2017 December – DUWA Board Meeting Minutes

DOWNRIVER UTILITY WASTEWATER AUTHORITY

DECEMBER 14, 2017 MEETING MINUTES

 Taylor City Hall City Council Chambers

1.  Roll Call and Introductions

DUWA Chairman Rick Sollars called the meeting to order at 9:15 AM, and asked for roll call to be taken. At the time of the Roll Call, voting representatives were in attendance from 10 communities: Allen Park, Belleville, Brownstown Township, Lincoln Park, Riverview, Romulus, Southgate, Taylor, Van Buren Township, and Wyandotte. A quorum (at least 7 members) was present. The representative from River Rouge joined the meeting in progress shortly after Roll Call was taken.

2.  Approval of Agenda

Copies of the Agenda were made available prior to the meeting (Attachment 1).  Motion by Vice Chairman 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 November 9, 2017 Board Meeting

Copies of the meeting minutes from the November 9, 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 November 9, 2017 Board meeting minutes.  Motion passed unanimously.

4.  Report on System Transfer Issues

a. Update re: coordination with Wayne County on Transition Plan

b. Update on NPDES Permit/MDEQ response to Blending

DUWA System Manager, Vyto Kaunelis, of OHM Advisors, provided a report on coordination efforts with Wayne County related to the Transition Plan. Key discussion points communicated to the Board included the following:

  • The Technical Committee met in late November. A primary focus of the meeting was to review Wayne County’s NPDES Blending report, as prepared by HRC/ASI. Final selection of blending options will be necessary by September 2018 per the permit requirements.
  • Information gathering efforts for preparation of the DTA have focused on collecting historical files. Where applicable, these files are on Citrix. Other files that may be of interest to the Board and their advisors can be made available electronically, such as available parcel boundaries and dewatering protocols.

c.  Update on Escrow Agreements

DUWA Attorney, Jim Fausone, of Fausone Bohn, LLP, presented the Board with Escrow Agreements associated with Riverview and Wyandotte. These communities have not received satisfaction from Wayne County on (other) issues not relating to the transition, and thus, have not paid for County sewer charges into the current shared account with Wayne County.

For DUWA to move forward and establish favorable credit rating for closure, the funds by these two communities need to be available. The intent of these agreements is to setup an escrow for the communities to pay into; these funds would be transferred to DUWA as part of the Cash Reserves at closing. If the transaction does not close, then the funds would go back to the communities.

Mr. Fausone requested the Board authorize the chair to execute the agreements on behalf of the authority, after the communities take up the item with their councils for notice to proceed. Mr. Fausone provided reference that the escrow account cost is nominal at ~$500 per year for setup and maintenance, and is anticipated to be a short-term need at ~6 months.

Ms. Beth Bialy offered additional understanding of the historical issues the communities held with Wayne County. Previously, Wayne County had borrowed funds from a joint cash pool between Wayne County and DUWA. Once this occurrence was discovered, the Finance Committee asked for a separate account from Wayne County’s shared pool. Wayne County suggested that splitting the account would be too intensive to complete, and thus, didn’t proceed with the split. Based on this, the two communities opted to not pay into the account. The two communities are tracking their expenses in their water and sewer funds.

Ms. Fillingham and Ms. Bialy stressed the importance of development of the escrow account, so the bond market can acknowledge the monies are attached to DUWA as presented in our financial receivables.

Chairman Sollars asked for a motion to move the escrow agreements to Riverview and Wyandotte for consideration and approval by DUWA and the cities and authority for the chair to execute the escrow agreements. Motion was taken by Roberto Scappaticci (Romulus) and seconded by John Zech (Southgate) to approve the motion as presented.  Mark Kowalewski (Wyandotte) abstained from the vote. Motion was passed unanimously with the remaining voting members.

d.  Update on Master Bond Ordinance

Ms. Ann Fillingham, of Dykema, provided the Board with hard copies of the complete Master Bond Ordinance (MBO) No. 2017 for formal consideration (Attachment 3). Ms. Fillingham noted that the consideration does not commit to the issuance of bonds. This will be a two-step process. This first (current) step is for development of the framework for DUWA to issue revenue bond via a first lien basis of bonds (purchase price) and second lien (exchanges via Michigan Finance Authority per SRF). The second step, anticipated for January or February will be to adopt a notice of intent for public notice to residences of the communities for revenue budget under Act 94. Future action, after completion of the first and second steps, will be for the Board to approve of a bond resolution with offering documentation, and proceeding to the market with an actual bond issue.

Ms. Fillingham again noted that the current request for motion for the MBO is for the framework only, and that specific provisions and supplemental documents will be developed at a later time. The Board was reminded that the MBO has been vetted through Legal, and comments have been incorporated.

The motion was made by Vice Chairman Matakas (Allen Park) and seconded by Ms. Kerreen Conley (Belleville) to accept the MBO for formal consideration.  Motion passed unanimously. 

e.  Consideration of Completing Baseline Environmental Assessment

f.  Consideration of Hiring Surveyor

Mr. Fausone noted the Legal Committee met on November 28, 2017. As part of their discussions, it was recommended a Baseline Environmental Assessment (BEA) be completed, as this is a normal step in real estate transactions. Completion of a BEA could provide the Board to understand the environmental conditions at the plant. Per the current DTA language, existing environmental conditions at the plant will follow the plant; thus, DUWA’s communities hold responsibility for existing environmental conditions. This is contrary to the normal intent of BEAs. BEAs normally provide a means for known environmental conditions to be the responsibility of the seller.

For preparation of a BEA, Fausone Bohn reached out to Environmental Resources Group, of Wixom, Michigan, a historical provider to Fausone Bohn for BEAs, for a proposal (Attachment 4). Other entities providing the services to DUWA communities were also contacted for a quote, but these entities did not opt to quote the work. Mr. Kowalewski (Wyandotte) asked the Board to consider the consultants that are a part of the Downriver Brownfield Board, and hire consultants within the Downriver region.

The Board requested to table a motion for approval of BEA and surveyor until further efforts were made for requesting proposal from Downriver businesses for the BEA and survey services.

g.  Update and presentation on the “Definitive Transfer Agreement”

Mr. Fausone presented a PowerPoint presentation for the DTA (Attachment 6).

The Board and DUWA Consultants followed the presentation with additional dialogue for the DTA’s super-majority of 66% for ratification as opposed to unanimity. The Board was made aware that the super-majority provisions were developed as part of the approved Service Agreement.

The Board further dialogued regarding the need for a group meeting to engage additional key members of the communities for presentation of the DTA. This meeting is anticipated to take place in January 2018 at Lakes of Taylor.

5.  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 7), the Authority’s Revenue and Expenditure report and the updated DUWA Balance Sheet Report (Attachment 8).

He noted that the following invoices had been received from DUWA Consultants:

  • Invoice from Plante Moran in the amount of $3,017.50 for work performed from September 30, 2017 through November 29, 2017 (Attachment 9).
  • Invoice from Plante Moran in the amount of $3,000.00 for work performed in association with the Financial Forecast for work performed from September 30, 2017 through November 29, 2017 (Attachment 10).
  • Invoice from S&P Global in the amount of $32,250.00 for credit assessment; invoice dated November 1, 2017 (Attachment 11).
  • Invoice from Fausone Bohn in the amount of $7,749.80 for work performed from October 5 through 31, 2017 (Attachment 12).
  • Invoice from OHM Advisors in the amount of $30,832.25 for work performed from September 17, 2017 through November 17, 2017 (Attachment 13).

Motion by Vice Chairman Matakas (Allen Park) and seconded by Roberto Scappaticci (Romulus) to pay the invoice. Motion passed unanimously.

Mr. Drysdale reported to the Board that the $500,000 fund transfer from Wayne County to DUWA has occurred.

6.  Public Comment

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

 7.  Other Business

Chairman Sollars thanked the Board for attending the day’s meeting given the unfavorable winter road conditions.

Chairman Sollars announced John Zech (Southgate) would be retiring as a DUWA voting member. Mr. Zech thanked the group for his participation, and announced Dustin Lent (in audience) would be taking over for his current DUWA role. Mr. Lent will be Southgate’s Administrator starting January 1, 2018.

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

8.  Next Meeting Date

Chairman Rick Sollars noted to the Board that the next regularly scheduled DUWA Board meeting is Thursday, January 11, 2018 (9:00 a.m. Taylor City Hall). However, this meeting interferes with a GLWA sewer/water charge information meeting. Several Board members plan to attend the GLWA meeting. After review of schedules, the Board motioned to move the January DUWA Board date from Thursday, January 11 to Friday, January 12, 2018 (9:00 a.m. Taylor City Hall). Motion by Jim Taylor (Van Buren Township), seconded by John Zech (Southgate) to change the date.  Motion passed unanimously.

There being no other business, Chairman Rick Sollars announced that a motion to adjourn would be in order. Motion by Vice Chairman Matakas (Allen Park), seconded by Roberto Scappaticci (Romulus) to adjourn the meeting.  Motion passed unanimously at 10:56 AM.

Meeting Minutes Prepared by:

Vyto Kaunelis/Lambrina Tercala

DUWA System Manager

December 27, 2017

Attachments

  1. Meeting Agenda
  2. November 9, 2017 Board Meeting Minutes
  3. Master Bond Ordinance No. 2017
  4. Proposal from Environmental Resources Group for Baseline Environmental Assessment, dated November 30, 2017
  5. Proposal from Boss Engineering for Boundary Survey at Treatment Plan, dated December 5, 2017
  6. ‘Definitive Agreement Presentation’ PowerPoint, dated December 14, 2017
  7. Status Report re: Payments from Communities dated September 7, 2017
  8. DUWA Revenue/Expenditure Report and Updated DUWA Balance Sheet
  9. Invoice from Plante Moran for work performed from September 30, 2017 through November 29, 2017
  10. Invoice from Plante Moran for work performed in association with the Financial Forecast for work performed from September 30, 2017 through November 29, 2017
  11. Invoice from S&P Global for credit assessment; invoice dated November 1, 2017
  12. Invoice from Fausone Bohn for work performed from October 5 through 31, 2017
  13. Invoice from OHM Advisors for work performed from September 17, 2017 through November 17, 2017