Minutes of the TEXAS WATER RESOURCES FINANCE AUTHORITY October 18, 2000 - 9:00a.m. Stephen F. Austin Building 1700 N. Congress, Room 118 Austin, Texas

Chairman Jack Hunt called to order the meeting of the Texas Water Resources Finance Authority at 9:05 a.m. in Room 118 in the Stephen F. Austin Building, Austin, Texas. The following Board members were present, constituting a quorum:

Jack Hunt, Chairman Noe Fernandez, Vice Chairman Wales H. Madden, Jr., Secretary/Treasurer William B. Madden, Member Bill Meadows, Member

Member Kathleen White was absent.

Persons attending were among those present at the Texas Water Development Board meeting of the same date.

The Authority then considered items on the formal agenda in the following order.

1. Consider approval of the minutes of the August 16, 2000 meeting.

Mr. Bill Meadows moved to approve the minutes as submitted; Mr. William Madden seconded the motion; it passed unanimously 5-0.

2. CONSIDER SELECTING A TEAM OF UNDERWRITERS FOR FUTURE AUTHORITY NEGOTIATED BOND SALES AND OTHER FINANCIAL TRANSACTIONS OCCURRING PRIOR TO OCTOBER 31, 2002 WITH A PROVISION FOR POST TRANSACTION AND FISCAL YEAR-END PERFORMANCE EVALUATIONS.

Ms. Nancy Marstiller, Director of Debt Management, announced the following 14 firms to serve the Authority: Solomon Smith Barney; Southwest Securities; Walton Johnson & Company; J.P. Morgan Securities; Morgan Keegan & Company, Inc.; Southwestern Capital Markets; Morgan Stanley & Company; Chase Securities of Texas, Inc.; Seibert Brandford Shank; Dain Rauscher; Bear Stearns; Estrada Hinojosa; Goldman Sachs & Company; and U.S. Bancorp Piper Jaffray. The Authority will select senior manager and co-manager positions for each transaction on an as needed basis, based on the size and the complexity of the transaction. This same team will also serve the Texas Water Development Board. She recommended approval of the team as proposed.

In response to Mr. Wales Madden question Ms. Marstiller reviewed the general criteria used in evaluating the firms. Staff reviewed each proposal which included 10 different questions with a point system attached to each. The proposals were reviewed independently by six staff members as well as staff at First Southwest Company. Each proposal was scored and averaged and then staff met collectively to prepare a recommendation for the board. The recommendation takes into consideration a good Texas presence, strong sales ability, the number of sales people available in Texas as well as nationwide, historically underutilized business status, and performance over the past two years.

Mr. William Madden moved to approve the staff recommendation; Mr. Fernandez seconded the motion; it passed unanimously 5-0.

The meeting was adjourned at 9:20 a.m.

APPROVED and ordered of record this the 16th day of May, 2001.

TEXAS WATER RESOURCES FINANCE AUTHORITY

Jack Hunt, Chairman

ATTEST:

Wales H. Madden, Jr., Secretary/Treasurer