John Walsh

Here is a statement from the Governor that will go out around 2-2:30 p.m. to the media. We'll also give a heads up to executive staffers and some others. - Meegan When | became aware that the city of Flint’s water showed elevated lead levels and that the state’s handling of the situation was being questioned, | requested funding to switch the source back to the Great Lakes Water Authority and appointed an independent task force to identify possible missteps and areas for improvement. The task force has done an exceptional job, reviewing stacks of documents and interviewing scores of Flint, Genesee County, state and federal officials. Although the task force’s final report is not yet completed, it has made me aware of some interim findings and corrective steps that | have decided to take immediately in order to restore trust in how the state keeps its citizens safe and informed. We'll continue to work with the community members to make sure we hear and respond to their concerns. In addition, MDEQ Director Dan Wyant has offered his resignation, and I’ve determined that it’s appropriate to accept it. I’m also making other personnel changes at MDEQ to address problems cited by the task force. But changes in leadership and staff are not enough. | understand there can be disagreements within the scientific community. That is why | have directed both the departments of Environmental Quality and Health and Human Services to invite every external scientist who has worked on this issue to be our partners in helping us improve Flint water. Let’s share research on water and blood lead level testing so we can arrive at accurate and mutually supported conclusions. Together, we should work to affirm that we’re using the very best testing protocols to ensure Flint residents have safe drinking water and that we’re taking steps to protect their health over the short and long term. | want the Flint community to know how very sorry | am that this has happened. And | want all Michigan citizens to know that we will learn from this experience, because Flint is not the only city that has an aging infrastructure. | know many Flint citizens are angry and want more than an apology. That’s why I’m taking the actions today to ensure a culture of openness and trust. We’ve already allocated $10 million to test the water, distribute water filters, and help in other ways. Last week, | called Flint Mayor Karen Weaver, and we’re going to meet soon to discuss other ways the state can offer assistance. These are only initial steps - we fully expect to take more actions following the recommendations of our task force. When it comes to matters of health and quality of life, we’re committed to doing everything we can to protect the well- being of our citizens. Meegan Holland Director of Communications for Gov. Rick Snyder xxxEND_PAGE:executiveofficeemails20_b0171_0407_0408_1 Office: 517-335-6397 xxxEND_PAGE:executiveofficeemails20_b0171_0407_0408_2

12315.docx; Flint Blood Lead Level Summary Report Dec.pdf Team, DHHS is sending out this update on Flint blood lead testing this afternoon. Preliminary data indicates that 30 of 1,361 adults and children tested in Flint since October 1 had elevated blood lead levels, according to a report issued today by the Michigan Department of Health and Human Services. We’ve worked with the folks there to make the release as reader friendly and people focused as possible, and also to show some historical context. The graph on the PDF is particularly effective, showing that levels were just as high in 2010. Please share any concerns you may have. Dave xxxEND_PAGE:executiveofficeemails20_b0161_0378_0378_1

See attached and pasted below. Please let me know if you have any edits. 2015 I. Intros and Acknowledgments Not Responsive xxxEND_PAGE:executiveofficeemails20_b0157_0369_0370_1 | Not Responsive xxxEND_PAGE:executiveofficeemails20_b0157_0369_0370_2

All, Attached is the final Flint Water OpEd that was submitted to the Flint Journal, DetNews, Freep, Michigan Chronicle this evening. Any questions, please advise. Mz Michelle A. Zdrodowski Executive Director of Communications Detroit Public Schools 3011 W. Grand Boulevard, 14th Floor Detroit, MI 48202 313.873.3238, office 313.421.2831, mobile xxxEND_PAGE:treasury01_b36_6099_6552_142 Changes to Flint Water System Made By Local Leaders, Not Emergency Managers Author: Darnell Earley, ICMA-CM, MPA [t is critically important that the record be set straight about the decision-making and approval processes that led to Flint joining the Karegnondi Water Authority (KWA) with the use of Flint River water as the interim water supply. The fact is, that the river has served and been used as the back-up supply for decades, and this was the rationale given to me by staff and Mayor Walling, who also serves as chairperson of the KWA board. Contrary to reports in the media and rhetoric being espoused by individuals, the decision was made at the local level, by local civic Jeaders. The decision to separate from Detroit Water and Sewerage Department and go with the KWA, which included the decision to pump Flint River water in the interim, were both a part of a long- term plan that was approved by Flint’s Mayor, and confirmed by a City Council vote of 7-1 on March 25, 2013. This plan was presented to me when | was appointed as Flint Emergency Manager in October 2013 - a full seven months after City Council’s affirmative vote. Genesee County Drain Commissioner Jeff Wright also made the affirmative vote by the City Council a necessary condition of joining the KWA, and applauded the decision in a March 26, 2013 news release, saying, “...1 have said from the beginning that this decision must be made by Flint’s City Council and Mayor... am glad that the residents of Flint were able to have their voices heard via their elected officials.” The Mayor’s approval of the plan, and the subsequent near unanimous vote by City Council were in no way coerced, forced or demanded by the State, nor any Emergency Manager. Council’s affirmative vote was supported and officially signed into EM Executive Order by then Emergency Manager Edward Kurtz on March 29, 2013. A subsequent order Kurtz signed on June 26, 2013, speaks specifically to the, “... upgrading of the Flint Water Plant to ready it to treat water from the Flint River to serve as the primary drinking water source for approximately two years and then converting to KWA delivered lake water.” When t began my term as Emergency Manager, it fell to me to oversee the implementation of the previously accepted and approved plans, as the DWSD terminated the contract with Flint in April 2014. It did not fall to me to question, second guess or to invalidate the actions that were taken prior to my appointment. At the time the decision was made there was no way to predict such an unfortunate outcome. | would also offer that had local leaders known then what they know now, parts of their decision may have been entirely different. What the City of Flint and the State of Michigan are now dealing with is the management of an unintended consequence resulting in a negative outcome

Water Fund Expenses.PDF; ATT00003.htm Latest info from Flint on water system. Received today. Sent from my iPhone Begin forwarded message:

Strategy suggests moving forward, One nit on the press release announcing all of the grants — the highlighted of should be if: Municipalities are eligible for the grants at they are experiencing one or more conditions indicative of “probable financial stress,” as defined by Public Act 436 of 2012, the Local Financial Stability and Choice Act.

Dave, if you need anything as you plan next Tuesday’s announcement in Flint, please contact Mike Brownfield. In addition, please note that Claire Allard is quite familiar with the distressed city grants. Thank you. xxxEND_PAGE:executiveofficeemails20_b0641_1972_1972_1

i suggested to Dave Murray that he gata confirmation from John Roberts that the money is indeed avallable to be distributed just for confirmation sake, We've all been around enough of these to make sure our i's are dotted and t's crossed before we go out publicly.

We can work with the Legislative staff and prepare a response. Please note that Flint will be a recipient of S2 milion in awards urvher the Financially Distressed Citkes and Townships prograrm - $900,000 for water and SL1 million for the incinerator, This has not been announced publicly - Treasury will be circulating internally their overall recommendations fate this aftarnacn or tomorrow morning. We can coordinate how this information might be disseminated with Comms to assist with our messaging in Flint (1 added Jarrod te this email chain}.

Importance: High PYT

Please see the attached. For our discussion later this pm. Thanks Rick xxxEND_PAGE:executiveofficeemails20_b0366_1413_1413_1

ATTO0002.htm Dave has been working with DEQ and Treasury on it. This is what | know so far. More to come. Begin forwarded message: i.

This is a public relations crisis — because of a real or perceived problem is irrelevant -- waiting to explode nationally. If Flint had been hit with a natural disaster that affected its water system, the state would be stepping in to provide bottled water and other assistance. What can we do given the current circumstances? Ari xxxEND_PAGE:executiveofficeemails20_b0133_0311_0316_1 LeeAnne Walters 36 of Flint shows water samples from her home from Wednesday January 21, 2015 to Flint's new emergency manager Jerry Ambrose after city an state officials spoke during a forum discussing growing health concerns about the drinking water being raised by Flint residents on Wednesday January 21, 2015 at the Flint City Hall dome. (Photo: Ryan Garza, Detroit Free Press) Buy Photo Fiuliscrean Buy Photo (Photo: Ryan Garza/Detroit Free Press) Story Highlights e Last fall, the city issued three advisories to boil the water after detecting coliform bacteria. e One resident calls it "poop water." e The water woes are the latest blows to a city where residents have felt swatted around for too long. 164 CONNECTLINKEDINEMAILMORE In a city where residents have felt under siege for years — from crime, bad press and an emergency manager some feel forced upon them — the newest threat pours from kitchen spigots and showerheads. It's the reason behind mysterious rashes on local children, parents say. Unexplained illnesses. Even sick pets. Bethany Hazard said it's the reason for the brown rust circles that began appearing just months ago around her drains and the oily film in her bathwater in her longtime east-side home. On the west side of Flint, Corodon Maynard said it's the reason he was bent retching violently over the toilet this month — just hours after chugging two glasses of water at bedtime. "| was throwing up like bleach water. It came up through my nose burning," said the 20-year-old. The water from the city system is so corrosive, according to General Motors officials, that the automaker's Flint Engine Operations pulled off the city water system, connecting instead into a water system operated by nearby Flint Township. So what's in Flint's water and just how dangerous is it? It depends on who you ask and what tests you're referring to. xxxEND_PAGE:executiveofficeemails20_b0133_0311_0316_2 State tests suggest the water is clear of coliform bacteria, which can suggest the presence of other disease-carrying pathogens. But as a result of treating the water to kill any dangerous microorganisms, the water now carries low levels of Tctal TAhaiamethane, or TTHM, a by-product of the disinfectants. Years of exposure may cause iver, Kidney or central Agrvous sysiern Groblens and an increased rigk of cancer, according to the U.S. Environmental Protection Agency. The city maintains the water — pulled from the Flint River rather than the Detroit water system that had served the city for years — is safe. Detrait invites Flint to rejoin water aystem amid re 3 complainis Mayor Dayne Walling who was born and raised in Flint, said he drinks it. The river, long known for the toxins left from Flint's industrial years, is cleaner than it has been in years, "but that perception persists," Walling said. That the possibility of bacteria and the TTHM levels were detected and then diminished, he said, is proof that the system works. But the system is in desperate need of infrastructure improvements and experienced water treatment staff, Walling said. Earlier this week, he asked for help from Gov. Rick Snyder to implement a new plan that called for those things. "There is nothing more important in Flint right now than fixing the water problems,” he wrote. And communication is key, he added. Experts talk In a city hall meeting Wednesday, the city invited experts to talk to residents. They included representatives from the Michigan Department of Environmental Quality, the EPA, and a Michigan State University microbiologist whose life work has been in studying water safety. FREEP Grove auibursis cul Flint water r necting short as heallh concerns grow In an immediate sense, the water is safe to drink, they assured the crowd. Discoloration is most likely iron and calcium being sloughed off old city pipes as new water is being pushed into the system. xxxEND_PAGE:executiveofficeemails20_b0133_0311_0316_3 But while scientists talked in terms of parts-per-billion and testing and chemical reactions and future monitoring, residents held onto jugs of discolored water — water they said tasted funny and smelled terrible. That's where it gets tricky, said Joan Mose, the MSU microbiologist. When it comes to a life-giving liquid we turn to countless times a day for survival, appearance and smell is important as well as keeping it clean of pathogens and toxins, she said. "You're so intimate with water. You drink it. You wash with it. You bathe in it,” she said. "You can't blame anyone for the frustration. Everyone wants safe and wholesome water." This much can be agreed upon: The city's water problems have worn residents raw with anger. Some claim city officials are trying to cover up missteps and even political shenanigans. Some have accused city leadership of outright poisoning them. "I've taken to calling it ‘poop water, Defense League. said Nayyirah Shariff, a community activist for the grassroots group Democracy Many said they are ready to abandon longtime homes. "What we have is a full-blown crisis," said GM retiree Claire McClinton who had bundled up against the snow earlier this week to run into El Potrero Mexican restaurant for a late lunch. But she reconsidered at the last minute and walked out instead, worried about eating at restaurants that rely on city water in their kitchens. She's not the only customer who is concerned. Business overall has been hit "probably 20 to 30%," said manager Jorge Alcazar. The restaurant's lifeblood is in customers seeking a quick, affordable lunch, often with a glass of ice water. Unwilling to drink the tap water, customers also don't want to pay $2 or more for a pop or buy a bottled water. Worse for waitress Ashley Trujillo, customers have argued with staff. One customer left three pennies as a tip after fuming about having to pay for water. Others have left nothing. "Like we have something to do with it," Trujillo said. All of this — the frustration, the slump in El Potrero's business, the :anmi-packed mecings with reskients toting luge of brown weler and clams they are baling polsanecl — are the latest blows to a city that has felt swatted around for too long. "People think all the crime happens in Flint and everyone is poor in Flint, so there's this stigma. Now we're fighting against dirty water. Really?" said radiology coder Cindy Marshall, who joined about two dozen protesters earlier this week. "Are you trying to kill us?" read one sign. "No more poison,” read another. 4 xxxEND_PAGE:executiveofficeemails20_b0133_0311_0316_4 McClinton echoed Marshall's sentiments: "We've lost confidence in the city." Soaring bills For years, residents in this city bleeding jobs and soaked in red ink have been facing growing water bills. Some have climbed as high as several hundred dollars a month. "We have residents choosing between water and groceries and other bills," said Hazard, whose own bill is about $100 a month for a single person. "| feel like I'm going under," said Hazard, who survived cancer twice and who was forced into early retirement and limited income. The city eventually decided to dump the Detroit system in favor of the Karegrorcdi Water Auinority, which is building a system to supply Genesee County with water pulled from Lake Huron. In the long run, this will mean lower water costs, officials have said. Under the plan, Flint is temporarily pulling water from the Flint River until the water authority's system comes online, expected in 2016. In August and September, however, the city issued three advisories to boil the water after detecting coliform bacteria. Just before Christmas, residents received notices that state tests indicated higher-than-acceptable levels of trihalomethane, the disinfectant by-product. Hazard's cats have been sick. So has she and several neighbors. Even her houseplant began to die. Maynard threw up. Residents complained of rashes and mysterious illnesses. "We just want safe water. How hard is that?" Hazard asked. But assurances come with qualifiers. The chlorine did its job and cleaned the water of microbial pathogens that can cause disease within days. That means the water is safe for healthy people to drink for a short time, said Michael Prysby, a district engineer in the state's Office of Drinking Water and Municipal Assistance. But the trade-off was TTMH — possibly a danger for the very young, the very old, or the very sick if they ingest it long-term, he added. "But we're talking decades," he said, adding that those who are worried should talk to their doctors. "We don't want to make a blanket statement to say water is safe or unsafe. It's misleading both ways." That's the kind of answer that infuriates Marshall, the protester and mother of a 5-year-old. "They said it's safe, but it's brown water,” said Marshall, also a radiology coder, after the meeting. "Why do we have to drink brown water? No one else has to drink brown water.” xxxEND_PAGE:executiveofficeemails20_b0133_0311_0316_5 Contact Robin Erb: 313-222-2708 or rarisgpireesir ese.cvi. Follow her on Twitter &"reenheath 164 CONNECTLINKEDINEMAILMORE xxxEND_PAGE:executiveofficeemails20_b0133_0311_0316_6

While | am sure there is much history of which | am not aware, my relatively uninformed response is to question why the State has to intervene in their negotiations with DWSD. | certainly understand our responsibilities arising from the appointment of an EM and allowing them to “chase their tail”, but when do they own the consequences of their decisions? | would like to participate in the internal meeting prior the meeting on the 28". Thanks.

Now what?

Rep. Walsh, As follow-up to the meeting with Treasury in your office, the below has been prepared by John O'Brien of KWA and John Lininger of Neuma, | am told. Treasury (Wayne) had requested data from KWA. if this is not in an acceptable format (if, for example, you need an accompanying letter from KWA), please let Matt and | know and one of us will pursue that. Thank you. Manny Begin forwarded message: xxxEND_PAGE:treasury01_b16_2099_2148_45 2) 3) 4) 1) TIME SENSITIVE ASSUMPTIONS USING BAN AND LIFE SETTLEMENTS FINANCING March 1, 2014 200 million dollar BAN loan @ 1% for 13 months ( construction capital ) = 2,167,000 dollars annual interest Apri) 1, 2014 180 Million Dollar Life Settlement loan@ 5% for 20 year term. PREPAID INTEREST AND UNDERWRITER’S FEES, INTEREST ONLY FOR 3 YEARS, INCLUDED IN LOAN). Loan paid in full in 20 years or less April 1, 2015 100 million dollar additional BAN financing plus 200 million dollar rollover of initial BAN. Total 300 million dollars @ 2% for 13 months = 6.5 million dollars interest. Total interest cost for both BAN financing totals 8,667,000. May 1, 2016 Combined loan for capital improvements and Life Settlements, including pre-paid interest, total 605,000,000 million dollars; see financial model “A” ASSUMPTIONS USING BOND FINANCING ONLY March 1, 2014 600 million dollar bond financing loan @ 5% for 25 years = 27,349,383 million dollars per year principle and interest; see amortization schedule “B”. Total repayment = 601,686,428 million dollars COMPARATIVE FINANCING MODELS TO KWA BETWEEN: “A” combined annual capital and life settlement loan costs for 20 years “B” conventional bond transaction for 25 years xxxEND_PAGE:treasury01_b16_2099_2148_46 ST+ palo (y vb 62 F SX SweLURNe Ie UUM COCOCOSORS [) co0'000'22 coo‘ooo’ss — cno'o0e'ee Q00'CC0'B}+ | GOO'ccO'ss: OOO'O0O'Sss! 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AAUS jm $7 + 19001 IDE - SMO} YseD ajdureg y 1q/UxXS xxxEND_PAGE:treasury01_b16_2099_2148_47 Exhibit B: 25 yr Amortization Schedule Loan Amount Interest Rate Annual Payment Year Beg. Balance 360,000,000 360,000,000 360,000,000 360,000,000 350,650,617 340,833,765 330,526,070 319,702,990 308,338,757 10 296,406,311 11 283,877,244 12 270,721,723 13 256,908,426 14 242,404,464 15 227,175,304 16 211,184,687 17 194,394,538 18 176,764,882 19 158,253,743 20 138,817,047 21 118,408,516 22 96,979,559 23 = 74,479,154 24 50,853,728 25 26,047,032 Cana abana Totals 360,000,000 5.00% 25,542,885 interest (18,000,000) (18,000,000) (18,000,000) (18,000,000) (17,532,531) (17,041,688) (16,526,303) (15,985,150) (15,416,938) (14,820,316) (14,193,862) (13,536,086) (12,845,421) (12,120,223) (11,358,765) (10,559,234) (9,719,727) (8,838,244) (7,912,687) (6,940,852) (5,920,426) (4,848,978) (3,723,958) (2,542,686) (1,302,352) (295,686,428) Principal 0 0 0 (9,349,383) (9,816,852) (10,307,695) (10,823,080) (11,364,234) (11,932,445) (12,529,068) (13,155,521) (13,813,297) (14,503,962) (15,229,160) (15,990,618) (16,790,149) (17,629,656) (18,511,139) (19,436,696) (20,408,531) (21,428,957) (22,500,405) (23,625,425) (24,806,697) (26,047,032) (360,000,000) Total Paid 0 io} 0 (27,349,383) (27,349,383) (27,349,383) (27,349,383) (27,349,383) (27,349,383) (27,349,383) (27,349,383) (27,349,383) (27,349,383) (27,349,383) (27,349,383) (27,349,383) (27,349,383) (27,349,383) (27,349,383) (27,349,383) (27,349,383) (27,349,383) (27,349,383) (27,349,383) (27,349,383) (601,686,428) Ending Balance 360,000,000 360,000,000 360,000,000 350,650,617 340,833,765 330,526,070 319,702,990 308,338,757 296,406,311 283,877,244 270,721,723 256,908,426 242,404,464 227,175,304 211,184,687 194,394,538 176,764,882 158,253,743 138,817,047 118,408,516 96,979,559 74,479,154 50,853,728 26,047,032 0 xxxEND_PAGE:treasury01_b16_2099_2148_48 SUMMARY AND CONCLUSIONS In the assumptions listed herein, the Blair proposal clearly provides KWA with substantial cost savings, less years of debt, and liquidity in the first three years. During the initial three years, KWA cannot pay P&I for conventional financing while continuing their annual payment obligation( 25 million dollars plus) to the City of Detroit. Conventional bond sales cannot provide the same cash flow without dramatically raising the existing user fees charged by KWA. Blair has proposed a multi-staged arrangement using BAN financing in conjunction with Life Settlements. The cost of BAN financing, over 26 months, is 8,667,000 dollars. The chart below illustrates the difference and advantages to these financing options: SUMMARY OF FINANCING COMPARISON TO KWA CONVENTIONAL BOND SALES 1. Annual cost to KWA = $27,349,383 per year over 22 years 2. Total repayments by KWA = $601,686,428 3. Balance in account after loan repayment = $0 BLAIR PROPOSAL Annual cost to KWA = $20,000,000 per year for 17 years Total repayments by KWA = $321,698,272 (includes cash balance and remaining policies after loan is repaid) 3. Balance in account after loan repayment = $26,968,395 KWA out-of-pocket cash required = $8,667,000 (years 1-3) xxxEND_PAGE:treasury01_b16_2099_2148_49 COMPARISION OF CASH REQUIREMENTS FOR KWA CUSTOMERS YEARS a | $25,000,000] | __—$2,166,667 |BAN Financing interest | $27,250,000| $6,500,000 |BAN Financing Interest | $29,702,500] | 827,349,383] $20,000,000 | | 827,349,383] $20,000,000 | | $27,349,383] $20,000,000 | J $27,349,383 | $20,000,000 | $27,349,383 $20,000,000 $27,349,383 $20,000,000 $27,349,383 $20,000,000 $27,349,383 $20,000,000 BlelelelelReie AM sSlwin|[Rplo ~ winnie B ~ 19 | 20) | __ $27,349,383 | $27,349,383[ | 23 | __$27,349,383| | 24 | _$27,349,383[ |___$27,349,383[ | es ee $348, 666,667 GENERAL ASSUMPTIONS: 5% interest rate for bond sales and Blair 25 year term for bond sale 20 year term for Blair Years 1-3 Low payments for bond sales and Blair Full assumptions (see attached to email) xxxEND_PAGE:treasury01_b16_2099_2148_50