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I don't think this belongs to us probably budget for state police. Could be the supplemental Sent from my iPhone Begin forwarded message:

When or if you have the time click on the link to the Mayor interview Flint mayor to state: Approve plan “as fast as humanly possible” to help keep lead out of water 14s LINDSEY SMITI1. 16 HOURS AGO Share Twitter Facebook Googlet+ Email xxxEND_PAGE:treasury01_b37_6553_6782_196 Flint leaders issued a water advisory last week after health officials raised concerns about lead levels in children's blood tests. Credit Steve Carmody / Michigan Radio Flint hasn*t been using any corrosion-control method since it switched from Detroit’s water system in April 2014. Corrosion-control treatment helps keep lead out of drinking water. Since the switch, more kids are showing up with elevated levels of lead in their blood. Flint Mayor Dayne Walling says he wants to put corrosion-control treatment back in place, but he needs state approval first. The state says it’s going to take a little while to implement. “One of my requests to (Michigan’s) Department of Environmental Quality director is that (approval) be accelerated as fast as humanly possible,” Walling said. “Whatever decisions are coming next, we need that corrosion control in the water treatment process that we have now,” he said. Walling was a guest today on Stateside with Cynthia Canty. Listen Listen Listening... 0:00 16.01 Listen to Flint Mayor Dayne Walling on Stateside. Flint spokesman Jason Lorenz says MDEQ made the recommendation to put corrosion-control treatment into the water supply last month. But, he says, it needs MDEQ Director Dan Wyant’s official approval. There’s been some debate over whether Flint should have had corrosion control in place the entire time. MDEQ officials have argued to the U.S. Environmental Protection Agency that corrosion control is not technically required yet, because the Flint River is a new water source. “You have to have to do a full year of studying” the water chemistry as it behaves across the system before implementing corrosion control, MDEQ spokesman Brad Wurfel said. He says that’s the only way to know what corrosion-control treatment to use. That period of study was to be completed by June 30. As the DEQ reads federal regulations, Flint technically has up to two years after the study to install treatment. But Wurfel says an announcement on the state's decision will come by the end of this week, and "the prescription for optimizing the system for corrosion control is going to be done in Flint by the end of this year." "If 1 handed you a bag of chocolate chips and a sack of flour and said 'make cookies,’ you'd still need a recipe right? They need to get the results from that testing to understand how much of what to put in the (new water source),”" Wurfel said. "We have a plan to expedite this with the city ... and folks can take some comfort in that," Wurfel said. It's not clear yet how much the treatment will cost, but Wurfel says "this won't break the bank.” A state- appointed emergency manager made the interim switch to the Flint River to save the city money. Related: Have you missed parts of the Flint water story? Here's a quick rundown. The U.S. Environmental Protection Agency has not yet answered this question: Was Flint required to have some form of corrosion-control treatment the whole time? At face value, the EPA rules are clear, all water systems that serve more than 50,000 people must have some kind of corrosion control. xxxEND_PAGE:treasury01_b37_6553_6782_197 But when you switch water sources, there is apparently some room for interpretation. In approving updates to this federal regulation in 2000, the EPA noted that “water systems need to make treatment changes, on occasion, to react to changing circumstances.” In these cases, the rule does not “prevent a state from approving treatment changes,” but it’s not entirely clear if the state can approve having zero corrosion-control treatment. One key section of the rule change reads: “One commenter requested that EPA clarity in the cule language that (large water) systems are not required to have (corroston-contral treatment) physically present. EPA disagrees that this is appropriate.” “Vor large water systems, (the federal rule) does not eliminate the need to have any (corrosion-control treatment) in place, unless the water system can demonstrate to the satisfaction of the State that such treatment will have no effect on reducing the levels ef lead and copper at the tap ... EPA expects few, if any. large water systems can make this demonstration without (corrosion-control treatment).” Flint residents can be sure about one thing: This period of study and approval won’t happen the next time the city switches water sources. The city expects to stop using the Flint River when a new regional water system in Genesee County is completed, slated for the end of 2016. According the MDEQ’s Brad Wurfel, that’s because they won’t need to study the nature of the new water source — Lake Huron. Because Detroit's water system uses water from Lake Huron, Flint will be able to use the same corrosion-control treatment it did when it was hooked up to Detroit’s system. Related Program: Stateside with Cynthia Canty xxxEND_PAGE:treasury01_b37_6553_6782_198 Workman, Wayne (TREASURY)

a f httn/ Awww minews/flint/ind merit ieee teres Re ae TS xxxEND_PAGE:executiveofficeemails21_b0827_2011_2011_1

Latest summary of Flint water issues with financial comparison. Would like to get this out today to Executive Office

Attached is the table you requested. Also attached is a letter from DWSD verifying their rates. Edward B. Koryzno, Jr. | Director - Bureau of Local Government Services State of Michigan | 430 W. Allegan Street, 3rd Floor | Lansing, MI 48922 (517) 373-4415 | (517) 373-0633 (fax) [email protected] 32 xxxEND_PAGE:treasury01_b27_4112_4389_167 Koryzno, Edward (Treasury)

The last LG agenda — for our meeting this morning. 108 xxxEND_PAGE:treasury01_b27_4112_4389_021 Local Government Meeting January 20, 2015 Key Updates Royal Oak Township - Burgess issuing a consent agreement order to clarify invoicing process, and awarding a pending bid for legal services Highland Park - Water leak has been shut off following pipes bursting - Kathy Square learning the issues of the water system - Still working through issues related to engaging a third party operator for water system - Call Friday on blight certificate related to high school sale Flint - Jerry Ambrose began as EM on 1/13/15 - Mayor’s letter to Governor on water issue amid increasing public concern - 50% of assessments are manual overrides Pontiac - Economic Development Director hired recently - Meeting in late January with legal team to discuss OPEB approach - here and in other communities Hamtramck - First RTAB meeting scheduled during the week of January 26" Ecorse - Syear budget proposed by council not balanced - Ongoing issues with interim City Manager Wyandotte - 93% of assessments are manual overrides xxxEND_PAGE:treasury01_b27_4112_4389_022 Stanton, Terry A(T reasury)

Wayne, Ed and Tom, Attached are the following files to be discussed on the call today: - Water Service Center Strategic Analysis, including value ranges under various scenarios Indexed revenue analysis, which shows a comparison of the projected revenues under the various scenarios included in the report Look forward to discussing at 2.00 pm ET. Juan ~~] Juan Santambrogio | Restructuring y Ernst & Young LLP 55 Ivan Allen Jr Blvd - Surte 1000, Atlanta, GA 30308, United States of America Office +1 404 817 5156 | Mobile +1 404 229 2567 | juan santambroqio@ey com Fax +1 866 455 6605 Website http “Awww ey com Any tax advice in this e-mail should be considered in the context of the tax services we are providing to you. Preliminary tax advice should not be relied upon and may be insufficient for penalty protection. The information contained in this message may be privileged and confidential and protected from disclosure. If the reader of this message is not the intended recipient, or an employee or agent responsible for delivering this message to the intended recipient, you are hereby notified that any dissemination, distribution or copying of this communication is strictly prohibited. If you have received this communication in error, please notify us immediately by replying to the message and deleting it from your computer. Notice required by law: This e-mail may constitute an advertisement or solicitation under U.S. law, if its primary purpose is to advertise or promote a commercial product or service. You may choose not to receive advertising and promotional messages from Ermst & Young LLP (except for EY Client Portal and the ey.com website, which track e-mail preferences through a separate process) at this e-mail address by forwarding this message to [email protected]. If you do so, the sender of this message will be notified promptly. Our principal postal address is 5 Times Square, New York, NY 10036. Thank you. Ernst & Young LLP 89 xxxEND_PAGE:treasury01_b22_3033_3514_438 City of Flint Flint Water Service Center Strategic Analysis 22 October 2014 EY Building a better working world Reliance Restricted xxxEND_PAGE:treasury01_b22_3033_3514_439 Executive summary The Flint Water Service Center (WSC) houses both the Water Distribution and Sewer Maintenance Divisions of the City of Flint. These Divisions convey water to Flint residents and businesses and remove the sewage to the Water Pollution Control Facility. Management is exploring various strategic alternatives regarding the future direction and ownership of WSC. To support the assessment, you requested EY provide valuation advisory services to evaluate various alternatives for WSC. As part of our analysis, we calculated a range of values for WSC as shown below: —____ Range ofCalculated Values Low Mid-point High Cost of equity 11.0% 10.0% 9.0% Calculated net asset value $125,426,300 $142,899,300 $165,307,200 indicated range of Calculated Values of City of Flint’s net asset value The calculated range of values reflects the perspective of a strategic investor maximizing its allowable return in a regulated water utility such as WSC. We calculated additional ranges of value based on management's projections, with no adjustments for an investor's allowable return, and our observed findings related to potential operating expense reductions of 10-30% as shown below. The sensitivities were included to illustrate how a potential buyer could achieve its desired return while accomplishing the City of Flint’s stated goal of not raising rates to customers above the levels determined by their baseline forecasts. Range of Calculated Values Low Mid-point High Disoourtad cash fow analysis - No ra’a adjustment 46,519,400 50,779,300 56,220,200 Discourted cash tow analysis - 10.0% reduction in operating expenses 125,487,500 142,946,400 165,382,000 Discounted cash flowy analysis - 20.0% reduction in operating expenses 125,508,800 142,999,500 165,416,900 Discourted cash flow anziyss - 30 0% reduction in operating expenses 125,550,000 143,040,600 165,471,800 Flint WSC Strategic Analysis EY xxxEND_PAGE:treasury01_b22_3033_3514_440 Scope of service Flint Water Service Center The valuation services consisted of performing calculations of value related to WSC and performing services related to the development of cash flow forecast sensitivities that are based upon market rate of return considerations for WSC. We performed the following procedures in the completion of our services: re Research regarding rates of return for regulated utilities operating in a similar industry tr Development of an appropriate discount rate for WSC t Development of forecast sensitivities based upon market rate of return considerations » Analysis of the performance and market position of WSC relative to similar publicly-traded companies r Analysis of financial data and valuation multiples of similar publicly-traded companies t Calculations’ of a value for the equity value of WSC utilizing applicable valuation methodologies r Consideration of the Income Approach to value Prepared a presentation summarizing the methodologies employed in our analysis and the assumptions on which our analysis was based 'Caiculations do not constitute an “appraisal", as that term is defined in BVS-I, General Requirements for Developing a Business Valuation, of the Business Valuation Standards of the American Society of Appraisers. A calculation does not represent EY’s opinion or recommendation of value Flint WSC Strategic Analysis EY xxxEND_PAGE:treasury01_b22_3033_3514_441 Valuation methodologies Three different approaches to value may be employed to estimate value: (i) the Income Approach, (ii) the Market Approach and (iii) the Cost Approach. The nature of the investment or asset and the availability of data will dictate which approaches are ultimately utilized to derive value. Income Approach The Income Approach focuses on the income-producing capability of the subject company or asset. The underlying premise of this approach is that the value of an asset can be measured by the present worth of the net economic benefit (cash receipts, less cash outlays) to be received over the life of the subject asset. The steps followed in applying this approach include: > Estimating the expected after-tax cash flows attributable to the asset over its life > Converting these after-tax cash flows to present value through “discounting” Es The discounting process uses a rate of return that accounts for both the time value of money and investment risk factors. Finally, the present values of the after-tax cash flows over the life of the asset are totaled to arrive at an indication of the calculated value for the asset. Market Approach » The Market Approach measures value based on what other purchasers in the market have paid for assets that can be considered reasonably similar to those being valued. When the Market Approach is utilized, data is collected on the prices paid for reasonably comparable assets. Adjustments are made to the prices paid to compensate for differences between reasonably similar assets and the asset being valued. Cost Approach b The Cost Approach is based on the premise that a prudent investor would pay no more for an asset than its replacement or reproduction cost new. The cost to replace the asset would include the cost of constructing a similar asset of equivalent utility at prices applicable at the time of the valuation analysis. To arrive at an estimate of value using the Cost Approach, the replacement or reproduction cost new is estimated and reduced for appraisal depreciation. Selected approach & Based on facts and circumstances and availability of information, we utilized the Income Approach in arriving at the calculated range of equity values for WSC. Flint WSC Strategic Analysis EY xxxEND_PAGE:treasury01_b22_3033_3514_442 Strategic Value Assumptions Summary We utilized the following assumptions in our valuation analysis, which were developed based on discussions with management and/or through industry research: re Transaction expected to be financed with 45.0% equity and 55.0% debt t City of Flint expected to retain and redeploy existing cash Future capital expenditures expected to be financed with 45.0% equity and 55.0% debt > Allowable return on equity assumed to be equal to 11.0% t Outstanding collectibles available to a strategic buyer immediately c= Transition to raw water from Karegnondi Water Authority (KWA) in 2015 > Post-employment benefits liability currently funded through cash flows t+ Outstanding debt of $21.8 million extinguished at time of transaction t Deferred tax liability available to the buyer due to temporary differences between book and tax calculations Flint WSC Strategic Analysis xxxEND_PAGE:treasury01_b22_3033_3514_443 City of Flint Flint WSC Strategic Analysis Table of contents Date of valuation: 31 March 2014 Exhibits Summary of calculated values Exhibit A Discounted cash flow analysis sensitivity - Base case Exhibit B Revenue Butld-Up - Base case Exhibit C Discounted cash flow analysis sensitivity - No rate adjustment Exhibit D Revenue Build-Up - No rate adjustment Exhibit E Discounted cash flow analysis sensitivity - 10.0% reduction in operating expenses Exhibit F Revenue Bulld-Up - 10.0% reduction in operating expenses Exhibit G Discounted cash flow analysis sensitivity - 20.0% reduction in operating expenses Exhibit H Revenue Build-Up ~ 20.0% reduction In operating expenses Exhibit | Discounted cash flow analysis sensitivity - 30.0% reduction in operating expenses Exhibit J Revenue Build-Up - 30.0% reduction in operating expenses Exhibit K Cost of Equity Exhibt L Rate of return benchmarking Exihibit M.1 Return on equity benchmarking Exhibit M.2 Equity multiples Exhibit N Balance sheet - Water Exhibit 0.1 Balance sheet - Wastewater Exhibit 0.2 Operating and maintenance benchmarking Exhibit P © 2014 by Ernst & Young LLP, All rights reserved. xxxEND_PAGE:treasury01_b22_3033_3514_444 City of Flint Exhibit A Flint WSC Strategic Analysis Summary of Calculated Values Date of valuation: 31 March 2014 (uss) Range of Cateutated Vatues Low Mid-point High Cost of equity 11.0% 10.0% 9.0% Calculated net asset value $125,426,300 $142,899,300 $165,307,200 Low Mid-point High Discounted cash flow analysis - Base Case{a) $125,426,300 $142,899,300 $165,307,200 Discounted cash flow analysis - No rate adjustment (b) 46,519,400 50,779,300 58,220,300 Discounted cash flow analysis - 10.0% reduction in operating expenses (c) 125,467,500 142,946,400 165,362,000 Discounted cash flow analysis - 20.0% reduction in operating expenses (d) 125,508,800 142,993,500 165,416,900 Discounted cash flow analysis - 30.0% reduction m operating expenses (e) 125,580,000 143,040,600 165,471,800 Notes : {a} Based on projections provided by Raftelis Financial Consultants, Inc. and includes rate adjustments to achieve required annual retum on equity of 11.0%. See Exhibit B. (b) Based on projections provided by Raftelis Financial Consultants, Inc with no additional rate adjustments. (c) Refects 2 10.0% reduction In operating expenses from the projections provided by Raftelis Financial Consultants, Inc. and associated rate adjustments to achleve the required annual return on equity of 11.0%. (0) Reflects a 20.0% reduction in operating expenses from the projections provided by Raftelis Financial Consultants, Inc. and associated rate adjustments to achieve the required annual retum on equity of 11.0%. (d) Reflects a 30.0% reduction in operating expenses from the projections provided by Raftelis Financial Consultants, Inc. and associated rate adjustments to achieve the required annual return on equity of 11.0%. Source of underiying data and certain information’ City of Flint. Some totals may not add due to rounding. See statement of © 2014 by Emst & Young LLP. All rights reserved. xxxEND_PAGE:treasury01_b22_3033_3514_445 City of Flint Exhibit B Fira WSC Statagic Analysis - Consolidated Pap tote Discourted cash Oow antalysis sensitivity - Base case(e) Dasa of vabsation: 31 March 2016 uss) Forte 20, eertts eatey_feapor Fo os tte ath perks ent Da ow as En Ed Ea Bi. Fad Ei Fad ED an Er Ror Fang rose = SOE vos | wane 7818 907% ame astm aaron own ane are estometor Furct Toes = mat usm 6 HOBOS Baw ‘W287 me BE TSH amas omen am ate acistrant etic a eT 2086 4 307, S12 nm _ seen 117108 1850958, arene Totkopecing ower Wase sare BEING Wee aS waa ere ares Sie) Fee wecn RD ea Aron ears Tita sr Cet ot wate ° a 2 sepa rd ¢mpt exoay Opeirg pares sss use IOUS oH emt exes Pict EBITDA 2RBIN 2867 Boe Dees Baws BESS H68a3 Exstng Deprecetan™ iis sooo sone sce soos smoce sopos ‘exten Deorocetor* eo e258 2onse 2s 321 ore) $260 8138060 EBT THOT Wiss Tae ees Tiees Tait ea mae ve ret Esper sy ee) Noes NSIT ert, ester powag Farum pn ct ures ae tse ger ose poem axe fete ze) peor (4M 20) Prt eam Cr) 6 Boe ‘peaes 10 rer cx) 12888 ‘32a eT trocme ses @ 39 (8) ane amen ome ame amy aren) f.1s5907, Nt cr wet S530 ‘eauam enna TOBzT9 TB ‘AIO TT A Gaazng Coprecctort rare semooe emome = ses seo ‘scaoes scco03s seco son sooo supos sons (Ad4 Aetorat Deprecatert om mess crab 20 rd soe sip 7arsA asean o7res8t 49 081,503 saan ire ‘edtins} Changes RIC ere 2x08 waa, (seat) pir pe RD nang, (eer (ate, Ce) aa arg ‘cTecs] Cranges 0 Oetned Tex Batce (aa) moet ma a rae 4s 8 mars woe 4600 800 sO" T8069 +433 Prrepad boroengs - Car id () 28a axee tame ase 10758 Peo nese eR 128 9 wees ‘3 c6a06 zene wera Lacs Preopat Repaynarts -Cepen sted) (1809) (2399 ces) ma (134 11 res) Ct pang Gear re) 1 a Procent veer tat @| 10% Cost t Easy Prasat vals of koe cash foe to way {ar of precart wah of teh ow ty ded Terral va ‘Aas Outten colette Les Bock valu of ext itt Teta edectod oy vcd ‘Tota techn ecpaty aoe feat ‘Ett Ta mont 0 mas newem xoro To ween mows aris (en Aerated copra fwawmTe = ea tZ248 mma mM wWiex mzaon wm = zani Pha Capea expercmares 13068 soce0 cor mes — TresOG ou. Stes nw DRGs ora soca Defer kas 64,650. aoe 280 720 2608 334 166 342606 20614 Retaeeco He THa37O 179 wise “woe wa Tee WIS HHS (BO castor rat Ea Return Rate Ba are wom | nen rena teal ieee saan romeo eS pen me ‘rewgp rata beso BEDE mam 6 me TTR 13 18e7 TUOSRS «ARATE EMO ENB ABET IF HD Raum on Raxp Baca ® 88 om 258 Cy om om 1% o™m 98 100% coy Eapey rancor Pato Base owns baseom enerE OSS e088 48 eames neve = TANS mae 70 masons sama sit ROE gl or ry nm nm oy cry tos 10% 1088 110% 110% hori ined ‘Gon ern Ca ory Br be a tm 50% im 46% 458 4m an Spentng expenses 0% of rt om ro on on sm cr se ory ry om Cry 18 ESITOA growth WA oe ny 26 ne 105% 985 rs my Tex 7th it Eevee an am 2m am Bm um a yn Bo on rd an Dapaoston a0 % of more 1% a8 om 1088 te 2% 26% cr ory um 16% 1898 Gown n sped epercnen ma NA Bm 1BDm 1588 Bm 2 7% tm om am 20% Capea expecta i 0% covert ae un 2m 2 am an re ao ry am am 4m nba ay cpa sm om =a roy am sm Ey S08 soy 2% BON 5% NRC a of ra om rr am 5m 3m tm Bi o% is cy 5m 1% oat dct) om 5o% om 5% 5% 508 60m 50% 80% 50% 5m 0% (Acro extent capex frorend ovr 0 2D, test OS oe OL Sond itn and omrtan efron ty of Firt Sra ray nck act 0 to: OBk dy Eres a Toney LLP Aaligees retereed, xxxEND_PAGE:treasury01_b22_3033_3514_446 City of Flint Exhibit B Flint WSC Strategic Analysis - Consolidated Page 2 of 2 Discounted Cash Flow Method - Terminal value Date of vafuation: 31 March 2014 (USS) Terminal! value calculation - Consolidated Normalized working capital Constant model Normafized 2025 total operating revenues $109,367,499 FCFE, normalized $14,431,739 Long-term growth rate 20% NWC requirement (a) 5.0% FCFE Terminal year growth rate 2.0% Implied increase / (decrease) in NWC ($107,223) FCFE, year ahead 74,720,374 OWided by: Capitalization rate 8.0% Capitalized value at end of estimation period $184,004,674 Normalized debt-free cash flow Remaining debt funded acquisition payments (80,453,082) EBITDA $46,023,473 Discount period Wi? Depreciation (normalized) 26,523,332 Present value factor @ 10% 0.3590 Operating income $19,500,142 Terminal value 347,940,886 Interest expense (5,620,581) Return on debt funded rate base (5,521,822) Eamings before taxes $8,357,738 Income taxes 3,251,160 Eamings after taxes 5,108,578 Add Depreciation (normalized) 26,523,332 (Increase) / decrease mn NWC. (107,223) Less: Principal repayments - Capex related (5,155,448) Add Principal borrowings - Capex related 14,587,832 Less Capital expenditures (26,523,332) Normalized FCFE $14,431,739 Notes: EBIT = Eamings before interest and taxes; FCFE = Free cash flow to equity; NWC = Debt-free net working capltal (a) Based on the consideration of Clty of Flint's ten year average of net working capital as a percentage of revenue © 2014 by Ernst & Young LLP. All rights reserved. xxxEND_PAGE:treasury01_b22_3033_3514_447 City of Flint Exhibit C Flint WSC Stratagic Analysis - Consolidated Discounted cash flow analysis sensitivity - Revenue Bulld-Up(a) Date of valuation: 31 March 2014 (uss) For the 3.0 months ending Test For the twelve month: 30 June. 2014 2015 aie 217 2018 2019 2020 2021 2022 2023 2024 2 Cost of water (2) 0 0 o 6,900,000 8,900,000 6,900,000 6,900,000 6,900,000 6,900,000 6,900,000 6,900,000 6,900,000 Oporatng expanses 15,250,343 BS 5AB 2H 44,109,434 BAI 45,952,615 47,305,913 48,704,882 $0,151,176 51,846,450 53,182,482 54,791,026 56,444,026 Existing Depreciation (b) 1,251,871 5,020,036 §,020,036 §,020,036 5,020,036 §,020,036 5,020,036 §,020,036 5,020,038, 5,020,038 5,020,036 $,020,038 Addifonal Oepreciation(b) 46,950 992,318 2.071.319 2.950,321 3.984.443 §,033,888 6,138,080 7,317,564 8,547,203 9,776,981 11,081 903 12,411,972 Interest Expense (c) 26,531 522,821 1,080,564 1,511,035 1,997,981 2,510,682 3,019,462 3,550,881 4,085,775 4,593,949 §,115,679 $,620,581 Return on dett funded rate base (tf) 705,288 2,785,508 9,018 982 3,391,178 3,819,248 3,892,323 4,181,237 4454240 4,740,578 5,022,883 5,268,609 $921,822 Return on equity grassed up 2.120,754 8,885,994 9,823,669 10,743,280 11,532,268 12,408,838 13,287,677 14,165,813 15,055,050 15,BB7,446 16,879,945 17,448,063 Total revere requirement 18,401,435 62,752,911 85,124,024 75,189,279 78,978,589 83,071.478 87,281,355 91,559,910 85,985,091 100,393,737 104,887,288 109,387,489 Base Revenue Forecast (c} 17,959,067 65,584,777 69,399,797. 73,450,289 78,891,089 79,160,882 81,138,514 83,113.210 85,138,025 87,222,671 89,353,371 91,546,879 Excoss/(Oeficient) revenue over base forecast 2831,868 4208.773 (1.708.981) (2,085,540) {3.810,796) (6,112,854) (8.446.700) (10,855,088) (13,171,066) (15 503,916) (17,820,820) Rotes: BV = Book value EBIT = Earrungs before interest and taxes; EBITDA = Eamings before interest, tax, depreciation end amortization; N/A = nol applicable, NYC = Net workng capital OPEB = Other post employment benefits, P= Price, ROR * Rate of retum, ROE = Fletum tn equity, TRY = Tangible book valve {a) Based on discussions with Management this represents agreed payments to the Karognodi Water Authority (d) Equals retum to debt holders on debt-fnenced porbone of acquisition. Source of: EY ©2014 by Emst & Young LLP. All rights reserved. xxxEND_PAGE:treasury01_b22_3033_3514_448 Fit WSe Statmye Aniysis - Comotdaind Page tala Orscoumted cach Cow arcttysis serestivty «Wo ras adimtment(e} Date of vation: 31 starch 2014 uss) Forte 30. enfin enciog Tepe For the ees month pecs exieg Bi dae aa as as ae Eas Ec) 22) 221 Eo er Eco Eas dina) Mor | HBT vos ment TANS nT ama som = weran ‘Recomm Furd ros SS mot MS RISTS var BE Beato age Fatsecgemert® D 2 2 A A ° 0 0 Tea parang rovers Wee “sar wy Tess mos ewer Biase _auaao SS teas Cont orate c . ° sxpo0 saonn sarap sence seco sscoco0 Spsargorerces sme ase mime am ses LxBeS aro ese form tesa ears 2hBTA CEES Bw AES NoBe ABTS EL) ae are Ey Dorrie ars smos supe Same somos somos son seo cones Athol Deore 90 Pn 2onse 20 3064 es $0968 Peed Prt Baran eat Teron eee Tetwis ees Te cas bes ARTs SEES mee 130s free Experce al samy (oosq Peo ree ase Rowe pee = coy Patum on att tnded eto base fre tN goose BMT BEA 3602) {215127 seem 6700875 Prater ee eS NATED veep aa 9028 Bees 73 1300 Tae s7ans one eer nam @ 38 FR (0) peg eemzen pemey psemy sera x55 gre ony (Paks: ME Sst rosa 8, 0 Norra wees San Sean Seem ‘S77 eo se TORO ro SOD Teo Bi) oF att Exstrg Onprecaticn® vate sence soos, ‘sous SONOS sumo smae sopoe somos sos seo sco ‘fs saxtoral Orpracanon® Bers O77eEst .08t e03 12409 Aas) Crangn nC tf) oes ost ree wy ‘Aitass) Crargoe m Dofared Tex Bates race me wrs 7809 et Prog tows «Capa rt neem sesce saze7e@ sacar m2 ay Pore Rapzyecarts« Capa tad ome peng (409726) 15905 2m (ee Precped bareargy « Accgeen rei lee Prope Repoymerss- Acton be} e275 (131009 Rrata) Sheebdad Leet Cpt ecenciares - Eau) Furencs Wont) GEE eM IRE es Caper oenctutes - Debt Frncng (ames eon mm ase Froecash tos tect eos mie are} (qeaany Prenat TOR Cont Ee oars (re ox 0350 Prac cab of tam ca om ay wae was ee are Tar Og) Sem offre rat of how a ow tng ‘a Trova cite eg Oaarg coectbten rok lees Bock rake of exter tt Tee weetac ogy ease ‘oan tenes ecpaty ate one Baba soma bee ma meses mor Icon mee SOURS TE een eae «= ens aS aes Acnuraseed cxorecaten TOME =| II ETII ED DI zozamr mmm «zee OS OND TAH AES Pe Contd aerate 3eBes = THD Heoe = EN Doe TBS 08 eam = ETT Sas Era) Bent acs Accurifed Oster ta taba fie eto 1008 27D 1m. 3000300 3412815 32511 Beto 3m30 fret) spurt Patna TF Tas ——atses areas —Rreasiss Ta 30s Qwes mms aumeer masses pero Rkoatosrton rare bose femur cn Pare Baca mere aM oem NEI 9538 11896618 ees namo ngage st 02882 to 770pH8 ewig tee mes «= Ae tee TD wire TOSS ARATE AOR teaies | bE ao Panumion Rate Base 2 om 7% aoe 7% rr. a am om to fon lpay rare Pats ove Sess BONO HORE emu navop ne 8 Ne saree rastate eamaert ROE ss ‘om a oe rey om aa am 1% omN an Schctet emo oxes Gore ravers ma 3m sam Ea 4m 3m 28 ia 2a 25 26 2 Commer g mre mw of earn om an as as sm on ae on on 88 ry am ERTOA goth aA cry ry ne am 3 2% 28 208, 28 20% 28 TDA REDS sm Rw me aa um cr ne a6 am an oe ne Dapaocton as 8% of rere 7% om roy om 1m an 3a ws cry om 10% 0% Gost h opt epee wr mA =m 190% se 1m a 7% 1m am sm 20% Cxbleqarctirss 3% ofamne ns Ba a cy am an ae an 2% an am Bm Dette east captal an an any ee =m Ba So cry cx cr BON Bm AC a8 oC owen 50 cry +7 5m 5m 1 om 2 sm 508 50% = Sat toes 508 soy SON 5 50% tm Bon son som a so nm weet (GV = Fm vabe GRIT Earp bara ntact ents ERITOA « Ean bobon eteeecd tat deesooaton nd avortzanon ML et apetcande AC = Bel workrg canta OPEB = Or poet tere bares Pe Pron ROR = Rabe ofr) ROE = Rates mn erty TEV = Tenge book eat (a) Based on procter provandy Fattoks France Corea re, ‘eat Oocerert. ay 0 cate tip eacse wen eran feo mls 10g Eee Yoemg LAP Ashgate, xxxEND_PAGE:treasury01_b22_3033_3514_449 City of Flint Exhibit D Flint WSC Strategic Analysis - Consolidated Page 2 of 2 Discounted Cash Flow Method - Terminal value Date of valuation: 31 March 2014 (US$) Terminal value calculation - Consolidated Normatized capital Constant model Normafized 2025 total operating revenues $91,546,879 FCFE, normalized $3,560,811 Long-term growth rate 20% NWC requirement (a) 5.0% FCFE Terminal year growth rate 2.0% Impbed Increase / (decreasa) in NWC ($89,752) FCFE, year ahead 3,632,027 Divided by: Capitalization rate 8.0% Capitalized value at end of estimation period $45,400,343 Normalized debt-free cash flow Remaining debt funded acquisition payments (17,928,515) EBITDA $28,202,853 Discount period 117 Depreciation (normalized) 26,523,332 Present value factor @ 10% 0.3580 Operating income $1,679,521 Termine! value $9,861,538 Interest expense (5,620,581) Retum on debt funded rate base (5,521,822) Eamings before taxes ($9,462,882) Income taxes Eamings after taxes Add. Depreciation (normalized) 26,523,332 (Increase) / decrease in NWC. (89,752) Less Principal repayments - Capex related (5,155,448) Add’ Principal borrowings - Capex related 14,587,832 Less: Capital expenditures ___ (26,523,332) Normalized FCFE $3,560,811 Notes: EBIT = Earnings before interest and taxes, FCFE = Free cash flow to equity; NWC = Debt-free net working capital (a) Based on the consideration of City of Flint’s ten year average of net working capital as a percentage of revenue Source of under Draft Document, EY All data subject to change upon completion of additional analysis. © 2014 by Emst & Young LLP. All rights reserved. xxxEND_PAGE:treasury01_b22_3033_3514_450 City of Flint Exhibit E Flint WSC Strategic Analysis - Consolidated Discounted cash flow analysts sensitivity - Revenue Build-Up{a) Date of valuation: 31 March 2014 (uss) For the 20 For the twelve month. Et) 2020 Cost of water (a) 0 0 0 6,900,000 6 900,000 6,900,000 6,900,000 6,900,000 6,300,000 6,900,000 6,900,000 6,900,000 Operating expenses 15,250,343 SAS 234 44,109,494 AZ SH 45.952,615 47,305,913 48,704,882 50,151,176 51,846 450 53,192,462 54,781,026 96,444,026 Extsting Depreciation {b} 4,251,571 5,020,038 §,020,036 5,020,036 5,020,036 $,020,036 5,020,036 §,020,038 §,020,038 5,020,036 §,020,036 §,020.036 Additional Deprectation[b) 46,950 992,318 2,071,319 2,950,321 3,954,443 $,033,688 6,138,060 7,317,564 6,547,203 9,776,881 11,081,803 12,411,972 Interest Expense (c} 26,531 $22,821 1,080,584 1,811,035 1,997,981 2.510.682 3,019,462 3,550,881 4,085,775 4,593,043 5,115,670 5,620,581 Return on debt funded rate basa (0) 705.286 2,785,508 3,018,682 3,391,174 3.619.248 3,892,323 4 181.237 4,454,440 4,740,578 5,022,863 5,268,689 §,921,822 Return on equity grossed up 2,120,754 8,885,994 9,823,689 10,743,280 11,532.268, 12,408,838 13,287,677 14,165,813 15,055,050 15,887,446 18,679,945 17,448,063 Total revenue requirement 18,401,435, 62,752,911 85,124,024 75,159,279 78,976,589 83,071,478 87,251,355 81,559,910 95,895,091 100,393,737 104,857,288 109,367,499 Base Revenue Forecast (c) 47,958,067 $5,585,777 69,399,797 73,450,289 76,891,049 79,160,882 81,138,514 83,113,210 85,139,025 87,222,671 89,353,371 91,548,879 Excess/{Deficien!) revenus over base forecast 2,831,888 4 275,773 (1,708,991) (2.085 540) {3,910,788} (6,112,681) (8448.70) (10,856,086) (13,171,068) (15,503 918) (17,820,620) Motes” BV = Book value, EBIT = Eamings belore interest and taxes; EBITDA = Eamings before interest, tax, depreciation and amortization, N/A = not applicable, NWC = Net working capital, OPEB = Other post employment benefits; P= Price, ROR = Rate of retum, ROE = Retum on equity, TRY = Tangible book value (a) Based on discussions with Management this represents agreed payments to the Karegnodi Water Authonty. Draft Documert. EY All data subject tp change upon completion of additional analysis. © 2014 by Ernst & Young LLP, All rights reserved, xxxEND_PAGE:treasury01_b22_3033_3514_451 City of Flint Exhibit F Pap las ‘Discoumted cash fow analysis seresitity - 10.0% reciution hi operating experssesta) Dae of vehsatioe: 31 March 2014 uss) Fort sorts scioy_lest er Fer a tehve coh periods ening 3 em aa End Ea Eu Ei fea hd wesc = saa yum se | oT ES ‘este Furd Toons = DBE RBM NRW Haw ate extra ——— eng sy sere Tord pute wows Waser __“teaems _Rors0s __wiewae amar cotoeen® 0 e 2 semen een 000 ——— semp35 women meee amo at ger earca ‘Qn __ BaeeT Rowe aes wines sateg Oegrecater” zat sees seme = Seana steno ‘dederal Dagestan oes err 2onse aa prors ear Taias aoa Bens seses Tie es as! Egor Em ase) (ronseg rere 199781) Faun ditt rand ito be 7520528 805) pow org asx Prt etre cox ‘omne tanas oraz rr rere as Sf) gma __ pea man are eens ‘a tore ae seaie COO «Ota 7826 At Besing Oeprocanc® ize coos somos sone secs det hectare Depreatr? Aedes, Crargas a AC 1 ‘eriece) Crargon m Detoread Tox Batre ‘dt Porced barowr- Capex rad ty aes Prrepad Rapeprerts ~ Cape rat (Adi Prop tonorrga - Argon niet) Lass Prrcped Rapoycrerts« Acton mised Lest Captagendtires Esty Funct} ess Capt operas - Dect Func} Free canton taut Prosort cn ttot & 1OR Cont ot Ecnty oars ote 03009 x0