In order to comply with the legislative mandate to reduce groundwater usage, the District, along with other municipal utility districts in the area, is part of the North Fort Bend Water Authority (the "Authority") Groundwater Reduction Plan ("GRP"). To comply with the groundwater reduction mandate, the Authority is responsible for constructing the necessary water delivery infrastructure to deliver surface water to the areas within the Authority. In order to design, construct, and operate the necessary infrastructure, the Authority assesses fees to the well owners/municipal utility districts within the Authority's boundaries based on the amount of water pumped by their wells or the amount of surface water received from the Authority. Accordingly, the Authority charges the District a fee for each 1,000 gallons of groundwater withdrawn by the District (the "GRP Fee"), which GRP Fee may be increased by the Authority from time to time. The District then passes the GRP Fees, plus a 5% surcharge to cover related District costs, through to the District's users based on the amount of water they use. As such, each user within the District is billed, in addition to the District's water rates, a separate amount for each 1,000 gallons of water delivered to such user in a billing cycle that is equal to 105% of the GRP Fee charged to the District by the Authority for each 1,000 gallons of water for that period.
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