Harris/Galveston Coastal Subsidence District

The District is located within Area 3 of the boundaries of the Harris-Galveston Coastal Subsidence District (the “Subsidence District”), the entity which regulates groundwater withdrawal in Harris and Galveston Counties. The District’s ability to to pump groundwater from its wells is subject to annual permits issued by the Subsidence District. On April 14, 1999 the Subsidence District adopted a Regulatory Plan to reduce groundwater withdrawl though conversion to surface water consumption by the areas within the Subsidence District’s boundaries. Under the Regulatory Plan, area within the Subsidence District’s boundaries must convert to 30% surface water by 2010, 70% surface water by 2020 and 80% surface water by 2030. Additional information can be found at www.hgsubsidence.org.

The District is also located within the boundaries of the North Harris County Regional Water Authority (the “Water Authority”). The Water Authority was created to accomplish the conversion to surface water by entities within the Subsidence District’s Area 3 in accordance with the Subsidence District’s Regulatory Plan. To implement the required conversion to surface water in accordance with the Subsidence District’s Regulatory Plan, the Water Authority has adopted a ground water reduction plan providing for the design, construction and operation of a network of surface water transmission lines, storage tanks, and pumping stations to transport and distribute surface water to the areas within the Water Authority’s boundaries. The Water Authority has also contracted with the City of Houston to secure a long-term supply of surface water. To obtain funding to accomplish its purpose, the North Harris County Regional Water Authority currently is assessing a ground water pumpage fee of $2.15 per 1000 gallons of water, which applies to certain water well permitees in its boundaries, including the District.

The District is required to pay for its share of the cost to acquire, design, construct and operate the Surface Water Facilities. The District’s share of the cost of the Surface Water Facilities is being paid through the pumpage fee.

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