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CITY OF SAGINAW, TEXAS
                                       FINANCIAL MANAGEMENT POLICIES

                                     c)      The customer must present a receipt for repair work by a professional
                                     plumber or for supplies necessary to repair the leak at the service address within
                                     30 days from the time the adjustment is sought
                              2.      If the account qualifies for an adjustment, an adjustment will be made for
                              the two highest qualifying billing periods as follows:
                                      a)     The average consumption for the three months prior to the adjustment
                                     period will be calculated and this average ( rounded to nearest 1, 000 gallons)  will
                                      be subtracted from the consumption for each of the two qualifying billing periods
                                      b)     The result( the difference from the calculate average expressed in number
                                      of gallons)  will be deducted from the billed consumption amount to calculate the
                                      revised consumption for the two qualifying billing periods
                                      c)     If the leak occurs during the sewer winter month averaging period
                                      November,   December,   or January),   then  the  consumption for  the sewer
                                      calculation  (for the  month( s)  in  question)   will be the  adjusted consumption
                                      amount or 8,000 whichever is less
                                      d)         An adjustment to water and sewer charges due to leaks will be made only
                                      once in a 12 month period and will not be made for more than two consecutive
                                      billing periods where the 33% or more increase in consumption occurs
                        J.     A customer may request a rereading of their water meter to investigate
                        high consumption.   The reread will occur within one business  day.    The result will
                        be reported to the customer by Utility Billing.
                              1.      If the reread is consistent with the original reading,  the customer may
                              request a field test of the  meter.   There is no charge for this test,  however the
                              customer must be present to verify that all water is turned off before testing.
                              2.      If the field test confirms the accuracy of the reading,  the customer may
                              request,  at their expense,  a meter test by an accredited third party approved by
                              the City.  While the meter is being tested an interim meter will be installed.
                              3.      The meter will be tested at three different flow rates per American Water
                              Works Association ( AWWA)  standards.   If the meter tests over 100%  at any flow
                              rate,  the consumption for the month in question shall be reduced by the resulting
                                over 100%,  a new meter will be installed ( the new meter may be the interim
                              meter),  and the customer' s test fee will be refunded.   If the meter tests less than

                              100%  accurate,  the meter  may be replaced  atthe City' s discretion.   If the meter
                              test is accurate ( at 100%),  the meter will be reinstalled if it is the City' s current
                              meter model.
                              4.      A copy of the meter test will be delivered to the customer
                              5.      The City acknowledges that water meters are mechanical devices and
                              subject to malfunction,  however once tested in accordance with the above policy,
                              no other adjustments will be made.

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