Great Lakes Water Authority Audit Committee

Thursday, April 7, 2016 at 8:00 a.m.

5th Floor Board Room, Water Board Building 735 Randolph Street, Detroit, Michigan 48226 GLWater.org

AGENDA 1. CALL TO ORDER 2. ROLL CALL 3. APPROVAL OF AGENDA 4. APPROVAL OF MINUTES A. March 24, 2016 (Page 1) 5. PUBLIC PARTICIPATION 6. OLD BUSINESS A. FY 2017 and 2018 Financial Planning Update – Including: - Review of GLWA Operations & Maintenance Budget - Coordination of lease and shared services agreements Presenter: Nicolette N. Bateson, CPA, Chief Financial Officer/Treasurer Proposed Action: None. B. FY 2015 Detroit Water & Sewerage Audit Update (Page 5) Presenter: Nicolette Bateson, CPA, Chief Financial Officer/Treasurer Proposed Action: None. 7. NEW BUSINESS A. Proposed FY 2017 Non-Contract Wholesale Water Customer Charges (Page 7) and Public Hearing Presenter: Jon Wheatley, Public Finance Manager Proposed Action: The Audit Committee recommends that the Great Lakes Water Authority Board hold a public hearing on the proposed non-contract wholesale water customer service charges as presented herein. Subject to public comment, it is further recommended that the Great Lakes Water Authority adopt the proposed charges for Genesee County Drain Commission and the City of Highland Park. B. Update: FY 2017 Wholesale Sewer Customer Charges-Bad Debt True-Up (Page 13) Presenter: Jon Wheatley, Public Finance Manager Proposed Action: None.

8. REPORTS A. Wholesale Accounts Receivable Aging Report as of March 31, 2016 (Page 15) – Presenter: Jon Wheatley, Public Finance Manager B. Wholesale Water Revenue Report- Variance Analysis (Page 28) – Presenter: Jon Wheatley, Public Finance Manager C. City of Detroit Retail Receivable (Page 29) - Marcus Hudson, CFO, DWSD

9. INFORMATION A. City of Highland Park Billings and Collections (Jon Wheatley, Public (Page 36) Finance Manager) B. Flint Prepayment Reconciliation (Jon Wheatley, Public Finance Manager)(Page 37) C. Cash Transfers to DWSD (Nicolette N. Bateson, CFO) (Page 38)

10. LOOK AHEAD Next Audit Committee Meeting: Friday, May 6, 2016 at 8 am

11. OTHER MATTERS

12. ADJOURNMENT AGENDA ITEM #4A

Great Lakes Water Authority Special Audit Committee Meeting

MINUTES

Thursday, March 24, 2016 at 8:00 a.m.

5th Floor Board Room, Water Board Building 735 Randolph Street, Detroit, Michigan 48226 GLWater.org

1. CALL TO ORDER

Chairman Baker called the meeting to order at 8:05 am

2. ROLL CALL

Chairman Brian Baker, Director Robert Daddow, and Director Joseph Nardone

3. APPROVAL OF AGENDA

Chairman Baker requested approval of the Agenda.

MOTION BY: JOSEPH NARDONE SUPPORT BY: ROBERT DADDOW ACTION: APPROVED

4. APPROVAL OF MINUTES

Chairman Baker requested approval of the Minutes of March 4, 2016.

MOTION BY: ROBERT DADDOW SUPPORT BY: JOSEPH NARDONE ACTION: APPROVED

5. PUBLIC PARTICIPATION

None

Page 1 Item 7B was moved up on the Agenda.

B. Rating Agency Criteria and Benchmarking Presenter: Jonathan Wheatley, Public Finance Manager, and Kari Blanchett (via telephone), PFM Proposed Action: Receive and file report.

 Kari Blanchett noted pages 20 and 23 of the presentation need to be corrected and will provide revised copies.

MOTION BY: ROBERT DADDOW SUPPORT BY: JOSEPH NARDONE ACTION: APPROVED

6. OLD BUSINESS A. FY 2017 and 2018 Financial Planning Update ‐ DWSD‐R Budget Update, Marcus Hudson, DWSD Chief Financial Officer ‐ FY 2017‐2021 Capital Improvement Plan, Monica Daniels, Capital Manager ‐ GLWA Next Steps, Nicolette N. Bateson, CPA, Chief Financial Officer/Treasurer, and Bart Foster, The Foster Group, LLC Proposed Action: None

B. FY 2015 City of Detroit Audit (including DWSD) Update (verbal report) Presenter: Nicolette N. Bateson, CPA, Chief Financial Officer/Treasurer o The City of Detroit requested an extension for the completion of the Audit through March 31st. Request letter went from the Mayor to State Treasurer, two days ago asking for an extension. There was internal discussion about 30 days vs 60 days. She will forward to the Board the extension letter. o We have seen a significant increase in the scope of testing on the Audit. Nicolette Bateson stated she met with Kathy Smith Roy, and they found a category of revenue they had not looked at before. The annual has about $5 Million in it, and they want to design a whole new Audit testing program for that amount. o This is KPMG’s last year under contract. o The draft of the financial statements is in process. Not sure if the draft will be ready by next Friday’s meeting. It may be necessary to ask for a Special Meeting in April in order to review a draft of the financial statement when it is in good condition, while we are working through the budget.

Page 2 7. NEW BUSINESS A. DWSD Financial Performance Report through November 30, 2015 Presenter: Nicolette N. Bateson, CPA, Chief Financial Officer/Treasurer, and Bart Foster, The Foster Group, LLC Proposed Action: Receive and file report.

MOTION BY: ROBERT DADDOW SUPPORT BY: JOSEPH NARDONE ACTION: APPROVED

8. REPORTS A. ERP and HRIS/Payroll Implementation Budget and Implementation Update - Mike Huber, Finance Director; Denis DesRosiers, ERP Program Director; and Nicolette N. Bateson, CPA, Chief Financial Officer/Treasurer  Mike Huber o Update to Financial Statement and BS & A implementation. We did the analytics and the update for the budget so the great news is we are under budget and ahead of schedule.  Denis DesRosiers o Nicolette Bateson commented that our strong point of connect with the city is the launch of their Oracle Cloud System. She asked, is Oracle Cloud/WAM integration going to cause us delays? Denis replied, per the HP Team, all of the work was on the city side. So, the interfaces for DWSD and DRMS, from an HP perspective, are exactly the same as the interface for Oracle Fusion. There should not be any impact, but we will follow up to make sure. However, there might be something with the GL strings if they have to revert back to seven segments from eight.

B. Transition Services Budget and Project Update - Mike Huber, Finance Director  Right now we have about $3 Million that we have not spent of the budget. We are assessing other needs we may have in the standup.  Audit Readiness Services – we have our evaluation for asset, evaluation for fixed asset inventory, as well as other needs we are identifying.  Nicolette Bateson asked, when will we be selecting a new firm? o Mike Huber replied that an RFP was sent out, and we have four bidders. Oral interviews will be held next week, and we hope to make a selection after that process. o The RFP was divided up into two sections. Phase one was requirement for lease to get acquisition valued for necessary legal documents and balance sheet. Phase two was for fixed asset inventory. We eventually need to do this, but it is not pressing. Page 3 o Nicolette Bateson stated that the thought was to find a firm that had the capacity to do both. It is preferred to do an asset inventory, especially at this point as we are standing up the entities because there are spill over impacts of being able to improve the data in our asset management system.

9. INFORMATION

None

10. LOOK AHEAD

Next Audit Committee Meeting will be held on Friday, April 1, 2016 at 8:00 am.

11. OTHER MATTERS

Next week’s meeting will consist of the CIP, Budget Update, and Budget Draft. We hope to be able to schedule a date to take the Budget, Schedule of Charges and the CIP to the full Board.

12. ADJOURNMENT

Chairman Baker requested a motion to adjourn.

MOTION BY: ROBERT DADDOW SUPPORT BY: JOSEPH NARDONE ACTION: APPROVED

There being no further business, the meeting adjourned at 9:50 am.

Page 4 AGENDA ITEM #6B

City of Detroit Notice of failure to provide Audited Financial Statements and Notice of failure to provide Operating Data for: Great Lakes Water Authority Water Supply System Revenue Bonds and Great Lakes Water Authority Sewage Disposal System Revenue Bonds

The City of Detroit expects to fail to file its audited financial statements for the fiscal year ended June 30, 2015 by the date required for the continuing disclosure undertakings for the above described bond issues.

While the City of Detroit’s administration and auditors are working diligently to complete the reports, the City has not received all necessary audited financial statements which are required elements of the City’s Comprehensive Annual Financial report.

As a result, the City of Detroit’s Water and Sewerage Department (“DWSD”) expects to fail to file the annual operating data for the above described bond issues for the fiscal year ended June 30, 2015 by the date required by the continuing disclosure undertakings for such bond issues. The City anticipates that it will be able to file its Comprehensive Annual Financial Report for the fiscal year ended June 30, 2015 (including DWSD’s audited financial statements) by May 31, 2016, and DWSD anticipates that it will be able to file the operating data by May 31, 2016.

This notice is in reference to DWSD Water Supply System Revenue Bonds and Sewage Disposal System Revenue Bonds that were assumed by the Great Lakes Water Authority as of January 1, 2016.

Page 5

Page 6 AGENDA ITEM #7A Great Lakes Water Authority Financial Services Group Audit Committee Communication

Date: April 7, 2016 To: Great Lake Water Authority Audit Committee From: Jon Wheatley, Public Finance Manager Re: Proposed FY 2017 Non- Contract Wholesale Water Customer Charges and Public Hearing

Background: On March 2, 2016 the GLWA Board of Directors held a public hearing for the proposed wholesale water and sewage service charges for FY 2017. Absent in that schedule of charges were the charges for the two non-contract customers: Genesee County Drain Commission (“GCDC”) and the City of Highland Park. Neither GCDC nor Highland Park has entered into a wholesale customer contract. Presently, Highland Park has expressed an interest in becoming a model contract customer and forming a long-term relationship with GLWA but it cannot legally do so because of its default payment status. GCDC, on the other hand, is on a terminated contract and has indicated that it will be joining the KWA system as soon as it is online. GLWA does not have a public hearing notice requirement for adoption of a schedule of charges for non-contract customers, which is unlike wholesale customers on the model contract. Given the upcoming timing of the GLWA Board approval of the FY 2017 service charges, non-contact customer charges could be considered at the same time. For consistency with the process for other customers, staff proposes a public hearing for these non-contract customers (draft public hearing notice attached).

Analysis: The recommended methodology for determining charges for the two non-contract water customers is presented in the attached letter dated April 4, 2016 from Bart Foster of The Foster Group, LLC. In determining the allocated share of the BUDGET for each, the FY 2016 fixed monthly charge and commodity charge are multiplied by the average Suburban Wholesale Charge Adjustment for the most comparable class of customers (i.e. customers that did not negotiate contract adjustments this year, as shown on page 2 of the letter) of 7.20%. This methodology is similar to the calculation that was made for the non-contract customers for FY 2016. Budget Impact: The proposed wholesale water service charges would generate a level of revenue consistent with the GLWA’s long term financial plan. Proposed Action: The Audit Committee recommends that the Great Lakes Water Authority Board hold a public hearing on the proposed non-contract wholesale water customer service charges as presented herein. Subject to public comment, it is further recommended that the Great Lakes Water Authority adopt the proposed charges for Genesee County Drain Commission and the City of Highland Park.

Page 7 T F G THE FOSTER GROUP

P.O. BOX 26282 The Foster Group, LLC Leawood, KS 66225 Bart Foster, President Tel: (913) 345-1410 Cell: (913) 530-6240 Fax: (913) 345-1640 [email protected]

MEMORANDUM

FY 2017 GLWA Water Charges April 4, 2016 Non-Contract Customers

To: Sue McCormick

From: Bart Foster

You have asked for FY 2017 water charge proposals to consider for the two customer communities that are currently being served by GLWA, but for whom charges have not yet been proposed nor approved. We offer the following summary recommendations and discussion.

GLWA provides services to Genesee County Drain Commission (“GCDC”) and the City of Highland Park without formal long-term contracts. Each of these customers is served under rather unique circumstances, and the current charges (developed by DWSD and inherited by GLWA) for each reflect modifications from the “standard” charge development for other wholesale water customers. Genesee County is master metered, but has only been separated from Flint since May 2014, so we have less historical independent GCDC water usage characteristics (with which to establish units of service and cost of service allocations) than are available for other customers. Also, GCDC plans to discontinue purchase of GLWA water once the KWA pipeline and the Genesee County water treatment facilities are operational. GLWA currently estimates that GCDC will purchase water through at least June 2017, therefore the entirety of FY 2017. Highland Park is not master metered1, and is being served pending potential rehabilitation of their own water treatment facilities, which we understand is not likely to ever materialize.

Over the past few years, we have explored and discussed possible charge approaches that reflect the unique contract status for both customers. We believe several alternative approaches are reasonable and have merit, and it is our understanding that the GLWA articles of incorporation and other guidelines are supportive of exploring alternative treatment of customers based on contract status. Given the short term nature of service to GCDC, and the difficulty in establishing reliable units of service for each customer, at this time we recommend simply indexing the existing revenue requirement assigned to each community by an amount that reflects the impact of the FY 2017 charges on other customers, similar to the manner by which the FY 2016 charges were established for these two unique customers.

1 In fact, it is currently difficult to obtain accurate and reliable information regarding retail water sales in Highland Park. Page 8 FY 2017 GLWA Water Charges April 4, 2016 Non-Contract Customers Page 2

For FY 2016, we established the indexed adjustment as equivalent to the average adjustment for the suburban wholesale class at large. Two developments for the FY 2017 charges result in a slightly different approach for establishing a recommended index.

1. Due to the separation of GLWA and DWSD, the Detroit customer class is now treated “akin to” a wholesale customer in the cost of service and service charge analyses. As such, we believe it is appropriate to establish the index based on the entire System, rather than the suburban wholesale class only.

2. Several customers negotiated significant modifications to their contract demands for FY 2017, which resulted in service charge impacts far from the average for these customers. We believe it is appropriate to exclude cost of service impacts on these customers from the calculation of the index, and reflect it as the average impact on customers without contract modifications.

The resulting index recommended to be applied to charges for GCDC and Highland Park is 7.2%, as illustrated below.

FY 2017 FY 2017 Allocated Revenue Revenue % Revenue Cost of @ Existing Adjustment Adjustment Service Charges Needed Needed $ $ $ All Customers 315,107,500 329,135,600 14,028,100 4.5% Customers with Contract Adjustments (a) 99,725,000 98,209,200 (1,515,800) -1.5% Customers without Contract Adjustments 215,382,500 230,926,400 15,543,900 7.2%

(a) Includes customers with contract demand decreases and increases

The proposed FY 2017 charges for each customer simply apply the resulting index to the existing charge schedule, as further discussed herein.

[Remainder of page intentionally left blank]

Page 9 FY 2017 GLWA Water Charges April 4, 2016 Non-Contract Customers Page 3

Genesee County Drain Commission The basis for the current structure of water charges for GCDC is an extension of the “expired contract” water charges that were established for the City of Flint when that contract was terminated in April 2014. Once the termination date of the original contract was effective, DWSD began charging Flint an “expired contract” charge structure, which was computed to reflect a two percentage point increase in the rate of return in the capital portion of the charge structure to all other wholesale customers. In effect, that modification raised the charges to Flint by approximately ten percent. Once Flint left the GLWA system, the same basic “expired contract” terms were used to compute a charge structure for GCDC, recognizing their unique volumes and demands. This structure was updated for the FY 2015 and FY 2016 charges.

The proposed charges for FY 2017 are summarized below, and simply represent indexing the existing charges by the 7.2% average impact to customers that did not modify their contract demands, as discussed above.

Existing (FY 2016) Charges 1 Fixed Monthly Charge - $/mo 900,000 Reflects Exp Contract Adjustment 2 Commodity Charge - $/Mcf 11.86 Reflects Exp Contract Adjustment 3 Projected FY Sales Volume - Mcf 523,000 24 month average through Sept 2015 4 Projected FY 2017 Revenue Under FY 2016 Charges 17,002,800 (1) * 12 + (2) * (3) 5 Effective Unit Cost - $/Mcf 32.51 (4) / (3) 6 Proposed Indexed Adjustment 7.2% Avg impact on customers w/o contract mods Proposed (FY 2017) Charges 7 Fixed Monthly Charge - $/mo 964,800 (1) * [1 + (6)] 8 Commodity Charge - $/Mcf 12.71 (2) * [1 + (6)] 9 Projected FY Sales Volume - Mcf 523,000 24 month average through Sept 2015 10 Projected FY 2017 Revenue Under FY 2016 Charges 18,224,900 (7) * 12 + (8) * (9) 11 Effective Unit Cost - $/Mcf 34.85 (10) / (9)

Highland Park While an old water service agreement existed between DWSD and Highland Park, it is our understanding that the agreement has been terminated, and that the intent of the original agreement was principally designed to provide for emergency “stand-by” service in the event that the Highland Park water treatment plant became temporarily unavailable. The Highland Park facility has been unavailable since November 2012, at which point the State of Michigan asked DWSD to become in effect a “full time” service provider. DWSD / GLWA has provided all water used by Highland Park since that time. GLWA does currently provide sewage disposal service to Highland Park via contract. While the stated intent is to bring water service to Highland Park under a service contract, under State law that cannot be accomplished at this time as Highland Park is in default. In the meantime, we suggest continuing to treat Highland Park as if it was served by a model contract.

Page 10 FY 2017 GLWA Water Charges April 4, 2016 Non-Contract Customers Page 4

The proposed charges for FY 2017 are summarized below, and simply represent indexing the existing charges by the 7.2% average impact to customers that did not modify their contract demands, as discussed above.

Existing (FY 2016) Charges 1 Fixed Monthly Charge - $/mo 58,400 (a) 2 Commodity Charge - $/Mcf 4.25 (a) 3 Projected FY Sales Volume - Mcf 110,000 Estimated based on old historical data 4 Projected FY 2017 Revenue Under FY 2016 Charges 1,168,300 (1) * 12 + (2) * (3) 5 Effective Unit Cost - $/Mcf 10.62 (4) / (3) 6 Proposed Indexed Adjustment 7.2% Avg impact on customers w/o contract mods Proposed (FY 2017) Charges 7 Fixed Monthly Charge - $/mo 62,600 (1) * [1 + (6)] 8 Commodity Charge - $/Mcf 4.56 (2) * [1 + (6)] 9 Projected FY Sales Volume - Mcf 110,000 Estimated based on old historical data 10 Projected FY 2017 Revenue Under FY 2016 Charges 1,252,800 (7) * 12 + (8) * (9) 11 Effective Unit Cost - $/Mcf 11.39 (10) / (9) (a) Does not include any adjustments reflecting contract status; reflects estimated units of service with demands similar to Detroit

We are prepared to present this material and discuss this matter at your convenience, and to finalize recommendations thereafter.

Page 11 GREAT LAKES WATER AUTHORITY NOTICE OF PUBLIC HEARING PROPOSED WATER SERVICE CHARGES FOR THE CITY OF HIGHLAND PARK AND THE GENESEE COUNTY DRAIN COMMISSION FOR FISCAL YEAR 2017

Notice is hereby given that the Great Lakes Water Authority Board of Directors will hold a Public Hearing on Water Service Charges for the City of Highland Park and the Genesee County Drain Commission proposed by the Great Lakes Water Authority for Fiscal Year 2017.

DATE: April 13, 2016 TIME: 1:00 p.m. PLACE: 5th Floor Board Room 735 Randolph Detroit, Michigan 48226

The proposed service charges are scheduled to take effect on July 1, 2016. The Great Lakes Water Authority Board of Directors will receive public comments and questions on any matters pertaining to the proposed service charges. Individuals or groups wishing to make oral presentations or submit prepared statements pertaining to the proposed service charges may do so at the Public Hearing. Individuals or groups giving oral presentations are encouraged to have their presentations in writing, with a copy to be submitted for the record to the Great Lakes Water Authority Board of Directors. Oral presentations should be brief to allow all parties the opportunity to participate. A time limit may have to be imposed based upon registration at the hearing. Interested parties who are unable to attend the Public Hearing may submit their comments in writing to: Sue F. McCormick, Chief Executive Officer Great Lakes Water Authority 735 Randolph Detroit, Michigan, 48226

Page 12 AGENDA ITEM #7B Great Lakes Water Authority Financial Services Group Audit Committee Communication

Date: April 7, 2016 To: Great Lake Water Authority Audit Committee From: Jon Wheatley, Public Finance Manager Re: Update: FY 2017 Wholesale Sewer Customer Charges- Bad Debt True-Up Background: At its meeting on January 27, 2016, the Great Lake Water Authority (GLWA) Board was presented the proposed FY 2017 Cost of Service Study and Service Charge Recommendations for water and sewer customers based on the memorandum dated January 26, 2016 from the Foster Group. In the development of the sewer service charges, there were two adjustments to the Suburban Wholesale Customer allocations, both related to bad debt expense associated with Highland Park. These calculations assume that none of the $5.6 million in Highland Park revenue will be collected during FY 2017. The service agreement protocol calls for these costs to be recovered from all suburban wholesale customers. A similar adjustment is made to “true- up” actual bad debt expense experienced in FYs 2013, 2014, and 2015 which totals $17.3 million. The original methodology for the FY 2017 sewer service charges called for recovering these costs over a four year period. This methodology has since been adjusted to recover these costs over a five year period to reduce the annual revenue requirement impact on the Suburban Wholesale Customer class.

Analysis: The FY 2017 Suburban Wholesale Sewer Service Charge Schedule Calculation (attached - dated April 5, 2016) prepared by the Foster Group shows the adjusted Suburban Bad Debt Adjustment on line #10. Budget Impact: The proposed change would change the annual Wholesale Bad Debt True-up from $4,323,900 over a 4 year period to $3,459,100 over a five year period. Proposed Action: Receive and file.

Page 13 FY 2017 Suburban Wholesale Sewer Service Charge Schedule Calculation Subtotal Suburban Wholesale (1) (2) (3) (4) (5) (6) (7) (8)

Unbundled Total Subtotal Suburban Wholesale SHARE Fixed Monthly Existing Charge Impact Cost Pool % Share Allocation Charge Charge Adjustment Adj Adj $ $ $/mo $/mo $/mo BUDGET Categories 1 Common-To-All 377,932,900 59.960% 226,608,300 18,884,000 2 Suburban Only 10,331,900 100.000% 10,331,900 861,000 3 OMID Specific 7,307,700 100.000% 7,307,700 609,000 4 CSO Facilities 44,967,400 17.000% 7,644,500 637,000 5 Industrial Specific 19,423,200 0.000% 0 0 ------6 Subtotal FY 2017 BUDGET 459,963,100 251,892,400 20,991,000 7 Detroit / Suburban Capital Adjustment 5,516,000 100.000% 5,516,000 459,700 ------8 Total FY 2017 BUDGET 257,408,400 21,450,700 20,673,200 777,500 3.8% 3.7% 9 Sub Wholesale Bad Debt Adj. - Projected 5,600,000 100.000% 5,600,000 466,700 464,100 2,600 0.6% 0.0% 10 Sub Wholesale Bad Debt Adj. - LBA/True-Up 3,459,100 100.000% 3,459,100 288,300 39,700 248,600 626.2% 1.2% ------11 Total Amount for Net Charges 266,467,500 22,205,700 21,177,000 1,028,700 4.9% 4.9% 12 Impact of Bad Debt Allocations - $ (9) + (10) 9,059,100 755,000 13 Impact of Bad Debt Allocations - % (12) / (8) 3.5% 3.5% 14 Original Plan Implementation - 4 years 4,323,900 15 Suggested Modified Implementation - 5 years 3,459,100 16 Variance 864,800 17 Relative % of Allocated FY 2017 BUDGET 0.3%

TFG PRELIMINARY THE FOSTER GROUP 4/5/16 Page 14 AGENDA ITEM #8A Great Lakes Water Authority Financial Services Group Audit Committee Communication

Date: April 7, 2016

To: Great Lake Water Authority Audit Committee

From: Jon Wheatley, Public Finance Manager Cindy Cezat, Financial Management Professional

Re: Wholesale Accounts Receivable Aging Report as of March 31, 2016

Background: The accounts receivable report for wholesale water, sewer, Industrial Waste Charge (IWC), Pollutant Surcharge, and Miscellaneous accounts as of March 31, 2016 is attached.

Monthly Analysis- As of March 31, 2016 Water Accounts: The total receivables were $34,105,708 with $35,357,452 due “0 to 45 days” and a credit balance of $1,251,744 “over 45 days”. The City of Flint credit balance of $4,983,537 is the reason for the overall credit balance in for the over 45 day receivable amount. This is due to the prepayment account held at the Great Lakes Water Authority (GLWA) which is being drawn down monthly based on the invoiced amounts to the City of Flint. Two other notable balances are for the City of Highland Park at $3,122,904 over 45 days past due and NOCWA with a balance of $541,923 which is due to a billing dispute from the July 1, 2015 to July 8, 2015 billing period. This matter is currently being negotiated with NOCWA. Sewer Accounts: The total receivables were $43,262,071 with $18,742,700 due “0 to 45 days” and $24,519,371 “over 45 days”. The City of Highland Park represents $24,445,472 of the overall balance in for the “over 45 day” receivable amount.

IWC Accounts: The total receivables were $2,530,365 with $847,062 due “0 to 45 days” and $1,683,304 “over 45 days”. The City of Highland Park represents $1,407,881 of the overall balance and the City of Detroit has $231,754 for the “over 45 day” receivable amount.

Pollutant Surcharge Accounts: The total receivables were $751,167 with $406,868 due “0 to 45 days” and $344,299 “over 45 days”. There is one account that has a $185,454 balance “over 45 days” and is being pursued by the Legal Department. Some of the other past due accounts are related to the quarterly billing cycle that some of the customers are on.

Miscellaneous Accounts: The total receivables were $1,569,200 with all of the accounts current. These receivables are related to agreements for the Upper Rouge Tunnel for Redford Township and Dearborn Heights and the Shared Services Agreement with Detroit.

Proposed Action: Receive and file.

Page 15 GREAT LAKES WATER AUTHORITY ACCOUNTS RECEIVABLE AGING REPORT AS OF MARCH 31, 2016

The aging reports being presented reflect only the current and >45 days categories (>30 days for IWC and Miscellaneous Billing). The balance transferred from DWSD was entered into the BS&A software as of the date transferred. The amount also included the unbilled which was not billed out until the end of January. Therefore it will be a few months until we start to include additional aging periods on the aging reports as the balance transferred from DWSD is paid off and multiple billing periods have been processed in the BS&A software. GLWA Aged Accounts Receivable-Summary Balances as of March 31, 2016

Type Total Current Non-Current

Water $ 34,105,707.63 $ 35,357,451.67 $ (1,251,744.04) Sewer $ 43,262,071.13 $ 18,742,700.00 $ 24,519,371.13 IWC $ 2,530,365.48 $ 847,061.79 $ 1,683,303.69 Pollutant Surcharge $ 751,166.92 $ 406,868.03 $ 344,298.89 Miscellaneous $ 1,569,200.00 $ 1,569,200.00 $ -

$ 82,218,511.16 $ 56,923,281.49 $ 25,295,229.67

2 of 12 Page 17 GLWA Aged Accounts Receivable-Water Accounts Balances as of March 31, 2016

Customer Name Total Current >45 Days ALLEN PARK $ 159,960.60 $ 159,960.60 $ - ASH TOWNSHIP $ 55,544.47 $ 55,544.47 $ - BELLEVILLE $ 21,551.17 $ 21,551.17 $ - BERLIN TOWNSHIP $ 51,272.84 $ 51,272.84 $ - BROWNSTOWN TOWNSHIP $ 232,160.98 $ 232,160.98 $ - BRUCE TOWNSHIP $ 2,259.56 $ 2,259.56 $ - BURTCHVILLE TOWNSHIP $ 17,974.91 $ 17,974.91 $ - CANTON TOWNSHIP $ 876,536.94 $ 876,536.94 $ - CENTER LINE $ 69,228.03 $ 69,228.03 $ - CHESTERFIELD TOWNSHIP $ 570,909.05 $ 570,908.24 $ 0.81 CLINTON TOWNSHIP $ 1,127,062.04 $ 1,127,062.04 $ - COMMERCE TOWNSHIP $ 337,230.63 $ 337,230.63 $ - DEARBORN $ 1,278,823.76 $ 1,278,823.76 $ - DEARBORN HEIGHTS $ 276,065.63 $ 276,065.63 $ - EASTPOINTE $ 254,400.05 $ 254,400.05 $ - ECORSE $ 109,929.98 $ 109,929.98 $ - FARMINGTON $ 70,241.86 $ 70,241.86 $ - FARMINGTON HILLS $ 592,811.36 $ 592,811.36 $ - FERNDALE $ 154,554.76 $ 154,554.76 $ - FLAT ROCK $ 188,848.22 $ 188,848.22 $ - FLINT $ (4,983,536.66) $ - $ (4,983,536.66) FRASER $ 91,348.80 $ 91,348.80 $ - GARDEN CITY $ 121,278.13 $ 121,278.13 $ - GENESSEE COUNTY DRAIN COMM $ 1,364,105.71 $ 1,364,105.71 $ - GIBRALTER $ 45,983.28 $ 45,983.28 $ - GREATER LAPEER CUA $ 407,008.14 $ 407,008.14 $ - GREENWOOD TOWNSHIP $ 33,471.59 $ 33,471.59 $ - GROSSE ILE TOWNSHIP $ 87,264.85 $ 87,264.85 $ - GROSSE POINTE PARK $ 92,850.29 $ 92,850.29 $ - GROSSE POINTE SHORES $ 38,643.68 $ 38,643.68 $ - GROSSE POINTE WOODS $ 97,904.74 $ 97,904.74 $ - HAMTRAMCK $ 103,666.06 $ 103,666.06 $ - HARPER WOODS $ 126,837.53 $ 126,837.53 $ - HARRISON TWP $ 97,865.32 $ 97,865.32 $ - HAZEL PARK $ 51,810.65 $ 51,810.65 $ - HIGHLAND PARK $ 3,307,810.13 $ 184,906.35 $ 3,122,903.78 HURON TOWNSHIP $ 203,000.62 $ 203,000.62 $ - INKSTER $ 133,808.19 $ 133,808.19 $ - KEEGO HARBOR $ 21,459.09 $ 21,459.09 $ - LENOX TOWNSHIP $ 42,966.29 $ 42,966.29 $ - LINCOLN PARK $ 175,450.63 $ 175,450.63 $ - LIVONIA $ 958,245.75 $ 958,245.75 $ - MACOMB TWP $ 720,333.54 $ 720,333.54 $ - MADISON HEIGHTS $ 144,212.78 $ 144,212.78 $ - MELVINDALE $ 101,777.78 $ 101,777.78 $ - 3 of 12 Page 18 GLWA Aged Accounts Receivable-Water Accounts Balances as of March 31, 2016

Customer Name Total Current >45 Days NEW HAVEN $ 81,632.04 $ 81,632.04 $ - NOCWA $ 4,019,445.20 $ 3,477,522.65 $ 541,922.55 NORTHVILLE $ 52,982.88 $ 52,982.88 $ - NORTHVILLE TOWNSHIP $ 863,967.94 $ 863,967.94 $ - NOVI $ 1,691,807.47 $ 1,691,807.47 $ - OAK PARK $ 100,539.03 $ 100,539.03 $ - OAKLAND CO DR COM $ 3,339.19 $ 3,339.19 $ - PLYMOUTH $ 71,638.46 $ 71,638.46 $ - PLYMOUTH TOWNSHIP $ 293,626.47 $ 293,626.47 $ - REDFORD TOWNSHIP $ 249,760.25 $ 249,760.25 $ - RIVER ROUGE $ 54,033.34 $ 54,033.34 $ - RIVERVIEW $ 79,408.49 $ 79,408.49 $ - ROCKWOOD $ 21,001.31 $ 21,001.31 $ - ROMEO $ 18,051.79 $ 18,051.79 $ - ROMULUS $ 259,587.00 $ 259,587.00 $ - ROSEVILLE $ 190,622.64 $ 190,622.64 $ - ROYAL OAK TOWNSHIP $ 16,761.61 $ 16,761.61 $ - SHELBY TOWNSHIP $ 1,795,959.09 $ 1,795,959.09 $ - SOCWA $ 3,472,788.44 $ 3,472,788.44 $ - SOUTH ROCKWOOD $ 7,352.05 $ 7,352.05 $ - SOUTHGATE $ 158,332.03 $ 158,332.03 $ - ST. CLAIR SHORES $ 214,812.81 $ 214,812.81 $ - STERLING HEIGHTS $ 2,229,548.25 $ 2,229,548.25 $ - SUMPTER TOWNSHIP $ 48,870.29 $ 48,870.29 $ - SYLVAN LAKE $ 33,876.93 $ 33,876.93 $ - TAYLOR $ 710,073.04 $ 710,073.04 $ - TRENTON $ 152,038.98 $ 152,038.98 $ - TROY (SEOC) $ 900,503.77 $ 900,503.77 $ - UTICA $ 43,434.49 $ 43,434.49 $ - VAN BUREN TOWNSHIP $ 417,711.85 $ 417,711.85 $ - VILLAGE OF ALMONT $ 16,079.85 $ 16,079.85 $ - WALLED LAKE $ 200,300.88 $ 133,335.93 $ 66,964.95 WARREN $ 795,023.76 $ 795,023.76 $ - WASHINGTON TOWNSHIP $ 215,461.40 $ 215,461.40 $ - WAYNE $ 197,898.17 $ 197,898.17 $ - WEST BLOOMFIELD TWP (C-O) $ 1,437,603.04 $ 1,437,603.04 $ - WESTLAND $ 901,305.27 $ 901,305.27 $ - WIXOM $ 169,977.41 $ 169,977.41 $ - WOODHAVEN $ 282,625.87 $ 282,625.87 $ - YCUA $ 1,602,991.10 $ 1,602,990.57 $ 0.53

Grand Total Water $ 34,105,707.63 $ 35,357,451.67 $ (1,251,744.04)

4 of 12 Page 19 GLWA Aged Accounts Receivable-Sewer Accounts Balances as of March 31, 2016

Customer Name Total Current >45 Days ALLEN PARK $ - $ - $ - CENTER LINE $ 147,799.00 $ 73,900.00 $ 73,899.00 DEARBORN EAST $ - $ - $ - DEARBORN EAST & WEST $ - $ - $ - DEARBORN N.E. $ - $ - $ - EVERGREEN-FARMINGTON $ 2,515,700.00 $ 2,515,700.00 $ - FARMINGTON $ - $ - $ - GROSSE POINTE $ - $ - $ - GROSSE POINTE FARMS $ - $ - $ - GROSSE POINTE PARK $ - $ - $ - HAMTRAMCK $ - $ - $ - HARPER WOODS $ 21,100.00 $ 21,100.00 $ - HIGHLAND PARK $ 24,913,572.13 $ 468,100.00 $ 24,445,472.13 MELVINDALE $ 109,600.00 $ 109,600.00 $ - OAKLAND COUNTY GWK DD $ 3,568,400.00 $ 3,568,400.00 $ - OMID $ 5,756,900.00 $ 5,756,900.00 $ - REDFORD TOWNSHIP $ - $ - $ - REDFORD TOWNSHIP - AREA #6 $ - $ - $ - ROUGE VALLEY $ 4,316,900.00 $ 4,316,900.00 $ - WAYNE COUNTY N.E. $ 1,916,900.00 $ 1,916,900.00 $ - WAYNE COUNTY-AREA #3 $ (4,800.00) $ (4,800.00) $ -

Grand Total Sewer $43,262,071.13 $18,742,700.00 $24,519,371.13

5 of 12 Page 20 GLWA Aged Accounts Receivable-IWC Accounts Balances as of March 31, 2016

Customer Name Total Current >30 Days ALLEN PARK $ 4,988.50 $ 2,494.25 $ 2,494.25 AUBURN HILLS $ - $ - $ - AUBURN HILLS $ - $ - $ - BERKLEY $ 4,485.25 $ 4,485.25 $ - BEVERLY HILLS $ 0.50 $ 0.50 $ - BINGHAM FARMS $ - $ - $ - BIRMINGHAM $ 12,410.75 $ 6,212.25 $ 6,198.50 BIRMINGHAM (E-F) $ 85.25 $ 85.25 $ - BLOOMFIELD HILLS $ - $ - $ - BLOOMFIELD TOWNSHIP $ - $ - $ - CANTON TOWNSHIP $ 29,053.75 $ 29,053.75 $ - CENTER LINE $ 11,396.00 $ 5,698.00 $ 5,698.00 CHESTERFIELD TOWNSHIP $ 18,114.25 $ 18,114.25 $ - CITY OF FARMINGTON (E-F) $ - $ - $ - CITY OF ROCHESTER $ - $ - $ - CLARKSTON $ - $ - $ - CLAWSON $ 4,273.50 $ 4,273.50 $ - CLINTON TOWNSHIP $ 39,707.25 $ 39,707.25 $ - DEARBORN $ 56,914.00 $ 56,914.00 $ - DEARBORN HEIGHTS $ 14,462.25 $ 14,462.25 $ - DETROIT $ 464,904.00 $ 233,150.50 $ 231,753.50 DETROIT METRO WC AIRPORT $ 165.00 $ 165.00 $ - EASTPOINTE $ 19,855.00 $ 9,927.50 $ 9,927.50 FARMINGTON $ 5,085.54 $ 5,085.54 $ - FARMINGTON HILLS $ - $ - $ - FERNDALE $ 13,777.50 $ 13,777.50 $ - FRASER $ 7,672.50 $ 7,672.50 $ - GARDEN CITY $ 11,426.25 $ 11,426.25 $ - GROSSE POINTE $ 2,444.75 $ 2,444.75 $ - GROSSE POINTE FARMS $ - $ - $ - GROSSE POINTE PARK $ 3,657.50 $ 1,828.75 $ 1,828.75 GROSSE POINTE SHORES $ - $ - $ - GROSSE POINTE WOODS $ (90.75) $ (90.75) $ - HAMTRAMCK $ 6,880.50 $ 6,880.50 $ - HARPER WOODS $ 2,725.25 $ 2,725.25 $ - HARRISON TWP $ 4,034.25 $ 4,034.25 $ - HAZEL PARK $ 4,914.25 $ 4,914.25 $ - HIGHLAND PARK $ 1,416,297.94 $ 8,417.75 $ 1,407,880.19 HUNTINGTON WOODS $ 442.75 $ 442.75 $ - INDEPENDENCE $ - $ - $ - INKSTER $ 8,602.00 $ 8,602.00 $ - KEEGO HARBOR $ - $ - $ - LAKE ORION $ - $ - $ - LATHRUP $ - $ - $ - LENOX TOWNSHIP $ 275.00 $ 275.00 $ - 6 of 12 Page 21 GLWA Aged Accounts Receivable-IWC Accounts Balances as of March 31, 2016

Customer Name Total Current >30 Days LIVONIA $ 70,039.75 $ 70,039.75 $ - MACOMB TWP $ 319.00 $ 319.00 $ - MADISON HEIGHTS $ - $ - $ - MELVINDALE $ 5,733.75 $ 5,733.75 $ - NEW HAVEN $ 618.75 $ 618.75 $ - NORTHVILLE $ 2,670.25 $ 2,670.25 $ - NORTHVILLE TOWNSHIP $ 7,059.25 $ 7,059.25 $ - NOVI $ 25,968.25 $ 25,968.25 $ - OAK PARK $ 9,526.00 $ 9,526.00 $ - OAKLAND TOWNSHIP $ - $ - $ - ORCHARD LAKE VILLAGE $ - $ - $ - ORION TOWNSHIP (C-O) $ - $ - $ - OXFORD TOWNSHIP $ - $ - $ - OXFORD VILLAGE $ - $ - $ - PLEASANT RIDGE $ 418.00 $ 418.00 $ - PLYMOUTH $ - $ - $ - PLYMOUTH TOWNSHIP $ 19,371.00 $ 19,371.00 $ - REDFORD TOWNSHIP $ 19,041.00 $ 19,041.00 $ - ROCHESTER HILLS $ - $ - $ - ROMULUS $ (1,383.25) $ (1,383.25) $ - ROSEVILLE $ 22,198.00 $ 22,198.00 $ - ROYAL OAK $ 21,378.50 $ 21,378.50 $ - ROYAL OAK TOWNSHIP $ - $ - $ - SHELBY TOWNSHIP $ 35,068.00 $ 17,545.00 $ 17,523.00 SOUTHFIELD (E-F) $ - $ - $ - SOUTHFIELD (SEOC) $ 5,458.75 $ 5,458.75 $ - ST. CLAIR SHORES $ - $ - $ - STERLING HEIGHTS $ 22,748.00 $ 22,748.00 $ - TROY (E-F) $ (594.00) $ (594.00) $ - TROY (SEOC) $ 55,621.50 $ 55,621.50 $ - UTICA $ 4,419.25 $ 4,419.25 $ - VAN BUREN TOWNSHIP $ 533.50 $ 533.50 $ - VILLAGE OF FRANKLIN $ - $ - $ - WASHINGTON TOWNSHIP $ 2,180.75 $ 2,180.75 $ - WATERFORD TOWNSHIP $ - $ - $ - WAYNE $ 7,763.25 $ 7,763.25 $ - WEST BLOOMFIELD TWP (C-O) $ (1,446.50) $ (1,446.50) $ - WEST BLOOMFIELD TWP (E-F) $ (9,534.25) $ (9,534.25) $ - WESTLAND $ 36,228.50 $ 36,228.50 $ -

Grand Total IWC $ 2,530,365.48 $ 847,061.79 $ 1,683,303.69

7 of 12 Page 22 GLWA Aged Accounts Receivable-Pollutant Surcharge Accounts Balances as of March 31, 2016

Customer Name Total Current >45 Days A & R PACKING $ 3,694.92 $ 3,694.92 $ - AACTRON $ 1,253.68 $ 1,253.68 $ - ACADEMY PACKING CO. $ - $ - $ - ACME RUSTPROOF $ 74.60 $ 74.60 $ - ADVANCE ENGINEERING COMPANY $ (574.43) $ - $ (574.43) ADVANCE RESOURCE RECOVERY $ 124.47 $ 124.47 $ - AEVITAS SPECIALITY SERVICES $ 33,714.70 $ 14,522.55 $ 19,192.15 ALEXANDER & HORNUNG $ - $ - $ - ALEXANDER & HORNUNG $ - $ - $ - ALEXANDER & HORNUNG $ - $ - $ - ALGAL SCIENTIFIC CORPORATION $ 22,994.85 $ 12,128.15 $ 10,866.70 ALL CHEM CORP $ 27.16 $ - $ 27.16 ALLWASTE CONTAINER SERVICE $ 1,302.28 $ 1,302.28 $ - ALPHA STAMPING COMPANY $ - $ - $ - AMERICAN WASTE TECH INC. $ 1,393.97 $ - $ 1,393.97 AUTOMOTIVE FINISH $ - $ - $ - BARTZ BAKERY $ - $ - $ - BAYS MICHIGAN CORPORATION $ 421.92 $ 421.92 $ - BEIRUT BAKERY, INC. $ - $ - $ - BETTER MADE SNACK FOOD $ (11,563.62) $ - $ (11,563.62) BOZEK'S MARKET $ 77.30 $ 77.30 $ - BROADWAY MKT CORNED BEEF $ 96.62 $ 96.62 $ - CAPITAL REPRODUCTIONS $ 2.40 $ 2.40 $ - CF BURGER CREAMERY $ 15,044.63 $ 15,044.63 $ - CHILANGO'S BAKERY $ 1,857.74 $ 48.44 $ 1,809.30 CHRYSLER STERLING STAMPING $ 1,046.72 $ 1,046.72 $ - CHRYSLER STERLING STAMPING $ 439.51 $ 439.51 $ - CINTAS CORP. - MACOMB TWP. $ - $ - $ - CINTAS CORPORATION $ - $ - $ - CINTAS CORPORATION $ 11,039.23 $ 11,039.23 $ - CITY LAUNDRY, INC. $ 8.59 $ 8.59 $ - CLASSIC CONTAINER CORP. $ - $ - $ - COTSCO WHOLESALE STORE $ 2,002.66 $ 2,002.66 $ - COTSCO WHOLESALE STORE $ 473.27 $ 473.27 $ - COTSCO WHOLESALE STORE $ 3,027.74 $ 3,027.74 $ - COTSCO WHOLESALE STORE $ 349.12 $ - $ 349.12 COUNTRY FRESH DAIRY CO. $ 38,610.75 $ 38,610.75 $ - CROSS CHEMICAL COMPANY, INC. $ 3,220.06 $ - $ 3,220.06 DA STUART COMPANY $ 1,612.57 $ 1,612.57 $ - DA STUART COMPANY $ 1,590.48 $ 1,590.48 $ - DA STUART COMPANY $ 1,664.11 $ 1,664.11 $ - DARLING & CO. $ 3,566.76 $ 3,566.76 $ -

8 of 12 Page 23 GLWA Aged Accounts Receivable-Pollutant Surcharge Accounts Balances as of March 31, 2016

Customer Name Total Current >45 Days DEARBORN SAUSAGE $ - $ - $ - DEARBORN SAUSAGE CO., INC. $ - $ - $ - DETROIT COCO-COLA BOTT $ 2,903.51 $ 2,903.51 $ - DETROIT LINEN SERVICE $ - $ - $ - DETROIT METRO WC AIRPORT $ - $ - $ - DETROIT SAUSAGES CO INC $ 57.96 $ 19.32 $ 38.64 DIFCO LABORATORIES $ 28,909.83 $ 28,909.83 $ - DIVERSIFIED CHEM TECH. INC. $ 170.20 $ 170.20 $ - DOMESTIC LINEN SUPPLY $ 951.65 $ 951.65 $ - DOMESTIC LINEN SUPPLY $ 22,579.49 $ 4,260.24 $ 18,319.25 E.W. GROBBEL'S SONS, INC. $ 2,675.15 $ 2,675.15 $ - EAGLE OTTAWA ROCHESTER HILLS $ 38,360.83 $ 5,377.87 $ 32,982.96 ENVIROSOLIDS, L.L.C. $ 82,073.79 $ - $ 82,073.79 EQ DETROIT, INC. $ 714.74 $ 714.74 $ - EQ DETROIT, INC. $ 4,249.98 $ 4,249.98 $ - EQ DETROIT, INC. $ (3,850.60) $ - $ (3,850.60) EQ DETROIT, INC. $ 0.59 $ 0.59 $ - EQ DETROIT, INC. $ 3,739.46 $ 3,739.46 $ - EXTRUDEHODE $ - $ - $ - FAYGO BEVERAGES, INC. $ 19,084.97 $ 19,084.97 $ - FITZGERALD PLATING $ 32.09 $ 32.09 $ - FORD NEW MODEL PROGRAM $ 96.44 $ 96.44 $ - FORMING TECH $ - $ - $ - FORMING TECH $ - $ - $ - FRESH-PAK $ 7,274.63 $ 7,274.63 $ - FRESH-PAK $ 702.30 $ 702.30 $ - GENERAL LINEN SUPPLY CO. $ 7,392.97 $ 6,923.10 $ 469.87 GLOBAL TITANIUM, INC. $ 11.94 $ 11.94 $ - GLOBAL TITANIUM, INC. $ 149.29 $ 149.29 $ - HACIENDA MEXICAN FOODS $ 7,519.63 $ 1,448.21 $ 6,071.42 HENKEL CORPORATION $ 400.71 $ 119.80 $ 280.91 HOME STYLE $ 2,130.74 $ 2,130.74 $ - HOOD CLEANERS $ 267.79 $ 25.83 $ 241.96 HUNTINGTON CLEANERS $ - $ - $ - INTERGRATED PACKAGING CORP $ - $ - $ - ISLAMIC SLAUGHTERHOUSE $ 1,172.63 $ 700.59 $ 472.04 ITALIAN BUTTER BREAD STICKS $ 9.38 $ 9.38 $ - J.G. FOOD PRODUCTS, INC. $ 138.04 $ 138.04 $ - JPT PROPERTIES $ (231.42) $ - $ (231.42) KAR NUT PRODUCTS $ 1,686.63 $ 1,686.63 $ - KOWALSKI SAUSAGES, CO. $ 2,346.62 $ 2,346.62 $ - KUBISCH SAUSAGE CO. $ - $ - $ -

9 of 12 Page 24 GLWA Aged Accounts Receivable-Pollutant Surcharge Accounts Balances as of March 31, 2016

Customer Name Total Current >45 Days KVF TROY CORPORATION $ (6,749.52) $ - $ (6,749.52) LA JALISCIENSE, INC. $ 787.98 $ 787.98 $ - LA MICHICOANA TORTILLA $ 476.31 $ 476.31 $ - LA MICHOACANA FLOUR TORTILLA $ 60.57 $ 60.57 $ - MACDERMID WESTERN $ 1,838.99 $ 1,838.99 $ - MCGEAN CHEMICAL $ 110.13 $ 110.13 $ - MCNICHOLS POLISHING & ANODIZIN $ - $ - $ - METROPOLITAN BAKERY $ 385.98 $ 385.98 $ - MICHIGAN DAIRY $ 38,309.10 $ 38,309.10 $ - MICHIGAN PROD. MACHINING $ - $ - $ - MICHIGAN SOY PRODUCTS CO. $ - $ - $ - MILANO BAKERY $ 52.85 $ 52.85 $ - MILTON CHILI CO. $ (144.16) $ (96.86) $ (47.30) MINNIE MARIE BAKERS, INC $ 1,878.30 $ 1,878.30 $ - MISTER UNIFORM & MAT RENTALS $ (36.52) $ - $ (36.52) NATIONAL CHILI COMPANY $ 87.64 $ 87.64 $ - NATIONAL CONEY ISLAND $ 363.06 $ 363.06 $ - NORTHERN LAKES SEAFOOD $ 33.68 $ 33.68 $ - NUCOTE, INC. $ 148.43 $ 148.43 $ - OAKWOOD BAKERY $ 198.16 $ 198.16 $ - PELLERITO FOOD INC. $ 1,440.74 $ 1,440.74 $ - PEPSI COLA, INC. $ 31,177.52 $ 31,177.52 $ - PETRO ENVIRON TECH, INC. $ 185,454.35 $ - $ 185,454.35 PLATING SPEC $ 121.00 $ 121.00 $ - POWER VAC OF MICHIGAN, INC. $ - $ - $ - PRODUCTION SPRING, LLC. $ - $ - $ - RAY'S ICE CREAM CO. $ - $ - $ - RED SPOT PAINT #409139 $ (57.08) $ - $ (57.08) ROTUNDA PACKING $ - $ - $ - RTT $ 2,727.85 $ - $ 2,727.85 S & D PACKING $ - $ - $ - SEAFARE FOODS, INC. $ 129.40 $ 129.40 $ - SPRAYTEK, INC. $ 206.73 $ 206.73 $ - SWEETHEART BAKERY, INC. $ 2.82 $ 2.82 $ - TOM LAUNDRY CLEANERS $ - $ - $ - TURRI'S ITALIAN FOODS $ - $ - $ - TURRI'S ITALIAN FOODS $ - $ - $ - U-METCO, INC. $ 2,371.16 $ 2,371.16 $ - UNCLE RAYS SNACKS, LLC $ 56,692.04 $ 56,692.04 $ - UNCLE RAYS SNACKS, LLC $ 2,480.80 $ 2,480.80 $ - UNIQUE LINEN SERVICES, INC. $ 1,636.03 $ 218.15 $ 1,417.88 UNITED FISH DISTRIBUTORS $ 8.02 $ 8.02 $ -

10 of 12 Page 25 GLWA Aged Accounts Receivable-Pollutant Surcharge Accounts Balances as of March 31, 2016

Customer Name Total Current >45 Days UNITED MEAT & DELI $ 661.68 $ 661.68 $ - UNITED TECH ESSEX GROUP $ - $ - $ - US ECOLOGY MICHIGAN $ 6,444.86 $ 6,444.86 $ - USHER OIL SERVICES $ 29,636.93 $ 29,636.93 $ - VERN DALE PRODUCTS, INC. $ 4,232.36 $ 4,232.36 $ - VERNE DALE PRODUCTS $ 9,029.09 $ 9,029.09 $ - VERNOR FOOD PRODUCTS $ (30.27) $ (30.27) $ - WIGLEY'S MEAT PROCESS $ 648.76 $ 648.76 $ - WINTER SAUSAGE $ 900.00 $ 900.00 $ - WINTER SAUSAGE $ 151.85 $ 151.85 $ - WOLVERINE PACKING CO $ 3,872.77 $ 3,872.77 $ - WOLVERINE PACKING CO. $ 1,109.81 $ 1,109.81 $ -

Grand Total Pollutant Surcharge $751,166.92 $406,868.03 $344,298.89

11 of 12 Page 26 GLWA Aged Accounts Receivable-Miscellaneous Accounts Balances as of March 31, 2016

Customer Name Total Current >30 Days DEARBORN HEIGHTS $ - $ - $ - DETROIT-SSS $ 784,600.00 $ 784,600.00 $ - DETROIT-SSW $ 784,600.00 $ 784,600.00 $ - OCWRC $ - $ - $ - REDFORD TOWNSHIP $ - $ - $ -

Grand Total Miscellaneous Receivables $ 1,569,200.00 $ 1,569,200.00 $ -

12 of 12 Page 27 Great Lakes Water Authority Financial Services Group Audit Committee Communication

Date: April 1, 2016 To: Great Lake Water Authority Audit Committee From: Jon Wheatley, Public Finance Manager Re: Wholesale Water Revenue Report- Variance Analysis

Background: The attached table summarizes the FY 2016 billed volumes and billed revenue to the Wholesale Customer Class. The reported numbers do not include the City of Flint as they were not included in the original FY 2016 Budget or the projections for the 2015 Refunding Bonds. Please note these are billed revenues and do not reflect collections of those revenues. It should be noted that the revenues are shown in the month that the billed flow was recorded and not the following month when the bills are usually sent out.

As can be seen from these tables, for the first eight months of FY 2016, billed volume and revenues are relatively close to the budgeted amounts, with billed volume at 99.6% of budget and billed revenue at 99.9% of budget. This is the first month of FY 2016 that actual billed volume and billed revenue fell below budgeted amounts.

During the non-peak months, billed revenue and volumes are below budget and are of concern because it may indicate a lower “base” usage trend.

We will continue to update the reports and present this to the Audit Committee on a monthly basis.

Proposed Action: Receive and file.

Page 28 Detroit Water and Sewerage Department Aging Balances as of March 31, 2016

Retail Delinquency Report by Tax Type - Water Grand Total Balance Total Current Tax Type Description Total Credit Balance Total 30 Days Total 60 Days Total 90 Days Total 120 Days Total 150 Days Total 180 Days (Less Credit Balance Balance) APARTMENT BUILDING -43,899.21 473,534.14 85,821.28 56,235.05 55,830.96 133,948.55 38,502.67 549,705.12 1,349,678.56 CHURCHES -27,749.31 36,645.81 11,291.21 7,699.83 6,378.64 7,549.38 6,731.41 223,807.90 272,354.87 CITY OF DET BANKRUPTCY -93.27 0.00 0.00 0.00 0.00 0.00 0.00 0.00 -93.27 COMMERCIAL -445,679.65 1,736,596.79 631,316.87 539,914.87 168,527.45 636,922.13 156,568.59 1,212,964.43 4,637,131.48 DET PUB SCHOOLS- LEASED 0.00 159.36 0.00 0.00 0.00 0.00 0.00 0.00 159.36 DET PUBLIC SCHOOLS-EAA 0.00 15,336.44 0.00 0.00 0.00 0.00 1,597.30 28,835.75 45,769.49 DETROIT PUBLIC SCHOOLS -299.69 158,364.45 101,755.19 95,350.15 102,962.01 109,008.03 111,857.99 690,582.23 1,369,580.36 DWSD FORECLOSURE 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 FEDERAL GOVERNMENT -5,890.28 20,735.28 3,357.03 2,208.95 1,497.49 368.94 58.97 0.00 22,336.38 FIRELINES COMMERCIAL -55,704.64 313,036.81 77,995.68 57,366.90 45,167.07 136,842.27 38,502.93 579,753.48 1,192,960.50 FIRELINES INDUSTRIAL -11,687.36 70,131.21 25,697.65 24,523.22 19,660.17 19,918.45 18,864.45 603,939.79 771,047.58 HOUSING COMMISSION 0.00 14,165.63 39,671.22 10,707.37 11,358.77 9,509.92 376.80 129,991.96 215,781.67 INDUSTRIAL -327,427.00 1,032,040.25 126,687.47 33,258.82 19,650.69 77,519.75 9,298.88 148,556.37 1,119,585.23 MEDICAL -1,017.55 40,590.17 10,446.12 7,330.88 6,089.27 16,612.61 5,571.15 77,513.99 163,136.64 MUNICIPAL -30.00 110,151.65 110,875.80 59,659.71 52,505.46 24,307.50 13,768.30 234,866.97 606,105.39 PLANNING & DEVELOPMENT -6,321.17 4,726.77 3,977.39 5,391.27 3,973.34 7,265.93 4,742.20 151,649.98 175,405.71 RESIDENTIAL -1,033,115.98 3,502,741.03 1,676,305.01 1,426,200.05 1,207,280.80 1,710,224.49 2,061,259.12 25,584,028.22 36,134,922.74 SCHOOLS -80.02 21,747.23 3,212.02 1,780.65 1,429.25 2,583.90 2,240.33 55,406.96 88,320.32 STATE OF MICHIGAN 0.00 57,087.02 92,604.91 2,983.60 3,590.67 13,015.58 16,293.27 113,219.01 298,794.06 UNKNOWN AT CONVERSION 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 USPS 0.00 683.86 0.00 0.00 0.00 0.00 0.00 1,211.35 1,895.21 United Way -DWF 0.00 0.00 0.00 0.00 0.00 0.00 0.00 208,359.93 208,359.93 WATER FOUNTAINS 0.00 0.00 0.00 0.00 0.00 0.00 0.00 90.00 90.00 WAYNE COUNTY -2,399.01 36,167.02 936.45 491.42 486.31 190.25 0.00 0.00 35,872.44 WAYNE STATE UNIVERSITY 0.00 102,239.91 101,129.50 86,569.39 6,572.84 0.00 0.00 0.00 296,511.64 Summary -1,961,394.14 7,746,880.83 3,103,080.80 2,417,672.13 1,712,961.19 2,905,787.68 2,486,234.36 30,594,483.44 49,005,706.29

Retail Delinquency Report by Tax Type - Sewer Grand Total Balance Total Current Tax Type Description Total Credit Balance Total 30 Days Total 60 Days Total 90 Days Total 120 Days Total 150 Days Total 180 Days (Less Credit Balance Balance) APARTMENT BUILDING -187,133.19 1,261,068.87 227,128.04 154,345.22 152,195.16 290,506.46 99,977.68 1,457,880.27 3,455,968.51 SCHOOLS -19.98 207,313.78 37,976.99 26,595.92 15,432.73 17,763.64 17,798.14 473,182.45 796,043.67 DETROIT PUBLIC SCHOOLS 0.00 543,650.21 430,922.42 410,960.45 428,060.59 448,921.27 447,223.89 2,843,769.99 5,553,508.82 INDUSTRIAL -107,418.59 3,475,475.97 1,049,044.52 1,398,950.17 1,194,079.74 3,086,988.67 567,489.47 5,107,778.80 15,772,388.75 FEDERAL GOVERNMENT -1,560.87 45,780.31 11,563.72 9,539.24 8,198.08 4,635.18 930.76 361.37 79,447.79 COMMERCIAL -337,480.08 4,816,006.20 1,605,396.41 2,266,297.05 1,322,419.56 4,491,398.07 1,143,640.03 10,490,792.41 25,798,469.65 WATER FOUNTAINS 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 CITY OF DET BANKRUPTCY 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 PLANNING & DEVELOPMENT -2,147.43 23,224.95 18,562.06 26,338.44 21,417.94 29,106.00 21,478.85 650,718.24 788,699.05 HOUSING COMMISSION 0.00 157,207.85 122,400.18 26,590.58 28,179.35 22,404.50 1,840.55 704,187.81 1,062,810.82 STATE OF MICHIGAN 0.00 332,925.08 682,993.02 197,281.78 6,059.29 104,708.47 34,206.38 242,580.07 1,600,754.09 FIRELINES INDUSTRIAL -1,343.20 1,142.69 54.50 36.89 35.39 56.24 132.31 16,109.06 16,223.88 UNKNOWN AT CONVERSION 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 MEDICAL -1,409.00 99,890.85 27,006.64 21,643.41 17,089.29 59,498.88 16,399.77 68,278.46 308,398.30 WAYNE COUNTY -8,773.70 81,110.84 1,097.43 36.99 47.61 0.89 0.00 0.00 73,520.06 DET PUB SCHOOLS- LEASED 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 RESIDENTIAL -492,625.34 8,005,180.03 4,168,276.80 3,588,142.41 2,842,676.68 2,623,612.87 2,581,130.91 55,597,517.05 78,913,911.41 CHURCHES -66,097.88 177,358.05 62,076.34 48,334.90 36,916.86 41,481.68 31,887.83 799,898.76 1,131,856.54 FIRELINES COMMERCIAL -1,492.14 20,356.70 12,116.94 26,128.79 8,916.66 52,502.37 8,085.72 76,275.36 202,890.40 MUNICIPAL 0.00 1,167,280.09 1,177,914.43 1,007,535.67 928,591.62 497,926.58 214,997.32 1,347,964.08 6,342,209.79 DET PUBLIC SCHOOLS-EAA 0.00 72,073.88 0.00 0.00 0.00 0.00 14,626.51 111,481.54 198,181.93 USPS 0.00 4,121.50 1,848.72 1,848.72 1,760.69 1,848.72 1,848.72 57,628.27 70,905.34 WAYNE STATE UNIVERSITY 0.00 261,904.91 260,450.02 226,538.92 16,771.11 19.66 19.66 372.84 766,077.12 Summary -1,207,501.40 20,753,072.76 9,896,829.18 9,437,145.55 7,028,848.35 11,773,380.15 5,203,714.50 80,046,776.83 142,932,265.92

Grand Total (3,168,895.54) 28,499,953.59 12,999,909.98 11,854,817.68 8,741,809.54 14,679,167.83 7,689,948.86 110,641,260.27 191,937,972.21

Note: "Bankruptcy" and "Active Installment" balances are included. DWSD accounts are included in Municipal tax type category.

Page 29 Detroit Water and Sewerage Department Retail Delinquency Report by Sales Class w/Bankruptcies Water and Sewer Combined 60 Days Days Past Due

Sales Class Sales Class Description Total Number of Accounts Total Balance Total Number of Accounts Past Due Total Past Due Average Amount Past Due 1 City Residential 276,748 116,517,717.41 112,975 100,404,175.84 888.73 2 Suburban Residential 234 128,147.98 100 117,398.98 1,173.99 3 City Commercial 19,548 35,384,810.97 10,049 25,926,964.07 2,580.05 4 Suburban Commercial 20 61,722.27 5 60,139.33 12,027.87 5 City Industrial 1,901 15,565,535.81 852 11,124,517.19 13,056.95 6 Suburban Industrial 15 585,282.80 5 67,136.49 13,427.30 7 City Municipal 636 7,821,154.62 44 5,022,881.04 114,156.39 9 City Schools 700 9,631,222.74 91 7,405,432.91 81,378.38 11 City Housing 540 1,279,796.27 12 945,255.64 78,771.30 13 Firelines Industr 188 894,514.54 39 648,243.50 16,621.63 15 City Firelines Comm 1,733 3,510,569.99 291 1,613,278.64 5,543.91 17 City Water Fountains 288 90.00 2 90.00 45.00 21 City Commercial IWC 5 1,835.42 1 1,065.33 1,065.33 29 Unknown 2 559,277.22 1 270,425.22 270,425.22 Overall - Total 302,558 191,941,678.04 124,467 153,607,004.18 Apr 5, 2016 8:41:21 AM

Note: "Bankruptcy" and "Active Installment" balances are included. DWSD accounts are included in City Municipal Sales Class category.

Page 30 Accounts under Bankruptcy by Sales Class Water and Sewer Combined 60 Days Days Past Due Billing Cycles: Customer Class Sales Class Description Total Number of Accounts Total Balance Total Number of Accounts Past Due Total Past Due Average Amount Past Due 1 City Residential 907 499,509.38 555 508,654.47 916.49 2 Suburban Residential 0 0.00 0 0.00 0 3 City Commercial 21 48,827.68 15 48,144.68 3,209.65 5 City Industrial 7 1,016.22 2 933.66 466.83 6 Suburban Industrial 0 0.00 0 0.00 0 7 City Municipal 2 -93.27 0 0.00 0 9 City Schools 1 10,217.23 1 9,849.15 9,849.15 11 City Housing 0 0.00 0 0.00 0 13 Firelines Industr 0 0.00 0 0.00 0 15 City Firelines Comm 1 121.63 0 0.00 0 Overall - Total 939 559,598.87 573 567,581.96 Apr 5, 2016 9:36:07 AM

Accounts with Active Installments by Sales Class Water and Sewer Combined 60 Days Days Past Due Billing Cycles: Customer Class Sales Class Description Total Number of Accounts Total Balance Total Number of Accounts Past Due Total Past Due Average Amount Past Due 1 City Residential 44,053 37,657,770.30 43,673 31,268,536.74 715.97 2 Suburban Residential 23 22,774.86 23 20,773.73 903.21 3 City Commercial 1,337 4,817,351.58 1,327 3,810,753.22 2,871.71 5 City Industrial 71 758,819.82 69 626,736.35 9,083.14 7 City Municipal 1 994.13 1 831.82 831.82 9 City Schools 14 381,896.70 14 272,199.14 19,442.80 11 City Housing 1 351.10 1 214.39 214.39 13 Firelines Industr 7 36,751.23 6 27,894.37 4,649.06 15 City Firelines Comm 82 383,937.31 66 323,225.48 4,897.36 21 City Commercial IWC 1 1,382.47 1 1,065.33 1,065.33 Overall - Total 45,590 44,062,029.50 45,181 36,352,230.57 Apr 5, 2016 9:36:40 AM

Page 31 Detroit Water and Sewerage Department Retail Delinquency Report by Sales Class Water and Sewer Combined 60 Days Days Past Due Accounts Billed between Mar 1, 2016 and Mar 31, 2016

Sales Class Sales Class Description Total Number of Accounts Total Balance Total Number of Accounts Past Due Total Past Due Average Amount Past Due 1 City Residential 168,166 61,745,682.12 69,473 45,374,874.85 653.13 2 Suburban Residential 197 95,311.21 79 84,751.99 1,072.81 3 City Commercial 17,563 31,329,868.02 9,476 22,787,963.83 2,404.81 4 Suburban Commercial 15 61,722.27 5 60,139.33 12,027.87 5 City Industrial 1,548 15,516,076.52 814 10,885,417.19 13,372.75 6 Suburban Industrial 12 585,282.80 5 67,136.49 13,427.30 7 City Municipal 522 911,968.86 28 645,288.80 23,046.03 9 City Schools 567 1,451,541.17 78 1,191,027.38 15,269.58 11 City Housing 508 3,234.38 4 1,304.66 326.17 13 Firelines Industr 127 873,182.70 34 626,887.54 18,437.87 15 City Firelines Comm 1,463 3,452,543.00 264 1,492,394.31 5,653.01 21 City Commercial IWC 5 1,835.42 1 1,065.33 1,065.33 Overall - Total 190,693 116,028,248.47 80,261 83,218,251.70 Apr 5, 2016 9:44:06 AM

Note: "Active Installment" balances are included. DWSD accounts are included in City Municipal Sales Class category.

Page 32 Detroit Water and Sewerage Department Aging Account Balances as of March 31, 2016 - Summary

City of Detroit Accounts - Water Customer Name Total Balance Due Current > 30 Days > 60 Days > 90 Days > 120 Days > 150 Days > 180 Days 36TH DISTRICT COURT 5,695.02 2,576.71 1,462.60 1,639.18 16.53 0.00 0.00 0.00 CITY OF DETROIT - CAYMC 307.11 167.21 139.90 0.00 0.00 0.00 0.00 0.00 DETROIT CITY AIRPORT 10,161.74 4,575.02 2,449.25 2,501.59 635.88 0.00 0.00 0.00 ELECTIONS COMMISSION 1,629.47 765.80 863.67 0.00 0.00 0.00 0.00 0.00 FIRE DEPARTMENT 119,986.16 5,396.95 5,612.25 6,072.56 5,782.13 5,961.44 4,646.48 86,514.35 GENERAL SERVICES DEPARTMENT 13,861.17 4,799.37 4,304.75 4,749.74 7.31 0.00 0.00 0.00 HEALTH DEPARTMENT 36,012.85 858.14 849.04 824.00 826.28 824.00 796.69 31,034.70 INSTITUTE OF ARTS 3,582.35 3,582.35 0.00 0.00 0.00 0.00 0.00 0.00 MUNICIPAL PARKING 19,629.24 5,036.70 4,861.49 4,795.48 4,935.57 0.00 0.00 0.00 PLANNING & DEVELOPMENT DEPT-DPS 129,892.05 7,218.47 23,667.39 4,396.41 4,379.17 4,263.84 4,360.08 81,606.69 POLICE DEPARTMENT 51,551.73 17,319.51 8,600.09 8,872.72 16,759.41 0.00 0.00 0.00 PUBLIC LIBRARY 13,261.32 0.00 11,752.20 1,509.12 0.00 0.00 0.00 0.00 PUBLIC LIGHTING 27,203.34 1,560.16 2,153.59 1,797.15 1,462.29 1,305.25 1,275.66 17,649.24 PUBLIC WORKS 30,381.17 4,604.83 4,896.15 3,143.23 0.00 0.00 0.00 17,736.96 RECREATION 53,028.11 13,242.48 12,376.53 11,405.48 11,263.11 4,445.48 0.00 295.03 RECREATION (2) 38,558.46 7,146.49 6,907.07 7,870.24 6,437.78 7,507.49 2,689.39 0.00 TRANSPORTATION 27,407.00 17,639.40 9,684.79 82.81 0.00 0.00 0.00 0.00 Grand Total 582,148.29 96,489.59 100,580.76 59,659.71 52,505.46 24,307.50 13,768.30 234,836.97

City of Detroit Accounts - Sewer Customer Name Total Balance Due Current > 30 Days > 60 Days > 90 Days > 120 Days > 150 Days > 180 Days 36TH DISTRICT COURT 13,929.50 6,144.45 3,698.44 4,075.02 11.59 0.00 0.00 0.00 CITY OF DETROIT - CAYMC 590.85 325.55 265.30 0.00 0.00 0.00 0.00 0.00 DETROIT CITY AIRPORT 128,821.74 44,005.96 39,316.35 39,431.83 6,067.60 0.00 0.00 0.00 ELECTIONS COMMISSION 3,139.96 1,462.03 1,677.93 0.00 0.00 0.00 0.00 0.00 FIRE DEPARTMENT 297,000.11 18,839.46 19,071.40 19,860.55 19,578.47 19,549.31 15,754.82 184,346.10 GENERAL SERVICES DEPARTMENT 43,129.48 14,690.55 13,690.55 14,725.69 22.69 0.00 0.00 0.00 HEALTH DEPARTMENT 161,331.05 6,219.55 6,199.47 6,144.24 6,149.26 6,144.23 6,083.98 124,390.32 INSTITUTE OF ARTS 13,291.98 13,291.98 0.00 0.00 0.00 0.00 0.00 0.00 MUNICIPAL PARKING 40,522.13 10,413.84 10,027.25 9,881.63 10,199.41 0.00 0.00 0.00 PLANNING & DEVELOPMENT DEPT-DPS 1,432,621.91 93,597.34 147,746.49 88,768.54 88,741.88 88,866.54 91,994.11 832,907.01 POLICE DEPARTMENT 164,767.21 66,637.08 27,295.41 27,684.65 43,150.07 0.00 0.00 0.00 PUBLIC LIBRARY 58,322.17 5,657.53 35,615.91 17,008.07 40.66 0.00 0.00 0.00 PUBLIC LIGHTING 328,890.57 27,253.87 27,811.99 27,699.63 27,258.66 26,691.50 26,626.23 165,548.69 PUBLIC WORKS 148,877.58 41,237.17 41,879.86 27,120.49 0.00 0.00 0.00 38,640.06 RECREATION 2,327,577.81 542,334.18 540,903.21 535,144.05 540,060.33 167,004.14 0.00 2,131.90 RECREATION (2) 991,817.84 163,157.75 187,458.23 189,681.82 187,311.00 189,670.86 74,538.18 0.00 TRANSPORTATION 96,345.94 56,792.44 39,244.04 309.46 0.00 0.00 0.00 0.00 Grand Total 6,250,977.83 1,112,060.73 1,141,901.83 1,007,535.67 928,591.62 497,926.58 214,997.32 1,347,964.08 Apr 5, 2016 9:24:23 AM

Grand Total 6,833,126.12 1,208,550.32 1,242,482.59 1,067,195.38 981,097.08 522,234.08 228,765.62 1,582,801.05

Page 33 Detroit Water and Sewerage Department City of Detroit Accounts - Water Aging Account Balances as of March 31, 2016 - Detail Customer Name Customer Number Total Balance Due Current > 30 Days > 60 Days > 90 Days > 120 Days > 150 Days > 180 Days 36TH DISTRICT COURT 100,591.300 508.46 167.33 159.36 165.24 16.53 0.00 0.00 0.00 101,292.301 5,186.56 2,409.38 1,303.24 1,473.94 0.00 0.00 0.00 0.00 36TH DISTRICT COURT - Total 5,695.02 2,576.71 1,462.60 1,639.18 16.53 0.00 0.00 0.00 CITY OF DETROIT - CAYMC 301,068.301 307.11 167.21 139.90 0.00 0.00 0.00 0.00 0.00 CITY OF DETROIT - CAYMC - Total 307.11 167.21 139.90 0.00 0.00 0.00 0.00 0.00 DETROIT CITY AIRPORT 9,990,002.301 10,161.74 4,575.02 2,449.25 2,501.59 635.88 0.00 0.00 0.00 DETROIT CITY AIRPORT - Total 10,161.74 4,575.02 2,449.25 2,501.59 635.88 0.00 0.00 0.00 ELECTIONS COMMISSION 101,272.301 1,629.47 765.80 863.67 0.00 0.00 0.00 0.00 0.00 ELECTIONS COMMISSION - Total 1,629.47 765.80 863.67 0.00 0.00 0.00 0.00 0.00 FIRE DEPARTMENT 63,003.303 86,514.35 0.00 0.00 0.00 0.00 0.00 0.00 86,514.35 9,990,027.301 33,471.81 5,396.95 5,612.25 6,072.56 5,782.13 5,961.44 4,646.48 0.00 FIRE DEPARTMENT - Total 119,986.16 5,396.95 5,612.25 6,072.56 5,782.13 5,961.44 4,646.48 86,514.35 GENERAL SERVICES DEPARTMENT 9,990,015.301 13,861.17 4,799.37 4,304.75 4,749.74 7.31 0.00 0.00 0.00 GENERAL SERVICES DEPARTMENT - Total 13,861.17 4,799.37 4,304.75 4,749.74 7.31 0.00 0.00 0.00 HEALTH DEPARTMENT 9,990,007.301 36,012.85 858.14 849.04 824.00 826.28 824.00 796.69 31,034.70 HEALTH DEPARTMENT - Total 36,012.85 858.14 849.04 824.00 826.28 824.00 796.69 31,034.70 INSTITUTE OF ARTS 601,993.301 33.05 33.05 0.00 0.00 0.00 0.00 0.00 0.00 9,990,013.301 3,549.30 3,549.30 0.00 0.00 0.00 0.00 0.00 0.00 INSTITUTE OF ARTS - Total 3,582.35 3,582.35 0.00 0.00 0.00 0.00 0.00 0.00 MUNICIPAL PARKING 9,990,018.301 19,629.24 5,036.70 4,861.49 4,795.48 4,935.57 0.00 0.00 0.00 MUNICIPAL PARKING - Total 19,629.24 5,036.70 4,861.49 4,795.48 4,935.57 0.00 0.00 0.00 PLANNING & DEVELOPMENT DEPT-DPS 9,990,045.300 129,892.05 7,218.47 23,667.39 4,396.41 4,379.17 4,263.84 4,360.08 81,606.69 PLANNING & DEVELOPMENT DEPT-DPS - Total 129,892.05 7,218.47 23,667.39 4,396.41 4,379.17 4,263.84 4,360.08 81,606.69 POLICE DEPARTMENT 9,990,012.301 51,551.73 17,319.51 8,600.09 8,872.72 16,759.41 0.00 0.00 0.00 POLICE DEPARTMENT - Total 51,551.73 17,319.51 8,600.09 8,872.72 16,759.41 0.00 0.00 0.00 PUBLIC LIBRARY 9,990,005.301 13,261.32 0.00 11,752.20 1,509.12 0.00 0.00 0.00 0.00 PUBLIC LIBRARY - Total 13,261.32 0.00 11,752.20 1,509.12 0.00 0.00 0.00 0.00 PUBLIC LIGHTING 9,990,006.301 27,203.34 1,560.16 2,153.59 1,797.15 1,462.29 1,305.25 1,275.66 17,649.24 PUBLIC LIGHTING - Total 27,203.34 1,560.16 2,153.59 1,797.15 1,462.29 1,305.25 1,275.66 17,649.24 PUBLIC WORKS 63,004.303 17,736.96 0.00 0.00 0.00 0.00 0.00 0.00 17,736.96 9,990,008.301 12,644.21 4,604.83 4,896.15 3,143.23 0.00 0.00 0.00 0.00 PUBLIC WORKS - Total 30,381.17 4,604.83 4,896.15 3,143.23 0.00 0.00 0.00 17,736.96 RECREATION 301,138.300 (30.00) 0.00 0.00 0.00 0.00 0.00 0.00 (30.00) 7,400,804.301 325.03 0.00 0.00 0.00 0.00 0.00 0.00 325.03 9,990,016.301 52,733.08 13,242.48 12,376.53 11,405.48 11,263.11 4,445.48 0.00 0.00 RECREATION - Total 53,028.11 13,242.48 12,376.53 11,405.48 11,263.11 4,445.48 0.00 295.03 RECREATION (2) 9,990,014.301 38,558.46 7,146.49 6,907.07 7,870.24 6,437.78 7,507.49 2,689.39 0.00 RECREATION (2) - Total 38,558.46 7,146.49 6,907.07 7,870.24 6,437.78 7,507.49 2,689.39 0.00 TRANSPORTATION 9,990,017.301 27,407.00 17,639.40 9,684.79 82.81 0.00 0.00 0.00 0.00 TRANSPORTATION - Total 27,407.00 17,639.40 9,684.79 82.81 0.00 0.00 0.00 0.00 Overall - Total 582,148.29 96,489.59 100,580.76 59,659.71 52,505.46 24,307.50 13,768.30 234,836.97 Apr 5, 2016 1 9:40:36 AM

Page 34 Detroit Water and Sewerage Department City of Detroit Accounts - Sewer Aging Account Balances as of March 31, 2016 - Detail Customer Name Customer Number Total Balance Due Current > 30 Days > 60 Days > 90 Days > 120 Days > 150 Days > 180 Days 36TH DISTRICT COURT 100,591.400 365.21 121.74 115.94 115.94 11.59 0.00 0.00 0.00 101,292.401 13,564.29 6,022.71 3,582.50 3,959.08 0.00 0.00 0.00 0.00 36TH DISTRICT COURT - Total 13,929.50 6,144.45 3,698.44 4,075.02 11.59 0.00 0.00 0.00 CITY OF DETROIT - CAYMC 301,068.401 590.85 325.55 265.30 0.00 0.00 0.00 0.00 0.00 CITY OF DETROIT - CAYMC - Total 590.85 325.55 265.30 0.00 0.00 0.00 0.00 0.00 DETROIT CITY AIRPORT 9,990,002.401 128,821.74 44,005.96 39,316.35 39,431.83 6,067.60 0.00 0.00 0.00 DETROIT CITY AIRPORT - Total 128,821.74 44,005.96 39,316.35 39,431.83 6,067.60 0.00 0.00 0.00 ELECTIONS COMMISSION 101,272.401 3,139.96 1,462.03 1,677.93 0.00 0.00 0.00 0.00 0.00 ELECTIONS COMMISSION - Total 3,139.96 1,462.03 1,677.93 0.00 0.00 0.00 0.00 0.00 FIRE DEPARTMENT 63,003.403 184,346.10 0.00 0.00 0.00 0.00 0.00 0.00 184,346.10 9,990,027.401 112,654.01 18,839.46 19,071.40 19,860.55 19,578.47 19,549.31 15,754.82 0.00 FIRE DEPARTMENT - Total 297,000.11 18,839.46 19,071.40 19,860.55 19,578.47 19,549.31 15,754.82 184,346.10 GENERAL SERVICES DEPARTMENT 9,990,015.401 43,129.48 14,690.55 13,690.55 14,725.69 22.69 0.00 0.00 0.00 GENERAL SERVICES DEPARTMENT - Total 43,129.48 14,690.55 13,690.55 14,725.69 22.69 0.00 0.00 0.00 HEALTH DEPARTMENT 9,990,007.401 161,331.05 6,219.55 6,199.47 6,144.24 6,149.26 6,144.23 6,083.98 124,390.32 HEALTH DEPARTMENT - Total 161,331.05 6,219.55 6,199.47 6,144.24 6,149.26 6,144.23 6,083.98 124,390.32 INSTITUTE OF ARTS 601,993.401 189.98 189.98 0.00 0.00 0.00 0.00 0.00 0.00 9,990,013.401 13,102.00 13,102.00 0.00 0.00 0.00 0.00 0.00 0.00 INSTITUTE OF ARTS - Total 13,291.98 13,291.98 0.00 0.00 0.00 0.00 0.00 0.00 MUNICIPAL PARKING 9,990,018.401 40,522.13 10,413.84 10,027.25 9,881.63 10,199.41 0.00 0.00 0.00 MUNICIPAL PARKING - Total 40,522.13 10,413.84 10,027.25 9,881.63 10,199.41 0.00 0.00 0.00 PLANNING & DEVELOPMENT DEPT-DPS 9,990,045.400 1,432,621.91 93,597.34 147,746.49 88,768.54 88,741.88 88,866.54 91,994.11 832,907.01 PLANNING & DEVELOPMENT DEPT-DPS - Total 1,432,621.91 93,597.34 147,746.49 88,768.54 88,741.88 88,866.54 91,994.11 832,907.01 POLICE DEPARTMENT 9,990,012.401 164,767.21 66,637.08 27,295.41 27,684.65 43,150.07 0.00 0.00 0.00 POLICE DEPARTMENT - Total 164,767.21 66,637.08 27,295.41 27,684.65 43,150.07 0.00 0.00 0.00 PUBLIC LIBRARY 9,990,005.401 58,322.17 5,657.53 35,615.91 17,008.07 40.66 0.00 0.00 0.00 PUBLIC LIBRARY - Total 58,322.17 5,657.53 35,615.91 17,008.07 40.66 0.00 0.00 0.00 PUBLIC LIGHTING 9,990,006.401 328,890.57 27,253.87 27,811.99 27,699.63 27,258.66 26,691.50 26,626.23 165,548.69 PUBLIC LIGHTING - Total 328,890.57 27,253.87 27,811.99 27,699.63 27,258.66 26,691.50 26,626.23 165,548.69 PUBLIC WORKS 63,004.403 38,640.06 0.00 0.00 0.00 0.00 0.00 0.00 38,640.06 9,990,008.401 110,237.52 41,237.17 41,879.86 27,120.49 0.00 0.00 0.00 0.00 PUBLIC WORKS - Total 148,877.58 41,237.17 41,879.86 27,120.49 0.00 0.00 0.00 38,640.06 RECREATION 7,400,804.401 2,131.90 0.00 0.00 0.00 0.00 0.00 0.00 2,131.90 9,990,016.401 2,325,445.91 542,334.18 540,903.21 535,144.05 540,060.33 167,004.14 0.00 0.00 RECREATION - Total 2,327,577.81 542,334.18 540,903.21 535,144.05 540,060.33 167,004.14 0.00 2,131.90 RECREATION (2) 9,990,014.401 991,817.84 163,157.75 187,458.23 189,681.82 187,311.00 189,670.86 74,538.18 0.00 RECREATION (2) - Total 991,817.84 163,157.75 187,458.23 189,681.82 187,311.00 189,670.86 74,538.18 0.00 TRANSPORTATION 9,990,017.401 96,345.94 56,792.44 39,244.04 309.46 0.00 0.00 0.00 0.00 TRANSPORTATION - Total 96,345.94 56,792.44 39,244.04 309.46 0.00 0.00 0.00 0.00 Overall - Total 6,250,977.83 1,112,060.73 1,141,901.83 1,007,535.67 928,591.62 497,926.58 214,997.32 1,347,964.08 Apr 5, 2016 9:17:15 AM

Page 35 AGENDA ITEM #9A Great Lakes Water Authority Financial Services Group Audit Committee Communication

Date: April 1, 2016 To: Great Lake Water Authority Audit Committee From: Jon Wheatley, Public Finance Manager Re: Informational Update – City of Highland Park Billings and Collections Background: Highland Park has not been current on its sewer account since at least Fiscal Year 2008. In 2012, the Michigan Department of Environmental Quality (MDEQ) requested that the City of Detroit Water & Sewerage Department (DWSD) supply water to Highland Park on a short term basis, at which time Highland Park owed the Department approximately $10 million for wastewater services. Beginning in 2013, Highland Park ceased making payments for a period of time and then subsequently began to make intermittent, partial payments. As of March 31, 2016, Highland Park had a delinquent balance of over $29.6 million, including over $24.9 million for wastewater treatment services, approximately $1.4 million for industrial waste control services, and over $3.3 million for water supply services. The table below is a billing and collection history for Highland Park, from June 30, 2012 to March 31, 2016.

Water Sewer IWC

June 30, 2012 Balance $ - $ 10,207,956 $ 852,987 FY 2013 Billings 485,887 4,987,635 154,444 FY 2013 Payments (65,652) (2,206,211) - June 30, 2013 Balance $ 420,235 $ 12,989,380 $ 1,007,431 FY 2014 Billings 1,004,357 6,980,442 161,951 FY 2014 Payments - (1,612,633) - June 30, 2014 Balance $ 1,424,592 $ 18,357,189 $ 1,169,382 FY 2015 Billings 1,008,032 5,553,123 165,739 FY 2015 Payments - (1,444,623) - June 30, 2015 Balance $ 2,432,625 $ 22,465,689 $ 1,335,120 FY 2016 Billings (9 months) 875,185 4,207,867 81,178 FY 2016 Payments (9 months) - (1,759,984) - Balance as of March 31, 2016 $ 3,307,810 $ 24,913,572 $ 1,416,298

Page 36 AGENDA ITEM #9B Great Lakes Water Authority Financial Services Group Audit Committee Communication

Date: April 1, 2016 To: Great Lake Water Authority Audit Committee From: Jon Wheatley, Public Finance Manager Re: Informational Update – City of Flint Billings

On October 16, 2015, the City of Flint (“City”) re-joined the regional water system. At that time, the City’s account was established with a deposit of $10 million. The table below identifies the balance remaining as of the most recent billing date of March 24, 2016.

CITY OF FLINT PREPAYMENT FUND RECONCILIATION

Previous Invoice Month Commodity Fixed Prepayment Month Usage Charge Charge Total Billing Fund Balance $10,000,000.00 November 26,875.0 $8.93 $341,729.00 * $581,722.75 $9,418,277.25 December 47,576.9 $8.93 $662,100.00 $1,086,961.72 $8,331,315.53 January 48,067.4 $8.93 $662,100.00 $1,091,341.88 $7,239,973.65 February 52,606.4 $8.93 $662,100.00 $1,131,875.15 $6,108,098.50 March 51,787.4 $8.93 $662,100.00 $1,124,561.84 $4,983,536.66 April May June July $5,016,463.34

* Prorated amount. Reading from October 16 to October 31

Page 37 AGENDA ITEM #9C

Cash Transferred to DWSD FY 2016

Water Sewer Total Notes Lease Lease Operations & Payment (I&E Operations & Payment Maintenance Pension Fund) Maintenance Pension (I&E Fund) January 2016 $ 3,740,800 2,486,700$ $ 11,767,600 $ 2,824,900 1,669,300$ 4,380,000$ $ 26,869,300 Lease and pension are for 7 months (Jul ‐ Jan) February 2016 3,740,800 355,200 1,681,100 2,824,900 238,500 625,700 9,466,200 Regular monthly transfer February 2016 3,740,800 2,824,900 6,565,700 Extra one month of O&M per Lease 4.4(a)(ii) March 2016 3,740,800 355,200 1,681,100 2,824,900 238,500 625,700 9,466,200 Regular monthly transfer April 2016 3,740,800 355,200 1,681,100 2,824,900 238,500 625,700 9,466,200 Regular monthly transfer

Total Transfers $ 18,704,000 3,552,300$ $ 16,810,900 $ 14,124,500 2,384,800$ 6,257,100$ $ 61,833,600

Note: Per Section 3.5 of the Lease, the Lease Payment may be used for: a) bond principal and interest for Local System Improvements, b) bond principal and interest for the City's share of common‐to‐all System Improvements, and c) Local System improvements paid from the lease payment deposited to the Improvement & Extension (I&E) Fund. The Lease payment above is net of debt service allocation established by City during its rate setting for FY 2016.

Page 38 Great Lakes Water Authority Audit Committee

Thursday, April 7, 2016 at 8:00 a.m.

5th Floor Board Room, Water Board Building 735 Randolph Street, Detroit, Michigan 48226 GLWater.org

ADDENDUM TO MEETING BINDER

Item # 6A - FY 2017 and 2018 Financial Planning Update –Review of GLWA (Page 1) Operations & Maintenance Budget

Item # 8B - Wholesale Water Revenue Report- Variance Analysis (Page 23)

AGENDA ITEM #6A

FY 2017 and 2018 Operations & Maintenance Budget Discussion

GLWA Audit Committee April 7, 2016

Page 1 Executive Summary  Operations budget is alignment with parameter of no more than a 4% increase  Increased transparency of the budget elements  Establishes new levels of accountability  Budget reflects flexibility to meet the changing needs while continuing to optimize  Supports long-term strategic initiatives: asset management, lean, performance management, staff development  This is first presentation of internally generated budget; presentation subject to refinement  Core emphasis is compliance, safety, and service

Page 2 Budget Parameters  The documents that established the regional authority memorialize a commitment to manage the budget within a 4% ceiling  FY 2017 is the first full operational year of GLWA  Base year to establish the dollar amount of the budget ceiling is DWSD’s FY 2016 original budget

Page 3 Combined Budget “Ceiling”

Preliminary BUDGET Comparison Combined Water and Sewer Systems (1) (2) (3) (4) (5) (6) (7) FY 2017 vs. FY 2016 FY 2018 vs. FY 2017 FY 2016 FY 2017 FY 2018 Variance % Variance Variance % Variance Original Budg Preliminary Preliminary (2) - (1) (4) / (1) (3) - (2) (6) / (2) GLWA Wholesale Items Wholesale Expense O&M (GLWA) (a) 276,671,300 287,738,100 299,247,700 11,066,800 4.0% 11,509,600 4.0% GLWA Pension Reimbursement (Operating ) (b) 16,875,500 16,875,500 16,875,500 0 0.0% 0 0.0% Debt Service (Wholesale Facilities ) 368,720,800 381,696,000 380,281,900 12,975,200 3.5% (1,414,100) -0.4% Non-Op Legacy Benefit Pmts (Wholesale Portion ) (b) 17,131,700 17,131,700 17,131,700 0 0.0% 0 0.0% WRAP Deposit (Wholesale Portion ) (a) 4,592,000 3,945,500 4,103,300 (646,500) -14.1% 157,800 4.0% Lease Payment Deposit to Retail I&E Account 50,000,000 50,000,000 50,000,000 0 0.0% 0 0.0% Revenue Transfer to Wholesale I&E Account (c) 30,712,200 37,904,900 59,463,200 7,192,700 23.4% 21,558,300 56.9% ------Total Wholesale Revenue Requirements (a) 764,703,500 795,291,700 827,103,300 30,588,200 4.0% 31,811,600 4.0% less: Non-operating Revenue (5,088,600) (6,192,300) (6,885,100) (1,103,700) 21.7% (692,800) 11.2% ------Subtotal Revenue Requirement from Charges 759,614,900 789,099,400 820,218,200 29,484,500 3.9% 31,118,800 3.9%

(a) Assumed to increase 4.0% annually (b) FY 2017 and FY 2018 assumed @ FY 2016 levels (c) Default calculation to result in overall 4.0% annual revenue requirement increase

Page 4 Budget Preparation Challenges  Limited “actual” data and ramp-up of new staff knowledge about the organization  Data: City DRMS system does not provide proper accrual information and data extraction and analysis is problematic  Four general ledger (GL) accounts string configurations & crosswalks implemented from 7.2015 to 3.2016; comparative analysis cannot be done without significant data manipulation  Staff: The bifurcation of staff with the stand-up of DWSD & GLWA at 1.1.2016, left GLWA budget positions vacant  Opening balance sheet due to bifurcation is under development  The Good News: GLWA recruited talented team who began in Nov/Dec 2015 & GLWA’s new financial system launched in March 2016 (with a streamlined GL account string – from7 segments to four)

Page 5 Budget Preparation Strategy  Budget based on specific identification of known expenses  Reclassified “contingencies” previously in budget items to an “unallocated reserve and repair contingency”; resulting savings support revenue financed capital and long term financial sustainability  Foundation for strong budgetary control through use of fiscal notes  The “Budget Buddy” system – new Financial Planning & Analysis team members are assigned a division to facilitate budget prep and management of that budget and performance measures - embed finance team in operations  Limited meaningful data from Oracle DRMS resulted in significant workarounds to understand prior year actuals (i.e. cash disbursement review, corroborating materials; FY 2015 audit expected in May 2016); new BS&A system has had a significant positive impact to set course for GLWA’s future  Staffing plan funded at less that 100%; ongoing optimization

Page 6 What’s New for GLWA  GLWA is a new organization  Expanded expertise in planning and asset management  A new employer with modernized employee benefit design  Training increase to support commitment to staff development  Shared services with City of Detroit/DWSD  Increased transparency in budget plan  New key concept: Downward pressure on individual “line items” offset by “unallocated reserve and repair contingency”  The focus of 2015 was standup of authority; the focus of 2016/17 is rollout of key new initiatives as well as those that were deprioritized (in particular, IT)  The operations & maintenance budget is subject to further refinements in presentation and analysis over the next few weeks

Page 7 Why this Budget is Important  Basis for FY 2017 cost and capital overhead plan project  Expanded transparency in budget decisions  First budget that reflects priorities of GLWA  Controlled & centralized financial management with strong link between finance and operations  No budget games  FY 2017 is the first year that new financial systems will be able to support desired level of budget control  Several new budget terms introduced

Page 8 Budget by Division

Budget framework encompasses service areas and lines of accountability

Page 9 New Budget Concepts  Unallocated Reserve & Repair Contingency

 Centralized Services

 “Contra” accounts  Capital Program Allocation  Shared Services  Personnel Transition Adjustment

Page 10 Budget by Division

FY 2017 FY 2018 Divisions FY 2017 % of Total FY 2018 % of Total A Water System Operations $ 64,904,252 23% $ 66,062,055 22% B Wastewater System Operations 121,912,047 42% 121,349,057 41% C Systems Operations Control 19,243,777 7% 20,257,152 7% D Fleet, Facilities, & Field Services 34,694,148 12% 36,211,836 12% E Systems Planning 8,376,750 3% 9,905,369 3% Subtotal -Direct System Expenses 249,130,974 87% 253,785,469 85% F Chief Executive Officer 1,683,890 1% 1,849,158 1% G Administrative & Compliance Services 10,921,296 4% 10,690,781 4% H Financial Services 12,692,430 4% 11,973,027 4% I Information Technology 7,288,959 3% 8,108,365 3% J Security & Integrity 3,423,090 1% 3,314,735 1% K Transition 1,248,000 0% - 0% L Unallocated Reserve and Repair Contingency 1,349,461 0% 9,526,165 3% Subtotal -Direct System Expenses 38,607,126 13% 45,462,231 15% Grand Total $ 287,738,100 100% $ 299,247,700 100%

Page 11 Budget By Expense Category

FY 2017 FY 2018 Operations & Maintenance Expense Type FY 2017 % of Total FY 2018 % of Total 1.1 Salaries & Wages $ 54,575,824 19%$ 55,981,614 19% 1.2 Overtime 8,532,400 3% 8,658,400 3% 1.3 Employee Benefits 20,494,988 7% 20,938,897 7% 1.4 Personnel Transition Adjustment (6,202,000) -2% (6,102,000) -2% 2 Transition Services 14,772,140 5% 15,518,053 5% Personnel Costs 92,173,352 32% 94,994,964 32% 3.1 Electric 51,164,929 18% 50,233,441 17% 3.2 Gas 9,314,882 3% 9,316,322 3% 3.3 Other Utilities 6,084,398 2% 6,084,398 2% Utilities 66,564,209 23% 65,634,161 22% 4 Chemicals 20,538,121 7% 20,576,957 7% 5 Supplies & Other 27,045,695 9% 25,233,993 8% 6 Contractual Services 107,103,203 37% 108,282,341 36% 7 Capital Program Allocation (26,376,921) -9% (25,233,021) -8% 8 Shared Services (9,875,920) -3% (10,391,660) -3% L Unallocated Reserve and Repair Contingency 10,566,361 4% 20,149,965 7% Grand Total $ 287,738,100 100%$ 299,247,700 100%

Page 12 Contractual Services  Nature of large utility is ongoing large dollar maintenance and repair of facilities (dollar amount and scope may appear to be capital investment in nature; but are repairs for accounting purposes; highlights importance of asset management)  The implementation of the lease an, services agreement calls for a number of studies to support system planning and optimization  Includes sewer system master plan  Provides for backfilling of staff when needed for operations  Includes services provided to GLWA from DWSD/City  Includes ongoing information technology systems support

Page 13 Contractual Services

FY 2017 FY 2018 Contractual Services FY 2017 % of Total FY 2018 % of Total A Water System Operations $ 7,440,325 7% $ 7,498,081 7% B Wastewater System Operations 28,778,470 27% 29,315,370 27% C Systems Operations Control 14,182,522 13% 15,168,522 14% D Fleet, Facilities, & Field Services 22,052,821 21% 23,707,921 22% E Systems Planning 15,310,000 14% 13,950,000 13% F Chief Executive Officer 461,000 0% 421,001 0% G Administrative & Compliance Services 8,939,840 8% 9,003,268 8% H Financial Services 1,985,500 2% 989,878 1% I Information Technology 6,952,725 6% 7,928,300 7% J Security & Integrity 300,000 0% 300,000 0% K Transition 700,000 1% 0% Grand Total $ 107,103,203 100%$ 108,282,341 100%

Page 14 Capital Program Allocation  Previous operations and maintenance budgets were shown net of capital overhead allocation  New financial system allows for better tracking of dollars spent  This budget therefore shows budget responsibility by department at gross amount with an offset for allocations  The capital improvement plan provides for an allocation of direct and indirect costs for constructed assets  Example: Employees may have time allocable to:  Direct overhead costs - i.e. actively engaged as a construction project manager  Indirect overhead - i.e. someone who supervises the PM; or who administers a project (i.e. Procurement Team members, General Counsel staff, etc.)  Direct and Indirect i.e. someone who serves as a project manager directly 25% of the time and supervises PM staff 50% of the time (indirect)  The objective is to accurately identify the true costs to deliver projectsPage 15 Capital Program Allocation

Capital Program Allocation by Division FY 2017 FY 2018 Capital 3.5 Procurement (195,000) (200,800) intensive 4.2 System Planning (2,500,000) (2,500,000) 4.4 Asset Management & Capital Planning (8,757,900) (7,323,600) nature of 4.5 Energy Management (800) (800) GLWA spans 5.2 Field Engineering (948,900) (982,200) the entire 5.3 Field Service Operations (288,900) (298,900) 5.4 Facility Operations (292,900) (303,100) organization 6.1 Chief Information Officer (736,400) (758,500) 6.5 Infrastructure (3,600,000) (3,600,000) Majority of 7.1 Systems Operations Control (2,894,500) (2,995,800) 8.5 Wastewater Engineering (3,061,321) (3,061,321) Capital 9.1 Chief Operating Officer Water Operations & Field Services (100,000) (103,500) Program 9.2.1 Water Director (139,900) (144,800) Allocation is 9.2.2 Water Quality (127,400) (131,800) 9.3.1 Water Works Park (175,400) (181,800) in 9.3.2 Lake Huron Water Plant (127,200) (131,800) engineering 9.3.3 Springwells Water Plant (222,600) (230,300) and planning 9.3.4 Northeast Water Plant (173,800) (180,000) 9.3.5 Southwest Water Plant (175,400) (181,400) 9.5.1 Water Engineering (1,653,800) (1,711,600) 10.1 Security & Integrity $ (204,800) $ (211,000) Grand Total $ (26,376,921) $ (25,233,021) Page 16 Personnel Costs  Currently a 25% positive variance exists based upon filled position vs. staffing plan  GLWA is in a transitional phase – especially in back office functions that were most impacted by the bifurcation effort  Focus on careful management of evaluating short- term and long-term operational needs  Staffing plan reflects ongoing compliance and regulatory evaluation  Modernized benefit plan for GLWA eliminates risk of incurring unfunded liabilities

Page 17 Personnel Budget Budget with Staffing Plan at 100% with "Transition Adjustment"

Personnel Expense Categories FY 2017 FY 2018 1.1 Salaries & Wages $ 54,575,824 $ 55,981,614 1.2 Overtime 8,532,400 8,658,400 1.3 Employee Benefits 20,494,988 20,938,897 1.4 Personnel Transition Adjustment (6,202,000) (6,102,000) 2 Transition Services 14,772,140 15,518,053 Grand Total $ 92,173,352 $ 94,994,964

- New GLWA benefit design implemented January 1, 2016 eliminates unfunded liabilities

- Primary budgetary risk is containing medical plan costs for a new employer like GLWA; benchmark estimates were used, subject to refinement once actual experience trend is known; re-evaluate every 3 to 6 months with alerts in place for large claims Page 18 Staffing Strategically

Measures of Organizational Change Transition Vacant at * Wastewater System Group Contracts 1.31.2016 staffing does not A Water System Operations 9 39 presume the staffing B Wastewater System Operations 22 139 reductions with the C Centralized Services 38 71 startup of the D Administrative & Other Services 41 64 biosolids dryer. Grand Total 110 313

Staffing plan will continue to Staffing Plan at 100% evolve strategically; a “Plan” FY 2017 FTE FY 2018 FTE is not authority to hire Group Count Count A Water System Operations 187 187 B Wastewater System Operations 461 442 Goal is to manage resources C Centralized Services 184 197 with appropriate balance of D Administrative & Other Services 273 275 transition contracts and Grand Total 1,105 1,101 direct hires Page 19 Shared Services  Reflects where GLWA is the services provider

 Shared services budgeted based upon executed agreement and related level of service definitions

 Only one “as needed” - legal services which are largely a pass-through expense; if shared service not utilized by DWSD, the costs will not be incurred

 Services provided by DWSD are reflected in contractual services (i.e. fleet maintenance services)

Page 20 Shared Services

Shared Services by Division FY 2017 FY 2018 2.2 General Counsel $ (1,695,600) $ (1,959,100) 3.5 Procurement (58,500) (59,400) 6.1 Chief Information Officer (1,853,200) (1,907,700) 6.2 Administration (31,440) (4,380) 6.3 Business Applications (152,800) (155,800) 6.4 Enterprise Applications (440,400) (429,900) 6.5 Infrastructure (1,714,800) (1,816,200) 6.6 Service Desk (148,680) (145,680) 7.1 Systems Operations Control (1,339,100) (1,481,400) 9.2.2 Water Quality (332,200) (342,000) 10.1 Security & Integrity (2,029,200) (2,090,100) 11.1 Transition (80,000) Grand Total $ (9,875,920) $ (10,391,660)

Page 21 Next Steps  Presentation to GLWA Board as a workshop item on April 13, 2016

 Next level of presentation will provide analysis by department and alignment of budget with organizational goals

Page 22 AGENDA ITEM #8B

735 Randolph Street Detroit, MI 48226 WWW.GLWATER.ORG

GLWA Suburban Wholesale Billing Summary Water Supply System - Revenue Analysis FY 2016 Budget vs. Actual - by Month (FY 2016 - July 2015 thru June 2016)

Cumulative

Budget Actual Actual/Budget Variances Unit Unit Unit Volume Revenue Revenue Volume Revenue Revenue Volume Revenue Revenue Mcf $ $/Mcf Mcf $ $/Mcf Mcf $ $/Mcf

Jul 1,484,430 28,447,300 19.16 1,484,928 27,991,867 18.85 498 (455,433) (0.31) Aug 1,445,640 28,221,400 19.52 1,525,278 29,144,269 19.11 79,638 922,869 (0.41) Sep 1,289,830 26,408,100 20.47 1,406,260 27,637,331 19.65 116,430 1,229,231 (0.82) Oct 1,130,720 24,931,200 22.05 1,135,048 25,028,541 22.05 4,328 97,341 0.00 Nov 967,010 23,567,400 24.37 935,394 23,304,814 24.91 (31,616) (262,586) 0.54 Dec 1,056,610 24,218,700 22.92 989,529 23,615,719 23.87 (67,081) (602,981) 0.94 Jan 1,088,010 24,533,300 22.55 1,013,414 23,883,542 23.57 (74,596) (649,758) 1.02 Feb 987,500 23,671,400 23.97 918,834 23,146,909 25.19 (68,666) (524,491) 1.22 Mar 1,078,400 24,466,400 22.69 0 0 0.00 0 0 0.00 Apr 1,003,740 23,813,600 23.72 0 0 0.00 0 0 0.00 May 1,181,850 25,608,700 21.67 0 0 0.00 0 0 0.00 Jun 1,407,110 27,612,400 19.62 0 0 0.00 0 0 0.00 Total 14,120,850 305,499,900 21.63 9,408,686 203,752,994 21.66 (41,064) (245,806) 0.02

Achievement of Budget 99.6% 99.9%

Water Supply System Sales Analysis Historical Water Sales

FY 2014 FY 2015 FY 2016

Jul 1,521,519 1,518,244 1,484,928 Aug 1,585,885 1,370,517 1,525,278 Sep 1,428,680 1,210,838 1,406,260 Oct 1,176,170 1,055,364 1,135,048 Nov 1,004,254 948,206 935,394 Dec 1,112,028 1,014,527 989,529 Jan 1,177,601 1,049,951 1,013,414 Feb 1,055,345 968,572 918,834 Mar 1,177,133 1,094,692 0 Apr 1,052,739 997,679 0 May 1,104,194 1,126,972 0 Jun 1,382,929 1,223,704 0 Total 14,778,477 13,579,265 9,408,686

FY 2016 Variance (Year to Date) from 93.51% 102.98%

2016 Water ‐ Volume and Revenue Analysis, Cumulative Page 23 3/29/2016, 1:00 PM

735 Randolph Street Detroit, MI 48226 WWW.GLWATER.ORG

GLWA Suburban Wholesale Billing Summary Water Supply System - Volume and Revenue FY 2016 Budget vs. Actual - by Month (FY 2016 - July 2015 thru June 2016)

Cumulative‐ Volume Mcf 1,800,000 16,000,000

1,600,000 14,000,000 1,400,000 12,000,000 Mcf Mcf 1,200,000 ‐ ‐ 10,000,000 1,000,000

8,000,000 Volume

Volume 800,000 6,000,000 600,000

Monthly 4,000,000

400,000 Cumulative

200,000 2,000,000

0 0 Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun

Monthly Budget Monthly Actual Cumulative Budget Cumulative Actual

Cumulative‐ Revenue $ $35 $350

$30 $300

$25 $250 millions

millions $

$ ‐

‐ $20 $200

$15 $150 Revenue

Revenue

$10 $100 Monthly

$5 $50 Cumulative

$‐ $‐ Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun

Monthly Budget Monthly Actual Cumulative Budget Cumulative Actual

2016 Water ‐ Volume and Revenue Analysis, Cumulative Page 24 3/29/2016, 1:00 PM