Correspondence between

004-265-2045 pdt https Awww. page 47 is infrastructure xxxEND_PAGE:deq16_b5_0892_4900_1019

Date: Tuesday, December 08, 2015 10:48:46 AM http://www. page 47 is infrastructure xxxEND_PAGE:deq03_b280_0439_0439_1

04478"15 Draft 1.pdf 04479"15 Draft 1.pdf Liane and Sonya, Please see the attached drafts for changes to DWRF for private lead service lines. Will you please review and get me any suggested revisions? Thanks Maggie

My suggested revisions are noted below. Let me know if there are any questions.

Date: Friday, October 09, 2015 8:09:28 AM Importance: High FY| —I’ll need a daily summary by 4:00pm (4:15pm at the latest) of all work efforts as described below. Be sure to cc Tracy Jo so that one of us will be able to forward it to George by the 4:30pm deadline. Thanks!

Date: Friday, October 09, 2015 8:09:00 AM Importance: High FY| —I’ll need a daily summary by 4:00pm (4:15pm at the latest) of all work efforts as described below. Be sure to cc Tracy Jo so that one of us will be able to forward it to George by the 4:30pm deadline. Thanks!

Importance: High FY1- FH need a daily summary by 4:000m (4.1 5prn at the latest} of ali work efforts as described belaw. Be sure to cc Tracy Jo so that one of us will be able to forward it to George by the 4:30pm deaciina. Thanks!

EPA has indicated that lead service line replacement ts eligible for principal forgiveness under GPR. Water savings/conservation for nat having to flush and waste treated water; and wastewater savings not having to treat wasted drinking water. » Chit or Smt, PAL,

Date: Thursday, October 08, 2015 5:08:00 PM EPA has indicated that lead service line replacement is eligible for principal forgiveness under GPR. Water savings/conservation for not having to flush and waste treated water; and wastewater savings not having to treat wasted drinking water. Liane J. Shekter Smith, P.E., Chief Office of Drinking Water and Municipal Assistance Michigan Department of Environmental Quality 517-284-6543

I stopped by to talk with you about a statement you made during the Flint talk. You mentioned that a lead service line is eligible for principal forgiveness. This is not accurate. Flint would be determined to be disadvantaged and that is how the lead service line project would be eligible for principal forgiveness. Also I had a conversation with Sylvia. She asked: e If DWRF could be used to reconnect Flint to DWSD? No, it's not the purpose of the DWRF. e If SAW funding could be used to reconnect Flint to DWSD? No, it's not the intended purpose. e If principal forgiveness could be provided to Flint? Yes, if they apply with a project that ranks high enough to receive available funding. T know things are moving swiftly. Does Flint intend to apply for DWRF? If so, when?

Date: Thursday, October 08, 2015 4:17:47 PM I stopped by to talk with you about a statement you made during the Flint talk. You mentioned that a lead service line is eligible for principal forgiveness. This is not accurate. Flint would be determined to be disadvantaged and that is how the lead service line project would be eligible for principal forgiveness. Also I had a conversation with Sylvia. She asked: e If DWRF could be used to reconnect Flint to DWSD? No, it’s not the purpose of the DWRF. e If SAW funding could be used to reconnect Flint to DWSD? No, it's not the intended purpose. e If principal forgiveness could be provided to Flint? Yes, if they apply with a project that ranks high enough to receive available funding. T know things are moving swiftly. Does Flint intend to apply for DWRF? If so, when?

What language would you recommend instead? Gbviousty EPA allows the maney to be spent on private lead service line replacemerd, and i can't imagine that they would require the city to operate and maintain the lines (rio city would take on that lability), is there someone at EPA can help us expedite @ review so | can get final language over to the legislature tornorrow? in addition, do we need to clarify that the loans can receive principal forgiveness or in that just internal? Thanks, Maggie

| made the two changes that we discussed yesterday evening- changing the definition to privately owned and wordsmithing the second change in 5409. Thanks for your help with this. Maggie 324.5403 Definitions; P to W. Sec. 5403. As used in this part: (a) “Priority list” means the annual ranked listing of projects developed by the department in section 5406. (b) “Project” means a project related to the planning, design, and construction or alteration of a waterworks system. (c) “Project refinancing assistance” means buying or refinancing the debt obligations of water suppliers if construction activities commenced, and the debt obligation was incurred, after the effective date of this part. (d) “Public water supply” means a waterworks system that provides water for drinking or household purposes to persons other than the supplier of the water, except for those waterworks systems that supply water to only | house, apartment, or other domicile occupied or intended to be occupied on a day-to-day basis by an individual, family group, or equivalent. (e) “State drinking water standards” means rules promulgated under Act 399 that establish water quality standards necessary to protect public health or that establish treatment techniques to meet these water quality standards. xxxEND_PAGE:deq20_b05_208_213_2 (f) “Water supplier’ or “supplier” means a municipality or its designated representative accepted by the director, a legal business entity, or any other person who owns a public water supply. However, water supplier does not include a water hauler. (g) “Waterworks system” or “system” means a system of pipes and structures through which water is obtained or distributed and includes any of the following that are actually used or intended to be used for the purpose of furnishing water for drinking or household purposes: (1) Wells and well structures. (11) Intakes and cribs. (iti) Pumping stations. (iv) Treatment plants. (v) Storage tanks. (vi) Pipelines and appurtenances. (vii) Peivately-owned residential lead service lines. €id) (viii) A combination of any of the items specified in this subdivision. 324.5409 Application for fund assistance; contents; availability of revenue sources; acceptance of applications by department; liability for incurred costs. Sec. 5409. (1) A water supplier whose project plan is approved or under review by the department under section 5407 may apply for assistance from the fund by submitting an application to the department. A complete application shall include all of the following, if applicable, as determined by the department: (a) If assistance is in the form of a loan, financial documentation that a dedicated source of revenue is established, consistent with obligations of debt instruments existing at the time assistance is requested, and pledged to both of the following purposes: (i) The timely repayment of principal and interest. (11) Adequate revenues to fund the operation and maintenance of the project. (b) Evidence of an approved project plan. (c) A certified resolution from a water supplier that is a municipality, or a letter of appointment from a water supplier that is not a municipality, designating an authorized representative for the project. (d) A certification by an authorized representative of the water supplier affirming that the supplier has the legal, institutional, technical, financial, and managerial capability to build, operate, and maintain the 3 xxxEND_PAGE:deq20_b05_208_213_3 project. The water supply does not need to certify it will operate and maintain any portion of the project funded for the replacement privately-owned of residential private lead service lines.

T'm checking with what other states are doing in the Region. I think a modification to the draft below is necessary but I want to confirm how it should be revised.

Date: Thursday, October 08, 2015 9:37:27 AM T assume Flint will be applying for a DWRF loan by May 1, 2016. I don't know how much principal forgiveness is being considered for Flint. In this current fiscal year, I have $5.5M in principal forgiveness available; $5M has been allocated to fund projects. The remaining $500,000 can be used for projects in the next fiscal year.

T assume Flint will be applying for a DWRF loan by May 1, 2016. I don't know how much principal forgiveness is being considered for Flint. In this current fiscal year, I have $5.5M in principal forgiveness available; $5M has been allocated to fund projects. The remaining $500,000 can be used for projects in the next fiscal year.

Importance: High (f we are going to clarify that Part 54 can cover replacement of private service lines, is this the best way to do? | made changes to the definition of waterworks systems to include private service lines, and changes the requirement the water supplier had to maintain and operate the private service lines. Please let me know ASAP what you think. Thanks, Maggie 324.5403 Definitions; P to W. xxxEND_PAGE:treasury01_b36_6099_6552_050 Sec. 5403. As used in this part: (a) “Priority list” means the annual ranked listing of projects developed by the department in section 5406. (b) “Project” means a project related to the planning, design, and construction or alteration of a waterworks system. (c) “Project refinancing assistance” means buying or refinancing the debt obligations of water suppliers if construction activities commenced, and the debt obligation was incurred, after the effective date of this part. (d) “Public water supply” means a waterworks system that provides water for drinking or household purposes to persons other than the supplier of the water, except for those waterworks systems that supply water to only 1 house, apartment, or other domicile occupied or intended to be occupied on a day-to-day basis by an individual, family group, or equivalent. (e) “State drinking water standards” means rules promulgated under Act 399 that establish water quality standards necessary to protect public health or that establish treatment techniques to meet these water quality standards. (f) “Water supplier” or “supplier” means a municipality or its designated representative accepted by the director, a legal business entity, or any other person who owns a public water supply. However, water supplier does not include a water hauler. (g) “Waterworks system” or “system” means a system of pipes and structures through which water is obtained or distributed and includes any of the following that are actually used or intended to be used for the purpose of furnishing water for drinking or household purposes: (i) Wells and well structures. (ii) Intakes and cribs. (iii) Pumping stations. (iv) Treatment plants. (v) Storage tanks, (vi) Pipelines and appurtenances. (vii) Private residential service lines. G49 (viii) A combination of any of the items specified in this subdivision. 324.5409 Application for fund assistance; contents; availability of revenue sources; acceptance of applications by department; liability for incurred costs. 2 xxxEND_PAGE:treasury01_b36_6099_6552_051 Sec. 5409. (1) A water supplier whose project plan is approved or under review by the department under section 5407 may apply for assistance from the fund by submitting an application to the department. A complete application shall include all of the following, if applicable, as determined by the department: (a) If assistance is in the form of a loan, financial documentation that a dedicated source of revenue is established, consistent with obligations of debt instruments existing at the time assistance is requested, and pledged to both of the following purposes: (i) The timely repayment of principal and interest. (ii) Adequate revenues to fund the operation and maintenance of the project. (b) Evidence of an approved project plan. (c) A certified resolution from a water supplier that is a municipality, or a letter of appointment from a water supplier that is not a municipality, designating an authorized representative for the project. (d) A certification by an authorized representative of the water supplier affirming that the supplier has the legal, institutional, technical, financial, and managerial capability to build, operate, and maintain the project. The water supply does not need certify it will operate and maintain any portion of the project that funds the replacement residential private service lines. Maggie Pallone Deputy Director Policy and Legislative Affairs Department of Environmental Quality 517-599-6190 (cell) [email protected]

FYI

Date: Monday, September 21, 2015 12:08:00 PM Thanks for checking. It’s on-going.....

Liane What's the latest on Flint? Is there information needed for the meeting on Monday? Sonya T. Butler, Chief Revolving Loan Section Office of Drinking Water & Municipal Assistance Michigan Department of Environmental Quality 525 W. Allegan Lansing, MI 48933 @ 517-284-5433 xxxEND_PAGE:deq21_b326_0959_0959_1

Date: Thursday, September 17, 2015 2:34:18 PM FYI

Date: Wednesday, September 16, 2015 3:32:08 PM Did you discuss SAW with Brad? Hopefully, he is aware that they are on the list. With respect to them being able to meet the grant conditions- not sure they're that different from other communities. Perhaps we need to have a frank conversation with them before they enter into any agreement.

Did you discuss SAW with Brad? Hopefully, he is aware that they are on the list. With respect to them being able to meet the grant conditions- not sure they're that different from other communities. Perhaps we need to have a frank conversation with them before they enter into any agreement.

FYI: Brad Wurfel asked if we had any funding request in from Flint for a project. We do not and the PPL for FY2016 was finaled last week. Also the replacement of the service lines is considered private property and is an ineligible cost in DWRF. SAW is in the 3" funding round. I think we need to talk about how to handle this given the community's distressed financials. They want $2M to do a wastewater and stormwater asset management plans. If they determine a funding gap, then they will need to raise rates. Are they willing to do that or risk repayment of the grant?

FYI: Brad Wurfel asked if we had any funding request in from Flint for a project. We do not and the PPL for FY2016 was finaled last week. Also the replacement of the service lines is considered private property and is an ineligible cost in DWRF. SAW is in the 3" funding round. I think we need to talk about how to handle this given the community's distressed financials. They want $2M to do a wastewater and stormwater asset management plans. If they determine a funding gap, then they will need to raise rates. Are they willing to do that or risk repayment of the grant?