THE FOSTER GROUP TFGTFG Detroit Water & Sewerage Department Capital Improvement Program Statistics – Sewage Disposal System

THE FOSTER GROUP TFGTFG 10/10/2015 Page 2 DWSD CIP Statistics – Sewage Disposal System During the 1990s, DWSD invested approximately $730 million (~$73 million annually) in capital improvements to the water system During the 1990s, DWSD invested approximately $730 million (~$73 million annually) in capital improvements to the water system During the 2000’s, the corresponding figure is $1.56 billion (~$156 million annually) During the 2000’s, the corresponding figure is $1.56 billion (~$156 million annually) The July 2008 CIP called for an additional $1.7 billion over 5 years (~$340 million annually) The July 2008 CIP called for an additional $1.7 billion over 5 years (~$340 million annually) The updated July year CIP anticipates the need for just over $1.0 billion (~$200 million annually) The updated July year CIP anticipates the need for just over $1.0 billion (~$200 million annually)

THE FOSTER GROUP TFGTFG 10/10/2015 Page 3 Annual Capital Improvement Investments Sewage Disposal System – ($ millions)

THE FOSTER GROUP TFGTFG 10/10/2015 Page 4 Annual Capital Improvement Investments Sewage Disposal System – ($ millions)

THE FOSTER GROUP TFGTFG 10/10/2015 Page 5 Capital Improvement Program – Sewage Disposal System Criteria in Report Criteria in Report Primary Project Purpose Primary Project Purpose  1 – Directly Mandated for Regulatory Compliance  2 – Necessary for Regulatory Compliance Mandates  3 – System Reliability  4 - Technological Advance / Efficiency  5 – New Service Areas Allocation Status Allocation Status  D - Detroit Only  S - Suburban Only  M - Macomb Only  C/O - Clinton/Oakland Only  C/O & Mac - Clinton Oakland and Macomb  83/17 - New Wet Weather Facilities  CTA - Common to all

THE FOSTER GROUP TFGTFG 10/10/2015 Page 6 Sewage Disposal System CIP - FUNDED Financing Requirement Summary

THE FOSTER GROUP TFGTFG 10/10/2015 Page 7 Sewage Disposal System CIP - FUNDED Financing Requirement Summary

THE FOSTER GROUP TFGTFG 10/10/2015 Page 8 Sewage Disposal System CIP Comparison July 2009 vs. July 2008– ($ millions)

THE FOSTER GROUP TFGTFG 10/10/2015 Page 9 DWSD CIP Observations – Sewage Disposal System Dramatic reductions in every year Dramatic reductions in every year 2-year Funding Window: 2-year Funding Window: 45% of Prior CIP 45% of Prior CIP Reflects reduction of almost $500 million Reflects reduction of almost $500 million Deferral/Elimination of Environmental Projects pending negotiation of new scope & schedule Deferral/Elimination of Environmental Projects pending negotiation of new scope & schedule Upper Rouge Tunnel ($337 million short term reduction) Upper Rouge Tunnel ($337 million short term reduction) Detroit River Outfall #2 ($185 million short term reduction) Detroit River Outfall #2 ($185 million short term reduction)

THE FOSTER GROUP TFGTFG 10/10/2015 Page 10 DWSD CIP Observations – Sewage Disposal System Elimination of Oakland/Macomb Interceptor Projects (asset to be transferred) Elimination of Oakland/Macomb Interceptor Projects (asset to be transferred) $186 million reduction ($26 million in Funding Range) $186 million reduction ($26 million in Funding Range) Added Long Term Incinerator Improvements Added Long Term Incinerator Improvements $130 million addition ($2 million in Funding Range) $130 million addition ($2 million in Funding Range) Addresses cancellation of Synagro Contract Addresses cancellation of Synagro Contract Other moderate deferrals to match construction schedules Other moderate deferrals to match construction schedules