DOWNRIVER UTILITY WASTEWATER AUTHORITY
APRIL 16, 2020 MEETING MINUTES

Taylor City Hall City Council Chambers

1. Roll Call and Introductions

DUWA Chair Gail McLeod (Allen Park) called the virtual meeting to order at 9:04 AM and asked for roll call to be taken. At the time of roll call, voting representatives were in attendance from 11 communities: Allen Park, Belleville, Brownstown Township, Dearborn Heights, Ecorse, 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). Motion by Bill Turner (Brownstown) and seconded by Greg Mayhew (Wyandotte) to approve the Agenda. Motion passed unanimously.

3. Approval of Minutes from March 26, 2020 Special Board Meeting

Copies of the meeting minutes from the March 26, 2020 Special Board Meeting were distributed by email prior to the meeting (Attachment 2). Motion by Jim Taylor (Van Buren Township) and seconded by Doug Drysdale (Riverview) to approve the minutes. Motion passed unanimously.

4. Legal Update

Attorney Andrea Hayden, of Fausone Bohn, provided the Legal Update.

a. Ratification of Shared Services Agreement Extension

Attorney Hayden reviewed the request for the ratification of the Shared Services Agreement extension between DUWA and Wayne County (Attachment 3). On October 10, 2019, the Board approved a First Amendment to the Shared Services Agreement with Wayne County extending the duration of the Agreement until April 17, 2020 to accommodate SCADA system work being completed by both DUWA and the County. In early 2020, both DUWA and the County recognized the need to extend the Agreement for an additional six months in order to complete the ongoing SCADA system work by both parties, and began drafting a Second Amendment. It was then discovered that Wayne County’s executed First Amendment had already included the October 17, 2020 date rather than the April 17, 2020 date. All other terms and conditions of the Amendment are identical to the Amendment executed by DUWA on October 10, 2019. The October 17, 2020 date was contemplated by the Second Amendment that the parties were pursuing, thus the most efficient way to address this error is for DUWA’s Board to ratify the version of the First Amendment executed by Wayne County.

Attorney Hayden requested a motion to ratify the First Amendment to the Shared Services Agreement executed by Wayne County on December 19, 2019 extending the date of the Agreement to October 17, 2020. Motion by Roberto Scappaticci (Romulus) and supported by Rick Rutherford (Belleville) to ratify the First Amendment to the Shared Services Agreement. Motion passed unanimously. 

5. 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 4), as well as a summary on the Biosolids Dryer Facility Project Delivery (Attachment 6).

a. System Manager Report

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

• EGLE approved the basis of design on the Blending Improvements project. A kick-off meeting was held and it was decided that Veolia could assist with the majority of the implementation activities at the DWTF to reduce costs and HRC will assist with specific design activities as a part of a reduced scope.
• A PFAS draft action plan has been initiated. This action plan will help DUWA track how industrial customers are minimizing PFAS in their effluent.
• The March 28^th rain event initiated blending operations at the DWTF. All worked well and within permit requirements. DUWA strives for 6 or fewer blending occurrences per year.
• The WIFIA loan application was submitted and an initial call with the EPA was held to review the application package. A second call with the EPA is scheduled for April 17, 2020 to review the completeness of the submittal and address any additional information required.
• Quotes have been received for the SCADA system implementation project. The quotes are consistently higher than what was recommended by the SCADA Integrator, but it is anticipated the currently authorized project contingencies will compensate. The current travel restrictions from Canada, due to COVID, may impact the project’s schedule.
• The Alkali Sewer Rehabilitation project is almost ready for bid phase. It is expected that work will begin in a few months.
• The emergency generators have experienced some failures of their control equipment. In-kind replacements may be relatively expensive. Thus, it may be worth considering whether the original intent of the design could be modified/simplified to reduce costs. There is a motion to approve HRC to perform a study to evaluate this possibility.
• The CCTV sewer inspection plan was presented to the Technical Committee. No comments were received so the plan will proceed as presented.
• DUWA received a SEMCOG grant to improve and update the GIS. Various improvements were identified and will be prioritized to be completed as part of the grant in addition to the requirements set by SEMCOG.
• Plante Moran has begun the finance audit process.
• The draft FY2021 rate package has been developed and includes an adjustment in flows as requested by Ecorse due to a large water main break at U.S. Steel. This adjustment did not have a major impact on customers.
• The Trenton Channel dredging project is considering use of the DWTF for treatment (versus direct discharge). This could generate a significant source of additional revenue during the duration of the project. This potential revenue is not assumed in the Rate Package, as the timing of the dredging process is unknown.

 b. COVID19 System Considerations

• The COVID19 pandemic has resulted in changing work operations and communications. Plant operations have adapted well. Temporary and permanent industrial closures are being tracked to later analyze the impacts to the system as a result of COVID19. Flexibility in the rate stabilization fund will be used to address flow impacts as they are better defined.

 c. Future Rate Methodology Review

• City of Taylor requested the DUWA Board begin to move forward with assessing the current rate methodology (Attachment 5). The desire is for a fair rate methodology for all.
• The current rate methodology was used with Wayne County and is in place for 5 years after the system transition date (per the system Service Agreement). (DUWA is currently ~1.5 years into system ownership).
• It is desired to understand the structure of a new rate methodology by December 2021. This will allow time for the communities to transition between the new and old methodologies.
• Current considerations for moving forward a new rate methodology included:
  • GLWA is in the process of changing their rate methodology and it would be helpful to hear about their process and lessons learned as a guide for DUWA during this process.
  • A rate consultant should be procured to assist with this effort.
  • An ad hoc team should be formed to guide the process. Multiple communities expressed that they would like representatives from their communities on the ad hoc team.
    • Keith Boc (Taylor) was especially interested in having representation from Taylor as Taylor is the largest user.
    • Roberto Scappaticci (Romulus) mentioned that there should be representation from both the largest and smallest users.
    • Jim Taylor (Van Buren Township) suggested having a financial and technical representative from each community on the team.
    • It was noted that the ad hoc team should not be too large where work efforts would be stalled or inhibited.
      • Consider having separate financial and technical committees, and then leads from each committee can share and review ideas.
    • Chairperson McLeod (Allen Park) suggested using the existing financial and technical committees for this task.
    • System Manager Kaunelis stated that the expectation is for all communities to participate in discussions and should consider GLWA’s method as they are considering both flow and strength in the new rate methodology.
    • System Manager Lambrina Tercala, of OHM Advisors, will provide a list of the current members of the ad hoc team to the Board for review and to offer suggestions for additional members.
    • The Board would like to review and approve the ad hoc team at the next Board meeting to formalize the team.

d. Biosolids Dryer Facility Progress Report

• Work has begun on this project as Walsh received its Notice to Proceed. A project summary was provided as part of the pre-meeting packet (Attachment 6).

6. Requests for Authorizations

System Manager Tercala provided the following requests to the Board.

a. Contract Amendments for Plante Moran and DNS Financial Services

Plante Moran acts as DUWA’s financial consultant and is operating under its authorized proposal for a not-to-exceed fee of $75,000 through December 31, 2021. DNS Financial Services acts as DUWA’s accountant and is operating under a three-year contract executed on August 8, 2019. Doug Drysdale (Riverview) of DNS Financial Services and Beth Bialy of Plante Moran have provided great value during the system transition through start up and have great historical knowledge of the system. They have also been instrumental in supporting the WIFIA financing and Industrial Pretreatment Program funding efforts, which were not considered in their existing authorizations. A proposal for Plante Moran and contract amendment for DNS Financial Services are requested for $40,000 per consultant (approximately $15,000 for IPP efforts and $25,000 for WIFIA efforts) (Attachment 7). The fees would be funded by both cash reserves and FY2020 rate package.

System Manager Tercala noted that DNS Financial Services is billed on an hourly basis and the Amendment states that compensation shall not exceed $46,000 per year unless authorized by the DUWA Board, with the exception of calendar year 2020 where the compensation shall not exceed $86,000. Chairperson McLeod (Allen Park) requested this to be noted in the motion.

Roberto Scappaticci (Romulus) asked whether these are additional funds on top of the money that was allocated as part of last month’s WIFIA Forced Account. System Manager Tercala stated the funds would be pulled from the approved-Forced Account ($250k), and the proposal and contract amendments allows for the contracting mechanism to bill for their services. No additional funds were requested.

Two motions proceeded for the Plante Moran proposal and DNS Financial Services contract amendment after the discussion.

Motion by Dustin Lent (Southgate) and supported by Dave Flaten (Ecorse) to authorize the Chair or Vice Chair to authorize the Plante Moran proposal for an additional $40,000 in association with additional Financial Consultant efforts. Motion passed unanimously, with Doug Drysdale abstaining from the vote (see Agenda Item 10).

Motion by Jim Taylor (Van Buren Township) and supported by Dustin Lent (Southgate) to authorize the Chair or Vice Chair to execute Amendment No 1 to DNS Financial Services contract for a not-to-exceed fee of $86,000 for CY2020 efforts in association with additional Accounting efforts. Motion passed unanimously.

b. HRC Task Orders

HRC acts as DUWA’s As-Needed Engineering Consultant. Under DUWA’s As-Needed contract, HRC has recently assisted with preparation of the Basis of Design for the on-going blending minimization work. Three distinct task orders were presented in the pre-meeting packet (Attachment 8) for the Board’s awareness and/or authorization.

Informational: Limited Assistance with Biosolids Dryer Facility Project

Walsh, DUWA’s DBE firm, for the Biosolids Dryer Facility has begun submitting Requests for Information (RFIs) for historical documents related to the existing biosolids processes and/or building. OHM Advisors has authorized HRC for a not-to-exceed fee of $5,000 to support DUWA in responding to RFIs. The authorization is within the System Manager’s authorizing limits per Bylaw Article V, Section 4, paragraph (b).

Request for Task Order Authorization Associated with Emergency Generator Study

It has been noted that there have been recent system control failures with the DWTF’s emergency generators. Replacements and system upgrades come at high costs; thus, the teams are considering the value of the expenses and the needs and functionality of the emergency generators. OHM Advisors reached out to HRC for a proposal to perform an engineering study to assess the DWTF’s emergency power needs and recommendations for system repair and/or replacement. The proposed fee is $14,075.

Motion by Roberto Scappaticci (Romulus) and supported by Greg Mayhew (Wyandotte) to authorize HRC for a $14,075 task order associated with the emergency generator study, which would be completed under the terms and conditions of the as-needed engineering contract. Motion passed unanimously.

Request for Task Order Authorization Associated with Detailed Design for Blending Minimization Work

EGLE approved the Basis of Design report associated with Control Measures A and C in support of the blending minimization work, so engineering design and construction can proceed. OHM, HRC, and Veolia met to discuss alternatives for project delivery. Based on the team’s feedback, the best value to DUWA is to proceed with a team of HRC as the engineer and Veolia as the implementer.

The proposed cost for HRC’s task order is $17,420. The pre-meeting packet included a 20% contingency for the authorization, for a total fee of $20,905. The 20% contingency includes efforts for additional work that will likely be required to address Control Measure C after the initial task work is completed.

• Keith Boc (Taylor) made comment the 20% contingency is high for engineering design and he does not want to get in the habit of approving 20% contingencies in the future.
• Jim Taylor (Van Buren Township) asked whether the contingency matches the complexity of the task. System Manager Kaunelis noted that they have a good understanding of the efforts needed for Control Measure A, but still have some questions on the design recommendations from the study on the Upper Tunnel, and thus do not yet know the exact effort required for this task. System Manager Kaunelis stated they could come back to the Board for another fee approval once they have a handle on the Upper Tunnel design improvements.
• Dustin Lent (Southgate) recommended reducing the contingency to 10%, and then if more money is needed to complete the work, they can come back to the Board for request. Chairperson McLeod (Allen Park) requested the motion to authorize HRC be reduced to 10% (overall) for HRC’s task order. Keith Boc (Taylor), Dustin Lent (Southgate), and then the Board at large supported.
• Kerry Morgan (General Council for Riverview) noted that there is a small difference ($1,743) between the 10% and 20% contingencies for this Task Order.

Motion by Roberto Scappaticci (Romulus) and supported by Rick Rutherford (Belleville) to authorize HRC for a $19,162 task order, which includes 10% contingency, associated with the blending minimization engineering effort. The work would be completed under the terms and conditions of the as-needed engineering contract. Motion passed unanimously.

7. Contract Operator Update

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

a. February 2020 MOR

A February 2020 Monthly Operating Report (MOR) was provided in the Board’s pre-meeting packet (Attachment 9). Highlights from the summary and other updates included the following: 

• February operations were in NPDES permit compliance, with no large rain events.
• The March 28^th rain event required primary bypassing the first day and secondary bypassing for 2 more days. Operators reduced wet well levels in preparation for the rain event and there was great coordination between the operators.
• Centrifuge #2 is currently getting inspected for repairs. Centrifuge #1 is currently running 24/7 and belt presses are available for backup if needed.
  • Jason Tapp (Veolia) noted that the built-in protection device for high vibration caused the shutdown of Centrifuge #2. Alfa Laval is performing (off-site) inspection and is preparing a detailed report for the necessary repairs and costs. Alfa Laval is currently estimating a $45k repair cost and 3-week turnaround time. Veolia will bid the repairs out to other vendors, where applicable.
• The maintenance team is doing great work, much of which is completed in-house without the need for a contractor.
• Plant records from Wayne County were moved to the warehouse.
• Veolia is recruiting for a third collection system person. However, recruiting is currently at a standstill due to the COVID19 pandemic.
• The Wyandotte Fire Department performed a walkthrough of the site to identify any potential safety hazards.
• Veolia is tracking DWTF’s electrical consumption to identify controls or protocols that can be optimized to reduce consumption, and thus costs. The highest electrical consumption occurs during large rain events when SWRDDD’s Pump No 5’s pump station and DWTF’s pumps are operating.

Chairperson McLeod (Allen Park) requested that page numbers be added to future MORs.

b. Veolia’s Approach to Emergency Planning (COVID19)

Veolia has increased cleaning frequency and is performing disinfection spraying. They have decreased onsite staffing by rotating schedules for employees. All employees are provided cloth masks. One employee has been hospitalized. Veolia is actively working with procurement services to ensure no interruption of PPE or chemical deliveries to the DWTF.

8. Treasurer’s Report

a. Non-Residential Unit (NRU) Billings

Beth Bialy, of Plante Moran, presented the non-residential unit (NRU) billings items. The commodity and debt rates are arrived at in the FY2021 Rate Package. The NRU fee has been the same for many years.  Communities self-report their NRU units each month on the same form used to report base flow The NRU surcharge fee is paid on a monthly basis. This surcharge was in place at system transfer and so it appears the charge is also subject to the provision related to keeping the rate methodology the same after system transition, however the reporting needs to be consistent and accurate. There have been inconsistencies with NRU reporting amongst the communities as there is some confusion in the NRU definition. A residence is defined as a structure designed for year-round habitancy with an average occupancy longer than 2 consecutive months.

Accountant Doug Drysdale (DNS Financial Services; Riverview) will be sending out a survey next week to each community asking how they count their NRUs and whether the surcharge fee is passed down to the NRUs or absorbed by the community. As the NRUs do not contribute a huge portion to the overall revenue, DUWA’s Finance Committee contemplated rolling this into the commodity rate – assuming legal requirements permit.  Due to the prohibition against changing the rate structure for 5 years and not having studied the legal requirements yet, the conclusion was to get all of the communities reporting consistently so that we have a good base from which to start in regard to any future changes in the methodology. 

• Keith Boc (Taylor) does not agree with the NRU fee being a part of the 5-year consistent rate methodology. Mr. Boc suggested stopping self-reporting or requiring auditing if reporting is not corrected.
• Dustin Lent (Southgate) thought it may be worthwhile to lookback and reimburse communities that overpaid and correct for the communities that underpaid. Kerry Morgan (General Counsel, Riverview) recommended the Board should focus on setting up a fair and accurate system for future reporting, as opposed to a lookback.
• Chairperson McLeod (Allen Park) expressed concern on the impact to small business owners.

July 1, 2020 is the due date for corrected reporting.

b. Draft FY2021 Rate Package (July 1, 2020 – June 30, 2021)

Accountant Doug Drysdale presented the FY2021 Rate Package (Attachment 10). It was presented to the Finance Committee on April 1, 2020 and minor adjustments were made thereafter. Accountant Drysdale highlighted the following items in the Rate Package:

• The operating expenses are lower than those in FY2020.
• The first year of princial payment for transfer bonds was $1.3M.
• Capital outlay decreased.
• Other revenues decreased from $1.8M last year to $1.6M this year.
• AmeriCane Sugar will be closing its plant in Taylor, and thus, decreasing DUWA’s IPP revenues by $150k-$200k per year.
• US Steel will decrease its flows as it shifts operations, and other industrial users are not at full strength due to COVID19.
• Projected base flow volume is 1.5M and excess flow volume is 1.3M.
• SRF debts are included and billed to each community based on their 5-year total average flow volume. Adjustments were made to Ecorse’s flows by request. Transfer debt is part of the commodity rate.
• DUWA is within the rate covenant ratio requirements of the master bond ordinance.
• The total, all-inclusive rate increased is 4.69%.

c. Pending Invoices

DUWA’s Treasurer Jason Couture (Taylor) presented the invoice register for a request for payment. The invoice register was provided in the pre-meeting packet (Attachment 11). The invoice register included 21 invoices due for a total of $3,790,086.77. Largest invoices included those to US Bank for bond payment, Veolia for O&M services, Eramosa for SCADA services, and Wyandotte for utilities. Motion by Dave Flaten (Ecorse) and supported by Roberto Scappaticci (Romulus) to pay the invoices. Motion passed unanimously. 

9. Public Comment

There was no public comment.

10. Other Business

Accountant Doug Drysdale (DNS Financial Services; Riverview) noted that he needs to abstain from voting due to conflict of interest during the motion authorizing the Chair or Vice Chair to execute Amendment No 1 to DNS Financial Services contract. Record will show Drysdale abstains. 

Chairperson McLeod (Allen Park) hopes everyone is staying well during this pandemic.

11. Next Meeting Date: Thursday, May 14, 2020 (9:00 AM; Taylor City Hall, pending shelter-in-place order is lifted)

Chairperson McLeod (Allen Park) reminded the Board that the next meeting would be on Thursday, May 14, 2020 (9:00 a.m. Taylor City Hall, pending shelter-in-place order is lifted).

12. Adjournment

There being no other business, Chairperson McLeod (Allen Park) announced that a motion to adjourn would be in order. Motion by Roberto Scappaticci (Romulus) and supported by Greg Mayhew (Wyandotte) to adjourn the meeting. Motion passed unanimously at 11:03 AM.

Meeting Minutes Prepared by:
Lambrina Tercala, OHM Advisors, DUWA System Manager

Attachments

1. Meeting Agenda
2. March 26, 2020 DUWA Special Board Meeting Minutes
3. Wayne County Shared Services Agreement Extension Request (by Fausone Bohn)
4. System Manager Report for April 2020 Board Meeting (by OHM Advisors)
5. Rate Methodology Revision Request (by City of Taylor)
6. DUWA Biosolids Dryer Facility Monthly Progress Summary (by Veolia)
7. Request to Amend Plante Moran (DUWA’s Financial Consultant) and DNS Financial Services (DUWA’s Accountant) Contracts
8. Request to Authorize Task Orders to HRC (DUWA’s As-Needed Engineering Consultant)
9. Monthly Operating Report for February 2020 (by Veolia)
10. DUWA FY2021 Rate Package
11. Invoice Register, dated April 9, 2020 (by DNS Financial Services)