Correspondence between

Sorry so late. I believe this is the fiscally distressed communities grant program. May not be able to confirm right away.

Hey Caleb and Terry, Ball still bouncing a bit and wanted to make sure | looped both of you in on some items that will be part of a new FY 16 supplemental that is announced on Wednesday along with the 2017 budget recommendation . | just emailed Terry reference a new statewide infrastructure fund within Treasury with a recommended $165 million set aside for pipe replacement for communities in need across the state. Another $25 million on top of that specific to Flint for pipe replacement. Other supplemental items of interest for you two are listed below. Note $50 million in transition funding within Treasury...Terry, | believe this is to continue to keep DPS afloat while the longer term solution recommended by the governor is worked on by the Legislature. Note the $50 million reserve within DTMB for Flint....Caleb, this is reserved funding for Flint to be used if needed this fiscal year. All Flint stuff is going through Bill Nowling, so | don’t think you two will need to speak to it, just wanted you to be aware that what’s in your budget from the supplemental. Thanks guys. DTMB Flint - reserve $50,000.0 $50,000.0 2016-6 (boilerplate appropriation) Treasury Assistance to $2,000 0 $2,000.0 2016-4 local governments Treasury Infrastructure fund $165,000.0 $165,000.0 2016-4 (boilerplate appropriation) Treasury Transition funding $50,000.0 $50,000.0 2016- for Detroit Public Schools Kurt Weiss State Budget Office 517-335-0050 t Sta te Budget xxxEND_PAGE:treasury01_b38_6783_6976_143 FY 2016 Supplemental Recommendations $22,002.9 |_($3,824.6)| Higher Ed Tuition Incentive Program (TIP) reimbursement $2,0000 2016-5 DIFS | $2,2250] 2016-4 | udicia udicia E-file (fee revenue dicia {$ in thousands) FY16 Supplemental (Exec. Rec. Request) Agency Issue Letter Number Intercounty Drain - topographical data $1,925.0 2016-4 Cap Outlay _|DNR: MNRTF Projects $27,957.2 2016-3 DNR: State parks repair and maintenance - | zo1e4 | Cap Dirtiayy Milliken State Park improvements #0000 2016-4 Unrealized savings from health care contract $13,400.0 | $13,400.0 2016-4 [Education | Flint - child care services $8,000 0 2016-6 Education | ois pormunkawens to child care providers $100.0 2016-8 Flint - nutrition programs $6,000.0| $9,500.0| 2016-6 | Flint - CCDF Reserve for Flint child care needs - boilerplate appropriation $8,000.0 2016-6 Flint - funding to keep Flint on Detroit water peo system (July-Sept. 2016) $3,900.0 $3,900.0 2016-6 IDEQ _|Flint - water system needs $2,200.0| $2,200.0 2016-6 [OEQ __|Flint - payment to city to aid with water bills $30,0000] $30,000.0[ 20166 | Flint - utility assistance: infrastructure and filters $25,000.0 | $25,000.0 2016-6 [DEQ _|Flint- water response team $2,2500| $2,2500 2016-6 DHHS Medicare Part B rate Increase $12,463.9 | $36,232.2 2016-4 IDHHS __|Medicare Part D clawback $18,354.2 | $18,354.2 2016-4 pHs | ae grant for community behavioral health $980 0 2010-4 DHHS Federal VOCA Justice assistance grant $5,000 0 2016-4 DHHS Fund shift (SCHIP $14,329 1 2016-4 DHHS Autism caseload/utilization $4,733.1 | $13,759.14 2016-4 DHHS Anticipated FY16 use tax adjustment 2016-4 DHHS FY16 adjustments to human services caseloads ($7,728 4)} ($92,759 3) 2016-4 DHHS FY16 child care fund adjustment $6,294.2 $6,294.2| 2016-4 | DHHS Sexual assault evidence kit tracking and $25.0 | $250| 2016-4 reporting commission OHHS Flint - food bank resources $430.0 $430.0 2016-6 IDHHS i F IDHHS | Flint- Intensive behavioral therapy | 1.50007 $1,500.0[ 2016-6 $260.0 $260.0 | _ 2016-6 F Flint - TANF Reserve for Flint (work project | $00 | | $6,10000 | pies authority and boilerplate appropriation, san se1000 ante-6 > el EF} a O° fe} < @ s oH. i egislature egislature egislature DMVA lola |S > Grand Rapids Homes for Veterans $2,300.0 2016-4 Last Updated 2/7/2016 FY16 Supplemental Requests Sorted by Agency Page 1 of 2 Printed: 2/7/2016 4:27 PM xxxEND_PAGE:treasury01_b38_6783_6976_144 FY 2016 Supplemental Recommendations {$ in thousands) program to tuition assistance fund re IDNR Cid CSCS ~=84,00007 §~=—2076-4_—C*” IDNR [Damfunding $3,0000| 20164 ~—*CY IONR __[Flint-summeryouth program | CS $2500] ~=— $2500] 2016-6 CO Technical cost adjustments Statewide school water testing 7 5 n choeol Aid [Flint - Early On services $9,200.0 $9,200.0 2016. chool Aid [State School Reform/Redesign $1,000.0 2016- Implementation of transportation package PA 174 of 2015 $3,800.0 $3,800 0 2016-4 State Police |Increase trooper schoo! by 12 additional recruits $428.8 $428.8 20164 DTMB State Building Authority rent lapse $26,500.0)] ($26,500 0 2016-4 Low-income state trooper pensioners DTMB PA 168 of 2015 $145.0 $145.0 2016-4 DTMB Office of retirement services (SIGMA $0 0 $2,800.0 2016-4 implementation DTMB Enterprise legal services $5,000.0 $5,000.0 2016-4 DTMB/CSC Office of Good Government new manager $325.0 2016-4 academ reasu Totali_$381,743.7 | $358,027.2] [%) 4 Last Updated 2/7/2016 FY16 Supplemental Requests Sorted by Agency Page 2 of 2 Printed: 2/7/2016 4:27 PM xxxEND_PAGE:treasury01_b38_6783_6976_145 Robert, Caria M. (T' reasury)

FYI ... | spoke with Fonger this morning and this is his story. | had asked him to confirm with Ed Kurtz, but apparently he didn’t want to wait. for gov rick_snyder.html xxxEND_PAGE:treasury01_b04_0379_0503_125

Sent from my iPhone Begin forwarded message:

proposal for.html#incart_river Ed Kurtz indicates they are looking at the proposal seriously, and that it is “not without merit.”

Lean. xxxEND_PAGE:executiveofficeemails20_b1912_4641_4641_1

Nat that ’rm aware of and believe this stl stands. Double checking on this end just in case.

The permits for KWA are already issued. I’ve got our folks working up some talking points on the DEQ-related issues this week, but our role here is not what the news really cares about. b Brad Wurfel Communications Director Michigan Department of Environmental Quality 517-241-7395 - office 517-230-8006 - cell

All, Steve Carmody has asked for some information on this. | will follow up with him based on the general info below. Any other "updates" at this point? Thanks, Terry Begin forwarded message:

Here is the start of some topline messages for Flint ... | don’t think that we need to get too deep into the specifics on the deal, we can leave that to Ed and others to discuss. Please let me know of any suggestions and additions that you have. | plan to also put together some background information that we can have on hand when discussing the topic. As | mentioned before, it likely won’t be until the week of Apr 8" that we discuss this publicly. e This is a decision made by the City of Flint and is a local decision that affects their local water supply. e Flint Emergency Manager Ed Kurtz has heavily involved the city’s elected officials throughout the decision-making process and all agree that this is best for the citizens and businesses in Flint. e = This will save Flint at least $100 million over the next 25 years, and possibly as much as $300 million. © The Departments of Treasury and Environmental Quality have approved the financial and environmental soundness of KWA’s plan. e Flint accounts for only 2% of DWSD’s capacity. Thanks, Caleb xxxEND_PAGE:treasury01_b06_0561_0924_363 ha Lamphier, Wendy (Ti reasury)

After speaking with Andy, Dan, Dennis and John, we have a plan for the next steps in Flint’s request to participate in the KWA with Genesee County. Here is what we can confirm publicly, although unless it’s a permitting question, we should have Treasury (Terry or |) answer any inquiries. Ed Kurtz will submit a resolution to join the Karegnondi Water Authority (KWA) to the Treasurer, likely today. Once | receive word that we have officially received, we can confirm that we have it and the Treasurer will thoroughly review the resolution and perform due diligence before making a decision. Under PA 436, the State Treasurer must approve contracts over $50,000 that were not competitively bid. No date has been set for the Treasurer to complete his review, but, he is fully aware of the tight timelines necessary to get approvals for the upcoming construction season, and will conduct his review accordingly. That is all we can confirm publicly through next week. Just so you are aware, and not for public consumption, a call was placed to DWSD to let them know that Ed Kurtz was submitting his request and that if they have a final best offer that they should submit it very soon. This may prompt them to go to the media, or not, but be prepared if you get a call from that angle. We need to develop some talking points for the following week, when Andy makes his determination. | will try to put together a draft by the end of the day and send it around for review. If anyone has anything they would like me to add, feel free to send it my way. Let me know if you have any questions. -Caleb xxxEND_PAGE:treasury01_b06_0561_0924_360 Koryzno, Edward (T reasury)

The article is correct, we will be meeting with both proponents and opponents of the potential pipeline project. There isn’t much to say at this point, Treasury dees not have an opinion yet, as we will be getting the full briefing tomorrow. Here is what we know: xxxEND_PAGE:executiveofficeemails20_b0274_1146_1150_1 -A group Is proposing a water pipeline from Lake Huron to the Flint Metro area, which would eliminate the nead to purchase water from Detroit Water and Sewer Department (DW5D)_ -The design and cost estimates have yet to be completed. ~The City of Flint has contributed about $25-30k towards the costs of the studies. -DWSD is opposed to the plan for the obvious reason that they would lose custorners. DWWSD officials have pointed out that a study was dorie in the 90's that concluded that a project of this nature would not be cost effective. -This would allow Flint to contrat their own water costs and quality and provide apnortunities for industrial growth. Since Treasury officials have not heen briefed on all the information yet, | would keap the statement from the Governor rather high-level, something like: Treasury officials are meating ternorrow to get the details of the prapased pipeline pian. Until the ultimate costs are known and the various studies have been conducted, the benefits to the citizens of Flint and Genesee County cannot be determined, Feel free to call rne if you have any crestions. Caleb

Follow Up Flag: Follow up Flag Status: Completed The article is correct, we will be meeting with both proponents and opponents of the potential pipeline project. There isn’t much to say at this point, Treasury does not have an opinion yet, as we will be getting the full briefing tomorrow. Here is what we know: -A group is proposing a water pipeline from Lake Huron to the Flint Metro area, which would eliminate the need to purchase water from Detroit Water and Sewer Department (DWSD). -The design and cost estimates have yet to be completed. -The City of Flint has contributed about $25-30k towards the costs of the studies. -DWSD is opposed to the plan for the obvious reason that they would lose customers. DWSD officials have pointed out that a study was done in the 90’s that concluded that a project of this nature would not be cost effective. -This would allow Flint to control their own water costs and quality and provide opportunities for industrial growth. Since Treasury officials have not been briefed on all the information yet, | would keep the statement from the Governor sather high-level, something like: Treasury officials will be meeting with Genesee County and Detroit officials tomorrow to get the details of the proposed pipeline plan. Until the ultimate costs are known and the various studies have been conducted, the benefits to the citizens of Flint and Genesee County cannot be determined. Feel free to call me if you have any questions. Caleb

Importance: High Per our quick conversation, Caleb. Any update you can provide ASAP from Treasury role and perspective will be great.

Importance: High Per our quick conversation earlier, Caleb. Any update you can provide ASAP from Traasury role and perspective will be great.