Thomas Saxton

Nick — attached are the info/presentations we talked about earlier. As we discussed too we have meeting @ 10 tomorrow morning. | would suggest maybe before John starts drafting that we go thru the attached first. Let me/us know if you are ok with that.

We've been asked to put together a couple of pages for the Governor on financing options for pipe replacement in Flint Let’s assume a $100m project 1 found the 1/19 document titled “water infrastructure improvements...” It’s a good start What I need is a memo that lays out the options for the Gov (1) SRO—basically just incorporate John’s SRO Federal government proposal (2) G.O options—CMI, GLWQ (quality of life bonds doesn’t seem big enough to mention) (3) Revenue bonds—bottle deposit, etc Are there other options we should discuss? Non-state dollars? For each, a short write up on pros and cons John—can you take the lead drafting something tomorrow? | know its short notice, but hopefully most of the work has been done already Thanks xxxEND_PAGE:treasury01_b39_6977_7316_143 suondg uoyeJsuey onusAdy pure usessoI1g sJUSWIDAOICUIT JINIONIJSLIFUT JOISAY xxxEND_PAGE:treasury01_b39_6977_7316_144 eet g Se Toh a Sei Sheree aBayiaud jueyo 0} joelqns “IVLLNACIANOD esodind SIU} JO} PSPUSLULUODSJ JOU a’e JNg paJojdxe useq sAey Spuog enuensd Alejo] pue uoHeziNoes OD9e QO} ‘sisAjeue siuj Jo uedsy < soBueyo jjlg ej}j0g J0/pue ebesn puny wsodeg ayjog «< suoijdo ssauaal6so} Vdq Jo/pue (,,4YMAAC,,) pun4 Bulajoasy s912A/A Buryuug (.V4W,) SAoujny soueul4 ueBIYsIyy OY} yo UONEZINN < (,LOMID,) Wesboid Ayjen® sayeqy Seye7}eAH - «SPuog ayI7 Jo Ayjend, se UMOUY OS|e “(,.dd3,,) WesHOlJg UONDS}Ol_ JEJUSWUOJAUZ GIND,,) Weibord aavenu| uebiYyoIWj ues} SPU0gG OD S}EIS < SJUDLUSAOIAUU! SINJONAJSEYU! JO}EM JOJ SPSsooud Jo S9OINOS jeUs}Od se paljjUSp! USeq eAeY SUOHdO HuiIMoO}jO} au} ‘ayep OL suondg uonrisuer snuaAayy xxxEND_PAGE:treasury01_b39_6977_7316_145 aBaraud jueyo 0} 1981q suoneoo|e Bujulewies ou} Ajjeoyloads AjyUSp! pue ezijijn 0} pepseu sjuswpusuly < SuOneIapISu0D ysi|dwoooe 0} ysalsee AjayI7 < S}jeuog 961 Hed ‘¥66) JO LSP Vd uo}je|Ss}ba"] buljqeuy UOLIIl GBS - L107 Ul SoueNssi se] < UOIIIW G/9$ paezuOYne AjjeuiBuo ay} yo Bururewead SI uOI|IW Ogg AjayewIxouddy < Aedes « SWESIS PUB SIDA 'SOYe] Ul S}JUBLUIPES Pe}euile}UOS dn uRE|O pue sei}iunuoOddo jBUOI}esJods SOUBYUS ‘s}UOUPa}eM APUNWWOS SzIjeYAe! pue WIejoa1 ‘UOHeUIWe}UO0D pea; ajege ‘uojnijod jusAod ‘Ayjenb sajyem SAcIduI pue Josjoud ‘says payeulLUe}UCO dojeaspas pue dn ueeo pjnom yeu} slwesGboid uoNoejoid Seonose jesnyeu PUB |BJUDLUUOJIAUS SOUBUI, ‘O} BGG) Ul SIQ]OA AQ pezUOUTNe sem WeIGOld [IND SUL esodind IW) ~- sP¥0G OD 7315 suondg voneiousy snuaAsy xxxEND_PAGE:treasury01_b39_6977_7316_146 e uaiaah abeyiaud Jualyo 0} joelgns “IWILNAGIANOD suonjeoolje Bululewes 9Z1|}Nn 0} pue senss! UONeUILUE}UOD |e} USWIUOJIAUS Jeujo pue sweajqoid Ajjenb sa}em ssolppe 0} Sesn ezoyjNe Oo} pepeeu s}USLUPUSLUY SOAITENIUI JOeEG Meu Aq JeSyo aq P[nod ‘seBua|jeyo jeBa] Jo Ayyiqissod UBS oe6enbue| jojeq ul pauojuew Ajjeoyloads jou sjoeloid yueweyeqe pee] ,UONEUILUe]UCD JeJUSWUOJIAUA, PUB ,SOUS,, "9"! ‘sjosfoud ,Oy!|-LIP, UO pasnooj aJOWW aq o} sigaddy Suolelapisuog seBualjeyo (e6a| junow 0} saried pejselejul 19ujo Jo} ajepipueo Buoys e eq jou Aew ‘uojezuoujne Bulurewal Jo junowe |jelus pue esodind jeulBuo jo yids o} eng « s}ijeueg (uoejuswWe|du) G6} 9g (UOHeZLOUNe pue jesodoid) ¢6} SHE ‘EEL JO LSP Vd uoHe|sibe’] bulqeug uo} GZ$ - 9007 Ul BoueNss!I se] < udl}IW O99$ pezuoUINeE AjjeuIBO ay} Jo Bulureuias S$] Uo gg Aje}ewixoiddy < Ayoedea , s0eds uado aalesold puke says |eJsnpul essnoai pue ‘swajqosd Ayyenb sayem s0Y30 pue abemas Jee4} ‘SUe|qo/d a}SeM pllos sSalippe ‘pun UOHOS}o/d seye"] yeolD JeuOCIBe e 0} ojNqljUCO ‘UONCUIWEUOD JeJUBWIUOIIAUD JOYJO PUe DIXO} JO Sajis dn uesjo pjnom yeu) swuesBoJd UOHOSjOJd je}USLULOIIAUS SOUL, ‘0} 9QGL Ul SUd}OA Ag pazuoUjNeE sem WeIBOIg dda eUL asoding «Spuog yr] Jo Auyen,, ddA — spuog OD 91¥1g suondg uonvsauay onuasdy Aa AAA xxxEND_PAGE:treasury01_b39_6977_7316_147 a Saar en abajiaud uUalyo 0} yoalqns “WLLNICI4 Oo suojeooye Bulurewas azijjn pue sywity Buimouog jenuue sowed ‘uolezuoyIne puedxe 0} papeseu aula? SOAHENIU! JOIeEq Mau Aq JesYO oq Pinos ‘soBuayjeyo jeBa] Jo Ayyiqissog S]USLU}ILULUOD SSO] UO peseq sainyipusdxe Bupjew unBeq aAey s}USstUUWJaA0B jeoo| pue payiwiwoo useq Apeauje aAey spun, JIOAAS ydesBesed uojezuoujne ul 40 eBenBux| jojjeq ul pauonuew Ajjeoyioeds jou sjoefoid juewayeqe pee] syoafoid eounos yuioduou pure sjoafoid Jayem WO}s 's}O9[oJd syJOm JUSWUJEe1} EHBEMES UO pasndoj aJoWW oq 0} sueeddy slojeseplsuos spsacoid puog OF) JO saunos sabe; Ayenusjog <« syyeueg L61 PUB pg ‘ES SHEd ‘VEE JO LSP Vd uoe]s[be7] buljqeuy (.AIDAAS,,) puny seaeUl AWEND sa}eAA O1He}e139 OU} JapUN pepusdxe jou avey spun yBnouye pancidde usaq Apesuje eAey yeu} joolosd J0y S}USUIWSAOGH jed0] 0} payiWiWWOS USSg sey UOT pZEzS << pepunjos aq pjnod pue jane] VIN 84} Je play SI ‘s}juewainbad souenss! AJojnyeys jeulBuo Aysijes 0} panss| ‘,puog Busty, uoNIU OES <« pun Buiajorey [ouju0D uoNN||Og JeyeAA SU} JopuN Bulurewed s| UNI OOZES << ‘papuedxe Aijnj you s! vor 7'ZZS$ ‘pazuoune AjpeuIBUo UO'iG |g 4} Jo NO Aysede5 .8y0foid uognijod 4a3eM pue sjoafod Jeyem Wwo}s ‘syoefoid som juawjee.| eBemes Busgueuy Aq aJBJS ay} Jo Ssajem Jo Ayjenb ay} anosdull, ‘0} ZOOZ Ul $1a}0A Aq pezuoujne sem Wesbold OMID OU Ssodind OMT) - SP40g OD 71015 suondg vonesousry snusaay A AA AA xxxEND_PAGE:treasury01_b39_6977_7316_148 abajiaud jualyo 0} joalgns ‘TWLLNAGIANOOD efuel siqepunj jo %NE Jo HUI] < Joqe] pue Bulosnos jevsyew 0} payejes soulepin6 jesepey yym Ajdwoo 0} pseu pno~y < 9102 ‘L Jeqo}9Q se Alles se og ued }nq siseq Aepenb e uo popieme oie sueo) pue 91,02 Ae suIBeg ssoooid uoeodde 7 | A+ eu} ajejoIp sjusluauinbas jesopsy ‘jos Apeouje Bulpunj og, Aj < sjusussesse jeloeds Jo Soy}e) JOMSS PUe Jo}EM YUBNOJU} SIBUMOSLUOY 0} $}SOO ou} Buoje ssed oyM sjusWUUIeACB Jeo) Aq predsy ose sueo] Ajjewuou ‘Jesyo ue se pesn jou Bueys snusael J} < SUONeIOpISuOD suoyjeayipou Bueys snueass yYBnoiuyy JUSWIUJEAOB Jo sy1un Je90] 0} SdiAUeS JGap Josyo Jo juB/ddns o} giqe oq Aew ayejg < peysiiqeyse jjam Apeaye weiBolg < syyeusg ssooojd Buroos uojeaijdde puswe 0} peiepisuco eq Aew sjuswupusy uoe[sib9e"7 buljqeug QL Ad Ul PePILULUOS Beg Sey UOlIIlu Ee gES < uolpw Sg Ajeyewxoidde ezis wesboid jenuuy <« AyoedeD ‘Ayenb sayem aAoidul 0} JOpJO Ul Sualjddns Jayem Pue SOl}IUNWWLUOD 0} SURO] 8}EJ JSSJAJUI-MO| SYeW 0} pauBiseq dsodind cHUMG, puny Fuysjoasy Jag FuPpULAC, [eEuopypexy suondg uonessusy snuasay xxxEND_PAGE:treasury01_b39_6977_7316_149 . aBayjaud juelo 0} joalqns “WILN3QIANOO peoejdal jou spun} 4A J] Ayoedeo jenuue ui uononpel %GI-OL < (AMO, PUNY Ja}eAA UBS[D JO) spuny JUaWeOR|del pseN < SUO]}eIspISUOD Bulpuog s8ujo Jo spuog Z jesodoijd YM wesGold jjpyoeg 0} pesu ON < syjeueg pepeau jou uojelsibe aye}s — weiBold jelope uo}e/sibe7 buljqeuy spesood yuoydn Buronpoud ‘uaaiGsoy aq pinos sueoy Ul UOII[IW OQs 0} dn AyjeqUajog < SSOUSAIBIO} JO} B/qIBI[a oq PjnOD OL.OZ souls spew sUeO] Jo AOE O1dN < Kyoedes ‘soluNWUWOd pebeyueapesip 10} sseuei6Joj ueo] jo soBeyusoied ujepies Jo} pomojje sey (,Vdq,) Aousby uojosjolg jejusWUOIIAUZ eu] asoding SSIUIALGIONT TUM suondg uonessusr onusAsy xxxEND_PAGE:treasury01_b39_6977_7316_150 eBaynud juayo 0} 9700/9 “IVINGCIINOO SON}!pusdxe USNS JO} pepseu SeNUSAGI JUeWECE|deY < Se@SOdnd |BJUSWIUOIIAUS 0} @SJEApe aq 0} Jesdde pjnoo sjei ysodap ay} Buuemo] << payoa|pal eq UBD USED UOWLUOD U! pjey Spun, JI ees 0} pepeeu uoeUIUUSIEg < SUdeISpisuoy sesodind je}UsWUOIAUS JO} peyeseueB sjesse seziny < syjeueg peonposju! pue payesp aq 0} pesu pjnom jiiq ejjog ay} o}seBueyD < uojjels|be7] buljqeug €b As ul uo ggg pue 7) Ay U! UON|IW 9G$ Wodj UMODP ‘| Ax JO SB YSBD UOWWOD U! LOU ZG$ SEY puny yWsodeq sjjog ey < eb Ad Ul UOIIIILW G'BLg pue vb Ad Ul VON 2°LZ$ “S} Ad U! UOIIIILU g°gLg asem pun Ysodeq efjog ayy ul senueAsy < KypedeS Aysedosd pawrejoun jo sjunowe jenuue OSESJOU! 0} JOPJO UI S}JUSO QO] O} a}eJ SOdap Oy} JOMO] O} [[/G B[}}Og Sy} Jo UOTeOYIPOLU Jo (aon! pue ea} ‘B'a ‘seBeeneq J8ujo 0}) uolsuedxe ue YIM peulguiod aq Pinon <« pun yWsodeq ajog ul sjesse useojosesy < asodind sadueyy Jig awjog so0/pue ages puny isodag 210g suondg¢ uonesauay snuassy xxxEND_PAGE:treasury01_b39_6977_7316_151 sre aeaes zs _ aBajlAud Jue! OF joelans “TYLLNIGI BuloBuo pure jenjul — s}soo aed Uyeoy le sjuswaouReyUS UOHeonpy Fe S]UsW8OB| del UIELU JOJEAA oe sopeidn Ayjioej jueujees, =e ‘ajdwexs o4 ~pepuny 8q 0} pesu jeu} sjuSWeoR|doeJ odid Joy UB} JOYJO SeJN}I|PUSdxa JEU}JO aJay} suyy ésyjaloid auy e}noexe 0} ABM jsa}sej puke BAIIOSYO }SO9 JSOLU 9U} SUILLIA}Ep 0} pepuNj 9q 0} peou Apnjs play jeuoHeonps ue seoq S89} SAIEISIUIUPY se a}e/ yNejeg 9}e1 pue uoeinp :suue} JuoWAedaYy te Jeak sad pajyebue} sueo] jo Joquinn sueo] |eNpiAlpul jo junowy . éeyideo pees papssu jo juNowWe ay} Ysiiqe}se 0} pasn eq pinoys suojdwnsse yeym ‘weiGoid ueo] BulAjoAel & J} gSUueO] JO sjueJH JOj pasn aq 0} spun auy éSJOUMOSWOY OU} 0} Buoje pessed eq sjugwssasse jeioeds uen Se é|]OM SB MOLIOG 0} peyse oq PUN 9U} P[NOM ‘JUSLULISAOB jo jiuN oylOeds BJO} Jj EJUSLULJOAOB Jo PUN [edo] B 0} DYIoeds JO ‘LUBIBOJd Spimeyje}S B Og 0} SIL} S] < suOTIsONg) WerIsolg xxxEND_PAGE:treasury01_b39_6977_7316_152 abayfaud jualjo 0} yoefqns “WILNIGIANOD ysodap jeniul UOIsIW COOLS B Woy sIeeA CQ] JaAO (SUBO]) S}JUBLUBOR/d98J OGE‘8] syoddns pue sexog enjq au} ul payeoo} Suoljduwinsse ay} Sesn ejdwexe siys Ose'as mn Ospen Gia coats m2 oooh ons"s wos Ost SeweEsTIdsy JO MOL DUTY EOE GF ber ees cor cero B2b bok Zh Of5 586 GL te 25 St 426 068 8. 499 C98 gl Se ReZ EL 000 Os: SHMMITNEY PO ONE A TOO Osh [74 Oe 000 t 0057 005 & COST O05 2 Lr4 006 2 ‘SqUSWaIE OTE P BOUN DaENDy Cay Gb cay 006 = . * 2 awysnpy syeWOJeNbeY LO equ mse os 2 mse 05 2 O67 DOs Z mse oosz wee 0052 SsU Tey 10 OTL 650 GZ 0 S20 oe 0 ‘E20 SZ 0 SZ 0 WS O “St 0 201384 JO}EY MOL boo é mee cree reed Se WEL bres GaSe ons's og uee) 6 E Fa 2 $ fr of z 4 poued bee koe 81g 108 BPE LET Gop Ort CONFER EO OTe hh See adu SL Cree al! BOBO LL BO Lee at? (Bunejad ; SueoD spatuletiay sur] B-ad Sadia Ene) 268 bE 2D8N UTR a? 903) mold BeDI0N TSt'00S FE bos'eas sy O71 GIVES OUT MEY SUEOT Hy Usual aue6 uy ere auEOT py ‘et vz0's er Ble’. wzsisy COS scote2 bz ‘OS8'DbP'Oe HL TOU CSSTvE Ty wees, sez cz0'es seacedey 9 au807 POL ‘STunowe ewes Buys ase BUED Ny Ad» bunindon 3 86019 sued) STLON oureez = SENOS S = LB LBOT Shh LUGE Sorbie ek ee A FEL ugh sar Le 586 WS sezeue moh 100 %00 Sz © timeag veTT f) 9 0 t) 0 0 0 ° 0 Q $004 voy WERTH =» MER ELG «= COV AGH BULL HRGRSRL HOT ANOS CHB BL LOB EPG, «= GLB SELBL «= (COD DG GY {res md §) SUBD) a9 sa0}] a) 20be so Ryu UEC {su007 293 omogeay) sonnasay (OL %00 5 ore meso 400.0 #24 BUTENSEuAUPY aL O ory Meunserun OsgG6 «= EPL ORLA AZ AGER GEG OO LPB LODE = SER ERS «= BOY §=— OPE SeW'E = LE BZZ SG TENT Stuaw edey ueoy 5605 Z omy Supe ueD7 ez, 4 aust hep oz tinge 948 82 AE GRL iad er ee 900 Set sheers WESENS Ow y8R0 A) BROT jo WET ‘o90'D00'00%, Sysodag usp 005% 804 163 (ROY SUBUOEoY bes pee 266 he 28 262 EMEBG —ALBOOZ «= EE OS EB ERA «= OPS Zsa Ge «FN YE soureg Suvuteg cog 2 Omg (un) Pakig eNO RTE ance) 000 000 094 Teodeq useO Ad 6a Baa dra @ Ad sad vad gad @ aa bad ‘suogdarresy syahjeuy Aq7 yseD 3les WS DE] Gay GAMINASE RY) LEE AR ueBusay 50 SRS ojduwexy pun, ueo'yT surajoasy xxxEND_PAGE:treasury01_b39_6977_7316_153 Robert, Carla M. (T reasury)

> > I've expressed the potential scenario that we need to cover periods beyond April. Rep Poleski feels pretty strongly that he wants to force the administration to revisit the issue with the legislature at that time. His sense is they want the language to serve as pressure on state government to get this resolved. > > 1am hanging out in committee to catch Chairman Pscholka after and see if he has the same view. > > Will update after | talk with him. > > Sent from my iPhone >

>> >> | would agree with Nick. Particularly given we don't have a firm schedule yet on the software changes, etc we need to make to the billing system. >>

xxxEND_PAGE:treasury01_b39_6977_7316_139 >> >> >> >> Either way, we are still left with a possible situation where we are through April, only spend $25m, and the water still isn't safe >> >> Would we have to stop? Wouldn't we want to spend the last $5m on May bills? >> >> How about saying something like "program continues until either the water is determined safe, or $30m is spent, whichever is first" >> >> >> >> -----Original Message——

>> >> >> Is there a way to find out what day of the month their billing cycles end on? >> >> Committee is still going, but | talked to Rep Poleski and feels pretty strongly about having an end date as his language contemplates. >> >> It would mean that bills containing April 14th would be the last bills covered. >> >> If the bill covers April 4- May 4 for example | think this would meet the April 2014 to April 2016 goal. If the last bill covered March 15- April 15th, there would be a two week portion of April not covered. >> >> Sent from my iPhone xxxEND_PAGE:treasury01_b39_6977_7316_140 Sampson, Jeremy (TREASURY)

OK. Will call you after 8am meeting. Sent from my Verizon 4G LTE Droid

. I don't know if you saw this note below from last Friday but we should try to talk about this today.

Al Mooney seems to be diligently working the system. | have highlighted several updates from the City. We should talk in the morning before you meet with the Governor to review the issues. In addition, Jady may be meeting with the Mayor later this evening to discuss a couple of issues so | may have more updates. Larry xxxEND_PAGE:treasury01_b39_6977_7316_118 Flint Water Bill Relief-Top Implementation Issues Project Scope The Flint Water Bill Relief Project will distribute an appropriated amount of state funds to the tustomers of the City of Flint water system. The Project will focus on overcoming implementation hurdles, distributing the funds using equitable principles defined in the appropriation legislation and administrative guidelines, and provide detaited reporting to ensure accountability for all the funds received. ( Commented Pa ae tel ar Significant Challenges in Implementing Water Bill Relief *® Communications o Develop a plan which will include media notices, targeted mallings, web-based communications, and/or other communique. Commented [AM2}: Sight revision with added details far o Engage a point person to handle the plan to relieve strain on city staff. joan © BSA software-bullding credit generator and modeling relief Commented [AM3]: Note sever! entries have hart slight oCan the BSA software handle the relief as proposed? oBSA Is at work defining the project scope of the necessary changes. oNeed to also mode! relief on all or a portion of the water service and water commodity penalties. ° Need to tighten timeline for pout the credit senerator. oA date range ‘delimiter will be used to reduce the data set and define the records to integrate into the rellef process. oThe system changes should include the ability to create comprehensive reporting and provide a complete audit trail of all expenditures for water bill relief. BSA preliminarily has provided for d rate of $150/hour for the software modificationg fa ets) J rate testuced d fom their ; tate: charged) and ey © Timeline for relief oGiven the early stage of the defining the project scope, early April is the best placeholder date for when the software modifications will be available following development, testing, and finalization of the relief program. | Commented [AM4): Stight revision with aided detalls for Uighly dependent on the software changes managing the exception emg ceriication, fenr presented b 24,494 Pre-Ruling Balance recotds and 3,531 water/sewer balanced Can rellef be “fully provided by the deadline in the statute? Michigan Department of Treasury February 19, 2016 xxxEND_PAGE:treasury01_b39_6977_7316_119 How the credits are applied o Need to show the sewer bill on future months to make clear that relief was provided for the water bill. oRelief will be provided on active accounts In the form of credits on water bills, not refunds. oCan the 65/20 relief be provided on penalties or-ean-penalties be-waived-aitegether. Need to have this modeled In the credit generator to make sure it fits within the $30 million? Updating customer information prior to running the credit generator oDelinquent accounts that were on the lien list for 2015 need to be restored in the system (i.e. 3,531 water/sewer balances). offhose billings that are now collectible after Shears v. City of Flint amended brelminany Injunction order need to be moved back onto customer account history the statis of the settlement of the lawsuits? Commercial accounts that are residential dwellings o Should commercial accounts that are residential dwellings (4 or more units) receive 65 or 20 relief? o How can we be sure the resident received the relief rather than have the relief be kept by the owner? How many are there? oCan the credit generator model this relief to ensure it fits within the $30 million? Handling starts o The credit generator needs to calculate relief to ensure those starting service after April 2014 get the proper credits. |A determination needs to be made as to the specific start date for credit allocations after the April 24, 2014 Flint River cutover date (i.e. at what point was Detrolt’s treated water no longer reaching taps). As_ noted in our discussion by phone on 2/13, this Is not a hurdle. The generator should be more than capable of handling all accounts with activity during the designated period whether active or inactive and regardless of the start/stop date. Handling stops o Targeting relief If a customer has changed residences but is still a customer. o Targeting relief to other bills owed to the city by the customer o Development of a hierarchy for which balances get paid In what order from the rellef credits if funds are available after 100% of the water relief has been provided for the account {L.e. the sewer charges for the account owed to the city, the water/sewer Michigan Department of Treasury February 19, 2016 Commented [AM5}: Tha concept of walving all penalties should be jettisoned as it will become it creates programmatic and policy issues we want to avold, Commented UL6];: Lenguage regarding lien needs tobe | updated to more seeurately communicate delinquency year | of origin and tax year, Commented [AMI]; Updated to reflect the one year In question and added # of records. Commented [AM8): Updated to reflect the @ of records and # of payments made on the Pre-Ruling Balances to mid- February, Commented [JL9]: This 's active litigation. The City must defer to its Counsel on any disclosures. Commented [AM20]: Note the added detail on defining the Initlal dete th use ~there should be separate dates for different districts. A matrix will need to he developed to adjust far the lag time between when meters are read end when the bill calculation routine is processed for the billing district. [four water service staff belleves a billing period included any Flint River source water, the billing district will be granted the entire credit for the period in question. xxxEND_PAGE:treasury01_b39_6977_7316_120 charges owed on another account by the same customer, the water/sewer charges owed by the same customer at Genesee County). o There may need to be an effort to find customers that have left the system to issue a refund. Policy alsa needs to be designed in such a way that prevents or limits the number of customers who intentionally close an account to prompt the refund process and reopen immediately in the same or related party's name. * Lega! agreement with relief to forestall future claims o Local officials need to decide If they need or want to pursue a legal agreement with the customers as part of the relief. This would be an agreement that the customer accepts the relief and foreswears any other claims to rellef on their water bills. ® Payments to city OAs the city provides relief, the state will provide funds to the city. oA thorough audit trail is necessary. This might require the city to engage an outside firm to document all expenditures and create an audit trail, © DHHS clients olf DHHS paid the water bill, the customer should only get relief for that portion they paid. Can the credit generator handle this? have paid on behalf of a water customer Is anproximate of the total credi Michigan Department of Treasury February 19, 2016 As discussed in the meeting held on 2/12, this point may be immaterial for inclusion i bry further discussion, Any customer recelving assistance from DHS is limited to $179 process by which credit balances on Inactive eccounts wil Commented {AMI}: Further definition is needed on the be managed. requested to describe the potential waiver of claina ' Commented 1112}; input by the City's legal counsel is | discussed at previous meetings. " Commented [L13I: State and City must discuss the _tmpact of timing of disbursement from tha State to City. xxxEND_PAGE:treasury01_b39_6977_7316_121 Stanton, Terry A. (T Treasury)

Fyi. See below.

importance: High See below the link to a Flint Journal article about the firing of the Police and Fire chiefs. The last paragraph refers to an interim Police chief. If accurate, it may be advisable for us to remind the Mayor that per the terms of the RTAB resolution she cannot name even an interim replacement without first submitting to the RTAB the minimum professional or occupational qualifications and the minimum/maximum salary range for the vacated positions. h xxxEND_PAGE:treasury01_b39_6977_7316_069 Osborne, Ken (TREASURY)

Please see the attached document. xxxEND_PAGE:treasury01_b39_6977_7316_061 Department of Environmental Quality Flint Funding February 11, 2016 2016 Budget Supplemental 1: PA 143 of 2015 City of Flint Emergency Water Services * $ 6,000,000 Drinking Water and Environmental Health Staff 2 $ 300,000 Laboratory Services $ 1,000,000 Supplemental 1 Total $ 7,300,000 Supplemental 2: PA 3 of 2016 Water System Infrastructure Needs $ 2,000,000 Utility Payment Relief $ 3,000,000 Lab and Testing Costs $ 250,000 Corrosion Control Procedures $ 36,500 Infrastructure Integrity Study $ 500,000 Supplemental 2 Total $ 5,786,500 Supplemental 3: TBD City of Flint Water Bill Relief $ 30,000,000 Utility Assistance $ 25,000,000 City of Flint Emergency Water Services (Jul - Sept) $ 3,900,000 Water System Needs (KWA) $ 2,200,000 Response Team $ 2,250,000 Supplemental 3 Total $ 63,350,000 Total 2016 Supplemental Funding for DEQ $ 76,436,500 2017 Budget City of Flint Emergency Water Services (Oct - Dec) $ 3,900,000 Drinking Water Technical Expertise 10 $ 1,500,000 Total 2017 General Fund Request for DEQ $ 5,400,000 * The DEQ paid $6 million to the City of Flint for water connection services through June 2016. The total cost for the connection services was $12 million of which the Mott Foundation paid $4 million and the City of Flint paid $2 million State of Michigan Totals Supplemental 1 - PA 143 of 2015 $ 9,350,100 Supplemental 2 - PA 3 of 2016 $ 28,028,500 Supplemental 3 - As Introduced $ 156,690,000 2017 Budget - As Introduced $ 38,730,900 Total State of Michigan Funding for Flint $ 232,799,500 xxxEND_PAGE:treasury01_b39_6977_7316_062 Stanton, Terry A. (1 reasury)

+ U BPA Ale Fyi. ¢? ¥? p* sr

There have been two deals for KWA. The first deal was done in 2013 by Genesee county at $35 million to finance the intake at Lake Huron. The other deal was done by KWA with Genesee, Lapeer and Sanilac Counties in 2014 at $220.5 million. The team on both deals were Miller as Bond Counsel with Dickson Wright as Underwriters Counsel. Stauder who is now with PFM was FA. [ believe they are currently working on a S60 million deal as well. Let me know if you need anything else. Thanks John xxxEND_PAGE:treasury01_b39_6977_7316_047 Stanton, Terry A. (T reasury)

Ken, For the last question: yes, it is our understanding relief can be provided on the water portion only. We intend to verify and document that the relief was for water and not sewer. Larry

{ met with Rep. Poleski during House Session today. He is working on boilerplate to provide some additional guidance/ audit requirements for the money appropriated for credits. Will share the language when | get it, likely this afternoon or tomorrow. The plan is for the bill to be up in House Appropriations next Wednesday at 9 a.m. How do we want to handle that? Nick, do you want to testify? If Howard and | are to cover it we'll need to spend some time getting a better understanding of the details. Michelle Lange and Scott Starr were also present for the meeting, | told them we would coordinate with them, and DEQ for purposes of the hearing next week. About how we want to handle next week. But from my conversations with staff and members | think Treasury wil! be the subject of most of the questions on this. Finally, Rep. Poleski has been looking at the financial statements for the Flint water system and noted that water and sewer were accounted for separately. | know this came up in our previous meeting with house staff, but he was very interested whether bills were also segregated between water and sewer and whether we could ensure that credits were authorized only for the water portion of the bills. Ken Osborne Legislative Liaison Department of Treasury Desk: 517-241-2474 Cell: 517-388-0968 xxxEND_PAGE:treasury01_b39_6977_7316_041 Robert, Carla M. (T Treasury)

fyi

You guys ok with me sharing this list with Corey Savino with the SFA?

Fyi... see below

Just FYI, | have attached a larger document we put together on accomplishments in the EM communities. Fred highlighted a couple but this is a good resource for reference on some of our successes across the communities.

| would agree schools are more challenging because of the ‘academic side’ and the way they are funded... While it may be a pretty low bar in terms of gauging success | would say Muskegon Hts & HPS could be mentioned... The schools have stabilized. There was not the disruption associated with a dissolution. There is community support. The reason we have had to keep EMs place is somewhat tied to the fact they are psa districts. Pontiac schools has beena ‘success’. Again, when we first got involved they were a week or two from making payroll. That situation involves a consent agreement not a EM. The ‘jury’ is still out om BHS. DPS is in a category by itself.

Not in my view. The school districts that have had EFMs/EMs (Detroit, Highland Park, Inkster, and Muskegon Heights) have not fared well. Inkster was dissolved and the other school districts have had multiple EMs. Prior to 2011, I would have said the reason was that Act 72 drew an artificial distinction between fiscal matters and instruction/academics and granted EFMs authority only over the former. However, under both Acts 4 and 436, EMs have had control over both fiscal matters and 1 xxxEND_PAGE:treasury01_b38_6783_6976_164 instruction/academics and it appears to have made little difference in regards to lack of long-term success. It may be that because school finances are tied so closely to enrollments, that once enrollments begin a downward spiral, even an EM cannot cut enough, or quickly enough, to keep up.

Thanks Fred Any schools?

Here are three possibilities: 1, Village of Three Oaks. The EFM was appointed on December 1, 2008 and exited after only one year. The EFM resolved all financial issues (including cash flow and accounts payable), while working cooperatively with local officials. Indeed, so positive was the working relationship between the EFM and Village officials that for a number of years after the EFM’s departure, Village officials invited her back for annual events. City of Detroit. The EM was appointed on March 25. 2013 and was succeeded by a FRC on December 9, 2014, after guiding the City through the largest municipal bankruptcy in U.S, history in only 18 months. In doing so, the EM addressed three primary issues: first, a cash crisis that was projected to reach a cumulative deficit in excess of $100.0 million by June 30, 2013; second, recurring general fund deficits (the City had not experienced a positive year-end fund balance since fiscal year 2004); and third, long-term liabilities, including unfunded actuarial accrued pension liabilities and other post-employment benefits, that exceeded approximately $14 billion as of June 30, 2012. City of Hamtramck. The EM was appointed on July 1, 2013 and was succeeded by an RTAB on December 18, 2014. The EM addressed general fund operating deficits. In addition, unfunded liabilities (pension and other post-employment benefits) posed significant obstacles to long-term fiscal health. Actuarial evaluation had indicated the pension plan had $98.4 million in actuarial accrued liabilities, but only $55.8 million in pension assets (i.e., a funding ratio of only 56.8 percent). Fred xxxEND_PAGE:treasury01_b38_6783_6976_165