Kevyn Orr

Good afternoon- Attached please find correspondence from Mr. Schenk. Thank you. Wendy J. Mullins OTTENWESS, TAWEEL & SCHENK, PLC The Buhl Building 535 Griswold Street, Suite 850 Detroit, MI 48226 (313) 965-2121, ext. 219 (313) 965-7680- Fax This electronic message and all contents contain information from the law firm of Ottenwess, Taweel & Schenk, PLC which may be privileged, confidential or otherwise protected from disclosure. The information is intended to be for the addressee only. If you are not the addressee, any disclosure, copy, distribution or use of the contents of this message is prohibited. If you have received this electronic message in error, please notify us immediately and destroy the original message and all copies. xxxEND_PAGE:treasury01_b20_2634_2931_119 OTTENWESS, TAWEEL & SCHENK, PLC ATTORNEYS ATLAW The Buhl Building David M. Ottenwess 535 Griswold, Suite 850 A. Tony Taweel Detroit, MI 48226 Matthew A. Schenk Matthew A. Schenk - (313) 965-2121 Stephanic P, Ottenwess Direct Dial (313) 965-2121 ext, 214 (313) 965-7680 John R. Monnich E-Mail: [email protected] www.ottenwesslaw.com Joseph A. Campbell May 2, 2014 Mr. Darnell Earley, ICMA-MC, MPA Emergency Manager City of Flint 1101 S. Saginaw Street Flint, MI 48502 RE: Your letter of April 29, 2014 to Mr. Kevyn Orr Mr. Earley, lam In receipt of your letter of April 29, 2014 addressed to Detroit’s Emergency Manager, Mr. Kevyn Orr, In that letter, you Indicated that Flint stopped using DWSD water as of that date and that “City officials have closed multiple valves within our infrastructure so that our system Is now completely isolated from DWSD infrastructure.” | am writing this letter to confirm the information discussed In a conference call with Deputy City Attorney, Mr. Anthony Chubb, and representatives of the Genesee County Drain Commissioner's Office on May 1, 2014. During that call, as we reviewed flow data from the DWSD FL-01 meter, It was acknowledged that Flint continued to use DWSD water through April 30, 2014. As a result, DWSD will bill the City of Flint for water usage through the end of April as opposed to the earller date indicated within your letter. Since that time, DWSD has worked with the Genesee County Drain Commissioner's Office to confirm the closure of valves associated with Flint’s usage of DWSD water. Should you have any questions regarding this matter, please do not hesitate to contact me. Very Truly Yours, Ottenwess, Taweel & Schenk, P| Matthew Schenk

Kevyn--perhaps I am not knowledgeable enough on the specific facts here, but | find this to be a strange letter because he only attacks the calculations without offering his own assessment, proposing an alternative or threatening to pull out. Maybe that is a good sign rather than a bad one. You, I, Ken and Heather should discuss on Monday, or when we see you. I am anxious to hear what Sue thinks. ***This e-mail (including any attachments) may contain information that is private, confidential, or protected by attorney-client or other privilege. If you received this e-mail in error, please delete it from your system without copying it and notify sender by reply e-mail, so that our records can be corrected,***

Sent on : 04/26 04:29:00 PM EDT Subject : Fwd: DWSD Offer Evaluation FYI. Sent from my iPhone Begin forwarded message:

Good afternoon Mr. Orr: Please find attached a communication from Ed Kurtz. Thank you. Maxine Murray Executive Assistant to Mayor Dayne Walling Edward J. Kurtz, Emergency Manager Michael K. Brown, City Administrator 1101 S. Saginaw Street Flint, MI 48502 810.237.2035 Telephone 810.766.7218 Fax (See attached file: Kevyn Orr - April 26, 2013 pdf)(See attached file: ATT00001 htm) xxxEND_PAGE:treasury01_b04_0379_0503_110 Crry or Detroit 735 RANDOLPH STREET WATER AND SEWERAGE DEPARTMENT Detrorr, Micuiaan 48226 Orrice oF Te Director WIWW,DETROIIMI.GOY RECEIVED APR 2-9 2013 April 24, 2013 Mr. Andy Dillon, Treasurer Michigan Department of Treasury Lansing, Michigan 48922 OFFICE OF THE STATE TREASURER’ Dear Mr. Dillon: Regarding: Rate Proposal for Flint / Genesee County As you are aware, during our meeting on Friday, April 20, 2013, the Detroit Water and Sewerage Department (DWSD) was requested to provide a rate proposal to Flint and Genesee County by today based upon the specifications that Flint provided to DWSD on Monday, April 22, 2013. Early this morning, DWSD responded to that request with several documents that were also provided to your office by electronic communication. In addition to the proposal document, the State of Michigan requested that DWSD include cost figures concerning DWSD’s stranded costs associated with capital investment made by DWSD over the years related to serving both Flint and Genesee County as water customers. This issue of “stranded costs” has received significant media attention over the past several months, and my impression is that the State was looking for a clear figure so that there could be subsequent discussion and negotiation over all costs associated with Flint’s decision on whether to join Karegondi Water Authority (CWA). - As you may know, State law requires that public utilities such as DWSD must base their rates upon the actual cost of service to particular customers. Additionally, state law limits the length of utility contracts to thirty years, while the useful life of capital assets in the water utility can greatly exceed that thirty year term. Unfortunately, the computation of stranded costs for DWSD’s capital investments in capacity and transmission attributable to Flint’s and Genesee’s consumption of DWSD water, is a complex calculation that cannot be performed with any level of certainty over the short time period provided by the State of Michigan for this analysis. Further, I have been advised by DWSD’s General Counsel that it would not be prudent to engage in a process of trying to guestimate a price range for such a complex computation. Iitecstues a Ae ot xxxEND_PAGE:treasury01_b04_0379_0503_111 Mr. Andy Dillon, State Treasurer April 24, 2013 Page 2 Based upon DWSD’s termination of Flint’s existing water contract last week, DWSD has roughly twelve months to determine the appropriate cost structure for Flint and Genesee’s water consumption over the remaining term of their non-contracted water service from DWSD. DWSD will, however, endeavor to finalize the rate impact of the stranded costs by the end of the current calendar year. Please rest assure that DWSD’s computation will be in accordance with State Law which dictates that such rates will not result in a rate structure that would generate a profit for DWSD, Our intent is simply to compute the rates so that costs properly attributable to Flint and Genesee County will not be borne by the remaining DWSD water customers, Sincerely, Sue McCormick Director xe; The Honorable Rick Snyder, Governor State of Michigan Ed Kurtz, Emergency Financial Manager, City of Flint Kevyn Orr, Emergency Financial Manager, City of Detroit James Fausone, Chairman, Board of Water Commissioners William Wolfson, DWSD General Counsel Nicolette Bateson, DWSD Chief Financial Officer xxxEND_PAGE:treasury01_b04_0379_0503_112

Follow Up Flag: Follow up Flag Status: Flagged Ken, | thought this would be helpful for Jones Day. Didn't know who to send it to on their end. Can you forward? Thanks. Andy Sent from my iPad Begin forwarded message: