ACEQUIA: SUSTAINABLE WATER SOLUTIONS. LEADING BY EXAMPLE. www.acequia.com

Industry Headlines

Energy & Water NexusSaving water IS saving energy.

Energy is a water issue and water is an energy issue. Both are issues of sustainability to support the demands of our growing population. Producing energy requires sizable volumes of water while the distribution and treatment of water is equally reliant upon readily accessible, inexpensive energy. The link between clean, available energy, and clean, available water is clear. One cannot exist without the other.

The November/December issue of Water Efficiency Magazine highlights the symbiotic relationship between energy and water usage. To read more about the Energy Water Nexus, see: http://twurl.nl/fespea.

“The Energy and Water Nexus,” Water Efficiency Magazine, The Journal For Water Resource Management, Nov/Dec 2009

Haiti Lacks Clean Water SupplyAcequia Supports Haitian Relief

Prior to the earthquake, no Haitian city had a centralized sewage system and there were virtually no water treatment facilities for the general public. While the devastation caused by the earthquake has made this a very public, critical issue in the states, life on the streets in Haiti is no easier today.

Acequia supports TWP (www.treeswaterpeople.org) in their relief efforts. In addition to encouraging our employees, partners, and clients to check

out TWP’s website and support the relief efforts, we have gone one step further. Acequia will donate $25 for every water assessment survey completed online to TWP (or one of five other nonprofits dedicated to environmental stewardship). See www.acequia.com for more info today.

Obama Awards Clean

Energy Tax CreditPresident Barack Obama unveiled a

$2.3 billion tax credit in January to boost jobs by promoting clean energy. The tax credits have been granted to 183 projects across the country. Technologies include solar, wind, and other initiatives to improve energy efficiency. To read more: http://twurl.nl/fw6kde.

60% Water Rate

Increase in VisaliaVisalia, CA city officials have proposed a 60% rate increase in water rates (to be spread over the next three years). This may seem drastic, but they see it as necessary measure. The rate hikes, subject to approval by the State, will be combined with intensive water conservation in an effort to restore the city’s groundwater supply. Officials will be looking to landscape audits and weather based irrigation systems (like Acequia) for their conservation efforts. For more information on Visalia and the California water drought, please see:http://twurl.nl/jj2cui.

UPCOMING EVENTS

POSTPONEDCONGRESSIONAL WATER CAUCUSThe Congressional Water Caucus was founded in 2007 as a response to the growing need for Congress to address the nation’s water issues. The CWC will bring together the government with the private sector in order to provide an educational dialogue about drought and water scarcity and its ultimate impact on national security. The CWC was postponed due to weather, and will now be held in conjunction with Earth Day Events.

3.22.10WORLD WATER DAYJoin Acequia in the celebration of World Water Day on March 22, 2010. More details of our planned celebration coming soon!

4.23-24.10LONE STAR EXPOThe Texas Apartment Association Annual Trade Show. Stop by the Acequia booth after keynote speaker Emmitt Smith!

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Over the last twelve years, Australia has experienced what Americans tend to refer to as “extreme drought.” Australians felt the same, until their water supplies were reduced to a point that they began to recognize this ongoing drought as something more significant. They now use the term climate change.

The Murray-Darling River, its basin, and surrounding states offer the clearest example of the impact climate change (both environmental and economic) can have on a region. Located in SW Australia, the Murray-Darling is truly the lifeblood of this region. The local economy (agriculture, drinking water, recreation) is wholly dependent on this river. We have a similar situation in the United States with the Colorado River, which supplies a significant portion of water to seven western states.

The most immediate impact of climate change in the Murray Darling could be felt in the agricultural industry. Rice farming, once a significant export, evaporated along with the water. Most families in the area were generational farmers. For the first few years of the “drought,” they “black-stumped” tens of thousands of acres of fruit and nut orchards. This practice, cutting down the trees to a two foot stump, allowed the trees to live for three to five years until supplemental water became available. The water never came for most of those trees, and in year five, bulldozers were often seen clearing away livelihoods.

As the agricultural impact worsened, the environmental devastation of climate change on the Murray-Darling began to emerge. Lake Alexandria, the primary source of fresh water

storage and supply for the city of Adelaide, began to dry up as its source (the MD river) slowed. As river flows diminish, salt content increases. The once fresh water lake is now a brine/saline mixture. Local marine life, as well as migratory fowl (already onthe endangered species list) is tremendous. To make matters worse over the past decades the river had naturally deposited iron sulfide into the lake bottom. With eighty square miles (4.1 Million acres) of lake bottom soils now exposed, the sulfides are beginning to react with oxygen to form hydrogen sulfide, more commonly known as battery acid. Australia has invested hundreds of millions of dollars into aerial lime applications and bio-remediation efforts to mitigate the effects of acidification to the lake and surrounding animal and plant life.

The Delegation was asked to review the data and events of historical climate shift in comparison to current events occurring in the United States that could lead to the similar consequences and to gain a better understanding of programs that worked, as well as those that were ineffective. Like many US Waterpurveyors, Australian water suppliers budgeted contingencies for dry years; but no one would have ever planned for 50-75% less water availability in the major river and surface storage systems. As a result, Australia has developed a system of allocating actual river flows making environmental rights equal to individual water rights. Australian water legislation and laws are considered to be some of the most progressive and current in the world today. As a means of creating “value” to water, Australia has taken the approach that water is to be “owned” by individuals, with“management” by the states, and regulated at the federal level.

AUSTRADE: THE UPDATETWO CONTINENTS AT WORKThe Australian Trade Commission (Austrade) assembled a group of eleven key decision makers in the North American Water industry for a study tour in November. The group (pictured to the right) included leaders in government, private sector, and research. Kenneth Cook was one of the eleven delegates. The story below recaps his experience in Australia.

Delegates: Jim Thebaut, The Chronicles Group; Alex Davis, State of CO, Natural Resources; Sally-Ann Watts, Austrade; Kenneth Cook, Acequia LP; Chad Briggs, US Dept of Energy; Wendy Martin, State of CA, Drought Coordinator; Lillian Kawasaki, CA Ground Water District; Brad Udall, NOAA/Univ. of CO; Timothy Brick, COB, Metro Water District of SoCA; Bryan Tolar, Georgia Agribusiness; Terry O’Day, Environment Now; not pictured: Pedro Sanchez, Mexico Water Commission

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Australia Study Tour (Continued)In 2006 a Water Trading Market was established for surface water rights, allowing owners to buy and sell water on the open market. While drought had disrupted many of the farming industries, water rights allowed many to survive by selling their water.

Lessons learned in the Australian urban environments were indicative of US urban issues that must be resolved. Today urban Australian citizens consume approximately 35 gals of water per person, per day (35ppd), as compared to their US counterparts (150-400ppd). One of the major differences has been landscape irrigation water reduction. Since 2004, lawn irrigation has been banned in most parts of Australia, with a fine that may include imprisonment. Swimming pools have been converted to brine supplies and permanently disconnected form potable water sources. Parks and green spaces utilize recycled water for supplemental irrigation, where available.

Australia has also had their share of mistakes to learn from as well. One of the most notable was the reduction of run-off water flows to the rivers and streams on lands replanted for carbon sequestration; today, these plantings are required to acquire water for supporting the plantings, allowing natural water run-off to in-stream flows and downstream water rights holders. Another was the acknowledgement that ground water and surface water are inextricably linked and should be managed together as one.

On the positive side Australia has become a wealth of technology and best management practices in water conservation and desalination. On the agriculture front $3.1B has been invested in technology and canal linings to total automate precise,measured delivery of water with only minimal evaporate loss. Many urban areas now recycle 40%-50% of their water for use, with a heavy emphasis on desalination to relieve pressure on the Murray-Darling basin. Australia leads the world in desalination technology from intake and saline discharge outfalls effects to the marine environment,to reduced power consumption during production. In addition, there has been significant investment in Wave Power Harvest technology for desalination and electric power production from wave motion.

At the end of the study tour, the North American Delegates were invited to serve on a cluster to continue to develop and share intellectual property between the two countries in hopes of jointly sharing the combined abilities with less fortunate countries. The United States must now learn the lessons of Australia. We have time, albeit precious few years, on our side. Government, research, and most importantly, private industry can all do their part. At Acequia, we believe that true sustainability in conservation is not only possible, it is the right thing to do.

As CEO and Managing partner of Acequia, Kenneth Cook is utilizing his role as a delegate to inform his peers in the irrigation industry. Acequia will also be co-sponsoring a viewing of “Running Dry: On the Brink” by the Chronicles Group at the Congressional Water Caucus in Washington, D.C.

RECENT INSTALLATION:VISTA DEL LAGO APARTMENTSAcequia recently added the Vista Del Lago Apartment Community in Dallas, TX to its portfolio. This multi-family property has 296 units and is owned by Post Investment Group.

Post Investment was drawn to Acequia as part of their overall greening initiative. Learn more about Post and their overall greening strategies at: http://twurl.nl/qrj0ky.

Join Acequia on Twitter!

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We would love to hear from our clients via Twitter and promote your greening stories!

INVESTOR NEWSLETTER ISSUE 4 FIRST QUARTER 2010

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Join us on LinkedIn!New Team Members

Several new members have joined the Acequia team over the last few months. Recent additions include two board members, two projects managers, and a government and public relations specialist. Our newsletter will highlight several employees per quarter, but we always encourage you to visit our www.acequia.com or LinkedIn to further connect with our team!

Dr. Milton Engelke, Board of Directors

Dr. Milton Engelke joined the Acequia Board of Directors in January 2010. In this role, he will provide agronomic consultation to our project management team and our client property managers. He will also be providing educational editorials for our newsletters, website, webinars, and client communications.

Dr. Engelke is the leader of the Turfgrass Genetic Improvement Team at Texas A & M. This team has developed

and released cultivars of improved annual rye, bent, buffalo, St. Augustine, zoysia, and Texas Blue hybrid grasses for use worldwide. Dr. Engelke earned a B.S. from the University of Wisconsin-Platteville, and his Masters and Doctoral degrees from the University of Wisconsin-Madison.

Rene Osuna, Regional

Manager, South Texas Rene Osuna joined the Acequia team in 2010 as the South Texas Project Manager. Rene will be assisting with expansion efforts in South Texas. Additionally, Rene will have a role in customer relations and marketing in his region. Please feel free to reach out to Rene at rosuna@acequia.com. Rene is a retired Army officer with over 18 years of service. Prior to joining Acequia, Rene was the president of Spanish Oaks Landscaping, a full service industrial and commercial landscaping and irrigation provider. Rene is a

Certified Landscape Irrigation Irrigation Auditor, Licensed Irrigator and Backflow Tester by the Texas Commission on Environmental Quality. Rene has a B.A. from St. Mary’s University and an MBA from the University of Phoenix.

Reed Rivers, North

Texas Project Manager Reed Rivers joined the Acequia team in December 2010. Reed will work with Acequia clients on irrigation management while serving as a liaison to continued research activities at Texas AgriLife. Acequia has a strategic alliance with Texas A & M University and the Texas AgriLife Extension & Research Center. This alliance spans the last two decades, focusing on turf grass research for drought tolerant species and management practices that reduce the turf dependence on potable water sources.

CLIENT SPOTLIGHT:MARQUIS AT ROGERS RANCH, SAN ANTONIOManaged by CWS Apartments, these contemporary apartment homes are located in the heart of the Rogers Ranch Community. Residents have access to three major golf courses and state of the art facilities, nestled amidst picturesque rolling hills and mature trees. Utilizing Acequia’s sustainable water solutions, this property has saved 57,796,090 gallons of water to date. This figure represents a sustained 85.04% savings since 2005.

http://www.cwsapartments.com

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