The One About The 185 Year-Old Startup In 2016, as the City of Detroit emerged from the largest municipal bankruptcy, a new chapter began for one of the oldest municipal water utilities in the America. Having been reclassified from a world-class regional water utility serving nearly 4 million Michiganders to the local water utility for the City of Detroit was going to change the focus of this once great organization and for the 700,000 Detroit residents it servers. How much that focus changed, how Oracle partnered with the City, and what this change meant to the customers and employees of The City of Detroit’s Water and Sewerage Department is our story today. Rob Presnell Chief Operating Officer Dan Rainey Chief Information Officer Ralf Dossmann Director, Cloud Customer Success

Detroit Water and Sewer Overview For over 185 years Detroit Water served Southeastern Michigan and the City of Detroit Served 4 million Michiganders 7,800 miles of water and sewer pipe 500 – 800M gallons of water pumped daily Local water department serving the City of Detroit Founded in 1836 Local until 20th century when expansion came to support migration to suburbs post WWII Heavy investment in the 60’s and 70’s when population estimates were that 10 million people would live within the service area. Local water department for City too Always tension between suburbs and city on investment dollars and influence Under Federal Court supervision since 1987 2011 Root Cause Committee, 2012 – 2013 court orders allowing org to operate independently from city in many ways, new director and executive team focused on building a new utility. Optimization plan perfect day…Faster, Faster, Faster! Race to change…. March 25, 2013 Dan starts and so does Emergency Manager Kevin Orr.

Detroit Bankruptcy and Outcome Your past will come back to haunt you July 19, 2013 Detroit files for bankruptcy November 7, 2014 Detroit exits On Jan 1, 2016 DWSD splits Great Lakes Water Authority Detroit Water & Sewerage Dept. New executive staff and appointees New focus only serving the citizens of Detroit 4 months later…Bankruptcy…Pension claw back, retiree healthcare discontinued, assets sold (not DIA, not Water) Despite bankruptcy DWSD proceeds forward with optimization plan. Options for utility included - sell, lease/operate, spin off, leave alone Chose split – late 2014 MOU – next 14 months = GLWA standup [erp, hris, payroll, email, web] rest shared with DWSD. Jan 1, 2016 – GLWA splits and DWSD is rebranded a local collection and distribution services provider With all new executive staff – except one

Detroit Water and Sewer’s New Opportunity Can a 185 year-old company act like a startup? New executive team needed to change DWSD’s focus DWSD could behave differently “We need to act more like “fill in the blank” and less like the old DWSD” Nothing less than a once in a lifetime chance to push the “reset” button… DWSD was now a “collection and distribution” utility vs. a “production, treatment and transmission” utility DWSD receives access to $4.0 million in dedicated affordability funds DWSD receives $50 million lease payment -- Risk profile of new DWSD was different Many of the court orders that DWSD operated under were still in force Options for affordability programs Perception is reality

7,000 200M 700,000 people The New Detroit Water and Sewer Gallons per day 7,000 Miles of infrastructure 700,000 people DETROIT Square-mile area: 138.77

A day in the life 99 problems, but no plan is number one RISKS BIG PICTURE LIMITATIONS Policy & Regulatory Concerns Asset Invest & Main. Rates 10% 15% 28% Affordability 23% 24% Economic Conditions Wholesale Charges Majority of budget is fixed costs. Bad Debt fluctuates. Additional risk with Drainage charge implementation Increase in bond debt for CIP shrinks O&M, affects ability to staff appropriately Rising wages and health care costs increases O&M Reduced consumption trend affects entire budget Significant investments are needed for the operation to move forward and cannot be executed in parallel Aging Infrastructure Investments & resources must be planned and aligned accordingly to maximize operational improvement while maintaining reasonable rate increases Public Safety Health Trust

Why re-invent ourselves? There isn’t a play in our playbook to fix this DWSD Deficient Water Assistance Programs Bills Delivered Late Not Knowing the Customer Base Negative News Coverage Frustrated Customers, Employees, & Board Phones Ringing Off the Hook Lines Out the Door Low Collection Rate Protests Single Service Channel $ Protests Collection rate Lines Phones were off the hook Frustrated employees, customers, board, city representatives news Didn’t know our customers Bills did not go out on time every month Assistance programs were not working

So what, now what? Stop using the old playbook and create a whole new one Service Delivery Process Improvement & System Consolidation People Mobile 1st Strategy Focus Investment Eliminate Excuses Design Practices Around our Customers Note Taker to Solution Oriented Service Data Integrity IT as a Service

Strategic Alignment & Resilience in Execution The right play calls with proper execution will put you in scoring position Results Service Delivery Transformation Call Wait Times 70% Decrease Culture Online Users 350% increase in registered users in 6 month period Web Payments 60% Increase Revenue Improvement $90M Improvement $5M reduction in expenses Customer Traffic 67% Decrease Productivity 60% increase in productivity Assistance Program 90% Success Rate Assistance Program New Bill Design Customer Portal Kiosk Virtual Line Voice Pay Performance Dashboard

The IT Pivot Cloud first ONLY is our mantra

Datacenter as a Service Not having a datacenter means new choices Two identity domains Ashburn and Chicago VPN and dedicated connectivity Qtr. Rack X6-2 in Production Qtr. Rack X5-2 in Test Three tiers of storage Windows and Linux compute

Cloud Customer Success Team Helping hands Having the best partners leads to the best end Strategize Set the direction, determine areas of importance, and establish resources Plan Select projects based on strategy Enhance Through consistent monitoring/reporting craft meaningful enhancements Monitor/Report Continuously monitor execution and report on plan success Execute Methodically implement the plan Cloud Customer Success Team Develop Challenge areas of concern and unknown Ralf can jump in here if he wants Diversify Increase viewpoints and perspectives Broaden Think short, medium, & long term

Executing the IT Pivot Making the calls that are leading to a digital transformation Results Service Delivery Transformation Productivity Project Management Cloud IAAS Database Business Intelligence File Storage Spatial Data Operating Costs $1.3 million reduction Productivity 10% increase in productivity Service Delivery Internal customer satisfaction improvement Culture Effective and consultative IT staff

Awards and Recognition Industry and Community Leadership

What’s next Phase I Phase II Phase III Phase IV Building a solid foundation for future generations to come Phase I GLWA & DWSD Split and Assessment I III IV II Service Delivery Transformation Phase II Phase III Water & Sewer Infrastructure Phase IV Built to last