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FW: DWSD News Release: DWSD Director's Statement on Flint Decision

See attached DWS5D news release with DWSD Director's statement on Flint’s decision ta commit to purchasing raw water frorn the KWA. In my discussion with Brent Wright, Flint WTP Supt., there is speculation {concern} of what may happen when the termination of the water service agreement with DWSD becomes effective on 4/17/2014. Current speculation is that DWS5D may attempt to recoup thelr “stranded costs” by adding it to Flint’s ready to serve and/or cormmodity rate for the remaining time that they need to purchase water from the DWSD (from 4/18/2014 — till KWA water can be piped to the Flint WTP}. [| will pass along any further updates concerning this matter. Michael Prysby, PE. District Engineer Office of Drinking Water and Municipal Assistance 517 335-6122

RE: Flint - Dept of Treasury

Great answers, Mike. The only camments/clarifications | have are in regards to the question on the use of the DWRE to operate the treatment plant fulltime. The DWRF may be used to construct facilities necessary to make full time operation feasible. However, it should be clear that “operating costs” are not eligible. Also, ary application to the DWRE requires 4 comprehensive, 20-year project plan, not a one-time, prohect specie request. The fact that the city of Hint recently turned down a DWRF loan even with a significant portion of it to be “forgiven” thet was intended to address high priority distributian systern needs cannot be overlooked. The city would have to inchide these needs in any revised/new project olan and satisfactorily explain any decision to not inchide these distribution improvements in this new loan anplication.

RE: Flint - Dept of Treasury

Date: Wednesday, January 23, 2013 10:25:00 AM Great answers, Mike. The only comments/clarifications | have are in regards to the question on the use of the DWRF to operate the treatment plant full time. The DWRF may be used to construct facilities necessary to make full time operation feasible. However, it should be clear that “operating costs” are not eligible. Also, any application to the DWRF requires a comprehensive, 20-year project plan, not a one-time, project specific request. The fact that the city of Flint recently turned down a DWRF loan even with a significant portion of it to be “forgiven” that was intended to address high priority distribution system needs cannot be overlooked. The city would have to include these needs in any revised/new project plan and satisfactorily explain any decision to not include these distribution improvements in this new loan application.

Flint - Dept of Treasury

| spoke with Mr. Randy Byrne from the Dept. Treasury — Office of Fiscal Resp. concerning the Flint WTP. Below is a brief summary of our discussion. | can fill you on more details this afternoon just prior or immediately after our KWA meeting. Ql1: The city of Flint has considered using the Flint River as a source of drinking water to be treated at their WTP; however, The city may be somewhat reluctant to use the river as their source, what is your assessment of this issue? A: The city could utilize the Flint River ranging from 100% utilization — to a certain percent blending (either Detroit or KWA) or zero percent utilization of the river. | agree that the city should have concerns of fully utilizing the Flint River (100%) for the following; the need to soften, the potential for more advanced treatment after next round of crypto monitoring, available capacity in Flint River at 100-year low flow, residuals management (disposal of lime sludge). As the percent utilization of the river decreases (blending options), the need for softening, residuals disposal, capacity issues do not pose as much of a concern. Q2: When comparing the treatment of Lake Huron water vs. Flint River water, are more treatment chemicals needed to effectively treat the water? xxxEND_PAGE:deq18_b170_1434_1436_1 A2: Flint river water will require a larger amount of primary coagulant (Ferric) due to poorer raw water quality than Lake Huron water. Also, a different type of primary coagulant (Alum) may be more suitable for the treatment of Lake Huron water. | can confirm that based on what the Detroit Lake Huron WTP uses. Also, since softening would need to be employed, treatment compounds including lime, soda ash, and carbon dioxide would be necessary. Q3: If the city needed to borrow money to be able to operate full time (KWA or blending), does the DEQ offer funding via the DWRF? A3: The city could apply for DWRF funding and their eligibility would be based upon how well they score in the overall DWRF ranking process. Also, the total amount of the loan and their ability to repay the loan would be considered. Q4: Flint has put forth a significant capital investment over the past 10 years to maintain their WTP, is the condition of the WTP sufficient for full time treatment of raw water from Lake Huron ? Are the operators qualified to operate the WTP? A4: The Flint WTP has demonstrated its ability to treat raw water (Flint River) and meet the drinking water standards based on quarterly test runs since 2009 and two pipeline emergencies that occurred in 2009 where water from the WTP was distributed to the city. Successful operation of the WTP on an intermittent basis is difficult. WTP operators face the constant challenge of maintaining WTP components in good working order while the plant is normally out of service over 90% of the time. The reliability of WTP and its components are better maintained through continuous operation. The operating experience and knowledge of the operators is also better established with full-time operation. WTP operators have the required operator certification and are very familiar with the operation of the Flint WTP, meeting drinking water standards, and troubleshooting operational problems. The Flint WTP is capable of meeting the drinking water standard if the plant was utilized to treat raw water

Flint - Dept of Treasury

Date: Wednesday, January 23, 2013 10:01:30 AM | spoke with Mr. Randy Byrne from the Dept. Treasury — Office of Fiscal Resp. concerning the Flint WTP. Below is a brief summary of our discussion. | can fill you on more details this afternoon just prior or immediately after our KWA meeting. Q1: The city of Flint has considered using the Flint River as a source of drinking water to be treated at their WTP; however, The city may be somewhat reluctant to use the river as their source, what is your assessment of this issue? A: The city could utilize the Flint River ranging from 100% utilization — to a certain percent blending (either Detroit or KWA) or zero percent utilization of the river. | agree that the city should have concerns of fully utilizing the Flint River (100%) for the following; the need to soften, the potential for more advanced treatment after next round of crypto monitoring, available capacity in Flint River at 100-year low flow, residuals management (disposal of lime sludge). As the percent utilization of the river decreases (blending options), the need for softening, residuals disposal, capacity issues do not pose as much of a concern. Q2: When comparing the treatment of Lake Huron water vs. Flint River water, are more treatment chemicals needed to effectively treat the water? A2: Flint river water will require a larger amount of primary coagulant (Ferric) due to poorer raw water quality than Lake Huron water. Also, a different type of primary coagulant (Alum) may be more suitable for the treatment of Lake Huron water. | can confirm that based on what the Detroit Lake Huron WTP uses. Also, since softening would need to be employed, treatment compounds including lime, soda ash, and carbon dioxide would be necessary. Q3: If the city needed to borrow money to be able to operate full time (KWA or xxxEND_PAGE:deq01_b054_3596_3598_1 003597 blending), does the DEQ offer funding via the DWRF? A3: The city could apply for DWRF funding and their eligibility would be based upon how well they score in the overall DWRF ranking process. Also, the total amount of the loan and their ability to repay the loan would be considered. Q4: Flint has put forth a significant capital investment over the past 10 years to maintain their WTP, is the condition of the WTP sufficient for full time treatment of raw water from Lake Huron ? Are the operators qualified to operate the WTP? A4: The Flint WTP has demonstrated its ability to treat raw water (Flint River) and meet the drinking water standards based on quarterly test runs since 2009 and two pipeline emergencies that occurred in 2009 where water from the WTP was distributed to the city. Successful operation of the WTP on an intermittent basis is difficult. WTP operators face the constant challenge of maintaining WTP components in good working order while the plant is normally out of service over 90% of the time. The reliability of WTP and its components are better maintained through continuous operation. The operating experience and knowledge of the operators is also better established with full-time operation. WTP operators have the required operator certification and are very familiar with the operation of the Flint WTP, meeting drinking water standards, and troubleshooting operational problems. The Flint WTP is capable of meeting the drinking water standard if the plant was utilized to treat raw water from Lake Huron. Q5: Do you see any weak links in the WTP or significant improvements if the WTP were to be fully utilized? A5: | would not see any major treatment changes or additions needed if Lake Huron water was utilized; however, in order for the city to fully utilize its storage capacity, a pumping station would need to be added immediately after the WTP such that treated water can be pumped into the city’s 20-Mgal Dort reservoir. In the current configuration, water from Detroit flows by gravity through this reservoir and then into the WTP’s 3 Mgal reservoir followed by xxxEND_PAGE:deq01_b054_3596_3598_2 003598 pumping via Pump Station No. 4 into the city’s distribution system. Improvement in stand-by power may also be necessary. Finally, if a component of Flint River water were to be treated, then more advanced treatment based upon higher bin classification (UV disinfection, etc.) could be required based upon crypto. results. Michael Prysby, P.E. District Engineer Office of Drinking Water and Municipal Assistance 517 335-6122 xxxEND_PAGE:deq01_b054_3596_3598_3

RE: Flint Water Discussion

Date: Thursday, January 17, 2013 2:22:48 PM The Dept. of Treasury has not contacted me nor did they send me a meeting request for today’s 2pm meeting to discuss Flint... If anything changes or if the meeting is re-scheduled, | will let you know. Michael Prysby, P.E. District Engineer Office of Drinking Water and Municipal Assistance 517 335-6122

FW: Flint Water Discussion

The Dept. of Treasury ~ Office of Fiscal Resp is requesting my participation in a meeting tomorrow at 2pm in thelr office to discuss Flint’s options for their future source of drinking water. lam agreeable to meet with Treasury to discuss water related issues pertaining to Flint; however, | would like to know what tyne of questions to expect and/or a meeting agenda. Also, given that this is a politically sensitive issue, | arm making ODWMA management aware of this meeting in the event that they may wish to participate (depending on the agenda}. i will forward additional meeting information as soon as | receive it frorm Treasury. Shannon will be sending me a meeting request along with more information as to what the meeting will entall - hopefully an agenda or general questions to expect. Michael Prysby, PLE. District Engineer Office of Drinking Water and Municipal Assistance S17 335-6122 xxxEND_PAGE:deq21_b547_1548_1549_1

FW: GCDC Going to Lake Huron for Water Supply

It is now official. GDCD has signed design engineering contracts on the design of the crib, intake line and junction box. Planning a construction start this construction season. Other design elements will be implemented later. No official word on how Flint City will decide. As stated in the MDEQ meeting 3/20, City/County are following a dual track on water supply issues. Will contact Saginaw Bay District office soon to establish contact and define the intake scope. Any questions let me know. John O' xxxEND_PAGE:deq12_b098_0517_0517_1