Correspondence between

Fred, Yes, | will contact Mr. Sheehan. Ed Sent from my iPhone

Paul: That would not be my interpretation. You did not indicate how Meadowbrook staff reached the conclusion that governmental immunity no longer would apply to Darnell for acts taken by him while at the City of Flint. I will presume that they read § 20(1) of the Act to apply only to an Emergency Manager currently serving in the local government regarding which litigation arises and concluded it would not apply to Darnell since he no longer is Emergency Manager for the City of Flint. That conclusion may appear reasonable if § 20(1) is read in isolation. However, when read as a whole, § 20 is replete with instances where the term “Emergency Manager” refers to past as well as current occupants of that office. Section 20 was intended to remedy two shortcomings in Act 72: providing legal representation for Emergency Financial Managers while in office and after /eaving office. Section 20(2) was intended to address the former and § 20(5) to address the latter, which was of particular concern since two former Act 72 Emergency Financial Managers had been subjected to litigation after leaving office. With one exception, the Attorney General’s Office consistently took the position under Act 72 that it would not provide legal representation for Emergency Financial Managers because they were not State officials. Section 20(2) requires such representation, but only if litigation challenges: (a) the validity of the Act, (b) the authority of a State official or officer acting under the Act, or (c) the authority of an Emergency Manager and even then only if he or she was acting within the scope of his or her authority under the Act. If, hypothetically speaking, litigation were to be filed against Darnell for acts taken by him while at the City of Flint, the Attorney General’s Office would be obligated to provide legal representation only if such litigation involved (a) or (c); (b) would not apply because Emergency Managers are neither State officials or officers. As noted above, § 20(5) would address, again hypothetically speaking, litigation filed against Darnell for acts taken by him while at the City of Flint. If not covered by insurance, his litigation-related expenses, actual and anticipated, would be assessed against the City of Flint, if approved by the State Treasurer after determining that Darnell’s conduct had been within the scope of his authority and occurred on behalf of a local government while it was in receivership. See § 20(5)(a) and (b). Let me know should you have further questions. Fred

FYI

Ed: I spoke with Pete Bade, who forwarded a copy of the proposed EM order. As John indicated, reliance is being placed upon § 12(1)(x) of the Act. State Treasurer approval would be required, but due to § 12(1)(x), not due to any dollar value. Fred

Fred, OFR staff believes that the restructuring of the debt would not need City Council approval. However, because the amount is over S50K we believe it would require the Treasurer's approval. Do you agree? Ed Edward 8. 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] Baa Think Green! Don't print this e-mail unless you need to. CONFIDENTIALITY NOTICE: This e-mail, and any attachments, is 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 is 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

So, no new borrowing or issuance of debt is to occur? This is merely a restructuring of terms, such as a change in the maturity date?

| believe the provision referenced is 12(1)(x) of PA 436: Enter into agreements with creditors or other persons or entities to restructure debt on terms, at rates of interest, and with security as shall be agreed among the parties, subject to approval by the state treasurer.

Thoughts?? Sent from my iPhone Begin forwarded message:

Angela, please a call for us to discuss early next week. Thank you Fred

Wayne: I now have had an opportunity to review the complaint and attached exhibits. The complaint asserts that the City’s drinking water is contaminated and seeks a temporary restraining order, although of what is not quite clear. The lack of clarity may be due in part to the plaintiff, who describes himself as indigent, acting in pro per (i.e., representing himself). Also unclear is why Darnell was named as a defendant. There is in the complaint no mention of Act 436, nor any assertion that the plaintiff is aggrieved by any action, or inaction, on Darnell’s part. However, because it appears Darnell was named in his official capacity as then Emergency Manager, it is likely the plaintiff will amend his complaint to substitute the current Emergency Manager, Jerry Ambrose, as a defendant. Given the absence in the complaint of any reference to Act 436, or to any action, or inaction, under that Act, there does not appear to be, in a strictly statutory sense, any basis to request Attorney General representation for either Darnell or Jerry. | spoke with Pete and he concurred. However, he and I also decided to re-read the complaint to satisfy ourselves we have not missed anything upon this point. The four corners of the Act notwithstanding, there may be prudential grounds for requesting involvement by the Attorney General’s Office. However, because I think it advisable not to reduce those grounds to writing, I would prefer to discuss at your convenience. I will forward a copy of the complaint to Darnell. Fred

19 xxxEND_PAGE:treasury01_b28_4390_4585_091 Thank you.

Wayne: It depends upon the circumstance. Per the Act, the Attorney General’s Office is required to defend any cause of action involving any of the following: (a) The validity of this act. (b) The authority of a state official or officer acting under this act. (c) The authority of an emergency manager if the emergency manager is or was acting within the scope of authority for an emergency manager under this act. 1 will need to review the document that Pete forwarded to determine the nature of Darnell’s involvement. Fred

Would the EM usually be defended by the AG or a SAAG?

xxxEND_PAGE:treasury01_b20_2634_2931_148 Can we discuss this matter following our 9:00 tomorrow? We usually wind up around 10. Darnell Earley, ICMA-CM, MPA Emergency Manager Flint, MI a----+-n-- Forwarded message ---------~

xxxEND_PAGE:treasury01_b04_0379_0503_031 Received by Flint yesterday evening.