Correspondence among

FYI Liane J. Shekter Smith, P.E., Chief Office of Drinking Water and Municipal Assistance Michigan Department of Environmental Quality 517-284-6543

The latest news release on the Flint/Genesee Detroit water negotiations. At this point | have not seen nor been asked to comment on this latest offer. The reporter noted in the comments that they are seeking a response from the Governor’s office. Given discussions that took place last week, | was anticipating a press conference would be held late today. Stephen Busch, P.E. Lansing and Jackson District Supervisor Office of Drinking Water and Municipal Assistance MDEQ 517-643-2314 xxxEND_PAGE:deq12_b060_0159_0159_1

Date: Friday, April 26, 2013 12:15:46 PM The latest news release on the Flint/Genesee Detroit water negotiations. At this point | have not seen nor been asked to comment on this latest offer. The reporter noted in the comments that they are seeking a response from the Governor’s office. Given discussions that took place last week, | was anticipating a press conference would be held late today. Stephen Busch, P.E. Lansing and Jackson District Supervisor Office of Drinking Water and Municipal Assistance MDEQ 517-643-2314 xxxEND_PAGE:deq01_b090_3635_3635_1

Date: Monday, March 25, 2013 3:12:23 PM Here are my comments on the attached documents: Currently Flint receives water from DWSD and uses their water treatment plant as a back- up. Flint is currently in compliance with the SDWA as they stand with regard to reliability/redundancy. There is no regulatory reason for leaving the DWSD system. The issue of KWA vs. DWSD is mainly a question of cost. The February 2013 TYJT report indicates that there are economically viable options that would allow Flint to continue to receive water from DWSD. There is conflicting information on costs depending on the source, and | really don’t know which cost estimates are most correct. If there is a cost effective option for Flint to stay on the DWSD system, it should be pursued. O If Flint leaves the DWSD system, there will be ~30 miles of unused water infrastructure. The cost of maintaining excess water infrastructure and capacity in the DWSD system will be the burden of the customers that remain on the DWSD system. O The DWSD system has already undergone a significant reduction in water demand that continues to hurt their bottom line. The loss of an additional customer will only exacerbate the problem. Small water systems that receive water from the DWSD on the Imlay to Flint transmission line will likely be left to build their own water system (Imlay, Mayfield, Greater Lapeer Utilities Authority). With regard to Flint’s representation/decision making authority: For the last 10 years, DWSD has implemented a customer outreach program open to all customers known as the Technical Advisory Committee (TAC). TAC has developed Partnering agreements to work together on decisions regarding the DWSD system. The TAC has worked with DWSD to develop the latest rate structure, capital improvements program, etc. Historically, Flint has chosen not to participate on the TAC, but could do so going forward to make sure they have a say in the decisions relating to the DWSD system. DWSD is currently working on converting to a water authority. This new structure could allow for a seat on the Board of Water Commissioners.

Here are my comments on the attached documents: - Currently Flint receives water from DWSO and uses their water treatment plant as a back-up. Flint is currently in compliance with the SDWA as they stand with regard to reliability/redundancy. There is no regulatory reason for leaving the DWS5D system. The issue of KWA vs. DWS5D is mainly a question of cost. - The February 2013 TYJT report indicates that there are economically viable options that would allow Flint to continue to receive water fram DWSD. There is conflicting information on costs depending an the source, and | really don’t knaw which cost estimates are most correct. If there is a cost effective option for Flint to stay on the DWS5D system, it should be pursued. © if Flint leaves the DWSD system, there will be ~30 miles of unused water infrastructure. The cost of maintaining excess water infrastructure and capacity in the DWSD system will be the burden of the customers that remain on the DWSD system. O The DWSD system has already undergone a significant reduction in water demand that continues to hurt their bottom fine. The loss of an additional customer will only exacerbate the prablern. - Small water systems that receive water from the DWSD on the Imlay to Flint transmission line will likely be left to build their awn water system (imlay, Mayfield, Greater Lapeer Utilities Authority). With regard to Flint’s representation/decision making authority: - For the last 10 years, DW5D has implemented a customer outreach program apen to all customers known as the Technical Advisory Committee (TAC). TAC has developed Partnering agreements to wark together on decisions regarding the DWSD system. The TAC has worked with DWSD to develop the latest rate structure, capital improvements program, ete. Historically, Flint has chosen not to participate on the TAC, but could do so going forward to make sure they have a say in the decisions relating to the DWSD system. - DWSD is currently working on converting to a water authority. This new structure could allow for a seat on the Board of Water Commissioners.

Date: Monday, March 25, 2013 7:02:26 AM Ihave reviewed the documents and have prepared comments of which I will discuss with Steve today to include as part of our overall comments. Michael Prysby, P.E. District Engineer Office of Drinking Water and Municipal Assistance 517 335-6122

| have reviewed the documents and have prepared comments of which | will discuss with Steve today to include as part of our overall comments. Michael Prysby, P.E. District Engineer Office of Drinking Water and Municipal Assistance 517 335-6122

Date: Sunday, March 24, 2013 8:01:28 PM I will review the docs and try to have my comments in by Tuesday afternoon as well. Thanks, Kris

| will review the docs and try to have my comments in by Tuesday afternoon as well. Thanks, Kris

Upon further discussions with Richard, | wil take the goint position to coordinate this effort. For the most part my schedufe is open next week so loan accornmodate the executive office's needs. { fully anticipate meeting the Wednesday Morning deadline, if not Tuesday afternoon. Stephen Busch, FE. Lansing and Jackson District Superisor Office of Drinking Walter and Municipal Assistance MOEG 5L7-G43-23414

Date: Friday, March 22, 2013 12:09:55 PM Upon further discussions with Richard, | will take the point position to coordinate this effort. For the most part my schedule is open next week so | can accommodate the executive office’s needs. | fully anticipate meeting the Wednesday Morning deadline, if not Tuesday afternoon. Stephen Busch, P.E. Lansing and Jackson District Supervisor Office of Drinking Water and Municipal Assistance MDEQ 517-643-2314

Upon further discussions with Richard, | will take the point position to coordinate this effort. For the most part my schedule is open next week so | can accommodate the executive office’s needs. | fully anticipate meeting the Wednesday Morning deadline, if not Tuesday afternoon. Stephen Busch, P.E. Lansing and Jackson District Supervisor Office of Drinking Water and Municipal Assistance MDEQ xxxEND_PAGE:deq17_b115_1010_1012_1 517-643-2314

Importance: High Kris and Mike — Note the assignment below, due next Wednesday morning at the latest. i xxxEND_PAGE:deq27_b364_2102_2105_1 1. City of Flint Water Supply Assessment Tucker, Young, Jackson, Tull Inc. February 2013 MDEQ —-LDO Comments DWSD’s most cost-effective option of 8 MGD maximum day from either the imlay Station or from FL-1 in Table 6-1 clearly causes the Flint WTP to exceed the 2:1 DWSD -— Flint River blending ratio during maximum day demand and the high usage months in the summer. The need to soften during higher usage from the Flint River will increase capital improvement costs and on-going operation/maintenance costs at the Flint WTP. Additional capital improvement include: e Repairs to lime slakers and lime storage silos e Disposal of lime sludge residuals — on site de-watering/filter press system e Potential for higher Cryptosporidium Bin classification from the Flint River which will require more advanced treatment (UV disinfection, etc). e Flint WTP is rated at 36 MGD. Existing components (pumps, treatment basins, chemical feed systems} may not be suitable for treating at very low rates (8.0 MGD or less). Additional operational costs include: « Additional treatment chemical cost — lime-soda ash for softening e Additional electrical usage for increased ozone generation and softening « Additional system monitoring for increased levels of disinfection by- products The TYJT report does not address these additional costs. 2. The Average Unit Cost of purchased water from DWSD presented in Table 4- 2 is mislead ince the annual change was based on a hypothetical rate y that Flintay . sieboen offered had they signed a new purchase contract with DWSD. The actual annual change (average) of water purchased from DWSD by Flint is approximately 10.5% based on a rate analysis conducted by Flint and their consultant. xxxEND_PAGE:deq27_b364_2102_2105_2 is approximately $40 million higher than KWA’s cost esti and their consultant ‘ : @ construction cos | We would agree with TYJT’s experience of higher — construction costs i in the immediate Detroit metropolitan area due to local: 3 construction costs and and requirements; however, these higher asaant fee ae aluaye-ap plicable in out-state areas. In Table 5-8 S,TYJT's estimate of $71 million and $218 million for the pumping stations arid transmission main respectively includes their 30% ELAC estimate. TYJT; however, includes an additional $32.8 million for further ELAC costs and increases the total ELAC casts to a appears that the ELAC is being double-counted ane unwarranted for a project having a significant amount of preliminary design engineering completed. imately 43%. It % ELAC seems Page 19 of the TYJT report states that under the KWA option, two separate treatment process streams would need to be maintainec 4 as a back-up supply. This is not true. The Flint WTP ¢s for the Flint River Hed use their existing KWA treatment train to treat Flint River water; however, some of treatment processes would need to be adjusted (increase coagulant and disinfectant dosages). TYJT states on Page 15 that approximately $7.1 million in capital improvements will be needed at the Flint WTP for the KWA option based on the 2008 KWA preliminary engineering report. A decrease in these costs (AWA, option) is likely as some of the capital improvements are not critical in the WTP’s operation. However, additional capital improvements are needed if the WTP is utilized as part of DWSD’s most cost effective blending option (see tem #1). Page 18 of the TYJT report offers a second pipeline to Flint for redundancy along with sharing the capital cost of the new pipeline by all DWSD customers. How well will other DWSD customers accept this proposition? The DWSD also offers to sell the existing transmission line to Flint for $4.7 million. What are the O&M costs of the transmission main? These costs do not appear to be included in the cost analysis. Will Flint be able to charge (sell) water to the Lapeer county customers that would then be purchasing water from Flint’s pipeline? Finally, the pipeline is 50 year old, what is the remaining life expectancy of th pipe ine. andi is this. She best! lang investment for Flint? EW : ar & fipebre: ee Page 2 states that the 18 miles of pipeline from KWA to the Flint WTP is a 30-inch diameter main. The KWA Appendix 20 - October 2012 document states the pipeline is a 36-inch diameter main. The city of Flint is also investigating the proper size needed for this pipeline to meet their WTP’s rated capacity and will be addressed in the final design. xxxEND_PAGE:deq27_b364_2102_2105_3 10. Page 20 states that due to Flint's high water loss that the KWA, pipeline wel Ge gatas dnl « Kea Re pokiee She oe Ss ad been fe Pad <ee oe. Bada j ig Se. a cad she “€& SoS aboie & an Be clea ie F ey, y hg Sa hg eApowt yy prosvgeh a ae Oe arehee woidh Bee ote! * : £ ahha, f : oe why Awcht Sngs @cosih 4 ee AYER | xxxEND_PAGE:deq27_b364_2102_2105_4

t don't think | need to be present at this meeting, but | would like to be kept updated on the progress. Thanks! Kris Donaldson, P.E. Acting Assistant District Supervisor Resource Management Division Michigan Deoartment of Environmental Quality 27700 Donaid Court Warren, Mi 48092 ph. 586-753-3759 fax. 586-753-3831

Date: Thursday, March 15, 2012 12:39:50 PM | don’t think | need to be present at this meeting, but | would like to be kept updated on the progress. Thanks! Kris Donaldson, P.E. Acting Assistant District Supervisor Resource Management Division Michigan Department of Environmental Quality 27700 Donald Court Waren, MI48092 ph. 586-753-3759 fax. 586-753-3831

FYI Liane J. Shekter Smith, P.E., Chief Resource Management Division Michigan Department of Environmental Quality 517-373-9523