DOWNRIVER UTILITY WASTEWATER AUTHORITY

JANUARY 14, 2021 MEETING MINUTES

VIRTUAL MEETING (due to COVID19)

1. Roll Call and Introductions

DUWA Chair Gail McLeod (Allen Park) called the virtual meeting to order at 9:00 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, Dearborn Heights, Ecorse, Lincoln Park, Riverview, Romulus, Southgate, Taylor, Van Buren Township, and Wyandotte. A quorum (at least 7 members) was present.

Chairperson McLeod (Allen Park) asked for a moment of silence in remembrance of Former DUWA Chair and Dearborn Heights’s Mayor Daniel Paletko.

2. Approval of Agenda

Copies of the Agenda were made available prior to the meeting (Attachment 1). Motion by Doug Drysdale (Riverview) and supported by Dustin Lent (Southgate) to approve the Agenda.

Due to the meeting being held virtually, a roll call vote was completed for Board actions. A roll call vote was taken to approve the agenda. The motion passed unanimously by all attending members.

3. Approval of Minutes from December 17, 2020 Board Meeting

Copies of the meeting minutes from the December 17, 2020 Board Meeting were distributed by email prior to the meeting (Attachment 2). Motion by Roberto Scappaticci (Romulus) and supported by Doug Drysdale (Riverview) to approve the minutes. A roll call vote was taken and the motion passed unanimously by all attending members.

4. Election of Officers for 2021

The current Officers are willing to maintain their positions for the next year as there were no other volunteers. The current slate of Officers includes Mayor McLeod (Allen Park) as DUWA’s Chair, Dustin Lent (Southgate) as DUWA’s Vice Chair, Roberto Scappaticci (Romulus) as DUWA’s Secretary, and Jason Couture (Taylor) as DUWA’s Treasurer (Attachment 3).

Motion by Dave Flaten (Ecorse) and supported by John Selmi (Dearborn Heights) to re-elect Mayor McLeod (Allen Park) as DUWA’s Chair, Dustin Lent (Southgate) as DUWA’s Vice Chair, Roberto Scappaticci (Romulus) as DUWA’s Secretary, and Jason Couture (Taylor) as DUWA’s Treasurer. A roll call vote was taken and the motion passed unanimously by all attending members. Rick Rutherford (Belleville) was absent for the vote.

5. Legal Update

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

a. General Counsel Monthly Report

Attorney Fausone stated that a written summary of the monthly legal update was provided in the pre-meeting Board packet (Attachment 4), and he had no further comments to add.

b. Final Flow Metering Agreement, 2-Yr Term

The Flow Metering Agreement with Veolia was approved to be executed at the December Board meeting pending the review and approval of the Legal Committee. Minor changes and additions were made during the Legal Committee review, and this agreement has now been executed (Attachment 5).

c. Final Ferric Chloride Reconciliation MOU

The Final Ferric Chloride Reconciliation Memo of Understanding was approved to be executed at the December Board meeting pending the review and approval of the Legal Committee. Minor changes and additions were made during the Legal Committee review, and this agreement has now been executed as approved at the December Board meeting (Attachment 6).

d. Adoption of Revised Remote Meeting Policy

The Remote Meeting Policy was revised for Board approval per State legislator guidance. The State’s guidance was rolled out after the December Board meeting (and was also anticipated). This revision shifts the date when remote participation is permitted for only certain reasons from January 1, 2021 to March 31, 2021. Remote participation in meetings is now allowed for any reason until March 31, 2021. After March 31, 2021, remote participation is only allowed under certain circumstances including a medical condition or the declaration of a statewide or local emergency (Attachment 7).

Attorney Fausone noted that the date limiting remote participation may be pushed back again due to the slow rollout of vaccines.

Motion by Roberto Scappaticci (Romulus) and supported by Greg Mayhew (Wyandotte) to approve the amended Remote Participation Policy with a new date of March 31, 2021 when remote participation is only allowed under certain circumstances. A roll call vote was taken, and the motion passed with 88.8% of the vote. Motion passed unanimously with all attending members.

e. Feedback on Over/Underpayment and Deduct Policy

The Legal Committee is continuing to work with the Finance Committee on drafting the overpayment, underpayment, and deduction policy. This policy will incentivize communities to properly report, and will help identify any inaccurate reporting occurrences. This policy was also brought up during the WIFIA bond financing discussions regarding what happens if a community does or does not pay. The Legal Committee encouraged the Board Commissioners to provide feedback on the policy. A couple comments on the policy have been received so far. One comment includes addressing the time differential between identifying the over/under payment and making the correction. Another comment includes addressing the exemption issue noting that hardline exemptions help the local communities with enforcement of the policy. This policy will be reviewed at the next Technical Committee meeting.

Kerry Morgan (Riverview Attorney) asked if the Legal Committee can meet to review the policy after the Technical Committee reviews it.  Attorney Fausone responded that both the Legal and Finance Committee will review the policy after the Technical Committee reviews it. Jim Taylor (Van Buren Township) stated that he has provided feedback on the policy and encouraged other Commissioners to do the same to make their voice heard and provide their input on the policy as more input will provide better results.

6. 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 8).

a. System Manager Monthly Report

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

• A flow metering control panel was destroyed in a car accident over the holidays. The driver did not have insurance. This incident will need to be dealt with and replacements are being considered.
• A significant amount of work has gone into the WIFIA loan agreement effort, and will be discussed later in the meeting.
• Raftelis held a Town Hall last week regarding the DUWA rate methodology. One on one meetings with the communities, Raftelis, and DUWA are being held this week. Thoughtful input has been received thus far, and a report summarizing all comments received will be prepared.
• Demolition has begun for the biosolids dryer facility project. The air quality permit waiver has been received allowing the team to begin construction prior to permit issuance. The solids handling building is in the process of being emptied.
• The Alkali Sewer Rehab project is going well. Bypass pumping has begun in preparation for cleaning and lining.
• The roof repair design package was put out to bid on January 13, 2021. This project is already receiving a lot of interest.
• A sewer inspection completed last year along the Fordline Sewer identified significant leaks along the pipe. This pipe has a long length between manholes. HRC is preparing a proposal to develop a recommended plan to address the leaks.

Roberto Scappaticci (Romulus) asked whether the pause over the last few months has created any schedule delays in the biosolids project. System Manager Kaunelis responded that everything is falling into place nicely, and the longer lead time parts were ordered ahead of time. Walsh suggested that they are moving quicker than expected, but are not looking to change the schedule. The next long lead item is the approval of the air quality permit. Mayor McLeod (Allen Park) encouraged those communities who have not yet signed up for their one-on-one meetings with Raftelis to do so noting that these meetings have been very productive for exchanging information and expressing individual community needs and requirements. System Manager Kaunelis echoed this request noting that eleven of the thirteen communities have already signed up.

b. Biosolids Dryer Facility Project

The biosolids dryer facility monthly progress report is provided in the pre-meeting Board package (Attachment 9). The DBE team has completed 90% design, which is now being reviewed. Demolition has begun and is going well. The air quality permit waiver has been received allowing the team to begin construction prior to permit issuance. The belt filter presses were removed from the solids handling building.

7. EPA WIFIA Loan Approval at $17.85M

The EPA WIFIA loan request is for $17.85M. This loan amount will provide 49% of the project funding and requires a 51% match by DUWA. The loan amount requested is conservative considering that the loan is a drawdown loan such that DUWA only draws the funds it needs from the loan. This is the first time that the WIFIA loan has been received in the state of Michigan. Several projects being funded by the loan are already in progress, such as the biosolids dryer facility project, Alkali sewer rehabilitation project, electrical repairs, and other small capital budget projects (Attachment 10).

Ann Fillingham from Dykema (Bond Counsel) and Kari Blanchett from PFM (Financial Advisor), who have both been extensively involved in the WIFIA loan effort, provided updates on the loan agreement process. Bond Counsel Fillingham stated that the EPA has been very thorough throughout this process considering this is the first WIFIA loan received in Michigan. The teams are working on negotiating closing documents which have been a long, but productive process. The EPA calls this a loan, but it looks like a bond as it is issued under the Master Bond Ordinance payable with the same sources as the 2018 bonds. This loan is a private transaction executed with the local bank, and is not publicly traded. The interest rate is set per the EPA program term. From the state perspective, this form of contract is appropriate to move forward with the transaction. The WIFIA loan agreement has been reviewed, recommended, and approved by the Legal Committee.

Attorney Fausone asked what advantages are received by going through this particular loan process. Bond Counsel Fillingham responded that this transaction is executed with a low interest rate and long term of financing which helps with debt service, rate perspective, and overall financial structure.  Kari Blanchett of PFM added that interest rates are set when the loan agreement is assigned, which would be 1.65% right now. Additionally, the extended length of financing of 36 years at a low interest rate provides more flexibility going forward.

Kari Blanchett stated that a fixed credit rating of BBB+ was received on the senior lien and a rating of BBB was received on the junior lien from S&P. These ratings focused on the credit strength of the weakest members of the Authority’s member communities. However, considering that DUWA is a utility, PFM has been pushing for a credit upgrade to the A category. Right now, credit upgrades are not being received due to the uncertainties brought about by COVID-19. System Manager Lambrina Tercala, of OHM Advisors, added that they expect to close on the loan at the end of January or in early February.

Motion by Roberto Scappaticci (Romulus) and supported by Greg Mayhew (Wyandotte) to authorize the Chair, Vice Chair, and Secretary to sign all necessary documents to effectuate the WIFIA loan closing, with a maximum loan amount of $17.85M, upon recommendation of its terms and conditions by DUWA’s Bond Counsel. DUWA’s 51% match will be pulled from cash reserves, as necessary. A roll call vote was taken, and the motion passed with 88.8% of the vote. Motion passed unanimously with all attending members.

8. Other Requests for Authorizations and Approvals

System Manager Tercala provided the following requests to the Board.

a. Alkali Sewer Rehab – Inland Water CO#3

The Alkali Sewer Rehabilitation project includes 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. HRC is the project’s engineer and Inland Waters is the general construction contractor. Change Order #3 for Inland Waters’ contract includes four components (Attachment 11):

• CCTV efforts required before the bypass could occur and as agreed to in the SWRDDD Bypass Agreement.
• Water service relocation as the drawings did not show service lines. This is a permanent relocation.
• Additional pavement removal and replacement completed for the water service relocation.
• Tree removal and replacement per Wyandotte’s City Standards including the removal of a 20-inch diameter tree to allow for construction activities. Two smaller diameter trees will be planted in its place.

The total cost for Change Order #3 is $29,755.60 and is recommended for payment by HRC. The remaining amount of DUWA’s 10% contingency, after consideration of Change Orders #2 and #3 will be $103,237. No additional change orders are expected at this time. This item was not reviewed by the Technical Committee due to the timing of the receipt of this change order.

Motion by Rick Rutherford (Belleville) and supported by Dave Flaten (Ecorse) to authorize the Chair or Vice Chair to sign Inland Waters’ Change Order #3 for a lump sum fee of $29,755.60. A roll call vote was taken, and the motion passed with 88.8% of the vote. Motion passed unanimously with all attending members.

b. Vulnerability Analysis as Required by EGLE

Last year, EGLE requested all NPDES permit holders to complete a Vulnerability Analysis due to the high Great Lakes Basin water levels. This Vulnerability Analysis is to identify any impact the high water levels may have on the permit holder’s ability to meet permit requirements and other applicable regulations. The Vulnerability Analysis will not be submitted to EGLE, but DUWA must certify to EGLE that it has been completed. After reviewing the guidance suggestions by EGLE, it was determined that much of the previous analyses DUWA has completed with the collection system analysis and blending measures could be used for consideration with the Vulnerability Analysis. Additional modeling analysis will still be necessary. HRC proposes to complete the Vulnerability Analysis for a fee of $7,000 in accordance with its as-needed contract with DUWA, and will utilize ASI as its subcontractor (Attachment 12). This was not reviewed by the Technical Committee due to the timing the proposal was received.

Motion by Jim Taylor (Van Buren Township) and supported by Rick Rutherford (Belleville) to authorize HRC for their Vulnerability Assessment work at a not-to-exceed cost of $7,000. The work would be completed as a distinct task under HRC’s as-needed professional service contract with DUWA. A roll call vote was taken, and the motion passed with 88.8% of the vote. Motion passed unanimously with all attending members.

c. Wastewater Sample Line Relocation

EGLE recently approved the proposed influent wastewater sample line relocation. The proposed cost for this work is $68,154.83 (Attachment 13). EGLE requires composite sampling, and it is important to measure accurate flows to ensure the proper amount of recirculated flow is subtracted out. Additional meters and equipment had to be purchased which increased the overall cost from the expected $60k. This project is WIFIA eligible. In tracking the small capital budget, $1.24M out of $1.87M has been authorized thus far, with approximately $631k remaining. This item was not reviewed by the Technical Committee due to the timing of this proposal.

Motion by Roberto Scappaticci (Romulus) and supported by Dustin Lent (Southgate) to authorize Veolia for a not-to-exceed fee of $68,154.83 in association with the influent wastewater sample line relocation work. This project would be funded by DUWA’s small capital program. A roll call vote was taken, and the motion passed with 88.8% of the vote. Motion passed unanimously with all attending members.

d. Worker’s Compensation Coverage

Since DUWA does not have employees, statutory workers compensation insurance has not been purchased. Aon, DUWA’s insurance broker, recommended DUWA purchase workers compensation insurance in the event someone ever argue that they are a DUWA employee by way of being a contractor to DUWA. The request is to renew the insurance to maintain DUWA’s basic policy of coverage for an annual cost of $458, which is a slight increase from the previous year’s cost of $445 (Attachment 14). DUWA recently approved $470,412 out of its $560k budget for other insurance premiums for 2021.

Motion by Rick Rutherford (Belleville) and supported by Jim Taylor (Van Buren Township) to renew basic workers compensation insurance policy by AccidentFund for a cost of $458. A roll call vote was taken, and the motion passed with 88.8% of the vote. Motion passed unanimously with all attending members.

9. Contract Operator Update

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

a. November 2020 MOR

The November 2020 Monthly Operating Report (MOR) was provided in the Board’s pre-meeting packet (Attachment 15). Highlights from the summary and other updates included the following:

• Plant operations were in compliance for the month of November marking 24 consecutive months of perfect compliance.
• No wet weather or bypass events were experienced in the month of November.
• LED lighting replacements have been completed inside and outside of the plant helping with cost savings on electricity.
• Annual maintenance was performed on the primary clarifier as there are many wear and tear parts.
• Centrifuge #1 was sent out for repair in November as they had to wait for flows and sludge production to decrease.
• Dewatering occurs 24/7 now instead of five days a week. This has been a more efficient process as the centrifuges are not stopped and started numerous times.
• Many items in the stock room have been purged and Veolia is making a list of valuable items to potentially sell.
• There was a spike in PFAS concentrations in the influent and effluent in October 2020. The cause of this spike is unknown. Quarterly reporting and monthly sampling is now required. Monthly sampling was desired anyway in order to gather data for the local limits’ analysis. More recent sampling showed much lower PFAS concentrations, and DUWA can request a reduction in sampling and reporting requirements in the future if PFAS concentrations remain low.
• Relatively warm weather experienced in November in conjunction with low glycol levels contributed to lower sludge production.
• About 2000 gallons of used oil was removed.

Mayor McLeod (Allen Park) asked if Veolia could still perform monthly sampling even if the EGLE requirements change. Program Manager Irving responded that Veolia can still perform monthly sampling and plans to do so right now to help establish the local limits. Kerry Morgan (Riverview Attorney) asked if there is a standard or limit for PFAS. Program Manager Irving responded that water quality standards have been established and are applied to wastewater. To date, there are no wastewater PFAS standards, but the water quality standards are used as a benchmark to trigger certain monitoring and reporting activities. Attorney Fausone noted that there will be a more in-depth conversation surrounding PFAS at the committee level and added that this is a typical administrative play to gather information in order to determine where to set the limits.

Jason Tapp, of Veolia Water, added to the summary of activities:

• Veolia is working to remove sludge from the Solids Handling Building’s bins for the biosolids dryer facility project. There are about 30 yards of very dry product.
• Centrifuge #1 was returned from the factory yesterday and should be back online today. It will use a closed loop system to cool the bearings like Centrifuge #2 to save on water usage.
• There have been motor control failures on the IPS pumps due to H2S in the control room. Veolia will work to improve ventilation.
• IPS pumps #5 and #6 have been removed.
• Veolia is offering small group tours if desired to see any of the ongoing construction projects at the plant.

10. Treasurer’s Report

a. 2021 Financial Calendar

Jason Couture (Treasurer) referenced the 2021 Financial Calendar in the Board’s pre-meeting packet (Attachment 16). The financial calendar includes dates regarding reporting, auditing, rate packages, and effective dates.

Motion by James Krizan (Lincoln Park) and supported by Doug Drysdale (Riverview) to approve the 2021 Financial Calendar. A roll call vote was taken, and the motion passed with 88.8% of the vote. Motion passed unanimously with all attending members.

b. Pending Invoices

Jason Couture (Treasurer) 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 41 invoices due for a total of $861,256.66. Largest invoices included those to Aon Risk Services for insurance services and Wyandotte for utility services. System Manager Tercala noted that Veolia’s O&M effort is not included in this invoice register, as the teams were pending review of the ferric reconciliation and the annual CPI updates. Veolia’s O&M invoices would be included in next month’s register.

Motion by Roberto Scappaticci (Romulus) and supported by Greg Mayhew (Wyandotte) to pay the invoice register. A roll call vote was taken, and the motion passed with 88.8% of the vote. Motion passed unanimously with all attending members.

11. Public Comment

Jim Taylor (Van Buren Township) stated that Van Buren Township met to discuss the Raftelis Town Hall and encouraged all communities to meet with Raftelis one-on-one. He noted that the new rate methodology will impact all communities and some may be a bit shocked with the results as there will be winners and losers, but the goal is to create a fair and equitable rate methodology. He added that the old rate methodology is antiquated and does not work in today’s world. There are risks in not knowing the outcome of the analysis so it is important that each community analyzes how the strengths of flows could impact them. He also noted that he expects Van Buren Township’s rates to increase, but he will accept these results with a fair and equitable methodology. Jim Taylor further noted he felt the final decided-upon rate methodology process will have a ripple effect on other systems such as Wayne County’s Rouge Valley as the rate method could be applied here too, as their existing method is the same as DUWAs. He encouraged the Board to allow for flexibility in the rate process to arrive at conclusions, and added that it is important that due diligence is done and that the rate methodology is right.

Mayor McLeod (Allen Park) noted that many get frustrated over the costs of their utilities, but never question the costs of their cable bills and that it is important to keep this in perspective. She asked that all communities be mature enough to accept the results even if their community rates increase.

12. Other Business

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

13. Next Board Meeting Date: Thursday, February 11, 2021 (Virtual via Zoom)

Chairperson McLeod (Allen Park) reminded the Board that the next meeting would take place on Thursday, February 11, 2021 virtually via Zoom. Keith Boc (Taylor) also noted that he will be retiring on January 26^th, but will attend the February 11^th Board meeting.

14. Adjournment

There being no other business, Chairperson McLeod (Allen Park) announced that a motion to adjourn would be in order. Motion by Keith Boc (Taylor) and supported by Jim Taylor (Van Buren Township) to adjourn the meeting.  A roll call vote was taken and the motion passed unanimously with all attending members. The meeting adjourned at 10:29 AM.

Meeting Minutes Prepared by:

Mackenzie Johnson, OHM Advisors, Engineer

Meeting Minutes Reviewed by:

Lambrina Tercala, OHM Advisors, DUWA System Manager

Attachments

1. Meeting Agenda
2. December 17, 2020 DUWA Board Meeting Minutes
3. DUWA Officer Elections
4. Monthly Legal Update (by Fausone Bohn)
5. Flow Metering Contract (by Fausone Bohn)
6. Ferric Chloride Reconciliation Memorandum of Understanding (by Fausone Bohn)
7. Remote Participation in Public Meetings Policy (by Fausone Bohn)
8. System Manager Report for January 2021 Board Meeting (by OHM Advisors)
9. Biosolids Dryer Facility Project December 2020 Monthly Progress Summary (by Veolia)
10. EPA WIFIA Loan Approval
11. Request for Approval of Inland Waters’ CO#3
12. Request for Vulnerability Analysis by HRC (as required by EGLE)
13. Request for Wastewater Sample Line Relocation Expenses
14. Request for Renewal of Workers Compensation
15. Monthly Operating Report for November 2020 (by Veolia)
16. 2021 Financial Calendar (by Jason Couture)
17. Invoice Register, dated January 8, 2021 (by Doug Drysdale)