2017 August – DUWA Board Meeting Minutes

DOWNRIVER UTILITY WASTEWATER AUTHORITY
AUGUST 10, 2017 MEETING MINUTES

Taylor City Hall City Council Chambers

1. Roll Call and Introductions
DUWA Chairman Rick Sollars called the meeting to order at 9:07 AM, and asked for the roll call to be taken. At the time of the Roll Call, voting representatives were in attendance from 12 communities: Allen Park, Belleville, Brownstown Township, Dearborn Heights, Ecorse, Lincoln Park, Riverview, Romulus, Southgate, Taylor, Van Buren Township, and Wyandotte. Chairman Sollars announced that a quorum (at least 7 members) was present. No Representative was in attendance from River Rouge. Chairman Sollars acknowledged that Belleville was being represented by the City’s Alternate, DPW Director Rick Rutherford, and asked the Board Members to introduce themselves since this was the first time Mr. Rutherford was attending for the City. Jim Taylor (Van Buren Township) introduced several students who were attending the Board Meeting as part of a summer training program on government which is being offered by the Township, and Chairman Sollars welcomed the group.

2. Approval of Agenda
Copies of the Agenda were made available prior to the meeting (Attachment 1). Motion by Bill Matakas (Allen Park) and seconded by Jim Taylor (Van Buren Township) to approve the Agenda as presented. Motion passed unanimously.

3. Approval of Minutes from July 13, 2017 Board Meeting
Copies of the meeting minutes from the July 13, 2017 Board Meeting were distributed by email prior to the meeting (Attachment 2). Motion by Jim Taylor (Van Buren Township) and seconded by John Zech (Southgate) to approve the July 13, 2017 Board meeting minutes. Motion passed unanimously.

4. Legal Committee Report
Legal Committee Chairman Patrick McCauley reported that the Committee met on August 1 in Taylor to discuss several issues including the draft Master Bond Ordinance, draft DUWA Bylaws and a draft Amendment to the DUWA Articles of Incorporation, and the Conflict of Interest question as it pertains to the possible hiring of a Consulting Firm to serve as System Manager. Attorneys for nine of the DUWA Communities were in attendance.

After hearing a presentation from Ann Fillingham (Dykema Gossett) summarizing the content of the draft Master Bond Ordinance (MBO), the Committee expressed support for approval of the MBO by the DUWA Board at such time as the document has been finalized. It was noted that the current draft is substantially complete, but is still undergoing review by various entities including the Bond Underwriter, so it is possible that a few minor changes may need to be incorporated prior to Board approval.

Mr. McCauley noted that some questions and concerns were raised regarding the draft Bylaws and the draft Amendment to the Articles of Incorporation. As a result of this discussion, several modifications are being made, and a revised version will then be circulated to the Attorneys for concurrence prior to bringing the documents to the Board for approval. It was noted that all 13 DUWA Communities will similarly need to approve the Amended Articles of Incorporation in order for them to go into effect.

The Legal Committee also discussed a memo from DUWA Attorney Paul Bohn regarding potential conflict of interest issues which may arise if DUWA hires a consulting firm to serve as the new System Manager. The Committee was in general agreement that the DUWA Board can, if necessary, waive a conflict arising from a consulting firm doing work for one or more DUWA Communities, or for a firm engaging in design or construction oversight work on Downriver System capital improvement projects. The Committee did not reach agreement as to the analysis of the Incompatible Public Offices Act and specifically whether that statute would be triggered if DUWA were to hire a firm with an employee who is an elected official for a DUWA Community. Further evaluation of that issue will be forthcoming, after which the legal analysis will be provided to the Selection Committee.

5. Status Report on System Transfer
DUWA Attorney Jim Fausone announced that he received a revised draft of the Definitive Agreement (DA) from Wayne County on August 1, and the document is currently under review. He noted that some, but not all, of the major issues appear to have been addressed. The draft DA will be disseminated to the local attorneys for review and comment, after which additional discussions will be held with Wayne County. He noted that the new target Closing Date as referenced by the County in the draft DA is April, 2018.

Mr. Fausone reported that several DUWA representatives met with Wayne County staff on August 9, and Wayne County presented a draft Transition Plan at that meeting. It appears that at least some Wayne County staff believe that the local Communities are willing to take responsibility and ownership of the Drainage District and CSO facilities that discharge flow into the Downriver System. Several DUWA Community Representatives indicated that they do not have interest in assuming those facilities, and this will need to be conveyed back to the County so alternative plans can be made as to the future management of those facilities. Of particular interest to DUWA are the issues pertaining to the SCADA and CMMS systems since those systems are essential components of the DSDS to be transferred to the Authority. However, both the SCADA and CMMS systems currently cover many facilities in addition to the DSDS, so the County will need to figure out how to deal with that problem. It is possible that the County may ask DUWA to have Veolia manage the SCADA and CMMS for both the DSDS and non-DSDS facilities initially until the County can reconfigure those systems to separate out the non-DSDS facilities.

During the August 9 meeting, DUWA’s representatives explained the need for substantial additional information relating to Real Estate matters. It was noted that local approval of the Definitive Agreement will be difficult if not impossible to obtain without such documentation.

Mr. Fausone reported that 12 of the 13 DUWA Communities have now approved the Stipulated Amendment to the Financing Plan, and the last Community will be considering the document later this month. It is hoped that a motion can be filed with the U.S. District Court in September to secure Judge Cox’ approval to maintain the status quo with regard to the Judgment Levy which was initially authorized in 1994.

Bond Counsel Ann Fillingham (Dykema Gossett) presented the draft Master Bond Ordinance (MBO) and summarized several key provisions. A copy of the MBO was distributed by email to the Board prior to the meeting (Attachment 3). She noted that the final version of the MBO will be presented to the Board for formal approval at the September 14 Board Meeting. Discussion of the draft MBO ensued, and several Community Representatives expressed support for moving forward with this document as the necessary mechanism to fund acquisition of the Downriver System from the County.

Attorney Fausone reported that DUWA is awaiting the credit assessment analysis from S&P Global, and noted that several documents have been provided to address questions that have arisen as that project proceeds. He indicated that S&P Global has requested that DUWA provide a 5 year cost projection showing the revenues and expenses anticipated for the System once the System is transferred. To address this issue, it is proposed that Plante & Moran prepare a 5 year cost projection. Beth Bialy (Plante & Moran) explained that this work can be undertaken as an extension of P&M’s current contract with the Authority, and that the total cost of the effort will be less than $15,000. She indicated the firm would be able to complete the analysis and issue a report in about 30 days. Motion by Dan Paletko (Dearborn Heights) supported by Jim Taylor (Van Buren Township) to authorize Plante & Moran to prepare the 5 year cost projection with a not-to-exceed budget of $15,000. Motion passed unanimously.

Attorney Fausone briefed the Board on the two draft Escrow Agreements for Wyandotte and Riverview that were included in the Pre-Meeting packet (Attachment 4). He indicated that both Communities have indicated a willingness to enter into such an agreement, although the documents are still under review. It is anticipated that an escrow agreement will be essential in order to secure a good credit rating since the County’s financial records show a substantial “receivable” for past due O & M bills to the two Communities. No action is needed from the Board on this matter at this time.

6. Selection Committee Report re: New System Manager
DUWA Secretary Dick Hinshon reported that a Request For Proposals (RFP) was emailed to more than 30 Michigan consulting firms on July 14 as authorized by the Board at the July 13 Board Meeting. The submittal deadline was August 7, and three proposals were received. The Selection Committee has agreed to interview all 3 firms, and the Committee will convene on August 22 to evaluate Proposals. The Committee intends to prepare a recommendation as to the best firm to hire, and to present that recommendation to the Board at the September 14 meeting for approval.

Mr. Hinshon noted that he has been in contact with the Legal Committee regarding potential conflict of interest issues, particularly as it relates to the provisions of the Incompatible Public Offices Act. He has requested that the Legal Committee provide a written analysis of the conflict of interest issue to the Selection Committee prior to the August 22 evaluation meeting. Other DUWA Community Representatives expressed an interest in attending the evaluation meeting, and it was agreed that this was acceptable provided that the number of additional attendees is less than 4 since that is the threshold number which would constitue a quorum and trigger compliance with the Open Meetings Act.

7. Treasurer’s Report
DUWA Treasurer Doug Drysdale presented the Treasurer’s Report which was included in the pre-meeting packet. This included the status of Community payments (Attachment 5), the Authority’s Revenue and Expenditure report and the updated DUWA Balance Sheet Report (Attachment 6).
He noted that three invoices have been received including a bill from Fausone Bohn in the amount of $9,779.60 for work performed in June, a bill from Plante & Moran in the amount of $5,695.00 for work performed in May and June, and bill from Hinshon Environmental Consulting in the amount of $5,945.00 for work performed in July (Attachments 7, 8 and 9). Motion by Jim Taylor (Van Buren Township) and seconded by John Zech (Southgate) to pay these invoices. Motion passed unanimously.

8. Public Comment
No issues or concerns were raised as part of the Public Comment agenda item.

9. Other Business
DUWA Secretary Dick Hinshon reported that Wayne County has issued the final Purchase Order to Inland Waters in the amount of $434,815.55 which is the full cost of the Sinkhole repair. The Contractor will be installing the CIPP liner in the deteriorated section of the downstream pipe within the next few weeks to complete the job.

Mr. Hinshon reminded the Board of his pending retirement on September 30, 2017 and noted that the Board will need to elect a new Secretary at the September Board Meeting to serve in his stead beginning in October. He recommended that the new DUWA Secretary be a Community Representative rather than a consultant. He noted that the new System Manager can be assigned responsibility for various tasks such as preparing Agendas and Meeting Minutes, but it would be beneficial to have all of the Authority’s Officers be Community Representatives.

There were no additional items brought forth for consideration as “Other Business” items.

10. Next Meeting Date
Chairman Sollars reminded the Board that the next regularly scheduled DUWA Board meeting Is September 14, 2017 (9:00 a.m. Taylor City Hall).

There being no other business, Chairman Solars announced that a motion to adjourn would be in order. Motion by Bill Matakas (Allen Park), seconded by Doug Drysdale (Riverview) to adjourn the meeting. Motion passed unanimously at 10:45 AM.

Meeting Minutes Prepared by:
Richard Hinshon
DUWA Secretary
August 21, 2017

Attachments

1. Meeting Agenda
2. Junly 13, 2017 Board Meeting Minutes
3. Draft Master Bond Ordinance dated August 7, 2017
4. Proposed Escrow Agreements with Wyandotte, Riverview
5. Status Report re: Payments from Communities dated July 28, 2017
6. DUWA Revenue/Expenditure Report and Updated DUWA Balance Sheet
7. Invoice for June 2017 work dated July 1, 2017 from Fausone Bohn
8. Invoice for May and June work dated July 31, 2017 from Plante & Moran
9. Invoice for July 2017 work dated August 2, 2017 from HEC