F Flint Water Crisis Public Archive

Steve Marquardt

Section Chief, Water Division at EPA Water Division / EPA

22

Emails

Feb 2015–Jan 2016

Archive range

22 emails found.

Jan 24 call notes

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My notes from a call yesterday where your names came up. Let me know if questions. thanks Steve Marquardt USEPA Region 5 77 West Jackson Blvd Chicago, Illinois 60604 (312)353-3214 xxxEND_PAGE:treasury01_b41_7622_7971_142 January 24, 2015 Call Notes Call arranged by Emily Barson — HHS Included representatives from Michigan Governor’s office, MDEQ, USEPA headquarters and Region 5 On the call the Governor's office requested information regarding press related to $80M in infrastructure funds going to Michigan. USEPA responded that this was the annual appropriation of Clean Water State Revolving Funds {CWSRF) and Drinking Water State Revolving Funds (DWSRF) and these funds are awarded to the state as a grant and then state provide these funds to communities primarily in the form of low interest loans. It would be up to the state to determine the amount of funds provided to Flint. There was then discussion of the state revolving fund and options under the fund to provide resources to Flint. The State asked about the eligibility of lead service line replacement and USEPA responded that they were eligible. The state also asked about eligibility of items inside the home and USEPA indicated that this would be investigated. Options discussed for further investigation: - Old Debt - The Michigan Finance Authority holds approximately $20M in DWSRF Flint Debt. The state should examine any savings that could be provided to Flint on this old debt including lowering the interest rate which is at 2.5% and possible extending the term of the debt from 20 year to 30 year. The extended term may make the semi-annual payments more affordable but costs more in the long run. Also, the State could pay off a portion of the debt. The Michigan Finance Authority may also have other ideas of actions that could be taken. - New Funding - FY15 USEPA Funding — In September 2015, the MI DWSRF program identified $35M in projects they plan to fund in 2016 and provide $5.5M in principal forgiveness for those projects. The FY15 USEPA funding allowed stated to provide 20%-30% of the grant to the state as principal forgiveness to communities. This would be approximately $5.5M-S8M. The state should investigate the ability to award Flint a DWSRF loan that provides principal forgiveness up to the maximum allowed. - F¥16 USEPA Funding — FY16 CWSRF and DWSRF allocations to states have not yet been released. It is anticipated that MI would receive a similar allocation to FY15 — in FY15 USEPA awarded approximately S60M in CWSRF and $27M in DWSRF. If Flint applies for funding, the state could provide a loan to Flint and provide principal forgiveness up to the amount allowed under the FY16 appropriation language which is 20% of the DWSRF grant. The issue is that these funds would not be available for some time if the normal state SRF process is followed. The state normally applies for the funds in summer and provides funds to communities in the fall. All options for new funding are dependent on Flint providing detailed information on needs, prioritizing the needs, and applying for funds. Action items: - USEPA look into eligibility options for SRF related to internal home plumbing replacement — Peter Grevatt (USEPA) - USEPA, Michigan Finance Authority and MDEQ to investigate SRF funding options listed above and any other possible options. — John Barton (Michigan Finance Authority), Sonya Butler (MDEQ), Steve Marquardt (USEPA R5) o Look for most effective, economic and efficient way to approach needs - USEPA Finance Center offered assistance — Jim Gebhardt (USEPA) - Investigate the ability to transfer funds from the CWSRF to the DWSRF and the pros and cons of approach - MDEQ requested the formation of a Municipal Finance Team - The USEPA Region 5 representative is Steve Marquardt and the request was made by EPA to have Sonya Butler from MDEQ and John Barton from the Michigan Finance Authority. xxxEND_PAGE:treasury01_b41_7622_7971_143 Workman, Wayne (TREASURY)

cap plans

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Here is a presentation it looks like given to Flint City Council — 9/14/15 it mentions: City Actions: oDeveloped a Written and Prioritized Infrastructure Plan 5 Year Capital Improvement Plan Section 6 —Pages 47 -68 also, DEQ funding options Steve Marquardt USEPA Region 5 77 West Jackson Blvd Chicago, Illinois 60604 (312)353-3214 xxxEND_PAGE:deq15_b781_2775_2775_1

DW SRF eligibility

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Page 19-20 seems to indicated that there are cases where private laterals are allowed to be funded under MI SRF. Is that the case? We are getting asked if the service lines — public and private portions are eligible for SRF funding. | know we discussed MI having a state rule not allowing privates but these seems to open the door in some cases. thanks xxxEND_PAGE:deq21_b570_1673_1674_1 nites /wow srichio: ufdocurments dass dec DWallgouide 248792 7 odf Service Lines, Water Meters, and Water Main Diameters The installation of service lines located within a public right of way (commonly referred to as “stubs” or “customer service connections’) are eligible for DWRF assistance. The installation of service lines from the “stub” to the privately-owned home or building will not be eligible for DWRE assistance unless that portion of the service line is also owned by the water supplier or it’s a lead service line that needs to be replaced as discussed below. The installation of water meters for a new waterworks system or an existing unmetered system is eligible for DWRF assistance, provided the meters are owned by the water supplier. The replacement or upgrading of existing water meters is also allowable if adequate need has been demonstrated in the project plan. An example would be upgrading meters to have remote read capabilities. While ancillary costs such as providing the meter reading equipment is eligible, billing software to process the information obtained from the meters is not eligible. Effective January 30, 2006, the replacement of lead water service laterals, both the public and the privately-owned portions, are eligible for DWRF assistance if necessary to comply with the March 2005 Lead and Copper Rule. The four main functions of the Rule are: A, Require water suppliers to optimize their treatment systems to control corrosion in customer's plumbing. B. Determine tap water levels of lead and copper for customers who have lead service lines or lead-based solder in their phimbing systems. C. Rule out the source water as a source of significant lead levels. D. ifaction levels are exceeded (1.c., 15 ppb), require the suppliers to educate their customers about icad and suggest actions they can take to reduce their exposure to lead through public notices and public education programs. If a water system, after installing and optimizing corrosion control treatment, continues to fail to meet the lead action level, it must begin replacing the lead service lines under its ownership. The need for lead service line replacement due to an action level exceedance must be discussed in the project plan. The installation and replacement of undersized water mains is eligible for DWRF assistance provided the project plan documents need. The ten-state standards require water main which provides fire protection to be 6-inches in diameter and larger sizes to meet minimum residual pressures and flow requirements during fire flow. Where local code requirements mandate a minimum size of 8-inches in diameter and it is documented in the project plan as part of the selected alternative, replacements with 8-inch diameter water main are allowable. However, please note that a local ordinance requirement alone is not a sufficient demonstration of need for water main replacement. There must be documentation of existing problems, such as low pressures/flows, frequent breaks, or capacity issues, resulting in the need for new water main. Construction activities, such as interior plumbing work, performed within the confines of individual private structures are not eligible for DWRF assistance. Steve Marquardt USEPA Region 5 77 West Jackson Blvd Chicago, Illinois 60604 (312)353-3214 xxxEND_PAGE:deq21_b570_1673_1674_2

RE: Flint Water Request

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xxxEND_PAGE:deq21_b244_0800_0801_1 Total ask was for $30M There are 2 funding issues raised: 1) $20 M in outstanding loans under DWSRF. We had previously indicated that they could not be forgiven under federal rules. He asked if a loan for $20M could be given and forgiven or was looking for state funding. No. The FY15 appropriations dictate, “The recipient agrees to provide additional subsidization in the form of principal forgiveness, negative interest rate loans, or grants to recipients of eligible Drinking Water State Revolving loans in accordance with the Consolidated and Further Continuing Appropriations Act, 2015 (P.L. 113-235), and shall be so used by the recipient only where such funds are provided as initial financing or to buy, refinance, or restructure debt obligations only where such debt was incurred on or after the date of enactment of P.L. 113-235.” The $20M in debt occurred prior to this date. Also, the MI FY 15 total DWSRF allocation is $27,349,000. States are able to use 20%-30% of the allocation for principal forgiveness so MI be looking at $5.5M-$8.2M in total for the whole state. MI has completed their state FY16 Intended Use Plan which includes who would get loans and principal forgiveness. Flint did not apply. 2) $10M request for “replacing service lines” to address lead. Flint could apply to MI and may be eligible for principal forgiveness depending on Congressional appropriations levels and requirements as well as State decisions on how to allocate. Seems that Flint would need to look at other state funds to address the $20M and should talk to the SRF program about the future $10M which would be a loan vs a grant. Please let me know if questions. thanks Steve Marquardt USEPA Region 5 77 West Jackson Blvd Chicago, iHinois 6G604 (312)553-3214

flint article

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FLINT, Mi — Mayor Dayne Wailing is asking Gov. Rick Snyder for $30 million to upgrade Flint's water system, including $10 million to remove lead service pipes and plumbing susceptible to leaching lead. Walling, speaking to the City Council on Monday, Sept. 14, announced the request, made in a letter to the governor the same day. "We need every available expert and resource to address Flint's water problems," Walling’s letter says. "Flint’s safety is my top priority. Just as the city and state have worked together on public safety, we need additional support for fixing the water problems. We need $30 million in new funds to repair and update the city-wide infrastructure and to assist households in becoming lead-free." Walling's letter comes the day before a professor from Virginia Tech University is scheduled to speak ata town hall meeting in Flint about the results of a study of lead in the city's drinking water. The meeting is from 6-8 p.m. Tuesday, Sept. 15, in Saints of God Church, 2200 Forest Hill Ave, Researchers from Virginia Tech last week advised Flint residents not to drink or cook with tap water here without flushing lines hefore each use or using a filter to remove lead. Virginia Tech students and faculty have posted the results of 252 water tests from Flint online, conchiding the city has "a very serious lead-in-water problem.” Testing so far has shown 10 percent of the water samples from across the city have 25 parts per billion of lead or more — far more than the allowable level, 15 ppb, set in federal guidelines. 1 xxxEND_PAGE:deq24_b707_1889_1890_1 City and state officials have said they have not seen such high lead levels in their own tests of more than 190 homes in the city since April 2014. Walling spoke about his letter to Snyder as part of a water presentation that included City Administrator Natasha Henderson and Department of Public Works Director Howard Croft. Croft said the city has made important upgrades to its water treatment and transmission systems in the short time since it began using the Flint River as its water souree in April 2014. The DPW director said the city has a draft copy of a pian for making Flint water less corrosive and less likely to result in high amounts of lead in the water supply. Walling has been successful in securing state money for Fint's water system previously. In February, Snyder awarded Flint $2 million to find leaks in city water lines and to replace a wastewater incinerator —- moves officials said would free up money for improving the quality of city water. Walling's request and remarks did not impress Flint Councilman Eric Mays, who left the council table and did not vote to endorse the mayor's letter to the governor. The council voted 8-0, with Mays absent, to endorse the letter. Mays called Walling's comments and letter "nothing more than a media show ... a horse and pony show.” Steve Marquardt USEPA Region 5 77 West Jackson Blvd Chicago, Illinois 60604 (312)353-3214 xxxEND_PAGE:deq24_b707_1889_1890_2

FW: Flint Water Request

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Good roorning... Wanted to see if you saw this letter. Nt was aloo sent to our office. You all up te anything with Flint funding? | did not see anything on the FYI6 PPLs.... fassume that they can come in and may qualify for add sub in future projects, thanks Stave Marquardt USEPA Region § 77 West Jackson Blyd Chicago, finals 60604 {312}353-3244 xxxEND_PAGE:deq21_b240_0790_0790_1

FW: FYI - new Flint forgiveness article from an hour ago.

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Steve Marquardt USEPS Region 5 77 West Jackson Blyd Chicago, Hinois 60604 (312}353-3214 Rep. Kildee asks EPA about clearing Flint's $22-million water loans on April 08, 2015 at 2:01 PM xxxEND_PAGE:deq21_b183_0630_0633_1 Dan Kildee FLINT, MI -- U.S. Rep. Dan Kildee says the state may have the authority to forgive Flint's $22 million in remaining water loans, potentially freeing up that money for "immediate water infrastructure improvements." “We don't know if the state would grant relief, (but) we don't want to be in a position where they think they don't have the authority," Kildee said today, April 8. The congressman asked U.S. Environmental Protection Agency Administrator Gina McCarthy for clarification on whether the debt can be forgiven, citing two provisions in federal law that could allow Gov. Rick Snyder to take action because of Flint's status as a disadvantaged community. Kildee said he made the request in a March 26 letter to the EPA. MLive-The Flint Journal could not immediately reach an agency representative for comment. Dave Murray, a spokesman for Snyder, said in an email that Snyder "doesn't believe it is appropriate to answer hypothetical questions.” Murray said last month that the state Treasury Department "doesn't have the legal authority to forgive loans, and this has been shared with Flint city leaders." His email today said the loans are a mix of federal and state dollars and said treasury officials do "not believe there is any pathway in federal law that would allow for loan forgiveness." "Gov. Snyder and the state continue to offer assistance to city leaders in their efforts to address long-standing water infrastructure issues in Flint," the statement says. Kildee said he believes it's more than likely that Snyder has the authority to act, based in part on a legal opinion from the Congressional Research Service. Kildee's request comes less than a month after Flint Mayor Dayne Walling renewed his request to Snyder to forgive the water loans because of the city's continuing financial emergency. xxxEND_PAGE:deq21_b183_0630_0633_2 Snyder declared Flint was in a financial emergency in 2011 after a review team issued a report, and since then the city has been run by a succession of four state-appointed emergency managers. Emergency manager Jerry Ambrose authorized the restructuring of Flint's four outstanding Drinking Water Revolving Fund bonds on March 19, postponing current principal payments and freeing up $2.2 million to help fix water safety and quality in the city. Murray said the state allowed that action so that the loan repayments can be used for expenses tied to "maintaining safety and improving the quality of Flint water." The city's water bonds are currently financed at a rate of 2.5 percent, and delaying the principal payment will increase the cost of the borrowing by approximately 2 percent -- or $228,000 -- over the 20-year life of the issues, the city has said. The city has been struggling with the quality of its drinking water since it started using the Flint River as a water source in April 2014. Flint was found to be in violation of the federal Safe Drinking Water Act because the annual average level of total trihalomethanes (TTHM) at two testing locations in the city since April 2014 was too high. TTHM is a byproduct of chlorinating water and warnings issued by the city say the contaminant in high levels could increase the risk of cancer if consumed over many years. The most recent tests have shown that each of eight sampling locations in the city had acceptable levels of TTHM, but residents and City Council members have continued to complain about water quality issues like discoloration and odor. City officials have said the water meets safety standards for drinking, and that those quality issues are tied to Flint's aging water infrastructure, which includes distribution pipes that are breaking at a rate of nearly one per day and which are too large for the current population. Kildee said Flint is among older cities in Michigan that are struggling with population loss and maintaining infrastructure that was built decades ago when more people lived here to support it. "It makes it harder for the city to dig itself out of a hole (now)," Kildee said. "I think it does create a unique circumstance for cities like Flint ... trying to go from the old to the new economy." xxxEND_PAGE:deq21_b183_0630_0633_3 Many of the water problems here have come to light since the city began using the Flint River as its water source one year ago. Although the city and Genesee County are currently building a new water pipeline to Lake Huron, it's not expected to be completed until some point in 2016. © 2015 MLive.com. All rights reserved. xxxEND_PAGE:deq21_b183_0630_0633_4

FW: FYI - new Flint forgiveness article from an hour ago.

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Steve Marquardt USEPA Reston § 77 West Jackson Bive Chicage, Hlineis 60604 {312}353-3214 Rep. Kildee asks EPA about clearing Flint's $22-million water loans Ron Fonger | sfengeri Gintive,com By Ron Fonger | rfenuert@nilive, cen: The Flint Journal on April 08, 2015 at 2:01 PM Dan Kildee FLINT, MI -- U.S. Rep. Dan Kildee says the state may have the authority to forgive Flint's $22 million in remaining water loans, potentially freeing up that money for "immediate water infrastructure improvements." xxxEND_PAGE:deq21_b239_0787_0789_1 "We don't know if the state would grant relief, (but) we don't want to be in a position where they think they don't have the authority," Kildee said today, April 8. The congressman asked U.S. Environmental Protection Agency Administrator Gina McCarthy for clarification on whether the debt can be forgiven, citing two provisions in federal law that could allow Gov. Rick Snyder to take action because of Flint's status as a disadvantaged community. Kildee said he made the request in a March 26 letter to the EPA. MLive-The Flint Journal could not immediately reach an agency representative for comment. Dave Murray, a spokesman for Snyder, said in an email that Snyder "doesn't believe it is appropriate to answer hypothetical questions." Murray said last month that the state Treasury Department "doesn't have the legal authority to forgive loans, and this has been shared with Flint city leaders." His email today said the loans are a mix of federal and state dollars and said treasury officials do "not believe there is any pathway in federal law that would allow for loan forgiveness." "Gov. Snyder and the state continue to offer assistance to city leaders in their efforts to address long-standing water infrastructure issues in Flint," the statement says. Kildee said he believes it's more than likely that Snyder has the authority to act, based in part on a legal opinion from the Congressional Research Service. Kildee's request comes less than a month after Flint Mayor Dayne Walling renewed his request to Snyder to forgive the water loans because of the city's continuing financial emergency. Snyder declared Flint was in a financial emergency in 2011 after a review team issued a report, and since then the city has been run by a succession of four state-appointed emergency managers. Emergency manager Jerry Ambrose authorized the restructuring of Flint's four outstanding Drinking Water Revolving Fund bonds on March 19, postponing current principal payments and freeing up $2.2 million to help fix water safety and quality in the city. xxxEND_PAGE:deq21_b239_0787_0789_2 Murray said the state allowed that action so that the loan repayments can be used for expenses tied to "maintaining safety and improving the quality of Flint water." The city's water bonds are currently financed at a rate of 2.5 percent, and delaying the principal payment will increase the cost of the borrowing by approximately 2 percent -- or $228,000 -- over the 20-year life of the issues, the city has said. The city has been struggling with the quality of its drinking water since it started using the Flint River as a water source in April 2014. Flint was found to be in violation of the federal Safe Drinking Water Act because the annual average level of total trihalomethanes (TTHM) at two testing locations in the city since April 2014 was too high. TTHM is a byproduct of chlorinating water and warnings issued by the city say the contaminant in high levels could increase the risk of cancer if consumed over many years. The most recent tests have shown that each of eight sampling locations in the city had acceptable levels of TTHM, but residents and City Council members have continued to complain about water quality issues like discoloration and odor. City officials have said the water meets safety standards for drinking, and that those quality issues are tied to Flint's aging water infrastructure, which includes distribution pipes that are breaking at a rate of nearly one per day and which are too large for the current population. Kildee said Flint is among older cities in Michigan that are struggling with population loss and maintaining infrastructure that was built decades ago when more people lived here to support it. "It makes it harder for the city to dig itself out of a hole (now)," Kildee said. "I think it does create a unique circumstance for cities like Flint ... trying to go from the old to the new economy." Many of the water problems here have come to light since the city began using the Flint River as its water source one year ago. Although the city and Genesee County are currently building a new water pipeline to Lake Huron, it's not expected to be completed until some point in 2016. © 2015 MLive.com. All rights reserved. xxxEND_PAGE:deq21_b239_0787_0789_3

RE: Principal forgiveness

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The difference is that DW could do PF before ARRA....| have a call tomorrow with OW and will circle back Statute ~ Section 130. Sectlon 1452 (d): “*(d) ASSISTANCE FOR DISADVANTAGED COMMUNITIES.— “*(1) Loan supsipy.—Notwithstanding any other provision of this section, in any case in which the State makes a loan pursuant to subsection (a)(2) to a disadvantaged community or to a community that the State expects to become a disadvantaged community as the result of a proposed project, the State may provide additional subsidization (including forgiveness of principal). “*(2) TOTAL AMOUNT OF SUBSIDIES.—For each fiscal year, the total amount of loan subsidies made by a State pursuant to paragraph (1) may not exceed 30 percent of the amount of the capitalization grant received by the State for the year. “*(3) DEFINITION OF DISADVANTAGED COMMUNITY.—In this subsection, the term ‘disadvantaged community’ means the service area of a public water system that meets affordability criteria established after public review and comment by the State in which the public water system is located. The Administrator may publish information to assist States in establishing affordability criteria. Regs - § 35.3525 Authorized types of assistance from the Fund. (b) Assistance to disadvantaged communities, (1) A State may provide loan subsidies (e.g., loans which include principal forgiveness, negative interest rate loans) to benefit communities meeting the State’s definition of ‘‘disadvantaged”’ or which the State expects to become ‘‘disadvantaged’” as a result of the project. Loan subsidies in the form of reduced interest rate loans that are at or above zero percent do not fall under the 30 percent allowance described in paragraph (b\(2) of this section. (2) A State may take an amount equal to no more than 30 percent of the amount of a particular fiscal year’s capitalization grant to provide loan subsidies to disadvantaged xxxEND_PAGE:deq21_b238_0784_0786_1 communities. If a State does not take the entire 30 percent allowance associated with a particular fiscal year’s capitalization grant, it cannot reserve the authority to take the remaining balance of the allowance from future capitalization grants. In addition, a State must: (i) Indicate in the Intended Use Plan (UP) the amount of the allowance it is taking for loan subsidies; (ii) Commit capitalization grant and. required State match dollars taken for loan subsidies in accordance with the binding commitment requirements in § 35.3550(e), and (iii) Commit any other dollars (e.g., principal and interest repayments, investment earnings) taken for loan subsidies to projects over the same time period during which binding commitments are made for the capitalization grant from which the allowance was taken. (3) A State may extend the term for a loan to a disadvantaged community, provided that a recipient completes loan repayment no later than 30 years after project completion and the term of the loan does not exceed the expected design life of the project. Steve Marquardt USEPA Region 5 77 West Jackson Blvd Chicago, Hlinois 60604 {212}353-3244

flint article

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FLINT (WJRT) - (02/24/15) - Flint Mayor Dayne Walling wants to make sure the city's water troubles are being heard on Capitol Hill. Mayor Walling sent a letter to the President's office urging the federal government to focus their attention on the City of Flint. Last month, Mayor Walling reached out to Gov. Snyder, and not long after his request action was taken in the form of grant money given to the city. Because of that response, he's hopeful federal officials will act fast. "| believe we need to have all the expertise at the table possible," Walling said. Walling said he is doing anything and everything to get more eyes on the Flint water situation. "We have not had the federal presence and the EPA. That's why | reached out to the Presidents Director of Intergovernmental Affairs and asked for that support," Walling said. In a letter addressed to the White House, Walling wrote, "| am requesting participation from the White House and Environmental Protection Agency on a City of Flint Technical Advisory Committee." "I'm optimistic that we will have strong federal support on this," Walling said. The committee is a group formed by the City of Flint to address water worries of residents. It's made up of Flint area medical professionals, Mid-Michigan universities and even General Motors. Walling said the missing link is the federal government. "The technical advisory committee will bring expertise to the table to review our plans on distribution improvements and treatment improvements and how all of this is affecting public health. As the City of Flint works toward getting back to local control out from under the emergency manager, Walling is stepping out to nurture resources for the future. "This is one of the things | have to do as an elected official is | have to speak out for our community and | have 1 xxxEND_PAGE:deq21_b161_0530_0531_1 to ask for the help and assistance that we need. | am going to do that whether we have an Emergency Manager or not or whether the governor is a Democrat or a Republican. This is something that our community needs and we expect a response," Walling said. No official date has been set for the Technical Advisory Water Committee's first meeting, but the Mayor says it will be some time in March. xxxEND_PAGE:deq21_b161_0530_0531_2