DOWNRIVER UTILITY WASTEWATER AUTHORITY

JULY 9, 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 9:03 AM and asked for roll call to be taken. At the time of roll call, voting representatives were in attendance from 8 communities: Allen Park, Belleville, Lincoln Park, Riverview, Romulus (via conference call), Southgate, Taylor, 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). Two amendments were made by System Manager Lambrina Tercala (OHM Advisors) to the agenda under Item 6: Requests for Authorizations and Approvals. Item 6.d. pertains to the Package Liability Policy and Insurance Extension and Item 6.e. pertains to the WIFIA Credit Rating Approval and Publication. Motion by Dustin Lent (Southgate) and seconded by James Krizan (Lincoln Park) to approve the amended Agenda. Motion passed unanimously.

3. Approval of Minutes from June 11, 2020 Board Meeting

Copies of the meeting minutes from the June 11, 2020 Board Meeting were distributed in the pre-meeting packet (Attachment 2). Motion by Rick Rutherford (Belleville) 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. General Counsel Monthly Report

Attorney Hayden provided a verbal summary of the monthly legal update. A written summary was provided in the pre-meeting Board packet (Attachment 3). Attorney Hayden noted the following highlights from the monthly legal update:

• A contract was prepared with Inland Waters Pollution Control for the Alkali sewer rehabilitation project.
• A contract was prepared with PSI for the roofing inspection and design services.

5. System Manager Update

System Manager Tercala 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).

a. System Manager Monthly Report

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

• HRC has begun work on the blending design efforts for Control Measure A. After further review of the value of Control Measure C, it has been determined that Control Measure C would not have a significant impact on reducing the frequency of blending events. A technical memo was submitted to EGLE for review with the recommendation to defer or possibility eliminate the Control Measure C improvement. Pending EGLE’s approval of the recommendation, this reduction in improvements and analysis could save several hundred thousand dollars.
• The SCADA system implementation has been completed. This project is no longer eligible for WIFIA funding due to the fact that a portion of the work was completed by a contractor that failed to meet the prevailing wages requirement. This project has been removed from the WIFIA loan.
• As a part of SEMCOG’s grant to improve the GIS, an abandoned sewer at Eureka and I-275 was identified. It is unclear whether this sewer was filled or bulkheaded. The next step is to work with MDOT to determine if this sewer was properly abandoned.
• Lincoln Park, by request of information, provided a “First Year in Review” report on how the system is performing since the transition from Wayne County.
• As a part of the WIFIA loan process, Fitch provided DUWA with an initial credit rating of “A” Stable, which is an improvement from last year.
• The Non-Residential User (NRU) town hall was held to clarify the procedures to improve consistency of NRU reporting.

b. Rate Consultant RFP and Selection Committee

A draft RFP for Rate Consultant services was provided to both the Board and Technical and Legal Committee members for review, and the RFP has now been updated based on Board and Committee feedback (Attachment 5). The RFP includes the scope of work, minimum insurance requirements, background on debt and commodity rates, and mandates that the existing rate methodology must be considered and analyzed as an option.

Several Board members have expressed the desire to engage a Selection Committee to support the review and recommendation of a Rate Consultant. The Selection Committee would review and score proposals, hold interviews, and provide a recommendation to the Board. The Selection Committee is proposed to include OHM Advisors, Fausone Bohn, Plante Moran, and limited Board Commissioners. Several Board Commissioners have expressed interest in being a part of the Selection Committee, including Van Buren Township, Lincoln Park, and Southgate. The motion was amended to include Lincoln Park. Another option discussed is to allow the System Manager to review and recommend a Rate Consultant independently.

Chairperson McLeod (Allen Park) stated she would prefer to have a Selection Committee to select a Rate Consultant, and other Board Commissioners agreed. System Manager Tercala noted that there was some interest in allowing Dick Hinshon to participate in the Selection Committee as he was previously a technical advisor and helped with the determination of the existing flow rate methodology. It was noted that Dick Hinshon has interest and availability to participate, but he would need professional insurance. System Manager Tercala suggested that he could be hired on as a part time employee for OHM Advisors so he would have professional insurance. Keith Boc (Taylor) and Chairperson McLeod (Allen Park) have both enjoyed working with him in the past and noted that he has a wealth of knowledge.

Motion by Dustin Lent (Southgate) and supported by Rick Rutherford (Belleville) to authorize the System Manager to post the RFP to solicit proposals from interested Rate Consultants. Motion passed unanimously.

Motion by Keith Boc (Taylor) and supported by Rick Rutherford (Belleville) to approve the appointment of Selection Committee members from OHM, Fausone Bohn, Plante Moran, Van Buren Township, Lincoln Park, and Southgate to jointly recommend a Rate Consultant for DUWA’s approval. Motion passed unanimously.

c. Biosolids Dryer Facility Project

i. Monthly Progress Report

The biosolids dryer facility monthly progress report is provided in the pre-meeting Board package (Attachment 6). The project is tracking on budget and on schedule. Kruger’s 60% design has been reviewed. The 30% Basis of Design Report has been submitted. The 60% design submittal from the dryer equipment manufacturer has been received. The 30% cost model has been completed. 

ii. 30% Cost Model (Phase 2)

The 30% cost model has been completed and was reviewed with the Technical Committee (Attachment 7). The contingency is currently around $900k and is based on the risk register, but this number may decrease depending on the cost for the subcontractor markup by Walsh. The total project cost has increased, but other WIFIA project costs have decreased.

iii. Kruger Request for Marketing

Kruger is requesting DUWA’s approval to provide a brief write-up about the biosolids project on their website and to explicitly state DUWA by name (Attachment 8). The press release approval form was provided in the pre-meeting Board packet (Attachment 9). Hearing no objections, this was approved by the Board.

6. Requests for Authorizations

System Manager Tercala provided the following requests to the Board.

a. Alkali Sewer Construction Services

i. Inland Waters as Contractor

The Alkali Sewer Rehabilitation project involves the rehabilitation of approximately 450 linear feet of 60-inch diameter brick sewer and construction of a new gate chamber of an existing SWRDDD-owned 72-inch sewer to assist with dry weather flow bypass. At the June Board meeting, the Board approved Inland Waters’ proposal with the intent to enter into contract negotiations. Fausone Bohn’s team has developed a contract which now requires Board approval (Attachment 10).

Motion by James Krizan (Lincoln Park) and supported by Roberto Scappaticci (Romulus) to authorize the Chair or Vice Chair to execute the agreement with Inland Waters Pollution Control, Inc. for a fee of $1,442,475 in association with the Alkali Sewer Rehabilitation project. A roll call vote was taken and the motion passed with 78.1% of the vote. 

ii. Contingency Authorization

There was discussion at the June Board meeting to allow the System Manager to approve up to 10% in contingency costs for a not-to-exceed cost of $144,248.00 during the Alkali Sewer Rehabilitation construction work. A memorandum summarizing this issue was provided in the pre-meeting Board packet (Attachment 11). This was suggested to minimize the potential for cost overruns due to delays. It is possible that the Contractor could run into unexpected issues during construction such as worsened condition of the sewer (worse than what was seen during the 2018 inspection) and/or poor weather conditions that could increase the duration of bypass pumping. As issues arise in the field, the System Manager could approve contingency costs up to 10% of the project cost so that the Contractor would not have to wait until the next Board meeting to receive approval for any necessary contingency costs.

The approval process would be a multi-layer process requiring approval from various entities. The Project Engineer (HRC) will first review the change order followed by the System Manager. If the System Manager determines the change order request is valid, it will be forwarded to the General Counsel (Fausone Bohn) to confirm that the request is compliant with the contract documents. If it is compliant, the System Manager will obtain approval from the Chair and Vice Chair for execution.

Keith Boc (Taylor) thought that allowing the System Manager to approve an amount up to $144k was high, but Roberto Scappaticci (Romulus) noted that he had made this suggestion at the last Board meeting to avoid delays which would potentially cost DUWA even more. Greg Mayhew (Wyandotte) agreed noting that delays could cost DUWA more than the contingency amount. Chairperson McLeod (Allen Park) agreed and reminded the Board that multiple entities would be reviewing the requested contingencies prior to approval to ensure the Contractor is not asking for funds for unnecessary work. Dustin Lent (Southgate) mentioned that the Board is tasked with reviewing all financial decisions and the Board hired trusted consultants to assist with these decisions in determining what the most necessary and cost-effective options are to complete the work in a timely manner.

Motion by James Krizan (Lincoln Park) and supported by Roberto Scappaticci (Romulus) to authorize the System Manager (OHM Advisors) to approve Contractor-requested contingency costs up to 10% of the project cost for a not-to-exceed cost of $144,248.00 for the Alkali Sewer Rehabilitation project. Motion passed unanimously. Dustin Lent (Southgate) initially supported this motion, but then noted that as the Vice Chair, he must abstain from the vote as he is also on the SWRDDD Board and wanted to avoid any conflict of interest. Thus, he proposed that the Board Secretary be authorized to approve any contingency costs instead of the Vice Chair.

b. Repair of Influent Pump Station Grippers (WIFIA Project #4-19)

The need to repair the Influent Pump Station (IPS) gripper components was identified as a part of the small capital budget planning for the FY2021 rate year. Two options for repair were provided by Veolia, and Option 1 is proposed (Attachment 12). The scope of work includes providing parts to rebuild the IPS gripper and trolley and furnish a new updated control panel. This equipment supports the 3-inch bar screens at the plant’s headworks. Ovivio is the subcontractor to Veolia for this project.

DUWA’s small capital budget includes $150k for the IPS gripper repair, which includes budget for freight and handling. This project is WIFIA eligible, and was recommended by the Technical Committee.

Motion by Greg Mayhew (Wyandotte) and supported by Rick Rutherford (Belleville) to authorize Veolia for a not-to-exceed fee of $150,000 in association with repair of the gripper components at the IPS. Motion passed unanimously.

c. Rebuild of Tunnel Pump No. 3 (WIFIA Project #4-7)

Routine repair of the Tunnel pumps is required to ensure proper operation and extended asset life. Repair of one pump per year has been budgeted in DUWA’s FY2021 small capital budget. The scope of work includes inspection and repair of the pump by a licensed pump representative. For this pump, Kennedy Industries will act as a subcontractor to Veolia.

DUWA’s small capital budget includes $64k for pump repair, and Veolia is requesting $63,800 (Attachment 13). This project is WIFIA eligible, and was recommended by the Technical Committee.

Motion by Dustin Lent (Southgate) and supported by James Krizan (Lincoln Park) to authorize Veolia for a not-to-exceed fee of $63,800 in association with repair of Tunnel Pump No. 3. Motion passed unanimously.

d. Package Liability Policy and Insurance Extension

DUWA’s current liability insurance policy expires at the end of September. There is a desire to extend this policy to allow it to align with the budget year and other insurance policy end dates. The current insurance provider typically offers 12-month packages, not 15-month packages. However, the insurance provider offered a 3-month extension to the current insurance policy for a fee of $32,133.75.

System Manager Tercala stated that she will follow-up with AON to see what the insurance policy renewal will look like next year. It is likely that there will be a 10-15% cost increase. Keith Boc (Taylor) asked what the cost of the current 12-month policy is. Doug Drysdale (Riverview) responded that it is currently about $133k for 12 months, so a fee of $32k for 3 months seems reasonable. Chairperson McLeod (Allen Park) asked whether DUWA would consider looking at a different insurance provider after this policy expires. System Manager Tercala responded that this will be a topic of conversation later this year with Aon, DUWA’s insurance broker.

Motion by Keith Boc (Taylor) and supported by Doug Drysdale (Riverview) to approve the 3-month extension of the liability insurance policy to the end of the calendar year. Motion passed unanimously.

e. Credit Rating Approval and Publication

Two indicative credit ratings will be required by the WIFIA loan program. DUWA is in the process of receiving these from Fitch and S&P. Fitch has provided DUWA with an indicative “A” Stable credit rating. S&P has not yet provided their rating, but their rating for the 2018 loan was BBB.

Per the WIFIA program, one credit rating needs to be publicly published. The cost for this effort has not yet been provided, and as such, the System Manager assumed it to be no more than $15k. In the interest of time for the WIFIA loan closing period, it was requested to authorize the System Manager the ability to approve up to $15k to PFM or Fitch for the cost of publishing the rating.

Motion by Dustin Lent (Southgate) and supported by Roberto Scappaticci (Romulus) to authorize the System Manager to authorize Fitch or PFM to approve the credit rating for publication for a not-to-exceed fee of $15,000. Motion passed unanimously.

7. Contract Operator Update

Jason Tapp, Assistant Project Manager of Veolia Water North America, provided the Contract Operator update.

a. May 2020 MOR

The May 2020 Monthly Operating Report (MOR) was provided in the Board’s pre-meeting packet (Attachment 14). Highlights from the summary and other updates included the following:

• Average flow into the plant is about 63 MGD.
• There was a blending event on May 19th, which brings the total number of blending events this year up to 3. It was noted that after the Blending Project’s Control Measure A effort is implemented, there will be more treatment capacity which will help reduce the frequency of blending events.
• Fine Screen #2, at the Influent Pumping Station, has been repaired and is back in service.
• The bowl for Centrifuge #2 was reinstalled and is back in service.
• 290 MissDig tickets have been cleared.

b. Marketing Request

Veolia requested authorization to create a brief 2-3 minute video showcasing Veolia’s staff and projects as they relate to DUWA’s and Veolia’s partnership (Attachment 15). This video will include voluntary interviews of DUWA’s Officers and/or Professionals and will be used for internal and external marketing. Hearing no objections, this was approved by the Board.

8. Treasurer’s Report

a. Non-Residential User (NRU) Fee Meeting on June 17, 2020 Meeting Recap

Beth Bialy, of Plante Moran, noted the following highlights discussed at the Non-Residential User (NRU) Town Hall meeting held on June 17, 2020 (Attachment 16). The NRU Town Hall helped ensure all communities are abiding by the definitions and are reporting NRUs properly.

• The NRU Fee brings in $500k-$600k per year. The NRU Fee is a component of the IPP Program.
• The NRU Fees help generate revenue for the efforts associated with the detection, monitoring, and enforcement of any contaminants to the DWTF’s headworks.
• Within the last two years, DUWA authorized Tetra Tech to complete a review of the IPP fees. Tetra Tech reviewed the current rates based on industrial users and identified some inconsistencies in NRU reporting.
• Commercial businesses will continue to be included in the NRU Fee until a better reporting structure is created.
• All 13 member communities responded to the survey and all are reporting some level of NRUs.
• There may have been an overstatement of payments by Brownstown Township by about $400k. Review of this is ongoing. If validated, Brownstown Township is expected to request a refund.

b. 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 17). The invoice register included 25 invoices due for a total of $584,923.27. Largest invoices included those to Veolia for flow monitoring services and the O2/LEL project, Walsh for their effort on the biosolids project, OHM for System Manager services, and Wyandotte for utility services. System Manager Tercala noted that the monthly invoice for Veolia’s O&M services is not included in this invoice register, but will be included for approval in next month’s invoice register. Motion by Rick Rutherford (Belleville) and supported by James Krizan (Lincoln Park) to pay the invoices. Motion passed unanimously.

9. Public Comment

There was no public comment.

10. Other Business

There was discussion on how future Board meetings should be held. Dustin Lent (Southgate) noted that the Governor extended the allowance for Board meetings to be held over Zoom through the end of July. Attorney Hayden will look into the law language to confirm. He recommended that the Board approvals process be amended to allow for up to two Board members to call in for Board approvals (excluding roll call votes). Chairperson McLeod (Allen Park) supported this recommendation noting that some may have compromised immune systems and may wish to call in from home. A laptop setup will be provided at the Board meetings for those calling in.

11. Next Meeting Date: Thursday, August 13, 2020 (9:00 AM; Taylor City Hall)

Chairperson McLeod (Allen Park) reminded the Board that the next meeting would be on Thursday, August 13, 2020 (9:00 a.m. Taylor City Hall) with social distancing measures put in place.

12. Adjournment

There being no other business, Chairperson McLeod (Allen Park) announced that a motion to adjourn would be in order. Motion by Doug Drysdale (Riverview) and supported by Keith Boc (Taylor) to adjourn the meeting.  Motion passed unanimously at 10:25 AM.

Meeting Minutes Prepared by:

Lambrina Tercala, OHM Advisors, DUWA System Manager

Attachments

1. Meeting Agenda
2. June 11, 2020 DUWA Board Meeting Minutes
3. Monthly Legal Update (by Fausone Bohn)
4. System Manager Report for July 2020 Board Meeting (by OHM Advisors)
5. Request for Proposal for Rate Consultant Services (by OHM Advisors)
6. DUWA Biosolids Dryer Facility Monthly Progress Summary (by Veolia)
7. 30% Cost Model (by Walsh)
8. Kruger Marketing Write-Up (by Veolia)
9. Press Release Approval Form (by Veolia)
10. Request to Authorize Inland Waters for Alkali Sewer Rehabilitation
11. Contingency Authorization for Alkali Sewer Repair Project
12. Request to Repair IPS Gripper Components (WIFIA Prj #4-19)
13. Request to Repair Tunnel Pump No. 3 (WIFIA Proj #4-7)
14. Monthly Operating Report for May 2020 (by Veolia)
15. Video Proposal to Celebrate Second Anniversary of DUWA/VNA Contract (Veolia)
16. June 17, 2020 NRU Town Hall Recap
17. Invoice Register, dated July 2, 2020 (by DUWA Treasurer)