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We've been asked to put together a couple of pages for the Governor on financing options for pipe replacement in Flint Let’s assume a $100m project 1 found the 1/19 document titled “water infrastructure improvements...” It’s a good start What I need is a memo that lays out the options for the Gov (1) SRO—basically just incorporate John’s SRO Federal government proposal (2) G.O options—CMI, GLWQ (quality of life bonds doesn’t seem big enough to mention) (3) Revenue bonds—bottle deposit, etc Are there other options we should discuss? Non-state dollars? For each, a short write up on pros and cons John—can you take the lead drafting something tomorrow? | know its short notice, but hopefully most of the work has been done already Thanks xxxEND_PAGE:treasury01_b39_6977_7316_143 suondg uoyeJsuey onusAdy pure usessoI1g sJUSWIDAOICUIT JINIONIJSLIFUT JOISAY xxxEND_PAGE:treasury01_b39_6977_7316_144 eet g Se Toh a Sei Sheree aBayiaud jueyo 0} joelqns “IVLLNACIANOD esodind SIU} JO} PSPUSLULUODSJ JOU a’e JNg paJojdxe useq sAey Spuog enuensd Alejo] pue uoHeziNoes OD9e QO} ‘sisAjeue siuj Jo uedsy < soBueyo jjlg ej}j0g J0/pue ebesn puny wsodeg ayjog «< suoijdo ssauaal6so} Vdq Jo/pue (,,4YMAAC,,) pun4 Bulajoasy s912A/A Buryuug (.V4W,) SAoujny soueul4 ueBIYsIyy OY} yo UONEZINN < (,LOMID,) Wesboid Ayjen® sayeqy Seye7}eAH - «SPuog ayI7 Jo Ayjend, se UMOUY OS|e “(,.dd3,,) WesHOlJg UONDS}Ol_ JEJUSWUOJAUZ GIND,,) Weibord aavenu| uebiYyoIWj ues} SPU0gG OD S}EIS < SJUDLUSAOIAUU! SINJONAJSEYU! JO}EM JOJ SPSsooud Jo S9OINOS jeUs}Od se paljjUSp! 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(T reasury)

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FYI, These folks are wanting to do consulting engineering on Flint’s water system. They have an excellent reputation and are wondering if there is an RFP process. Wayne L. Workman Deputy State Treasurer Michigan Department of Treasury

Position" We need to get a handle on how big is the potential deficit in the water system

Per our conversation a lot of these dates involve DEQ et al in which we/Treasury did not play a role i.e., someone else [DEQ] would need to confirm their accuracy. Just quickly, items we would question from the document or need to investigate further... 12/20/12 (p.1) - we don’t have the notification that is referenced 3/29/13 (p.2) — we are not aware of any veto by Kurtz. The early offers by DWSD to reconnect were rejected because of the add'l cost, they were long term & the fact the City had executed a contract with KWA. On Jan 12’15 they waived the reconnection fee but there were still issues re the length/term of the commitment. 3/12/15 — the Veolia report did mention corrosion control but the focus was on TTHM which was chlorination issue not related to the lead problem. | believe Treasury funded the study.

Wayne and Tom We need to quickly look at this and see if we agree Thanks xxxEND_PAGE:treasury01_b41_7622_7971_106

I can answer only the first question at this point. The order has not yet been issued by the court. The parties are in the process of the drafting it.

Couple of things (1) when was the recent order limiting the time period issued? 9 months for $3m vs $30 m for 48 months doesn't add, unless usage really changed? How did we get the $30m original estimate? Was part of it Kincaid? ts there still the ongoing $750,000 a month risk to the city? (2) Tom or Wayne --I'm out this morning. Please send an email to the gov right away, cc the folks in the room yesterday, and tell him something like "since our meeting yesterday, we found out the court has eliminated most of the city's exposure to a refund... Thanks Sent from my iPad

requested by COB today. It is what Harvey mentioned the other day Wayne L. Workman Deputy State Treasurer Michigan Department of Treasury

today. Importance: High Assume you guys have seen this Looks ok to me

With the declaration apparently the Mayor is appealing for Fed help to Cong. Kildee. That seems reasonable.

FYI Wayne L. Workman Deputy State Treasurer Michigan Department of Treasury

Follow Up Flag: Follow up Flag Status: Completed Let me check to sme if ican get someone to do a quick calculation

xxxEND_PAGE:treasury01_b37_6553_6782_134 Can we get a short call? Sent from my iPhone Begin forwarded message:

| know that I’m a broken record on this one, but | need some specific attention to Flint today. | need you all to reconstruct a timeline of events from the records we have relating to the Flint KWA DWSD controversy as it is becoming unwieldy. Please go back and review the Flint procedures and find the initial decision making process relating to the switchover. The first time | remember it is in 2012 (August | think) when the county started pitching the project at council. Then we instituted Mike Brown as EM and from there on it became to a certain extent our problem. However, if | remember right, this was a Flint idea from the start. Then, if you can trace the financial drivers of the decision to present day it would be important. | think for the most part the explanation you had in the distressed cities reports were helpful...my point being that this was an idea to help the city survive and without drastic changes it wouldn’t have, KWA being one of them. We'll take any other ideas that you have. xxxEND_PAGE:executiveofficeemails21_b0853_2234_2234_1

What's our plan to help? It can't be (1) it's not a problem (2) it's not OUR problem (3) we can't help flint because others will want help Sent from my iPad On Sep 26, 2015, at 6:55 PM, Workman, Wayne (TREASURY)

We will have an update later today from our call with the City yesterday. Wayne L. Workman Deputy State Treasurer Michigan Department of Treasury

Flint asks Snyder for $30M to upgrade water system Associated Water from the Flint River rushes into the Flint water treatment plant in Flint.(Photo: File photo) xxxEND_PAGE:treasury01_b37_6553_6782_080 1 CONNECTTWEETLINKEDIN 2 COMMENTEMAILMORE Flint — The mayor of Flint is asking Michigan Gov. Rick Snyder for $30 million to help upgrade the city’s water system and replace lead service pipes. The Flint Journal reports Mayor Dayne Walling announced his request while speaking Monday to the City Council. The request was made that day in a letter to Snyder. The funds sought by Walling include $10 million to replace lead service lines and plumbing that can leach lead into drinking water. Virginia Tech researchers testing Flint’s water have said residents shouldn’t drink or cook with city water without flushing lines or using a filter. The U.S. Environmental Protection Agency says Flint’s water is within levels allowed for lead. The agency has said it would help the city in its efforts to reduce lead. xxxEND_PAGE:treasury01_b37_6553_6782_081 Workman, Wayne (TREASURY)

FYI; see related attachment.

Thank you Wayne L. Workman Deputy State Treasurer Michigan Department of Treasury

Wayne: The Court of Appeals drew a distinction between two actions taken by Mike Brown: first, the ratification by him of water and sewer rale increases proposed by the then City Finance Director (“Townsend”) and second, the initiation and implementation by Mike himself of separate, additional water and sewer rate increases. The Court struck down only the former action; it left the latter action in place. The Court concluded that the water and sewer rate increases proposed by Townsend violated charter provisions requiring “notice and publication to its residents thirty days prior and by not waiting to implement those rates 97 xxxEND_PAGE:treasury01_b30_4670_4718_34 until July | of the next fiscal year.” The Court also concluded that nothing in Act 4, under which Mike acted, nor in subsequently enacted Act 436, authorized an Emergency Manager to simply ratify the actions of someone else (i.e., Townsend). Had Mike initiated and implemented the initial set of water and sewer rate increases on his own, the outcome would have been different. “[H]owever, [the statute] d[id] not support the action taken by the EM to expressly ratify and confirm the increases recommended by Townsend.” As a bottom line, this decisions appears to have limited impact upon the authority of Emergency Managers. Fred

My first impression is that the EM could raise rates, but he not follow the correct process. Fred, please weigh in with your thoughts. Sent from my iPhone