RESOLUTION NO.

OF THE SAN ANTONIO WATER SYSTEM BOARD OF TRUSTEES APPOINTING A SYNDICATE OF UNDERWRITING FIRMS TO ASSIST IN THE REFUNDING OF THE OUTSTANDING WATER SYSTEM REVENUE REFUNDING SERIES 1992 BONDS, CONSISTING OF SALOMON SMITH BARNEY, INC., SAMUEL A. RAMIREZ & CO., INC., A.G. EDWARDS & SONS , BEAR STEARNS & CO., INC., GOLDMAN SACHS & CO., DAIN RAUSCHER, INC., JP MORGAN CHASE & CO., SOUTHWEST SECURITIES, AND SOUTHWESTERN CAPITAL MARKETS, INC.; DESIGNATING SALOMON SMITH BARNEY, INC, IN THE SENIOR MANAGER ROLE AND SAMUEL A. RAMIREZ & CO., INC. IN THE CO-SENIOR MANAGER ROLE; APPOINTING A SYNDICATE OF UNDERWRITING FIRMS TO ASSIST IN THE FINANCING OF THE CY 2002 CAPITAL IMPROVEMENTS PLAN, CONSISTING OF MORGAN STANLEY & CO., SIEBERT BRANDFORD SHANK & CO, M.E. ALLISON & CO. INC., MORGAN KEEGAN & COMPANY, INC., APEX PRYOR SECURITIES, L.L.C. DESIGNATING MORGAN STANLEY, INC, IN THE SENIOR MANAGER ROLE AND SIEBERT BRANDFORD SHANK & CO, L.L.C. IN THE CO-SENIOR MANAGER ROLE; DIRECTING THE PRESIDENT/CHIEF EXECUTIVE OFFICER TO DEVELOP A SET OF PROCEDURES FOR MANAGEMENT AND ADMINISTRATION OF THE POOL; FINDING THE RESOLUTION TO HAVE BEEN CONSIDERED PURSUANT TO THE LAWS GOVERNING OPEN MEETINGS; PROVIDING A SEVERABILITY CLAUSE; AND ESTABLISHING AN EFFECTIVE DATE.

WHEREAS, the San Antonio Water System (the ´System´) has seen it to be advantageous and prudent to consider a restructuring of its currently outstanding debt through the refunding of the Series 1992 Water System Revenue and Refunding Bonds, and WHEREAS, the System desires to debt finance a portion of its Calendar Year 2002 Capital Improvements Program, and

WHEREAS, the System has selected a pool of underwriters to assist in the structuring, marketing, and sale of its debt, and WHEREAS, the System¶s has selected underwriters from the pool to serve on the syndicates for the two transactions based upon the objectives of having firms with capital to underwrite the risk of the bond issue, institutional and retail marketing capabilities and national, regional and small and minority business representation. WHEREAS, the San Antonio Board of Trustees desires to (I) appoint two syndicates to assist the System in refunding the Series 1992 Bonds and to finance the Calendar Year 2002 Capital Improvements Program, (ii) and to designate the Senior and Co-Senior Managers for the transactions, now therefore: BE IT RESOLVED BY THE SAN ANTONIO WATER SYSTEM BOARD OF TRUSTEES: 1. That the following firms are hereby appointed to serve as the managers of the underwriting syndicate to assist in the refunding of the outstanding Water System Revenue Refunding Bonds, Series 1992 Salomon Smith Barney, Inc. Samuel A. Ramirez & Co., Inc. JP Morgan Chase & Co. A.G. Edwards & Sons, Inc. Goldman Sachs & Co. Dain Rauscher, Inc. Southwest Securities Southwestern Capital Markets, Inc. 2. That Salomon Smith Barney, Inc is hereby reaffirmed to serve in the role of senior manager and hereby designates Samuel A. Ramirez & Co., Inc. to serve in the role of Co-Senior for the refunding transaction. 3. That the following firms are hereby appointed to serve as the managers of the underwriting syndicate to assist in the financing of the Calendar Year 2002 Capital Improvements Plan Morgan Stanley & Co. Siebert Brandford Shank & Co, L.L.C Bear Stearns & Co., Inc. M.E. Allison & Co. Inc. Morgan Keegan & Company, Inc. Apex Pryor Securities . 4. That Morgan Stanley & Co, Inc is hereby designated to serve in the role of Senior Manager and that A.G.Edwards, Inc. is designated as Co-Senior Manager for the refunding transaction.

5. It is officially found, determined and declared that the meeting at which this resolution is adopted was open to the public, and that public notice of the time, place and subject matter of the public business to be conducted at such meeting, including this resolution, was given to all as required by the Texas codes annotated, as amended, Title 5, Chapter 551, Government Code. 6. If any part, section, paragraph, sentence, phrase of word of this resolution is for any reason held to be unconstitutional, illegal, inoperative, or invalid, of if any exception to or limitation upon any general provision herein contained is held to be unconstitutional, illegal, 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, illegal, invalid, or ineffective. 7. This resolution becomes effective immediately upon its passage. PASSED AND APPROVED this the 4th day of December, 2001.

______________________________ James M. Mayor, Chairman ATTEST: ______________________________ J. J. Amaro, Secretary

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