Attention: Sienna Plantation Developer Waste Treatment & FireStation Issues:

The following communication was included in the city council agenda items for the upcoming September 6th regular session under background for item 5c. Please note that this information is being made available before it has been posted to our resident's association website at SiennaNet.com or in the monthly newsletter (our dues pay for this). Comments on this in the following thread are welcome:

SIENNA PLANTATION MUNICIPAL UTILITY DISTRICT NO. 1
c/o 3200 Southwest Freeway, Suite 2600
Houston, Texas 77027
August 12, 2005
The Honorable Allen Owen City of Missouri City
2022 Masters Lane Missouri City, TX 77459

Re: Regional Wastewater Treatment Plant to Serve Sienna Plantation South and Proposed City of Missouri City Fire Station No. 5

Dear Mayor Owen:

I am writing to you on behalf of the Board of Directors regarding two important projects in Sienna Plantation planned for construction in the next year. Regional Wastewater Treatment Plant The City of Missouri City (the "City") and Sienna Plantation Municipal Utility District No. 1 (the "District") entered into a Wastewater Treatment Services Contract dated April 5, 1999, which requires the City design, construct, finance and operate a regional wastewater treatment plant (the "Plant") to serve the land in what is commonly referred to Sienna South (Sienna Plantation MUDs 1-7). The start of this project has been delayed several times because of an incompatible site location and the bankruptcy of AFG Pacific Properties, Inc. After of the delays in the construction of the Plant (which the District acknowledges were completely outside the control of the City), the District expanded its interim facilities to serve recent development. However, based on the growth projections in Sienna South from Sienna/Johnson and Regent Properties, the District determined it is necessary to start the construction of the Plant as soon as possible. The Board of the District would like to request that the City allow the District, rather than the City, design, finance, construct and operate the Plant. The Board realizes that with the tremendous growth occurring in Missouri City due to the opening of the Fort Bend Parkway and the widening of State Highway 6, the City has limited

time and resources to devote to this project. On the other hand, the District is in a position to devote the appropriate amount of time and resources to ensure that the Plant is constructed in the timeframe that meets the District's requirements. The District would propose to construct an initial phase of 1.5 MGD and the necessary lift station and force main to divert the wastewater from the District's existing interim facilities. The District would also construct the treatment facilities necessary to treat the effluent to Type I standards for reuse as lake recharge and irrigation of the esplanades and common areas in Sienna Plantation. The City would be released of all obligations with respect to the Plant, until the annexation and dissolution of the District when ownership of the Plant would transfer to the City. The District estimates that the initial phase of the Plant would require a bond issue in the amount of $11.25 million. Obviously, under this proposal the City would not need to issue that debt and would free up its bonding capacity for other uses. Fire Station No. 5 The District and the City entered into a Fire Protection Agreement dated March 19, 2002, which provides for the District to construct and convey to the City a fire station comparable to Fire Station No. 4 and a fire truck. The City staff has expressed a desire to work with the District to "oversize" this Fire Station to provide for future expansion to meet the ultimate needs of the City. The Board of the District welcomes the opportunity to work with the City to meet the City's long-range needs in this area. However, the Sienna municipal utility districts received approval from the TCEQ and voted bonds in amount that only allows for the construction of a Fire Station comparable to No. 4. Thus, we have discussed with the City staff the possibility of entering into a cost-sharing agreement with the City to pay for the requested upgrades to the facility. The Board now recognizes that the City is in a better position to design the Fire Station and construct it in a manner that meets the City's needs. Therefore, the Board proposes that the District and the City enter into an agreement whereby the City would design (including site selection) and construct Fire Station No. 5. The District would pay to the City up to $2 million toward the cost of the fire station and a fire truck. The $2 million would be payable in four installments: i) upon site acquisitions; ii) within 45 days of the date the City selects an architect and reaches an agreement on that fee, iii) within 45 days of the date the City receives bids for the construction of thefire station; iv) within 45 days of the date the City approves a purchase contract for a fire truck. The developer in the District would have the right to approve the site selected and would retain architectural approval over the design of the fire station. The City would be authorized to construct a fire station of whatever size and at whatever cost it deems appropriate, however the District's financial obligation would be capped at $2 million. Thereafter, if the City has not yet annexed Sienna Municipal Utility District No. 2, the City and the District would enter into an agreement whereby the District would pay the City the City's actual cost to operate Fire Station No. 5 on an annual basis. If the City Counsel of Missouri City is interested in pursuing the options set forth in this letter, I would suggest the Council authorize the City Manager to enter into contract negotiations with the District's consultants to develop the documents necessary to memorialize these two proposals. If you have any questions regarding the District's proposal, please contact the District's attorney Richard Muller, Allen Boone Humphries Robinson LLP, at (713) 8606415 or myself at (713) 621-0050. The Board of the District looks forward to working with you to accomplish these two important projects for Sienna Plantation.

Sincerely, Carl S. Bowles, President

cc: Sienna Plantation Municipal Utility District No. l
Board of Directors: Robbie Bates, Vice President, Allen Robinson, Secretary Pamela Logsdon, Assistant Secretary James Feuerbach, Assistant Vice President

Michael Smith, Sienna Plantation Development Co. Jim Price, Regent Properties