Find answers to questions related to the many facets of the DUWA organization: DUWA Overview, Acquisition of the Downriver System from Wayne County, System Manager and Staff, NPDES Permit Requirements, Service Agreement, etc.
DUWA Frequently Asked Questions (FAQ)
1. Why was the Authority created?
The Authority was formed in 2010 with the primary objective of providing a forum for the Downriver Communities to negotiate with Wayne County on a new Service Agreement which would replace the 1962 Agreement which was expiring. Once the County decided it wanted to get out of the business of providing wastewater services, the Authority began to focus on acquiring the sewer system on behalf of the 13 Downriver Communities.
2. What Communities are members of the Authority?
There are 13 Communities who are members of the Downriver Utility Wastewater Authority: Allen Park, Belleville, Brownstown Township, Dearborn Heights, Ecorse, Lincoln Park, River Rouge, Riverview, Romulus, Southgate, Taylor, Van Buren Township and Wyandotte.
3. Can a Downriver Community obtain wastewater service from the System without being a member of the Authority?
Yes. Any Community in the System can choose to be a “Customer” rather than an “Owner” by terminating its membership in the Authority. However, Customer Communities may be assessed a surcharge for being granted the right to use facilities that they do not own.
4. How does the Authority pay for its expenses?
Currently, DUWA assesses each Community based on their respective usage of the System. In addition, a portion of the operating revenue collected by Wayne County is paid to the Authority to cover transition costs associated with DUWA’s acquisition of the System. Once the transfer is complete, DUWA will collect revenue directly from the Communities served by the System to cover operating costs and debt for Capital Improvements.
5. How are the Officers of the Authority selected?
The DUWA Board elects four Officers (Chairman, Vice Chairman, Treasurer and Secretary) annually at the first meeting of the year. Officers serve a one year term.
6. How often does the Authority meet? When and where? Is DUWA subject to the Freedom of Information Act?
The Authority meets on the 2nd Thursday of each month at 9:00 AM in the Taylor City Hall (Council Chambers). All DUWA meetings are open to the public. As a public body, DUWA is subject to the Freedom of Information Act. See the “Contact Us” page of this Web Site for further information about filing a Freedom of Information Act request with DUWA.
Acquiring the Downriver System from Wayne County:
7. Why is the Authority purchasing the Downriver System? Didn’t the Communities already pay for the wastewater treatment plant?
Wayne County has indicated that it no longer desires to provide wastewater services, and wishes to sell the System. DUWA has offered to purchase the System partly to avoid a sale to a 3rd Party who might then recoup its purchase cost by raising rates. DUWA’s analysis shows that the System can be purchased by selling a new Revenue Bond without raising rates above historical projections to cover the debt service because of anticipated savings that will be achieved from a more efficient operation by a private contract operator. Although the Communities previously paid for the Downriver facilities, the County has asserted that it is the legal owner, and as such the County is legally entitled to sell the assets. Both the County and the Downriver Communities recognize that a lawsuit over ownership of the System would be lengthy and very costly.
8. How was the purchase price determined?
The $57.5 million purchase price was negotiated based on Wayne County’s assertion that the unfunded “legacy costs” (i.e. Pension and OPEB liabilities) for the Downriver System were approximately $60 million. The County advised that, in the absence of a sale of the System, those legacy costs would need to be recovered in the form of a sizable rate increase over a long period of time. The purchase price is far below the replacement cost, and is also much less than what was previously offered to the County by a 3rdParty.
9. When will the acquisition be completed?
DUWA and Wayne County are committed to trying to complete the transfer by in 2018. However, many actions will need to be completed quickly in order to meet that target date.
10. How will the Authority pay for the purchase?
DUWA plans to sell a Revenue Bond to generate the funds which will be used to purchase the System from Wayne County.
11. Will rates go up to pay for the purchase of the System?
DUWA’s financial analysis indicates that there will be sufficient savings to offset the new Revenue Bond debt service payments such that rates will not increase as a result of the purchase. However, it is likely that there will still be annual rate increases due to the escalation of operating costs for power, chemicals, labor, sludge hauling/disposal, and other factors. Rate increases on the order of 4% - 6% have been typical in recent years.
12. What happens to the existing debt for the Downriver System?
It is anticipated that the existing Downriver System debt will be transferred from the County to the Authority. The Michigan Department of Treasury must approve the transfer of debt in order for DUWA to acquire the System. The Downriver Communities will continue to make their regular debt service payments after the System is acquired by DUWA.
13. Do the Member Communities have to approve the acquisition for the transfer to take effect?
Each of the 13 Downriver Communities will be asked to officially vote on the Definitive Agreement between DUWA and Wayne County. The DUWA Articles of Incorporation determine the number of DUWA members that need to approve the Definitive Agreement transaction. Not all Communities may choose to be members of DUWA.
14. Who will operate and maintain the sewer system, and how was that decision made?
DUWA has received Proposals from the two largest private contract operations firms in the country. After evaluating the Proposals, DUWA decided to enter into contract negotiations with Veolia regarding day to day operation and maintenance responsibility for the System.
15. What will happen to the current Wayne County employees who operate the System today?
Veolia intends to offer employment to the existing Wayne County Downriver System employees. Each employee will have to decide whether to accept employment with Veolia if they want to continue to work for the System. Some employees may be able to find other jobs with Wayne County depending on their experience and qualifications; others may opt to retire or seek other employment.
System Manager and Other future DUWA Staff:
16. How will DUWA manage and administer the System?
DUWA hired OHM Advisors to serve as the Authority’s System Manager, and help finalize the Authority’s organization chart. DUWA’s preliminary chart shows a staff of 4 employees, including a Chief Engineer, a Chief Finance Office, an Administrative Assistant and a Billing Clerk, in addition to the System Manager.
17. When does DUWA anticipate hiring the System Manager?
The Authority hired OHM Advisors in September 2017.
18. Where will DUWA’s administrative offices be located?
Currently, the Authority receives mail at the Taylor DPW (25605 Northline Road). No decision has been made as to where the Authority’s permanent Administrative Offices will be located, but the Authority is considering establishing an office at the Wastewater Treatment Plant for its future employees.
NPDES Permit Requirements:
19. When will the new NPDES discharge Permit go into effect?
The new NPDES Permit was issued on November 1, 2017 and lasts for 5 years.
20. Will the NPDES Permit change as a result of the pending System acquisition by DUWA?
No. The Permit includes a provision which allows MDEQ to administratively transfer the Permit to the Authority.
21. How will DUWA handle the new requirements to reduce Wet Weather Flow Blending?
DUWA and Wayne County have identified a series of relatively low cost minor improvements which are expected to reduce the frequency of flow blending to satisfy the new Permit. The first step in the process will be to prepare and submit a plan and schedule for this work to MDEQ.
22. How will DUWA handle the new requirements to implement Asset Management?
Veolia’s scope of services includes requirements to develop and implement the new Asset Management requirements that are set forth in the NPDES Permit.
23. What does the new DUWA Service Agreement do?
The Service Agreement spells out the rights and responsibilities of both the Authority and the Member Communities. Basically, the Authority is obligated to accept, transport and treat wastewater from the Communities, and to meet all State/Federal regulatory requirements. DUWA also has responsibility to set rates, collect revenue and undertake capital improvements as necessary. The Communities must pay their share of operating costs and debt service, and limit their wastewater flows to the agreed upon maximum flow rates.
24. How does it differ from the old (1962) Wayne County Service Agreement?
Under the 1962 Agreement, the Communities were treated as “customers” to the System, and Wayne County was the sole decision maker for the System (e.g. rates, capital projects, staffing). Communities paid the bills but had no power to control costs.
25. Has the Service Agreement been approved and when will it go into effect?
Yes, all 13 Communities have approved the Service Agreement. It will go into effect when the System is transferred from Wayne County to DUWA.
26. Can a Community decide whether to be an “Owner” or a “Customer”?
All 13 Communities are currently members of DUWA, and under the existing structure, DUWA members are co-owners of the System. If a Community decides it would prefer to be a customer rather than an owner, it can do so by withdrawing from the Utility Authority. Customer communities (if any) may be assessed a surcharge on the standard rate being collected for operating the System. The decision to become a customer will need to be made in conjunction with consideration of the Definitive Agreement.
27. How does the Service Agreement handle rates and charges?
The Service Agreement specifies that the current Rate Methodology will remain in use for at least 5 years so as to preserve stability for the Communities. This means that rates will continue to reflect self-reported “base flow” (i.e. water consumption), plus a pro rata share of the “excess flow” (i.e. the difference between the total flow treated annually minus the sum of all base flow). Excess flow values will continue to be calculated as a 5 year average to account for flow variations which occur during wet and dry years.