System Transfer – From County to Community
On May 11, 2016, the Downriver Utility Wastewater Authority (“DUWA”) issued a Letter Of Intent to purchase the Downriver Sewage Disposal System (“DSDS”) from Wayne County for $57,500,000 subject to certain terms and conditions. Wayne County subsequently accepted the purchase offer, and the two Parties began work on a number of items that need to be finalized in order to transfer the System to the Authority.
The following is a compilation of the major tasks needing to be completed to accomplish the transfer:
• Adoption of a new Service Agreement between DUWA and the 13 Member Communities establishing the rights and responsibilities of all parties, including agreement that the Authority will accept, convey and treat wastewater generated in the Service Area and agreement that the Communities will pay the cost of operating the System under rates established by DUWA;
• Transfer of all outstanding debt for the System from Wayne County to DUWA, including the Judgment Levy debt which currently utilizes millage assessments as part of the revenue stream to retire the debt;
• Sale of a new Revenue Bond by DUWA to generate funds to be used for the initial purchase price of the System;
• Adoption of Sewer Use Regulations by DUWA to control and manage the character of wastewater allowed to be discharged into the System;
• Conduct a “due diligence” condition assessment of all assets being acquired, and identify deficiencies needing to be corrected prior to system transfer (if any);
• Negotiation of a “Definitive Agreement” which officially transfers responsibility for the DSDS from Wayne County to DUWA. The Definitive Agreement will address the transfer of existing contracts for goods and services, an inventory of all assets including equipment, vehicles and spare parts, transfer of all cash and reserves held by Wayne County on behalf of the System, disposition of current County employees including resolution of any unfunded Legacy Costs associated with Pension Plans and OPEB, transfer of all Real Estate including deeds, titles and easements, transfer of all intellectual property, acquisition of insurance coverage, resolution of responsibility for all pending claims, and transfer of Inter-Governmental Agreements between the DSDS and local facilities served by the System (e.g. Drainage Districts);
• Hire staff to manage and oversee the System, and negotiate a contract with firm qualified to operate and maintain the facilities;
• Secure a new NPDES discharge permit for the System from the Michigan Department of Environmental Quality with provisions to transfer such permit to DUWA as of the effective date of the acquisition of the System by the Authority;
• Approval of an Industrial Pretreatment Program to be administered by DUWA to control and regulate industrial waste discharges into the System.
The Parties have a goal to complete these action items to allow for the System to be transferred by October 1, 2017.