Newsletter - As of Of 12/31/2007

During this past year we continued to grow at a fast pace. Membership grew from 34,014 members as of 12/31/07 to 35,150 members as of 12/31/08, an increase of 1,136 members. Several of the area school districts continue to construct new schools within our service area. These schools attract new residential subdivisions that add to the growth of our system.

On May 20, we began operations at the new 3 million gallon per day reverse osmosis treatment plant located on Owassa Rd in Hidalgo Co. We also began operations last September at the new 3 million gallon per day reverse osmosis treatment plant located on Doolittle Rd next to the main office. Construction should begin on the Hidalgo Co. Empowerment Zone Project Phase I this month, which includes a 500,000 gallon elevated water tower and 6 miles of 12" water lines.

Three years ago we purchased a tract of land that will be the site for the North Weslaco wastewater project. This project will be funded by U.S.D.A. and involves constructing a new wastewater treatment plant and a collection system that will serve the area north of Weslaco. This project will connect about 1,000 new customers and will bring in additional revenues for the Wastewater Department.

We finally settled our lawsuit with the BFI landfill expansion located 1/4 mile from our main water treatment plant and reservoir. We won our jury trial in District Court in 2002, but the Texas Supreme Court refused to hear our appeal on other legal matters.

This year we may have to increase the monthly water rates. We have not increased rates since February 2002. If we do increase rates, we will notify you by message on your monthly water bill.

At this year's annual meeting, there will be an election held for the terms of three board members. The nominating committee met and nominated the following persons;

District 1 - Randy Miller
District 2 - Dennis Goldsberg
District 3 - Derrick Swanberg

As usual, at this year's annual meeting, we will have a drawing to give away a 2003 Ford Ranger pick-up truck. Everyone who returns a proxy card or is in attendance at the meeting will be eligible for the drawing, except for board members and employees of the Corporation.
The Board of Directors, management staff and employees appreciate your past support and we look forward to serving you this coming year.

Thank-you