MEDIA RELEASE: Flint Mayor Targets First Lead Pipe Removal
- From
- Kristin Moore
- To
- Undisclosed-Recipients
for Next Week
xxxEND_PAGE:treasury01_b39_6977_7316_181
Kristin Moore
Public Relations Director
[email protected]
February 17, 2016
For Immediate Release
Flint Mayor Karen Weaver Targets First
Lead Pipe Removal for Next Week
Mayor Calls on Gov. Snyder to Pressure House, Senate GOP Leaders to
immediately Pass $25 Million Supplemental to Pay for Pipe Removal
Mayor's Ambitious “Fast Start” Plan Wins Endorsement of
Renowned Virginia Tech Water Expert Dr. Marc Edwards
(FLINT)-- Mayor Karen Weaver announced today that her administration intends
to begin replacing lead pipes in Flint next week to restore safe, clean drinking
water as quickly as possible to the citizens of her city. She called on Gov. Rick
Snyder to pressure the Legislature to move immediately to approve funding for
the first phase of her $55 million Fast Start lead pipe replacement plan.
Mayor Weaver said she is working with water infrastructure experts from the
Lansing Board of Water & Light (BWL) to train local Flint workers on lead pipe
removal at a vacant property in Flint owned by the Genesee County Land Bank.
The training exercise is set to begin next week at a location to be announced.
House-by-house lead service line removal and replacement operations targeting
high-risk households across the city will commence shortly thereafter, Weaver
said.
Mayor Weaver said she is very pleased that her Fast Start plan has been
endorsed by renowned Virginia Tech water expert Dr. Marc Edwards, who is
widely hailed for his role in uncovering the shocking lead levels in Flint’s water
supply and frequently testifies before Congress on lead contamination in
municipal water systems. Dr. Edwards confirmed to MSNBC’s The Rachel!
Maddow Show last week that he supports Mayor Weaver’s project moving
forward.
“These guys know what they are doing,” Edwards told MSNBC. “Society needs to
decide if lead pipe replacements are a good investment. Personally, | think so. |
support this plan.”
“{ will not accept anything less than full removal of all lead pipes from our water
system,” said Mayor Weaver. “I continue to hear from Lansing that the people of
Flint should wait to see if pipes can be ‘coated.’ | call on Governor Snyder to end
that discussion, and to commit fully to getting the lead out of Flint.”
2
xxxEND_PAGE:treasury01_b39_6977_7316_182
Weaver added: “Legislative leaders and Governor Snyder say they want to see
our city recover. Job one in that recovery is removal of lead service lines. This
Legislature can move bills in a matter of hours when it wants to. Now is the time
for the state to accept its duty and its responsibility and cover the cost of this
important action.”
During the training exercise next week, the BWL will demonstrate its innovative
technology for removing and replacing lead pipes with new copper pipes in half
the time at half the cost of traditional methods. The Lansing public water and
electric utility has perfected its technique by removing more than 13,500 lead
pipes in Michigan’s capital city over the past 12 years.
“Flint is so fortunate to have great neighbors, friends and partners reaching out
to us from every corner of Michigan, across the country and all around the
world. Our sister city right next door in Lansing is definitely one of our strongest
allies,” Weaver said. “I’m especially grateful to Lansing Mayor Virg Bernero and
the Board of Water & Light for their help. Together, we’re going to get the lead
out of Flint, starting next week.”
Mayor Weaver said she also appreciates Gov. Snyder’s change of heart on
moving quickly to replace Flint’s lead pipes and his recent budget proposal to
partially fund the project, but she is not agreeing to allow the governor's
engineering firm and contractors do the work. Weaver welcomed the governor’s
interest in working with the city to coordinate removal of the first 30 lead service
lines, but noted that much more needs to be done by Gov. Snyder and others to
secure full funding for her plan.
Toward that end, Mayor Weaver said she is working closely with The White
House and Flint’s representatives in the Michigan Legislature and U.S. Congress
to secure full funding for her lead pipe removal project, as well as long-term
funding to fully repair the city’s devastated water distribution system. She called
on state and federal lawmakers to move quickly to approve emergency funding
for her project while long-term repairs to Flint’s water distribution system are
evaluated.
“Lansing and Washington need to understand that the first and most critical
priority is an emergency public health intervention to start getting rid of these
pipes immediately,” Weaver said. “Then we can figure out exactly what it will
cost over the long-term to fix our broken water distribution system. If we have to
replace major components or even the whole system, it will cost an enormous
amount of money. Everyone needs to be prepared for that possibility. Let’s start
a serious conversation about where that money is going to come from while we
get to work removing the pipes.”
If funding to ramp up her Fast Start project is not secured quickly from the state
or federal government, Weaver said she may have to take her case directly to
the national and international audience that is closely following the daily
3
xxxEND_PAGE:treasury01_b39_6977_7316_183
indignities still being suffered by the people of Flint, especially the city’s children,
who have been living on bottled water for months after being forced to drink
\ead-poisoned water for nearly two years.
“tf the state and federal governments won’t pay to restore safe drinking water
and dignity to the people of my city, | may have to go on national TV and
crowdsource the funding on the Internet,” Weaver said. “Rachel Maddow might
just be willing to help me issue a worldwide challenge to the celebrities and
other philanthropic donors who are showing so much love for Flint.
“We're going to get this done — and done quickly -- by any and every means
necessary,” Weaver concluded. “The people of my city have simply run out of
patience and | have a moral obligation to act.”
HHH
Kristin Moore
Public Relations Director
City of Flint
Office: (810) 237-2089
Mobile: ($10) 875-2576
xxxEND_PAGE:treasury01_b39_6977_7316_184
$600 {Rav 04-15)
STATE OF MICHIGAN
RICK SNYDER DEPARTMENT OF TREASURY NICK A. KHOURI
GOVERNOR STATE TREASURER
DATE: February 17, 2016
TO: File
FROM: Nick A. Khouri 4 “
SUBJECT: Flint Emergency Loan Waiver
Pursuant to Section 21 of the Emergency Loan Agreement between the State of Michigan and the
City of Flint, dated April 29, 2015, I hereby waive the requirement of Section 6(c) in which the
city must seek prior approval of the Receivership Transition Advisory Board to terminate the City
Administrator.
war michigan.govireasury
xxxEND_PAGE:treasury01_b39_6977_7316_185
g
STATE OF MICHIGAN
RICK SNYDER DEPARTMENT OF TREASURY NICK A. KHOURI
GOVERNOR LANSING STATE TREASURER
Index of Documents in Respect to
City of Flint Emergency Loan
(General Obligation Limited Tax)
2014-15 Series I
April 29, 2015
Responsibility for: Document:
City Officials 1. Application
City Officials 2. EM Order Authorizing Loan Application
Emergency Loan Board _ 3. Emergency Loan Board Order of Approval
Department of Treasury 4. EM Appointment Documentation
City Officials 5. EM Order Ratifying Terms of Loan
Department of Treasury 6. Certification of Statutory Compliance
Department of Treasury 7. Certification of Final Transcript
Department of Treasury 8. Certified Copy of Emergency Municipal Loan Act
Department of Treasury 9. Emergency Loan Agreement
City Officials 10. Certification of City Charter
City Officials 11. Copy of Note
City Officials 12. Certification of Non-Litigation/Signature Identification
City Officials . 13. Certification of Receipt of Loan
City Officials 14, Certification of Non-Litigation of City Attorney
City Officials 15. Certification of City Clerk Incumbency
Miller Canfield 16. Legal Opinion of Miller Canfield
Office of Attorney General 17. Letter from Office of Attomey General
City Officials 18. Certification of Final Transcript by City
430 WEST ALLEGAN STREET » LANSING, MICHIGAN 48822
ww michigan. qovireasury » (517) 373-3200
xxxEND_PAGE:treasury01_b39_6977_7316_186
xxxEND_PAGE:treasury01_b39_6977_7316_187
MICHIGAN DEPARTMENT OF TREASURY
Bureau of Lara! Government Services
PO Box 30728
Lansing, Michigan 48909
EMERGENCY MUNICIPAL LOAN APPLICATION
Applicant: City of Flint
County/Countles of: Genesee County
Mailing Address: 1101 S. Saginaw St. Flint Mi 48502
Chlef Financial Officer: Garaid Ambrose Phone:
Contact Person: Gerald Ambrose Phone:
Loan Amount Requested: $7,060,000,00
4, Projected Ganeral Fund deficit for the current fiscal year:
2, Date of last Tax Anticipation Note or
810-766-7470 ext. 2062
810-766-7470 ext. 2062
date of last application made to Department of Treasury to Issue a Tax Anticipation Note:
For school districts, date af last State Ald Note:
3. Income Tax Ravenua Growth Rate
A. Calendar year preceding appiication:
§, Calendar year praceding above year:
4, Local and State Tax Basa Growth Rates
C. Tax year of most recant municipal State Equalized Value:
D. Tax year five yaars preceding above year:
E, Tax year of most racant statawide State Equalized Value:
F. Tax year five years praceding above year:
S. Decrease in State Equalized Value
G. Tax year of most recant munteipal SEV:
H. Tax year preceding akove year:
6, Ad valorem operating tax millage
|. Maximum lavy par charter:
J. Maximurn levy authorized as approved by voters:
K. Current levy:
2014
2013
2014
2014
2009
2014
2013
10.0000
9.1000
19,2000
income tax revenue:
Income tex revenue;
A/a
Municipat SEV (real and personal}:
Munietpal SEV (real and parsonal):
Statewide SEV (real and personal):
Statewide SEV (real and personal}:
c/o
e/F
{C/O)/\£/F)
Munieipa! SEV (reat and personal):
Municipal SEV (real and personal):
7. Oses the municipality have one or more delinquent special assessments? Yes or No,
If yes, provide explanation:
8. Doas the municipality have outstanding bonds, notes, or other evidancas of Indebtedness
that wera issued In anticipation of a contract obligation with, or en assessment obligation
agalnst, anather municipality that has one or mora delinquent special assessments
that were levied to satisfy, in whole or In part, the cantract or assessment obligation? Yes or No.
If yes, provide explanation:
9. School district enrofment
U Current fiseal year:
M. Three years preceding above year:
10. Is the municipality in receivership or subject to a consent agreement under the
2035
2012
Local Financts! Stability and Choice Act, Public Act 436 af 2012? Yes or No.
Enrollment:
Enrolimant:
(M-L/Mi
$7,000,000
N/A
$13,038,276
$24,674,274
0.89
$773,073,560
$1,548,866,08S
$360,592,938,004
$423,901,291,288
0.50
0.85
0.59
$773,073,560
$797,212,769
No
NIA
N/A
AVALUEL
Yes
xxxEND_PAGE:treasury01_b39_6977_7316_188
ADDITIONAL REQUIRED INFORMATION
11, Resolution adopted by the governing body of the municipality approving the application.
12. Resolution adopted by the governing bedy of the municipality approving tha Deficit Ellminstton Plan.
13. Deficit Elimination Plan, not less than five years, that allminates the General Fund deficit
and balances future expenditures with anticipated revenues.
14. Budget for current fiscal year and proceding fiscal year(s) If available.
15. Projected monthly cash flows for the procading 12 months.
16. Accounts Payable Aging Repert.
17. Additional commants. Taxable Values are from the tax roll settlement reports and do not reflect the distributions that
occur for the Flint DDA, tha Hrownflald Authority, etc...
Chief Administrative Officer Name: Amb
Chief Administrative Officer Signature: Date: f/\ of, 1S
xxxEND_PAGE:treasury01_b39_6977_7316_189
City of Fiint- Deficit Elimination Plan - April 47, 2015
With the currently approved Defic Ellmination/ Raserve Accumulation Plan, adjusted for revised revenue ostimates, the currant $7 millon
defalt would not bo ollrainated unul FY22, With tho $7 millon loan, tho deficit ls efiminated by tha and of F¥15, and Genaral Fund raservea
accumulate to aa much ag 10% ef projected revenues by FY20, assuming $1 million continues to ba budgeted for reserve accumulation ag
provided far In the currant DEP/RAP and City Ordinance.
{Impact of Emergency Loan on General Fund Doficit:
1 Status Quo -No Loan:
$1 million surplus commilted annually by ordinance for deficit ellmination/resarve accumulationfOPEB reduction
Assumes revenue-expense gay |s not ellminated aach year
Tentative Tentative Projected Projected Projected
FY16 faaks EY4a FY19 Ey
Genoral Fund (101)
Revenues $51,239,208 $80,029,123 $50,638,175 $54,180,184 $51,762,200
Expenses $54,239,208 $50,029,129 $80,698,175 $51,180,184 $51,762,309
Revenues - Expenses Gap $o $0 $0 so $0
Committed for Deficit Reserva $1,006,009 $1,000,009 $1,000,009 $1,000,009 $4,000,009
Projacted Fund Balance June 30, 2015* ($7,000,000)
Projectad Fund Balance FY17 - FY20 (88,000,000) ($5,000,000) ($4,000,000) ($3,000,000
Ending Fund Balance ($6,000,000) ($5,000,000) ($4,000,000) ($3,000,000) ($2,000,000
* Accumulated GF Deficll per exit, June 30, 2014 ($8,051,427)
$1,000,000 revenue surplus budgeted In GF for FY 16 for deficit elimination $1,000,000
$800,000 budgeted in Pubtic Improvement Fund for FY 15 to raduce GF daticit per previous EM order $800,000
AdGhonal projected GF surplus loc FY1S which will reduce deficit
$161,427,
(87,000 000)
$1 millon surpius committed annually by ordinance for deficit eliminattonirasarve accumulationfOPEB reduction
Revenue - expense gap Is eliminated each ysar
Projacted Projacted Projected Projected
pals Frig
Ganeral Fund (101)
Revenues $51,230,208 $50,020,123 $60,839,178 $61,180,184
Expenses $80,698,175 $51,180,184
Ravenues - Expenses Gap
Committed for Deficit Reserve $1,000,009 $1,000,000
Projected Fund Salance Juns 30, 2015* $0
Projected Fund Balances FY17 - FY20 $1,000,000 $2,000,000
Ending Fund Balance $1,000,006 $2,000,000 $3,000,000 $4,000,000
Roserves as % of Ravenuas 2% 4% 8% B%
* Accumulated GF Defci! per audit, June 30, 2014
$1,000,000 raven surplus budgeted in GF for FY16 for dafici! efmination
$800,000 budgeted in Public impcavement Fund tor F¥'15 to reduce GF deficit per pravious EM order
Addilcnal projected GF surplus for #18 which will reduca deficit
Loan
Emergency Manoger, City of Flint
xxxEND_PAGE:treasury01_b39_6977_7316_190
CITY OF FLINT, MICHIGAN
Setting a Sustainable Course for the City of Flint
Five Year Financial Projections 2015-2019
Adopted Budgets for FY15 and FY16
Future Projections for FY17, FY18 and FY19
Darnell Earley, ICMA-CM, MPA
Emergency Manager
Prepared by
Department of Finance
Gerald Ambrose, Finance Director
Antonio Brown, Deputy Finance Director
xxxEND_PAGE:treasury01_b39_6977_7316_191
11.
Contents
City of Flint §-Year Financial Plan
. Preface
. Background
. Overview
. Highlights
. Addendum for City Council and Mayor Recommendations
@eaorn
City Council Adopted Vision and Misston Goals
City Counci] Approved Budget Priorities
Organization Chart
FY15 and FY16 Budgets and 3-Year Forecast
FY15 and FY16 General Fund Budget
City of Flint Staffing Projection
Projected 5-Year Facilities Improvements
Deficit Elimination/Reserve Accumulation Projections
Five Year Outlook — Pension and Retiree Healthcare Costs
Projected Taxpayer Impact
xxxEND_PAGE:treasury01_b39_6977_7316_192
City of Flint 5-Year Financial Plan
Preface
This adopted budget for the City of Flint covers the FY15 and FY16 fiscal years which bagin July 1, 2014
and July 1, 2015 respectively. Financial projections for the following 3 fiscal years are Included as well.
This budget has been developed within the context of the Clty‘s recently adopted Master Plan, the
Vision, Mission, and Goals for the City government as adopted by the City Councll, and the Sudget
Priorities as adopted by the City Council. Accompanying this budget Is a preliminary statement of
objectives Initially proposed to be accomplished during the two years.
Taken together, the budget and strategic plan will serve as a template to move the City government
forward to become a well-managed, financially stable, and accountable organization focused on creating
a vibrant and growing community which will attract and retain residents, businesses, students, and
visitors and improve our quality of life.
However, this budget demonstrates the continuing financial challenges facing the City of Flint. Stagnant
revenue growth In property tax and Income tax revenues, coupled with significant Increases in legacy
costs, retiree health care in particular, create a significant gap between revenues and expenses which
require increases In other revenues and decreases In City staffing and services including the possibility of
adjustments In public safety services.
Unfortunately, the financlat forecast for the next several years beyond FY16 show a continuing gap
between projected revenues and expenses. Within the next few years, without significant means to
Identify and collect additionat revenues, or to further reduce the cost base, the City of Flint will be
extremely challenged to pravide even the most basic of City services.
Over the last several weeks, this adopted budget has been reviewed by the City Council, which will also
held a public hearing to receive citizen Input, The Mayor and Council subsequently provided comments
and recommendations pertaining to the budget to the Emergency Manager.
xxxEND_PAGE:treasury01_b39_6977_7316_193
Background
The City of Flint has been in state receivership since December, 2011, as a result of consistent deficits In
the General Fund, a decline in pooled cash, unrealistic budgeting, and unfunded fiabilittes for
postemployment benefits. Significant progress has been made In addressing these financial issues, as the
$19.1 milllon deficit at the end of FY12 had been reduced to $12.9 miflion at the end of FY13, cash position
had Improved, and the FY14 budget was reailstically balanced, with further reduction of the deficit
anticipated.
The FY14 budget was designed and Implemented with the same goals In mind - operating within the
constraints of avallable revanues; restructuring operations and cost factors to enhance future financial
stabillty, and continulng to reduce the remaining $22.9 million deficit. The F¥14 budget was constructed
with the spacifle Intent of further reducing the deficit by a minimum of $1 million, by budgeting expenses
at 51 million less than projected revenues, As of January 31, 2014, seven months Into the FY14 year,
revenues and expenses are on target.
In order to ragain and maintain financial solvency, it is not only necessary to ellminate the remaining
accumulated deficit but to hava an adequate amount of reserves to protect the City in the event of
unexpected financial fosses. Planning to accomplish this requires a continual dedication of revenues over
the next several years ta eliminate the remaining deficit and establish an adequate reserve level. A draft
deficit elimination plan ta accomplish this Is currently under review by the Michigan Department of
‘Treasury.
Making progress to date has required hard decisions and sacrifices for all. The F¥13 and FY14 budgets
were balanced through a mixture of significant ravanue Increases, significant expenditure decreases, and
steps taken to reduce legacy costs. Revenue increase Included a 25 percent increase In water and sewer
rates, passage of a 6 mill property tax Increase far police and fire, establishment of a special assessment
district for street lighting, and Implementation of a fee sufficient to cover the cost of waste collection.
Expenditure reductions included elimination of 20 percent of the City's workforce, compensation
decreases equivalent to a 20 percent wage reduction for remaining employees, and the restructuring of
health and retirement benefits for current employees and retirees necessary to develop a credibly
balanced spending plan.
The actions taken to-date to restructure healthcare benefits for current employees and retirees have also
had a significant impact on reducing both current casts and long-term liabilities. The 20% reduction In the
workforce required significant reorganizational actlvities focused on reducing current costs. Long term
liabilities were reduced by elfminating traditional defined benefit pension programs for new employees
in favor of hybrid plans; by moving the City’s retirement system into the a state wide retirement system;
by restructuring health Insurance benefits for current employees and placing retirees into those same
plans; and by eliminating the promise of retiree health care for new employees In favor of providing
retlree medical savings accounts. Much of the positive financial result in FY43 came from these actions.
The restructuring, which was Implemented during the course of FY12, reduced the City’s OPEB Iiabilities
alone from nearly $900 million to less than $325 million as noted in the FY13 audit.
The efforts of the City to regain financial solvency have been aided by support from numerous Federal,
State and private partners. State palice troopers have been placed in the City to support local law
enforcement efforts, and funds have bean allocated to enhance prosecution activitles and to operate the
City’s lock up. The Governor's proposed budget continues this support.
xxxEND_PAGE:treasury01_b39_6977_7316_194
The steps taken to begin to restore the City to financial solvency have not been without conflict and
changing circumstances, A significant legal challenge has been mada ta the decision to move retlrees