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Allison, Attached is the periodic update on distressed local governments, Please pass on to the Governor as appropriate. This will be the basis for our Local Government briefing March 30. Please call with any questions. Wayne xxxEND_PAGE:treasury01_b31_4719_5108_301 3600 (Rev 01-11) STATE OF MICHIGAN RICK SNYDER DEPARTMENT OF TREASURY R. KEVIN CLINTON GOVERNOR STATE TREASURER DATE: March 23, 2015 TO: Rick Snyder, Governor FROM: R. Kevin Clinton, Treasurer SUBJECT: Status of Financially Stressed Local Governments EMERGENCY MANAGER Flint Emergency Manager: Gerald Ambrose Appointed: January 13, 2015 Anticipated Exit: April 2015 Recent Developments The city was awarded $2M through the Financially Distressed Cities, Villages, and Townships Grant Program. These funds will be used to enhance the city’s water system through improved waste management, leak detection, and pipe assessments. An EM Order is being prepared that will restructure its SRF loans. This would free up approximately $2.2M allowing the city to further improve its water system. The City of Flint had informed residents that it is in violation of the Clean Water Standards Act, after unsafe levels of trihalomethanes (TTHM, a disinfectant by-product) were found in the water. Recent testing by the Michigan Department of Environmental Quality (MDEQ) Testing Lab showed that the total TTHM levels for the month of February are well within the Environmental Protection Agency (EPA) guidelines for safe water. However, because EPA regulations require that the four month average for all testing sites be within certain guidelines, the city is still considered to be non-compliant by the MDEQ. Monthly testing will be ongoing, and is being conducted by several parties. The city hired Veolia to provide an analysis of the water system, including recommended improvements, and associated costs. Recommendations included water plant improvements, distribution system improvements, new policies and procedures, and better communication with customers. On March 19, 2015, the report was presented to the Flint Water Advisory Committee, but the presentation broke down due to citizen unrest. An International City/County Management Association (ICMA) comprehensive public safety study has been completed, and was presented to the City Council on January 22, 2015. Several recommendations for both police and fire are currently being reviewed. Of the 16 major recommendations for public safety, the following four are most crucial: www michigan govitreasury xxxEND_PAGE:treasury01_b31_4719_5108_302 Page 2 o Establish more aggressive protocols for responding to service demands from the public. o Equip a minimum of one marked patrol car with an automated external defibrillator (AED) and an automatic license plate reader, and equip every car with e-ticket readers and printers. o Develop a robust in-service training program. o Establish and publish a clear multi-year strategic plan that includes specific performance goals and objectives for all units. Significant Actions/Issues The General Fund accumulated deficit for FY 2014 was $9M. In FY 2013, the General Fund had an accumulated deficit of $12.9M. Noted reductions included $5.6M from Parks & Recreation, 2.6M from Community Development, 1.8M from Public Safety, and $1.7