City of Flint Special Council Meeting:

1. City of Flint Special Council Meeting: Presentation of FY20 & FY21 Proposed Budget and Projections March 21, 2019

2. CITY OF FLINT • Council Priorities • FY2020 & FY2021 • Maintain General Fund reserve Balance. • Maintain Police and Fire staffing levels while seeking additional funding sources to increase public safety programs. • Ensure the Department of Public Works has tools necessary to provide for street maintenance, sidewalk maintenance, • snow removal, and right-of-way tree maintenance. • Resolve the Water Lead Crisis through improvement of City infrastructure and replacement of customer service lines. • Stabilize the financial position of the Water and Sewer Funds at the most affordable rates possible at the highest quality standards. • Build community relationships to ensure capacity and continued implementation of Master Plan and Capital Improvement Plan; including blight elimination, economic development, parks maintenance and essential human services. • Improve customer service across all departments through training and technology. 2

3. CITYOFFLINTSTRATEGICPLAN 2020-2024 SettingaSustainableCoursefortheCityofFlint TheVisionfortheCityGovernmentofFlint A well-managed, financiallystable, and accountable governmentfocused on creating and maintaininga vibrant and growing communitywhich will attract andretain residents, businesses, students, and visitors and improve our qualityof life TheMissionoftheCityGovernment To assure that residents, businesses, students and visitors inthe City ofFlint receivemunicipal services in a customer friendly, financially responsible,and equitable mannerin order to insure equality ofopportunity for all persons TheGoals In orderto operate per our Mission and realizeour Vision, residents, businesses, studentsandvisitorscan expectthatthe City of Flint will: 1. The City will operate in an open and financially sustainable manner, includingimprovingcitizen access, focusingon measurableresults,improvingthe City's financial position and eliminating accumulated deficits 2. The City will providea highly trained andprofessional staff of elected leaders, appointed officials and employees 3. The City will providefor asafe, secure, healthy andclean environmentin which to live, work,learnandplay 4. The City will provide access to dependable, quality and sustainable water andsewer 5. The City will provide access to an adequate and well maintainedtransportation networkforall modesof travel serving motorized, non-motorized, and pedestrian needs 6. The City will foster cooperation among business, non-profit,higher education, foundationpartners,and residentsto createa climate that supports economic developmentwitha focuson small businessand entrepreneursin orderto buildlocal wealth and enhance the taxbase 7. The City will seekpartnerships with Local, State and Federal governmentalpartners, and other private entities in order to maximizeefficiencies and resources inmeeting its Mission 8. The City will promote the equal protection of the law for each person in accordance with fundamental human rights 3

4. THE ADOPTED FUNDS Also adopted are: - 295 Fund: Section 108 loans - 246 Fund: EDA Revolving loans - 583 Fund: (Enterprise) Oak Business Center 4

5. A YEAR IN THE NEWS • April 2018 – Governor Snyder officially disbands the Flint RTAB, giving Flint complete home rule control. • October 2018 – General Motors returns to Flint city water after almost four years. • December 2018 – City closes on its Drinking Water Revolving Loan fund clearing the way for the city to use the remaining $77.7 million of WIIN-act funds for capital improvements throughout the water delivery system. • December 2018 – Mayor Weaver announces that top priority 18,000 lead and galvanized steel lines have been removed as part of the FAST START initiative. • February 2019 – City of Flint officials announce amendment to the court ruling Concerned Pastors for Social Action v Nick Khouri et al, allowing for the release of $6.6 million of disputed reimbursements back to the city. 5

6. THE POSITIVES… • The General Fund is projected to be “in the black”… • Shared sacrifices – unfilled positions removed from budget • Public safety employee counts unaffected • Assessed property values continue to show improvement • Increase of 2.2% in total taxable value, net of exemptions • Fund balances remain healthy • General Fund fund balance increased to $20.3M as of end of FY18 6

7. …AND THE NEGATIVES • Legacy costs continue to grow – $24.7M for Pensions and $18.0M for Retiree Health Care (RHC) in FY20 • Pension balloons to $39.2M in FY25, assuming same actuarial assumptions • RHC costs expected to grow over next few years as well • There is limited growth in revenues due to economics • Lower occupancy rates and growing number of vacated parcels • Short-term income tax growth limited • Utility infrastructure continues to age / Utility cashflow limited • Just as in FY19, proposal excludes significant city-funded capital improvement in water system (funded through water crisis dollars) • Cash flow challenges limit ability to fund badly needed Waste Water Treatment Plant upgrades 7

8. EMPLOYEES BY DEPARTMENT Note: These figures include grant-funded positions 8

9. EMPLOYEES BY DEPARTMENT 9 Note: These figures include grant-funded positions

10. GENERAL FUND AT A GLANCE • Comments • Fund balance is NOTuncommitted funding; need those funds plus more to address MERS and OPEB obligation • Ombudsman annual expenditure of $250K continues to be included in General Fund • Police and Fire estimated to remain above 57.8% of General Fund through FY20 (required above 55.5% per Public Safety millage – Ordinance 1-164 “Police and Fire Funding”) • Key Assumptions: • Relatively flat property tax valuation • Slight uptick in income tax, full impact of Lear and other economic activity • Contract negotiations for Capts& Lts, 1600 and 1799 are not complete 10

11. GENERAL FUND 11

12. STREET FUNDS • Comments: • FY20 negative positions indicative of increased appropriations / spending on ACT51 eligible projects • Increased project activity should reap additional ACT51 funding (use-it-or-lose-it basis) 12

13. SPECIAL ASSESSMENTS • Comments: • Both funds are funded with special assessments added to tax bills • Due to reduction in taxable parcels, assessment fees must be increased to fund operations and improvements 13

14. REDUCTION IN TAXABLE PARCELS 14

15. PUBLIC IMPROVEMENT FUNDS • Comments: • Debt service payments on city loans paid out of the 301 fund, which is funded with a transfer from the 402 fund • The 402 fund’s fund balance is needed to fund growing debt service payments and limited public improvement projects 15

16. FEE BASED FUNDS 16

17. WATER AND SEWER RATES Administration is proposing no increase in rates (effective July 1, 2019) FACTORS IN RATE SETTING: Operating and Maintenance Costs Capital Improvements Plan Fund Balance Reserve Size of System Number of Customers Collection Rate Consumption rates vs. Monthly Service Charges Tenuous finances and our voluntary agreement with the DEQ require us to increase collections and address non-revenue water. 17

18. OTHER FUNDS • INTERNAL SERVICE FUNDS: • Fringe Benefit • Information Services • Fleet • Self Insurance Fund • Per the Uniform Budgeting and Accounting Act, Act 2 of 1968; Section 141.422a; • The City is not required to budget for Funds where the City is acting as a trustee or agent; Internal Service Funds, Enterprise Funds; Capital Project Fund and/or Debt Service Fund. However, only Enterprise funds are included in the Recommended Budgets. • SPECIAL REVENUE GRANT FUNDS: • 274 Fund • 296 Fund • CDBG, ESG, HOME, and Other Grants are not budgeted as these budgets are approved at the time the grant award is accepted by City Council. Grant budgets roll from year to year depending on the available balances at year end. • Other Adopted Funds: • 208 Fund • 265 Fund • 583 Fund • 246 Fund • These funds have less than $1M of fund balance 18

19. NEXT STEPS & ACKNOWLEDGEMENTS 19

20. Thank you for your interest in the financial health of the City of Flint.