a series of selections on the type of irrigation system a consumer has, a weekly email is provided that will determine how long (in minutes) an irrigation system needs to run based on the past seven days of weather. This recommendation provides the actual amount of supplemental water that is required for a healthy lawn based on research of the Texas A&M Agrilife Extension Service and proven technologies. This innovative program has been available to those within the NTMWD service area since May 2013. The City of Anna will encourage customers to subscribe to weekly watering updates through Water My Yard or other similar program in an effort to reduce outdoor water consumption. 2026 Water Conservation Plan City of Anna 7-7 7.4 Compulsory Landscape and Water Management Measures The following landscape water management measures are required by GTUA to be included in this Plan, due to GTUA’s contract with NTMWD. These measures represent minimum measures to be implemented and enforced in order to irrigate the landscape appropriately and are to remain in effect on a permanent basis unless water resource management stages are declared. 1. Landscape Water Management Measures • Limit landscape watering with sprinklers or irrigation systems at each service address to no more than two days per week (April 1 – October 31), with education that less than twice per week is usually adequate. (NTMWD has identified assigning designated watering days as a BMP and suggests implementing a watering schedule as part of this measure). Additional watering of landscape may be provided by hand-held hose with shutoff nozzle, use of dedicated irrigation drip zones. An exception is allowed for landscape associated with new construction that may be watered as necessary for 30 days from the installation of new landscape features. • Limit landscape watering with sprinklers or irrigation systems at each service address to no more than one day per week beginning November 1 and ending March 31 of each year, with education that less than once per week is usually adequate. • Estimated savings from the year-round watering restrictions, mentioned above, since NTMWD terminated drought stages in 2015 is approximately 2.5 to 3.5 percent on an average annualized basis. • Prohibit lawn irrigation watering from 10 AM to 6 PM (April 1 – October 31). • Prohibit the use or irrigation systems that water impervious surfaces. (Wind-driven water drift will be taken into consideration.) • Prohibit outdoor watering during precipitation or freeze events. • Prohibit use of poorly maintained sprinkler systems that waste water. • Prohibit excess water runoff or other obvious waste. • Require rain and freeze sensors and/or ET or Smart controllers on all new irrigation systems. Rain and freeze sensors and/or ET or Smart controllers must be maintained to function properly. 2026 Water Conservation Plan City of Anna 7-8 • Prohibit overseeding, sodding, sprigging, broadcasting or plugging with cool season grasses or watering cool season grasses, except for golf courses and athletic fields. • Require that irrigation systems be inspected at the same time as initial backflow preventer inspection. • Requirement that all new irrigation systems be in compliance with state design and installation regulations (Texas Administrative Code Title 30, Chapter 344). • Require the owner of a regulated irrigation property to obtain an evaluation of any permanently installed irrigation system on a periodic basis. The irrigation evaluation shall be conducted by an licensed irrigator in the State of Texas and be submitted to the local water provider (i.e., city, water supply corporation). 2. Additional Water Management Measures • Prohibit the use of potable water to fill or refill residential, amenity, and any other natural or manmade ponds. A pond is considered to be a still body of water with a surface area of 500 square feet or more. • Non–commercial car washing can be done only when using a water hose with a shut- off nozzle. • Hotels and motels shall offer a linen reuse water conservation option to customers. • Restaurants, bars, and other commercial food or beverage establishments may not provide drinking water to customers unless a specific request is made by the customer for drinking water. Appendix E is a summary of considerations for landscape water management regulations adopted as part of the development of this water conservation plan. These regulations are intended to minimize waste in landscape irrigation. Appendix E includes the required lan dscape water measures laid out in this section. 7.5 Monitoring of Effectiveness and Efficiency - GTUA Annual Water Conservation Report Appendix D is a form that the City of Anna uses to develop its annual water conservation report. This form should be completed by March 31 of the following year and used to monitor the effectiveness and efficiency of the water conservation program and to plan conservation-related activities for the next year. The form records the water use by category, per capita municipal use, 2026 Water Conservation Plan City of Anna 7-9 and total water loss for the current year and compares them to historical values. As part of the development of Appendix D, the City of Anna will complete the tracking tool by March 31 of the following year and submit them to GTUA. 2026 Water Conservation Plan City of Anna 8-1 8. IMPLEMENTATION AND ENFORCEMENT OF THE WATER CONSERVATION PLAN Appendix G contains the ordinance adopted by the City Council approving the City of Anna Water Conservation Plan. Appendix E, the considerations for landscape water management regulations, also includes information about enforcement. Appendix H includes a copy of an ordinance adopted related to illegal connections and water theft. 2026 Water Conservation Plan City of Anna 9-1 9. REVIEW AND UPDATE OF WATER CONSERVATION PLAN TCEQ requires that the water conservation plans be updated every five years. The plan will be updated as required and as appropriate based on new or updated information. APPENDIX A LIST OF REFERENCES 1. Freese and Nichols, Inc.: 2019 Model Water Resource Management Plan for NTMWD Members Cities and Customers, prepared for the North Texas Municipal Water District, Fort Worth, February 2019. 2. Title 30 of the Texas Administrative Code, Part 1, Chapter 288, Subchapter B, Rules 288.20 3. Model Water Conservation Plan for Greater Texoma Utility Authority Customers APPENDIX B TEXAS COMMISSION ON ENVIRONMENTAL QUALITY RULES ON DROUGHT CONTINGENCY PLANS APPENDIX B TEXAS COMMISSION ON ENVIRONMENTAL QUALITY RULES ON DROUGHT CONTINGENCY PLANS TITLE 30 ENVIRONMENTAL QUALITY PART 1 TEXAS COMMISSION ON ENVIRONMENTAL QUALITY CHAPTER 288 WATER CONSERVATION PLANS, DROUGHT CONTINGENCY PLANS, GUIDELINES AND REQUIREMENTS SUBCHAPTER B DROUGHT CONTINGENCY PLANS RULE §288.20 Drought Contingency Plans for Municipal Uses by Public Water Suppliers (a) A drought contingency plan for a retail public water supplier, where applicable, must include the following minimum elements. (1) Minimum requirements. Drought contingency plans must include the following minimum elements. (A) Preparation of the plan shall include provisions to actively inform the public and affirmatively provide opportunity for public input. Such acts may include, but are not limited to, having a public meeting at a time and location convenient to the p ublic and providing written notice to the public concerning the proposed plan and meeting. (B) Provisions shall be made for a program of continuing public education and information regarding the drought contingency plan. (C) The drought contingency plan must document coordination with the regional water planning groups for the service area of the retail public water supplier to ensure consistency with the appropriate approved regional water plans. (D) The drought contingency plan must include a description of the information to be monitored by the water supplier, and specific criteria for the initiation and termination of drought response stages, accompanied by an explanation of the rationale or basis for such triggering criteria. (E) The drought contingency plan must include drought or emergency response stages providing for the implementation of measures in response to at least the following situations: (i) reduction in available water supply up to a repeat of the drought of record; (ii) water production or distribution system limitations; (iii) supply source contamination; or (iv) system outage due to the failure or damage of major water system components (e.g., pumps). (F) The drought contingency plan must include specific, quantified targets for water use reductions to be achieved during periods of water shortage and drought. The entity preparing the plan shall establish the targets. The goals established by the entity under this subparagraph are not enforceable. (G) The drought contingency plan must include the specific water supply or water demand management measures to be implemented during each stage of the plan including, but not limited to, the following: (i) curtailment of non-essential water uses; and (ii) utilization of alternative water sources and/or alternative delivery mechanisms with the prior approval of the executive director as appropriate (e.g., interconnection with another water system, temporary use of a non-municipal water supply, use of reclaimed water for non-potable purposes, etc.). (H) The drought contingency plan must include the procedures to be followed for the initiation or termination of each drought response stage, including procedures for notification of the public. (I) The drought contingency plan must include procedures for granting variances to the plan. (J) The drought contingency plan must include procedures for the enforcement of mandatory water use restrictions, including specification of penalties (e.g., fines, water rate surcharges, discontinuation of service) for violations of such restrictions. (2) Privately-owned water utilities. Privately-owned water utilities shall prepare a drought contingency plan in accordance with this section and incorporate such plan into their tariff. (3) Wholesale water customers. Any water supplier that receives all or a portion of its water supply from another water supplier shall consult with that supplier and shall include in the drought contingency plan appropriate provisions for responding to reductions in that water supply. (b) A wholesale or retail water supplier shall notify the executive director within five business days of the implementation of any mandatory provisions of the drought contingency plan. (c) The retail public water supplier shall review and update, as appropriate, the drought contingency plan, at least every five years, based on new or updated information, such as the adoption or revision of the regional water plan. Source Note: The provisions of this §288.20 adopted to be effective February 21, 1999, 24 TexReg 949; amended to be effective April 27, 2000, 25 TexReg 3544; amended to be effective October 7, 2004, 29 TexReg 9384 APPENDIX C WATER CONSERVATION UTILITY PROFILE Name of Utility: Public Water Supply Identification Number (PWS ID): Contact Information City: Email: Date: A.Population and Service Area Data Address: Zip Code: Zip+4: First Name: Telephone Number: Is this person the designated Conservation Coordinator? Regional Water Planning Group: Groundwater Conservation District: Our records indicate that your entity: Yes No UTILITY PROFILE FOR RETAIL WATER SUPPLIER Year Historical Population Served By Retail Water Service Historical Population Served By Wholesale Water Service Historical Population Served By Wastewater Water Service 2025 2024 2023 2022 2021 4.Described source(s)/method(s) for estimating current and projected populations. UTILITY PROFILE FOR RETAIL WATER SUPPLIER 2.Historical service area population for the previous five years, starting with the most current year. Average Year Projected Population Served By Retail Water Service Projected Population Served By Wholesale Water Service Projected Population Served By Wastewater Water Service 2030 2040 2050 2060 2070 3. Projected service area population for the following decades. Year Water Produced in Gallons Purchased/ Imported Water in Gallons Exported Water in Gallons Total System Input Total GPCD 2021 Historic 5- year Average B. System Input System input data for the previous five years. Total System Input = Self-supplied + Imported – Exported C. Water Supply System 1. Designed daily capacity of system in gallons 2. Storage Capacity 2a. Elevated storage in gallons: 2b. Ground storage in gallons: D. Projected Demands 1. Estimate the water supply requirements for the next ten years using population trends, historical water use, economic growth, etc. The 5 and 10 year projections must align with your 5 & 10 year targets and goals. Year Population Water Demand (gallons)GPCD 2027 2028 2029 2030 2031 2032 Page 3 of 10 UTILITY PROFILE FOR RETAIL WATER SUPPLIER 2.Description of source data and how projected water demands were determined. E.High Volume Customers F.Utility Data Comment Section Additional comments about utility data. Residential - Single Family Residential - Multi-Family Industrial Commercial Institutional Agricultural 1. List of active retail connections by major water use category. Section II: System Data Page 4 of 10 UTILITY PROFILE FOR RETAIL WATER SUPPLIER Please attach a list of the annual water use for the five highest RETAIL customers by volume and include customer name, water use category, and water type (Treated/Raw). 2. Net number of retail water supplier connections, installed and removed, by water use category per year for the previous five years. Net Number of Retail Water Supplier Connections Year Residential - Single Family Residential - Multi-Family Industrial Commercial Institutional Agricultural Total 2025 2024 2023 2022 2021 1. Gallons of RETAIL water provided to each major water use category. These volumes come from the previous five years of water use survey data. If a field is open to edit, please enter the volumes. Year Residential - Single Family Residential - Multi-Family Industrial Commercial Institutional Agricultural Total 2025 2024 2023 2022 2021 B. Annual and Seasonal Use Page 5 of 10 UTILITY PROFILE FOR RETAIL WATER SUPPLIER Summer RETAIL (Treated) Total RETAIL (Treated) 2025 2024 2023 2022 2021 Average in Gallons 3. Summary of seasonal and annual water use. Total Gallons of Treated Water Month 2025 2024 2023 2022 2021 January February March April May June July August September October November December Total 2. The gallons of water billed and metered to RETAIL customers for the previous five years. The total for each year should match the total for each year in the accounting table. Page 6 of 10 UTILITY PROFILE FOR RETAIL WATER SUPPLIER Year Total Residential GPCD 2025 2024 2023 2022 2021 Historic Average Average Daily Water Use and Peak Day Water Use for the previous five years. 4. Peak Day Use Year Average Daily Use (gal) Peak Day Use (gal) Ratio (peak/avg) 2025 2024 2023 2022 2021 5. Summary of Historic Water Use Water Use Category Historic Average Percent of Connections Percent of Water Use Residential - Single Family Residential - Multi-Family Industrial Commercial Institutional Agricultural Page 7 of 10 UTILITY PROFILE FOR RETAIL WATER SUPPLIER The previous five years residential GPCD for single family and multi-family units. C. Residential Water Use Total Water loss data for the previous five years. D. Water Loss Year Total Water Loss in Gallons Water Loss in GPCD 2025 2024 2023 2022 2021 Average E. System Data Comment Section A. Wastewater System Data Section III: Wastewater System Data 1. Design capacity of wastewater treatment plant(s) in gallons per day: Water Use Category Metered Unmetered Total Connections Percent of Total Connections Municipal Industrial Commercial Institutional Agricultural Total 2. List of active wastewater connections by major water use category. UTILITY PROFILE FOR RETAIL WATER SUPPLIER Total Gallons of Treated Water Month 2025 2024 2023 2022 2021 January February March April May June July August September October November December Total 4. Number of gallons of wastewater that was treated by the utility for the previous five years. 5. Could treated wastewater be substituted for potable water? Yes No Page 9 of 10 UTILITY PROFILE FOR RETAIL WATER SUPPLIER B.Reuse Data 1.Data by type of recycling and reuse activities implemented during the current reporting period. Type of Reuse Total Annual Volume (in gallons) On-site Irrigation Plant wash down Chlorination/de-chlorination Industrial Landscape irrigation (park,golf courses) Agricultural Discharge to surface water Evaporation Pond Other Total C. Wastewater System Data Comment Page 10 of 10 UTILITY PROFILE FOR RETAIL WATER SUPPLIER APPENDIX D GTUA CUSTOMER WATER CONSERVATION REPORT Greater Texoma Utility Authority 2024 Water Conservation and Water Resource and Emergency Management Plan Adopted on 5/20/2024 2024 Water Conservation and Water Resource and Emergency Management Plans Greater Texoma Utility Authority TABLE OF CONTENTS Water Conservation Plan 1.00 Introduction ................................................................................................................................................ 1 1.01 Minimum Regulatory Requirements Checklist ........................................................................... 1 1.02 Additional Requirements and Guidance ...................................................................................... 1 2.00 Water Utility Profile ................................................................................................................................. 3 2.01 Description of the Service Area ...................................................................................................... 3 2.02 Water Utility Profile ............................................................................................................................ 3 3.00 Water Conservation Goals .................................................................................................................... 3 3.01 5- and 10-Year Goals ......................................................................................................................... 3 3.02 Method for Tracking ............................................................................................................................ 4 4.00 Metering, Records and Water Loss Control ..................................................................................... 4 4.01 Metering Program ............................................................................................................................... 4 4.02 Monitoring and Record Management Program.......................................................................... 6 4.03 Water Loss Control Program ........................................................................................................... 6 5.00 Contract Requirements for Wholesale Customers ....................................................................... 6 6.00 Reservoir System Operations Plan ..................................................................................................... 7 7.00 Conservation Plan Adoption and Enforcement .............................................................................. 7 7.01 Means of Implementation and Enforcement ............................................................................... 7 7.02 Review and Update of Water Conservation Plan ..................................................................... 7 7.03 Regional Water Planning Group and NTMWD Notification .................................................. 8 8.00 Water Conservation Program............................................................................................................... 8 8.01 Public Education Program ................................................................................................................ 8 8.02 Required Conservation Strategies ................................................................................................. 8 A. TCEQ Conservation Plan Requirements ...................................................................................... 8 B. Conservation Coordinator ................................................................................................................. 9 C. Water Conservation Pricing ............................................................................................................. 9 D. Ordinances, Plumbing Codes, or Rules on Water-Conserving Fixtures ............................ 9 E. Reuse and Recycling of Wastewater ......................................................................................... 10 F. Year-Round Outdoor Watering Schedules ............................................................................... 10 2024 Water Conservation and Water Resource and Emergency Management Plans Greater Texoma Utility Authority G. Time of Day Watering Schedule.................................................................................................. 10 H. Irrigation System Requirements for New and Commercial Systems ............................... 11 I. Water Waste Provisions ................................................................................................................. 11 8.03 Additional Conservation Strategies ............................................................................................ 12 A. Annual Reports ................................................................................................................................. 12 9.00 Landscape Water Management Measures……………………………………………………………..………15 A. In-House Conservation Efforts………………………………………………………………………………………….15 B. Additional Water Conservation Measures (Not Required in Model WCP)…………………..16 2024 Water Conservation and Water Resource and Emergency Management Plans Greater Texoma Utility Authority Water Resource and Emergency Management Plan 1.00 Introduction ................................................................................................................................................ 1 1.01 Minimum Regulatory Requirements .............................................................................................. 1 2.00 Implementation and Enforcement ...................................................................................................... 1 2.01 Provisions to Inform the Public and Opportunity for Input .................................................... 1 2.02 Program for Continuing Public Education and Information ................................................... 2 2.03 Coordination with the Regional Water Planning Groups and NTMWD ............................ 2 2.04 Initiation and Termination of Water Resource Management Statges .. Error! Bookmark not defined. A. Inititation of a Water Resource Management Stage ................................................................ 2 B. Termination of a Water Resource Management Stage ........................................................... 3 2.05 Procedure for Granting Variances to the Plan ............................................................................ 4 2.06 Procedures for Enforcing Mandatory Water use Restrictions ............................................... 4 2.07 Review and Update of Water Resource and Emergency Management Plan ................... 5 3.00 Water Resource and Emergency Management Plan .................................................................... 5 3.01 Water Resource Management – Stage 1 ..................................................................................... 6 A. Initiation and Termination Criteria for Stage 1 ........................................................................... 6 B. Goal for Use Reduction Under Stage 1 ........................................................................................ 7 C. Water Management Measures Available Under Stage 1 ....................................................... 7 3.02 Water Resource ManagemEnt – Stage 2 ..................................................................................... 8 A. Initiation and Termination Criteria for Stage 2 ........................................................................... 8 B. Goal for Use Reduction Under Stage 2 ........................................................................................ 9 C. Water Management Measures Available Under Stage 2 ....................................................... 9 3.03 Water Resource Management – Stage 3 .................................................................................. 10 A. Initiation and Termination Criteria for Stage 3 ........................................................................ 10 B. Goal for Use Reduction Under Stage 3 ..................................................................................... 12 C. Water Management Measures Available Under Stage 3 .................................................... 12 2024 Water Conservation and Water Resource and Emergency Management Plans Greater Texoma Utility Authority APPENDICES APPENDIX A List of References APPENDIX B Texas Administrative Code Title 30 Chapter 288 APPENDIX C TCEQ Water Utility Profile APPENDIX D NTMWD Member City and Customer Annual Water Conservation Report APPENDIX E TCEQ Water Conservation Implementation Report APPENDIX F Letters to Regional Water Planning Group and NTMWD APPENDIX G Adoption of Plans APPENDIX H Sample Enforcement Ordinance (Illegal Water Connections and Theft of Water) APPENDIX I Sample Landscape Ordinance 2024 Water Conservation and Water Resource and Emergency Management Plans Greater Texoma Utility Authority DEFINITIONS AQUATIC LIFE means a vertebrate organism dependent upon an aquatic environment to sustain its life. ATHLETIC FIELD means a public sports competition field, the essential feature of which is turf grass, used primarily for organized sports practice, competition or exhibition events for schools, professional sports and league play sanctioned by the utility providing retail water supply. BEST MANAGEMENT PRACTICES (BMPs) are voluntary efficiency measures that save a quantifiable amount of water, either directly or indirectly, and that can be implemented within a specific time frame. COMMERCIAL VEHICLE WASH FACILITY means a permanently located business that washes vehicles or other mobile equipment with water or water-based products including, but not limited to, self-service car washes, full-service car washes, roll-over/in-bay style car washes, and facilities managing vehicle fleets or vehicle inventory. COMMERCIAL FACILITY means business or industrial buildings and the associated landscaping, but does not include the fairways, greens, or tees of a golf course. CONSERVATION includes those practices, techniques, and technologies that reduce the consumption of water, reduce the loss or waste of water, improve the efficiency in the use of water, or increase the recycling and reuse of water so that a water supply is made available for future or alternative uses. COOL SEASON GRASSES are varieties of turf grass that grow best in cool climates primarily in northern and central regions of the U.S. Cool season grasses include but are not limited to perennial and annual rye grass, Kentucky blue grass and fescues. CUSTOMERS include those entities to whom NTMWD provides wholesale water that are not member cities of NTMWD. DESIGNATED OUTDOOR WATER USE DAY means a day prescribed by a rule on which a person is permitted to irrigate outdoors. DRIP IRRIGATION is a type of micro-irrigation system that operates at low pressure and delivers water in slow, small drips to individual plants or groups of plants through a network of plastic conduits and emitters; also called trickle irrigation. DROUGHT, for the purposes of this report, means an extended period when an area receives insufficient amounts of rainfall to replenish the water supply, causing water supply sources (in this case reservoirs) to be depleted. 2024 Water Conservation and Water Resource and Emergency Management Plans Greater Texoma Utility Authority ET/SMART CONTROLLERS are irrigation controllers that adjust their schedule and run times based on weather (ET) data. These controllers are designed to replace the amount of water lost to evapotranspiration. EVAPOTRANSPIRATION (ET) represents the amount of water lost from plant material to evaporation and transpiration. The amount of ET can be estimated based on the temperature, wind, and relative humidity. EXECUTIVE DIRECTOR means the Executive Director of NTMWD and includes a person the Executive Director has designated to administer or perform any task, duty, function, role, or action related to this Plan or on behalf of the Executive Director. FOUNDATION WATERING means an application of water to the soils directly abutting (within 2 feet of) the foundation of a building or structure. INTERACTIVE WATER FEATURES means water sprays, dancing water jets, waterfalls, dumping buckets, shooting water cannons, inflatable pools, temporary splash toys or pools, slip-n-slides, or splash pads that are maintained for recreation. IRRIGATION SYSTEM means a permanently installed, custom-made, site-specific system of delivering water generally for landscape irrigation via a system of pipes or other conduits installed below ground. LANDSCAPE means any plant material on a property, including any tree, shrub, vine, herb, flower, succulent, ground cover, grass or turf species, which is growing or has been planted out of doors. MEMBER CITIES include the cities of Allen, Farmersville, Forney, Frisco, Garland, McKinney, Mesquite, Plano, Princeton, Richardson, Rockwall, Royse City, and Wylie, Texas, which are members of NTMWD. MUNICIPAL USE means the use of potable water provided by a public water supplier as well as the use of treated wastewater effluent for residential, commercial, industrial, agricultural, institutional, and wholesale uses. NEW LANDSCAPE means: (a) vegetation installed at the time of the construction of a residential or commercial facility; (b) installed as part of a governmental entity's capital improvement project; or (c) installed to stabilize an area disturbed by construction. ORNAMENTAL FOUNTAIN means an artificially created structure from which a jet, stream, or flow of treated water emanates and is not typically utilized for the preservation of aquatic life. POND is a still body of water with a surface area of 500 square feet or more. This does not include recreational swimming pools. 2024 Water Conservation and Water Resource and Emergency Management Plans Greater Texoma Utility Authority PUBLIC WATER SUPPLIER is an individual or entity that supplies water to the public for human consumption. REGIONAL WATER PLANNING GROUP is a group established by the Texas Water Development Board to prepare a regional water plan under Texas Water Code §16.053. REGULATED IRRIGATION PROPERTY means any property of a designated customer class (i.e., commercial) that uses one million gallons of water or more for irrigation purposes in a single calendar year or is greater than one acre in size. RESIDENTIAL GALLONS PER CAPITA PER DAY (RESIDENTIAL GPCD) means the total gallons sold for retail residential use by a public water supplier divided by the residential population served and then divided by the number of days in the year. RETAIL CUSTOMERS include those customers to whom the utility provides retail water from a water meter. REUSE is the authorized use for one or more beneficial purposes of use of water that remains unconsumed after the water is used for the original purpose of use and before that water is either disposed of or discharged or otherwise allowed to flow into a watercourse, lake, or other body of state-owned water. SOAKER HOSE means a perforated or permeable garden-type hose or pipe that is laid above ground that provides irrigation at a slow and constant rate. SPRINKLER/SPRAY IRRIGATION is the method of applying water in a controlled manner that is similar to rainfall. The water is distributed through a network that may consist of pumps, valves, pipes, and sprinklers. SPRINKLER means an above-ground water distribution device that may be attached to a garden hose. RECREATIONAL/SWIMMING POOL is defined as a body of water that involves contact recreation. This includes activities that are presumed to involve a significant risk of ingestion of water (e.g., wading by children, swimming, water skiing, diving, tubing, surfing, etc.) TOTAL GALLONS PER CAPITA PER DAY (TOTAL GPCD) means the total amount of water diverted and/or pumped for potable use less wholesale sales divided by the total permanent population divided by the days of the year. Diversion volumes of reuse as defined in TAC §288.1 shall be credited against total diversion volumes for the purposes of calculating GPCD for targets and goals. WATER CONSERVATION COORDINATOR is the person designated by a retail public water supplier that is responsible for implementing a water conservation plan. 2024 Water Conservation and Water Resource and Emergency Management Plans Greater Texoma Utility Authority WATER CONSERVATION PLAN means the Member City or Customer water conservation plan approved and adopted by the utility. WATER RESOURCE AND EMERGENCY MANAGEMENT PLAN means a plan for temporary supply management and demand management responses to temporary and potentially recurring water supply shortages and other water supply emergencies required by Texas Administrative Code Title 30, Chapter 288, Subchapter B. This is sometimes called a drought contingency plan. 2024 Water Conservation and Water Resource and Emergency Management Plans Greater Texoma Utility Authority ABBREVIATIONS Ac-Ft/Yr .................................................................................................................................... Acre-Feet per Year BMP......................................................................................................................... Best Management Practices CDC ........................................................................................... Centers for Disease Control and Prevention DWU .................................................................................................................................... Dallas Water Utilities E&O ................................................................................................................................. Education and Outreach ED ............................................................................................................................................... Executive Director EPA ............................................................................................................... Environmental Protection Agency ET ............................................................................................................................................... Evapotranspiration FNI .................................................................................................................................... Freese and Nichols, Inc. gpf ............................................................................................................................................... Gallons per Flush gpm ........................................................................................................................................... Gallons per Minute LAMP ................................................................................................................Linear Asset Management Plan LRWSP………………………………………………………………………………………………Long Range Water Supply Plan FWSD ...................................................................................................................... Fresh Water Supply District GPCD ........................................................................................................................ Gallons per Capita per Day ICIM ........................................................................... Industrial, Commercial, Institutional and Multifamily MGD ................................................................................................................................. Million Gallons per Day MUD ................................................................................................................................ Municipal Utility District NCTCOG ................................................................................ North Central Texas Council of Governments NTMWD ...............................................................................................North Texas Municipal Water District SUD ......................................................................................................................................Special Utility District TCEQ ....................................................................................... Texas Commission on Environmental Quality TRWD .............................................................................................................. Tarrant Regional Water District TWDB .......................................................................................................... Texas Water Development Board UTRWD ............................................................................................... Upper Trinity Regional Water District UD........................................................................................................................................................ Utility District WCAC ................................................................................................. Water Conservation Advisory Council WCP.............................................................................................................................. Water Conservation Plan WREMP .................................................................... Water Resource and Emergency Management Plan WSC ............................................................................................................................Water Supply Corporation WENNT......................................................................................... Water Efficiency Network of North Texas WTP .................................................................................................................................. Water Treatment Plant WWTP ................................................................................................................. Wastewater Treatment Plant 2024 Water Conservation Plan This Water Conservation Plan has been developed in accordance with the requirements of 30 Texas Administrative Code (TAC) Chapter 288. A copy of the version of 30 TAC Chapter 288 in place at the time of this Plan preparation is included in Appendix B. 2024 Water Conservation Plan Greater Texoma Utility Authority PAGE 1 1.00 INTRODUCTION Greater Texoma Utility Authority is a Customer of the North Texas Municipal Water District (NTMWD). This Plan was developed following TCEQ guidelines and requirements governing the development of water conservation plans. The goal of the Water Conservation Plan is to serve as good stewards of water resources by preserving water supplies for essential uses and the protection of public health. The objectives to achieve this goal are as follows: • To reduce the loss and waste of water. • To improve efficiency in both indoor and outdoor water use. • To maximize the level of recycling and reuse. • To protect and preserve environmental resources. • To extend the life of current water supplies. • To raise public awareness of water conservation and encourage responsible personal behavior through public education programs. 1.01 MINIMUM REGULATORY REQUIREMENTS CHECKLIST A water conservation plan is defined as “[a] strategy or combination of strategies for reducing the volume of water withdrawn from a water supply source, for reducing the loss or waste of water, for maintaining or improving the efficiency in the use of water, for increasing the recycling and reuse of water, and for preventing the pollution of water. A water conservation plan may be a separate document identified as such or may be contained within another water management document.” Recognizing the need for efficient use of existing water supplies, TCEQ has developed guidelines and requirements governing the development of water conservation and drought contingency plans. The minimum TCEQ requirements and where they are addressed within this document are included in Appendix B. 1.02 ADDITIONAL REQUIREMENTS AND GUIDANCE In addition to TCEQ rules regarding water conservation, this Plan also incorporates both minimum requirements as required from NTMWD and elements from several conservation initiatives. • 2024 NTMWD Water Conservation Plan – Member Cities and Customers of the NTMWD are required to implement water conservation strategies as designated in the NTMWD Water Conservation Plan. These strategies 2024 Water Conservation Plan Greater Texoma Utility Authority PAGE 2 represent minimum measures to be implemented and enforced to promote water conservation and are to remain in effect on a permanent basis. • Guidance and Methodology for Reporting on Water Conservation and Water Use - Developed by TWDB and TCEQ in consultation with the Water Conservation Advisory Council (the Guidance). The Guidance was developed in response to a charge by the 82nd Texas Legislature to develop water use and calculation methodology and guidance for preparation of water use reports and water conservation plans in accordance with TCEQ rules. • North Texas Regional Landscape Initiative – The North Texas regional water providers (NTMWD, DWU and TRWD) collaborated to create the Regional Landscape Initiatives. This document was developed as a resource of best management practices for municipal staff to help reduce water waste and encourage long-term water conservation in the North Texas region. Information consists of the background, importance, and benefits of each BMP and key talking points to consider when implementing the strategy. Several of the optional water management measures included in this Plan are from this collaborative initiative. 2.00 WATER UTILITY PROFILE This section contains a description of Greater Texoma Utility Authority ’s service area and water system. This information can also be reviewed in Appendix C, which contains a completed TCEQ Water Utility Profile. 2.01 DESCRIPTION OF THE SERVICE AREA GTUA’s service area is located in Collin and Grayson Counties. GTUA provides wholesale water to the city of Sherman and the NTMWD. Sherman’s Certificate of Convenience and Necessity covers approximately seventy square miles and is estimated to serve a population of 43,745. This area includes two rural water supply corporations, which are outside the city limits and the city of Knollwood as well as the town of Dorchester. GTUA also provides wholesale water to NTMWD, a regional wholesale supplier for thirteen member cities and numerous other customers in Collin, Dallas, Denton, Rockwall, Kaufman, Hunt, Hopkins, and Rains Counties. NTMWD currently provides water for over 1.3 million people. GTUA provides treated water obtained from NTMWD to the Collin-Grayson Municipal Alliance, which presently includes the cities of Anna, Howe, Melissa, and Van Alstyne. The City of Sherman, a Member City of the GTUA obtains its raw water supplies from Lake Texoma. GTUA purchases treated water supplies from NTMWD. 2.02 WATER UTILITY PROFILE Greater Texoma Utility Authority ’s existing water supply is composed of the following sources. • Purchased Treated Water from NTMWD 3.00 WATER CONSERVATION GOALS TCEQ rules require the adoption of specific 5-year and 10-year water conservation goals for a water conservation plan. 3.01 5- AND 10-YEAR GOALS Per capita water use varies from year to year based on several factors including weather conditions, changing demographics and other variables. The TWDB requires specific 5- and 10-year goals which are summarized in Table 1. Table 1: Five- and 10-Year Per Capita Water Use Goals Historic 5-Year Average Baseline 5-Year Goal 2029 10-Year Goal 2034 Total (GPCD)1 59 65 62 58 Residential (GPCD)2 * * * * ICIM (GPCD)3 * * * * Water Loss (GPCD)4 1 0 1 1 Water Loss (Percentage)5 2% 0% 2% 2% 1Total GPCD = (Total Gallons in System / Permanent Population) / 365 2Residential GPCD = (Gallons Used for Residential Use / Residential Population) / 365 3ICIM GPCD = (Gallons Used for Industrial, Commercial, Institutional and Multi-family Use / Permanent Population) / 365 4Water Loss GPCD = (Total Water Loss / Permanent Population) / 365 5Water Loss Percentage = (Total Water Loss / Total Gallons in System) x 100; or (Water Loss GPCD / Total GPCD) x 100 * GTUA is a water wholesaler and does not have any residential or ICIM connections. 3.02 METHOD FOR TRACKING NTMWD requires Member Cities and Customers to complete annual conservation reports by March 31 of the following year and submit them to NTMWD. A copy of the form is included as Appendix D. The completion of this Annual Water Conservation Report allows Greater Texoma Utility Authority to track the effectiveness of its water conservation programs over time and reassess those programs that are not providing water savings, ensuring maximum water use efficiency and greater levels of conservation. 4.00 METERING, RECORDS AND WATER LOSS CONTROL 4.01 METERING PROGRAM One of the key elements in water conservation is careful tracking of water use and control of losses. Careful metering of water deliveries and water use, detection, and repair of leaks in the distribution system, and regular monitoring of unaccounted water are important in controlling losses. ACCURATE METERING OF TREATED WATER DELIVERIES FROM NTMWD Accurate metering of water diversions and deliveries, detection, and repair of leaks in the raw water transmission and potable water distribution systems and regular monitoring of nonrevenue water are essential elements of NTMWD’s program to control losses. Water deliveries from NTMWD are metered by NTMWD using meters with accuracy of ±2%. These meters are calibrated on an annual basis by NTMWD to maintain the required accuracy. METERING OF CUSTOMER AND PUBLIC USES As a wholesale water supplier, GTUA has instituted a program of careful monitoring and record management to assure that its customers are charged appropriately for their water use. The program includes the following elements: • Deliveries to wholesale customers are metered by meters with accuracy of ±2%, which are read monthly. These readings are used to bill customers. • Meters used to measure deliveries to wholesale customers are calibrated annually, and tested, as necessary. • Treated drinking water is metered at the point of delivery from NTMWD and at each customer’s delivery vault, metered by meters with accuracy of ±2%. • Treated water meters are calibrated at least annually, and more frequently, if necessary. • All meter readings are shared with customers so they can compare the readings against the operations of their system. • GTUA monitors unaccounted water in its delivery system. (For GTUA, unaccounted water is defined as raw water diverted from Lake Texoma less metered sales to customers, or treated water received from NTMWD less metered sales to customers.) • GTUA Uses Eastech and Simmons meters for our wholesale accounts. One of the goals of GTUA’s water conservation program is to maintain unaccounted water below 5% every year. LEAK DETECTION, METER TESTING, REPAIR AND REPLACEMENT All GTUA water transmission pipelines are reinforced concrete cylinder pipe or ductile iron pipe with an internal protective liner and external protective coating. Because of the multiple layers of material, these pipelines have very long service lives and are not subject to frequent development of leaks. • Most joints in GTUA’s pipeline are designed with bell and spigot joint construction including a rubber gasket. Some joints are welded. For larger lines, each joint is also sealed with concrete. • All GTUA water pipelines are constructed in legally defined and identified rights-of-way, properly registered with authorities in each county. • GTUA personnel routinely inspect GTUA facilities and pipelines for leaks or mechanical problems. Repairs are undertaken as soon as practicable in order to minimize waste. • GTUA operates a program for right-of-way identification for construction projects adjacent to GTUA facilities and pipelines in order to minimize leaks caused by pipeline damage during construction. • GTUA’s metering program allows comparison of measured flows in the system and metered deliveries to customers, which can be used to identify leaks. • GTUA’s regular monitoring of unaccounted water (monthly basis) provides a further check for problems in the distribution system. • GTUA personnel make regular inspections of its system to detect unauthorized connections. 4.02 MONITORING AND RECORD MANAGEMENT PROGRAM As required by TAC Title 30, Chapter 288, a record management system should allow for the separation of water sales and uses into residential, commercial, public/institutional, and industrial categories. This information is included in the NTMWD annual water conservation report that is included in Appendix D. 4.03 WATER LOSS CONTROL PROGRAM DETERMINATION AND CONTROL OF WATER LOSS Total water loss is the difference between treated water pumped and authorized consumption or metered deliveries to customers. Authorized consumption includes billed metered uses, unbilled metered uses, and unbilled unmetered uses such as firefighting and releases for flushing of lines. Water losses include two categories: • Apparent losses such as inaccuracies in customer meters. (Customer meters tend to run more slowly as they age and under-report actual use). Unauthorized consumption due to illegal connections and theft. • Real losses due to water main breaks and leaks in the water distribution system and unreported losses. 5.00 CONTRACT REQUIREMENTS FOR WHOLESALE CUSTOMERS Every water supply contract entered into or renewed after official adoption of this water conservation plan, including any contract extension, will include a requirement that each wholesale customer of Greater Texoma Utility Authority must develop and implement a water conservation plan and water conservation measures. If the customer intends to resell the water, then the contract between the initial supplier and customer must specify that the contract for the resale of the water must have water conservation requirements so that each successive customer in the resale of the water will be required to implement water conservation measures in accordance with the provisions of Title 30 TAC Chapter 288. 6.00 RESERVOIR SYSTEM OPERATIONS PLAN Greater Texoma Utility Authority purchases treated water from NTMWD and does not have surface water supplies for which to implement a reservoir system operations plan. NTMWD operates multiple sources of water supply as a system. The operation of the reservoir system is intended to optimize the use of the District’s sources (within the constraints of existing water rights) while minimizing energy use cost for pumping, maintaining water quality, minimizing potential impacts on recreational users of the reservoirs and fish and wildlife. 7.00 CONSERVATION PLAN ADOPTION AND ENFORCEMENT 7.01 MEANS OF IMPLEMENTATION AND ENFORCEMENT As a wholesale provider to cities, GTUA does not have any residential or ICIM connections and is unable to use any of the following enforcement measures for the water conservation plan but requires our member cities to enforce the Offenses in Section 8.00 in their own manner. Examples of enforcement measures include: (a) Refusing to provide water service at sites of new construction or substantial remodeling for customers who do not meet requirements for water conservation fixtures as established by International Plumbing Code and Amendments (b) Discontinuing service to customers who fail to pay their water bill (c) analyzing water rates and adjusting them to eliminate conservation plan abuse (d) Issuance of penalties or fines for users of water who do not comply with the provisions of the adopted Plans (e) Discontinuing water service to irrigation meters and fire hydrant meters under described drought conditions. 7.02 REVIEW AND UPDATE OF WATER CONSERVATION PLAN TCEQ requires that the water conservation plan be updated every five years. This Plan will be updated as required and as appropriate based on new or updated information. 7.03 REGIONAL WATER PLANNING GROUP AND NTMWD NOTIFICATION In accordance with TCEQ regulations, a copy of this water conservation plan was provided to the Region C Water Planning Group. In accordance with NTMWD contractual requirements, a copy of this water conservation plan was also sent to NTMWD. Appendix F includes a copy of the letters sent. 8.00 WATER CONSERVATION PROGRAM 8.01 PUBLIC EDUCATION PROGRAM GTUA makes use of the educational tools and support options available through NTMWD, as well as the following elements: ▪ Since 2004, GTUA has provided the “Learning to Be Water Wise” curriculum to area school districts at no cost. The “Learning to Be Water Wise” curriculum includes individual kits and activities to educate 5th grade students on the importance of water and the need for water conservation in their homes and communities. ▪ GTUA provides conservation brochures and information to interested civic groups and schools. Information includes brochures on water-saving measures and xeriscape landscaping. ▪ GTUA promotes the Texas Smartscape website (www.txsmartscape.com) ▪ Water conservation tips and techniques, shared via social media and our website. ▪ Staff directly interacts with and educates members of our service area who have questions. 8.02 REQUIRED CONSERVATION STRATEGIES The following water conservation strategies are required. These strategies represent minimum measures to be implemented and enforced to promote water conservation and are to remain in effect on a permanent basis. A. TCEQ CONSERVATION PLAN REQUIREMENTS The preceding sections cover the regulatory requirements identified in TAC Title 30, Part 1, Chapter 288, Subchapter B, Rule 288. These rules are included in Appendix B. B. CONSERVATION COORDINATOR The designation of a Conservation Coordinator is required by House Bill 1648, effective September 1, 2017, for all retail public water utilities with 3,300 service connections or more. The NTMWD requires that all Member Cities and Customers, regardless of number of connections, appoint a Conservation Coordinator who will serve as the primary point of contact between the entity and the District on conservation matters. The duties of the Conservation Coordinator are as follows: • Submit an annual conservation report to NTMWD by March 31. This is referred to as the ‘Appendix D Report’. NTMWD will provide a blank workbook for each Member City and Customer to fill out prior to the deadline. • Submit an adopted water conservation and water resource and emergency management plan by May 1, 2024 (and every five years afterwards). These plans must be submitted to NTMWD, the applicable Regional Water Planning Group, TCEQ and TWDB. The conservation coordinator is also responsible for submitting a copy of the Plan if it is updated after initial adoption and submission. Greater Texoma Utility Authority ’s Conservation Coordinator is identified below. Greater Texoma Utility Authority will notify NTMWD if this changes at any point before the water conservation plan is updated. Nichole Murphy 903-786-4433 nichole@gtua.org C. WATER CONSERVATION PRICING Each Member City and Customer must adopt an increasing block rate water structure that is intended to encourage water conservation and to discourage excessive use and waste of water. As a wholesale water provider, the Greater Texoma Utility Authority has a set rate of $4.658 per 1,000 gallons for all our Member cities. D. ORDINANCES, PLUMBING CODES, OR RULES ON WATER-CONSERVING FIXTURES Greater Texoma Utility Authority’s plumbing code standards encourages water conservation and meets the minimum statutory requirements. The state has required water-conserving fixtures in new construction and renovations since 1992. The state standards call for flows of no more than 2.5 gallons per minute (gpm) for faucets, 2.5 gpm for showerheads. As of January 1, 2014, the state requires maximum average flow rates of 1.28 gallons per flush (gpf) for toilets and 0.5 gpf for urinals. Similar standards are now required under federal law. These state and federal standards assure that all new construction and renovations will use water- conserving fixtures. E. REUSE AND RECYCLING OF WASTEWATER NTMWD currently has the largest wastewater reuse program in the state. NTMWD has water rights allowing reuse of up to 71,882 acre-feet per year (64 MGD) of treated wastewater discharges from the Wilson Creek Wastewater Treatment Plant for municipal purposes. Additionally, NTMWD has permitted and is currently constructing the Sister Grove Regional Water Resource Recovery Facility (WRRF) in the Lavon Lake watershed. This facility will have an initial capacity of 16 MGD and an ultimate capacity of 64 MGD. NTMWD has also developed the East Fork Water Reuse Project which can divert treated wastewater discharges by NTMWD and purchased wastewater return flows from TRA via Main Stem Pump Station. NTMWD also provides treated effluent from its wastewater treatment plants available for direct reuse for landscape irrigation and industrial use. F. YEAR-ROUND OUTDOOR WATERING SCHEDULES A mandatory weekly watering schedule has been gradually gaining acceptance in the region and the state. Per our contract with NTMWD, GTUA requires all Member Cities to adhere to a permanent outdoor watering schedule. • Summer (April 1 – October 31) –Spray irrigation with sprinklers or irrigation systems at each service address must be limited to no more than two days per week. Additionally, prohibit lawn irrigation watering from 10 a.m. to 6 p.m. Education should be provided that irrigation should only be used when needed, which is often less than twice per week, even in the heat of summer. • Winter (November 1 – March 31) – Spray irrigation with sprinklers or irrigation systems at each service address must be limited to no more than one day per week with education that less than once per week (or not at all) is usually adequate. Additional irrigation may be provided by hand-held hose with shutoff nozzle, use of dedicated irrigation drip zones, and/or soaker hose provided no runoff occurs. Many North Texas horticulturists have endorsed twice-weekly watering as more than sufficient for landscapes in the region, even in the heat of summer. G. TIME OF DAY WATERING SCHEDULE Per our contract with NTMWD, GTUA requires that during the summer months (April 1 – October 31) under normal conditions, spray irrigation with an irrigation system or sprinkler is only permitted on authorized watering days, before 10 a.m. or after 6 p.m. The primary purpose of this measure is to reduce wind drift and evaporation losses during the active growing season. The time-of-day watering schedule requirement increases watering efficiency by eliminating outdoor irrigation use when climatic factors negatively impact irrigation system efficiencies. Midday irrigation is not an optimal time to irrigate because evapotranspiration rates are higher, and plants are more susceptible to stress associated with factors such as higher temperatures and lower relative humidity. H. IRRIGATION SYSTEM REQUIREMENTS FOR NEW AND COMMERCIAL SYSTEMS In 2007, the 80th Texas Legislature passed House Bill 1656, Senate Bill 3, and House Bill 4 related to regulating irrigation systems and irrigators by adopting minimum standards and specifications for designing, installing, and operating irrigation systems. The Texas legislation required cities with a population over 20,000 to develop a landscape irrigation program that includes permitting, inspection, and enforcement of water conservation for new irrigation systems. Per our contract with NTMWD, GTUA requires all Member Cities adhere to a minimum set of irrigation standards: 1) Require that all new irrigation systems be in compliance with state design and installation regulations (Texas Administrative Code Title 30, Chapter 344). 2) Require operational rain and freeze sensors and/or ET or Smart controllers on all new irrigation systems. Rain and freeze sensors and/or ET or Smart controllers must be properly maintained to function properly. 3) Require that irrigation systems be inspected at the same time as initial backflow preventer inspection. 4) Require the owner of a regulated irrigation property to obtain an evaluation of any permanently installed irrigation system on an annual basis. The irrigation evaluation shall be conducted by a licensed irrigator in the state of Texas and be submitted to the local water provider (i.e., city, water supply corporation). I. WATER WASTE PROVISIONS Per our contract with NTMWD, GTUA requires all Member Cities prohibit activities that waste water. The main purpose of a water waste ordinance is to provide for a means to enforce that water waste is prevented during lawn and landscape irrigation, that water resources are conserved for their most beneficial and vital uses, and that public health is protected. It provides a defined enforcement mechanism for exceptional neglect related to the proper maintenance and efficient use of water fixtures, pipes, and irrigation systems. The ordinance can provide additional assistance or enforcement actions if no corrective action has been taken after a certain number of correspondences. Per our contract with NTMWD, GTUA requires that the following water waste ordinance offenses include: 1) The use of irrigation systems that water impervious surfaces. (Wind-driven water drift will be taken into consideration.) 2) Outdoor watering during precipitation or freeze events. 3) The use of poorly maintained sprinkler systems that waste water. 4) Excess water runoff or other obvious waste. 5) Overseeding, sodding, sprigging, broadcasting, or plugging with cool season grasses or watering cool season grasses, except for golf courses and athletic fields. 6) The use of potable water to fill or refill residential, amenity, and any other natural or manmade ponds. A pond is considered to be a still body of water with a surface area of 500 square feet or more. This does not include recreational swimming pools. 7) Non-commercial car washing that does not use a water hose with an automatic shut- off valve. 8) Hotels and motels that do not offer a linen reuse water conservation option to customers. 9) Restaurants, bars, and other commercial food or beverage establishments that provide drinking water to customers unless a specific request is made by the customer for drinking water. 8.03 ADDITIONAL CONSERVATION STRATEGIES GTUA HAS IMPLEMENTED WATER CONSERVATION MEASURES INTENDED TO HELP CUSTOMERS WITH THEIR WATER CONSERVATION PLANNING, INCLUDING: ▪ Providing model water conservation and drought contingency plans for use by customers in developing their own plans. ▪ Requiring an annual report on water conservation efforts from customers and developing a water conservation report for all GTUA customers GTUA MODEL WATER CONSERVATION PLAN FOR GTUA CUSTOMERS AND MODEL DROUGHT CONTINGENCY AND WATER EMERGENCY RESPONSE PLAN FOR GTUA CUSTOMERS In order to assist its customers in the development of their own water conservation and drought contingency and water emergency response plans, GTUA has developed a Model Water Conservation and Drought Contingency and Water Emergency Response Plans for GTUA Water Customers3. The model water conservation plans address the TCEQ requirements for water conservation plans for municipal use by public water suppliers 1 and includes several provisions that go beyond TCEQ requirements. GTUA will work with its customers to develop water conservation and drought contingency and water emergency response plans using the model plan as a guide. The model water conservation plan includes the following elements addressing TCEQ requirements for water conservation plans for public water suppliers: ▪ 288.2(a)(1)(A) – Utility Profile ▪ 288.2(a)(1)(B) – Specification of Goals ▪ 288.2(a)(1)(C) – Specific, Quantified Goals ▪ 288.2(a)(1)(D) – Accurate Metering ▪ 288.2(a)(1)(E) – Universal Metering ▪ 288.2(a)(1)(F) – Determination and Control of Unaccounted Water ▪ 288.2(a)(1)(G) – Public Education and Information Program ▪ 288.2(a)(1)(H) – Non-Promotional Water Rate Structure ▪ 288.2(a)(1)(I) – Reservoir System Operation Plan ▪ 288.2(a)(1)(J) – Means of Implementation and Enforcement ▪ 288.2(a)(1)(K) – Coordination with Regional Water Planning Group ▪ 288.2(a)(2)(A) – Leak Detection, Repair and Water Loss Accounting ▪ 288.2(a)(2)(B) – Record Management System ▪ 288.2(a)(2)(C) – Requirement for Water Conservation Plans by Wholesale Customers ▪ 288.2(c) – Review and Update of Plan ▪ The TCEQ requires a water utility profile to be completed and submitted with the update to the water conservation plan. This is included as Appendix C in the model plan. ▪ The TCEQ requires that a water conservation implementation report be completed and submitted to them on an annual basis. This is included in Appendix I of the model plan. In addition to the TCEQ requirements, the GTUA model plan for customers receiving treated water from NTMWD also requires the following strategy be included in the customer plans, pursuant to the NTMWD requirements: • 288.2(a)(3)(F) – Considerations for Landscape Water Management Regulations GTUA requires a water usage report to be submitted to the GTUA on an annual basis. This report is included as Appendix D in the model water conservation plan. GTUA recommends the following strategies be included in customer plans: ▪ 288.2(a)(3)(A) – Conservation Oriented Water Rates ▪ 288.2(a)(3)(B) – Ordinances, Plumbing Codes or Rules on Water-Conserving Fixtures ▪ 288.2(a)(3)(D) – Reuse and Recycling of Wastewater ▪ 288.2(a)(3)(F) – Additional Considerations for Landscape Water Management Regulations ▪ 288.2(a)(3)(G) – Monitoring Method ▪ 288.2(a)(3)(H) – Additional Conservation Ordinance Provisions The TCEQ lists the following optional strategy that GTUA also suggests as an optional strategy in the model water conservation plan: • 288.2(a)(3)(C) – Replacement or Retrofit of Water-Conserving Plumbing Fixtures GTUA’s model drought contingency and water emergency response plan is consistent with Texas Commission on Environmental Quality (“TCEQ”) guidelines and requirements for development of drought contingency and water emergency response plans by public drinking water suppliers, contained in Title 30, Part 1, Chapter 288, Subchapter B, Rule 288.20 of the Texas Administrative Code1. The model plan includes the following elements addressing TCEQ requirements for drought contingency plans for public water suppliers: • 288.20(a)(1)(A) – Provisions to Inform the Public and Provide Opportunity for Public Input • 288.20(a)(1)(B) – Provisions for Continuing Public Education and Information • 288.20(a)(1)(C) – Coordination with Regional Water Planning Group • 288.20(a)(1)(D) – Criteria for Initiation and Termination of Drought Stages • 288.20(a)(1)(E) – Drought and Emergency Response Stages • 288.20(a)(1)(F) – Specific, Quantified Targets for Water Use Reductions • 288.20(a)(1)(G) – Water Supply and Demand Management Measures for Each Stage • 288.20(a)(1)(H) – Procedures for Initiation and Termination of Drought Stages • 288.20(a)(1)(I) – Procedures for Granting Variances • 288.20(a)(1)(J) – Procedures for Enforcement of Mandatory Restrictions • 288.20(a)(3) – Consultation with Wholesale Supplier • 288.20(b) – Notification of Implementation of Mandatory Measures • 288.20(c) – Review and Update of Plan A. Annual Reports One element of the GTUA Model Water Conservation and Drought Contingency and Water Emergency Response Plans for GTUA Customers 3 is a requirement that customers complete the TCEQ Utility Profile and Water Conservation Plan Requirements for Municipal Water Use by Public Water Suppliers (Appendix D) by March 1 of the following year and submit them to GTUA . GTUA will use these to help generate its own annual water conservation report. GTUA’s report will be used to review the effectiveness of its water conservation program. 9.0 LANDSCAPE WATER MANAGEMENT MEASURES A. IN-HOUSE WATER CONSERVATION EFFORTS GTUA has implemented an in-house water conservation program, including the following elements: • Wherever possible, landscapes will use native or adapted drought tolerant plants, trees, and shrubs. • Irrigation at GTUA facilities will occur between 8:00PM and 10:00AM in the peak consumption months (April 1 through October 31) to lower evaporation losses. • Irrigation will be limited to the amount needed to promote survival and health of plants and lawns. • Irrigation will be avoided on Saturday and Sunday, if possible, since these are periods of high water use by the public. The following landscape management measures are included in the GTUA model water conservation plan for treated water customers. The minimum measures for treated water customers that should be implemented and enforced to irrigate the landscape appropriately are as follows: • Prohibition of watering impervious surfaces (wind driven water drift will be taken into consideration) • Prohibition of outdoor watering during precipitation or freeze events. • Lawn and landscape irrigation is limited to twice per week. • Prohibiting the use of treated water to fill or refill residential amenity, or any other natural or manmade ponds. A pond is considered to be a still body of water with a surface area of five hundred square feet or more. • Rain and freeze sensors and/or ET or Smart controllers required on all new irrigation systems. Rain and freeze sensors and/or ET or Smart controllers must be maintained to function properly. • “At home” car washing may be done only when using a water hose with a shut-off nozzle. • GTUA customers are responsible for developing regulations, ordinances, policies, or procedures for enforcement of water conservation guidelines. B. Additional Water Conservation Measures (Not Required in Model Water Conservation Plan) The following water conservation measures are included in the model water conservation plan as options to be considered by GTUA customers: • Consideration for additional landscape water management regulations • Water audits • Rebates Appendix E of the model water conservation plan for treated water customers is a summary of considerations for landscape water management regulations adopted as part of the development of this water conservation and drought contingency and water emergency response plan. These regulations are intended to minimize waste in landscape irrigation. Appendix E of the model plan includes the required landscape water measures mentioned above, as well as the ones discussed below. GTUA recommends the following measures be included in customer water conservation plans, but they are not required: • Requirement that all existing irrigation systems be retrofitted with rain and freeze sensors and/or ET or Smart controllers capable of multiple programming. Rain and freeze sensors and/or ET or Smart controllers must be maintained to function properly. • Prohibition of use of poorly maintained sprinkler systems that waste water. • Prohibition of planting cool season grasses (such as rye grass or other similar grasses) that intensify cool season water requirements, exception allowed for golf courses or public athletic fields. • Requirement that all new athletic fields be irrigated by a separate irrigation system from surrounding areas. • Implementation of other measures to encourage off-peak water use. Customers develop landscape ordinances to guide developers in landscaping requirements for the customer. GTUA recommends that the following measures be included in the entity’s landscape ordinance: • Requirement that all new irrigation systems be in compliance with state design and installation regulations (TAC Title 30, Part 1, Chapter 344) • Native, drought tolerant, or adaptive plants should be encouraged. • Drip irrigation systems should be promoted. • ET/Smart controllers that only allow sprinkler systems to irrigate, when necessary, should be promoted. Water audits are useful in finding ways in which water can be used more efficiently at a specific location. GTUA recommends customers offer water audits to customers. This measure is recommended but not required. In addition to the conservation measures described above, GTUA considers the following water conservation incentive programs as options to consider: • Low-flow toilet replacement and rebate programs, • Rebates for rain/freeze sensors and/or ET or Smart controllers, • Low-flow showerhead and sink aerators replacement programs or rebates, • ET/Smart irrigation controller rebates, • Water efficient clothes washer rebates, • Pressure reducing valve installation programs or rebates, • Rain barrel rebates, • On-demand hot water heater rebates, or • Other water conservation incentive programs. 2024 Water Resource and Emergency Management Plan Under Texas Water Code Chapter 11 and Title 30 Texas Administrative Code Chapter 288, Retail, Irrigation and Wholesale Public Water Suppliers are required to develop, implement and submit updated Drought Contingency Plans to TCEQ every five years. 2024 Water Resource and Emergency Management Plan Greater Texoma Utility Authority PAGE 1 1.00 INTRODUCTION Greater Texoma Utility Authority is a Customer of the North Texas Municipal Water District (NTMWD). This Plan was developed following TCEQ guidelines and requirements governing the development of drought contingency plans. The goal of the water resource and emergency management plan is to prepare for potential water shortages and to preserve water for essential uses and the protection of public health. The objectives to achieve this goal are as follows: • To save water during droughts, water shortages, and emergencies. • To save water for domestic use, sanitation, and fire protection. • To protect and preserve public health, welfare, and safety. • To reduce the adverse impacts of shortages. • To reduce the adverse impacts of emergency water supply conditions. Note: NTMWD refers to their drought contingency plan (DCP) as the water resource and emergency management plan (WREMP) and should be considered synonymous with a DCP. 1.01 MINIMUM REGULATORY REQUIREMENTS A drought contingency plan is defined as “a strategy or combination of strategies for temporary supply and demand management responses to temporary and potentially recurring water supply shortages and other water supply emergencies”. Recognizing the need for efficient use of existing water supplies, TCEQ has developed guidelines and requirements governing the development of water conservation and drought contingency plans. The minimum TCEQ requirements and where they are addressed within this document are described in Appendix B. 2.00 IMPLEMENTATION AND ENFORCEMENT 2.01 PROVISIONS TO INFORM THE PUBLIC AND OPPORTUNITY FOR INPUT Greater Texoma Utility Authority provided opportunity for public input in the development of this Plan by the following means: • Providing written notice of the proposed Plan and the opportunity to comment on the Plan by newspaper and posted notice. • Posting the draft Plan on the community website and/or social media. 2024 Water Resource and Emergency Management Plan Greater Texoma Utility Authority PAGE 2 • Providing the draft Plan to anyone requesting a copy. • Holding a public meeting regarding the Plan on 5/20/2024. Public notice of this meeting was provided on the community website and in local newspapers. • Approving the Plan at a public Board meeting on 5/20/2024. Public notices of this meeting were provided on the community website and live audio was available during the meeting. 2.02 PROGRAM FOR CONTINUING PUBLIC EDUCATION AND INFORMATION Greater Texoma Utility Authority informs and educates the public about the Plan by the following means: • Preparing a bulletin describing the plan and making it available at City Hall and/or other appropriate locations. • Including information and making the Plan available to the public through the community website and/or social media. • Notifying local organizations, schools, and civic groups that utility staff are available to make presentations on the Plan (usually in conjunction with presentations on water conservation programs). • At any time that the Plan is activated or changes, Greater Texoma Utility Authority will notify local media of the issues, the water resource management stage (if applicable), and the specific actions required of the public. The information will also be publicized on the community website and/or social media. Billing inserts will also be used as appropriate. 2.03 COORDINATION WITH THE REGIONAL WATER PLANNING GROUPS AND NTMWD Appendix F of this Plan includes copies of letters sent to the Chairs of the appropriate regional water planning groups as well as NTMWD. 2.04 INITIATION AND TERMINATION OF WATER RESOURCE MANAGEMENT STAGE A. INITITATION OF A WATER RESOURCE MANAGEMENT STAGE The Official Designee may order the implementation of a water resource management stage when one or more of the trigger conditions for that stage is met. 2024 Water Resource and Emergency Management Plan Greater Texoma Utility Authority PAGE 3 • NTMWD has initiated a water resource management stage. (Stages imposed by NTMWD action must be initiated by Member Cities and Customers.) • Emergency conditions such as a pump failure of water leak • Special conditions including general maintenance or maintenance requiring a long shut- down of the system The following actions will be taken when a water resource management stage is initiated: • The public will be notified through local media and the supplier’s website. • Wholesale customers and NTMWD will be notified by email that provides details of the reasons for initiation of the water resource management stage. • If any mandatory provisions of the Plan are activated, Greater Texoma Utility Authority will notify TCEQ and the NTMWD Executive Director within five business days. Instructions to report drought contingency plan water use restrictions to TCEQ is available online at https://www.tceq.texas.gov/drinkingwater/homeland_security/security_pws. B. TERMINATION OF A WATER RESOURCE MANAGEMENT STAGE Water resource management stages initiated by NTMWD may be terminated after NTMWD has terminated the stage. For stages initiated by the Official Designee, they may order the termination of a water resource management stage when the conditions for termination are met or at their discretion. The following actions will be taken when a water resource management stage is terminated: • The public will be notified through local media and the supplier’s website. • Wholesale customers and NTMWD will be notified by email. • If any mandatory provisions of the Plan that have been activated are terminated, Greater Texoma Utility Authority will notify TCEQ Executive Director and the NTMWD Executive Director within five business days. Instructions to report drought contingency plan water use restrictions to TCEQ is available online at https://www.tceq.texas.gov/drinkingwater/homeland_security/security_pws. The Official Designee may decide not to order the termination of a water resource management stage even though the conditions for termination of the stage are met. Factors which could influence such a decision include, but are not limited to, the time of the year, weather conditions, or the anticipation of potentially changed conditions that warrant the continuation of the water resource management stage. The reason for this decision should be documented. 2024 Water Resource and Emergency Management Plan Greater Texoma Utility Authority PAGE 4 2.05 PROCEDURE FOR GRANTING VARIANCES TO THE PLAN The Official Designee may grant temporary variances for existing water uses otherwise prohibited under this Plan if one or more of the following conditions are met: • Failure to grant such a variance would cause an emergency condition adversely affecting health, sanitation, or fire safety for the public or the person or entity requesting the variance. • Compliance with this Plan cannot be accomplished due to technical or other limitations. • Alternative methods that achieve the same level of reduction in water use can be implemented. Variances shall be granted or denied at the discretion of the Official Designee. All petitions for variances should be in writing and should include the following information: • Name and address of the petitioners. • Purpose of water use. • Specific provisions from which relief is requested. • Detailed statement of the adverse effect of the provision from which relief is requested. • Description of the relief requested. • Period of time for which the variance is sought. • Alternative measures that will be taken to reduce water use and the level of water use reduction. • Other pertinent information. 2.06 PROCEDURES FOR ENFORCING MANDATORY WATER USE RESTRICTIONS Mandatory water use restrictions may be imposed in Stage 1, Stage 2 and Stage 3. As a wholesale supplier only, GTUA does not control how the Member Cities enforce the Mandatory Water Use restrictions. Entities should determine the best means of enforcement, be it tickets or administrative fees, that work bestAd for their community. 2024 Water Resource and Emergency Management Plan Greater Texoma Utility Authority PAGE 5 2.07 REVIEW AND UPDATE OF WATER RESOURCE AND EMERGENCY MANAGEMENT PLAN As required by TCEQ rules, Greater Texoma Utility Authority must review their respective Plan every five years. The plan will be updated as appropriate based on new or updated information. 3.00 WATER RESOURCE AND EMERGENCY MANAGEMENT PLAN Initiation and termination criteria for water management stages include general, demand, supply, and emergency criteria. One of the major indicators of approaching or ongoing drought conditions is NTMWD’s combined reservoir storage, defined as storage at Lavon Lake plus storage in Bois d’Arc Lake. Percent storage is determined by dividing the current storage by the total conservation storage when the lakes are full. Table 1 summarizes the water management stages by triggers based on percent combined storage and associated demand reduction goals and outdoor watering restrictions. The following sections go into more detail on the three water management stages. TCEQ requires notification when mandatory restrictions are placed on a customer. NTMWD must notify TCEQ when they impose mandatory restrictions on Member Cities and Customers. Member Cities and Customers must likewise notify TCEQ when they impose mandatory restrictions on their customers (wholesale or retail). Measures that impose mandatory requirements on customers are denoted with “requires notification to TCEQ”. NTMWD and the utilities must notify TCEQ within five business days if these measures are implemented ( https://www.tceq.texas.gov/response/drought/drought-and-public-water- systems). Table 2: Water Management Plan Stages Summary Drought Stage April to October November to March Demand Reduction Goal Outdoor Watering Restrictions Percent Combined Storage Stage 1 Initiation 70% 60% 2% 2X per week (Apr-Oct) 1X per week (Nov-Mar) Termination 75% 65% Stage 2 Initiation 55% 45% 5% 1X per week (Apr-Oct) 1X every other week (Nov-Mar) Termination 70% 60% Stage 3 Initiation 30% 20% 30% No outdoor watering Termination 55% 45% 2024 Water Resource and Emergency Management Plan Greater Texoma Utility Authority PAGE 6 3.01 WATER RESOURCE MANAGEMENT – STAGE 1 A. INITIATION AND TERMINATION CRITERIA FOR STAGE 1 NTMWD has initiated Stage 1, which may be initiated when one or more of the following criteria is met: • General Criteria o The Executive Director, with the concurrence of the NTMWD Board of Directors, finds that conditions warrant the declaration of Stage 1. o One or more source(s) is interrupted, unavailable, or limited due to contamination, invasive species, equipment failure or other cause. o The water supply system is unable to deliver needed supplies due to the failure or damage of major water system components. o Part of the system has a shortage of supply or damage to equipment. (NTMWD may implement measures for only that portion of the system impacted.) o A portion of the service area is experiencing an extreme weather event or power grid/supply disruptions. • Demand Criteria o Water demand has exceeded or is expected to exceed 90% of maximum sustainable production or delivery capacity for an extended period. • Supply Criteria o The combined storage in Lavon and Bois d’Arc Lake, as published by the TWDB, is less than: ▪ 70% of the combined conservation pool capacity during any of the months of April through October ▪ 60% of the combined conservation pool capacity during any of the months of November through March o The Sabine River Authority (SRA) has indicated that its Upper Basin water supplies used by NTMWD (Lake Tawakoni and/or Lake Fork) are in a Stage 1 drought. o NTMWD is concerned that Lake Texoma, Jim Chapman Lake, the East Fork Water Reuse Project, Main Stem Pump Station, and/or some other NTMWD water source may be limited in availability within the next six months. Stage 1 may terminate when one or more of the following criteria is met: • General Criteria 2024 Water Resource and Emergency Management Plan Greater Texoma Utility Authority PAGE 7 o The Executive Director, with the concurrence of the NTMWD Board of Directors, finds that conditions warrant the termination of Stage 1. o The circumstances that caused the initiation of Stage 1 no longer prevail. • Supply Criteria o The combined storage in Lavon and Bois d’Arc Lakes, as published by the TWDB, is greater than: ▪ 75% of the combined conservation pool capacity during any of the months of April through October ▪ 65% of the combined conservation pool capacity during any of the months of November through March B. GOAL FOR USE REDUCTION UNDER STAGE 1 The goal for water use reduction under Stage 1 is an annual reduction of 2% in the use that would have occurred in the absence of water management measures. Because discretionary water use is highly concentrated in the summer months, savings should be higher than 5% in summer to achieve an annual savings goal of 2%. If circumstances warrant, the Executive Director can set a goal for greater or less water use reduction. C. WATER MANAGEMENT MEASURES AVAILABLE UNDER STAGE 1 The actions listed below are provided as potential measures to reduce water demand. NTMWD may choose to implement any or all of the available restrictions in Stage 1. • Requires notification to TCEQ by NTMWD. Require Member Cities and Customers (including indirect Customers) to initiate Stage 1 restrictions in their respective, independently adopted water resource management plans. • Continue actions described in the water conservation plan. • Increase enforcement of landscape watering restrictions from the water conservation plan. • Initiate engineering studies to evaluate alternative actions that can be implemented if conditions worsen. • Accelerate public education efforts on ways to reduce water use. • Halt non-essential NTMWD water use. • Encourage the public to wait until the current drought or water emergency situation has passed before establishing new landscaping. • Encourage all users to reduce the frequency of draining and refilling swimming pools. 2024 Water Resource and Emergency Management Plan Greater Texoma Utility Authority PAGE 8 • Requires notification to TCEQ by Member Cities and Customers and/or NTMWD. Initiate a rate surcharge for all water use over a certain level. • Requires notification to TCEQ by Member Cities and Customers. Parks, golf courses, and athletic fields using potable water for landscape watering are required to meet the same reduction goals and measures outlined in this stage. As an exception, golf course greens and tee boxes may be hand watered as needed. 3.02 WATER RESOURCE MANAGEMENT – STAGE 2 A. INITIATION AND TERMINATION CRITERIA FOR STAGE 2 NTMWD has initiated Stage 2, which may be initiated due to one or more of the following criteria is met: • General Criteria o The Executive Director, with the concurrence of the NTMWD Board of Directors, finds that conditions warrant the declaration of Stage 2. o One or more supply source(s) is interrupted, unavailable, or limited due to contamination, invasive species, equipment failure or other cause. o The water supply system is unable to deliver needed supplies due to the failure or damage of major water system components. o Part of the system has a shortage of supply or damage to equipment. (NTMWD may implement measures for only that portion of the system impacted.) o A portion of the service area is experiencing an extreme weather event or power grid/supply disruptions. • Demand Criteria o Water demand has exceeded or is expected to exceed 95% of maximum sustainable production or delivery capacity for an extended period. • Supply Criteria o The combined storage in Lavon and Bois d’Arc Lake, as published by the TWDB, is less than ▪ 55% of the combined conservation pool capacity during any of the months of April through October ▪ 45% of the combined conservation pool capacity during any of the months of November through March o SRA has indicated that its Upper Basin water supplies used by NTMWD (Lake Tawakoni and/or Lake Fork) are in a Stage 2 drought. 2024 Water Resource and Emergency Management Plan Greater Texoma Utility Authority PAGE 9 o NTMWD is concerned that Lake Texoma, Jim Chapman Lake, the East Fork Water Reuse Project, the Main Stem Pump Station, and/or some other NTMWD water source may be limited in availability within the next three months. Stage 2 may terminate when one or more of the following criteria is met: • General Criteria o The Executive Director, with the concurrence of the NTMWD Board of Directors, finds that conditions warrant the termination of Stage 2. o The circumstances that caused the initiation of Stage 2 no longer prevail. • Supply Criteria o The combined storage in Lavon and Bois d’Arc Lake, as published by the TWDB, is greater than ▪ 70% of the combined conservation pool capacity during any of the months of April through October ▪ 60% of the combined conservation pool capacity during any of the months of November through March B. GOAL FOR USE REDUCTION UNDER STAGE 2 The goal for water use reduction under Stage 2 is an annual reduction of 5% in the use that would have occurred in the absence of water resource management measures. Because discretionary water use is highly concentrated in the summer months, savings should be higher than 5% in summer to achieve an annual savings goal of 5%. If circumstances warrant, the Executive Director can set a goal for greater or less water use reduction. C. WATER MANAGEMENT MEASURES AVAILABLE UNDER STAGE 2 The actions listed below are provided as potential measures to reduce water demand. NTMWD may choose to implement any or all of the available restrictions in Stage 2. • Continue or initiate any actions available under the water conservation plan and Stage 1. • Implement viable alternative water supply strategies. • Requires notification to TCEQ by NTMWD. Require Member Cities and Customers (including indirect Customers) to initiate Stage 2 restrictions in their respective, independently adopted water resource management plans. • Requires notification to TCEQ by NTMWD and/or Member Cities and Customers. Limit landscape watering with sprinklers or irrigation systems at each service address to once per week on designated days between April 1 and October 31. Limit landscape 2024 Water Resource and Emergency Management Plan Greater Texoma Utility Authority PAGE 10 watering with sprinklers or irrigation systems at each service address to once every other week on designated days between November 1 and March 31. Exceptions are as follows: o New construction may be watered as necessary for 30 days from the installation of new landscape features. o Foundation watering (within 2 feet), watering of new plantings (first year) of shrubs, and watering of trees (within a 10-foot radius of its trunk) for up to two hours on any day by a hand-held hose, a soaker hose, or a dedicated zone using a drip irrigation system, provided no runoff occurs. o Athletic fields may be watered twice per week. o Locations using alternative sources of water supply only for irrigation may irrigate without day-of-the-week restrictions provided proper signage is employed to notify the public of the alternative water source(s) being used. However, irrigation using alternative sources of supply is subject to all other restrictions applicable to this stage. If the alternative supply source is a well, proper proof of well registration with your local water supplier (e.g., city, water supply corporation) is required. Other sources of water supply may not include imported treated water. o An exemption is for drip irrigation systems from the designated outdoor water use day limited to no more than one day per week. Drip irrigation systems are, however, subject to all other restrictions applicable under this stage. • Requires notification to TCEQ by Member Cities and Customers. Prohibit overseeding, sodding, sprigging, broadcasting or plugging with or watering, except for golf courses and athletic fields. • Requires notification to TCEQ by NTMWD. Institute a mandated reduction in water deliveries to all Member Cities and Customers. Such a reduction will be distributed as required by Texas Water Code Section 11.039 (Appendix E). • Requires notification to TCEQ by Member Cities and Customers and/or NTMWD. Initiate a rate surcharge for all water use over a certain level. • Requires notification to TCEQ by Member Cities and Customers. Parks and golf courses using potable water for landscape watering are required to meet the same reduction goals and measures outlined in this stage. As an exception, golf course greens and tee boxes may be hand watered as needed. 3.03 WATER RESOURCE MANAGEMENT – STAGE 3 A. INITIATION AND TERMINATION CRITERIA FOR STAGE 3 2024 Water Resource and Emergency Management Plan Greater Texoma Utility Authority PAGE 11 NTMWD has initiated Stage 3, which may be initiated due to one or more of the following criteria is met: • General Criteria o The Executive Director, with the concurrence of the NTMWD Board of Directors, finds that conditions warrant the declaration of Stage 3. o One or more supply source(s) is interrupted, unavailable, or limited due to contamination, invasive species, equipment failure, or other cause. o The water supply system is unable to deliver needed supplies due to the failure or damage of major water system components. o Part of the system has a shortage of supply or damage to equipment. (NTMWD may implement measures for only that portion of the system impacted.) o A portion of the service area is experiencing an extreme weather event or power grid/supply disruptions. • Demand Criteria o Water demand has exceeded or is expected to exceed maximum sustainable production or delivery capacity for an extended period. • Supply Criteria o The combined storage in Lavon and Bois d’Arc Lake, as published by the TWDB, is less than ▪ 30% of the combined conservation pool capacity during any of the months of April through October ▪ 20% of the combined conservation pool capacity during any of the months of November through March • SRA has indicated that its Upper Basin water supplies used by NTMWD (Lake Tawakoni and/or Lake Fork) are in a drought and have significantly reduced supplies available to NTMWD. • The supply from Lake Texoma, Jim Chapman Lake, the East Fork Water Reuse Project, the Main Stem Pump Station, and/or some other NTMWD water source has become limited in availability. Stage 3 may terminate when one or more of the following criteria is met: • General Criteria o The Executive Director, with the concurrence of the NTMWD Board of Directors, finds that conditions warrant the termination of Stage 3. 2024 Water Resource and Emergency Management Plan Greater Texoma Utility Authority PAGE 12 o Other circumstances that caused the initiation of Stage 3 no longer prevail. • Supply Criteria o The combined storage in Lavon and Bois d’Arc Lake, as published by the TWDB, is greater than: ▪ 55% of the combined conservation pool capacity during any of the months of April through October ▪ 45% of the combined conservation pool capacity during any of the months of November through March B. GOAL FOR USE REDUCTION UNDER STAGE 3 The goal for water use reduction under Stage 3 is an annual reduction of 30% in the use that would have occurred in the absence of water resource management measures, or the goal for water use reduction is whatever reduction is necessary. Because discretionary water use is highly concentrated in the summer months, savings should be higher than 30% in summer to achieve an annual savings goal of 30%. If circumstances warrant, the Executive Director can set a goal for greater or less water use reduction. C. WATER MANAGEMENT MEASURES AVAILABLE UNDER STAGE 3 The actions listed below are provided as potential measures to reduce water demand. NTMWD may choose to implement any or all of the available restrictions in Stage 3. • Continue or initiate any actions available under the water conservation plan and Stages 1 and 2. • Implement viable alternative water supply strategies. • Requires notification to TCEQ by NTMWD. Require Member Cities and Customers (including indirect Customers) to initiate Stage 3 restrictions in their respective, independently adopted water resource management plans. • Requires notification to TCEQ by Member Cities and Customers. Initiate mandatory water use restrictions as follows: o Hosing and washing of paved areas, buildings, structures, windows or other surfaces is prohibited except by variance and performed by a professional service using high efficiency equipment. o Prohibit operation of ornamental fountains or ponds that use potable water except where supporting aquatic life. • Requires notification to TCEQ by Member Cities and Customers. Prohibit new sod, overseeding, sodding, sprigging, broadcasting or plugging with or watering. 2024 Water Resource and Emergency Management Plan Greater Texoma Utility Authority PAGE 13 • Requires notification to TCEQ by Member Cities and Customers. Prohibit the use of potable water for the irrigation of new landscape. • Requires notification to TCEQ by NTMWD and/or Member Cities and Customers. Prohibit all commercial and residential landscape watering, except foundations (within 2 feet) and trees (within a 10-foot radius of its trunk) may be watered for two hours one day per week with a hand-held hose, a soaker hose, or a dedicated zone using a drip irrigation system provided no runoff occurs. Drip irrigation systems are not exempt from this requirement. • Requires notification to TCEQ by Member Cities and Customers. Prohibit washing of vehicles except at a commercial vehicle wash facility. • Requires notification to TCEQ by Member Cities and Customers. Landscape watering of parks, golf courses, and athletic fields with potable water is prohibited. As an exception, golf course greens and tee boxes may be hand watered as needed. Variances may be granted by the water provider under special circumstances. • Requires notification to TCEQ by Member Cities and Customers. Prohibit the filling, draining, and/or refilling of existing swimming pools, wading pools, Jacuzzi and hot tubs except to maintain structural integrity, proper operation and maintenance or to alleviate a public safety risk. Existing pools may add water to replace losses from normal use and evaporation. Permitting of new swimming pools, wading pools, Jacuzzi and hot tubs is prohibited. • Requires notification to TCEQ by Member Cities and Customers. Prohibit the operation of interactive water features such as water sprays, dancing water jets, waterfalls, dumping buckets, shooting water cannons, inflatable pools, temporary splash toys or pools, slip-n-slides, or splash pads that are maintained for recreation. • Requires notification to TCEQ by Member Cities and Customers. Require all commercial water users to reduce water use by a set percentage. • Requires notification to TCEQ by NTMWD. Institute a mandated reduction in deliveries to all Member Cities and Customers. Such a reduction will be distributed as required by Texas Water Code Section 11.039. • Requires notification to TCEQ by NTMWD and/or Member Cities and Customers. Initiate a rate surcharge over normal rates for all water use or for water use over a certain level Appendix A List of References The following appendix contains a list of references used throughout the plans. APPENDIX A LIST OF REFERENCES 1. Texas Commission on Environmental Quality Water Conservation Implementation Report. https://www.tceq.texas.gov/assets/public/permitting/forms/20645.pdf 2. Title 30 of the Texas Administrative Code, Part 1, Chapter 288, Subchapter A, Rules 288.1 and 288.5, and Subchapter B, Rule 288.22, downloaded from http://texreg.sos.state.tx.us/public/readtac$ext.ViewTAC?tac_view=4&ti=30&pt=1&ch= 288, April 2023. 3. Water Conservation Implementation Task Force: “Texas Water Development Board Report 362, Water Conservation Best Management Practices Guide,” prepared for the Texas Water Development Board, Austin, November 2004. 4. Texas Water Development Board, Texas Commission on Environmental Quality, Water Conservation Advisory Council: Guidance and Methodology for Reporting on Water Conservation and Water Use, December 2012 5. Freese and Nichols, Inc.: Model Water Conservation Plan for NTMWD Members Cities and Customers, prepared for the North Texas Municipal Water District, Fort Worth, January 2019. 6. Freese and Nichols, Inc.: Model Water Resource and Emergency Management Plan for NTMWD Members Cities and Customers, prepared for the North Texas Municipal Water District, Fort Worth, January 2019. 7. Freese and Nichols Inc, Alan Plummer Associates, Inc., CP & Y Inc., Cooksey Communications. “2021 Region C Water Plan” Appendix B Texas Administrative Code Title 30 Chapter 288 The following appendix contains the Texas Administrative Code that regulates both water conservation and drought contingency plans. Prior to the code, a summary is given that outlines where each requirement is fulfilled within the plans. APPENDIX B TEXAS ADMINISTRATIVE CODE TITLE 30 CHAPTER 288 TCEQ rules governing development of water conservation plans are contained in Title 30, Chapter 288, Subchapter A of the Texas Administrative Code, which is included in this Appendix for reference. The water conservation plan elements required by TCEQ water conservation rules that are covered in this water conservation plan are listed below. Minimum Conservation Plan Requirements for Public Water Suppliers • 288.2(a)(1)(A) – Utility Profile – Section 2 • 288.2(a)(1)(B) – Record Management System – Section 4 • 288.2(a)(1)(C) – Specific, Quantified Goals – Section 3 • 288.2(a)(1)(D) – Accurate Metering – Section 4 • 288.2(a)(1)(E) – Universal Metering – Section 4 • 288.2(a)(1)(F) – Determination and Control of Water Loss – Section 4 • 288.2(a)(1)(G) – Public Education and Information Program – Section 8 • 288.2(a)(1)(H) – Non-Promotional Water Rate Structure – Section 8 • 288.2(a)(1)(I) – Reservoir System Operation Plan – Section 6 • 288.2(a)(1)(J) – Means of Implementation and Enforcement – Section 7 • 288.2(a)(1)(K) – Coordination with Regional Water Planning Group – Section 7 • 288.2(c) – Review and Update of Plan – Section 7 Additional Requirements for Public Water Suppliers (Population over 5,000) • 288.2(a)(2)(A) – Leak Detection, Repair, and Water Loss Accounting – Section 4 • 288.2(a)(2)(B) – Requirement for Water Conservation Plans by Wholesale Customers – Section 5 Minimum Conservation Plan Requirements for Wholesale Water Suppliers • 288.5(1)(A) – Description of Service Area – Section 2 • 288.5(1)(B) – Specific, Quantified Goals – Section 3 • 288.5(1)(C) – Measure and Account for Water Diverted – Section 4 • 288.5(1)(D) – Monitoring and Record Management Program – Section 4 • 288.5(1)(E) – Program of Metering and Leak Detection and Repair – Section 4 • 288.5(1)(F) – Requirement for Water Conservation Plans by Wholesale Customers – Section 5 • 288.5(1)(G) – Reservoir System Operation Plan – Section 6 • 288.5(1)(H) – Means of Implementation and Enforcement – Section 7 • 288.5(1)(I) – Documentation of Coordination with Regional Water Planning Group – Section 7 • 288.5(3) – Review and Update of Plan – Section 7 TITLE 30 ENVIRONMENTAL QUALITY PART 1 TEXAS COMMISSION ON ENVIRONMENTAL QUALITY CHAPTER 288 WATER CONSERVATION PLANS, DROUGHT CONTINGENCY PLANS, GUIDELINES AND REQUIREMENTS SUBCHAPTER A WATER CONSERVATION PLANS RULE §288.1 Definitions The following words and terms, when used in this chapter, shall have the following meanings, unless the context clearly indicates otherwise. (1) Agricultural or Agriculture--Any of the following activities: (A) cultivating the soil to produce crops for human food, animal feed, or planting seed or for the production of fibers; (B) the practice of floriculture, viticulture, silviculture, and horticulture, including the cultivation of plants in containers or non-soil media by a nursery grower; (C) raising, feeding, or keeping animals for breeding purposes or for the production of food or fiber, leather, pelts, or other tangible products having a commercial value; (D) raising or keeping equine animals; (E) wildlife management; and (F) planting cover crops, including cover crops cultivated for transplantation, or leaving land idle for the purpose of participating in any governmental program or normal crop or livestock rotation procedure. (2) Agricultural use--Any use or activity involving agriculture, including irrigation. (3) Best management practices--Voluntary efficiency measures that save a quantifiable amount of water, either directly or indirectly, and that can be implemented within a specific time frame. (4) Conservation--Those practices, techniques, and technologies that reduce the consumption of water, reduce the loss or waste of water, improve the efficiency in the use of water, or increase the recycling and reuse of water so that a water supply is made available for future or alternative uses. (5) Commercial use--The use of water by a place of business, such as a hotel, restaurant, or office building. This does not include multi-family residences or agricultural, industrial, or institutional users. (6) Drought contingency plan--A strategy or combination of strategies for temporary supply and demand management responses to temporary and potentially recurring water supply shortages and other water supply emergencies. A drought contingency plan may be a separate document identified as such or may be contained within another water management document(s). (7) Industrial use--The use of water in processes designed to convert materials of a lower order of value into forms having greater usability and commercial value, and the development of power by means other than hydroelectric, but does not include agricultural use. (8) Institutional use--The use of water by an establishment dedicated to public service, such as a school, university, church, hospital, nursing home, prison or government facility. All facilities dedicated to public service are considered institutional regardless of ownership. (9) Irrigation--The agricultural use of water for the irrigation of crops, trees, and pastureland, including, but not limited to, golf courses and parks which do not receive water from a public water supplier. (10) Irrigation water use efficiency--The percentage of that amount of irrigation water which is beneficially used by agriculture crops or other vegetation relative to the amount of water diverted from the source(s) of supply. Beneficial uses of water for irrigation purposes include, but are not limited to, evapotranspiration needs for vegetative maintenance and growth, salinity management, and leaching requirements associated with irrigation. (11) Mining use--The use of water for mining processes including hydraulic use, drilling, washing sand and gravel, and oil field re-pressuring. (12) Municipal use--The use of potable water provided by a public water supplier as well as the use of sewage effluent for residential, commercial, industrial, agricultural, institutional, and wholesale uses. (13) Nursery grower--A person engaged in the practice of floriculture, viticulture, silviculture, and horticulture, including the cultivation of plants in containers or nonsoil media, who grows more than 50% of the products that the person either sells or leases, regardless of the variety sold, leased, or grown. For the purpose of this definition, grow means the actual cultivation or propagation of the product beyond the mere holding or maintaining of the item prior to sale or lease, and typically includes activities associated with the production or multiplying of stock such as the development of new plants from cuttings, grafts, plugs, or seedlings. (14) Pollution--The alteration of the physical, thermal, chemical, or biological quality of, or the contamination of, any water in the state that renders the water harmful, detrimental, or injurious to humans, animal life, vegetation, or property, or to the public health, safety, or welfare, or impairs the usefulness or the public enjoyment of the water for any lawful or reasonable purpose. (15) Public water supplier--An individual or entity that supplies water to the public for human consumption. (16) Regional water planning group--A group established by the Texas Water Development Board to prepare a regional water plan under Texas Water Code §16.053. (17) Residential gallons per capita per day--The total gallons sold for residential use by a public water supplier divided by the residential population served and then divided by the number of days in the year. (18) Residential use--The use of water that is billed to single and multi-family residences, which applies to indoor and outdoor uses. (19) Retail public water supplier--An individual or entity that for compensation supplies water to the public for human consumption. The term does not include an individual or entity that supplies water to itself or its employees or tenants when that water is not resold to or used by others. (20) Reuse--The authorized use for one or more beneficial purposes of use of water that remains unconsumed after the water is used for the original purpose of use and before that water is either disposed of or discharged or otherwise allowed to flow into a watercourse, lake, or other body of state-owned water. (21) Total use--The volume of raw or potable water provided by a public water supplier to billed customer sectors or nonrevenue uses and the volume lost during conveyance, treatment, or transmission of that water. (22) Total gallons per capita per day (GPCD)--The total amount of water diverted and/or pumped for potable use divided by the total permanent population divided by the days of the year. Diversion volumes of reuse as defined in this chapter shall be credited against total diversion volumes for the purposes of calculating GPCD for targets and goals. (23) Water conservation coordinator--The person designated by a retail public water supplier that is responsible for implementing a water conservation plan. (24) Water conservation plan--A strategy or combination of strategies for reducing the volume of water withdrawn from a water supply source, for reducing the loss or waste of water, for maintaining or improving the efficiency in the use of water, for increasing the recycling and reuse of water, and for preventing the pollution of water. A water conservation plan may be a separate document identified as such or may be contained within another water management document(s). (25) Wholesale public water supplier--An individual or entity that for compensation supplies water to another for resale to the public for human consumption. The term does not include an individual or entity that supplies water to itself or its employees or tenants as an incident of that employee service or tenancy when that water is not resold to or used by others, or an individual or entity that conveys water to another individual or entity, but does not own the right to the water which is conveyed, whether or not for a delivery fee. (26) Wholesale use--Water sold from one entity or public water supplier to other retail water purveyors for resale to individual customers. Source Note: The provisions of this §288.1 adopted to be effective May 3, 1993, 18 TexReg 2558; amended to be effective February 21, 1999, 24 TexReg 949; amended to be effective April 27, 2000, 25 TexReg 3544; amended to be effective August 15, 2002, 27 TexReg 7146; amended to be effective October 7, 2004, 29 TexReg 9384; amended to be effective January 10, 2008, 33 TexReg 193; amended to be effective December 6, 2012, 37 TexReg 9515; amended to be effective August 16, 2018, 43 TexReg 5218 TITLE 30 ENVIRONMENTAL QUALITY PART 1 TEXAS COMMISSION ON ENVIRONMENTAL QUALITY CHAPTER 288 WATER CONSERVATION PLANS, DROUGHT CONTINGENCY PLANS, GUIDELINES AND REQUIREMENTS SUBCHAPTER A WATER CONSERVATION PLANS RULE §288.2 Water Conservation Plans for Municipal Uses by Public Water Suppliers (a) A water conservation plan for municipal water use by public water suppliers must provide information in response to the following. If the plan does not provide information for each requirement, the public water supplier shall include in the plan an explanation of why the requirement is not applicable. (1) Minimum requirements. All water conservation plans for municipal uses by public water suppliers must include the following elements: (A) a utility profile in accordance with the Texas Water Use Methodology, including, but not limited to, information regarding population and customer data, water use data (including total gallons per capita per day (GPCD) and residential GPCD), water supply system data, and wastewater system data; (B) a record management system which allows for the classification of water sales and uses into the most detailed level of water use data currently available to it, including, if possible, the sectors listed in clauses (i) - (vi) of this subparagraph. Any new billing system purchased by a public water supplier must be capable of reporting detailed water use data as described in clauses (i) - (vi) of this subparagraph: (i) residential; (I) single family; (II) multi-family; (ii) commercial; (iii) institutional; (iv) industrial; (v) agricultural; and, (vi) wholesale. (C) specific, quantified five-year and ten-year targets for water savings to include goals for water loss programs and goals for municipal use in total GPCD and residential GPCD. The goals established by a public water supplier under this subparagraph are not enforceable; (D) metering device(s), within an accuracy of plus or minus 5.0% in order to measure and account for the amount of water diverted from the source of supply; (E) a program for universal metering of both customer and public uses of water, for meter testing and repair, and for periodic meter replacement; (F) measures to determine and control water loss (for example, periodic visual inspections along distribution lines; annual or monthly audit of the water system to determine illegal connections; abandoned services; etc.); (G) a program of continuing public education and information regarding water conservation; (H) a water rate structure which is not "promotional," i.e., a rate structure which is cost- based and which does not encourage the excessive use of water; (I) a reservoir systems operations plan, if applicable, providing for the coordinated operation of reservoirs owned by the applicant within a common watershed or river basin in order to optimize available water supplies; and (J) a means of implementation and enforcement which shall be evidenced by: (i) a copy of the ordinance, resolution, or tariff indicating official adoption of the water conservation plan by the water supplier; and (ii) a description of the authority by which the water supplier will implement and enforce the conservation plan; and (K) documentation of coordination with the regional water planning groups for the service area of the public water supplier in order to ensure consistency with the appropriate approved regional water plans. (2) Additional content requirements. Water conservation plans for municipal uses by public drinking water suppliers serving a current population of 5,000 or more and/or a projected population of 5,000 or more within the next ten years subsequent to the effective date of the plan must include the following elements: (A) a program of leak detection, repair, and water loss accounting for the water transmission, delivery, and distribution system; (B) a requirement in every wholesale water supply contract entered into or renewed after official adoption of the plan (by either ordinance, resolution, or tariff), and including any contract extension, that each successive wholesale customer develop and implement a water conservation plan or water conservation measures using the applicable elements in this chapter. If the customer intends to resell the water, the contract between the initial supplier and customer must provide that the contract for the resale of the water must have water conservation requirements so that each successive customer in the resale of the water will be required to implement water conservation measures in accordance with the provisions of this chapter. (3) Additional conservation strategies. Any combination of the following strategies shall be selected by the water supplier, in addition to the minimum requirements in paragraphs (1) and (2) of this subsection, if they are necessary to achieve the stated water conservation goals of the plan. The commission may require that any of the following strategies be implemented by the water supplier if the commission determines that the strategy is necessary to achieve the goals of the water conservation plan: (A) conservation-oriented water rates and water rate structures such as uniform or increasing block rate schedules, and/or seasonal rates, but not flat rate or decreasing block rates; (B) adoption of ordinances, plumbing codes, and/or rules requiring water-conserving plumbing fixtures to be installed in new structures and existing structures undergoing substantial modification or addition; (C) a program for the replacement or retrofit of water-conserving plumbing fixtures in existing structures; (D) reuse and/or recycling of wastewater and/or graywater; (E) a program for pressure control and/or reduction in the distribution system and/or for customer connections; (F) a program and/or ordinance(s) for landscape water management; (G) a method for monitoring the effectiveness and efficiency of the water conservation plan; and (H) any other water conservation practice, method, or technique which the water supplier shows to be appropriate for achieving the stated goal or goals of the water conservation plan. (b) A water conservation plan prepared in accordance with 31 TAC §363.15 (relating to Required Water Conservation Plan) of the Texas Water Development Board and substantially meeting the requirements of this section and other applicable commission rules may be submitted to meet application requirements in accordance with a memorandum of understanding between the commission and the Texas Water Development Board. (c) A public water supplier for municipal use shall review and update its water conservation plan, as appropriate, based on an assessment of previous five-year and ten-year targets and any other new or updated information. The public water supplier for municipal use shall review and update the next revision of its water conservation plan every five years to coincide with the regional water planning group. Source Note: The provisions of this §288.2 adopted to be effective May 3, 1993, 18 TexReg 2558; amended to be effective February 21, 1999, 24 TexReg 949; amended to be effective April 27, 2000, 25 TexReg 3544; amended to be effective October 7, 2004, 29 TexReg 9384; amended to be effective December 6, 2012, 37 TexReg 9515 TITLE 30 ENVIRONMENTAL QUALITY PART 1 TEXAS COMMISSION ON ENVIRONMENTAL QUALITY CHAPTER 288 WATER CONSERVATION PLANS, DROUGHT CONTINGENCY PLANS, GUIDELINES AND REQUIREMENTS SUBCHAPTER A WATER CONSERVATION PLANS RULE §288.5 Water Conservation Plans for Wholesale Water Suppliers A water conservation plan for a wholesale water supplier must provide information in response to each of the following paragraphs. If the plan does not provide information for each requirement, the wholesale water supplier shall include in the plan an explanation of why the requirement is not applicable. (1) Minimum requirements. All water conservation plans for wholesale water suppliers must include the following elements: (A) a description of the wholesaler's service area, including population and customer data, water use data, water supply system data, and wastewater data; (B) specific, quantified five-year and ten-year targets for water savings including, where appropriate, target goals for municipal use in gallons per capita per day for the wholesaler's service area, maximum acceptable water loss, and the basis for the development of these goals. The goals established by wholesale water suppliers under this subparagraph are not enforceable; (C) a description as to which practice(s) and/or device(s) will be utilized to measure and account for the amount of water diverted from the source(s) of supply; (D) a monitoring and record management program for determining water deliveries, sales, and losses; (E) a program of metering and leak detection and repair for the wholesaler's water storage, delivery, and distribution system; (F) a requirement in every water supply contract entered into or renewed after official adoption of the water conservation plan, and including any contract extension, that each successive wholesale customer develop and implement a water conservation plan or water conservation measures using the applicable elements of this chapter. If the customer intends to resell the water, then the contract between the initial supplier and customer must provide that the contract for the resale of the water must have water conservation requirements so that each successive customer in the resale of the water will be required to implement water conservation measures in accordance with applicable provisions of this chapter; (G) a reservoir systems operations plan, if applicable, providing for the coordinated operation of reservoirs owned by the applicant within a common watershed or river basin. The reservoir systems operations plans shall include optimization of water supplies as one of the significant goals of the plan; (H) a means for implementation and enforcement, which shall be evidenced by a copy of the ordinance, rule, resolution, or tariff, indicating official adoption of the water conservation plan by the water supplier; and a description of the authority by which the water supplier will implement and enforce the conservation plan; and (I) documentation of coordination with the regional water planning groups for the service area of the wholesale water supplier in order to ensure consistency with the appropriate approved regional water plans. (2) Additional conservation strategies. Any combination of the following strategies shall be selected by the water wholesaler, in addition to the minimum requirements of paragraph (1) of this section, if they are necessary in order to achieve the stated water conservation goals of the plan. The commission may require by commission order that any of the following strategies be implemented by the water supplier if the commission determines that the strategies are necessary in order for the conservation plan to be achieved: (A) conservation-oriented water rates and water rate structures such as uniform or increasing block rate schedules, and/or seasonal rates, but not flat rate or decreasing block rates; (B) a program to assist agricultural customers in the development of conservation pollution prevention and abatement plans; (C) a program for reuse and/or recycling of wastewater and/or graywater; and (D) any other water conservation practice, method, or technique which the wholesaler shows to be appropriate for achieving the stated goal or goals of the water conservation plan. (3) Review and update requirements. The wholesale water supplier shall review and update its water conservation plan, as appropriate, based on an assessment of previous five-year and ten-year targets and any other new or updated information. A wholesale water supplier shall review and update the next revision of its water conservation plan every five years to coincide with the regional water planning group. Source Note: The provisions of this §288.5 adopted to be effective May 3, 1993, 18 TexReg 2558; amended to be effective February 21, 1999, 24 TexReg 949; amended to be effective April 27, 2000, 25 TexReg 3544; amended to be effective October 7, 2004, 29 TexReg 9384; amended to be effective December 6, 2012, 37 TexReg 9515 APPENDIX B TEXAS ADMINISTRATIVE CODE TITLE 30 CHAPTER 288 TCEQ rules governing development of water conservation plans are contained in Title 30, Chapter 288, Subchapter A of the Texas Administrative Code, which is included in this Appendix for reference. The water conservation plan elements required by TCEQ water conservation rules that are covered in this drought contingency plan are listed below. Minimum Drought Contingency Plan Requirements for Public Water Suppliers • 288.20(a)(1)(A) – Provisions to Inform Public and Provide Opportunity for Public Input - Section 2 • 288.20(a)(1)(B) – Program for Continuing Public Education and Information – Section 2 • 288.20(a)(1)(C) –Coordination with Regional Water Planning Groups – Section 2 • 288.20(a)(1)(D) – Description of Information to Be Monitored and Criteria for the Initiation and Termination of Water Resource Management Stages – Sections 2 • 288.20(a)(1)(E) – Stages for Implementation of Measures in Response to Situations – Section 3 • 288.20(a)(1)(F) – Specific, Quantified Targets for Water Use Reductions During Water Shortages – Section 3 • 288.20(a)(1)(G) – Specific Water Supply or Water Demand Measures to Be Implemented at Each Stage of the Plan – Section 3 • 288.20(a)(1)(H) – Procedures for Initiation and Termination of Drought Contingency and Water Emergency Response Stages – Section 2 • 288.20(a)(1)(I) – Description of Procedures to Be Followed for Granting Variances to the Plan – Section 2 • 288.20(a)(1)(J) – Procedures for Enforcement of Mandatory Water Use Restrictions – Section 2 • 288.20(b) – TCEQ Notification of Implementation of Mandatory Provisions – Sections 2 and 3 • 288.20(c) – Review of Drought Contingency and Water Emergency Response Plan Every Five (5) Years – Section 2 Minimum Drought Contingency Plan Requirements for Wholesale Water Suppliers • 288.22(a)(1) – Provisions to Inform the Public and Provide Opportunity for Public Input – Section 2 • 288.22(a)(2) – Coordination with the Regional Water Planning Groups – Section 2 • 288.22(a)(3) – Criteria for Initiation and Termination of Drought Stages – Section 3 • 288.22(a)(4) – Drought and Emergency Response Stages – Section 3 • 288.22(a)(5) – Procedures for Initiation and Termination of Drought Stages – Section 2 • 288.22(a)(6) – Specific, Quantified Targets for Water Use Reductions During Water Shortages – Section 3 • 288.22(a)(7) – Specific Water Supply or Water Demand Management Measures to be Implemented during Each Drought Stage – Section 3 • 288.22(a)(8) – Provision in Wholesale Contracts to Require Water Distribution According to Texas Water Code Section §11.039 – Sections 2 and 3 • 288.22(a)(9) – Procedures for Granting Variances to the Plan - Section 2 • 288.22(a)(10) - Procedures for Enforcement of Mandatory Restrictions – Section 2 • 288.22(b) – TCEQ Notification of Implementation of Mandatory Measures – Sections 2 and 3 • 288.22(c) – Review and Update of the Plan – Section 2 TITLE 30 ENVIRONMENTAL QUALITY PART 1 TEXAS COMMISSION ON ENVIRONMENTAL QUALITY CHAPTER 288 WATER CONSERVATION PLANS, DROUGHT CONTINGENCY PLANS, GUIDELINES AND REQUIREMENTS SUBCHAPTER B DROUGHT CONTINGENCY PLANS RULE §288.20 Drought Contingency Plans for Municipal Uses by Public Water Suppliers (a) A drought contingency plan for a retail public water supplier, where applicable, must include the following minimum elements. (1) Minimum requirements. Drought contingency plans must include the following minimum elements. (A) Preparation of the plan shall include provisions to actively inform the public and affirmatively provide opportunity for public input. Such acts may include, but are not limited to, having a public meeting at a time and location convenient to the public and providing written notice to the public concerning the proposed plan and meeting. (B) Provisions shall be made for a program of continuing public education and information regarding the drought contingency plan. (C) The drought contingency plan must document coordination with the regional water planning groups for the service area of the retail public water supplier to ensure consistency with the appropriate approved regional water plans. (D) The drought contingency plan must include a description of the information to be monitored by the water supplier, and specific criteria for the initiation and termination of drought response stages, accompanied by an explanation of the rationale or basis for such triggering criteria. (E) The drought contingency plan must include drought or emergency response stages providing for the implementation of measures in response to at least the following situations: (i) reduction in available water supply up to a repeat of the drought of record; (ii) water production or distribution system limitations; (iii) supply source contamination; or (iv) system outage due to the failure or damage of major water system components (e.g., pumps). (F) The drought contingency plan must include specific, quantified targets for water use reductions to be achieved during periods of water shortage and drought. The entity preparing the plan shall establish the targets. The goals established by the entity under this subparagraph are not enforceable. (G) The drought contingency plan must include the specific water supply or water demand management measures to be implemented during each stage of the plan including, but not limited to, the following: (i) curtailment of non-essential water uses; and (ii) utilization of alternative water sources and/or alternative delivery mechanisms with the prior approval of the executive director as appropriate (e.g., interconnection with another water system, temporary use of a non-municipal water supply, use of reclaimed water for non-potable purposes, etc.). (H) The drought contingency plan must include the procedures to be followed for the initiation or termination of each drought response stage, including procedures for notification of the public. (I) The drought contingency plan must include procedures for granting variances to the plan. (J) The drought contingency plan must include procedures for the enforcement of mandatory water use restrictions, including specification of penalties (e.g., fines, water rate surcharges, discontinuation of service) for violations of such restrictions. (2) Privately-owned water utilities. Privately-owned water utilities shall prepare a drought contingency plan in accordance with this section and incorporate such plan into their tariff. (3) Wholesale water customers. Any water supplier that receives all or a portion of its water supply from another water supplier shall consult with that supplier and shall include in the drought contingency plan appropriate provisions for responding to reductions in that water supply. (b) A wholesale or retail water supplier shall notify the executive director within five business days of the implementation of any mandatory provisions of the drought contingency plan. (c) The retail public water supplier shall review and update, as appropriate, the drought contingency plan, at least every five years, based on new or updated information, such as the adoption or revision of the regional water plan. Source Note: The provisions of this §288.20 adopted to be effective February 21, 1999, 24 TexReg 949; amended to be effective April 27, 2000, 25 TexReg 3544; amended to be effective October 7, 2004, 29 TexReg 9384 TITLE 30 ENVIRONMENTAL QUALITY PART 1 TEXAS COMMISSION ON ENVIRONMENTAL QUALITY CHAPTER 288 WATER CONSERVATION PLANS, DROUGHT CONTINGENCY PLANS, GUIDELINES AND REQUIREMENTS SUBCHAPTER B DROUGHT CONTINGENCY PLANS RULE §288.22 Drought Contingency Plans for Wholesale Water Suppliers (a) A drought contingency plan for a wholesale water supplier must include the following minimum elements. (1) Preparation of the plan shall include provisions to actively inform the public and to affirmatively provide opportunity for user input in the preparation of the plan and for informing wholesale customers about the plan. Such acts may include, but are not limited to, having a public meeting at a time and location convenient to the public and providing written notice to the public concerning the proposed plan and meeting. (2) The drought contingency plan must document coordination with the regional water planning groups for the service area of the wholesale public water supplier to ensure consistency with the appropriate approved regional water plans. (3) The drought contingency plan must include a description of the information to be monitored by the water supplier and specific criteria for the initiation and termination of drought response stages, accompanied by an explanation of the rationale or basis for such triggering criteria. (4) The drought contingency plan must include a minimum of three drought or emergency response stages providing for the implementation of measures in response to water supply conditions during a repeat of the drought-of-record. (5) The drought contingency plan must include the procedures to be followed for the initiation or termination of drought response stages, including procedures for notification of wholesale customers regarding the initiation or termination of drought response stages. (6) The drought contingency plan must include specific, quantified targets for water use reductions to be achieved during periods of water shortage and drought. The entity preparing the plan shall establish the targets. The goals established by the entity under this paragraph are not enforceable. (7) The drought contingency plan must include the specific water supply or water demand management measures to be implemented during each stage of the plan including, but not limited to, the following: (A) pro rata curtailment of water deliveries to or diversions by wholesale water customers as provided in Texas Water Code, §11.039; and (B) utilization of alternative water sources with the prior approval of the executive director as appropriate (e.g., interconnection with another water system, temporary use of a non- municipal water supply, use of reclaimed water for non-potable purposes, etc.). (8) The drought contingency plan must include a provision in every wholesale water contract entered into or renewed after adoption of the plan, including contract extensions, that in case of a shortage of water resulting from drought, the water to be distributed shall be divided in accordance with Texas Water Code, §11.039. (9) The drought contingency plan must include procedures for granting variances to the plan. (10) The drought contingency plan must include procedures for the enforcement of any mandatory water use restrictions including specification of penalties (e.g., liquidated damages, water rate surcharges, discontinuation of service) for violations of such restrictions. (b) The wholesale public water supplier shall notify the executive director within five business days of the implementation of any mandatory provisions of the drought contingency plan. (c) The wholesale public water supplier shall review and update, as appropriate, the drought contingency plan, at least every five years, based on new or updated information, such as adoption or revision of the regional water plan. Source Note: The provisions of this §288.22 adopted to be effective February 21, 1999, 24 TexReg 949; amended to be effective April 27, 2000, 25 TexReg 3544; amended to be effective October 7, 2004, 29 TexReg 9384 Appendix C TCEQ Water Utility Profile The following appendix contains the form TCEQ-20162. TX0910148Public Water Supply Identification Number (PWS ID): GREATER TEXOMA UTILITY AUTHORITYName of Utility: Certificate of Convenience and Necessity (CCN) Number: Wastewater ID Number: 4301-CSurface Water Right ID Number: CONTACT INFORMATION 5100 Airport DriveAddress:City: Denison State: TX nichole@gtua.orgEmail: Telephone Number: 9037864433 Date: C Regional Water Planning Group: Groundwater Conservation District: Our records indicate that you: A. Population and Service Area Data 1. Current service area size in square miles: 87 File Name File Description CGMA Map.pdf Attached file(s): 75020Zip Code:Zip+4: Received financial assistance of $500,000 or more from TWDB Have a surface water right with TCEQ Last Name: Title:Senior Project Manager NicholeContact:First Name:Murphy Is this person the designated Conservation Coordinator? Yes No Page 1 of 11 UTILITY PROFILE FOR WHOLESALE WATER SUPPLIER Year Historical Population Served By Wholesale Water Service 2023 71,914 2022 62,953 2021 46,186 2020 45,496 2019 41,745 2. Historical service area population for the previous five years, starting with the most current year. Year Projected Population Served By Wholesale Water Service 2030 143,985 2040 261,040 2050 356,405 2060 425,946 2070 555,788 3. Projected service area population for the following decades. 4. Described source(s)/method(s) for estimating current and projected populations. File Name File Description CGMA pop-wtr W-O 289 proj2024 thru 2053_concept_12-31- 23_rev.xlsx Attached file(s): Page 2 of 11 UTILITY PROFILE FOR WHOLESALE WATER SUPPLIER Year Water Produced in Gallons Purchased/Imported Water in Gallons Total System Input Total GPD 2023 0 1,650,247,000 1,650,247,000 4,521,225 2022 0 1,469,040,000 1,469,040,000 4,024,767 2021 0 961,775,000 961,775,000 2,635,000 2020 0 949,150,000 949,150,000 2,600,411 2019 0 831,689,000 831,689,000 2,278,600 Historic Average 0 1,172,380,200 1,172,380,200 3,212,001 B. System Input System input data for the previous five years. Total System Input = Self-supplied + Imported C. Water Supply System File Name File Description Description of Water System.pdf Attached file(s): 1. Designed daily capacity of system in gallons 13,500,000 2. Storage Capacity 2a. Elevated storage in gallons: 2b. Ground storage in gallons: 0 750,000 Page 3 of 11 UTILITY PROFILE FOR WHOLESALE WATER SUPPLIER D. Projected Demands Year Population Water Demand (gallons) 2025 90,921 1,973,021,632 2026 100,630 2,254,514,138 2027 110,886 2,467,053,693 2028 121,189 2,900,954,978 2029 132,888 3,213,305,650 2030 143,985 3,525,710,790 2031 155,414 3,837,505,759 2032 167,801 4,177,498,539 2033 179,584 4,517,413,781 2034 193,173 5,089,524,958 1. The estimated water supply requirements for the next ten years using population trends, historical water use, economic growth, etc . 2. Description of source data and how projected water demands were determined. File Name File Description CGMA pop-wtr W-O 289 proj2024 thru 2053_concept_12-31- 23_rev.xlsx Attached file(s): Customer Water Use Category Annual Water Use Treated or Raw 1. The annual water use for the five highest volume RETAIL customers. Customer Water Use Category Annual Water Use Treated or Raw City of Anna Municipal 736,644,000 Treated City of Melissa Municipal 617,288,000 Treated City of Van Alstyne Municipal 142,005,000 Treated City of Howe Municipal 62,325,000 Treated 2. The annual water use for the five highest volume WHOLESALE customers. E. High Volume Customers Page 4 of 11 UTILITY PROFILE FOR WHOLESALE WATER SUPPLIER F. Utility Data Comment Section Additional comments about utility data. A. Wholesale Water Supplier Connections Water Use Category Type Total Wholesale Connections (Active + Inactive) Percent of Total Connections Municipal 7 100.00 % Industrial 0 0.00 % Commercial 0 0.00 % Institutional 0 0.00 % Agricultural 0 0.00 % Total 7 100.00 % 1. List of active wholesale connections by major water use category. Section II: System Data 2. Net number of new wholesale connections by water use category for the previous five years. Net Number of New Wholesale Connections Year Municipal Industrial Commercial Institutional Agricultural Total 2023 1 0 0 0 0 1 2022 0 0 0 0 0 0 2021 0 0 0 0 0 0 2020 0 0 0 0 0 0 2019 0 0 0 0 0 0 Page 5 of 11 UTILITY PROFILE FOR WHOLESALE WATER SUPPLIER For the previous five years, the number of gallons of WHOLESALE water exported (sold or transferred) to each major water use category. Year Municipal Industrial Commercial Institutional Agricultural Total 2023 1,650,247,000 0 0 0 0 1,650,247,000 2022 1,320,938,000 0 0 0 0 1,320,938,000 2021 961,775,000 0 0 0 0 961,775,000 2020 949,150,000 0 0 0 0 949,150,000 2019 810,652,000 0 0 0 0 810,652,000 B. Accounting Data Total Gallons of Treated Water Month 2023 2022 2021 2020 2019 January 95,062,000 48,434,000 56,171,000 41,566,000 56,652,000 February 78,678,000 50,523,000 54,148,000 40,291,000 62,882,000 March 100,225,000 63,404,000 37,148,000 40,802,000 55,723,000 April 108,455,000 80,391,000 62,195,000 52,611,000 47,455,000 May 137,816,000 92,893,000 52,384,000 61,025,000 55,061,000 June 149,464,000 106,532,000 65,731,000 72,563,000 53,199,000 July 164,673,000 216,438,000 95,634,000 83,880,000 96,348,000 August 232,398,000 178,086,000 109,699,000 89,424,000 110,673,000 September 197,693,000 154,418,000 112,454,000 79,464,000 94,670,000 October 128,987,000 129,485,000 89,475,000 76,209,000 84,754,000 November 83,520,000 98,109,000 62,464,000 61,843,000 49,257,000 December 81,291,000 102,225,000 63,036,000 58,326,000 43,978,000 Total 1,558,262,000 1,320,938,000 860,539,000 758,004,000 810,652,000 1. The previous five years' gallons of treated water provided to WHOLESALE customers. C. Annual and Seasonal Water Use Page 6 of 11 UTILITY PROFILE FOR WHOLESALE WATER SUPPLIER Summer WHOLESALE (Treated + Raw) Total WHOLESALE (Treated + Raw) 2023 546,535,000 1,558,262,000 2022 501,056,000 1,320,938,000 2021 271,064,000 860,539,000 2020 245,867,000 758,004,000 2019 260,220,000 810,652,000 Average in Gallons 364,948,400.00 1,061,679,000.00 3. Summary of seasonal and annual water use. Total Gallons of Raw Water Month 2023 2022 2021 2020 2019 January 0 0 0 0 0 February 0 0 0 0 0 March 0 0 0 0 0 April 0 0 0 0 0 May 0 0 0 0 0 June 0 0 0 0 0 July 0 0 0 0 0 August 0 0 0 0 0 September 0 0 0 0 0 October 0 0 0 0 0 November 0 0 0 0 0 December 0 0 0 0 0 Total 0 0 0 0 0 2. The previous five years' gallons of raw water provided to WHOLESALE customers. Page 7 of 11 UTILITY PROFILE FOR WHOLESALE WATER SUPPLIER Water Loss data for the previous five years. D. Water Loss Year Total Water Loss in Gallons Water Loss in GPCD Water Loss as a Percentage 2023 0 0 0.00 % 2022 148,102,000 6 10.00 % 2021 0 0 0.00 % 2020 0 0 0.00 % 2019 21,037,000 1 2.53 % Average 33,827,800 1 2.51 % Average Daily Water Use and Peak Day Water Use for the previous five years. E. Peak Day Use Year Average Daily Use (gal) Peak Day Use (gal) Ratio (peak/avg) 2023 4,269,210 5940597 1.3915 2022 3,619,008 5446260 1.5049 2021 2,357,641 2946347 1.2497 2020 2,076,723 2672467 1.2869 2019 2,220,964 2828478 1.2735 F. Summary of Historic Water Use Water Use Category Historic Average Percent of Connections Percent of Water Use Municipal 1,138,552,400 100.00 %100.00 % Industrial 0 0.00 %0.00 % Commercial 0 0.00 %0.00 % Institutional 0 0.00 %0.00 % Agricultural 0 0.00 %0.00 % G. System Data Comment Section Page 8 of 11 UTILITY PROFILE FOR WHOLESALE WATER SUPPLIER A. Wastewater System Data Section III: Wastewater System Data 1. Design capacity of wastewater treatment plant(s) in gallons per day: Water Use Category Metered Unmetered Total Connections Percent of Total Connections Municipal 0 0.00 % Industrial 0 0.00 % Commercial 0 0.00 % Institutional 0 0.00 % Agricultural 0 0.00 % Total 0 100.00 % 2. List of active wastewater connections by major water use category. 3. Percentage of water serviced by the wastewater system: % Page 9 of 11 UTILITY PROFILE FOR WHOLESALE WATER SUPPLIER Total Gallons of Treated Water Month 2023 2022 2021 2020 2019 January February March April May June July August September October November December Total 4. Number of gallons of wastewater that was treated by the utility for the previous five years. 5. Could treated wastewater be substituted for potable water? Yes No 1. Data by type of recycling and reuse activities implemented during the current reporting period. B. Reuse Data Type of Reuse Total Annual Volume (in gallons) On-site Irrigation 0 Plant wash down 0 Chlorination/de-chlorination 0 Industrial 0 Landscape irrigation (park,golf courses) 0 Agricultural 0 Discharge to surface water Evaporation Pond Other 0 Total 0 Page 10 of 11 UTILITY PROFILE FOR WHOLESALE WATER SUPPLIER Page 11 of 11 UTILITY PROFILE FOR WHOLESALE WATER SUPPLIER Appendix D GREATER TEXOMA UTILITY AUTHORITY Annual Water Conservation Report Water Conservation Plan Annual Report Wholesale Water Supplier Name of Utility:GREATER TEXOMA UTILITY AUTHORITY Public Water Supply Identification Number (PWS ID):TX0910148 Certification of Convenience and Necessity (CCN) Number: Surface Water Right ID Number:4301-C Wastewater ID Number: Check all that apply: Address:5100 Airport Drive City:Zip Code:Denison 75020 Email:nichole@gtua.org Telephone Number:9037864433 Regional Water Planning Group:C Groundwater Conservation District:Red River Groundwater Conservation District Regional Water Planning Group: Retail Water Supplier Wholesale Water Supplier Wastewater Treatment Utility C Groundwater Conservation District:Red River Groundwater Conservation District Reporting Period (Calendar year): Period Begin (mm/yyyy):01/2023 Period End (mm/yyyy):12/2023 Check all that apply: Received financial assistance of $500,000 or more from TWDB Have a surface water right with TCEQ Last Name: Title:Senior Project Manager NicholeContact:First Name:Murphy Is this person the designated Conservation Coordinator?Yes No CONTACT INFORMATION Page 1 of 6 Water Conservation Annual Report ~ Wholesale Water Suppliers TWDB Form No. 1969 Revised on 3/11/2016 10:58 AM For this reporting period, provide the total volume of wholesale water exported (transfered or sold): 1,650,247,000 For this reporting period, does your billing/accounting system have the capability to classify customer into the Wholesale Customer Categories? 1. 2. For this reporting period, select the category(s) used to calculate wholesale customer water usage: 3. NoYes Wholesale Customers Categories* Municipal Industrial Commercial Institutional Agricultural *Recommended Customer Categories for classifying customer water use. For definitions, refer to Guidance and Methodology on Water Conservation and Water Use. SYSTEM DATA Municipal Industrial Commercial Institutional Agricultural Wholesale Customer Category Gallons Exported (transfered or sold) Number of Customers Municipal 1,650,247,000 7 Industrial 0 0 Commercial 0 0 Institutional 0 0 Agricultural 0 0 Total Gallons¹1650247000 7 For this reporting period, enter the gallons of WHOLESALE water exported (transfered or sold). Enter zero if a Customer Category does not apply. 4. 1 Page 2 of 6 Water Conservation Annual Report ~ Wholesale Water Suppliers TWDB Form No. 1969 Revised on 3/11/2016 10:58 AM Gallons Raw Wholesale Water Exported 0 Treated Wholesale Water Exported 1,650,247,000 Total Gallons During the Reporting Period Water Produced: Water from permitted sources such as rivers, lakes, streams, and wells 0 Wholesale Water Imported: Purchased wholesale water transferred into the system.1,650,247,000 System Input: Total water supplied to system and available for use. Produced + Imported = System Input 1,650,247,000 Wholesale Water Exported: Wholesale water sold or transferred out of the system.1,650,247,000 Gallons Per Day: Wholesale Water Exported / 365 = Gallons Per Day 4,521,225 Population: Estimated total population for municipal customers.71,914 Gallons Per Capita Per Day: Wholesale Exported / Population / 365 = Gallons Per Capita Per Day 63 Provide the breakdown of Wholesale Water Exported into Raw and Treated water volumes. Date to Achieve Target Specified and Quantified Targets Five-year target 2024 55 total GPCD, 1 GPCD water loss, 2% water loss percentage Ten-year target 2029 55 total GPCD, 1 GPCD water loss, 2% water loss percentage Provide the specific and quantified five and ten-year targets as listed in your most current Water Conservation Plan. Water Use Accounting ¹Municipal + Industrial + Commercial + Institutional + Agricultural = Wholesale Water Exported Page 3 of 6 Water Conservation Annual Report ~ Wholesale Water Suppliers TWDB Form No. 1969 Revised on 3/11/2016 10:58 AM 1.Water Conservation Plan. What year did your entity adopt or revise their most recent Water Conservation Plan? 2019 Does The Plan incorporate Best Management Practices?Yes No 2.Water Conservation Programs Has your entity implemented any type of water conservation activity or program? Yes No If yes, select the type(s) of Best Management Practices or water conservation strategies implemented during this reporting period. Estimate the gallons saved from wholesale supplier conservation strategies implemented. Do not include volume reused. Please include reuse in 3 below. Wholesale Supplier Activities and Practices Check if Implemented Estimated Gallons Saved Agricultural Conservation Programs Conservation Analysis & Planning Conservation Rate Structures Conservation Technology Education & Public Awareness 0 Industrial Conservation Programs Water Conservation Programs and Activities Wholesale Supplier Best Management Practices Conservation Planning Customer Contract Requirements to Develop and Implement Water Conservation and Drought Contingency Plans Technical Assistance and Outreach Resource Sharing Cost Share Program Wholesale Supplier Collective Purchase and Direct Distribution of Water Conservation Equipment Page 4 of 6 Water Conservation Annual Report ~ Wholesale Water Suppliers TWDB Form No. 1969 Revised on 3/11/2016 10:58 AM 4.Water Savings For this reporting period, estimate the savings that resulted from water conversation activities and programs. Estimated Gallons Saved/Conserved Estimated Gallons Recycled/Reused Total Volume of Water Saved¹ Dollar Value of Water Saved² 0 0 0 Leak Detection/Water Loss Program 0 Rebate, Retrofit, and Incentive Programs Regulatory & Enforcement System Operations Water Efficient Landscape Programs 0 Water Use Audits Other Totals 0 3.Recycle/Reuse (Water or Wastewater Effluent) For this reporting period, provide direct and indirect reuse activities. Reuse Activity Estimated Volume (in gallons) On-site irrigation 0 Plant wash down 0 Chlorination/de-chlorination 0 Industrial 0 Landscape irrigation (parks, golf courses)0 Agricultural 0 Other 0 Estimated Volume of Reuse 0 Page 5 of 6 Water Conservation Annual Report ~ Wholesale Water Suppliers TWDB Form No. 1969 Revised on 3/11/2016 10:58 AM ¹Estimated Gallons Saved + Estimated Gallons Recycled/Reused = Total Volume Saved ²Estimated this value by taking into account water savings, the cost of treatment or purchase of water, and deferred capital cost due to conservation. 5.Program Effectiveness In your opinion, how would you rank the overall effectiveness of your conservation programs and activities? Less Than Effective Somewhat Effective Hightly Effective Does Not Apply 6. What might your entity do to improve the effectiveness of your water conservation program? As a wholesale supplier only, GTUA has little authority over the residential customer. We will continue our education initiative for conserving water and promote conservation activities on our website and social media. 7. Select the areas for which you would like to receive more technical assistance. Technical Assitance Areas Agricultural Best Management Practices Wholesale Best Management Practices Industrial Best Management Practices Drought Contingency Plans Landscape Efficient Systems Leak Detection and Equipment Educational Resources Water Conservation Plans Water IQ: Know Your Water Water Loss Audits Rainwater Harvesting Recycling and Reuse Page 6 of 6 Water Conservation Annual Report ~ Wholesale Water Suppliers TWDB Form No. 1969 Revised on 3/11/2016 10:58 AM Appendix E TCEQ Water Conservation Implementation Report TC EQ -201 59 (1 1-5-0 4) Pag e 1 o f 5 Entity Name: Greater Texoma Utility Authority Address: 5100 Airport Road, Denison, TX 75020 Telephone Number: (903) 786-4433 Fax: Form Completed By: Paul Sigle Title: General Manager Signature: Date: I. WATER USES Indicate the type(s) of water uses (example: municipal, industrial, or agricultural). Municipal Use Use Use II. WATER CONSERVATION MEASURES IMPLEMENTED Provide the water conservation measures and the dates the measures were implemented. Texas Commission on Environmental Quality Water Conservation Implementation Report This report must be completed by entities that are required to submit a water conservation plan to the TCEQ in accordance with Title 30 Texas Administrative Code, Chapter 288 . Please complete this report and submit it to the TCEQ. If you need assistance in completing this form, please contact the Resource Protection Team in the Water Supply Division at (512) 239-4691. TC EQ -201 59 (1 1-5-0 4) Pag e 2 o f 5 Description of Water Conservation Measure: None Date Implemented: Description of Water Conservation Measure: Date Implemented: Description of Water Conservation Measure: Date Implemented: Description of Water Conservation Measure: Date Implemented: Description of Water Conservation Measure: TC EQ -201 59 (1 1-5-0 4) Pag e 3 o f 5 Date Implemented: Description of Water Conservation Measure: Date Implemented: Description of Water Conservation Measure: Date Implemented: Description of Water Conservation Measure: Date Implemented: Description of Water Conservation Measure: Date Implemented: Description of Water Conservation Measure: TC EQ -201 59 (1 1-5-0 4) Pag e 4 o f 5 Date Implemented: III. TARGETS A. Provide the specific and quantified five and ten-year targets as listed in water conservation plan for previous planning period. 5-Year Specific/Quantified Target: 55 Total GPD 2024 Date to achieve target: 12 -30 -2024 10-Year Specific/Quantified Target: 54 Total GPD 2034 Date to achieve target: 12-30-2034 B. State if these targets in the water conservation plan are being met. Yes C. List the actual amount of water saved. 2019 – 4,334,380 2020 – 16,718,470 TC EQ -201 59 (1 1-5-0 4) Pag e 5 o f 5 2021 – 156,567,600 2022 - 0 2023 - 0 D. If the targets are not being met, provide an explanation as to why, including any progress on the targets. Appendix F Letters to Regional Water Planning Group and NTMWD April 2, 2024 Region C Water Planning Group North Texas Municipal Water District P.O. Box 2408 Wylie TX 75098-2408 Re: Water Conservation and Drought Contingency and Water Emergency Response Plan Dear Sir or Madam: Enclosed please find a copy of the Water Conservation and Drought Contingency and Water Emergency Response Plan for the Greater Texoma Utility Authority. The Board of Directors of the Greater Texoma Utility Authority approved this Plan at their April 15, 2024 meeting. This copy is being submitted in accordance with the Texas Water Development Board and the Texas Commission on Environmental Quality rules. Sincerely, Paul Sigle General Manager PS:nm Enclosure Appendix G Adoption of Plans RESOLUTION NO. __________ A RESOLUTION BY THE BOARD OF DIRECTORS OF GREATER TEXOMA UTILITY AUTHORITY ADOPTING A WATER CONSERVATION AND DROUGHT CONTINGENCY AND WATER EMERGENCY RESPONSE PLAN TO PROMOTE THE RESPONSIBLE USE OF WATER AND TO PROVIDE FOR PENALITES AND/OR THE DISCONNECTION OF WATER SERVICE FOR NONCOMPLIANCE WITH THE PROVISIONS OF THE WATER CONSERVATION AND DROUGHT CONTINGENCY AND WATER EMERGENCY RESPONSE PLAN WHEREAS, the Greater Texoma Utility Authority (“GTUA”) has previously adopted a Water Conservation and Drought Contingency Plan; and WHEREAS, GTUA recognizes that the amount of water available to its water customers is limited; and WHEREAS, GTUA recognizes that due to natural limitations, drought conditions, system failures, and other acts of God that may occur, GTUA cannot guarantee an uninterrupted water supply for all purposes at all times; and WHEREAS, the Water Code and the regulations of the Texas Commission on Environmental Quality (“TCEQ”) require that GTUA adopt a Water Conservation Plan and Drought Contingency and Water Emergency Response Plan; and WHEREAS, the GTUA has determined an urgent need in the best interest of the public to adopt a Water Conservation and Drought Contingency and Water Emergency Response Plan; and WHEREAS, pursuant to Chapter 49 of the Water Code, GTUA is authorized to adopt such policies necessary to preserve and conserve its water resources; NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF DIRECTORS OF GREATER TEXOMA UTILITY AUTHORITY THAT: SECTION 1: The Water Conservation and Drought Contingency and Water Emergency Response Plan for GTUA dated __________________, ________ attached hereto as Appendix A, is hereby adopted. SECTION 2: This plan shall be used in conjunction with the previously adopted resolutions to implement and preserve GTUA Water Conservation and Drought Contingency and Water Emergency Response Plan. SECTION 3: All resolutions that are in conflict with the provisions of this resolution be, and the same are hereby, repealed and all other resolutions of the GTUA not in conflict with the provisions of this resolution shall remain in full force and effect. SECTION 4: It is hereby declared to be the intention of the Board of Directors of GTUA that the sections, paragraphs, sentences, clauses, and phrases of this resolution are severable and, if any phrase, clause, sentence, paragraph, or section of this resolution shall be declared unconstitutional by the valid judgment or decree of any court of competent jurisdiction, such unconstitutionality shall not affect any of the remaining phrases, clauses, sentences, paragraphs, and sections of the resolution, since the same would have been enacted by the Board of Directors without the incorporation of this resolution of such unconstitutional phrase, clause, sentence, paragraph, or section. SECTION 5: This resolution shall take effect immediately from and after its passage. SECTION 6: The Board of Directors does hereby find and declare that sufficient written notice of the date, hour, place and subject of the meeting adopting this Resolution was posted at a designated place convenient to the public for the time required by law preceding the meeting, that such place of posting was readily accessible at all times to the general public, and that all of the foregoing was done as required by law at all times during which this Resolution and the subject matter thereof has been discussed, considered and formally acted upon. The Board of Directors further ratifies, approves and confirms such written notice an the posting thereof. SECTION 7: The General Manager or their designee is hereby directed to file a copy of the Plan and this Resolution with the TCEQ in accordance with Title 30, Chapter 288 of the Texas Administrative Code. PASSED AND APPROVED this the 15 day of April 2024. ______________________________ President Board of Directors Greater Texoma Utility Authority ATTEST: ______________________________ Secretary-Treasurer Board of Directors Greater Texoma Utility Authority Appendix H Illegal Water Connections and Theft of Water Appendix H is included as an example for GTUA Member Cities who do not currently have a way to handle water theft or illegal connections. APPENDIX H ILLEGAL WATER CONNECTIONS AND THEFT OF WATER MUNICIPAL ORDINANCE PERTAINING TO ILLEGAL WATER CONNECTIONS AND THEFT OF WATER Ordinance No. ___________ AN ORDINANCE PERTAINING TO ILLEGAL WATER CONNECTIONS AND/OR THE THEFT OF WATER RELATED TO THE WATER SUPPLY FOR THE CITY OF __________________. WHEREAS, the City of ____, Texas (the “City”) recognizes that the amount of water available to its water customers is limited; and WHEREAS, pursuant to Chapter 54 of the Local Government Code, the City is authorized to adopt such policies necessary to preserve and conserve available water supplies; and WHEREAS, the City seeks to adopt an ordinance pertaining to illegal water connections and theft of water. NOW THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF __________ THAT: Section 1. The City Council hereby approves and adopts this Ordinance as described herein. Section 2. A person commits an offense of theft of water by any of the following actions: (a) A person may not knowingly tamper, connect to, or alter any component of the City’s water system including valves, meters, meter boxes, lids, hydrants, lines, pump stations, ground storage tanks, and elevated storage tanks. This shall include direct or indirect efforts to initiate or restore water service without the approval of the City. (b) If, without the written consent of the City Manager or the City Manager’s designee, the person knowingly causes, suffers or allows the initiation or restoration of water service to the property after termination of service(s). For purposes of this section, it shall be assumed that the owner, occupant, or person in control of the property caused, suffered, or allowed the unlawful initiation or restoration of service(s). (c) A person may not knowingly make or cause a false report to be made to the City of a reading of a water meter installed for metered billing. (d) A person commits a separate offense each day that the person performs an act prohibited by this section or fails to perform an act required by this section. Section 3. An offense under this Ordinance is a Class C misdemeanor punishable by a fine of up to two thousand dollars ($2,000.00) and/or discontinuance of water service by the City. Section 4. The City Council does hereby find and declare that sufficient written notice of the date, hour, place and subject of the meeting considering this Ordinance was posted at a designated place convenient to the public for the time required by law preceding the meeting, that such place of posting was readily accessible at all times to the general public, and that all of the foregoing was done as required by law at all times during which this Ordinance, and the subject matter thereof, has been discussed, considered and formally acted upon. The City Council further ratifies, approves and confirms such written notice and the posting thereof. Section 5. Should any paragraph, sentence, clause, phrase or word of this Ordinance be declared unconstitutional or invalid for any reason, the remainder of this Ordinance shall not be affected. Section 6. The City Secretary is hereby authorized and directed to cause publication of the descriptive caption of this ordinance as an alternative method of publication provided by law. Section 7. {If Applicable} Ordinance No. _______, adopted on _________, is hereby repealed. Passed by the City Council on this ___ day of _____, ____. ______________________________________ Mayor Attest: ______________________________________ City Secretary Appendix I Landscape Ordinance This is an example of a basic landscape ordinance which can be adopted or modified for adoption by municipalities or other jurisdictions. Landscape ordinances with a wide variety of formats and levels of complexity have been adopted by the governments of NTMWD Member Cities and Customers to date. 1. PURPOSE Landscaping is accepted as adding value to property and is in the interest of the general welfare of the City. The provision of landscaped areas also serves to increase the amount of a property that is devoted to pervious surface area which, in turn, helps to reduce the amount of impervious surface area, storm water runoff, and consequent nonpoint pollution in local waterways. Therefore, landscaping is hereafter required of new development, including single and two family uses. Single and two family use requirements are less in scope than those for other uses such as multi family, commercial, institutional, and industrial development. Landscape requirements for these uses are set forth herein. 2. SCOPE AND ENFORCEMENT The standards and criteria contained within this Section are deemed to be minimum standards and shall apply to all new or altered construction occurring within the City exceeding thirty percent (30%) of the original floor and/or site area. Additionally, any use requiring a Conditional Use Provision (CUP) zoning designation must comply with these landscape standards unless special landscaping standards are otherwise provided for in the ordinance establishing the CUP district. The provisions of this Section shall be administered and enforced by the City Manager or his/her designee. If at any time after the issuance of a certificate of occupancy, the approved landscaping is found to be not in conformance with the standards and criteria of this Section, the City Manager (or his/her designee) shall issue notice to the owner, citing the violation and describing what action is required to comply with this Section. The owner, tenant or agent shall have thirty (30) calendar days from date of said notice to establish/restore the landscaping, as required. If the landscaping is not established/restored within the allotted time, then such person shall be in violation of this Ordinance. 3. PERMITS No permits shall be issued for building, paving, grading or construction until a detailed landscape plan is submitted and approved by the City Manager or his/her designee, along with the site plan and engineering/construction plans. A landscape plan shall be required as part of the site plan submission, as required in Section __. The landscape plan may be shown on the site plan (provided the site plan remains clear and legible) or may be drawn on a separate sheet. Prior to the issuance of a certificate of occupancy for any building or structure, all screening and landscaping shall be in place in accordance with the landscape plan. In any case in which a certificate of occupancy is sought at a season of the year in which the City Manager, or his/her designee, determines that it would be impractical to plant trees, shrubs or groundcover, or to successfully establish turf areas, a temporary certificate of occupancy may be issued provided a letter of agreement from the property owner is submitted that states when the installation shall occur. All landscaping required by the landscaping plan shall be installed within six (6) months of the date of the issuance of the certificate of occupancy. 4. LANDSCAPE PLAN Prior to the issuance of a building, paving, grading or construction permit for any use other than single family detached or two family dwellings, a landscape plan shall be submitted to the City Manager, or his/her designee. The City Manager, or his/her designee, shall review such plans and shall approve same if the plans are in accordance with the criteria of these regulations. If the plans are not in conformance, they shall be disapproved and shall be accompanied by a written statement setting forth the changes necessary for compliance. The landscape plan shall be prepared and by a person knowledgeable in plant material usage and landscape design (e.g., landscape architect, landscape contractor, landscape designer, etc.). For all uses other than single and two family uses, the landscape plan shall be sealed by a registered landscape architect and shall contain the following minimum information: A. Minimum scale of one inch (1") equals fifty feet (50'); show scale in both written and graphic form. B. Trunk location and caliper size, dripline location, and species of all trees to be preserved. Tree stamps or standard symbols shall not be used unless they indicate true size and location of trees and driplines. C. Location of all plant and landscaping material to be used, including plants, paving, benches, screens, fountains, statues, earthen berms, ponds (to include depth of water), topography of site, or other landscape features. D. Species and common names of all plant materials to be used. E. Size of all plant material to be used (container size, planted height, etc.) F. Spacing of plant material where appropriate. G. Layout and description of irrigation, sprinkler, or water systems including location of water sources. H. Name and address of the person(s) responsible for the preparation of the landscape plan. I. North arrow/symbol, and a small map indicating location of the property. J. Date of the landscape plan. 5. GENERAL STANDARDS The following criteria and standards shall apply to landscape materials and installation: A. All required landscaped open areas shall be completely covered with living plant material or landscape mulch materials such as shredded hardwood mulch or decomposed granite. B. Plant materials shall conform to the standards of the approved plant list for the City and the current edition of the "American Standard for Nursery Stock" (as amended), published by the American Association of Nurserymen. Approved plant lists should Grass seed, sod and other material shall be clean and free of weeds and noxious pests and insects. C. Large trees shall have an average spread of crown of greater than fifteen feet (15') at maturity. Trees having a lesser average mature crown of fifteen feet (15') may be substituted by grouping the same so as to create the equivalent of fifteen feet (15') of crown spread. Large trees shall be a minimum of three inches (3") in caliper measured six inches (6") above the ground and ten feet (10') in height at time of planting. Small trees shall be a minimum of two inches (2") in caliper measured six inches (6") above the ground and eight feet (8') In height at time of planting. D. Shrubs not of a dwarf variety shall be a minimum of two feet (2') in height when measured immediately after planting. Hedges, where installed for screening purposes, shall be planted and maintained so as to form a continuous, unbroken, solid visual screen which will be six feet (6') high within three (3) years after time of planting (except for parking lot/headlight screens, which shall form a continuous, solid visual screen three feet high within two years after planting). E. Vines not intended as ground cover shall be a minimum of two feet (2') in height immediately after planting and may be used in conjunction with fences, screens, or walls to meet landscape screening requirements as set forth. F. Grass areas shall be sodded, plugged, sprigged, hydro mulched and/or seeded, except that solid sod shall be used in swales, earthen berms or other areas subject to erosion. G. Ground covers used in lieu of grass in whole and in part shall be planted in such a manner as to present a finished appearance and complete coverage within one (1) year of planting. H. All automatic, underground irrigation system shall have operational freeze and rain sensors to prevent watering at inappropriate times. Landscaped areas having less than four (4) feet in width shall be irrigated by underground tubing or other capillary system but not by aboveground spray. Irrigation equipment (except for controllers and weather stations) shall not be visible from public streets or walkways. I. Earthen berms shall have side slopes not to exceed 33.3 percent (three feet (3') of horizontal distance for each one foot (1') of vertical height). All berms shall contain necessary drainage provisions as may be required by the City's Engineer. 6. MINIMUM LANDSCAPING REQUIREMENTS FOR ALL USES OTHER THAN SINGLE- AND TWO-FAMILY RESIDENTIAL DEVELOPMENTS A. For all uses other than single and two-family uses, at least twenty percent (20%) of the street yard shall be permanently landscaped area. The street yard shall be defined as the area between the building front and the front property line. For gasoline service stations, the requirement is a minimum of fifteen percent (15%) landscaped area for the entire site, including a six hundred (600) square foot landscaped area at the street intersection corner (if any), which can be counted toward the fifteen percent (15%) requirement. B. A minimum fifteen foot (15') landscape buffer adjacent to the right-of-way of any major thoroughfare is required. Corner lots fronting two (2) major thoroughfares shall provide the appropriate required landscape buffer on both street frontages. All other street frontages shall observe a minimum ten foot (10') landscape buffer. One (1) large shade tree shall be required per forty (40) linear feet (or portion thereof) of street frontage. Trees may be grouped or clustered to facilitate site design and to provide an aesthetically pleasing, natural looking planting arrangement. The landscaped buffer area may be included in the required street yard landscape area percentage. C. Landscape areas within parking lots should generally be at least one parking space in size, with no landscape area less than fifty (50) square feet in area. Landscape areas shall be no less than five feet (5') wide and shall equal a total of at least sixteen (16) square feet per parking space. There shall be a landscaped area with at least one (1) large tree within sixty feet (60') of every parking space. There shall be a minimum of one (1) large tree planted in the parking area for every ten (10) parking spaces for parking lots having more than twenty (20) spaces. Within parking lots, landscape areas should be located to define parking areas and to assist In clarifying appropriate circulation patterns. A landscape island shall be located at the terminus of all parking rows, and shall contain at least one tree. All landscape areas shall be protected by a monolithic concrete curb or wheel stops, and shall remain free of trash, litter, and car bumper overhangs. The area of parking lot landscaping islands shall be In addition to the required street yard landscape area percentage. D. All existing trees which are to be preserved shall be provided with undisturbed, permeable surface area under and extending outward to the existing dripline of the tree. All new trees shall be provided with a permeable surface under the dripline a minimum of five feet (5') by five feet (5'). E. A minimum of fifty percent (50%) of the total trees required for the property shall be large shade trees as specified on the City’s approved plant list. Large trees shall not be used under existing or proposed overhead utility lines. F. Necessary driveways from the public right-of-way shall be permitted through all required landscaping in accordance with City regulations. 7. MINIMUM LANDSCAPING REQUIREMENTS FOR SINGLE-FAMILY AND TWO- FAMILY DEVELOPMENTS A. For all single family and two family developments, each residential lot shall be planted with at least one (1) large tree having a minimum caliper of three inches (3") in the front yard; and one (1) large tree having a minimum caliper of three inches (3") in the back yard; and one (1) small tree having a minimum caliper of two inches (2") in the front yard; and two (2) small trees having a minimum caliper of two inches (2") in the back yard. Trees shall be from the city’s approved plant list. B. Only small trees from the city’s approved plant list shall be allowed to be planted between the street curb and the right-of-way, unless otherwise specifically approved as part of a Planned Development (PD). 8. SIGHT DISTANCE AND VISIBILITY Rigid compliance with these landscaping requirements shall not be such as to cause visibility obstructions and/or blind corners at intersections. Whenever an intersection of two (2) or more public right-of-way occurs, a triangular visibility area, as described below, shall be created. Landscape planting within the triangular visibility area shall be designed to provide unobstructed cross visibility at a level between thirty inches (30") and seven feet (7') measured above top of curb. Trees may be permitted in this area provided they are trimmed in such that lateral limbs or foliage extend into the cross visibility area. The triangular areas are: A. The areas of property on both sides of the intersection of an alley access way and public right-of-way shall have a triangular visibility area with two (2) sides of each triangle being a minimum of ten feet (10') in length from the point of intersection and the third side being a line connecting the ends of the other two (2) sides. B. The areas of property located at a corner formed by the intersection of two (2) or more public right-of-ways (or a private driveway onto a public road) shall have a triangular visibility area with two (2) sides of each triangle being a minimum of twenty five feet (25') in length along the right-of-way lines (or along the driveway curb line and the road right-of-way line) from the point of the intersection and the third side being a line connecting the ends of the other two (2) sides. In the event other visibility obstructions are apparent in the proposed landscape plan, as determined by the City Manager or his/her designee, the requirements set forth herein may be reduced to the extent to remove the conflict. SAMPLE RECOMMENDED PLANT LIST These native/adapted plants exhibit a combination of outstanding characteristics in low water use, low maintenance, disease and insect resistance, and appearance. Large Trees Texas Mountain Laurel Perennials Bur Oak Texas Persimmon Autumn Pink/Maroon Sage Cedar Elm Tree Yaupon Holly Black-Eyed Susan Chinquapin Oak Vitex/Chaste Tree Blue Plumbago Lacebark Elm Gayfeather Live Oak Tall Shrubs Indian Blanket Shumard Oak Nellie R. Stevens Holly Purple Coneflower Texas Ash Oleander Russian Sage Wax Myrtle Skeletonleaf Goldeneye Medium Trees Yew Texas Lantana Lacey Oak Little Gem Magnolia Medium/Small Shrubs Ornamental Grasses Shantung Maple Agave Big Muhly Texas Pistache Boxleaf Euonymus Dwarf Fountain Grass Compact Eleagnus Mexican Feathergrass Narrow-Leaf Trees Compact Texas Sage Arizona Cypress Dwarf Burford Holly Groundcover/Vines Bald Cypress Dwarf Yaupon Holly Carolina Jessamine Deodar Cedar Dwarf Oleander Crossvine Eastern Red Cedar Indian Hawthorne Liriope/Giant Liriope Spartan Juniper Knock-Out Red/Pink Rose Trailing Rosemary Lorapetalum Small Trees Red Yucca Turf Crepe Myrtle Sandankwa Viburnum Bermuda Grass Desert Willow Softleaf Yucca Buffalo Grass Possumhaw Holly Spineless Prickly Pear Zoysia Redbud Upright Rosemary Savannah Holly APPENDIX E CONSIDERATIONS FOR LANDSCAPE WATER MANAGEMENT REGULATIONS 1. PURPOSE Landscaping is accepted as adding value to property and is in the interest of the general welfare of the City. The provision of landscaped areas also serves to increase the amount of a property that is devoted to pervious surface area which, in turn, helps to reduce the amount of impervious surface area, storm water runoff, and consequent nonpoint pollution in local waterways. Therefore, landscaping is hereafter required of new development, including single and two family uses. Single and two family use requirements are less in scope than those for other uses such as multi family, commercial, institutional, and industrial development. Landscape requirements for these uses are set forth herein. 2. SCOPE AND ENFORCEMENT The standards and criteria contained within this Section are deemed to be minimum standards and shall apply to all new or altered construction occurring within the City exceeding thirty percent (30%) of the original floor and/or site area. Additionally, any use requiring a Conditional Use Provision (CUP) zoning designation must comply with these landscape standards unless special landscaping standards are otherwise provided for in the ordinance establishing the CUP district. The provisions of this Section shall be administered and enforced by the City Manager or his/her designee. If at any time after the issuance of a certificate of occupancy, the approved landscaping is found to be not in conformance with the standards and criteria of this Section, the City Manager (or his/her designee) shall issue notice to the owner, citing the violation and describing what action is required to comply with this Section. The owner, tenant or agent shall have thirty (30) calendar days from date of said notice to establish/restore the landscaping, as required. If the landscaping is not established/restored within the allotted time, then such person shall be in violation of this Ordinance. 3. PERMITS No permits shall be issued for building, paving, grading or construction until a detailed landscape plan is submitted and approved by the City Manager or his/her designee, along with the site plan and engineering/construction plans. A landscape plan shall be required as part of the site plan submission, as required in Section __. The landscape plan may be shown on the site plan (provided the site plan remains clear and legible) or may be drawn on a separate sheet. Prior to the issuance of a certificate of occupancy for any building or structure, all screening and landscaping shall be in place in accordance with the landscape plan. In any case in which a certificate of occupancy is sought at a season of the year in which the City Manager, or his/her designee, determines that it would be impractical to plant trees, shrubs or groundcover, or to successfully establish turf areas, a temporary certificate of occupancy may be issued provided a letter of agreement from the property owner is submitted that states when the installation shall occur. All landscaping required by the landscaping plan shall be installed within six (6) months of the date of the issuance of the certificate of occupancy. 4. LANDSCAPE PLAN Prior to the issuance of a building, paving, grading or construction permit for any use other than single family detached or two family dwellings, a landscape plan shall be submitted to the City Manager, or his/her designee. The City Manager, or his/her designee, shall review such plans and shall approve same if the plans are in accordance with the criteria of these regulations. If the plans are not in conformance, they shall be disapproved and shall be accompanied by a written statement setting forth the changes necessary for compliance. The landscape plan shall be prepared and by a person knowledgeable in plant material usage and landscape design (e.g., landscape architect, landscape contractor, landscape designer, etc.). For all uses other than single and two family uses, the landscape plan shall be sealed by a registered landscape architect and shall contain the following minimum information: A. Minimum scale of one inch (1") equals fifty feet (50'); show scale in both written and graphic form. B. Trunk location and caliper size, dripline location, and species of all trees to be preserved. Tree stamps or standard symbols shall not be used unless they indicate true size and location of trees and driplines. C. Location of all plant and landscaping material to be used, including plants, paving, benches, screens, fountains, statues, earthen berms, ponds (to include depth of water), topography of site, or other landscape features. D. Species and common names of all plant materials to be used. E. Size of all plant material to be used (container size, planted height, etc.) F. Spacing of plant material where appropriate. G. Layout and description of irrigation, sprinkler, or water systems including location of water sources. H. Name and address of the person(s) responsible for the preparation of the landscape plan. I. North arrow/symbol, and a small map indicating location of the property. J. Date of the landscape plan. 5. GENERAL STANDARDS The following criteria and standards shall apply to landscape materials and installation: A. All required landscaped open areas shall be completely covered with living plant material or landscape mulch materials such as shredded hardwood mulch or decomposed granite. B. Plant materials shall conform to the standards of the approved plant list for the City and the current edition of the "American Standard for Nursery Stock" (as amended), published by the American Association of Nurserymen. Approved plant lists should Grass seed, sod and other material shall be clean and free of weeds and noxious pests and insects. C. Large trees shall have an average spread of crown of greater than fifteen feet (15') at maturity. Trees having a lesser average mature crown of fifteen feet (15') may be substituted by grouping the same so as to create the equivalent of fifteen feet (15') of crown spread. Large trees shall be a minimum of three inches (3") in caliper measured six inches (6") above the ground and ten feet (10') in height at time of planting. Small trees shall be a minimum of two inches (2") in caliper measured six inches (6") above the ground and eight feet (8') In height at time of planting. D. Shrubs not of a dwarf variety shall be a minimum of two feet (2') in height when measured immediately after planting. Hedges, where installed for screening purposes, shall be planted and maintained so as to form a continuous, unbroken, solid visual screen which will be six feet (6') high within three (3) years after time of planting (except for parking lot/headlight screens, which shall form a continuous, solid visual screen three feet high within two years after planting). E. Vines not intended as ground cover shall be a minimum of two feet (2') in height immediately after planting and may be used in conjunction with fences, screens, or walls to meet landscape screening requirements as set forth. F. Grass areas shall be sodded, plugged, sprigged, hydro mulched and/or seeded, except that solid sod shall be used in swales, earthen berms or other areas subject to erosion. G. Ground covers used in lieu of grass in whole and in part shall be planted in such a manner as to present a finished appearance and complete coverage within one (1) year of planting. H. All automatic, underground irrigation system shall have operational freeze and rain sensors to prevent watering at inappropriate times. Landscaped areas having less than four (4) feet in width shall be irrigated by underground tubing or other capillary system but not by aboveground spray. Irrigation equipment (except for controllers and weather stations) shall not be visible from public streets or walkways. I. Earthen berms shall have side slopes not to exceed 33.3 percent (three feet (3') of horizontal distance for each one foot (1') of vertical height). All berms shall contain necessary drainage provisions as may be required by the City's Engineer. 6. MINIMUM LANDSCAPING REQUIREMENTS FOR ALL USES OTHER THAN SINGLE- AND TWO-FAMILY RESIDENTIAL DEVELOPMENTS A. For all uses other than single and two-family uses, at least twenty percent (20%) of the street yard shall be permanently landscaped area. The street yard shall be defined as the area between the building front and the front property line. For gasoline service stations, the requirement is a minimum of fifteen percent (15%) landscaped area for the entire site, including a six hundred (600) square foot landscaped area at the street intersection corner (if any), which can be counted toward the fifteen percent (15%) requirement. B. A minimum fifteen foot (15') landscape buffer adjacent to the right-of-way of any major thoroughfare is required. Corner lots fronting two (2) major thoroughfares shall provide the appropriate required landscape buffer on both street frontages. All other street frontages shall observe a minimum ten foot (10') landscape buffer. One (1) large shade tree shall be required per forty (40) linear feet (or portion thereof) of street frontage. Trees may be grouped or clustered to facilitate site design and to provide an aesthetically pleasing, natural looking planting arrangement. The landscaped buffer area may be included in the required street yard landscape area percentage. C. Landscape areas within parking lots should generally be at least one parking space in size, with no landscape area less than fifty (50) square feet in area. Landscape areas shall be no less than five feet (5') wide and shall equal a total of at least sixteen (16) square feet per parking space. There shall be a landscaped area with at least one (1) large tree within sixty feet (60') of every parking space. There shall be a minimum of one (1) large tree planted in the parking area for every ten (10) parking spaces for parking lots having more than twenty (20) spaces. Within parking lots, landscape areas should be located to define parking areas and to assist In clarifying appropriate circulation patterns. A landscape island shall be located at the terminus of all parking rows, and shall contain at least one tree. All landscape areas shall be protected by a monolithic concrete curb or wheel stops, and shall remain free of trash, litter, and car bumper overhangs. The area of parking lot landscaping islands shall be In addition to the required street yard landscape area percentage. D. All existing trees which are to be preserved shall be provided with undisturbed, permeable surface area under and extending outward to the existing dripline of the tree. All new trees shall be provided with a permeable surface under the dripline a minimum of five feet (5') by five feet (5'). E. A minimum of fifty percent (50%) of the total trees required for the property shall be large shade trees as specified on the City’s approved plant list. Large trees shall not be used under existing or proposed overhead utility lines. F. Necessary driveways from the public right-of-way shall be permitted through all required landscaping in accordance with City regulations. 7. MINIMUM LANDSCAPING REQUIREMENTS FOR SINGLE-FAMILY AND TWO- FAMILY DEVELOPMENTS A. For all single family and two family developments, each residential lot shall be planted with at least one (1) large tree having a minimum caliper of three inches (3") in the front yard; and one (1) large tree having a minimum caliper of three inches (3") in the back yard; and one (1) small tree having a minimum caliper of two inches (2") in the front yard; and two (2) small trees having a minimum caliper of two inches (2") in the back yard. Trees shall be from the city’s approved plant list. B. Only small trees from the city’s approved plant list shall be allowed to be planted between the street curb and the right-of-way, unless otherwise specifically approved as part of a Planned Development (PD). 8. SIGHT DISTANCE AND VISIBILITY Rigid compliance with these landscaping requirements shall not be such as to cause visibility obstructions and/or blind corners at intersections. Whenever an intersection of two (2) or more public right-of-way occurs, a triangular visibility area, as described below, shall be created. Landscape planting within the triangular visibility area shall be designed to provide unobstructed cross visibility at a level between thirty inches (30") and seven feet (7') measured above top of curb. Trees may be permitted in this area provided they are trimmed in such that lateral limbs or foliage extend into the cross visibility area. The triangular areas are: A. The areas of property on both sides of the intersection of an alley access way and public right-of-way shall have a triangular visibility area with two (2) sides of each triangle being a minimum of ten feet (10') in length from the point of intersection and the third side being a line connecting the ends of the other two (2) sides. B. The areas of property located at a corner formed by the intersection of two (2) or more public right-of-ways (or a private driveway onto a public road) shall have a triangular visibility area with two (2) sides of each triangle being a minimum of twenty five feet (25') in length along the right-of-way lines (or along the driveway curb line and the road right-of-way line) from the point of the intersection and the third side being a line connecting the ends of the other two (2) sides. In the event other visibility obstructions are apparent in the proposed landscape plan, as determined by the City Manager or his/her designee, the requirements set forth herein may be reduced to the extent to remove the conflict. SAMPLE RECOMMENDED PLANT LIST These native/adapted plants exhibit a combination of outstanding characteristics in low water use, low maintenance, disease and insect resistance, and appearance. Large Trees Texas Mountain Laurel Perennials Bur Oak Texas Persimmon Autumn Pink/Maroon Sage Cedar Elm Tree Yaupon Holly Black-Eyed Susan Chinquapin Oak Vitex/Chaste Tree Blue Plumbago Lacebark Elm Gayfeather Live Oak Tall Shrubs Indian Blanket Shumard Oak Nellie R. Stevens Holly Purple Coneflower Texas Ash Oleander Russian Sage Wax Myrtle Skeletonleaf Goldeneye Medium Trees Yew Texas Lantana Lacey Oak Little Gem Magnolia Medium/Small Shrubs Ornamental Grasses Shantung Maple Agave Big Muhly Texas Pistache Boxleaf Euonymus Dwarf Fountain Grass Compact Eleagnus Mexican Feathergrass Narrow-Leaf Trees Compact Texas Sage Arizona Cypress Dwarf Burford Holly Groundcover/Vines Bald Cypress Dwarf Yaupon Holly Carolina Jessamine Deodar Cedar Dwarf Oleander Crossvine Eastern Red Cedar Indian Hawthorne Liriope/Giant Liriope Spartan Juniper Knock-Out Red/Pink Rose Trailing Rosemary Lorapetalum Small Trees Red Yucca Turf Crepe Myrtle Sandankwa Viburnum Bermuda Grass Desert Willow Softleaf Yucca Buffalo Grass Possumhaw Holly Spineless Prickly Pear Zoysia Redbud Upright Rosemary Savannah Holly APPENDIX F LETTERS TO REGION C WATER PLANNING GROUP AND GTUA May 19th, 2026 Region C Water Planning Group North Texas Municipal Water District P.O. Box 2408 Wylie, Texas 75098-2408 Re: City of Anna Water Conservation Plan and Water Resource and Emergency Management Plan To whom it may concern: Enclosed please find a copy of the recently updated Water Conservation Plan and Water Resource and Emergency Management Plan for the City of Anna. I am submitting a copy of this plan to the Region C Water Planning Group in accordance with the Texas Water Development Board and Texas Commission on Environmental Quality rules. The Anna City Council adopted the Water Conservation Plan and Water Resource and Emergency Management Plan on ________________, 2026. Sincerely, Paul Sigle, P.E. Greater Texoma Utility Authority 5100 Airport Drive Denison, Texas 75020 Re: City of Anna Water Conservation Plan and Water Resource and Emergency Management Plan Dear Paul: Enclosed please find a copy of the recently updated Water Conservation Plan and Water Resource and Emergency Management Plan. The Anna City Council approved adoption the Water Conservation Plan and Water Resource and Emergency Management Plan on ___________, 2026. Sincerely, APPENDIX G ADOPTION OF WATER CONSERVATION PLAN Municipal Ordinance Adopting Water Resource and Emergency Management Plan Ordinance No. ___________ AN ORDINANCE ADOPTING A WATER RESOURCE AND EMERGENCY MANAGEMENT PLAN FOR THE CITY OF ANNA TO PROMOTE RESPONSIBLE USE OF WATER AND TO PROVIDE FOR PENALTIES AND/OR THE DISCONNECTION OF WATER SERVICE FOR NONCOMPLIANCE WITH THE PROVISIONS OF THE WATER RESOURCE AND EMERGENCY MANAGEMENT PLAN. WHEREAS, the City of Anna, Texas (the “City”), recognizes that the amount of water available to its water customers is limited; and WHEREAS, the City recognizes that due to natural limitations, drought conditions, system failures and other acts of God which may occur, the City cannot guarantee an uninterrupted water supply for all purposes at all times; and WHEREAS, the Water Code and the regulations of the Texas Commission on Environmental Quality (the “Commission”) require that the City adopt a Water Resource and Emergency Management Plan; and WHEREAS, the City has determined an urgent need in the best interest of the public to adopt a Water Resource and Emergency Management Plan; and WHEREAS, pursuant to Chapter 54 of the Local Government Code, the City is authorized to adopt such Ordinances necessary to preserve and conserve its water resources; and WHEREAS, the City Council of the City of Anna desires to adopt the North Texas Municipal Water District (the “NTMWD”) Model Water Resource and Emergency Management Plan as official City policy for the conservation of water. NOW THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF ANNA THAT: Section 1. The City Council hereby approves and adopts the NTMWD Model Water Resource and Emergency Management Plan (the “Plan”), attached hereto as Addendum A, as if recited verbatim herein. The City commits to implement the requirements and procedures set forth in the adopted Plan. Section 2. Any customer, defined pursuant to 30 Tex. Admin. Code Chapter 291, failing to comply with the provisions of the Plan shall be subject to a fine of up to two thousand dollars ($2,000.00) and/or discontinuance of water service by the City. Proof of a cul pable mental state is not required for a conviction of an offense under this section. Each day a customer fails to comply with the Plan is a separate violation. The City's authority to seek injunctive or other civil relief available under the l aw is not limited by this section. Section 3. The City Council does hereby find and declare that sufficient written notice of the date, hour, place and subject of the meeting adopting this Ordinance was posted at a designated place convenient to the public for the time required by law preceding the meeting, that such place of posting was readily accessible at all times to the general public, and that all of the foregoing was done as required by law at all times during which this Ordinance and the subject matter thereof has been discussed, considered and formally acted upon. The City Council further ratifies, approves and confirms such written notice and the posting thereof. Section 4. Should any paragraph, sentence, clause, phrase or word of this Ordinance be declared unconstitutional or invalid for any reason, the remainder of this Ordinance shall not be affected. Section 5. The City Manager or his designee is hereby directed to file a copy of the Plan and this Ordinance with the Commission in accordance with Title 30, Chapter 288 of the Texas Administrative Code. Section 6. The City Secretary is hereby authorized and directed to cause publication of the descriptive caption of this ordinance as an alternative method of publication provided by law. Section 7. {If Applicable} Ordinance No. _______, adopted on _________, is hereby repealed. Passed by the City Council on this ___ day of _____, ____. ______________________________________ Mayor Attest: ______________________________________ City Secretary APPENDIX H ILLEGAL WATER CONNECTIONS AND THEFT OF WATER APPENDIX I SAMPLE LANDSCAPE ORDINANCE APPENDIX J DROUGHT CONTINGENCY PLAN 2026 WATER RESOURCE AND EMERGENCY MANAGEMENT PLAN CITY OF ANNA MAY 19, 2026 2026 Water Resource and Emergency Management Plan City of Anna i TABLE OF CONTENTS 1. INTRODUCTION AND OBJECTIVES .................................................................................. 1-1 2. DEFINITIONS AND ABBREVIATIONS ................................................................................ 2-1 3. TEXAS COMMISSION ON ENVIRONMENTAL QUALITY RULES .......................................... 3-1 4. WATER RESOURCE AND EMERGENCY MANAGEMENT PLAN .......................................... 4-1 4.1 Provisions to Inform the Public and Opportunity for Public Input ............................... 4-1 4.2 Program for Continuing Public Education and Information ......................................... 4-1 4.3 Criteria for Initiation and Termination of Water Resource and Emergency Management Stages And Targets For Water Use Reductions ........................................................... 4-2 4.3.1 Stage 1 ................................................................................................................. 4-3 4.3.2 Stage 2 ................................................................................................................. 4-6 4.3.3 Stage 3 ............................................................................................................... 4-10 4.4 Procedures for Granting Variances to the Plan ......................................................... 4-15 4.5 Procedures for Enforcing Mandatory Water Use Restrictions ................................... 4-15 4.6 Coordination with the Regional Water Planning Group and GTUA ............................ 4-16 2026 Water Resource and Emergency Management Plan City of Anna 1-1 1. INTRODUCTION AND OBJECTIVES This Water Resource Emergency Management Plan (WREMP) was prepared utilizing the 2024 Model Water Resource and Emergency Management Plan prepared by Greater Texoma Utility Authority (GTUA) for its Customers1. This Plan addresses all of the current TCEQ requirements for a drought contingency plan.2 This WREMP will replace the City of Anna plan previously adopted. The measures included in this WREMP are intended to provide short-term water savings during drought or emergency conditions. Water savings associated with ongoing, long -term strategies are discussed in the document entitled Water Conservation Plan for City of Anna. 2 The purpose of this WREMP is as follows: • To conserve the available water supply in times of drought, water supply shortage, and emergency. • To maintain supplies for domestic water use, sanitation, and fire protection. • To protect and preserve public health, welfare, and safety. • To minimize the adverse impacts of water supply shortages. • To minimize the adverse impacts of emergency water supply conditions. GTUA provides treated potable water received from NTMWD to the City of Anna. This WREMP calls for the City of Anna to adopt Water Resource and Emergency Management Stages initiated by GTUA during a drought or water supply emergency. In the absence of drought response measures, water demands tend to increase during drought due to increased outdoor irrigation. The severity of a drought depends on the degree of depletion of supplies and on the relationship of demand to available supplies. 1 Superscripted numbers match references listed in Appendix A. 2026 Water Resource and Emergency Management Plan City of Anna 2-1 2. DEFINITIONS AND ABBREVIATIONS 1. AQUATIC LIFE means a vertebrate organism dependent upon an aquatic environment to sustain its life. 2. ATHLETIC FIELD means a public sports competition field, the essential feature of which is turf grass, used primarily for organized sports practice, competition or exhibition events for schools ; professional sports and league play sanctioned by the utility providing retail water supply. 3. COMMERCIAL FACILITY means business or industrial buildings and the associated landscaping, but does not include the fairways, greens, or tees of a golf course. 4. COMMERCIAL VEHICLE WASH FACILITY means a permanently -located business that washes vehicles or other mobile equipment with water or water-based products, including but not limited to self-service car washes, full service car washes, roll-over/in-bay style car washes, and facilities managing vehicle fleets or vehicle inventory. 5. CUSTOMERS include those entities GTUA provides wholesale water. 6. DESIGNATED OUTDOOR WATER USE DAY means a day prescribed by rule on which a person is permitted to irrigate outdoors. 7. DRIP IRRIGATION is a type of micro-irrigation system that operates at low pressure and delivers water in slow, small drips to individual plants or groups of plants through a network of plastic conduits and emitters; also called trickle irrigation. 8. DROUGHT, for the purposes of this report, means an extended period of time when an area receives insufficient amounts of rainfall to replenish the water supply, causing water supply sources (in this case reservoirs) to be depleted. 9. EVAPOTRANSPIRATION (ET) represents the amount of water lost from plant material to evaporation and transpiration. The amount of ET can be estimated based on the temperature, wind, and relative humidity. 10. FOUNDATION WATERING means an application of water to the soils directly abutting (within 2 feet) the foundation of a building, structure . 2026 Water Resource and Emergency Management Plan City of Anna 2-2 11. GENERAL MANAGER means the General Manager of the GTUA and includes a person the General Manager has designated to administer or perform any task, duty, function, role, or action related to this Plan or on behalf of the General Manager. 12. INTERACTIVE WATER FEATURES means water sprays, dancing water jets, waterfalls, dumping buckets, shooting water cannons, inflatable pools, temporary splash toys or pools, slip-n-slides, or splash pads that are maintained for recreation. 13. IRRIGATION SYSTEM means a permanently installed, custom-made, site-specific system of delivering water generally for landscape irrigation via a system of pipes or other conduits installed below ground. 14. LANDSCAPE means any plant material on a property, including any tree, shrub, vine, herb, flower, succulent, ground cover, grass or turf species, that is growing or has been planted out of doors. 15. NEW LANDSCAPE means : (a) vegetation installed at the time of the construction of a residential or commercial facility; (b) installed as part of a governmental entity’s capital improvement project; or (c) installed to stabilize an area disturbed by construction. 16. NORTH TEXAS MUNICIPAL WATER DISTRICT means the provider of treated potable water for Greater Texoma Utility Authority. 17. ORNAMENTAL FOUNTAIN means an artificially created structure (up to a certain diameter) from which a jet, stream, or flow of treated water emanates and is not typically utilized for the preservation of aquatic life. 18. RETAIL CUSTOMERS include those customers to whom the Customer provides retail water from a water meter. 19. SOAKER HOSE means a perforated or permeable garden-type hose or pipe that is laid above ground that provides irrigation at a slow and constant rate. 20. SPRINKLER means an above-ground water distribution device that may be attached to a garden hose. 21. SUPPLIER means a Customer that purchases wholesale water from GTUA and provides water to retail and/or wholesale customers. 2026 Water Resource and Emergency Management Plan City of Anna 2-3 22. SWIMMING POOL means any structure, basin, chamber, or tank including hot tubs, containing an artificial body of water for swimming, diving, or recreational bathing, and having a depth of two (2) feet or more at any point. 23. WATER RESOURCE AND EMERGENCY MANAGEMENT PLAN means a strategy or combination of strategies for temporary supply management and demand management responses to temporary and potentially recurring water supply shortages and other water supply emergencies required by Texas Administrative Code Title 30, Chapter 288, Subchapter B. This is sometimes called a drought contingency plan. Abbreviations Abbreviation Full Nomenclature GTUA Greater Texoma Utility Authority NTMWD or District North Texas Municipal Water District TCEQ Texas Commission on Environmental Quality TWDB Texas Water Development Board Model WREMP Model Water Resource and Emergency Management Plan for GTUA Customers 2026 Water Resource and Emergency Management Plan City of Anna 3-1 3. TEXAS COMMISSION ON ENVIRONMENTAL QUALITY RULES The TCEQ rules governing development of drought contingency plans for public water suppliers are contained in Title 30, Chapter 288, Section 288.20 of the Texas Administrative Code, a current copy of which is included in Appendix B. For the purpose of these rules, a drought contingency plan is defined as “a strategy or combination of strategies for temporary supply and demand management responses to temporary and potentially recurring water supply shortages and other water supply emergencies.”2 Minimum Requirements TCEQ’s minimum requirements for drought contingency plans are addressed in the following subsections of this report: • 288.20(a)(1)(A) – Provisions to Inform the Public and Provide Opportunity for Public Input – Section 4.1 • 288.20(a)(1)(B) – Program for Continuing Public Education and Information – Section 4.2 • 288.20(a)(1)(C) – Coordination with the Regional Water Planning Group – Section 4.6 • 288.20(a)(1)(D) – Description of Information to be Monitored and Criteria for the Initiation and Termination of Water Resource Management Stages – Section 4.3 • 288.20(a)(1)(E) – Water Resource Management Stages – Section 4.3 • 288.20(a)(1)(F) – Specific, Quantified Targets for Water Use Reductions During Water Shortages – Section 4.3 • 288.20(a)(1)(G) – Water Supply and Demand Management Measures for Each Stage – Section 4.3 • 288.20(a)(1)(H) – Procedures for Initiation and Termination of Water Resource Management Stages – Section 4.3 • 288.20(a)(1)(I) - Procedures for Granting Variances – Section 4.4 • 288.20(a)(1)(J) - Procedures for Enforcement of Mandatory Restrictions – Section 4.5 • 288.20(a)(3) – Consultation with Wholesale Water Supplier – Sections 1 and 4.3 • 288.20(b) – TCEQ Notification of Implementation of Mandatory Measures – Section 4.3 • 288.20(c) – Review and Update of WREMP – Section 4.7 2026 Water Resource and Emergency Management Plan City of Anna 4-1 4. WATER RESOURCE AND EMERGENCY MANAGEMENT PLAN 4.1 PROVISIONS TO INFORM THE PUBLIC AND OPPORTUNITY FOR PUBLIC INPUT The City of Anna provided opportunity for public input in the development of this WREMP by the following means: • Providing written notice of the proposed WREMP and the opportunity to comment on the WREMP by newspaper, posted notice, and notice on the City’s website and social media (if available). • Making the draft WREMP available on the City’s website. • Providing the draft WREMP to anyone that requests a copy. • Holding a public meeting - providing advance public notice of such meeting. 4.2 PROGRAM FOR CONTINUING PUBLIC EDUCATION AND INFORMATION The City of Anna will inform and educate the public about the Water Resource and Emergency Management Plan by the following means: • Preparing a bulletin describing the plan and making it available at City Hall and other appropriate locations. • Making the plan available to the public through the City’s website. • Including information about the Water Resource and Emergency Management Plan on the City’s website. • Notifying local organizations, schools, and civic groups that utility staff are available to make presentations on the Water Resource and Emergency Management Plan (usually in conjunction with presentations on water conservation programs). • At any time that the Water Resource and Emergency Management Plan is activated or changes, the City of Anna will notify local media of the issues, the Water Resource and Emergency Management Stage (if applicable), and the specific actions required of the public. The information will also be publicized on the City’s website. Billing inserts will also be used as appropriate. 2026 Water Resource and Emergency Management Plan City of Anna 4-2 4.3 CRITERIA FOR INITIATION AND TERMINATION OF WATER RESOURCE AND EMERGENCY MANAGEMENT STAGES AND TARGETS FOR WATER USE REDUCTIONS Initiation of a Water Resource Management Stage The City Manager, Mayor, or official designee may order the implementation of a Water Resource Management Stage when one or more of the trigger conditions for that stage is met. • Water Resource and Emergency Management Plan stages imposed by GTUA action must be initiated by the City of Anna. • For other trigger conditions internal to a city or water supply entity, the City Manager, Mayor, or official designee may decide not to order the implementation of a Water Resource and Emergency Management Stage or Water Emergency even though one or more of the trigger criteria for the stage are met. Factors which could influence such a decision include, but are not limited to, the time of the year, weather conditions, the anticipation of replenished water supplies, or the anticipation that additional facilities will become available to meet needs. The reason for this decision should be documented. The following actions will be taken when a water resource management stage is initiated: • The public will be notified through local media and the City’s website as described in Section 4.2. • Wholesale customers (if any) and GTUA will be notified by e-mail with a follow-up letter that provides details of the reasons for initiation of the Water Resource and/or Emergency Management Stage. • If any mandatory provisions of the Water Resource and Emergency Management Plan are activated, the City of Anna will notify the TCEQ Executive Director and the GTUA General Manager within 5 business days. Termination of a Water Resource Management Stage WREMP stages initiated by GTUA may be terminated after GTUA has terminated the stage. For WREMP stages initiated by the City of Anna, the City Manager, Mayor, or official designee may order the termination of a Water Resource Management Stage when the conditions for termination are met or at their discretion. 2026 Water Resource and Emergency Management Plan City of Anna 4-3 The following actions will be taken when a Water Resource Management Stage is terminated: • The public will be notified through local media and the City’s website as described in Section 4.2. • Wholesale customers (if any) and GTUA will be notified by e-mail with a follow-up letter. • If any mandatory provisions of the Water Resource and Emergency Management Plan that have been activated are terminated, the City of Anna will notify the TCEQ Executive Director and the GTUA General Manager within 5 business days. The City Manager, Mayor, or official designee may decide not to order the termination of a Water Resource and/or Emergency Management Stage even though the conditions for termination of the stage are met. Factors which could influence such a decision include, but are not limited to, the time of the year, weather conditions, or the anticipation of potential changed conditions that warrant the continuation of the Water Resource and/or Emergency Management Stage. The reason for this decision should be documented. Water Resource and Emergency Management Plan Stages and Corresponding Measures 4.3.1 Stage 1 Initiation and Termination Conditions for Stage 1 NTMWD Stage 1 Initiation Conditions: o The Executive Director, with the concurrence of the NTMWD Board of Directors, finds that conditions warrant the declaration of Stage 1. o Water demand is projected to approach the limit of the NTMWD’s permitted supply. o The storage level in Lake Lavon as published by the Texas Water Development Board (TWDB),4 is less than 70 percent of the total conservation pool capacity during any of the months of April through October or less than 60 percent of the total conservation pool capacity during any of the months of November through March. o The Sabine River Authority (SRA) has indicated that its Upper Basin water supplies used by NTMWD (Lake Tawakoni and/or Lake Fork) are in a Stage 1 drought. 2026 Water Resource and Emergency Management Plan City of Anna 4-4 o NTMWD has concern that Lake Texoma, Jim Chapman Lake, the East Fork Water Reuse Project, the Main Stem Pump Station, or some other NTMWD water source may be limited in availability within the next six (6) months. o Water demand exceeds 95 percent of the amount that can be delivered by NTMWD to Customers for three (3) consecutive days. o Water demand for all or part of the NTMWD delivery system approaches delivery capacity because delivery capacity is inadequate. o NTMWD supply source is interrupted or unavailable due to contamination, invasive species, equipment failure, or other cause. o NTMWD water supply system is unable to deliver water due to the failure or damage of major water system components. o Part of the NTMWD system has a shortage in supply or damage to equipment. NTMWD may implement measures for only that portion of the NTMWD system impacted. GTUA Stage 1 Initiation Conditions: • NTMWD has notified GTUA that NTMWD has initiated Stage 1 of their Plan. • The General Manager, with the concurrence of the GTUA Board of Directors, finds that conditions warrant the declaration of Stage 1. • GTUA’s water demand exceeds 95 percent of the amount that can be delivered to customers for three consecutive days. • GTUA’s supply source becomes contaminated. • GTUA’s water demand for all or part of the delivery system equals delivery capacity because delivery capacity is inadequate. • GTUA’s water system is unable to deliver water due to the failure or damage of major water system components. City of Anna Stage 1 Initiation Conditions: • City Manager, Mayor, or official designee, with the concurrence of the City Council, finds that conditions warrant the declaration of Stage 1. • The City of Anna‘s water demand exceeds 85 percent of the amount that can be delivered to customers for three consecutive days. 2026 Water Resource and Emergency Management Plan City of Anna 4-5 • The City of Anna’s water demand for all or part of the delivery system equals delivery capacity because delivery capacity is inadequate. • Supply source becomes contaminated. • The City of Anna’s water system is unable to deliver water due to the failure or damage of major water system components. • The City’s Water source becomes contaminated. • The City’s water supply system is unable to deliver adequate water due to maintenance, construction, or repair of major system components. NTMWD Stage 1 Termination Conditions: o The Executive Director, with the concurrence of the NTMWD Board of Directors, finds that conditions warrant the termination Stage 1. o The storage level in Lake Lavon, as published by the TWDB4, is greater than 75 percent of the total conservation pool capacity during any of the months of April through October or greater than 65 percent of the total conservation pol capacity during any of the months of November through March. o Other circumstances that caused NTMWD initiation of Stage 1 no longer prevail. GTUA Stage 1 Termination Conditions: • NTMWD has notified GTUA that NTMWD has terminated Stage 1 of their Plan. • The General Manager, with the concurrence of the GTUA Board of Directors, finds that conditions warrant the termination of Stage 1. • Other circumstances that caused GTUA initiation of Stage 1 no longer prevail. The City of Anna Stage 1 Termination Conditions: • City Manager, Mayor, or official designee, with the concurrence of the City Council, finds that conditions warrant the termination of Stage 1. • Other circumstances that caused the City of Anna’s initiation of Stage 1 no longer prevail. 2026 Water Resource and Emergency Management Plan City of Anna 4-6 Goal for Use Reduction and Actions Available under Stage 1 The goal for water use reduction under Stage 1 is a two percent (2%) reduction in the amount of water use that would have occurred prior to institution of drought restrictions. If circumstances warrant, or if required by GTUA, the City Manager, Mayor, or official designee can set a goal for greater or lesser water use reduction under Stage 1. The City Manager, Mayor, or official designee may order the implementation of any or all of the actions listed below, as deemed necessary, to achieve a two-percent reduction. Measures described as “requires notification to TCEQ” are those that impose mandatory requirements on customers. The City of Anna will notify TCEQ and GTUA within five (5) business days if such mandatory measures are implemented. • Continue actions established by the Water Conservation Plan. • Notify any wholesale customers of actions being taken and request that they implement similar procedures. • Initiate engineering studies to evaluate alternative water sources and/or alternative delivery mechanisms should conditions worsen. • Further accelerate public education efforts on ways to reduce water use. • Halt non-essential city government water use. Examples include street cleaning, vehicle washing, operation of ornamental fountains, etc. • Encourage the public to wait until the current drought or emergency situation has passed before establishing New Landscape. • Encourage all users to reduce the frequency of draining and refilling swimming pools. 4.3.2 Stage 2 Initiation and Termination Conditions for Stage 2 NTMWD Stage 2 Initiation Conditions: o The Executive Director, with the concurrence of the NTMWD Board of Directors, finds that conditions warrant the declaration of Stage 2. o Water demand is projected to approach the limit of the NTMWD’s permitted supply. 2026 Water Resource and Emergency Management Plan City of Anna 4-7 o The storage level in Lake Lavon as published by the Texas Water Development Board (TWDB)4, is less than 55 percent of the total conservation pool capacity during any of the months of April through October or less than 45 percent of the total conservation pool capacity during any of the months of November through March. o SRA has indicated that its Upper Basin water supplies used by NTMWD (Lake Tawakoni and/or Lake Fork) are in a Stage 2 drought. o NTMWD has concern that Lake Texoma, Jim Chapman Lake, the East Fork Water Reuse Project, the Main Stem Pump Station, or some other NTMWD water source may be limited in availability within the next three (3) months. o Water demand exceeds 98 percent of the amount that can be delivered by NTMWD to Customers for three (3) consecutive days. o Water demand for all or part of the NTMWD delivery system approaches delivery capacity because delivery capacity is inadequate. o NTMWD supply source is interrupted or unavailable due to contamination, invasive species, equipment failure, or other cause. o NTMWD water supply system is unable to deliver water due to the failure or damage of major water system components. o Part of the NTMWD system has a shortage in supply or damage to equipment. NTMWD may implement measures for only that portion of the NTMWD system impacted. GTUA Stage 2 Initiation Conditions: • NTMWD has notified GTUA that NTMWD has initiated Stage 2 of their Plan. • The General Manager, with the concurrence of the GTUA Board of Directors, finds that conditions warrant the declaration of Stage 2. • GTUA’s water demand exceeds 98 percent of the amount that can be delivered to Customers for three consecutive days. • GTUA’s supply source is interrupted or unavailable due to contamination, invasive species, equipment failure, or other cause. • GTUA’s water demand for all or part of the delivery system equals delivery capacity because delivery capacity is inadequate. 2026 Water Resource and Emergency Management Plan City of Anna 4-8 • GTUA’s water system is unable to deliver water due to the failure or damage of major water system components. City of Anna Stage 2 Initiation Conditions: • City Manager, Mayor, or official designee, with the concurrence of the City Council, finds that conditions warrant the declaration of Stage 2. • The City of Anna’s water demand exceeds 90 percent of the amount that can be delivered to customers for three consecutive days. • The City of Anna’s water demand for all or part of the delivery system exceeds delivery capacity because delivery capacity is inadequate. • The City of Anna ‘s supply source becomes contaminated. • The City of Anna’s supply source is interrupted or unavailable due to invasive species. • The City of Anna’s water supply system is unable to deliver water due to the failure or damage of major water system components. • Other criteria the City of Anna wishes to consider may be entered here. NTMWD Stage 2 Termination Conditions: o The Executive Director, in concurrence of the NTMWD Board of Directors, finds that conditions warrant the termination of Stage 2. o The storage level in Lake Lavon, as published by the TWDB4, is greater than 70 percent of the total conservation pool capacity during any of the months of April through October or greater than 60 percent of the total conservation pool capacity during any of the months of November through March. o Other circumstances that caused NTMWD initiation of Stage 2 no longer prevail. GTUA Stage 2 Termination Conditions: • NTMWD has notified GTUA that NTMWD has terminated Stage 2. • The General Manager, with the concurrence of the GTUA Board of Directors, finds that conditions warrant the termination of Stage 2. 2026 Water Resource and Emergency Management Plan City of Anna 4-9 • Other circumstances that caused GTUA initiation of Stage 2 no longer prevail. City of Anna Stage 2 Termination Conditions: • City Manager, Mayor, or official designee, with the concurrence of the City Council, finds that conditions warrant the termination of Stage 2. • Other circumstances that caused the City of Anna’s initiation of Stage 2 no longer prevail. Goals for Use Reduction and Actions Available under Stage 2 The goal for water use reduction under Stage 2 is a reduction of ten percent (10%) in the amount of water use that would have occurred prior to the institution of drought restrictions. If circumstances warrant, or if required by GTUA, the City Manager, Mayor, or official designee can set a goal for greater or lesser water use reduction. The City Manager, Mayor, or official designee may order the implementation of any or all of the actions listed below, as deemed necessary to achieve a ten percent reduction. Measures described as “requires notification to TCEQ” are those that impose mandatory requirements on customers. The City of Anna must notify TCEQ and GTUA within five (5) business days if such mandatory measures are implemented. • Continue or initiate any actions available under the Water Conservation Plan and Stage 1. • Notify any wholesale customers of actions being taken and request that they implement similar procedures. • Implement viable alternative water supply strategies. • Encourage all users to reduce the frequency of draining and refilling swimming pools. • Requires Notification to TCEQ – Limit landscape watering with sprinklers or irrigation systems at each service address to once per week on designated days between April 1 and October 31. Limit landscape watering with sprinklers or irrigation systems at each service address to once every other week on designated days between November 1 and March 31. Exceptions are as follows: o New Landscape may be watered as necessary for 30 days from the date of the installation of new landscape features. o Foundation Watering (within 2 feet), New Landscape Watering, watering of new plantings (first year) of shrubs, and watering of trees (within a ten foot radius of its trunk) may occur 2026 Water Resource and Emergency Management Plan City of Anna 4-10 for up to two hours on any day by a hand-held hose, a dedicated zone using a Drip Irrigation system and/or Soaker Hose, provided no runoff occurs. o Athletic Fields may be watered twice per week. o Locations using alternative sources of water supply only for irrigation may irrigate without day-of-the-week restrictions, provided proper signage is employed to notify the public of alternative water source(s) being used. However, irrigation using alternative sources of supply is subject all other restrictions applicable to this stage. If the alternative supply source is a well, proper proof of well registration with the North Texas Groundwater Conservation District or Red River Groundwater Conservation District is required. Alternative sources of water supply may not include imported treated water. o An exemption is allowed for Drip Irrigation systems from the designated outdoor water use day limited to no more than one day per week. Drip Irrigation systems are however subject to all other restrictions applicable under this stage. o Hand watering with shutoff nozzle, drip lines, and Soaker Hoses are allowed before 10 am and after 6 pm, provided no runoff occurs. • Requires Notification to TCEQ – Prohibit hydro seeding, hydro mulching, and sprigging. • Requires Notification to TCEQ – Initiate a rate surcharge as requested by GTUA. • Requires Notification to TCEQ – If GTUA has imposed a reduction in water available to Customers, impose the same percent reduction on any wholesale customers. • Requires Notification to TCEQ – Parks and golf courses using potable water for landscape watering are required to meet the same reduction goals and measures outlined in this stage. Exception for golf course greens and tee boxes which may be hand watered as needed. 4.3.3 Stage 3 Initiation and Termination Conditions for Stage 3 2026 Water Resource and Emergency Management Plan City of Anna 4-11 NTMWD Stage 3 Initiation Conditions: o The Executive Director, with the concurrence of the NTMWD Board of Directors, finds that conditions warrant the declaration of Stage 3. o NTMWD water demand is projected to approach the limit of the NTMWD’s permitted supply. o The storage level in Lake Lavon as published by the Texas Water Development Board (TWDB),4 is less than 30 percent of the total conservation pool capacity during any of the months of April through October or less than 20 percent of the total conservation pool capacity during any of the months of November through March. o SRA has indicated that its Upper Basin water supplies used by NTMWD (Lake Tawakoni and/or Lake Fork) are in a Stage 3 drought. o NTMWD has concern that Lake Texoma, Jim Chapman Lake, the East Fork Water Reuse Project, the Main Stem Pump Station, or some other NTMWD water source has become limited in availability. o Water demand exceeds the amount that can be delivered by NTMWD to Member Cities and Customers. o Water demand for all or part of the NTMWD delivery system approaches delivery capacity because delivery capacity is inadequate. o NTMWD supply source is interrupted or unavailable due to contamination, invasive species, equipment failure, or other cause. o NTMWD water supply system is unable to deliver water due to the failure or damage of major water system components. o Part of the NTMWD system has a shortage in supply or damage to equipment. NTMWD may implement measures for only that portion of the NTMWD system impacted. GTUA Stage 3 Initiation Conditions: • NTMWD has notified GTUA that NTMWD has initiated Stage 3 of their Plan. • The General Manager, with the concurrence of the GTUA Board of Directors, finds that conditions warrant the declaration of Stage 3. • GTUA’s water demand exceeds the amount that can be delivered to Customers. 2026 Water Resource and Emergency Management Plan City of Anna 4-12 • GTUA’s water demand for all or part of the delivery system seriously exceeds delivery capacity because the delivery capacity is inadequate. • GTUA’s supply source is interrupted or unavailable due to contamination, invasive species, equipment failure, or other cause. • GTUA’s water system is unable to deliver water due to the failure or damage of major water system components. The City of Anna Stage 3 Initiation Conditions: • City Manager, Mayor, or official designee, with the concurrence of the City Council, find that conditions warrant the declaration of Stage 3. • The City of Anna’s water demand exceeds 95 percent of the amount that can be delivered to customers. • The City of Anna’s water demand for all or part of the delivery system seriously exceeds delivery capacity because the delivery capacity is inadequate. • The City of Anna‘s water supply source becomes contaminated. • The City of Anna’s water supply system is unable to deliver water due to the failure or damage of major water system components. • Other criteria the City of Anna wishes to consider may be entered here. NTMWD Stage 3 Termination Conditions: o The Executive Director, in concurrence of the NTMWD Board of Directors, finds that conditions warrant the termination of Stage 3. o The storage level in Lake Lavon, as published by the TWDB, is greater than 55 percent of the total conservation pool capacity during any of the months of April through October or greater than 45 percent of the total conservation pol capacity during any of the months of November through March. o Other circumstances that caused NTMWD initiation of Stage 3 no longer prevail. GTUA Stage 3 Termination Conditions: • NTMWD has notified GTUA that NTMWD has terminated Stage 3. 2026 Water Resource and Emergency Management Plan City of Anna 4-13 • The General Manager, with the concurrence of the GTUA Board of Directors, finds that conditions warrant the termination of Stage 3. • Other circumstances that caused the GTUA’s initiation of Stage 3 no longer prevail. The City of Anna Stage 3 Termination Conditions: • City Manager, Mayor, or official designee, with the concurrence of the City Council, finds that conditions warrant the termination of Stage 3. • Other circumstances that caused the City of Anna’s initiation of Stage 3 no longer prevail. Goals for Use Reduction and Actions Available under Stage 3 The goal for water use reduction under Stage 3 is a reduction of whatever amount is designated by the City of Anna in the amount of water use that would have occurred prior to institution of drought restrictions. If circumstances warrant or if required by GTUA, the City Manager, Mayor, or official designee can set a goal for greater or lesser water use reduction. The City Manager, Mayor, or official designee may order the implementation of any or all of the actions listed below, as deemed necessary. Measures described as “requires notification to TCEQ” are those that impose mandatory requirements on Customers. The City of Anna will notify TCEQ and GTUA within five (5) business days if such mandatory measures are implemented. • Continue or initiate any actions available under the Water Conservation Plan and Stages 1 and 2. • Notify any wholesale customers of actions being taken and request them to implement similar procedures. • Implement viable alternative water supply strategies. • Requires Notification to TCEQ – Initiate mandatory water use restrictions as follows: o Hosing and washing of paved areas, buildings, structures, windows or other surfaces is prohibited except by variance and performed by a professional service using high efficiency equipment. o Prohibit operation of ornamental fountains or ponds that use potable water except where supporting aquatic life or water quality. 2026 Water Resource and Emergency Management Plan City of Anna 4-14 • Requires Notification to TCEQ – Prohibit new sod, hydro-seeding, hydro-mulching, and sprigging. • Requires Notification to TCEQ – Prohibit the use of potable water for the irrigation of New Landscape. • Requires Notification to TCEQ – Prohibit all commercial and residential landscape watering, except that Foundation Watering (within 2 feet) and watering of trees (within a ten foot radius of its trunk) may occur for two hours one day per week with a hand-held hose or with a dedicated zone using a Drip Irrigation system and/or Soaker Hose, provided no runoff occurs. Drip Irrigation systems are not exempt from this requirement. • Requires Notification to TCEQ – Prohibit washing of vehicles except at a Commercial Vehicle Wash Facility. • Requires Notification to TCEQ – Landscape watering of parks, golf courses, and Athletic Fields with potable water is prohibited. Exception for golf course greens and tee boxes that may be hand watered as needed. Variances may be granted by the water provider under special circumstances. • Requires Notification to TCEQ – Prohibit the filling, draining, and/or refilling of existing swimming pools, wading pools, Jacuzzi and hot tubs except to maintain structural integrity, proper operation and maintenance, or to alleviate a public safety risk. Existing pools may add water to replace losses from normal use and evaporation. Permitting of new swimming pools, wading pools, Jacuzzi, and hot tubs is prohibited. • Requires Notification to TCEQ – Prohibit the operation of interactive water features such as water sprays, dancing water jets, waterfalls, dumping buckets, shooting water cannons, inflatable pools, temporary splash toys or pools, slip-n-slides or splash pads that are maintained for recreation. • Requires Notification to TCEQ – Require all commercial water users to reduce water use by a percentage established by the City Manager, Mayor, or official designee. • Requires Notification to TCEQ – If GTUA has imposed a reduction in water available to the City of Anna, the City of Anna will impose the same percent reduction on any wholesale customers. 2026 Water Resource and Emergency Management Plan City of Anna 4-15 • Requires Notification to TCEQ – Initiate a rate surcharge over normal rates for all water use or for water use over a certain level. 4.4 PROCEDURES FOR GRANTING VARIANCES TO THE PLAN The City Manager, Mayor, or official designee may grant temporary variances for existing water uses otherwise prohibited under this Water Resource and Emergency Management Plan if one or more of the following conditions are met: • Failure to grant such a variance would cause an emergency condition adversely affecting health, sanitation, or fire safety for the public or the person or entity requesting the variance. • Compliance with this plan cannot be accomplished due to technical or other limitations. • Alternative methods that achieve the same level of reduction in water use can be implemented. Variances shall be granted or denied at the discretion of the City Manager, Mayor, or official designee. All petitions for variances should be in writing and should include the following information: • Name and address of the petitioners. • Purpose of water use. • Specific provisions from which relief is requested. • Detailed statement of the adverse effect of the provision from which relief is requested. • Description of the relief requested. • Period of time for which the variance is sought. • Alternative measures that will be taken to reduce water use and the level of water use reduction. • Other pertinent information. 4.5 PROCEDURES FOR ENFORCING MANDATORY WATER USE RESTRICTIONS Mandatory water use restrictions may be imposed in Stage 1, Stage 2 and Stage 3. Appendix D contains the ordinance approving the City of Anna Water Resource and Emergency Management Plan, including enforcement of same, outlining the penalties associated with mandatory water use restrictions. 2026 Water Resource and Emergency Management Plan City of Anna 4-16 4.6 COORDINATION WITH THE REGIONAL WATER PLANNING GROUP AND GTUA Appendix C includes a copies of letters sent to the Chair of the Region C Water Planning Group and GTUA in conjunction with this Water Resource and Emergency Management Plan. The City of Anna will send the final ordinance(s) or other regulation(s), along with a copy of the final Water Resource and Emergency Management Plan to GTUA after adoption, review and approval of the Plan. As required by TCEQ rules, the City of Anna reviews its Water Resource and Emergency Management plans every five years. The Plan will be updated as appropriate based on new or updated information, such as the revision of the regional water plans. Item No. 7.a. City Council Agenda Staff Report Meeting Date: 6/9/2026 Staff Contact: Terri Doby AGENDA ITEM: Consider/Discuss/Action to approve a Resolution directing Publication of Notice of Intention to Issue up to $54,000,000 Combination Tax and Revenue Certificates of Obligation to Provide Funds for Water Improvements and Wastewater Treatment Plant Expansion Projects; and Resolving other Matters relating to the Subject. (Director of Finance Terri Doby) SUMMARY: The City's Financial Advisors will provide a presentation with a plan of finance for Combination Tax and Revenue Certificates of Obligation (CO), for Council consideration. The presentation will include proposed projects and a schedule for the sale. FINANCIAL IMPACT: The repayment of the utility portion of these Certificates of Obligation has been included in the utility rate model and will have an impact on sewer rates over time. The ultimate increase to rates will be determined by future growth, payments by wholesale users, and the use of impact fees to minimize rate increases to Anna's neighbors. BACKGROUND: Anna continues to see our needs for City facilities expansion as we continue to grow. One means of financing large capital projects is through the use of municipal debt. One common form of borrowing is Certificates of Obligation (COs). In the City of Anna, debt is used to fund roads, facilities, parks, equipment, and water and sewer infrastructure. STRATEGIC CONNECTIONS: This item supports the City of Anna Strategic Plan, specifically advancing the strategic outcome area: Resilient. Anna's mobility and utility infrastructure consistently meets community needs by: • Focusing on resiliency and the City's ability to recover from upsets • Having a robust multi-modal transportation network • Dependably delivering utility services to the City's neighbors and businesses ATTACHMENTS: 1. Certificate of Resolution 2. Resolution 3. Notice of Intention 4. Anna CO Series 2026 Schedule of Events 5.20.26v2 5. Anna CO Series 2026 Plan of Finance 6.1.26 CERTIFICATE FOR RESOLUTION th day of June, 2026, at the scheduled meeting place thereof, and the roll was called of the duly constituted officers and members of said City Council, to-wit: 3. That the Mayor of said City has approved and hereby approves the aforesaid Resolution; that the Mayor and the City Secretary of said City have duly signed said Resolution; and that the Mayor and the City Secretary of said City hereby declare that their signing of this Certificate shall constitute the signing of the attached and following copy of said Resolution for all purposes. SIGNED AND SEALED THE 9TH DAY OF JUNE, 2026. ATTEST: ___________________________________ Pete Cain, Mayor ___________________________________ Carrie L. Land, City Secretary (SEAL) CITY OF ANNA WHEREAS, this City Council of the City of Anna, Texas (the “City”) deems it advisable to authorize publication of notice of intent to issue certificates of obligation for the purposes hereinafter set forth; and WHEREAS, it is hereby officially found and determined that the meeting at which this Resolution was considered was open to the public, and public notice of the time, place, and purpose of said meeting was given, all as required by Chapter 551, Texas Government Code. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ANNA, TEXAS: Section 1. Attached hereto and marked “Exhibit A” is a form of notice, the form and substance of which are hereby passed and approved. Section 2. The City Secretary shall cause said notice to be published in substantially the form attached hereto, in a newspaper, as defined by Subchapter C, Chapter 2051, Texas Government Code, of general circulation in the area of said City, once a week for two consecutive weeks, with the date of the first publication to be before the 45th day before the date tentatively set for the passage of the ordinance authorizing the issuance of the certificates, and, if the City maintains an Internet website, continuously on the City’s website for at least 45 days before the date tentatively set for the passage of the ordinance authorizing the issuance of the certificates. Section 3. This Resolution shall be effective immediately upon adoption. PASSED AND APPROVED BY THE CITY COUNCIL OF THE CITY OF ANNA, TEXAS, this 9th day of June 2026. Pete Cain, Mayor ATTEST: [CITY SEAL] Carrie L. Land, City Secretary EXHIBIT A ; and (ii) legal, fiscal and engineering fees in connection with such projects. The ordinance may authorize an authorized officer of the City to effect the sale and delivery of the certificates of obligation on a date subsequent to the adoption of the ordinance. The maximum interest rate for the certificates may not exceed the maximum legal interest rate. The maximum maturity date for the certificates shall not exceed 40 years. The estimated combined principal and interest required to pay the certificates to be authorized on time and in full is $104,957,528. The current principal of all outstanding debt obligations of the City is $257,590,000. The current combined principal and interest required to pay all outstanding debt obligations of the City on time and in full is $423,015,225. The City proposes to provide for the payment of such certificates of obligation from the levy and collection of ad valorem taxes in the City as provided by law and from a pledge of certain surplus revenues of the City’s waterworks and sewer system, remaining after payment of all operation and maintenance expenses thereof, and all debt service, reserve, and other requirements in connection with all of the City’s revenue bonds or other obligations (now or hereafter outstanding), which are payable from all or any part of the net revenues of the City's waterworks and sewer system. The certificates of obligation are to be issued, and this notice is given, under and pursuant to the provisions of V.T.C.A., Local Government Code, Subchapter C of Chapter 271. Jun-26 Jul-26 Aug-26 Sep-26 S M T W Th F S S M T W Th F S S M T W Th F S S M T W Th F S 1 2 3 4 5 6 1 2 3 4 1 1 2 3 4 5 7 8 9 10 11 12 13 5 6 7 8 9 10 11 2 3 4 5 6 7 8 6 7 8 9 10 11 12 14 15 16 17 18 19 20 12 13 14 15 16 17 18 9 10 11 12 13 14 15 13 14 15 16 17 18 19 21 22 23 24 25 26 27 19 20 21 22 23 24 25 16 17 18 19 20 21 22 20 21 22 23 24 25 26 28 29 30 26 27 28 29 30 31 23 24 25 26 27 28 29 27 28 29 30 30 31 HOLIDA HOLIDA HOLIDA Regular Scheduled City Council Meeting (Deadline May 29, 2026 for Plan of Finance and Notice of Intent Resolution) 1) Presentation of Plan of Finance to City Council 2) City Council directs staff and consultants to implement Plan of Finance 3) City Council approves a Resolution authorizing publication of a Notice of Intent to issue Certificates of Obligation, Series 2026 First Publication of Notice of Intent to issue the Certificates of Obligation, Series 2026 (must be no later than June 26, 2026) Publication of Notice of Intent on City's website (Notice to be on Citys website continuously until the Ordinance is adopted) Second Publication of Notice of Intent to issue the Certificates of Obligation, Series 2026 (must be 7 days after first publication) Distribution of 1st draft of POS and NOS for comments and send POS to Rating Agency Deadline to rovide comments to 1st draft of POS and NOS Distribution of 2nd draft POS and NOS and send POS to Rating Agency Credit rating conference call Deadline to provide comments to 2nd draft of POS and NOS Due diligence conference call Distribution of 3rd draft POS and NOS for final comments and send POS to Rating Agency Deadline to provide final comments on 3rd draft POS and NOS Rating due from Rating Agency Publication of POS and NOS Pricing of Certificates of Obligation, Series 2026, Bids due 9:30 am Central Time Regular Scheduled City Council Meeting City Council considers and approves Ordinance Authorizing the Issuance of the Certificates of Obligations, Series 2026 Deadline to publish Final Official Statement Attorney General Approves Sale Closing of the Series 2026 issue and delivery of funds to the City Key Actions to be Taken by City Council Key Actions to be Taken by City Staff *Not to Exceed Par Amount TBD City Staff, BC Tuesday, 06/9/26 City Staff / FA City Council TBD City Staff, BC City Council CITY OF ANNA, TEXAS NOT TO EXCEED $54,000,000* COMBINATION TAX AND REVENUE CERTIFICATES OF OBLIGATION, SERIES 2026 As of May 20, 2026 Responsible Date Event Party Friday, 06/26/26 FA Tuesday, 07/7/26 All parties Wednesday, 07/8/26 FA Wednesday, 09/9/26 UW, BC, PA Tuesday, 08/11/26 FA City Council Prior to Closing AG, BC FAThursday, 08/20/26 Wednesday, 07/29/26 RA Friday, 07/31/26 Week of July 13, 2026 All parties Tuesday, 07/21/26 All parties FA Friday, 07/17/26 Tuesday, 07/28/26 All parties FA Week of July 20, 2026 All parties Hilltop Securities Inc. Page 1 Public Finance Department Contact © 2026 Hilltop Securities Inc. | All rights reserved | Member: NYSE/FINRA/SIPC City of Anna, Texas Combination Tax and Revenue Certificates of Obligation, Series 2026 June 9, 2026 Andre Ayala Managing Director 717 N. Harwood St., Suite 3400 Dallas, TX 75201 Direct: 214.953.4184 andre.ayala@hilltopsecurities.com Jim Sabonis Managing Director 717 N. Harwood St., Suite 3400 Dallas, TX 75201 Direct: 214.953.4195 jim.sabonis@hilltopsecurities.com Jorge Delgado Senior Vice President 717 N. Harwood St., Suite 3400 Dallas, TX 75201 Direct: 214.859.1714 jorge.delgado@hilltopsecurities.com Amber Chien Assistant Vice President 717 N. Harwood St., Suite 3400 Dallas, TX 75201 Direct: 214.953.4297 amber.chien@hilltopsecurities.com © 2026 Hilltop Securities Inc. | All rights reserved | Member: NYSE/FINRA/SIPC Table of Contents Page 2Summary……………………………………………………………………. 3City of Anna Credit Ratings……..……….……………………………… 4PreliminarySources & Uses of Funds………………………………… 5Schedule of Events ………………………………………………………. 6Questions and Discussion………………………………………………. 7Appendix A –Preliminary Cash Flows as of May 22, 2026………... 9Appendix B –May 29, 2026Municipal Market Update...……………. 1 © 2026 Hilltop Securities Inc. | All rights reserved | Member: NYSE/FINRA/SIPC 2 Objectives Issuance of Certificates of Obligation, Series 2026 to fund $52,500,000 Capital Improvement Program, including: Wastewater Treatment Plan Collin Well No. 3 New Money DebtIssuance Detail Amortization/Repayment Period: 30Years RepaymentSource: City’s Net Revenuesof Water & Sewer System Method of Sale: Competitive Bid Not to ExceedAmount: $54,000,000 BudgetedInterest Rate: 4.95%(1) (1) Assumes “AA/Aa2” Tax-Exempt Interest Rates + 0.50% as of 5/22/2025. Subject to Change at Anytime. Summary © 2026 Hilltop Securities Inc. | All rights reserved | Member: NYSE/FINRA/SIPC City of Anna Credit Ratings 3 Moody's S&P Fitch Moody's S&P Fitch Aaa AAA AAA MIG 1 SP-1+ F1 (+ or -) Aa1 AA+ AA+ MIG 2 SP-1 F2 (+ or -) Aa2 AA AA MIG 3 SP-2 F3 (+ or -) Aa3 AA- AA- SG SP-3 B (+ or -) A1 A+ A+ A2 A A A3 A- A- Baa1 BBB+ BBB+ Baa2 BBB BBB Baa3 BBB- BBB- Ba1 BB+ BB+ Ba2 BB BB Short Term (less than 3 years) Ratings below the red line are speculative grade. Long Term Hi g h e s t Q u a l i t y C r e d i t Lo w e s t Q u a l i t y C r e d i t The City of Anna is currentlyrated “Aa2” by Moody’s and “AA” by S&P © 2026 Hilltop Securities Inc. | All rights reserved | Member: NYSE/FINRA/SIPC 4 Preliminary Sources and Uses of Funds (1) Assumes “AA/Aa2” Tax-Exempt Interest Rates + 0.50% as of 5/22/2025. Subject to Change at Anytime. Par Amount $53,430,000 Total Sources of Funds $53,430,000 Project Fund Deposit $52,500,000 Budgeted Financing Costs 449,130 Underwriter’s Discount 480,870 Total Uses of Funds $53,430,000 Total Principal & Interest $103,846,641 Average Annual P&I $3,461,555 Sources of Funds Uses of Funds Summary Transaction Statistics Preliminary Interest Rate = 4.95%(1) © 2026 Hilltop Securities Inc. | All rights reserved | Member: NYSE/FINRA/SIPC 5 June9,2026 –RegularCityCouncilMeeting 1) Presentation of Plan of Finance to City Council to issue Certificates of Obligation,Series 2026 2) CityCouncilauthorizesCityStafftomoveforwardwiththePlanofFinance 3) City Council approves a Resolution authorizing publication of a Notice of Intent toissueCertificates ofObligation,Series 2026 August11,2026 –RegularCouncilMeeting 1) PricingoftheCertificatesofObligation,Series2026 2) City Council considers and approves Ordinance Authorizing the Issuance of the CertificatesofObligation,Series2026 PriortoClosing–AttorneyGeneralApprovesSale September 9,2026 1) ClosingoftheCertificatesofObligation,Series2026,anddeliveryoffundstotheCity Schedule of Events © 2026 Hilltop Securities Inc. | All rights reserved | Member: NYSE/FINRA/SIPC Questions and Discussion 6 © 2026 Hilltop Securities Inc. | All rights reserved | Member: NYSE/FINRA/SIPC Appendix A Preliminary Cash Flow Details 7 © 2026 Hilltop Securities Inc. | All rights reserved | Member: NYSE/FINRA/SIPC 8 Preliminary Cash Flows as of May 22, 2026 Notes: (1) Audit as of Fiscal Year Ended 2025. Adjusted to exclude Developer fees for capital improvements. (2) Assumes "AA"/"Aa2" Tax Exempt Interest Rates as of 5/22/2026 plus 0.50%. Subject to Change at Any Time. (3) Represents the lowest developer fees for capital improvements since Fiscal Year 2019 for illustrative purposes only. Existing Projected LOW NET GO Total One-Time Revenue W&S Rev Existing W&S Rev Projected Surplus/Development FYE Available for Supported Debt Service Supported Debt Service (Deficit)Revenues Net 30-Sep Debt Service(1)Debt Service Coverage Principal Interest Total D/S Debt Service Coverage Cash Since FY19 (3)Cash Flows 2026 9,634,131$ 8,577,736$ 1.12x -$ -$ -$ 8,577,736$ 1.12x 1,056,395$ 4,794,475$ 5,850,870$ 2027 9,634,131 9,171,456 1.05x - 2,468,466 2,468,466 11,639,922 0.83x (2,005,791) 4,794,475 2,788,684 2028 9,634,131 9,173,631 1.05x - 2,644,785 2,644,785 11,818,416 0.82x (2,184,285) 4,794,475 2,610,190 2029 9,634,131 9,344,169 1.03x 905,000 2,622,386 3,527,386 12,871,555 0.75x (3,237,424) 4,794,475 1,557,051 2030 9,634,131 9,346,695 1.03x 950,000 2,576,475 3,526,475 12,873,170 0.75x (3,239,039) 4,794,475 1,555,436 2031 9,634,131 9,345,624 1.03x 1,000,000 2,528,213 3,528,213 12,873,836 0.75x (3,239,705) 4,794,475 1,554,770 2032 9,634,131 9,345,880 1.03x 1,050,000 2,477,475 3,527,475 12,873,355 0.75x (3,239,224) 4,794,475 1,555,251 2033 9,634,131 9,349,139 1.03x 1,100,000 2,424,263 3,524,263 12,873,401 0.75x (3,239,270) 4,794,475 1,555,205 2034 9,634,131 9,340,625 1.03x 1,160,000 2,368,328 3,528,328 12,868,953 0.75x (3,234,822) 4,794,475 1,559,653 2035 9,634,131 9,344,369 1.03x 1,215,000 2,309,546 3,524,546 12,868,915 0.75x (3,234,784) 4,794,475 1,559,691 2036 9,634,131 9,343,744 1.03x 1,280,000 2,247,795 3,527,795 12,871,539 0.75x (3,237,408) 4,794,475 1,557,067 2037 9,634,131 9,341,269 1.03x 1,345,000 2,182,826 3,527,826 12,869,095 0.75x (3,234,964) 4,794,475 1,559,511 2038 9,634,131 9,343,244 1.03x 1,410,000 2,114,640 3,524,640 12,867,884 0.75x (3,233,753) 4,794,475 1,560,722 2039 9,634,131 9,340,394 1.03x 1,485,000 2,042,989 3,527,989 12,868,383 0.75x (3,234,252) 4,794,475 1,560,223 2040 9,634,131 9,344,459 1.03x 1,560,000 1,967,625 3,527,625 12,872,084 0.75x (3,237,953) 4,794,475 1,556,522 2041 9,634,131 9,340,809 1.03x 1,635,000 1,888,549 3,523,549 12,864,358 0.75x (3,230,227) 4,794,475 1,564,248 2042 9,634,131 9,341,881 1.03x 1,720,000 1,805,513 3,525,513 12,867,394 0.75x (3,233,263) 4,794,475 1,561,212 2043 9,634,131 9,341,194 1.03x 1,810,000 1,718,145 3,528,145 12,869,339 0.75x (3,235,208) 4,794,475 1,559,267 2044 9,634,131 9,342,469 1.03x 1,900,000 1,626,323 3,526,323 12,868,791 0.75x (3,234,660) 4,794,475 1,559,815 2045 9,634,131 9,340,156 1.03x 1,995,000 1,529,921 3,524,921 12,865,078 0.75x (3,230,947) 4,794,475 1,563,528 2046 9,634,131 9,343,563 1.03x 2,095,000 1,428,694 3,523,694 12,867,256 0.75x (3,233,125) 4,794,475 1,561,350 2047 9,634,131 9,342,044 1.03x 2,205,000 1,322,269 3,527,269 12,869,313 0.75x (3,235,182) 4,794,475 1,559,293 2048 9,634,131 9,339,741 1.03x 2,315,000 1,210,399 3,525,399 12,865,139 0.75x (3,231,008) 4,794,475 1,563,467 2049 9,634,131 9,343,863 1.03x 2,435,000 1,092,836 3,527,836 12,871,699 0.75x (3,237,568) 4,794,475 1,556,907 2050 9,634,131 9,342,875 1.03x 2,555,000 969,334 3,524,334 12,867,209 0.75x (3,233,078) 4,794,475 1,561,397 2051 9,634,131 - n/a 2,685,000 839,644 3,524,644 3,524,644 2.73x 6,109,487 4,794,475 10,903,962 2052 9,634,131 - n/a 2,825,000 703,271 3,528,271 3,528,271 2.73x 6,105,860 4,794,475 10,900,335 2053 9,634,131 - n/a 2,965,000 559,969 3,524,969 3,524,969 2.73x 6,109,162 4,794,475 10,903,637 2054 9,634,131 - n/a 3,115,000 409,489 3,524,489 3,524,489 2.73x 6,109,642 4,794,475 10,904,117 2055 9,634,131 - n/a 3,275,000 251,336 3,526,336 3,526,336 2.73x 6,107,795 4,794,475 10,902,270 2056 9,634,131 - n/a 3,440,000 85,140 3,525,140 3,525,140 2.73x 6,108,991 4,794,475 10,903,466 232,471,027$ 53,430,000$ 50,416,641$ 103,846,641$ 336,317,668$ $53,430,000 Combination Tax & Revenue Certificates of Obligation, Series 2026 Preliminary Interest Rate = 4.95%(2) © 2026 Hilltop Securities Inc. | All rights reserved | Member: NYSE/FINRA/SIPC Appendix B Municipal Market Update May 29, 2026 9 © 2026 Hilltop Securities Inc. | All rights reserved | Member: NYSE/FINRA/SIPC Market Commentary 10 Source: Ipreo, TM3, Bloomberg, BBC, Wall Street Journal, New York Times, The Bond Buyer, Econoday, CNBC Primary Market: •30-Day Visible Supply is approximately $21.649 billion •The calendar consists of $14.9 billion of negotiated deals and $2.6 billion of competitive deals •The largest negotiated deal of the week is the $1.1 billion University of California General Revenue Bonds (2 deals) Secondary Market: •Municipal Bond Funds reported $2.3 billion of net inflows, compared with $1.5 billion of inflows the prior week •Weekly trade volume of $62.015 billion represents a decrease of $10.544 billion from the previous week’s $72.559 billion General Market Overview: •May closed just above $50 billion in supply as 2026 YTD is tracking roughly 5% ahead of 2025’s record pace, with June beginning the year’s heaviest weekly issuance near $18 billion, supported by reinvestment flows and an expected surplus of available cash. •The first revision of Q1 GDP showed quarterly/annualized economic growth was reduced from +2.0% to +1.6% on slightly lower consumer spending and inventory accumulation. •Economic Calendar: PMI Manufacturing Final, ISM Manufacturing Index, Construction Spending, JOLTS, Factory Orders, ISM Services Index, Beige Book, Jobless Claims, Productivity and Costs, Fed Balance Sheet, Employment Situation Market Observations Statistics © 2026 Hilltop Securities Inc. | All rights reserved | Member: NYSE/FINRA/SIPC Source: Refinitiv Municipal Market Data and HilltopSecurities Change in 20-Year MMD 11 Change in 20-Year MMD with Market Commentary – 1/1/2021 to 5/29/2026 © 2026 Hilltop Securities Inc. | All rights reserved | Member: NYSE/FINRA/SIPC Source: Refinitiv Municipal Market Data, U.S. Treasury and Bloomberg (1) SOFR 1 Month is blended with LIBOR 1 Month rates prior to 2019 Weekly Benchmark Interest Rates 12 Benchmark Interest Rates –1/1/2016 to 5/29/2026 Rates Analysis – 1/1/2016 to 5/29/2026 © 2026 Hilltop Securities Inc. | All rights reserved | Member: NYSE/FINRA/SIPC Tax-Exempt Market Overview | The Bond Buyer Source: The Bond Buyer 13 The Bond Buyer 20-Bond General Obligation Index – 1/1/2016 to 5/29/2026 The Bond Buyer Revenue Bond Index – 1/1/2016 to 5/29/2026 Item No. 7.b. City Council Agenda Staff Report Meeting Date: 6/9/2026 Staff Contact: Natasha Roach AGENDA ITEM: Acting as the Anna Public Facility Corporation, Consider/Discuss/Action on the appointment of President of the Anna Public Facility Corporation; and, acting as the Anna Housing Finance Corporation, Consider/Discuss/Action on the appointment of President of the Anna Housing Finance Corporation. (Director of Economic Development Natasha Roach) SUMMARY: With Councilman Carver’s term ending, the position of President of the Public Facilities Corporation (PFC) and Housing Finance Corporation (HFC) is now vacant. Since both Boards are comprised of City Council members, the Council must formally appoint a new President to serve a three-year term (May 2026 – May 2029). FINANCIAL IMPACT: This item has no financial impact. BACKGROUND: The Anna Housing Finance Corporation (AHFC) was created in 2021 by the City of Anna and operates pursuant to Chapter 394, Local Government Code, as amended. The AHFC plays a key role in the financing of affordable rental housing developments in the City through the issuance of tax-exempt private activity bonds that are typically also financed with the Low-Income Housing Tax Credits (LIHTCs). The primary function of the AHFC is to issue single-family and multi-family bonds for the financing of reasonably priced housing. The Anna Public Facility Corporation (APFC) was created in 2021 by the City of Anna and operates pursuant to Chapter 303, Local Government Code, for the purpose of assisting the City in financing, refinancing, or providing public facilities. The APFC provides for the acquisition, construction, rehabilitation, renovation, repair, and furnishings of public facilities in the City. The APFC may also serve as an additional bond issuer to significantly expand its access to private activity bond cap for financing affordable housing in the City of Anna. STRATEGIC CONNECTIONS: This item supports the City of Anna Strategic Plan, specifically advancing the strategic outcome area: Excellent. Anna is a high-performing City that implements best practices and pursues accreditation, demonstrating its commitment to: • Ethical and collaborative decision-making • Continuous improvement and achieving measurable outcomes • Ensuring a positive work environment for Council, staff, and neighbors ATTACHMENTS: Item No. 7.c. City Council Agenda Staff Report Meeting Date: 6/9/2026 Staff Contact: Carrie Land AGENDA ITEM: Consider/Discuss/Action on appointments to Boards and Commissions and/or associated liaisons. SUMMARY: Currently, Place 3 of the Planning and Zoning Commission is vacant. The vacant term is set to expire in 2028. Responsibilities The Planning & Zoning Commission is responsible for reviewing new commercial and residential developments within the City. The Commission is the approval body for subdivision plats and site plans. It reviews and makes recommendations to the City Council on Zoning Ordinance amendments, specific use permits, and rezoning requests. The Planning & Zoning Commission also serves as the Tree Board. Council Liaison's Responsibilities: • Ensure the Board complies with deadlines & code provisions • Encourage the Board to remain within the City's mission statement • Ensure compliance with TOMA • Only discuss items on the agenda • Ensure compliance with attendance • Report quarterly to the City Council on the actions of the board • Share communications from the Council to the board concerning policy direction and strategic goal aims Current Liaisons are: BOA - Elden Baker (Appointed in 2024) EDC/CDC - Vacant (Stan Carver was the last Council appointed liaison in 2025.) NEIC – Manny Singh (Appointed in 2025) Parks - Kevin Toten (Appointed in 2024) P&Z - Kelly Patterson-Herndon (Appointed in 2024) FINANCIAL IMPACT: This item has no financial impact. BACKGROUND: Resolution 2026-03-1904 Each calendar year following the General Election, the City Council confirms by majority vote Council Member appointments to outside agencies, committees, task forces, Boards and Commissions, and liaison appointments to City Boards and Commissions. Council Members provide a link to represent the City Council's values, beliefs, and position to these entities. The representative will periodically report to the City Council on the activities of these organizations. Council liaisons may attend, but are not required to attend, the meetings of the boards or commissions to which they have been appointed as liaisons. Board and commission members may contact their Council liaison regarding items of concern or interest related to their appointed board. STRATEGIC CONNECTIONS: This item has no strategic connection. ATTACHMENTS: