Laura Cossa

Hi Liane, This is a follow up on your discussion with Jennifer Crooks - she asked me to confirm that the DWSRF loan funds used for lead service line replacement are eligible for loan (principal) forgiveness. That is correct. The last Capitalization Grant Award has the relevant Terms and Conditions copied below. The method of distributing principal forgiveness (e.g. based on green, disadvantaged status, etc) for communities applying for an SRF loan is up to the state and it must be explained in that year’s IUP. Please let me know if you have other questions. Thank you. Laura 3. Additional Subsidization a. 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. b. Priority for additional subsidies should be given to communities that could not otherwise afford such projects or that are defined by the State as disadvantaged. To further ensure sustainability of eligible projects receiving additional subsidies, these subsidies should be directed to: 1) repair, replacement, and upgrade of infrastructure in existing communities; 2) investigations, studies, or plans that improve the technical, financial and managerial capacity of the assistance recipient to operate, maintain, and replace financed infrastructure; and/or 3) preliminary planning, alternatives assessment and eligible capital projects that reflect the full life cycle costs of infrastructure assets, conservation of natural resources, and alternative approaches to integrate natural or “green” systems into the built environment. The recipient agrees to provide in its Annual Report an explanation as to how they did or did not address this provision. xxxEND_PAGE:deq21_b245_0802_0802_1

Date: Wednesday, October 07, 2015 5:11:40 PM Hi Liane, This is a follow up on your discussion with Jennifer Crooks - she asked me to confirm that the DWSREF loan funds used for lead service line replacement are eligible for loan (principal) forgiveness. That is correct. The last Capitalization Grant Award has the relevant Terms and Conditions copied below. The method of distributing principal forgiveness (e.g. based on green, disadvantaged status, etc) for communities applying for an SRF loan is up to the state and it must be explained in that year’s IUP. Please let me know if you have other questions. Thank you. Laura 3. Additional Subsidization a. 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. b. Priority for additional subsidies should be given to communities that could not otherwise afford such projects or that are defined by the State as disadvantaged. To further ensure sustainability of eligible projects receiving additional subsidies, these subsidies should be directed to: 1) repair, replacement, and upgrade of infrastructure in existing communities; 2) investigations, studies, or plans that improve the technical, financial and managerial capacity of the assistance recipient to operate, maintain, and replace financed infrastructure; and/or 3) preliminary planning, alternatives assessment and eligible capital projects that reflect the full life cycle costs of infrastructure assets, conservation of natural resources, and alternative approaches to integrate natural or “green” systems into the built environment. The recipient agrees to provide in its Annual Report an explanation as to how they did or did not address this provision. xxxEND_PAGE:deq04_b071_1935_1935_1

Hi Liane, This is a follow up on your discussion with Jennifer Crooks - she asked me to confirm that the DWSRF loan funds used for lead service line replacement are eligible for loan (principal) forgiveness. That is correct. The last Capitalization Grant Award has the relevant Terms and Conditions copied below. The method of distributing principal forgiveness (e.g. based on green, disadvantaged status, etc) for communities applying for an SRF loan is up to the state and it must be explained in that year’s IUP. Please let me know if you have other questions. Thank you. Laura 3. Additional Subsidization a. 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. Fe EE OE TA ET OE EE RE TE OL EEE ean TE UOT EER OE EE SEE OEE b. Priority tot addibonel subsidies should fie communities (hal could nol otherwice afford (uch SE ee ee ea Re Ra: . we es . projects or that ere defined by jthe State as dicadvanta ietf, To further ensure sustainability of eligible projects receiving additional subsidies, these subsidies should be directed to: 1) repair, replacement, and upgrade of infrastructure in existing communities; 2) investigations, studies, or plans that improve the technical, financial and managerial capacity of the assistance recipient to operate, maintain, and replace financed infrastructure; 1 = = ee = 2 EOES Pee as Ses xxxEND_PAGE:deq21_b246_0803_0804_1 and/or 3) preliminary planning, alternatives assessment and eligible capital projects that reflect the full life cycle costs of infrastructure assets, conservation of natural resources, and alternative approaches to integrate natural or “green” systems into the built environment. The recipient agrees to provide in its Annual Report an explanation as to how they did or did not address this provision. xxxEND_PAGE:deq21_b246_0803_0804_2

Hi Sonya, Because it is an eligibility question, there is probably no specific regulation to address it, but HQ issued a memo (attached). Although is not dated, it was still draft in 2012, so is probably 2012/2013. We may be able to find a more precise date from HQ. Just FYI, there is a reference on page 2 to a 2003 memo — the link to the 2003 memo is: 04 10 dwsrf memos memo dwsrf_policy 2003-07-25.pdf. | hope this helps. Please let me know if you have any questions. Thanks. Laura

Laura xxxEND_PAGE:treasury01_b41_7622_7971_311 Could you tell me where to find the federal law that allows for work to be done on private property (see original note down below)? John Barton from Treasury wants this information and I know you can find it faster than I.

Laura, We revised the FY 20712 Wellhead Protection Set Aside Work Plan to include information on how grant recipients are selected and how the furcis are distributed. The revised Work Flan is atlached. Cartie Monosraith Chief, Drinking Water and Environmental Health Section Michigan Department of Environmental Quality Resource Management Division 244 Lansing, ME48909-7741 Phone: S17-241-2853 Fax: 517-241-1328 www michigan gov/de:

Leura, We revised the FY 2013 Wellhead Protection Set Aside Work Plan to include information on how grarit recipients are selected and how the funds are distributed. The ravised Work Pian is attached Carrie Monosmith Chief, Drinking Water and Environmental Health Section xxxEND_PAGE:deq26_b014_0306_0308_1 Michigan Gepartment of Environmental Quality Resource Managernent Division PO Box 30241 Lansing, M1 48909-7742 Phorun: 817-244-2853 Fan: 527-241-1528 www michigan. gov/deg

Laura, I've attached the FY13 draft DW TUP (it includes details of how we will spend the 2012 cap grant}. The answers to your questions from the current year TUP ore noted below, Carrie, please ackiress Laura's question about the wellhead protection werk plan, Thanks

Hi Sonya, | remember us having a discussion about the 2012 IUPs, but | don't think these topics came up - | am reviewing the IUP as part of the cap grant application, and | have the following questions: e only Flint project qualified for disadvantaged community assistance ($13,870,000), but max amount allowed by the 2012 cap grant is 8,178,900. Are you planning to use PF for the difference, or other grants? This project decided last month not to move forward. If it had, our intent was to provide the PF amounts from the 2010 & 2011 cap grants to the project. xxxEND_PAGE:deq26_b033_0465_0466_1 e According to the 2012 guidance, Additional Subsidy should be between $5,452,600 and $8,178,900. How much will it be? (is not clear from the IUP because there are several years mixed together). Also, what is the status of the 2010 and 2011 add sub? As of yesterday Cf just completed data entry in PBR. & CBR for FFATA), 2010 PF allocated is $9,002,758. 2611 PF allocated is $0. Finally, one requirement for the IUP that is related to local assistance set asides (Wellhead Protection), states that IUP must include, at minimum, the process by which recipients will be selected and how funds will be distriouted among them (40 CFR 35.555(c)(6)(ii)). | don't see this in the IUP, but can you please, send me that info, or can include it in the Wellhead Protection Workplan? Carrie will need to address this. With this, | think | am done with DW 2012. | will move it through signature chain for approval next week. | also plan to send the 2007 and 2008 transfers for approval next week. | did not get the approval yet from the Grants Office to start the CW 2012, but that is much easier, | need only 2 days to send it in the signature chain - next week, as well. Thank you. Laura xxxEND_PAGE:deq26_b033_0465_0466_2