2019 February – Board Meeting Minutes

DOWNRIVER UTILITY WASTEWATER AUTHORITY

FEBRUARY 14, 2019 MEETING MINUTES

Taylor City Hall City Council Chambers

1. Roll Call and Introductions
DUWA Vice Chairman Bill Matakas (Allen Park) called the meeting to order at 9:07 AM and asked for roll call to be taken. At the time of the Roll Call, voting representatives were in attendance from 11 communities: Allen Park, Belleville, Brownstown Township, Ecorse, Lincoln Park, Riverview, Romulus, Southgate, Taylor, 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). System Manager Lambrina Tercala, of OHM Advisors, provided an amended Agenda to the Board before the start of the meeting. The amendment, as written, was a request to add Agenda Item ‘5c – Request to Authorize CCI for As-Needed SCADA Advisory Contract.’ System Manager Tercala requested the Agenda Item be rewritten to ‘5c – Request to Authorize a SCADA Integrator for As-Needed SCADA Advisory Contract.’ Motion by Dustin Lent (Southgate) and seconded by Roberto Scappaticci (Romulus) to approve the amended Agenda. Motion passed unanimously.

3. Approval of Minutes from January 11, 2019 Board Meeting
Copies of the meeting minutes from the January 11, 2019 Board Meeting were distributed by email prior to the meeting (Attachment 2). Motion by Rick Rutherford (Belleville) and seconded by Jim Taylor (Van Buren Township) to approve of the minutes. Motion passed unanimously.

4. Legal Update
Attorney Artaev provided the Legal Update.

Attorney Artaev reminded the Board that he distributed electronic thumb drives that archive DUWA’s closing documents at the last Board meeting. If a Board member is in need of more thumb drives, then the member should follow up with Mr. Artaev after the meeting.

Attorney Artaev reminded the Board of the two escrows that were developed under the terms of the Closing Memorandum. The two escrows and their status were presented as follows:

  • Accounts Payable Escrow: To be used by Wayne County for invoices received related to DSDS. The escrow total was $2.5M. The amount remaining was remitted in early January 2019.
  • Post-Closing Escrow: To be used for purposes of paying professional closing costs. The escrow remains with Wayne County, and the remaining balance is to be provided to DUWA by March 27, 2019. DUWA expects to receive this escrow on time. There has not been an indication from Wayne County regarding the projected remaining amount in this escrow.

A rundown of the expenditures will be submitted by Wayne County for the escrows. Discussions associated with the need for a detailed audit will be coordinated after receipt of the Post-Closing Escrow.

5. System Manager Update

a. System Manager Report
System Manager Tercala provided a verbal summary of activities since the last meeting. A written summary was in the pre-meeting Board packet (Attachment 3).

b. New Methodology for MAFL Tracking at Riverdrive Interceptor
System Manager Tercala provided an update on the Technical Committee’s review and approval of the new tracking method for maximum allowable flow limits (MAFL) for the Riverdrive Interceptor. A summary of the Technical Committee’s recommendation and the PowerPoint presentation provided to the Technical Committee was in the pre-meeting Board packet (Attachment 4).

c. Request to Authorize a SCADA Integrator for As-Needed SCADA Advisory Contract
DUWA is now in receipt of Wayne County’s proposal for the pending SCADA Split. Wayne County’s proposed summary for the split, which includes the general scope, fee, and schedule was provided to the Board on March 7 (Attachment 5).

Based on discussions between OHM, Fausone Bohn, and Veolia, it was recommended the Board engage a SCADA Integrator for an as-needed contract to provide their SCADA expertise and advisement as it relates to the Wayne County SCADA split options. The contract request is expected to be for up to 2 months and a not-to-exceed fee of $10,000. It will be at the System Manager’s discretion to secure a qualified firm – potential contractors are anticipated to include Commerce Controls Inc. and Eramosa. Both firms have worked at the DWTF before.

Motion by Keith Boc (Taylor) and supported by Jim Taylor (Van Buren Township) to authorize the System Manager to select a SCADA Integrator to provide DUWA with an evaluation and analysis of Wayne County’s SCADA Split Proposal in such an agreement in a not-to-exceed fee of $10,000. Motion passed unanimously.

6. Request to Lock In Natural Gas Rates with Constellation
System Manager Tercala reminded the Board that retail contractors are in place with DTE and Constellation for natural gas; however, the purchase price unit rates still need to be secured. A memo related to the request to lock in a natural gas rate was included in the pre-meeting packet (Attachment 6). The memo recommended a locked in rate with a 46 month term at a unit price of $2.9047 per dekatherm. (A dekatherm is a unit of energy used primarily to measure natural gas. It is approximately equal to one thousand cubic feet of natural gas with a heating value of 1000 Btu/cf.)

Constellation provided day-of rates to OHM and Veolia before the Board meeting. System Manager Tercala requests the Board approve a motion to lock the natural gas rate with a 46 month term at a unit price of $2.85 per dekatherm. The request was based on positive feedback from Veolia’s Energy Sector expert in consideration of their experience with Constellation and the favorable pricing.

Motion by Roberto Scappaticci (Romulus) and seconded by Dustin Lent (Southgate) to lock in the natural gas rate of $2.85 per dekatherm for a 46 month period with Constellation. Motion passed unanimously.

7. Request for Equipment Disposal (Sale) of Obsolete Switch Gear
System Manager Tercala approached the Board with the desire to sell obsolete switch gear and electrical breakers that no longer serve a useful function to DUWA. The request to sell memo and three rendered bids were provided in the pre-meeting Board packet (Attachment 7).

Motion by Jim Taylor (Van Buren Township) and Roberto Scappaticci (Romulus) to sell the equipment to the highest, available bidder at time of sale. Motion passed unanimously.

8. Request to Authorize PFM for Dissemination Agent Annual Filing Services
System Manager Tercala presented PFM’s proposal for dissemination agent annual filing assistance services at a cost of $1,000 per year (Attachment 8). The filing assistance relates to DUWA’s new annual and ongoing continuing disclosure filing requirements as a part of the Continuing Disclosure Agreement the Authority was required to enter into as a part of the 2018 bond financing. PFM’s proposal covers these services only, as they are still waiting for additional feedback from S&P on the ongoing reporting requirements for the rating. Upon receipt of the same, PFM will send DUWA a separate engagement letter or proposal to assist DUWA with that as well as other general financial advisory or debt related services on an as needed basis.

Motion by Rick Rutherford (Belleville) and supported by Dustin Lent (Southgate) to approve of PFM’s dissemination agent proposal. A roll call vote was made. The vote passed with all communities in favor; the weighted vote was 90.733%.

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

a. December 2018 Updated MOR
A revised December 2018 Monthly Operating Report (MOR) was provided in the Board’s pre-meeting package (Attachment 9). At the January meeting, Veolia requested the MORs lag by one month for each of the Board meetings to provide sufficient time to receive and review DWTF laboratory data before compiling the data for the pre-meeting packets. As such, a revised December 2018 MOR was prepared and submitted in the Board package. The revisions include additional key performance indicators (KPIs) and holding spaces for future KPIs. Veolia welcomes feedback on the MORs.

Ms. Irving noted that DWTF was in compliance for January 2019. Reduction of solid volumes continues to improve.

Veolia is continuing to track repairs or other equipment replacements that are necessary. The following items were recently observed and will be considered in more detail for future work:

  • A crane in the Biosolids Building is in need of repair and/or replacement. The crane is needed for moving polymer feed totes. A crane inspection company is preparing repair costs. Means to remove the crane from the building will need to be considered; it may require a roof work.
  • The Employee Service Building had a water line rupture during the cold weather in early February. Reviews of the level of impact to the building’s integrity and the need to rehabilitate or mothball the building have started.

The MDEQ District Engineer, Thomas McDowell, was recently onsite to review the biosolids improvements and coordinate on other items. The Engineer was appreciative of the progress being made. Mr. McDowell had recently reviewed the 2018 Asset Management submittal and has requested a couple items for edits. Veolia will work with OHM for development of the amended submittal.

b. Updated Staffing Chart, dated February 7, 2019
The December 2018 MOR included a staffing chart for that reporting period. Ms. Irving provided a February 7, 2019 staffing chart (updated) for the Board’s review (Attachment 10). The chart shows the following vacancies: maintenance staff (4), collection system technicians (2), and operations staff (2). Veolia has increased pay rates for electricians and instrumentation team members to stay competitive in the local market.

Eight (8) positions, not included in the vacancies total, are currently on-boarding. A key position that will be filled starting next week is Assistant Project Manager. The position will be filled by Jason Tapp, who has worked at DWTF before and is well regarded in the area.

c. Feb 2019 Waste Sludge Storage Tank Recycle and Drain Line Collapse & Repairs
An incident report, inclusive of photos, was prepared by Veolia for the drain line collapse that occurred on February 4-5, 2019 (Attachment 11). The line collapse occurred near the sludge holding tanks. The event occurred during an uncharacteristically cold day, but was unrelated to the weather. The drain collapse is believed to be attributed to hydrogen sulfide induced corrosion.

HRC assisted with as-needed engineering services. Veolia dispatched RJ&J to complete the emergency repair on a time and material basis. The piping was replaced with HDPE. The total cost of the effort is not yet know, but will be provided once available.

d. Excess Solids – Brent Run Landfill Limit & MDEQ Inventory Updates
Veolia’s sludge hauler, Custom Ecology, received notice from Brent Run landfill on January 18, 2019 that they need to restrict DUWA’s loads to one load per day. The letter notice was included in the pre-meeting packet (Attachment 12). This restriction significantly affects DUWA’s ability to dispose of solids at historical costs. The solids will be disposed of at Woodland Meadows, but at a premium cost. The potential cost impact to DUWA is an additional $100,000 per month. Veolia and OHM are working on cost effective, short and long term solutions for biosolids disposal.

10. Request for Payment to Veolia Water for Additional Cost Implications for Excess Solids
As discussed at previous Board and Technical Committee meetings, additional costs were incurred due to the processing and disposal of the DWTF excess solids. The total cost is $275,980.33. Veolia prepared a breakdown of the costs, which was included in the pre-meeting packet (Attachment 13).

Ms. Irving noted the temporary centrifuge cost incurred by Veolia was more than what is being passed through to DUWA. The actual cost was roughly three times more than what is requested. Veolia held back costs because of the low effectiveness of the equipment while deployed.

Motion by Jim Taylor (Van Buren Township) and Roberto Scappaticci (Romulus) to pay Veolia Water for the excess solids costs. Vice Chairman Matakas (Allen Park) requested an amendment to the motion to call for the payment to be pulled from reserves. The amended motion was approved. Motion passed unanimously.

11. Treasurer’s Report
Treasurer Jason Couture (Taylor) presented the Treasurer’s Report that was included in the pre-meeting packet. The Treasurer’s Report included a Treasurer’s Report (Attachment 14), status of Community payments (Attachment 15) and an invoice register (Attachment 16).

a. Treasurer’s Report, period ending December 31, 2018
The Treasurer’s Report is DUWA’s first quarterly reporting of finances. The period end date is the fiscal year end (December 31, 2018). The report has not been audited. Plante Moran will review and validate as part of their future audit efforts.

Noted discussion points included:

  • The ‘Gain on Transfer of System’ shows the recording of debt of system and fixed assets related to the system. The currently presented loss will be removed once the fixed assets are recorded. This will be reflected in the audit report.
  • ‘Veolia’s O&M Services’ expenditure presents as over budget, but that is because the balancing O&M values are included on other line items. The current breakdown was based on Wayne County’s listings. Future reports will roll up these other O&M line items into the ‘Veolia O&M Services’ expenditure.
  • ‘Utilities-Electric’ cost was higher than predicted because Wayne County had deferred payment of a major electrical invoice.

b. Update on Community Payments of Monthly Assessment
Treasurer Couture noted the listings were mostly up-to-date through September 2018. Once all of the communities have paid through September, the assessment report will no longer be generated.

Some communities paid for October and November. For those communities, DUWA has released a credit memo.

c. Pending Invoices
The invoice register included request for payment for 28 invoices for a total of $1,591,407.80. Motion by Doug Drysdale (Riverview) and seconded by Roberto Scappaticci (Romulus) to pay the invoices. Motion passed unanimously.

12. Public Comment
There was no public comment.

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

14. Next Meeting Date: March 14, 2019 (9:00 AM; Taylor City Hall)
Vice Chairman Matakas (Allen Park) reminded the Board that the next meeting would be the Board Meeting on Thursday, March 14, 2019 (9:00 a.m. Taylor City Hall).

15. Adjournment
There being no other business, Vice Chairman Matakas (Allen Park) announced that a motion to adjourn would be in order. Motion by Rick Rutherford (Belleville) and seconded by Jim Taylor (Van Buren Township) to adjourn the meeting. Motion passed unanimously at 10:16 AM.

Meeting Minutes Prepared by:
Lambrina Tercala, DUWA System Manager

Attachments

1. Meeting Agenda
2. January 10, 2019 DUWA Board Meeting Minutes
3. System Manager Report for February 2019 Board Meeting (by OHM Advisors)
4. Riverdrive Interceptor MAFL Compliance Tracking Memo & Presentation (by OHM Advisors)
5. Memo Request to Authorize SCADA Integrator (by OHM Advisors)
6. Memo Request to Lock In Natural Gas Rates with Constellation (by OHM Advisors)
7. Memo Request for Equipment Disposal (Sale) of Obsoletely Switch Gear (by OHM Advisors)
8. Proposal for Dissemination Agent, dated January 11, 2019 (by PFM)
9. Amended Monthly Operating Report for December 2018 (by Veolia)
10. Updated Staffing Chart, dated February 7, 2019 (by Veolia)
11. Memo re: February 4/5, 2019 Waste Sludge Storage Tank Recycle and Drain Lines Collapse and Subsequent Repairs (by Veolia)
12. Letter to CEI from Brent Run Landfill re: Landfill Restriction, dated January 18, 2019 (by Brent Run)
13. Letter re: Excess Solids Expenses (by Veolia)
14. 2018 Treasurer’s Report (by DNS Financial Services)
15. Update on Community Payments of Monthly Assessment, dated January 31, 2019
16. Invoice Register, dated February 8, 2018 (by DNS Financial Services)