2018 June – Board Meeting Minutes

DOWNRIVER UTILITY WASTEWATER AUTHORITY
June 15, 2018 MEETING MINUTES

Taylor City Hall City Council Chambers

1. Roll Call and Introductions
DUWA Chairman Rick Sollars called the meeting to order at 9:05 AM and asked for roll call to be taken. At the time of the Roll Call, voting representatives were in attendance from 10 communities: Belleville, Brownstown, Ecorse, Lincoln Park, Taylor, Allen Park, Riverview, Romulus, Southgate and Wyandotte. A quorum (at least 7 members) was present.

2. Approval of Agenda
Copies of the Agenda were made available prior to the meeting (Attachment 1). Motion by DUWA Vice Chairman Bill Matakas (Allen Park) and seconded by Dustin Lent (Southgate) to approve the Agenda as presented. Motion passed unanimously.

3. Approval of Minutes from May 10, 2018 Board Meeting
Copies of the meeting minutes from the May 10, 2018 Board Meeting were distributed by email prior to the meeting (Attachment 2). Motion by Doug Drysdale (Riverview) and seconded by Vice Chairman Matakas (Allen Park) to approve the Board meeting minutes. Motion passed unanimously.

4. Report on System Transfer Issues

a. System Manager Update

System Manager Vyto Kaunelis, of OHM Advisors, provided a status update to the Board related to the following technical items. Mayor Paletko (Dearborn Heights) joined the meeting shortly after System Manager Kaunelis began his update.

• Alkali Sewer rehabilitation work was discussed in detail at last Technical Committee meeting. Consensus by all present was that we must work quickly to resolve the issue. Wayne County (WC) does not have the capacity to address the work, and, therefore, DUWA must take it on to move forward quickly. Agreement with Hubble, Roth, and Clark (HRC) to begin the process of addressing this matter is later on in the agenda.
• Power failure experienced at DWTF (see Kelly Cave memo; Attachment 3). Detailed presentation and discussion scheduled for Technical Committee meeting on 6/27. Significant increases to WC’s existing construction and engineering contracts are expected to address this emergency. Engineering resources for this emergency were also working on the NPDES permit required Blending Report. WC and their engineer (HRC) are evaluating the impact and may inform MDEQ that report submittal will be delayed due to this emergency.
• Industrial wastewater discharge exemption raised by two communities, Ecorse and Wyandotte. This exemption relates to a (large) delta between the water intake and wastewater discharge volumes by an industry. WC Industrial Pretreatment Program (IPP) staff used to perform this function, but stopped about 10 years ago due to staffing reductions. It’s an infrequent, but necessary service. A meeting is being arranged by WC to meet with Wyandotte and BASF (a larger water industrial user in Wyandotte) to develop a plan for addressing these issues. There may be several alternatives to consider.
• Technical Team is considering that we’re in the 100 day transition period, therefore starting to address detailed tasks – e.g. former engineer is walking us through the technical files at the DWTF this afternoon and we’ll start developing an inventory of files.
• Shared services agreement will be necessary with WC after transition:

o WC to provide continuation on construction project (engineering and finance) until completion and closeout of contracts – extended due to low-lift pump work and emergency electrical work.
o DUWA to provide continuation of SCADA services for remote facilities, until separation of SCADA (may be dependent upon definition of transition plan).

• IPP progress: Pre-Final submittal provided to MDEQ on 6/1. The team is expecting MDEQ comments on 6/15.
• Short-term capital planning needed to help establish the 5-year budget. Initial meeting to gather existing data and judgements scheduled for 7/26.
• An update on WC’s ‘Other Facilities’ was provided for reference to the Board:

o SWRDDD CSO – Veolia has been asked to propose as Contract Operator. Veolia has asked for definition of scope.
o ECPAD – Chairman Sollars (Taylor) and Mayor Plateko (Dearborn Heights) both signed letter to WC to confirm WC’s continued operation of ECPAD.

Lambrina Tercala, of OHM Advisors and support as DUWA System Manager, presented an update on the Phase I/II and BEA work that is being completed by ECT. Based on the Phase I findings, and coordination efforts with WC, it is likely that Phase II work may be limited, and ECT’s scope will shift to focus on preparing a Due Care package to DUWA. ECT’s memo that captured this update was provided in the pre-meeting package (see Attachment 4).

b. Legal Update

DUWA Attorney Jim Fausone, of Fausone Bohn, provided a status update to the Board related to the following legal items:

• WC/Rick Kaufman sent a letter (Attachment 5) to Chairman Sollars (Taylor) with regard to more tasks to be performed, ECT’s Phase I findings report, and issues for WC to address based on ECT’s findings (including, but not limited to, waste drums removal). Procurement and time are limiting factors for WC to complete.
• DTA will go to WC Commissioners for approval on 7/12.
• The transfer date is within a 100-day window, and as such, many teams are working towards that goal. Financial, municipal bond, technical and legal work are all continually happening. Moving forward, there may be items that require decision from the Board or its Officers and should be taken into account over the course of next month. Chairman Sollars (Taylor) is available to provide direction.
• Legal team is developing priority procedures and policies, such as record retention. The initial thought for record retention was to provide it at the leased building across the street from the plant (Spare Parts Building). However, it may make more sense to reduce risk to have the files further off-site. These are the type of things the team is considering as they generate the documents. The Board was asked to think about this matter.
• Looking forward into system ownership, DUWA will experience day-to-day finance and mail (beyond Veolia). The Board Officers will be solicited for input on how to proceed with this type of matter.

c. Financial Matters Relating to the Upcoming Revenue Bond Issuance

i. Acknowledgement of JP Morgan’s (Bond Underwriter) G17 Disclosure

System Manager Tercala presented JP Morgan’s disclosure to the Board for informational purposes. In general, the disclosure form is a formality, and states what JP Morgan will do, won’t do, and conflicts of interest, if any. A copy was attached in the pre-meeting package (Attachment 6).

ii. Master Bond Ordinance (MBO) Update

System Manager Tercala presented the Board with a MBO update. Earlier this year, the Board approved resolutions associated with the following MBO items. Certificates were prepared associated with the resolutions; the certificates were provided to Chairman Sollars (Taylor) for signature. Chairman Sollars provided hard copies of the signed certificates to Attorney Fausone as part of today’s meeting. The certificates were as follows:

• Certification of Master Bond Ordinance;
• Certification of Resolution of the Board of Commissioners of Downriver Utility Wastewater Authority Regarding Declaration of Intent to Reimburse From Proceeds of Revenue Bonds;
• Declaration of Official Intent to Reimburse System Expenditures; and
• Certification of Resolution of the Board of Water Commissioners of the Downriver Utility Wastewater Authority Authorizing Publication of Notice of Intent to Issue Sewage Disposal System Revenue Bonds.

iii. Financial Calendar

DUWA Financial Consultant, Beth Bialy, of Plante Moran, presented an updated financial calendar to the Board (Attachment 7).

Regarding the Public Offering Statement, it was noted by Attorney Fausone that the Board authorizes this document, so due care is necessary to review and assess the facts.

d. Insurance Update on AON

Mr. Joe Perry provided a status update to the Board with the follow risk management and insurance-related items:

• Progress has been made with Veolia regarding determining their insurance needs. Mr. Perry spoke with Veolia and their Risk Manager to discuss the structure of the program. Veolia is in process of reviewing program to look at requirements and limits, and how Veolia will tie into the program.
• Information related to Wayne County’s insurance program is forthcoming and will include: what type of insurance program they have, what type of information is needed for covering the DWTF, what they are insurance for, and how they are insured. The team has also requested their current vehicle list.
• The need for cyber insurance was discussed with DUWA’s legal, and will be considered by the team. It is important to consider cyber insurance given the nature of digital connectedness of the SCADA equipment. Wayne County does not possess cyber insurance but rather a broad insurance that includes such operations.

A request for each community’s insurance/risk management protection was provided in the pre-meeting package (Attachment 8). The communities are requested to review their current coverage and provide update to Mr. Perry and/or System Manager Tercala as soon as possible.

e. Request to Adopt Bylaws

Attorney Fausone requested adoption of the bylaws provided in the pre-meeting package. It was noted that bylaws are adopted at the Board level, as well as future amendments rather than at the community level.

After presentation of the bylaws, the Board and Attorney Fausone discussed edits to the bylaws. Several edits were requested for incorporation into the bylaws for adoption. Motion by Vice Chairman Bill Matakas (Allen Park) and seconded by Mayor Paletko (Dearborn Heights) to approve the bylaws with the following amendments:

o Article 5, Section 2 – strike ‘day to day’
o Article 7, Section 6 – shall include a capital improvement plan in addition to the 2-year operating budget
o Article 11, Amendments – add ‘super’ before ‘majority’ to be consistent with Article 7, Section 5

Motion passes unanimously. The (amended) adopted bylaws is provided as Attachment 9.

f. Request for Approval of HRC Proposal for Design Investigation re: Alkali Sewer Rehabilitation

System Manager Kaunelis updated the Board on DUWA’s progress for direct contract w/ HRC to perform investigative work to better assess the Alkali sewer system for the future (critical) rehabilitation. It was noted that the current authorization is for investigative work, and a design proposal will be presented once a more refined conceptual rehab approach is better understood. The authorization request is for a not-to-exceed fee of $50,000.

Subsequent to the update, Chairman Sollars requested a motion to approve HRC to perform the work per the provided proposal (Attachment 10). Motion by Vice Chairman Matakas (Allen Park) and seconded by Roberto Scappaticci (Romulus). Motion passes unanimously.

g. Request for Approval of Veolia Transition Agreement

Attorney Fausone updated the Board on the need for a Veolia Transition Agreement with the Board, so Veolia could proceed with their 90-day transfer activities. In Veolia’s original estimate of fees, the transition cost was built into their 20-yr operating contract. However, because Veolia’s 20-yr operations contract is under legal review by both parties, and the system timing is such that transition activities are necessary, a proposal for transition activities is requested. The proposal was presented to the Board for approval (Attachment 11); the proposal requests $111,367, and payment of services would be based on an itemized list of costs only if the 20-yr operations contract is not authorized. That is, if for an unforeseen reason, the system does not transfer to DUWA, this stand-alone agreement with Veolia will authorize DUWA to pay Veolia for their transition services rendered. However, if the system transfers, Veolia would be paid for their transition services under their operations contract only.

It was also noted that authorization of this proposal is necessary to possibly help WC to allow Veolia to speak to existing employees for consideration of hiring onto Veolia’s team.

Motion by Vice Chairman Matakas (Allen Park) and seconded by Rick Rutherford (Belleville). Motion passes unanimously.

5. Treasurer’s Report
DUWA Treasurer Doug Drysdale (Riverview) presented the Treasurer’s Report that was included in the pre-meeting packet. This included the status of Community payments (Attachment 12), the Authority’s Revenue and Expenditure report and the updated DUWA Balance Sheet Report (Attachment 13).

Treasurer Drysdale (Riverview) noted that eight (8) invoices have been received from DUWA Professionals or other Consultants. A Treasurer’s Invoice Register Report was provided to summarize the invoices (Attachment 14):

• BTG Solutions in the amount of $225.00 (Attachment 15)
• Detroit Legal News (to Dykema) in the amount of $432.00 (Attachment 16)
• Fausone Bohn in the amount of $26,026.08 (Attachment 17)
• Firooz Fath-Azam in the amount of $4,025.00 (Attachment 18)
• Hennessey Engineers, Inc. in the amount of $4,500.00 (Attachment 19)
• Hinshon Environmental Consulting in the amount of $1,520.00 (Attachment 20)
• OHM Advisors in the amount of $15,090.50 (Attachment 21)
• Plate Moran in the amount of $3,187.50 (Attachment 22)

Motion by Dustin Lent (Southgate) and seconded by Robert Scappaticci (Romulus) to pay the invoices. Motion passed unanimously.

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

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

8. Next Meeting Date
Chairman Rick Sollars reminded the Board that the next regularly scheduled DUWA Board meeting is July 12, 2018 (9:00 a.m. Taylor City Hall). Chairman Sollars (Taylor) noted that he would not be at the next DUWA Board meeting.

There being no other business, Chairman Rick Sollars announced that a motion to adjourn would be in order. Motion by Robert Scappaticci (Romulus), seconded by Todd Dyrsdale (Wyandotte) to adjourn the meeting. Motion passed unanimously at 10:07 AM.

Meeting Minutes Prepared by:

Vyto Kaunelis/Lambrina Tercala
DUWA System Manager
June 24, 2018

Attachments
1. Meeting Agenda
2. May 10 DUWA Board Meeting Minutes
3. Kelley Cave Memo regarding Influent Pump Station Electrical Issues, dated June 13, 2018
4. ECT Due Care Memo Update
5. Kaufman Letter re: ‘Completion of Requested Items Prior to Closing’, dated May 30, 2018
6. JP Morgan (Underwriter) G-17 Disclosure
7. Updated Financial Calendar
8. DUWA Insurance Survey for Community Members
9. As Adopted DUWA Bylaws
10. HRC Proposal for investigation of Alkali Sewer
11. Veolia Transition Agreement
12. Status Report re: Payments from Communities dated May 31, 2018
13. DUWA Revenue/Expenditure Report and Updated DUWA Balance Sheet
14. Treasurer’s Invoice Register Report
15. Invoice from BTG Solutions, dated May 30, 2018.
16. Invoice from Detroit Legal News (to Dykema), dated May 15, 2018
17. Invoice from Fausone Bohn, dated May 1, 2018
18. Invoice from Firooz Fath-Azam, dated May 29, 2018
19. Invoice from Hennessey Engineers, Inc., dated May 17, 2018
20. Invoice from Hinshon Environmental Consulting, dated May 25, 2018
21. Invoice from OHM Advisors, dated May 11, 2018
22. Invoice from Plate Moran, dated May 23, 2018