2018 December – Board Meeting Minutes

DOWNRIVER UTILITY WASTEWATER AUTHORITY

DECEMBER 13, 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 9:14 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, Ecorse, Lincoln Park, Riverview, Romulus, Southgate, Taylor, 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 Roberto Scappaticci (Romulus) to approve the Agenda. DUWA Attorney, Jim Fausone, of Fausone Bohn, requested the agenda be amended to add the following two items:

  • Item 8C – Request for Approval of Utility Payments
  • Item 8D – Payment Processing for Sick Time from Wayne County to Veolia

Vice Chair Matakas and Mr. Scappaticci approved of the amendments related to the motion. Motion passed unanimously.

3.       Approval of Minutes from November 8, 2018 Board Meeting

Copies of the meeting minutes from the November 8, 2018 Board Meeting were distributed by email prior to the meeting (Attachment 2). Motion by Vice Chair Matakas (Allen Park) and seconded by Doug Drysdale (Riverview). Motion passed unanimously.

4.        Legal Update

Attorney Fausone provided the Legal Update.

a. Veolia O&M Agreement Amendment regarding Auto Insurance

An amendment to the original agreement (first amendment) between Veolia and DUWA was prepared and provided in the Board’s pre-meeting package (Attachment 3). The amendment relates to a section of the agreement requiring DUWA to retain a $5M per accident policy. DUWA’s current insurance includes a $1M per accident policy. DUWA’s Advisors coordinated with Aon (DUWA’s insurance broker) on the matter. Aon recommended the current $1M policy was sufficient. Veolia agreed a $1M per accident policy was sufficient.

The amendment replaces the $5M policy requirement with a $1M policy requirement. The policy is in favor of DUWA as savings will be realized in less premiums. Attorney Fausone recommended a motion for the Board to authorize Chairman Sollars to execute the agreement’s amendment. Motion by Rick Rutherford (Belleville) and supported by Dave Flatten (Ecorse). Motion passed unanimously.

b.  Additional Insurance Options

Attorney Fausone requested the Board’s attention and direction on additional insurance options related to Workers Compensation and Inland Marine Insurance.

  • Workers Compensation: Since DUWA does not have employees, statutory workers compensation insurance was not purchased. Aon recommended DUWA purchase this insurance in the event someone ever argue they are a DUWA employee by way of being a contractor to DUWA. The annual cost for the basic statutory workers compensation insurance is $445.

A motion was made to request the Board to authorize Aon to purchase the basic policy. Motion by Vice Chair Matakas (Allen Park) and supported by Doug Drysdale (Riverview). Motion passed unanimously.

  • Inland Marine Insurance: This insurance policy was discussed at previous Board meetings. Attorney Fausone reminded the Board this policy was in place with Wayne County through Handover Citizens Insurance, and is for catastrophic damage to the interceptor system in the event of an earthquake, fire, flood, and third-party contractor damage (not including a sinkhole). DUWA has been considering this policy, but has not acted on it. A $5M policy would carry an annual cost of $57,370. If double the coverage is desired, then the annual cost would approximately double. Wayne County carried a $5M policy; the ‘right’ amount of coverage is arbitrary.

The Financial Team reported the annual premiums budgeted for insurance is $625K, of which $476k is currently allocated. Thus, DUWA has a remainder of $148k allocated for insurance premium, and there is room for this additional coverage by DUWA if the Board wishes to secure it.

Discussion among the Board proceeded, with comments and questions related to the coverage area, if the policy was ever used by Wayne County (answer: no), and the deductible amount.

A motion was made to request the Board to authorize Aon to purchase the $5M Inland Marine Insurance from Handover. Motion by Vice Chair Matakas (Allen Park) and supported by Roberto Scappaticci (Romulus). Motion passed unanimously.

In closing, Attorney Fausone provided the following remaining updates:

  • DUWA’s leased space at 740 Central is not currently on DUWA’s insurance policy. Fausone Bohn is working with Wayne County to assure the facility is insured. Wayne County has verbally noted it is under their insurance; proof of insurance has not yet been received.
  • Closing Books, via thumb drives, will be provided to the Board at the January meeting. Wayne County and the Attorneys are in receipt of their Closing Books.
  • ‘Davis v Southgate’ litigation case should be concluding; however, final documentation is not yet signed and funds have not been released.
  • Minor amendments to the DUWA and Wayne County agreement will be forthcoming. An example of an amendment includes removing the vehicle listing attachment, as the vehicle listing was not fully accurate based on the vehicles that were turned over.
  • Remaining funds from the first escrow ($2.5M) that was with Wayne County will be returned to DUWA by end of CY2018. All costs that are received after January 1, 2019 will become the responsibility of DUWA.

5.        System Manager Update

a. System Manager Report

System Manager Vyto Kaunelis, of OHM Advisors (OHM), provided a summary of activities since the last meeting in the pre-meeting Board packet (Attachment 4). System Manager Kaunelis provided highlights of select activities, including the following:

  • Active Construction Projects: A change order was presented and approved at the November 2018 Board meeting to extend Weiss’s contract duration. At that time, it was believed a change order for additional fees would be forthcoming. It is now anticipated a final, balancing change order will be brought forward to the Board in February 2019; a request to significantly increase the contract value is not expected.
  • Downriver Wastewater Treatment Facility (DWTF) Performance: Later in the agenda, Veolia will provide an update on excessive solids that have been identified at the DWTF. The solids are impacting DWTF performance.
  • MissDig: Wayne County did not participate the Downriver Sewage Disposal System (DSDS) in the MissDig program. The Technical Committee is discussing alternatives on how DUWA can proceed with MissDig participation. Initially, it is anticipated that DUWA will sign up for a MissDig account and engage Veolia for field staking activities.
  • Interceptor Inspections via CCTV: Veolia’s contract allows for up to 10% of the collection system to be inspected per year. Ecorse and Lincoln Park have requested the span between EC6 and RD1 within the Riverdriver Interceptor be included. It is anticipated this area will be included in Year 1 activities.  System Manager Kaunelis asked for the Board to provide other recommendations for Year 1 activities to the Team. It is anticipated the work will occur in late spring/early summer.
  • Industrial Pretreatment Program Rate Development:

o   The Financial Team met to discuss existing rate methodology and the current build-up of reserves. System Manager Kaunelis has solicited TetraTech to provide a proposal to update their 1998 Rate Setting Study. DUWA is pending receipt of the proposal.

o   Financial and Technical Teams are reviewing if IPP funds need to be segregated or if they can be included in the general maintenance funds. System Manager Kaunelis has engaged Dick Hinshon, former Technical Advisors to DUWA, on this item to provide an opinion on if funds require segregation.

  • Transition Activities:

o   Electrical utility transfer activities has revealed Great Lakes Water Authority (GLWA) may have been paying for up to five of DSDS’s meters and DSDS has been paying for one of GLWA’s meters. System Manager Kaunelis is in contact with GLWA to assess transition needs.

o   SCADA costs for segregation of the system from Wayne County’s outside facilities are to be resolved by end of March. To date, DUWA has not received feedback on Wayne County’s approach. This is a significant cost item, and DUWA is very interested in pushing this task along.

  • Alkali Sewer Additional Investigation: HRC completed a Flow Control Plan to understand the cost impacts associated with completing this work. The plan has been coordinated with Mark Kowalewski (Wyandotte). The Plan is now with Southgate Wyandotte Relief Drain Drainage District (SWRDDD) for review. SWRDDD approval is required as DUWA seeks to use SWRDDD’s collection network to bypass dry weather flows during sewer relining work.
  • Freedom of Information Act (FOIA): OHM Advisors is acting as DUWA’s FOIA Coordinator. OHM Advisors representatives have been trained in the FOIA process by Fausone Bohn’s team.

b. PFAS Flyer

System Manager Vyto Kaunelis reminded the Board that a PFAS flyer was included in the Board package (Attachment 5). The flyer includes a summary of PFAS activities the DWTF has completed to date.

6.  Contract Operator Update

Kelly Irving, of Veolia, provided the Contract Operator update.

a. Monthly Monitoring Report (November 2018)

The November 2018 Monthly Operating Report (MOR) was provided in the Board’s pre-meeting package (Attachment 6).

Ms. Irving reported Veolia’s primary focus remains on solids handling and disposal. Since the last Board meeting, solids volume has been cut in half. The sludge processing equipment is now operational and running, other than minor repairs of a bearing and panel view that is pending repair. The sludge hauling company, CCI, has been moving 7-8 gravel trucks of solids from DWTF per day. Their work has included a few weekend mobilizations.

MOR discussion items included the following items:

  • There was a total suspended solids (TSS) violation at DWTF, which was a result of the excessive solids inventory. Veolia has worked with MDEQ for approval of conditional bypasses around the primary tanks. Several of the primary tanks are currently non-operational and undergoing repair.
  • Veolia continues to attempt to backfill vacant positions. Current staff chart shows six vacancies.
  • Ms. Irving reminded the Board the MOR is evolving and Veolia is open to feedback.

Ms. Irving then provided follow-up on Board requests received at the November 2018 meeting:

  • Veolia has coordinated with their sludge hauler (CCI) to understand their haul routes. CCI will be providing a haul route map to Veolia, and Veolia will then provide to DWUA Board.
  • Headworks screens have alarms in place to alert the operator should the screens overflow or become blind. Veolia is currently reviewing each alarm at the DWTF (beyond the headworks), and will ensure priority alarms require an operator to deploy to the process unit upon activation of the alarm.

System Manager Kaunelis asked Ms. Irving to provide the Board with the anticipated cost implications associated with Veolia’s increased solids handling and disposal efforts. Ms. Irving reported that Veolia reviewed Wayne County’s pre-transfer date records to assess the amount of solids removed in CY2018. Based on that analysis, 30% less solids were hauled from the plant from previous years. A savings was realized by the DSDS due to reduced solids hauling costs; this savings would be part of the current reserves. However, that savings has now translated to more cost now to catch up to a more appropriate sludge inventory. Veolia anticipates a savings of up to $500K may have been realized by the system by reducing the CY2018 hauled volume. Veolia anticipates the increased efforts that are now underway to reduce the inventory will carry an expense between $250k-$300k beyond current budgets.

7.  Discussion on & Request for Pre-Approval for Routine Utility Payments

DUWA Treasurer Jason Couture (Taylor) reminded the Board of DUWA’s current accounts payable process. That is, payments are not issued until the Board approves the invoices on a monthly basis. To avoid late charges, the Financial Team seeks for approval of reoccurring utility payments.

A motion for standing approval of routine utility payments was requested. The approval assumes the Treasurer and the System Manager will review the invoices prior to releasing payment, and the Board would be advised of the costs at each meeting. Motion by Dave Flatten (Ecorse) and seconded by Dustin Lent (Southgate). Motion passed unanimously.

8.  Treasurer’s Report

Treasurer Couture presented the Treasurer’s Report that was included in the pre-meeting packet. The Treasurer’s Report included the status of Community payments (Attachment 7) and an invoice register (Attachment 8).

a. Update on Community Payments of Monthly Assessment

Treasurer Couture noted everyone is up-to-date on payments, other than Allen Park and Riverview for August 2018. The most recent/last pay period was September.

b. Pending Invoices

The invoice register included request for payment for 35 invoices for a total of $2,280,368.99. Motion by Vice Chairman Matakas (Allen Park) and seconded by Roberto Scappaticci (Romulus) to pay the invoices. Motion passed unanimously.

Treasurer Couture will work with DNS Financial Services to provide quarterly financial reports for review and approval starting in 2019.

c. Request for Approval of Utility Payment [Amended Agenda Item]

Amended Agenda Item was covered under Agent Item No. 7.

d. Payment Processing for Sick Time from Wayne County to Veolia [Amended Agent Item]

Attorney Fausone noted there has been discussion between Wayne County, DUWA’s Financial and Legal Teams, and Veolia to coordinate on an eased approach to provide sick time payments to former Wayne County employees that became full-time employees with Veolia. Wayne County does not currently have a mechanism to pay Veolia directly. An idea originated to allow Wayne County to pay DUWA, and DUWA would in turn pay Veolia. Attorney Fausone noted that if the Board is amendable to this, then a legal agreement would be prepared, and DUWA would coordinate on payroll tax items associated with the fund transfer. There were no objections by Board members.

9.  Public Comment

There was no public comment.

10.  Other Business

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

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

Chairman Sollars reminded the Board that the next meeting would be the Board Meeting on Friday, January 11, 2018 (9:00 a.m. Taylor City Hall). Meetings are normally held on Thursdays, but the next meeting is held on a Friday to avoid a GLWA meeting conflict for DUWA’s community members.

12.  Adjournment

There being no other business, Chairman Sollars announced that a motion to adjourn would be in order. Motion by Vice Chairman Matakas (Allen Park), seconded by Dustin Lent (Southgate) to adjourn the meeting.  Motion passed unanimously at 10:13 AM.

 

Meeting Minutes Prepared by:

Lambrina Tercala, DUWA System Manager

Attachments

  1. Meeting Agenda
  2. November 8, 2018 DUWA Board Meeting Minutes
  3. First Amendment to the Agreement for Operations, Maintenance and Management Services, dated November 2018 (by Fausone Bohn)
  4. System Manager Report for December 2018 Board Meeting (by OHM Advisors)
  5. Updated on DSDS’s PFAS Efforts memo, dated December 7, 2018 (by OHM Advisors)
  6. Monthly Operating Report for December 2018 (by Veolia)
  7. Update on Community Payments of Monthly Assessment, dated November 30, 2018
  8. Invoice Register, dated December 7, 2018 (by DNS Financial Services)