Bart Foster

"Nicolette Bateson" <ba heights net>> Siva Ath Sent: Friday, February 13, 2015 1:53:06 PM

xxxEND_PAGE:treasury01_b27_4112_4389_215 >> >> >> >> >> Actually, my quick take is about 8%. >> >> >> >> >> >> Some background: >> >> When Flint left, the annual revenue profile for the Water System was initially reduced by $12.5 million, However, we immediately recalculated the rate for Genesee County (recognizing their higher demands), to effectively “claw back” about $2 million of the reduction, so the net Flint impact is ~ $10.5 million, or just under 2.5% of the >> (reduced) Water System rate revenue. Assuming that same amount could be replaced, and all else being equal, the “system rate increase” could be reduced by about 3 percent, with a bit more of the reduction occurring in the suburban wholesale rate structure. Safe to say that (again, absent any other changes) the average suburban water rate increase would be closer to 8 percent compared to the current 11.1%. >> >> >> >> >> >> Hope this helps... >> >> >> >> -- Bart Foster >> President >> THE FOSTER GROUP >> (913) 345-1410 >> (913) 345-1640 fax >> (913) >> < > >> >> >> Please note that the information in this message along with any attachments are intended for the exclusive use of the addressee and may contain confidential or privileged information. If you are not the intended recipient, please do not forward, copy or print the message or its attachments: notify me at the above address and delete this message and any attachments. >> Thank you. >> >> >> >> >> >> On Feb 12, 2015, at 7:02 PM, Bart Foster < >

> > > > > Actually, my quick take is about 8%. > > > > > > Some background: xxxEND_PAGE:executiveofficeemails19_b217_525_528_2 > > When Flint left, the annual revenue profile for the Water System was > initially reduced by $12.5 million, However, we immediately > recalculated the rate for Genesee County (recognizing their higher > demands), to effectively “claw back” about $2 million of the > reduction, so the net Flint impact is ~ $10.5 million, or just under > 2.5% of the > (reduced) Water System rate revenue. Assuming that same amount could > be replaced, and all else being equal, the “system rate increase” > could be reduced by about 3 percent, with a bit more of the reduction > occurring in the suburban wholesale rate structure. Safe to say that > (again, absent any other changes) the average suburban water rate > increase would be closer to 8 percent compared to the current 11.1%. te Hope this helps... VVVV VV Vv > >-- Bart Foster > President >THE FOSTER GROUP > (913) 345-1410 > (913) 345-1640 fax tell > Please note that the information in this message along with any > attachments are intended for the exclusive use of the addressee and > may contain confidential or privileged information. If you are not > the intended recipient, please do not forward, copy or print the > message or its attachments: notify me at the above address and delete > this message and any attachments. > Thank you. > > a ~ > On Feb 12, 2015, at 7:02 PM, Bart Foster < rn > wrote: > VvVvVVV Vv xxxEND_PAGE:executiveofficeemails19_b217_525_528_3 > > Bob - in transit but will review and reply this evening. > > Sent from my iPhone > > > > On Feb 12, 2015, at 3:44 PM, Daddow, Robert < daddowr@oakgov.com >

Actually, my quick take is about 8%. Some background: When Flint left, the annual revenue profile for the Water System was initially reduced by $12.5 million, However, we immediately recalculated the rate for Genesee County (recognizing their higher demands), to effectively “claw back” about $2 million of the reduction, so the net Flint impact is ~ $10.5 million, or just under 2.5% of the (reduced) Water System rate revenue. Assuming that same amount could be replaced, and all else being equal, the 1 xxxEND_PAGE:treasury01_b27_4112_4389_161 “system rate increase” could be reduced by about 3 percent, with a bit more of the reduction occurring in the suburban wholesale rate structure. Safe to say that (again, absent any other changes) the average suburban water rate increase would be closer to 8 percent compared to the current 11.1%. Hope this helps. . . Bart Foster President THE FOSTER GROUP (913) 345-1410 (913) 345-1640 fax (913) Piease note that the information in this message along with any attachments are intended for the exclusive use of the addressee and may contain confidential or privileged information. If you are not the intended recipient, please do not forward, copy or print the message or its attachments: notify me at the above address and delete this message and any attachments. Thank you. On Feb 12, 2015, at 7:02 PM, Bart Foster

Bob - in transit but will review and reply this evening. Sent from my iPhone

Bob - in transit but will review and reply this evening. Sent from my iPhone On Feb 12, 2015, at 3:44 PM, Daddow, Robert < daddowr@oakgov.com >

Supply Assessment

Dave - please see attachment, which summarizes the information you are seeking. You should be aware of several items: * The allocated costs of service and rates computed in the attachment follow an “all else being equal" application of the current (FY 2012-13) DWSD unit costs. This is consistent with the figures we've been discussing with Flint representatives in one on one meetings, Whenever these service requirements actually get applied in a proposed rate, the lower SYSTEM units associated with lower FLINT units (blending, max day, Genesee, etc.) will raise the unit costs for ALL customers, creating a moderate impact for ALL customers, We've acknowledged this to Flint representatives in our discussions. Frankly, with all of the other moving parts (associated with other customer contract renegotiations, changing revenue requirements from the new organization structure, etc.) - we are of the opinion that this approach is the most appropriate option. e As such, in our discussions with Flint we've taken care to identify these figures as hypothetical results indicative of rate calculations, as opposed to firm offers. e Scenarios 3 and 4 (average day service only) have not been part of our discussions with Flint to date. e As Sue mentioned, our most recent discussions with Flint have introduced a potential rate “credit” for them providing their own redundancy and/or for DWSD reserving wheeling rights in the event that Flint elects to move their delivery point to Imlay. These elements are not part of the existing DWSD rate structure and are less easily quantified. e We've not included any "rate" impact of the sale of the 72-inch main to Flint, nor have we been definitive with how that would work in our discussions with Flint. We contemplate that the transaction could be negotiated in a manner that takes the items mentioned in the prior bullet into consideration. We are scheduled to have further conversations with Flint on these concepts tomorrow. T trust that this information is responsive to your requests. Let me know if you have any questions. Bart Foster President THE FOSTER GROUP (913) 345-1410 (913) 345-1640 fax (913) ell bfoster@fostergrouptic com xxxEND_PAGE:treasury01_b03_0010_0378_280 Please note that the information in this message along with any attachments are intended for the exclusive use of the addressee and may contain confidential or privileged information. If you are not the intended recipient, please do not forward, copy or print the message or its attachments: notify me at the above address and delete this message and any attachments. Thank you.