RESOLUTION NO.

05-470

OF THE SAN ANTONIO WATER SYSTEM BOARD OF TRUSTEES

APPOINTING A POOL OF INVESTMENT BANKING FIRMS CONSISTING OF A.G. EDWARDS & SONS, INC.; APEX PRYOR
SECURITIES; BANC OF AMERICA SECURITIES; BEAR STEARS &

CO., INC.; CABRERA CAPITAL MARKETS, INC.; CITIGROUP GLOBAL MARKETS, INC.; COASTAL SECURITIES; GOLDMAN SACHS & CO.; JACKSON SECURITIES, L.L.C.; JPMORGAN SECURITIES, INC.; LEHMAN BROTHERS; LOOP CAPITAL MARKETS, LLC; MORGAN KEEGAN & CO., INC.; MORGAN
STANLEY & CO., INC.; POPULAR SECURITIES, INC.; SAMUEL A.

RAMIREZ & CO., INC.; RBC DAIN RAUSCHER, INC.; SAMCO CAPITAL MARKETS; SIEBERT BRANDFORD SHANK & CO.;
SOUTHWEST SECURITIES; STEPHENS, INC.; UBS FINANCIAL

SERVICES AND W ACHOVIA BANK, N.A. TO PROVIDE UNDERWRITING SERVICES TO ASSIST THE SYSTEM IN

SECURING FUNDING FOR CAPITAL IMPROVEMENTS
PROGRAMS; APPOINTING A SYNDICATE OF INVESTMENT
BANKING FIRMS TO PROVIDE UNDERWRITING SERVICES TO

ASSIST THE SYSTEM IN A 2005 BOND TRASACTION;
DESIGNATING MORGAN STANLEY & CO., INC. IN THE ROLE OF SENIOR MANAGER, DESIGNATING LEHMAN BROTHERS AS COSENIOR MANAGER, AND DESIGNATING A.G. EDWARS & SONS,

INC.; BANC OF AMERICA SECURITIES; POPULAR SECURITIES, INC.; SAMUEL A. RAMIREZ & CO., INC.; SIEBERT BRANDFORD
SHANK & CO.; AND SOUTHWEST SECURITIES AS CO-MANAGERS;

FINDING THE RESOLUTION TO HAVE BEEN CONSIDERED PURSUANT TO THE LAWS GOVERNING OPEN MEETINGS;

EFFECTIVE DATE

PROVIDING A SEVERABILITY CLAUSE; AND ESTABLISHING AN

WHEREAS, the San Antonio Water System (the System) monitors its
outstanding debt and investigates opportunities to manage this debt in an effective and effcient
manner; and

WHEREAS, the capital requirements of the System over the next five years is over $1 bilion; and
WHEREAS, the System is desirous to debt finance a portion of its 2006 Capital Improvements Program and future years Capital Improvements Programs; and
WHEREAS, in order to proceed in a timely fashion with financings for capital improvements, a pool of Investment Banking firms need to be appointed to assist in the structuring, marketing, and sale of debt; and

WHEREAS, the System's standard process for solicitation and evaluation of proposals for professional services has been completed, firms were evaluated based upon the
objectives of having underwriting experience, the capital to underwte the risk of

the bond issue,

05-470
institutional and retail marketing capabilties, and national, regional, and small and minority business representation; and

WHEREAS, the System desires to appoint a syndicate for the 2005 debt
transaction; and

WHEREAS, the San Antonio Water System Board of Trustees desires to (i)
appoint a pool of Investment Banking firms to provide underwriting services for a term of three

years consisting of A.G. Edwards & Sons, Inc.; Apex Pryor Securities; Banc of America
Securities; Bear Stearns & Co., Inc.; Cabrera Capital Markets, Inc.; Citigroup Global Markets, Inc.; Coastal Securities; Goldman Sachs & Co.; Jackson Securities, L.L.C.; JPMorgan Securities, Inc.; Lehman Brothers; Loop Capital Markets, LLC; Morgan Keegan & Co., Inc.; Morgan

Stanley & Co., Inc.; Popular Securities, Inc.; Samuel A. Ramirez & Co., Inc.; RBC Dain
Rauscher, Inc.; SAMCO Capital Markets; Siebert Brandford Shan & Co.; Southwest Securities; Stephens, Inc; UBS Financial Services and Wachovia Bank, N.A.; and (ii) designate Morgan Stanley & Co., Inc. in the role of Senior Manager, Lehman Brothers as Co-Senior Manager, and A.G. Edwards & Sons, Inc.; Banc of America Securities; Popular Securities, Inc.; Samuel A. Ramirez & Co., Inc; Siebert Brandford Shank & Co.; and Southwest Securities as Co-Managers for the 2005 debt transaction; now, therefore:

BE IT RESOLVED BY THE SAN ANTONIO WATER SYSTEM BOARD
OF TRUSTEES:
I. That the following firms are hereby appointed to serve in the pool of Investment

Banking firms to provide underwriting services to assist the System from time to time in
the issuance of debt for a term of three years from November 16, 2005 to November 15, 2008:

National Firms Bear Stearns & Co., Inc. Citigroup Global Markets, Inc. Goldman Sachs & Co. JPMorgan Securities
Lehman Brothers

Regional Firms A.G. Edwards & Sons, Inc. Banc of America Securities
Coastal Securities

Morgan Stanley & Co., Inc. UBS Financial Services Wachovia Bank, N.A. SMWBE Firms Apex Pryor Securities Cabrera Capital Markets, Inc. Jackson Securities, L.L.C.
Loop Capital Markets, LLC. Popular Securities, Inc.

Morgan Keegan & Co., Inc. RBC Dain Rauscher, Inc. SAMCO Capital Markets Stephens, Inc.
Southwest Securities

Samuel A. Ramirez & Co., Inc. Siebert Brandford Shank & Co.

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05"'470
2. That the following firms are hereby appointed to serve as the managers of the

underwriting syndicate for the 2005 debt transaction:
o Morgan Stanley & Co., Inc. .- Senior Manager o Lehman Brothers - Co-Senior Manager
o A.G. Edwards & Sons, Inc. - Co-Manager
o Bane of America Securities - Co-Manager

o Popular Securities, Inc. - Co-Manager
o Samuel A. Ramirez & Co., Inc. - Co-Manager

o Siebert Brandford Shank & Co. - Co-Manger
o Southwest Securities - Co- Manager
3. It is offcially found, determined, and declared that the meeting at which this

resolution is adopted was open to the public and public notice of the time, place, and
subject matter of the public business to be considered at such meeting, including this

resolution, was given, all as required by Chapter 551, as amended, Texas Governent
Code.
4. If any part, section, paragraph, sentence, phrase or word of this resolution is for any

reason held to be unconstitutional,' ilegal, inoperative or invalid, or if any exception to or limitation upon any general provision herein contained is held to be unconstitutional,
ilegal, invalid or ineffective, the remainder of this resolution shall nevertheless stand

effective and valid as if it had been enacted without the portion held to be

unconstitutional, ilegal, invalid or ineffective.
5. This resolution is effective immediately.

PASSED AND APPROVED on the i 5th day of

November 2005.

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Attest:

J es M. Mayor, hairman

Salvadore M. Hernánde~

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