Importance: High
Ed/Randy:
Attached is the Flint Water Report.
Given the volume of information, | have kept the report focused upon the issues germane to the DEQ violation notice
and the offer from DWSD.
| have tried to keep technical jargon to a minimum, but some inclusion was necessary in order for some items to be
clear.
(also went back into our records to see what rate projections were assumed to be in order to cross-compare the City’s
analysis of the DWSD proposal. However, | kept references to all of this at a minimum.
If there are any questions, let me know.
Eric Cline | Department Manager
State of Michigan | Michigan Department of Treasury | Office of Fiscal Responsibility
430 W. Allegan Street, 3rd Floor | Lansing, MI 48922
Lansing Office (517) 335-2078 | Cell Phone (517) 243-8350 | Traverse City Office (231) 922-5228
E-mail cliner 1 @michigan.gov
CONFIDENTIALITY NOTICE: This e-mau, and any attachments, 1s for the sole use of the intended recipient(s) and may contain
information that is confidential and protected from disclosure under the law. Any unauthorized review, use, disclosure, or distribution
1s prohibited. If you are not the intended recipient, please contact the sender by reply e-mail, and delete/destroy all copies of the
original message and attachments Thank you.
26
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72 (Rev 11-13)
STATE OF MICHIGAN
GOVERNOR LANSING STATE TREASURER
SUMMARY REPORT
TO: Wayne Workman, Deputy State Treasurer
FROM: Eric Cline. Department Manager; Office of Fiscal Responsibility
SUBJECT: Summary of Flint Water System Issues
DATE: January 22, 2015
Summary
On December 16, 2014, the City of Flint received a violation notice from the Michigan Department of
Environmental Quality (DEQ). This notice stated that the City water samples were in violation of Maximum
Contaminant Levels (MCL), a violation of the Safe Drinking Water Act (PA 399 of 1976).
The DEQ considers the violation period to have begun December 1, 2014. The violation was triggered when
water sample reports showed that the City’s water quality, on average, exceed the total allowable level of
Disinfection Byproducts during the first three quarters of 2014. Further, four of the City’s eight water sample
site locations individually exceeded allowable MCL levels during the same period of 2014.
These conditions are considered a Tier 2 violation and, as a result, the City was required to notify the public of
these contamination levels by January 10, 2015 (which was done) and continue to notify them every three
months until the violation is resolved.
The City must also update its Operational Evaluation Report, which is on-file with the DEQ, as to how it will
correct this issue by March 1, 2015.
Causes & Possible Solutions
According to information provided by the City, the high levels of Disinfection Byproducts, which resulted in the
DEQ violation notice, can be caused by high levels of chlorine. The City is required to perform testing every
three months and the yearly average exceeded allowable MCL levels.
Some of the potential causes for this high level of chlorine include:
Inefficient ozone system operation.
A sewer leak discovered upstream of the intake, resulting in the need to increase the chlorine feed.
An improper softening process.
Unlined cast iron pipes in the distribution system.
Recirculating water in the distribution system due to poor configuration of two pump stations.
Broken valves resulting in stagnant water.
High chlorine demand in filters.
PO BOX 30716 » LANSING, MICHIGAN 48809
ww michigan govftreasury e (517) 373-3200
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Page 2
e High potential of impurities in the source water.
© Less than optimal removal of impurities.
The City outlined some potential remedies to this problem in its initial Operational Evaluation Report, dated
November 26, 2014. These potential remedies are intended to be implemented in stages. Stage 1 consists of
actions that can be implemented without any new construction within the distribution system and are due to be
implemented by early March 2015.
Stage | actions include:
Troubleshooting of the ozone system.
Implementation of different testing methods.
Operational changes at the Water Treatment Plant.
Increase water main flushing efforts to minimize stagnant water.
Identify areas with high water age and implement preemptive measures.
Stage 2 consists of long term actions that require major system construction and potentially include:
Upgrades to the ozone system.
Implement the use of polymer aids.
Convert to lime and soda ash softening.
Change the disinfectant process.
Install a new feed at the intake to optimize disinfection.
Implement advanced treatment for precursor removal.
Increase main flushing based on water modeling results.
Continue valve replacements.
Emphasize cast iron pipes on water main replacement priority list.
The projected cost of these options is unavailable.
It should be noted that all of these potential remedies are intended to be utilized only until the KWA pipeline is
operational in late 2016.
Further, the City will be providing additional potential solutions when it updates the Operational Evaluation
Report, which must be submitted to the DEQ by March 1, 2015.
Also, the City’s Emergency Manager has committed to hiring an independent external consultant to assess the
steps that the City has taken, to make recommendations as to other steps that can be taken, to oversee
implementation, and to monitor operations until KWA is online.
DWSD Situation
Concurrent to the City addressing the aforementioned issues, on January 12, 2015, the Detroit Water and Sewer
Department (DWSD) extended an offer to the City to reopen water connections that have been closed since May
2014 and resume supplying the City with drinking water.
DWSD has offered waiving a connection charge if the City will consider a long term agreement. DWSD has
offered the City a fixed monthly rate of $846,700/month ($10,160,400/year) plus a commodity rate of
$14.92/Mef. DWSD stated that these rates will be guaranteed until June 30, 2015. Any future rate increases
beyond the June 30 date are not identified, however, prior projections indicated that DWSD rates would exceed
$16-million in 2015.
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Page 3
The City’s analysis of this offer indicates that the total cost of purchasing water from DWSD would exceed $12-
million annually (before any rate increases beginning July 1, 2015). These costs are supported by projections
utilized by the City when the original decision to switch to KWA was made.
The City’s current water system expenditures are approximately $11.7-million, with operations and capital
upgrades currently running below projections. Therefore, the Emergency Manager has made the determination
that the City will not be acting upon the offer extended by DWSD.
If further information on this issue is needed, please let me know.
Copy: Edward Koryzno, Director; Bureau of Local Government Services
Randall Byrne, State Administrative Manager; Office of Fiscal Responsibility
Oak Township\Consent Agreement\2015 Budget\State Treasurer Action Letter to Township.2015 Budget.v2.12-15-
14.doc
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Stanton, Terry A. (T reasury)