F Flint Water Crisis Public Archive

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Thomas Saxton Wayne Workman

Flint Water infrastructure funding options

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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! 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(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)

update on Flint

From
Larry Steckelberg
To
Wayne Workman , Thomas Saxton
See all emails with these participants
We are in receipt of a narrative summary of the status of the unpaid accounts for Flint water. ] spoke with Jody Lundquist at length this afternoon to let her know that we would have Suzanne and Cary share the cashflow format with her and work to clarify what we are asking her to provide. | expect Cary and Suzanne will discuss this first thing on Thursday and will talk with Jody about that format and her timeline of when she could provide the information. | should note that Jody was being conservative about her timeline so as to not under-deliver and is being careful to be as accurate as possible because she knows this information will be used at a high level and does not want to make mistakes. | will follow-up with Cary and Suzanne after the morning session with the Department leadership which should be around noon. Larry Steckelberg Division Administrator Property Services Division Michigan Department of Treasury (517) 241-3733 xxxEND_PAGE:treasury01_b41_7622_7971_019 Stanton, Terry A. (T reasury)

RE: Message from "RNP002673A81665"

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Per our conversation a lot of these dates involve DEQ et al in which we/Treasury did not play a role i.e., someone else [DEQ] would need to confirm their accuracy. Just quickly, items we would question from the document or need to investigate further... 12/20/12 (p.1) - we don’t have the notification that is referenced 3/29/13 (p.2) — we are not aware of any veto by Kurtz. The early offers by DWSD to reconnect were rejected because of the add'l cost, they were long term & the fact the City had executed a contract with KWA. On Jan 12’15 they waived the reconnection fee but there were still issues re the length/term of the commitment. 3/12/15 — the Veolia report did mention corrosion control but the focus was on TTHM which was chlorination issue not related to the lead problem. | believe Treasury funded the study.

Draft Flint CIP

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All: FYI. Attached is the most recent draft to the Flint Capital Improvements Plan. It was recently submitted to the City Planning Commission for approval so note that some of the projects could change prior to final approval. Planned Water System improvements begins on Page 47 of the .pdf. \ note that Lead Service Line Replacement is listed as an Urgent project but with a cost TBD. No other information is provided. | also note about $34M in other system projects that have been identified. There is not a great amount of detail in the document but it provides a good overview of some of the areas that the City sees as priority. If there are any questions, let me know. Eric Cline | Department Manager | State of Michigan Michigan Department of Treasury | Local Government Financial Services Division | Fiscal Responsibility Section 430 W. Allegan Street, 2rd Floor | Lansing MI 48922 Lansing Office (517) 335-2078 | Cell Phone 617 Traverse City Office (231) 922-5228 E-mail cliner1 @muichigan gov CONFIDENTIALITY NOTICE This e-mail, and any attachments, is for the sole use of the intended recipient(s) and may contain information that 1s confidential and protected from disclosure under the law, Any unauthorized review. use, disclosure, or distribution Js prohibited If you are not the intended iecipient, please contact the sender by reply e-mau, and delete/destroy all copies of the original message and attachments Thank you xxxEND_PAGE:treasury01_b40_7317_7621_219 The introduction to the Capital Improvement Plan (CIP) is divided into three sections: + Whatisa Capital inupraverent + Why Prepare a CIP? + How Does the CIP Relate to the Master Plan? City of Flint Capital Improvement Plan « Introduction & Overview DRAFT - 1.10.16 WHAT IS A CAPITAL IMPROVEMENT PLAN? A Capital Improvement Plan (CIP) is a multi-year program for expenditures by the City of Flint for rehabilitation, replacement, and balancing of the City’s municipal infrastructure systems, Projects considered through the CIP process involve proposed investments in the City’s infrastructure and facilities, such as police and fire stations, parks and recreation facilities, community centers, offices, roads and sidewalks, and utilities. City of Flint Capital improvement Plan DRAFT - 1.10.16 Definition of Capital Improvements Capital improvements are permanent physical improvements, generally expected to have a normal life of ten years or longer. Equipment and objects needed for day-to-day use are generally not considered capital improvements. Smaller projects and projects that are intended to last for fewer than ten years are funded through the City’s operating budget. CIP and Budgeting ACIP is typically prepared and adopted annually by the Planning Commission and is presented as a recommendation to the Mayor and the City Council. Each year, the plan identifies the physical needs of the City’s departments, estimates the costs of proposed projects, and recommends expenditures and sources of funding for priority capital improvements. As such, the CIP plays an integral role in the process of formulating the City’s annual capital budget. xxxEND_PAGE:treasury01_b40_7317_7621_220 City of Flint Capital improvement Plan » Introduction & Overview DRAFT — 1.10.16 20 Year Horizon The Flint CIP is a 6-20 year plan of programmed projects for the City’s municipal infrastructure systems. The first two years of this plan should form the basis for the City’s two-year Capital Approval of annual budgets allocates funds to undertake projects in this period, thus beginning the implementation of the CIP. In addition, capital projects that will need to be implemented between years 7 and 20 are also included to provide a basis for future updates to this CIP. Uncertainty about the availability of budgets does not allow for these necessary improvements to be planned in the 6-year period and are considered unfunded needs in this CIP. a 7 BENEFITS OF THE CIP * Assist in implementation of the Master Plan. + Identify both short- and long-term capital expenditures to allow budgeting. * Determine regular maintenance needs for City facilities so they remain viable. + Provide for a more effective evaluation of alternatives and solutions than the crisis- decision process. + Enhance opportunities for grants by allowing for long-term planning. + Provide the ability to stabilize debt and consolidate projects to reduce borrowing costs. + Serve as a public relations and economic development tool. + Allow for a focus on preserving infrastructure while ensuring efficient use of public funds. + Provide opportunities for cooperation between departments and other units of government, such as Genesee County and Flint Community Schools, by pooling resources to reduce costs in some instances. City of Flint Capital improvement Plan DRAFT — 1.10.16 Rok igs xxxEND_PAGE:treasury01_b40_7317_7621_221 CAPITAL IMPROVEMENT PLANNING IN FLINT The City of Flint has been significantly impacted by factory closures and population loss, with an 18% decline in population between the 2000 and 2010 census. The loss of jobs and population and decline in local tax revenue and state- shared revenues has had a significant impact on the City’s finances. The City returned to state receivership in December 2011, as a result of consistent deficits in the General Fund, a decline in pooled cash, poor budgeting practices, and unfunded liabilities for retiree benefits Significant progress has been made in addressing the financial issues leading to the assignment of an emergency manager, as the $19.1 million deficit at the end of FY12 had been eliminated by the end of FY15, largely as the result of a $7 million emergency loan. On April 29", 2015 the Emergency Manager notified the Governor of Michigan that the financial emergency in Flint had been resolved. At that time, the Governor relieved the Emergency Manager of his responsibilities and a Receivership Transition Advisory Board was created to oversee the transition of city affairs, to its charter- designated officials. For the first time in nearly a decade, the City began FY16 City of Flint Capital improvement Plan « introduction & Overview DRAFT - 1.10.16 with positive balances in all of its funds. Cash position had drastically improved, and the FY16 and FY17 Budgets are realistically balanced. Looking forward to FY18 and beyond however, the City will continue to face significant challenges as expenditures are projected to outpace any increases in revenues leading to operating deficits in many of the City funds. Water rate increases and the renewal of two City millage’s (Public Safety and Parks and Recreation), will assist in ensuring ongoing sources of funding exist for much needed capital improvements, but will limit the amount of progress that can be made without additional sources of revenue or other decrease operational costs. While the City continues to await resolution of litigation over retiree healthcare that could devastate the City’s financial position, a number of issues emerging in Q1 of FY16 have adversely impacted the ability to complete even planned FY16 capital improvements. On August 17, 2015 a preliminary injunction order was issued against the City requiring that the City immediately reduce its water and sewer rates. In addition, the order barred the City in shutting off a service for non-payment or collecting delinquent balances prior to August 17. City of Flint Capital improvement Plan DRAFT -— 1.10.16 This led to a projected increase of uncollectible accounts of approximately $11 million, a decrease in monthly billed revenue and a drop in the number of payments being received. In order to respond to the loss in projected revenue, a spending freeze across the City was implemented. At this time, the freeze remains in effect. For water and sewer funds, it was necessary to identify projects which could be eliminated or postponed to lessen the financial burden of the order and maintain ongoing daily operations. To that end, many of the water and sewer capital improvements were eliminated or postponed with the exception of any projects necessary to ready the City for receipt of water

RE: Confirming our Discussion tonight

From
Thomas Saxton
To
Wayne Workman , Larry Steckelberg
See all emails with these participants
... $0, What | would do is make sure that someone from our shop (say Suzanne & Randy) be on the phone or at the mtg with Y&Y for the kick off. We need to have a clear scope of work as to what is needed & it (cash flow — work product) can't be filtered (no pun intended) thru the City/Natasha. We need the info ‘real time’ the same as the City. We can’t afford the ‘back & forth’ as to what we are looking for. Wayne — it might be good if you make that call with the Mayor & Natasha. | am happy to participate.

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