2019 August – Board Meeting Minutes

DOWNRIVER UTILITY WASTEWATER AUTHORITY

AUGUST 8, 2019 MEETING MINUTES

Taylor City Hall City Council Chambers

  1. Roll Call and Introductions

DUWA Chair Rick Sollars (Taylor) 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: Allen Park, Belleville, Ecorse, Lincoln Park, Riverview, Romulus, Southgate, Taylor, 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 DUWA Vice Chair Bill Matakas (Allen Park) and seconded by Doug Drysdale (Riverview) to approve the Agenda. Motion passed unanimously.

  1. Approval of Minutes from July 11, 2019 Board Meeting

Copies of the meeting minutes from the July 11, 2019 Board Meeting were distributed by email prior to the meeting (Attachment 2). Motion by Jim Taylor (Van Buren Township) and seconded by Dustin Lent (Southgate) to approve the minutes. Motion passed unanimously.

  1. Legal Update

DUWA Attorney Jim Fausone, of Fausone Bohn, provided the Legal Update.

  • The Davis v Southgate litigation case, where Bodman was re-assigned to DUWA, is nearing closure. Bodman provides monthly updates to DUWA, and says it is moving along. Settlement dollars are being held in Bodman’s trust fund. The teams expect the case will close in the next 2-3 months.
  • In the next month, the current Shared Service Agreement between DUWA and Wayne County will expire. There is talk about extending the agreement for 6 months to 1 year. The need for extension is mainly attributable to the SCADA split.
  • One of two closing escrows were provided a year ago as part of system transfer. DUWA is awaiting the second, a $500K Post-Closing escrow, for expenditures from Wayne County. The escrow is due in September, after the next Board meeting. Efforts are moving along as expected, and Fausone Bohn will continue to update DUWA.
  1. System Manager Update

System Manager Vyto Kaunelis, of OHM Advisors, provided a verbal summary of activities since the last meeting. A written summary was in the pre-meeting Board packet for the System Manager Report (Attachment 3), as well as a summary on biosolids efforts (Attachment 4) and insurance renewal projections (Attachment 5).

a. System Manager Report

System Manager Kaunelis noted the following highlights from the System Manager Report:

  • Blending Report: The scope of the blending work remains similar to what was previous expected. The Basis of Design is due to EGLE at end of this month. A meeting was held with HRC (as-needed engineer) regarding the draft report, and work is progressing well. Once available, the draft final report will be provided to the Technical Committee.
  • Collection System: CCTV work is underway. To date, no serious structurally issues identified. The Riverdrive Interceptor segment remains open. A varied approach is needed along the EC6 stretch because 1) an orifice plate is located at one end of the line and 2) the pipe stretch is long for standard CCTV equipment. AUI (Veolia’s CCTV subcontractor) is worried about the equipment getting stuck. Veolia is looking at the orifice plate to see if it needs to be temporarily removed.
  • DWTF –In general, operations are going well and equipment replacement work is underway. An area of future focus will be roof rehabilitation or replacements. The teams are working on a program for the roofs. Past reports note serious issues at select buildings. As such, investment is necessary. The teams are working on a program that will keep investments manageable over the years.
  • IPP: Recent on-site audit by EGLE went well.
  • SWRDDD Electric Bill Split: SWRDDD is working on an alternative proposal for cost splitting. They expect to make good progress over the next few months.
  • SCADA Split: The program is going well with no surprises. Eramosa is actively working on the design. On August 1, Eramosa completed a visit to DWTF to get detailed site information. DUWA and Eramosa will continue to coordinate with Wayne County and their consultants.

b. Biosolids Update

  • Veolia/Bill Hanley was present at the July 25 Technical Committee meeting. This permitted the Committee members to ask question on the progressive Design-Build approach. The Committee endorses the progressive Design-Build project delivery method. OHM and Veolia will work on managing expectations, as this delivery method does not provide a guaranteed maximum price until later in the design process. Receiving the price later in the project delivery may cause some confusion. It was also noted that a few southeast MI authorities and municipalities are currently completing their first progressive Design-Build project or have recently finish it – the listing included GLWA, WTUA and Ann Arbor.
  • The WIFIA Letter of Interest was submitted on time. EPA released a list of all interested parties. Total project funding request was $6.6B; available total funding is $6B. This appears to be positive for DUWA’s chances to receive funding.
  • Implementation of the project will include three major selections:
    1. Overall Capital Project Manager (CPM): This is the initial selection. A CPM firm, which is expected to be Veolia (Agenda Item 7C), will assist with the DB procurement process and beyond. A key driver with the selection of Veolia in this role is to ensure the project does not have a negative impact to O&M activities and staffing needs. Veolia has assured DUWA that this is part of their role and oversight as the CPM.
    2. Dryer Equipment Selection: There are three major manufacturers DUWA is considering, one of which is Kruger, which is owned by Veolia. Each of these manufacturers manufacture thermal heated dryers with slightly different means of drying. Veolia will not be included in Equipment selection review or discussions to avoid conflict of interest. OHM will take lead on Equipment RFP preparation.
    3. Design-Build Firm: The CPM will assist with leading RFP development.
  • Veolia is updating the pro forma costs for the project. The overall project scope and cost savings are similar to what was previously provided.
  • An anticipated schedule for the project was attached in the pre-meeting package (Attachment 4).

After the update, System Manager Kaunelis received and responded to questions from the Board. Discussion items included background data for the roof inspection work and Biosolids project financing.

c. Insurance Renewal Projections

System Manager Lambrina Tercala, of OHM Advisors, presented the indications for insurance renewal pricing to the Board (Attachment 5). It was noted that renewal for the first year may be extended from 12 months to 15 months as the 12-month period stops coverage in September. The 15-month coverage would permit the insurance renewal to better correlate with DUWA’s budget year.

  1. Requests for Authorizations

System Manager Lambrina Tercala, of OHM Advisors, provided the following requests to the Board.

a. Carryover from Wayne County: Raw Sewage Pumps 5 and 6 Rehab & HRC Final Invoice re SRF No. 5419-01

Several invoices related to the DSDS were missed despite Wayne County’s efforts to ensure invoices through the system transfer date were reviewed and processed for payment as soon as possible. The following two invoices relate to the DSDS and require payment. The pre-meeting package included backup information related to the work (Attachment 6).

  • System Specialties, Dated CY2018. Total Cost of $9,558.43. This work is associated with repair of Raw Sewage Pumps 5 & 6. Veolia has paid this cost directly to System Specialties to be able to engage them on other on-site work.
  • Hubbell, Roth & Clark, Inc., Invoice Dated September 4, 2018. Total Cost of $55,400. The work related to the completed Solids Complex Renovation SRF Project (work completed from July 2012 through April 2017). The services were performed from October 1, 2016 through April 11, 2017. DUWA recently received reimbursement from EGLE for the outstanding invoice.

Two motions were requested:

  • Motion No 1 – System Specialties: Motion by Dustin Lent (Southgate) and supported by Roberto Scappaticci (Romulus) to approve payment to Veolia for the passthrough cost of $9,558.43 in association with System Specialties outstanding 2018 invoices. Motion passed unanimously.
  • Motion No 2 – HRC: Motion by Roberto Scappaticci (Romulus) and supported by Dustin Lent (Southgate) to approve payment to HRC for Invoice No 0163577 (Final Invoice) of a total amount of $55,400 for services rendered associated with Solids Complex Renovation SRF project. Motion passed unanimously. 

b. Emergency, Other: Disposal of Grit related to CY2018 IPS Electrical Failure

An extraordinary amount of grit accumulated in the grit chambers due to the Influent Pump Station emergency and Secondary/Headworks Improvement work. Once the new IPS electrical system was placed online, Veolia engaged a vactor service to clear the channels of the grit. This was necessary to support Weiss’s warranty repair work. The total cost for grit removal is $17,880.00. The cost is associated with the IPS emergency and not SRF-eligible. The request for payment was provided in the pre-meeting Board package (Attachment 7).

Motion by Rick Rutherford (Belleville) and supported by Dave Flatten (Ecorse) to approve payment to Veolia for $17,880 for vactor services associated with accumulated grit due to recent construction efforts. Motion passed unanimously.

c. Capital Project: HNTB Invoice No 42 re SRF No. 5420-01

Project closeout is underway for the SRF Project No. 5420-01. HNTB is the engineer on the project. Invoice No 42 for a total cost of $118,450.37 for services rendered from March 30 through June 28, 2019 was provided in the pre-meeting package (Attachment 8). Greg Tupancy, of Wayne County, has been retained by DUWA via the Shared Services agreement. Mr. Tupancy assists with construction administration for the SRF project and recommends payment be processed.

Motion by Vice Chair Matakas (Allen Park) and supported by Doug Drysdale (Riverview) to authorize the System Manager to recommend payment and DUWA’s accountant to approve payment for a total invoice amount of $118,450.37. Motion passed unanimously.

  1. Requests for Professional Services Authorizations

System Manager Lambrina Tercala, of OHM Advisors, provided the following requests to the Board.

a. Renewal Extension of DNS Financial Services Accounting Contract

DNS Financials Service’s 1-year accounting contract expires on September 13, 2019. DNS has offered to continue engagement as DUWA’s Accountant. The compensation remains at $100 per hour for the first year, with the ability to negotiate at subsequent years. The contract term and duration is three (3) years from the effective date. There is no contract max. These terms are consistent with DUWA’s other professional advisor contracts. The contract was provided in the pre-meeting Board package (Attachment 9).

Motion by Jim Taylor (Van Buren Township) and supported by Dustin Lent (Southgate) to authorize the Chair or Vice Chair to engage DNS Financial Services as DUWA’s accountant with an effective date of August 8, 2019. A roll call was taken. Doug Drysdale (Riverview) abstained from the vote. Motion passed with all members present approving the contract authorization. Motion passed with 81.284% of the vote.

b. Amend Eramosa SCADA Split Contract for Hardware/Software Purchases

Eramosa’s final proposal for SCADA split services, dated July 10, 2019, was attached to the pre-meeting packet (Attachment 10). The pricing is less than the draft pricing based on reductions in hardware/software and total project contingency.

DUWA has approved engagement of Eramosa for transition planning, design and implementation services associated with the SCADA split. The currently authorized, total not-to-exceed contract price to Eramosa is $88,113.16. Hardware/software costs have not yet been authorized for the SCADA split. Hardware and software need to be procured for the split.

This request is for DUWA to amend the current contract of $88,113.16 to a not-to-exceed fee of $364,236.99. This total project cost includes the labor, hardware/software, and a 15% contingency. The total cost before contingency is $316,727.82.

It was noted that the aforementioned costs exclude the following:

  • The project cost does not include an annual support cost for the new software license. That cost is projected to be approximately $15k.
  • The project cost is only based on Eramosa’s work efforts. Electrical support will be necessary to reroute fiber/copper at the DWTF to the new network cabinet location, install power wiring, place new network cabling, etc. The current estimate for this ancillary work is $20k.

Motion by Vice Chair Matakas (Allen Park) and supported by Greg Mayhew (Wyandotte) to amend Eramosa’s contract to include hardware/software costs and 15% contingency associated with SCADA split project from $88,113.16 to $364,236.99 for a not-to-exceed fee. Motion passed with all members present approving of the contract authorization. Motion passed with 84.378% of the vote.

c. Biosolids Project Management – Procurement Phase Services by Veolia

Veolia has assisted DUWA in the last several months to identify the best alternative to reduce O&M expenses associated with the current status quo disposal costs. The alternative was identified as installation of a Biosolids Dryer Facility. The Technical Committee has endorsed this project type. To reduce O&M expenses, it is in DUWA’s financial interest to implement the new facility as quickly as possible.

DUWA expects to engage a progressive Design-Build (pDB) team for project delivery. Veolia prepared a proposal (Attachment 11) to assist DUWA with procurement phase efforts in the development of a pDB Request for Proposal, prospective PDB team interviews/evaluations, pDB Team recommendation, and contract negotiations. These services would commence immediately and are expected to be complete by yearend. Total cost for the work is $60,420.

Motion by Vice Chair Matakas (Allen Park) and supported by Doug Drysdale (Riverview) to authorize the Chair or Vice Chair to engage Veolia of North America for procurement phase services associated with the future progression Design-Build Biosolids Dryer Facility project at a lump sum cost of $60,420. Motion passed with all members present approving of the contract authorization. Motion passed with 84.378% of the vote.

  1. Contract Operator Update

Kelly Irving, Veolia’s Program Manager, provided the Contract Operator update.

a. Staff Spotlight: Duane Russow, Maintenance Manager 

Program Manager Irving introduced Duane Russow, Maintenance Manager, to the Board. Mr. Russow is responsible for leading the maintenance team at the DWTF. 

b. June 2019 MOR

A June 2019 Monthly Operating Report (MOR) was provided in the Board’s pre-meeting package (Attachment 12). Highlights from the summary and other updates included the following:

  • DWTF is in compliance. No bypasses occurred in June. Flows are coming down.
  • Select Primary and Secondary Tanks are undergoing routine maintenance. This type of work will be completed once per year. Work includes welding repairs and cleaning.
  • The solids centrifuges are in operation. There is a reoccurring issue with ventilation/cooling for one of the VFD drives. Maintenance staff have modified the unit to assist with cooling. A longer-term solution will need to be considered once the new (3rd) centrifuge comes online as part of the Biosolids project.
  • As noted under the System Manager section, Veolia’s CCTV subcontractor, AUI, cannot complete the EC6 CCTV stretch because of the orifice plate and the need for a longer cable length. Mike Tapp, Veolia’s Collection System Manager, is meeting with potential subconsultants to identify available equipment to complete the work.
  • Condition assessments are underway as part of Asset Management work efforts. The assessments include thermography, visual assessment, etc reviews. The assets will be identified as more-to-less critical as well. This information will be used as part of future capital improvement planning.
  • DWTF recently went through Veolia’s first annual safety audit. The audit went well and provided findings for the operation and maintenance staff to advance on.
  • The food-to-mass ratio was reviewed. A flux was noted due to glycol flows extending into June. It was a heavy season for glycol, which translates to revenue to DWTF.

Ms. Irving then provided and reviewed a handout related to Maintenance KPIs (Attachment 13).

c. Waste Management Disposal Agreement

Veolia has entered a 2-year agreement with Waste Management to provide all biosolids for disposal to Waste Management facilities. The agreement was provided to the Board as part of the pre-meeting package (Attachment 14). Veolia’s national procurement team worked to drive the disposal pricing down from current-day costs and also provide assurance that Waste Management would receive DUWA’s biosolids for the 2-year period, contingent on the terms of the agreement. 

d. MissDig Update

Under the pilot program, Veolia is receiving approximately 20 to 30 locate tickets per day. Of those, 7 to 10 require on-site locating. Veolia is using Korterra for ticket management, and has been happy with the system.

Motion by Vice Chair Matakas (Allen Park) seconded by Doug Drysdale (Riverview) to receive and file the Contract Operator Update deliverables. Motion passed unanimously.

  1. Treasurer’s Report

Treasurer Jason Couture (Taylor) provided the Treasurer’s Report.

a. Approval of FY2018 Audit 

The Audit Report was previously distributed (Attachment 15). The Report dates from system transfer to yearend, December 31, 2018. Beth Bialy, of Plante Moran, provided an overview of the audit findings at the last Board meeting.

Motion by Doug Drysdale (Riverview) and supported by Dustin Lent (Southgate) to approve the Audit Report. Motion passed unanimously. 

b. Quarterly Financial Statement – 20192Q 

Treasurer Couture presented the CY2019 second quarter financial statement. The report was included in the pre-meeting packet (Attachment 16). Treasurer Couture presented an overview of the quarterly report, which included general guidance on percent burn rate. In general, the burn rate is 50%. It was noted that items such as the Industrial Surcharges revenue is tracking ahead because of the extended glycol season, and also the Allen Park reimbursement is low (5%) because of timing differences. Interest earnings are higher than expected when compared to Wayne County’s previous accounting.

Motion by Vice Chair Matakas (Allen Park) and Greg Mayhew (Wyandotte) to receive and file the second quarter finance statement. Motion passed unanimously.

c. Pending Invoices 

Treasurer Couture presented the invoice register with supplemental register for a request for payment. The invoice registers are provide as Attachment 17. The invoice registers included request for payment for 30 invoices and 1 credit for a total of $1,649,879.08. The request for payment is $1,649,879.08. Motion by Roberto Scappaticci (Romulus) and supported by Dustin Lent (Southgate) to pay the invoices. Motion passed unanimously.

  1. Public Comment

There was no public comment.

  1. Other Business

a. Claim Addresses

System Manager Tercala reminded the Board that a Sewage Disposal System Event claim form is available on DUWA’s website and the form should be submitted to OHM’s Livonia office rather than DUWA’s mailing address.

Chairman Sollars made note that Matt Coppler (Lincoln Park; DUWA’s Secretary) would be taking another position in early October. Lincoln Park’s Finance Director will act as Lincoln Park’s interim representative at DUWA Board meetings. An interim Secretary will be needed for the future. Chairman Sollars requested for volunteers to engage OHM with their interest.

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

  1. Next Meeting Date: September 12, 2019 (9:00 AM; Taylor City Hall)

Chairman Sollars (Taylor) reminded the Board that the next meeting would be the Board Meeting on Thursday, September 12, 2019 (9:00 a.m. Taylor City Hall).

  1. Adjournment

There being no other business, Chairman Sollars (Taylor) announced that a motion to adjourn would be in order. Motion by Doug Drysdale (Riverview) and supported by Dustin Lent (Southgate) to adjourn the meeting.  Motion passed unanimously at 10:28 AM.

Meeting Minutes Prepared by:

Lambrina Tercala, DUWA System Manager

Attachments

  1. Meeting Agenda
  2. July 11, 2019 DUWA Board Meeting Minutes
  3. System Manager Report for July 2019 Board Meeting (by OHM Advisors)
  4. Biosolids Project Update (by OHM Advisors)
  5. Insurance Renewal Projections (by Aon)
  6. Request for Payment Authorization – Carryover from Wayne County
  7. Request for Payment Authorization – Disposal of Grit related to CY2018 IPS Electrical Failure
  8. Request for Payment Authorization – HNTB Invoice No 42 re SRF No. 5420-01
  9. Request for Professional Services Authorization – DNS Financial Services Accounting Contract
  10. Request for Professional Services Authorization – Eramosa SCADA Split Contract
  11. Request for Professional Services Authorization – Veolia CPM Procurement Phase Contract
  12. Monthly Operating Report for June 2019 (by Veolia)
  13. Maintenance KPIs (by Veolia)
  14. Waste Management Disposal Agreement (by Veolia)
  15. FY2018 Audit Report (by Plante Moran)
  16. 2019 Second Quarter Financial Statement (by DNS Financial Services)
  17. Invoice Registers, dated August 1 and 5, 2019 (by DNS Financial Services)