DOWNRIVER UTILITY WASTEWATER AUTHORITY
MARCH 9, 2017 MEETING MINUTES
Taylor City Hall City Council Chambers
1. Roll Call and Introductions
In the absence of DUWA Chairman Rick Sollars, DUWA Vice Chairman Bill Matakas called the meeting to order at 9:08 AM, and asked for the roll call to be taken. Voting representatives were in attendance from 9 communities: Allen Park, Belleville, Dearborn Heights, Ecorse, Riverview, Romulus, Southgate, Taylor, and Wyandotte. Vice Chairman Matakas announced that a quorum (at least 7 members) was present. There were no representatives in attendance from Brownstown Township, Lincoln Park, River Rouge or Van Buren Township at the meeting.
2. Approval of Agenda
Copies of the agenda were made available prior to the meeting (Attachment 1). Motion by Kerreen Conley (Belleville) and seconded by Doug Drysdale (Riverview) to approve the agenda as presented. Motion passed unanimously.
3. Approval of Minutes from February 9, 2017 Board Meeting
Copies of the meeting minutes from the February 9, 2017 Board Meeting were distributed by email prior to the meeting (Attachment 2). Motion by Roberto Scappaticci (Romulus) and seconded by John Zech (Southgate) to approve the February 9, 2017 Board meeting minutes as presented. Motion passed unanimously.
4. Status Report on new DUWA Service Agreement
a. Update on Community Approvals
Secretary Hinshon distributed a table showing the current status of Community approvals for the DUWA Service Agreement (Attachment 3). Mr. Hinshon noted that Southgate, Lincoln Park and Riverview approved the Agreement since the last DUWA Board Meeting, so there are now twelve communities who have approved the Agreement. He indicated that Riverview has expressed concern over the provisions in the new NPDES Permit relating to wet weather flow blending reductions. As a result, a proposed Policy on Wet Weather Flow Blending/Bypassing has been developed to clarify the procedures to be used to decide when to initiate bypassing. That draft Policy is listed on the Agenda for Board consideration later in the meeting..
Allen Park is the only Community which has not yet approved the Service Agreement. Mr. Hinshon noted that the City has deferred consideration of the Service Agreement pending resolution of a longstanding issue relating to overpayments by the City for its share of the cost of the Downriver System. Mr. Hinshon reported that a tentative agreement has been reached with Wayne County, DUWA and the City regarding a Reimbursement Plan. The Reimbursement Plan is listed on the Agenda for DUWA Board consideration later in the meeting. If DUWA and Wayne County approve the Reimbursement Plan, it is likely that Allen Park will then seek Council approval for the DUWA Service Agreement. The next City Council meeting will be on March 14.
b. Proposed Reimbursement Plan for Allen Park
Mr. Hinshon presented the Briefing Paper dated March 1, 2017 (Attachment 4) regarding Allen Park’s Overpayments and Proposed Reimbursement Plan. He noted that, after several meetings, staff from Wayne County, Allen Park and DUWA representatives have reached agreement that the amount of the cumulative overpayment since 2010 is on the order of $3.25 million. That amount includes the Base Flow over-reporting, plus the Excess Flow and Revenue Bond debt service costs paid by Allen Park.
He summarized the proposed Reimbursement Plan which, if approved, would credit Allen Park $500,000 per year for each of the next six (6) budget years starting in July, 2017. In that way, Allen Park would be compensated for a total of $3 million. During the six year period, the other 12 Communities would pay slightly more than they otherwise would be charged to generate the revenue that is to be used to repay Allen Park. It was noted that the other 12 Communities have, in essence, been subsidized by Allen Park each year since 2010 since they were undercharged by the amount that Allen Park overpaid. Motion by Dan Paletko (Dearborn Hieghts) supported by John Zech (Southgate) to approve the proposed Board Resolution as set forth on page 3 of the March 1, 2017 Briefing Paper. Motion passed by a vote of 7 – 0 with two abstentions (Ecorse and Allen Park).
c. Proposed DUWA Policy re: Wet Weather Flow Blending/Bypassing
Mr. Hinshon presented the Proposed DUWA Policy dated March 1, 2017 regarding the Operating Protocol for Initiating Wet Weather Flow Blending/Bypassing (Attachment 5) which was developed in conjunction with the City of Riverview in response to City Council concerns. He noted that the purpose of the Policy is to make sure that the decision to initiate a bypass will continue to be made based on weather conditions, flow levels and plant capacities. In particular, Riverview has requested that the operating staff have clear cut direction to initiate a bypass based on these factors rather than being influenced or controlled by the number of bypass events that may have already occurred prior to the event. Motion by Doug Drysdale (Riverview) supported by John Zech (Southgate) to approve the proposed DUWA Policy on Wet Weather Flow Blending/Bypassing. Motion passed unanimously.
5. Status Update on System Transfer
DUWA Attorney Jim Fausone reported that Wayne County has not as yet responded to DUWA regarding the major issues identified with the County’s earlier draft “Definitive Agreement” document. Based on recent telephone conversations, it appears that the County is working to resolve several matters, most notably the disposition of the CSO Basins and Drainage District facilities that are located in the DSDS Service Area. Mr. Fausone has reminded the County that DUWA has already declined to take over responsibility for those facilities as part of the DSDS transfer transaction. Other major issues to be addressed by Wayne County include provisions relating to current County employees and their legacy costs for Pension and OPEB, as well as completion of all Schedules to be included as part of the Definitive Agreement.
Mr. Fausone summarized the draft Transaction Calendar dated March 1, 2017 that was included in the Pre-Meeting packet distributed to the Board (Attachment 6). He noted that the target completion date for the transfer is October 1, but it was recognized that this date is dependent on timely completion of numerous activities by both DUWA and Wayne County.
Mr. Fausone noted that discussions are ongoing with Wayne County and the County’s financial advisors regarding the transfer of the System’s outstanding debt. Agreement has been reached between the parties to have the County prepare and submit a motion to the Federal District Court (Judge Cox) seeking authorization to retain the Judgment Levy and continue to allow for millage revenue to be used to retire this debt as part of the transfer. That motion is to be filed by April 1. Approval of the State of Michigan Department of Treasury for the SRF debt transfer is targeted to be obtained by August 30.
It was stated that the Communities will be asked to approve the Definitive Agreement after it is finalized. Some Board Members noted that their support for acquiring the System was contingent on a purchase price that was “rate neutral”, i.e. that the new debt service costs for a Revenue Bond would be offset by savings in both operating costs and management and administrative costs. Mr. Fausone indicated that this is the underlying premise to the transaction, but also noted that interest rates are rising so debt service costs are likely to be higher than initially projected. In addition, it was pointed out that the current DSDS rates do not include costs for Pension and OPEB liabilities, and if the transfer does not take place the rates will need to be significantly increased to account for those obligations.
Mr. Fausone reported that, after further discussions with DUWA Representatives, Wayne County has decided to withdraw the “Monitoring Services” RFP that was released in February. The County’s procurement process for the new “Monitoring Services” project would take many months to complete, and it appears that the System transfer would either be completed or would be close to being completed before the project would begin.
Mr. Fausone also reported that little progress has been made between the County and Veolia regarding negotiations for an Interim O & M services contract. It is unclear whether the Interim O & M Services contract will be finalized prior to the system transfer.
6. Update on NPDES Permit
Secretary Hinshon indicated that the public review and comment period on the new NDPES Permit expired on March 3, and that no objections or comments were received by MDEQ. The state is now in a position where it can officially issue the new Permit, which includes mutually acceptable language dealing with the issues of Wet Weather Flow Blending and Asset Management. Once issued, the new Permit will go into effect as of November 1, 2017.
7. Committee Report re: Process/Schedule for Hiring System Manager
DUWA Secretary Dick Hinshon presented a report dated March 1, 2017 (Attachment 7) from the System Manager Committee. He noted that the Committee met on March 1 and reached consensus on the Manager’s Position Description and minimum Qualifications & Experience for applicants. A list of individuals has been developed as the pool of potentially interested people who would receive an email announcing the availability of the position. In addition, advertisements will be placed with MML, MTA and MWEA to help inform candidates about the job. The Committee is recommending a salary range of $125,000 – $150,000 for the position which is competitive with the wage rate offered by other large public utilities.
The Committee is recommending that DUWA accept applications electronically since this is the process now in use by most other systems. To do so, it would be appropriate for DUWA to create a Web Site and then establish a mechanism for applicants to submit their resumes electronically. This would also make it easy for the Committee to access and review applications without resorting to copying and distributing paperwork. Mr. Hinshon suggested that the Board consider authorizing HEC to retain a Web Site Subconsultant to assist with the creation of a Web Site for DUWA. Motion by John Zech (Southgate) supported by Kerreen Conley (Belleville) to authorize HEC to retain a Web Site Subconsultant to develop a new DUWA Web Site with a cost not to exceed $2,500. Motion passed unanimously.
Mr. Fausone indicated that he has acquired the rights to the Domain Name of “DUWAuthority.org” since the Domain Name “DUWA” is already in use. Motion by Dave Flaten (Ecorse) supported by John Zech (Southgate) to approve the Domain Name of “DUWAuthority.org” for the new DUWA Web Site. Motion passed unanimously.
Mr. Hinshon indicated that the Committee is hoping to begin receiving applications around the end of March if the Web Site can be placed into service by that time. A tentative application submittal deadline has been established as the end of April, assuming the Web Site creation can be completed expeditiously. The Committee hopes to maintain confidentiality for applicants until a recommendation is made to the full DUWA Board as to the preferred candidate for the position. Once the Committee has selected a preferred candidate, that individual would be asked to attend a DUWA Board Meeting as part of the decision making process.
8. Treasurer’s Report
DUWA Treasurer Drysdale gave the Treasurer’s Report and presented several documents which were included in the Board’s pre-meeting packet. He summarized the status of payments received from the Communities (Attachment 8), and updated the Board on the Balance Sheet and the Revenue/Expenditure Report (Attachment 9). He noted that DUWA has substantial cash on deposit because of the receipt of Wayne County’s payment ($500,000) to cover transition costs. He reported that the Authority recently paid Veolia for the Condition Assessment report, and this expenditure is reflected in the current balance.
He noted that the Board pre-meeting packet contained several invoices from Plante & Moran, Fausone, Bohn, and Hinshon Environmental Consulting (Attachments 10, 11, and 12). Motion by Kerreen Conley (Belleville) and seconded by John Zech (Southgate) to pay the invoices submitted to DUWA. Motion passed unanimously.
9. Public Comment
No issues or concerns were raised as part of the Public Comment agenda item.
10. Other Business
There was no Other Business brought forward for consideration by the Board.
11. Next Meeting Date
Vice Chairman Matakas reminded the Board that the next regularly scheduled DUWA Board Meeting is April 13, 2017 (9:00 a.m. Taylor City Hall).
There being no other business, Vice Chairman Matakas announced that a motion to adjourn would be in order. Motion by Dan Paletko (Dearborn Heights), seconded by John Zech (Southgate) to adjourn the meeting. Motion passed unanimously at 9:55 AM.
Meeting Minutes Prepared by:
Richard Hinshon
DUWA Secretary
March 14, 2017
Attachments
1. Meeting Agenda
2. February 9, 2017 Board Meeting Minutes
3. Scoreboard dated 3/2/17 re: Community approvals of the DUWA Service Agreement
4. Briefing Paper dated 3/1/17 re: Allen Park Overpayments and Proposed Reimbursement Plan
5. Proposed DUWA Policy dated 3/1/17 re: Operating Protocol for Initiating Wet Weather Flow Blending/Bypassing
6. Wayne County/DUWA Transaction Calendar dated 3/1/17
7. March 1, 2017 Report from the System Manager Committee
8. Status Report re: Payments from Communities
9. DUWA Balance Sheet and Revenue/Expenditure Report
10. Invoice dated February 15, 2017 from Plante & Moran
11. Invoices dated January 1, 2017 and February 1, 2017 from Fausone Bohn
12. Invoice dated March 6, 2017 from Hinshon Environmental Consulting