2018 April – Board Meeting Minutes

 DOWNRIVER UTILITY WASTEWATER AUTHORITY

April 12, 2018 MEETING MINUTES

Taylor City Hall City Council Chambers

 

  1. Roll Call and Introductions

DUWA Vice Chairperson Gail McLeod (Allen Park) called the meeting to order at 9:03 AM, and asked for roll call to be taken. At the time of the Roll Call, voting representatives were in attendance from 9 communities: Allen Park, Brownstown Township, Ecorse, Lincoln Park, Riverview, Romulus, Southgate, Van Buren Township, and Wyandotte. A quorum (at least 7 members) was present.

  1. Approval of Agenda

Copies of the Agenda were made available prior to the meeting (Attachment 1).  Motion by Treasurer Doug Drysdale (Riverview) and seconded Dustin Lent (Southgate) by to approve the Agenda as presented. Motion passed unanimously.

  1. Approval of Minutes from March 8, 2018 Board Meeting

Copies of the meeting minutes from the March 8, 2018 Board Meeting were distributed by email prior to the meeting (Attachment 2).  Chairman Rick Sollars (Taylor) joined the meeting before request for motion. Motion by Gail McLeod (Allen Park) and seconded by Treasurer Doug Drysdale (Riverview) to approve the Board meeting minutes. Motion passed unanimously.

  1. Report on System Transfer Issues

a. Update re: Technical Issues

System Manager Vyto Kaunelis, of OHM Advisors, provided a status update to the Board related to the following technical items:

  • Work sessions have been completed by DUWA Professionals in support of the DTA Resolution votes for the DUWA communities. Mr. Kaunelis reported that the work sessions have provided for good technical discussions, and that the Council and Board members have been prepared with good and hard questions.
  • Carol Symes, of Veolia North America (Veolia), was then invited to the podium to update the Board on the status of Veolia’s sewer inspection work. Veolia is the anticipated Contract Operator for the system upon transfer.
    • Symes noted that Veolia’s sewer inspection proposal was approved at the February 2018 Board meeting, and since that time, has solicited for and retained a subcontractor to support the field inspection work. Advanced Underground Inc (AUI) was Veolia’s selected subcontractor for the work. AUI’s original quote for the work was $39K, which was less than Veolia’s $49K proposed estimate. However, subsequent to being selected and completing field reconnaissance, AUI requested a $9K increase in their pricing due to additional manhole entry and confined space work. Veolia approved their revised price.
    • Symes noted Wayne County, and specifically Kelly Cave, provided good assistance in association with Wayne County’s permit requirements for the inspection work. The permit has been approved, and was received late last week. The inspection work commenced Monday of this week (4/9). To date, approximately 6,000 linear feet of the proposed 9,700 linear feet of sewer have been inspected. No major pipe issues have been found, and Veolia/AUI will provide the inspection tapes to Hubble, Roth, and Clark (Wayne County’s engineer [HRC]) for review and final compilation.
  • Lambrina Tercala, of OHM Advisors, was invited to the podium to update the Board on the status of the boundary survey and Phase I Environmental Site Assessment work being completed in support of the due diligence efforts.
    • Hennessey Engineers has completed a draft of the boundary survey, and DUWA is working with Wayne County on the property line between the Downriver Wastewater Treatment Facility (DWTF) and Southgate-Wyandotte Relief Drainage District’s (SWRDD) Pump Station No. 5 facility.
    • Environmental Consulting & Technology, Inc (ECT) has prepared and submitted a Phase I Environmental Site Assessment for DUWA’s review. The environmental recognized conditions noted in the draft report are consistent with expectations. Fausone Bohn, DUWA’s legal team, is working with Wayne County’s legal team to obtain Right of Access to the plant for completion of the Phase II work. Mr. Jim Fausone, of Fausone Bohn noted the insurance limits that Wayne County’s team is requesting are beyond normal limits. The teams are coordinating to address and agree on final requirements. Peggy Madden (River Rouge) joined the meeting during these remarks.
  • Kaunelis informed the Board the MDEQ Flow Blending Report was accepted by the MDEQ. The next submittal is due on September 1, 2018, and HRC with Applied Science Inc are actively working on development of the document. The submittal is anticipated to include lower cost alternatives if they are proven effective; DWTF is assessing the effectiveness of select alternatives over the next several months.
  • The Asset Management Program (AMP) plan was prepared by Veolia, and presented to the Technical Committee in March 2018. The AMP was developed by Veolia as they are the anticipated Contract Operator and will be responsible for implementing the AMP. The AMP was formally submitted by Wayne County to MDEQ, because Wayne County is the current permit holder.
  • A meeting was held earlier this week by Wayne County and Wyandotte to discuss the SWRDD operating agreement. DUWA System Manager also attended this meeting. The purpose of the meeting was to advance Wyandotte’s questions and comments associated with the agreement. No major items are anticipated to impact finalizing the agreement.
  • The Technical Advisors are continuing to review and consider future capital improvement projects that may influence financial projections.

b. Update re: Financial Transition Items

 Bill Brickey, of Plante Moran, updated the Board on the outcome of the Financial Meeting, which occurred at the end of March 2018. The meeting minutes are attached (Attachment 3). The intent of the meeting was to discuss the rates for 2018-2019. The rate package is attached (Attachment 4).

Mr. Brickey reported that the model rate would stay at $7.16 for the second straight year. The debt rate will increase to $2.06 for an overall rate increase of <1% overall. Mr. Brickey informed the Board that the rates will not require Wayne County Commission approval because there is no increase in the commodity rate.

Mr. Brickey then provided the following other financial highlights:

  • Currently, 19 of the 44 positions at the DWTF are unfilled. This has caused a positive budget variance, which will ultimately cause an increase in the reserves included in the transfer. The budget item will not be reduced in the operating expense, because the desire is to fill those positions.
  • The current budget includes a $500K line item for due diligence by Wayne County to DUWA. This budget item will also be made available for next year.
  • Allen Park’s credit situation will be incorporate into the rate model. The credit situation dealt with previously overpaying the County; the budgeted rates will account for paying back Allen Park over a limited time period.
  • As of February 2018, the system holds operating and maintenance reserves of $13.7M. There are also capital reserves of $7.3M and industrial pretreatment program reserves of $5.8M. These reserves will remain stable.

 c. Update re: Definitive Transfer Agreement

 DUWA Attorney Jim Fausone provided update to the group on the following DTA items:

  • To date, eight (8) communities have voted for the DTA resolution, and each of those communities have favorably advanced their vote.
  • The Master Bond Ordinance is ready for publication, with publication costs anticipated up to $5K. This cost will be billed to Dykema and later invoiced to DUWA.
  • The Legal teams continue to work on DTA schedules.
    • One item that is actively being addressed by the Technical team are select sewers within Romulus’s city limits that are owned by Wayne County, but are not depicted on the current schedule. This effort may require a revision to the schedule.
    • Another item is the list of litigation that will transfer from Wayne County to DUWA. The 2011 flood class action claims have been settled, and those will be removed from the schedule. DUWA Professionals attended a recent meeting associated with the Lincoln Park v. Wayne County counter claim; this claim is in active status.
    • Fausone communicated that in many of these legal cases, the Technical team is engaged to resolve the technical items before the legal matters can be finalized.
  • The Technical and Legal teams are continuing work on development of Veolia’s operating contract. A meeting will be held, after this Board meeting, with select DUWA Professionals and Veolia to further discuss. Within the next several months, the contract is anticipated to go to Legal Committee for review, and then ultimately to the Board for approval.
  • Formal policies and procedures are items the Board should be working on as the Authority moves to being an operating Authority. Mr. Fausone offered several major items to consider, including ligation matters, contracting authority by the System Manager, and procurement requirements. Mr. Fausone recommended the Board and Council put together policies for the Board to review. He offered the suggestion the Board develop an ad hoc group for the effort, and that if a community member had interest to supporting this effort, then to reach out to the Chairman or Fausone Bohn.

d. Insurance Broker Services

Mr. Fausone offered recommendation to the Board on how they may wish to proceed with procuring an Insurance Broker. He noted procuring an Insurance Broker further reiterates the Board’s need to have a formal procurement policy.

The discussion items included the following:

  • The Board needs to consider what insurance should be in place as they move from oversight to an operating Authority. Mr. Fausone noted that much of the insurance needs to be in place at the time of closing. Closing is anticipated within the period of August 1 through September 28, 2018. The later date was noted as being more likely for closing.
  • Via Vyto Kaunelis’s introduction, Fausone Bohn reached out to GLWA’s Risk Manager, Michael Tilley, to gain an understanding of their Request for Proposal (RFP) process. Mr. Fausone collected and provided several GLWA prepared documents associated with their work in securing a Broker; these documents are attached (Attachment 4). The purpose of the Insurance Broker would be to assist the Authority in obtaining the correct insurance and assist in the bidding process. The Broker would not be the provider; the Broker’s purpose is to identify the best deal for the Authority. As presented in Attachment 4, AON was brought forward by GLWA’s Broker for their use. Mr. Fausone offered that DUWA consider two options for securing a Broker: 1) Reach out to AON regarding services and scope that would be appropriate for DUWA or 2) go out for a formal RFP for Brokerage services. Several Board members asked questions and comments associated with the proposed options. The Board finalized discussions by requesting Fausone Bohn obtain a proposal from AON for the Board’s consideration. The proposal will be presented at the next Board meeting.
  1. Treasurer’s Report

DUWA Treasurer Doug Drysdale presented the Treasurer’s Report that was included in the pre-meeting packet. This included the status of Community payments (Attachment 6), the Authority’s Revenue and Expenditure report and the updated DUWA Balance Sheet Report (Attachment 7).

He noted that five invoices have been received from DUWA Professionals.

  • Fausone Bohn in the amount of $28,996.08 for work performed in February 2018 (Attachment 8).
  • OHM Advisors in the amount of $12,231.25 for work performed in February 2018 (Attachment 9).
  • Plate Moran in the amount of $2,890.00 for work performed in late January and February 2018, dated February 28, 2018 (Attachment 10).

Motion by Gail McLeod (Allen Park) and seconded by Roberto Scappaticci (Romulus) to pay the invoices. Motion passed unanimously.

  1. Public Comment

Mr. Patrick McCauley, DUWA’s Legal Committee lead, supported Mr. Fausone’s recommendation that DUWA proceed with development of formal policies and procedures, and referenced there is a revised set of ByLaws that will assist with collection of Legal comments. Mr. McCauley also noted that it is advisable to confirm insurance coverage with Wayne County while DUWA proceeds with procuring their own.

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

  1. Other Business

Chairman Sollars (Taylor) noted that construction will occur at the service drive entrance to the City offices through the summer. Mr. Sollars requested the Board and meeting attendees provide for additional time to gain access to the City offices for the Board meetings.

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

  1. Next Meeting Date

Chairman Rick Sollars reminded the Board that the next regularly scheduled DUWA Board meeting is May 10, 2018 (9:00 a.m. Taylor City Hall).

There being no other business, Chairman Rick Sollars announced that a motion to adjourn would be in order. Motion by Doug Drysdale (Riverview), seconded by Dustin Lent (Southgate) to adjourn the meeting.  Motion passed unanimously at 9:47 AM.

Meeting Minutes Prepared by:

Vyto Kaunelis/Lambrina Tercala

DUWA System Manager

May 1, 2018

Attachments

  1. Meeting Agenda
  2. March 8, 2018 Board Meeting Minutes
  3. March 22, 2018 Downriver Finance Committee Meeting Minutes
  4. Wayne County Department of Public Services/Environmental Services Group, DSDS Rate Package, Year 2019
  5. Request to Board for RFQ of Insurance Broker (AON)
  6. Status Report re: Payments from Communities dated March 28, 2018
  7. DUWA Revenue/Expenditure Report and Updated DUWA Balance Sheet
  8. Invoice from Fausone Bohn, dated March 1, 2018
  9. Invoice from OHM Advisors, dated March 15, 2018
  10. Invoice from Plate Moran, dated February 28, 2018