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Memo re Alternative Proposal for Sale of Water Transmission Main

In follow-up to our meeting this morning, attached is my memorandum regarding this matter. If you have any further questions, please let me know. Peter M Bade Chief Legal Officer City of Flint p 810 766 7146 f 8102322114 xxxEND_PAGE:treasury01_b20_2634_2931_260 DEPARTMENT OF LAW MEMORANDUM TO: ‘Wayne Workman Randall Byrne Fred Headen cc: Darnell Earley FROM: Peter M. Bade yw RE: Altemative Proposal for Sale of Water Transmission Main DATE: May 28, 2014 On May 12, 2014, Emergency Manager Darnell Earley presented to the Flint City Council a proposal for sale of a portion of the 72 inch water transmission main to the Genesee County Drain Commissioner. A special meeting of the Flint City Council was held on Monday, May 19, 2014 to discuss the proposal. Pursuant to MCL 141.1559(2), Council adopted a resolution rejecting the proposal. A second special meeting was scheduled on Wednesday, May 21, 2014 for the purpose of discussing an alternative proposal. At the May 21* meeting, Council members acknowledged they did not have an alternative proposal. However, pursuant to a motion by Councilman Sheldon Neeley, a resolution was adopted recommending the water main sale price be increased to $4 million dollars, with equal payments over two years. Pursuant to MCL 141.1559(2), Council had seven (7) days from the date of their rejection of the proposed action to submit to the local emergency financial assistant loan board an alternative proposal that would yield substantially the same financial result as the action proposed by the xxxEND_PAGE:treasury01_b20_2634_2931_261 Emergency Manager. Accordingly, the deadline for submission of Council’s alternative proposal was Tuesday, May 27, 2014. Council did not submit an alternative proposal to the local emergency financial assistant loan board. S:\P. MM to DEarley re Water Transmission Main 5-28-14.docx xxxEND_PAGE:treasury01_b20_2634_2931_262 Byrne, Randall (T Treasury)

Order Relevant to PA 436, 141.1550, Sec. 10 (1)

xxxEND_PAGE:treasury01_b20_2634_2931_149 Wayne Workman to host Call in - 14 Access Code sy Maxine: Please forward this meeting notice to Peter Bade. Thank you. Poter M Bade Chiet Tegal Oiticer Cat ot Flint p X10 766 7140 f Xiu 2322114 xxxEND_PAGE:treasury01_b20_2634_2931_150 EMERGENCY MANAGER CITY OF FLINT GENESEE COUNTY MICHIGAN ORDER No. 13 PROHIBITING COUNCILMAN ERIC MAYS FROM ACCESS TO LOCAL GOVERNMENT FACILITIES BY THE POWER AND AUTHORITY VESTED IN THE EMERGENCY MANAGER ("EMERGENCY MANAGER”) FOR THE CITY OF FLINT, MICHIGAN ("CITY”) PURSUANT TO MICHIGAN'S PUBLIC ACT 436 OF 2012, LOCAL FINANCIAL STABILITY AND CHOICE ACT, ("PA 436"); DARNELL EARLEY, THE EMERGENCY MANAGER, ISSUES THE FOLLOWING ORDER: Pursuant to Public Act 436, the Emergency Manager has broad powers in receivership to rectify the financial emergency and to assure the fiscal accountability of the City of Flint and its capacity to provide or cause to be provided necessary services essential to the public health, safety and welfare; and Pursuant to Public Act 436, the Emergency Manager acts in place of local officials, specifically the Mayor and City Council, unless the Emergency Manager delegates specific authority; and Pursuant to Public Act 436, the Emergency Manager has broad power to manage the local government, and may issue orders to elected and appointed officials necessary to accomplish the purpose of the act. An order issued under PA 436 is binding on the person to whom it is issued; and Pursuant to Public Act 436, the Emergency Manager may prohibit a local elected official from access to the local government’s office, facilities, electronic mail, and internal information systems for failure to abide by an order which disrupts the Emergency Manager’s ability to manage the local government; and xxxEND_PAGE:treasury01_b20_2634_2931_151 Emergency Manager Order 3, Directives to Councilman Eric Mays, dated December 13, 2013, a copy of which is attached, attempted to address a pattern of extremely disruptive and disorderly behavior by Councilman Eric Mays that has interfered with my ability to manage the City of Flint; and Councilman Mays has consistently disregarded and not carried out the provisions of Order 3, including but not limited to: 1. Engaging in loud, disruptive and obnoxious behavior during meetings of the Flint City Council. 2. Repeatedly disregarding directives of the Council President during meetings. 3. Continuing to speak after having been called to order by the Council President. 4. Repeatedly engaging in disorderly conduct that causes the Council President to seek police assistance in removing him from Council Chambers. Openly refusing to comply with the Council President’s efforts to restore order at meetings. Openly advocating that the Emergency Manager orders be disregarded at meetings. Interrupting other members of Council and speaking over them. Speaking out of turn and speaking without being recognized by the Council President. Engaging in disjointed, rambling and excessively long diatribes that unnecessarily delay Council action. 10. Inappropriately engaging members of the public during meetings. 11. Being verbally abusive toward staff, other Council members, Council leadership, and the Emergency Manager. ui Cena Emergency Manager Order 8, Council Meeting Protocol, dated March 5, 2014, a copy of which is attached, provides, in part, that “Council members shall not make comments during Council meetings, other than to respond to roll call or to respond directly to a request of the Council President, or at his recognition. When recognizing a member, the Council President shall limit comments, discussion or debate to a reasonable amount of time;” and Councilman Mays has consistently disregarded and not carried out this provision of Order 8. He has repeatedly spoken at meetings without being recognized; refused to follow the directives of the Council President; ignored the Council President’s efforts to call him to order; continued speaking after having been requested by the Council President to stop; and interfered with the Council President’s efforts to conduct meetings in an orderly manner; and Emergency Manager Order 8 and Emergency Manager Order 10, Council Meeting Agenda, dated April 1, 2014, copies of which are attached, seek to ensure that “the business of the City of Flint conducted at City Council meetings occurs in an orderly, dignified, and efficient manner, reflecting the level of professionalism deserved by Council members, City officials, staff and the public;” and Councilman Eric Mays has consistently disregarded and not carried out this provision of Orders 8 and 10. Councilman Mays’ behavior significantly undermines the orderly conduct of Council xxxEND_PAGE:treasury01_b20_2634_2931_152 meetings, and causes an undignified, inefficient and highly unprofessional atmosphere for conducting the important business of the City of Flint; and Governance of the City of Flint is subject to extraordinary circumstances due to a financial emergency necessitating a response to Mr. Mays’ disruptive behavior; and Emergency Manager Orders 3, 8 and 10 are necessary to accomplish the purposes of Public Act 436; and Councilman Mays’ consistent refusal to abide by Order Nos. 3, 8, and 10 has substantially disrupted and interfered with my ability to manage the local government; and Implementation of my financial and operating plan requires that Council function in a competent, professional and efficient manner, and that it properly address assignments; and I have assigned important matters to Council, including review of the Fiscal Year 2015 budget; proposed ordinances and ordinance amendments; formation of multiple advisory committees; and have increasingly solicited their input regarding municipal affairs; and It is my intention to increase the assignments to Council, with the expectation that Council will assume greater responsibility for duties mandated in the Flint City Charter, and allowing the City to move to a transition advisory board, as contemplated by MCL 141.1563; and Councilman Mays’ continuous disruptive behavior has significantly impaired Council’s ability to address the assignments I have directed to that body, thereby disrupting my ability to manage the local government; and Order No. 3 was issued as a progressive step in an attempt to persuade Councilman Mays to correct his behavior and participate as a member of Council in a professional, constructive and thoughtful manner, consistent with the purposes of Public Act 436; and If allowed to continue, Councilman Mays’ disruptive behavior will significantly undermine my efforts to address the financial emergency and to accomplish the purposes of Public Act 436; and Based upon the above, Councilman Eric Mays is prohibited from access to Flint City Hall and all other City governmental office facilities, electronic mail, and internal information systems. This Order is effective May 21, 2014. This Order may be amended, modified, repealed or terminated by any subsequent order issued by the Emergency Manager. Dated: By: Darnell Earley Emergency Manager xxxEND_PAGE:treasury01_b20_2634_2931_153 City of Flint xc: State of Michigan Department of Treasury Mayor Dayne Walling Flint City Council Inez Brown, City Clerk S\P Bade\EM2014\Orders\Order No 13 Mays 05 20 14.doc xxxEND_PAGE:treasury01_b20_2634_2931_154 Byrne, Randall (T. reasury)

RE: Sale of the Pipeline

How about 4:00 pm today? 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] ws 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

DWSD

Good afternoon- Attached please find correspondence from Mr. Schenk. Thank you. Wendy J. Mullins OTTENWESS, TAWEEL & SCHENK, PLC The Buhl Building 535 Griswold Street, Suite 850 Detroit, MI 48226 (313) 965-2121, ext. 219 (313) 965-7680- Fax This electronic message and all contents contain information from the law firm of Ottenwess, Taweel & Schenk, PLC which may be privileged, confidential or otherwise protected from disclosure. The information is intended to be for the addressee only. If you are not the addressee, any disclosure, copy, distribution or use of the contents of this message is prohibited. If you have received this electronic message in error, please notify us immediately and destroy the original message and all copies. xxxEND_PAGE:treasury01_b20_2634_2931_119 OTTENWESS, TAWEEL & SCHENK, PLC ATTORNEYS ATLAW The Buhl Building David M. Ottenwess 535 Griswold, Suite 850 A. Tony Taweel Detroit, MI 48226 Matthew A. Schenk Matthew A. Schenk - (313) 965-2121 Stephanic P, Ottenwess Direct Dial (313) 965-2121 ext, 214 (313) 965-7680 John R. Monnich E-Mail: [email protected] www.ottenwesslaw.com Joseph A. Campbell May 2, 2014 Mr. Darnell Earley, ICMA-MC, MPA Emergency Manager City of Flint 1101 S. Saginaw Street Flint, MI 48502 RE: Your letter of April 29, 2014 to Mr. Kevyn Orr Mr. Earley, lam In receipt of your letter of April 29, 2014 addressed to Detroit’s Emergency Manager, Mr. Kevyn Orr, In that letter, you Indicated that Flint stopped using DWSD water as of that date and that “City officials have closed multiple valves within our infrastructure so that our system Is now completely isolated from DWSD infrastructure.” | am writing this letter to confirm the information discussed In a conference call with Deputy City Attorney, Mr. Anthony Chubb, and representatives of the Genesee County Drain Commissioner's Office on May 1, 2014. During that call, as we reviewed flow data from the DWSD FL-01 meter, It was acknowledged that Flint continued to use DWSD water through April 30, 2014. As a result, DWSD will bill the City of Flint for water usage through the end of April as opposed to the earller date indicated within your letter. Since that time, DWSD has worked with the Genesee County Drain Commissioner's Office to confirm the closure of valves associated with Flint’s usage of DWSD water. Should you have any questions regarding this matter, please do not hesitate to contact me. Very Truly Yours, Ottenwess, Taweel & Schenk, P| Matthew Schenk

Re: E & Y Statement of Work

Well, Monday is going to be a very full day with the swearing in of the new City Council, a Veteran's Day ceremony, as well as other meetings already scheduled. I would still like to hold off at least until after Wednesday, so that we can be as prepared as possible to begin any significant meetings with E&Y. Perhaps they can send us a list of information that we need to prepare for their visit, so that we can have an opportunity to pull the data together on the studies they propose to conduct---and then we schedule a meeting, preferably after Wednesday. That way we we can talk about both projects at the same time. I understand the urgency, but would feel much better if we can get as prepared as possible, including the preliminary discussions with Hurley, before proceeding with setting a firm meeting date for all projects within their proposed scope of work. Darnell Earley, IOMA-CM, MPA Emergency Manager Flint, MI On Thu, Nov 7, 2013 at 3:42 PM, Workman, Wayne (TREASURY)