2018 October – Board Meeting Minutes

DOWNRIVER UTILITY WASTEWATER AUTHORITY
OCTOBER 11, 2018 MEETING MINUTES
Taylor City Hall City Council Chambers

1. Roll Call and Introductions
DUWA Chairman Rick Sollars (Taylor) called the meeting to order at 9:10 AM and asked for roll call to be taken. At the time of the Roll Call, voting representatives were in attendance from 10 communities: Brownstown Township, Ecorse, Lincoln Park, Taylor, Allen Park, Riverview, Romulus, Southgate, Van Buren Township 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 Vice Chair Mayor Matakas (Allen Park) and seconded by Dustin Lent (Southgate) to approve the Agenda. Motion passed unanimously.

3. Approval of Minutes

a. Corrected Minutes from September 13, 2018 Board Meeting
Copies of the corrected meeting minutes from the September 13, 2018 Board Meeting were distributed by email prior to the meeting (Attachment 2). Vyto Kaunelis, DUWA’s System Manager, explained the corrections. Motion by Jim Taylor (Van Buren Township) and seconded by Doug Drysdale (Riverview). Motion passed unanimously.

b. Minutes from September 21, 2018 Special Board Meeting
Copies of the meeting minutes from the September 21, 2018 Special Board Meeting were distributed by email prior to the meeting (Attachment 3). Motion by Doug Drysdale (Riverview) and seconded by Dustin Lent (Southgate) to approve the Board meeting minutes. Motion passed unanimously.

4. Acknowledgement of Closing
DUWA Attorney, Jim Fausone (Fausone Bohn) noted the immense effort made to achieve the closing and thanked the professionalism of PFM (DUWA’s Financial Advisor) and Dykema (DUWA’s Bond Counsel) for good interest rates and a timely process. Fausone summarized that the wrap up went fairly smoothly and OHM Advisors and Plante Moran helped navigate working with Wayne County. System Manager Kaunelis echoed Mr. Fausone’s comments that it was a long process but successful, with great cooperation. DUWA Chairman Rick Sollars (Taylor) mentioned how this had been a long and difficult process, and said everyone had done a good job.

5. System Manager Update

a. First 2 Weeks of DUWA Ownership

System Manager Kaunelis presented the board with a Michigan Department of Environmental Quality (MDEQ) notification of violation (NOV) received by the Downriver Wastewater Treatment Facility (DWTF) regarding mercury sampling frequency and other items (Attachment 4). Wayne County was the owner/operator at the time of citation, and thus, the county is responding. The violations are more management-type issues, and nothing requiring a capital change, noted Mr. Kaunelis. The MDEQ is coming to meet with DUWA to get to know the Board and the Veolia Operators; Firooz Fath-Azam will represent the county at the meeting.

Preparation and operation the first few weeks went well. There were minor issues such as division of tools/equipment between Wayne County and Veolia, but no major problems. Mr. Kaunelis pointed out a contact list of Veolia staff (Attachment 5) in the Board packet, as well as a memo detailing critical repairs needed at the plant (Attachment 6).

For the critical repairs, there were several purchase requisitions generated earlier this year. It was DUWA’s understanding that these purchase orders were executed, but most have not been issued; one was issued the day after the closing. Based on discussions with Veolia and the System Managers, it was recommended that DUWA should take over the purchase orders and execute them, as they are for critical equipment and the costs are already established. DUWA’s emergency procurement protocols were used to obtain the purchase orders through Veolia. The list of purchase orders totals $222,000. DUWA’s stub budget line item is $200,000, but System Manager Kaunelis recommended these issues be paid from the reserves. Mr. Kaunelis noted that there will likely be more discoveries of deferred maintenance emerging over the next year or so until the Veolia asset management program catches up. Motion to receive and file by David Flatten (Ecorse), seconded by Vice Chair Matakas (Allen Park). Motion passed unanimously.

b. SWRDD & DUWA Electric Bill Splitting Process

System Manager Kaunelis presented to the board that currently, one electric bill covers both DWTF and the Southgate Wyandotte Relief Drain Drainage District (SWRDDD) Pump Station No. 5. This sharing likely results in a lower electric bill for both parties. Years ago, an electrical engineer at the plant had a spreadsheet set up to split the bill based on usage, but when he retired, the method was lost and a historical split was used from then on.

Currently, 92% of the bill is applied to the DWTF and 8% is applied to SWRDDD, but there was no indication if this was reasonable or not. As part of the transition activities, Hubble, Roth and Clark (HRC) produced a method to estimate the electric usage split. The split methodology that HRC created has been reviewed, and results in about $0.5M cost swing out of the ~$3.5M annual electrical bill from DUWA to SWRDDD.

Attorney Fausone noted a letter received from Mark Kowaleski (Wyandotte) (Attachment 7) discussing financial hardship such a shift in bill splitting would create. Chairman Sollars (Taylor) requested a more detailed written communication from SWRDDD, and then will set up a subcommittee via digital communication to propose an appropriate bill split.

6. Contract Operator Update

Mark Sanderson and Kelly Irving, of Veolia, provided the contract operator update. Veolia is actively working on filling vacancies at DWTF. There are offers on the table for nine (9) out of 15 remaining vacancies. Over the last two weeks, the staff have been working hard cleaning, making repairs, and other activities. Despite wet weather last week, Operations and Management worked together to prevent any bypasses.

Plant staff are engaged and morale is high. Mr. Sanderson thanked Chairman Sollars (Taylor) for visiting the plant on Day 1 of operations, and thanked Ms. Irving and team for showing them around. Chairman Sollars thanked the team for providing the tour and encouraged other board members to visit the plant and get to know the staff. Ms. Irving noted to call ahead for a tour since there are many activities going on at the plant.

Ms. Irving stated that after the first month of operations, there will be a full operations report.

There have been some issues with the SCADA network and coordination. Operations staff say the SCADA network has historically been problematic. CCI and TetraTech, SCADA contractors to Wayne County, were working on the network the week prior to and week after the turnover, on behalf of Wayne County. Wayne County has concerns about DUWA/Veolia overstepping their boundaries during this pre-transfer period. System Manager Kaunelis noted post-transfer communications on SCADA work are much better than pre-transfer. Weekly SCADA conference calls have been initiated. Continued effort is needed to ensure that communication is kept up.

7. Legal Update

a. FOIA Officer

DUWA’s Attorney Jim Fausone, of Fausone Bohn, stated that DUWA needs to appoint a FOIA Officer. This could be someone from one of the 13 member communities or someone from OHM Advisors, with additional compensation for the effort. This should be done before FOIAs are received. Vice Chair Matakas suggested having someone from OHM act as FOIA officer and charging a reasonable fee for FOIA requests as a pass-through cost for DUWA. Chairman Sollars asked if anyone had objections to OHM handling the FOIA process, and there were none. Mr. Fausone and System Manager Kaunelis planned to discuss the details after the meeting.

b. Resolution to Adopt Rates

Attorney Fausone discussed the resolution for system rates included in the packet (Attachment 8). Early next year, as part of the budgeting and rate setting process, DUWA will set rates to begin July 2019.

Motion by Jim Taylor (Van Buren Township) and supported by Roberto Scappaticci (Romulus) for DUWA to adopt all existing 2018-19 rates set by Wayne County from September 27, 2018 until changed by the Board. A roll call was collected and achieved 89.497% approval with favorable votes from all Board members in attendance. Motion passed with supermajority.

c. Request for Approval of Bodman PLC

Attorney Fausone explained that a few steps must be made to effectuate the settlement of claims made against the system when it was owned by Wayne County. The County had engaged Bodman throughout this lawsuit and Mr. Fausone recommended that DUWA continue their services (Attachment 9, Attachment 10). The Board discussed the lawsuit and that there were some appellate issues, but that from the Wayne County/DUWA point of view, this would resolve DSDS involvement and eliminate any appeal issues. Vice Chair Matakas (Allen Park) expressed concern over the Detroit Metro Airport runoff and how it may affect these issues.

Motion by Vice Chair Matakas (Allen Park) and supported by Todd Drysdale (Wyandotte) to approve engaging the Bodman law firm for the Davis v Southgate matter conclusion and authorize the General Counsel to sign the engagement letter on behalf of the Authority. A roll call was collected and achieved 89.497% approval with favorable votes from all Board members in attendance. Motion passed with supermajority.

d. Summary of Insurance Policies

Attorney Fausone noted an informational document was included in the packet (Attachment 11) and that no specific action was required for this item. The document summarizes the insurance premiums previously selected by the Board and in coordination with AON, DUWA’s insurance broker.

e. US Bank’s Authorized Representative Certificate

Attorney Fausone requested signatures for the US Bank paperwork from Chairman Sollars (Taylor), Treasurer Jason Couture (of Taylor), and Accountant Doug Drysdale (Riverview) (Attachment 12).

Motion by David Flatten (Ecorse) and seconded by Dustin Lent (Southgate). Motion passed unanimously.

8. Treasurer’s Report

DUWA Treasurer Couture presented the Treasurer’s Report that was included in the pre-meeting packet. This included the status of Community payments (Attachment 13), the Authority’s Revenue and Expenditure report and the updated DUWA Balance Sheet Report (Attachment 14).

Treasurer Couture noted that sixteen (16) invoices have been received from DUWA Professionals or other Consultants. A Treasurer’s Invoice Register Report was provided to summarize the invoices (Attachment 15):

• AON Risk Services (2 invoices), in the amounts of $5,000.00 and $436,079.19
• BS&A Software, in the amount of $1,850.00
• BTG Solutions, the amount of $600.00
• City of Wyandotte, in the amount of $33,000.00
• DNS Financial Services (2 invoices), in the amounts of $500.00 and $2,325.00
• ECT (3 invoices), in the amounts of $370.00, $907.50, and $495.00
• Fausone Bohn, in the amount of $51,549.45
• Hennessey Engineers, in the amount of $4,433.50
• Hubbell, Roth & Clark, Inc., in the amount of $7,402.38
• OHM Advisors, in the amount of $21,872.75
• Plante Moran (2 invoices), in the amounts of $4,207.50 and $9,520.00

Motion by Vice Chair Matakas (Allen Park) and seconded by Dustin Lent (Southgate) to pay the invoices. Motion passed unanimously.

9. Public Comment

There was no public comment.

10. Other Business

System Manager Kaunelis requested a photograph of the group after the meeting. Attorney Fausone requested signatures from Chairman Sollars and Treasurer Couture after the meeting.

11. Next Meeting Date: November 8, 2018 (9:00 AM; Taylor City Hall)

Chairman Sollars reminded the Board that the next meeting would be the Board Meeting on November 8, 2018 (9:00 a.m. Taylor City Hall).

12. Adjournment

There being no other business, Chairman Sollars announced that a motion to adjourn would be in order. Motion by Roberto Scappaticci (Romulus), seconded by Doug Drysdale (Riverview) to adjourn the meeting. Motion passed unanimously at 10:12 AM.

Meeting Minutes Prepared by:
Hannah Slabaugh

Meeting Minutes Reviewed by:
Lambrina Tercala/Vyto Kaunelis
DUWA System Manager
October 15, 2018

Attachments

1. Meeting Agenda
2. September 13 Corrected DUWA Board Meeting Minutes
3. September 21 DUWA Board Meeting Minutes
4. Notice of violation from MDEQ to Wayne County, dated 9/20/2018
5. Veolia Downriver Wastewater Treatment Facility Contact List
6. Memo re: Emergency Procurement for Critical Wastewater Treatment Equipment ($222k) (by OHM and Veolia)
7. Letter from Mark Kowaleski re: DUWA/SWRDD Electric Bill Split (by Wyandotte)
8. Resolution for System Rates
9. Letter re: Litigation counsel in Davis, et al. v Southgate, et al. (by Fausone Bohn)
10. Letter re: Legal Representation in Davis, et al v. Southgate, et al and Terms of Engagement (by Bodman)
11. Insurance Policies – Information (by Fausone Bohn)
12. US Bank Authorized Representative(s) Certificate (by US Bank)
13. Update on Community Payments of Monthly Assessment
14. Account Balance
15. Pending Invoices