HYBRID MEETING (Taylor City Hall and Online)

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 8 communities: Allen Park, Ecorse, Lincoln Park, River Rouge, 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 Jim Taylor (Van Buren Township) and supported by Dave Flaten (Ecorse) 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 May 13, 2021 Board Meeting
Copies of the meeting minutes from the May 13, 2021 Board meeting were distributed by email prior to the meeting (Attachment 2). Motion by Dustin Lent (Southgate) and supported by Greg Mayhew (Wyandotte) to approve the minutes. A roll call vote was taken and the motion passed unanimously by all attending members.

4. 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 3). He noted that it was a pretty typical month in terms of legal support activities as the firm has been assisting the System Manager with a variety of contract-related matters. Fausone Bohn has helped draft the wire and financial control policies. These policies will be brought forth to their respective committees prior to being presented to the Board. Fausone Bohn has also participated in technical and rate making meetings.

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 provided in the pre-meeting Board packet for the System Manager Report (Attachment 4).

a. System Manager Monthly Report
System Manager Kaunelis noted the following highlights from the System Manager Report:

• Local limits for PFOS/PFOA are in the process of being developed. This is a complex task as there is a water quality standard that must be met, but there may be some legacy issues with discharge from the airport. This issue will be worked through with EGLE to ensure DUWA proceeds in the best way possible.
• The first components of the biosolids dryers have been delivered and are being installed. There are continuing concerns regarding COVID impacts on deliveries of parts. For example, the spare bowl assembly for the centrifuge was ordered awhile ago, but was delayed in shipping and customs before finally being delivered (due to COVID).
• The Biosolids construction team is doing well to track their project deliveries, but some delays are expected.
• There are a couple ongoing property items where developers have contacted DUWA about coordinating property use near the DWTF.
• There is a large parcel of land nearby that is owned by Wyandotte, but a developer has a long-term lease on it. The developer is attempting to find synergy with DUWA and others for potential use of the land.
• There is a development being constructed southeast of the DWTF. The developer would like to use an abandoned alley on DUWA’s property, and DUWA would like to work with the developer on use of a new drive access to Biddle for biosolids hauling.
• A progress meeting was held with Raftelis yesterday, and the rate methodology development is moving along nicely. The next Town Hall is scheduled for the end of July, and a meeting request will be sent out soon.
• John Selmi has resigned from Dearborn Heights and will no longer be on the Board. Ali Dib, the City Engineer, will be filling that position.

Jim Taylor (Van Buren Township) stated that each wastewater treatment plant must establish its own processes and strategies on how to meet and address the water quality standards for PFOS and PFOA and asked if there are any processes or strategies DUWA can adopt or learn from other plants to address these standards. System Manager Kaunelis responded that DUWA is tracking GLWA and South Huron Valley treatment plants’ efforts, either directly or with EGLE. The major difference between these plants and the DWTF is that during the winter, the DWTF receives high runoff from the airport, which also has legacy issues with its use of fire-fighting foam. The DWTF receives a high volume of runoff, but the PFOS/PFOA concentrations will likely be relatively low, however they may not be as low as the local limits.

Jim Taylor (Van Buren Township) asked if there have been any conversations yet with the airport authority regarding this matter. System Manager Kaunelis responded that a meeting was held last week with Veolia and Fausone Bohn to review the sample results to better understand the order of magnitude of the concentrations that the DWTF can expect to receive. These numbers will be shared with EGLE’s IPP technical staff to ensure the direction DUWA proposes to take is appropriate. Subsequent meetings will take place with the IUs once the local limits are better flushed out.

Chairperson McLeod (Allen Park) asked about the Wayne County policy prohibiting direct connections (associated with the SCADA split project and use of remote access by Eramosa to WC). System Manager Kaunelis responded that there are always concerns about outside access to the SCADA system and its vulnerability to a hacker looking to do damage or for ransom. Wayne County’s policy makes it difficult for Eramosa to perform the necessary SCADA work, but Eramosa is working on how best to approach this. As it is difficult for Eramosa to be onsite for this work due to border crossing issues, Eramosa hired a local firm that could be onsite to do the work that is allowed within the existing policy.

Attorney Kerry Morgan (Riverview) asked if DUWA is considering options to either treat the airport runoff onsite before discharge to the DWTF or continuing the current practice of receiving the airport runoff at the DWTF for treatment. Attorney Fausone responded that all options are currently being considered and it is too early to make any definitive recommendations on how to proceed. The meeting held last week simply identified the broad issues with the airport and noted that the DWTF is not the only plant in the state to receive airport runoff. For this reason, EGLE will be contacted for support and recommendation on how to best handle the airport runoff based on the strategies other plants use.

Attorney Kerry Morgan also asked about the status of the NPDES permit renewal. System Manager Kaunelis responded that the NPDES permit is in effect for 5 years, and a renewal application must be submitted before the permit expires. EGLE reviewed the renewal application and had questions regarding basic information on the plant and outfalls. These questions have since been answered, and EGLE is now working on developing a draft permit with updated requirements such as limits for PFOS/PFOA. Attorney Morgan asked if there would be focus on evaluating the number of bypasses. System Manager Kaunelis responded that no material change is expected, but cannot be guaranteed depending on the EGLE reviewer.

b. Biosolids Dryer Facility Project
The biosolids dryer facility monthly progress report is provided in the pre-meeting Board package (Attachment 5). The 6-week look ahead provides expected upcoming construction activities. Jason Nash from Veolia is onsite regularly to oversee construction and coordination. The major issues at this stage are coordinating deliveries and ensuring parts are arriving at the appropriate times. With Kruger as a direct supplier, the delivery process is under control and working well. Timing of deliveries becomes more difficult to track with parts being shipped oversees and when subcontractors are providing the parts. The team is doing well to track and work out problems ahead of time. At this time, the overall schedule can still be accommodated, but any other delays will impact the overall schedule.

c. Roof Material Costs/Lead Time Advisement by VJM Design
DUWA was notified by VJM Design that their supplier informed them of a significant increase in roofing material costs. DUWA is in the process of working out the final contract with VJM Design as the selected bidder, and while there are usually no major changes at this stage, the market has substantially changed since the bid was received. The table in the memo in the pre-meeting Board packet (Attachment 6) shows the magnitude of impact. While there are significant changes in the unit prices, the amount of change in the overall project is relatively small. Additionally, the next highest bidder was substantially higher. Although this is an unusual case, the contractor was unable to anticipate these market changes and the contractor will not receive a final price commitment from the supplier until the materials are shipped. With the work beginning in September, there may be additional cost impacts at that time. System Manager Tercala will continue to work with VJM Design throughout this process.

Chairperson McLeod commented that while it may be unusual, all industries are experiencing material cost increases. For example, Allen Park’s DPW is noticing a significant difference between the costs of projects completed last year versus this year.

d. As-Needed Engineering RFQ Selection Committee Request
The RFQ for As-Needed Engineering Services has been posted and DUWA has received interest from various engineering firms. Volunteers are now needed to help evaluate and select the proposals. It is a time commitment to participate in the selection committee, but volunteers are being requested. If interested, contact System Managers Kaunelis or Tercala.

6. Other Requests for Authorizations and Approvals
System Manager Tercala provided the following requests to the Board.

Rick Rutherford (Belleville) joined the meeting.

a. Annual Fee for Wayne County Right of Way Permit
DUWA is required to hold an annual Wayne County right-of-way permit to allow access for routine operation and maintenance services on the interceptors located within Wayne County right-of-ways. There is a $1000 fee to pull the annual permit. The permit application was submitted earlier this year and was paid by Veolia in order to begin the CCTV efforts that are now underway (Attachment 7). Based on the timing of Board meetings, Veolia paid this fee ahead of time and is now requesting repayment as a pass through cost with no markup.

Motion by Greg Mayhew (Wyandotte) and supported by Dave Flaten (Ecorse) to authorize repayment to Veolia for $1000 for DUWA’s annual Wayne County Right-of-Way permit fee. A roll call vote was taken, and the motion passed with 72% of the vote. Motion passed unanimously with all attending members.

b. Influent Pump Station, Pump No 5 Soft Start Purchase
Influent Pump Station (IPS) Pump No 5 was equipped with a VFD, which recently failed due to corrosion issues resulting from hydrogen sulfide exposure. This issue was introduced at the last Board meeting by Jason Tapp of Veolia, and was reviewed in depth at last month’s Technical Committee meeting. Replacement of the VFD would cost approximately $200k. Veolia completed significant due diligence to troubleshoot and determine the best plan to move forward. Veolia decided to instead purchase a soft start which would cost about $35k, and would still preserve the functional needs of the pump. Veolia worked with Rockwell to negotiate a reduced price of $19k for the soft start. Veolia installed the soft start in-house, and is seeking repayment for the soft start purchase at cost plus arrangement (Attachment 8). This cost was not expected nor budgeted for, but can be paid for by the “Other Capital Repairs” item within the Small Capital Project budget. This project was reviewed and recommended by the Technical Committee. There will be additional efforts by Veolia in the future to value engineer a system to mitigate corrosion damage by reducing the hydrogen sulfide concentration in the air within the pump station.

Motion by Dustin Lent (Southgate) and supported by James Krizan (Lincoln Park) to remit payment to Veolia for $19,876.10 for purchase of IPS Pump No 5 soft start. The work will be funded as part of DUWA’s Small Capital Project budget. A roll call vote was taken, and the motion passed with 72% of the vote. Motion passed unanimously with all attending members.

c. Control Measure ‘A’ Implementation Fee Increase Due to Steel Pricing
As has been discussed earlier in the meeting, material cost increases have been experienced across several DUWA projects. Veolia was previously authorized to work with a fabricator to implement Control Measure A, which will increase the flow that can be passed through the secondary clarifier system to reduce wet weather flow blending. Since the authorization, the fabricator notified Veolia of the increased cost of steel and is requesting additional funds. Veolia’s original estimate for this work was about $108k, and the revised estimate is now about $118k with the increased steel cost (Attachment 9). This results in a net increase of $10,333.94. This work is WIFIA eligible. This request was reviewed and recommended by the Technical Committee.

Motion by Greg Mayhew (Wyandotte) and supported by Dustin Lent (Southgate) to modify Veolia’s Control Measure A implementation authorization from $107,818.11 to $118,152.05. This is a not-to-exceed fee. The work will be funded as part of the WIFIA loan and/or cash reserves. A roll call vote was taken, and the motion passed with 72% of the vote. Motion passed unanimously with all attending members.

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

a. April 2021 MOR
The April 2021 Monthly Operating Report (MOR) was provided in the Board’s pre-meeting packet (Attachment 10). Highlights from the summary and other updates included the following:

• Plant operations were in compliance for the month of April, and no bypasses occurred.
• The amount of rain received in April 2021 was almost identical to the amount of rain received in April 2020.
• Flows have been relatively low and the weather has been fairly dry all spring.
• Shelving has been installed in the UV room to better organize the UV bulbs and to facilitate inventory.
• Operators have been performing aesthetic work such as painting railings. Some railings from the old solids building have been repurposed.
• Process performance is good and is remaining dialed in.
• April was the highest glycol month, and the amount of glycol received decreased in May. Veolia does not expect to receive any more glycol this year.
• There have been some issues with air venting at the control structure where water overflows the clarifiers and goes into a trough. Historically, people driving by on Central Road would report foam/water spilling out of the control structure, thus it was sealed. However, now air is unable to escape causing water to backup in clarifiers 1, 2, and 4, which creates some problems when the plant receives high flows. To resolve this, the water that overflows is now piped back to the effluent trough instead of spilling out onto the ground.
• The influent sample line relocation is almost complete. The samplers have arrived, and the maintenance team installed the piping and plumbing from the control structure outside. The electrical work is also complete. The only work remaining is to install the flow meter, and HESCO will be onsite in the next few days to install and program the meter.
• Many maintenance activities have been completed.
• Some recent safety improvements have been made related to valve turning at the plant. These valves used to be connected to a pneumatic valve controller which failed and was never replaced due to the replacement cost. These valves have been operated manually since. Manual operation of the valves introduces a fall hazard and strain hazard as they require over 100 turns and nearly an hour to open or close the valves. Low cost modifications have recently been made that allow for one person to effortlessly operate the valves in a matter of minutes.
• Electricians installed night lights on each clarifier so operators can better see the sludge blankets in the dark.
• Stem covers on various valves at the plant have been replaced as they are faded and weathered from the environment.
• A floor scrubber was purchased for use around the plant and maintenance shop.
• KPIs are on target. There is a slight backlog in April but nothing significant.
• Veolia staff continue to perform monthly calibrations and maintenance of flow meters, level sensors, and rain gauges. The flow meter at the Southgate-Wyandotte connection near the plant requires confined space entry to perform maintenance.
• CCTV efforts began in May and significant progress has been made as of early June.
• Locates have increased as the weather warms up and with the lessening impact of COVID.
• There continues to be IPP coordination between Veolia, OHM, and EGLE as it relates to PFAS minimization efforts.
• PFAS concentrations have decreased since the spike in October, and levels are currently hovering right around the water quality limit.
• Biosolids levels are as expected.
• There is no vacancy credit for April, but there will be one for May due to an open laborer position. Two operator positions opened and both were filled quickly. Veolia received quality candidates for these operator and maintenance positions.
• Electrical, water, oxygen, and chemical consumptions are tracking as expected. Sludge production is about at the same level as this time last year.
• The annual safety audit will take place next week.
• The tile in the Administration building is being ripped up and Veolia will be doing some painting.

In addition to the items listed above, Jason Tapp, of Veolia, noted several more activities that Veolia has been involved with. Veolia is ensuring that maintenance and operations teams are prepared for any potential temporary shutdowns related to the construction project. These temporary shutdowns help facilitate the movement of equipment in and out and allow the contractor to do what they need to do as it relates to the project. Coordination has been excellent so far. Additionally, weekly preventative maintenance is continuing to be performed on the existing dewatering equipment such as the centrifuges, conveyer belts, gear boxes, and motors. This maintenance is being performed to increase the reliability of these components in the event that redundancy is lost and these components become essential to continuing operations. Lastly, two major components in the oxygen feed system will be replaced next week. The oxygen master flow control valve and flow control meter have been malfunctioning and causing problems and are no longer reliable. Integration of the new components will occur next week, and should be fairly quick to install.

8. Treasurer’s Report

a. FY2020 Audit Report for Approval
Beth Bialy, of Plante Moran, presented the FY2020 Audit Report (Attachment 11). The audit opinion of the Independent Audit Report is an unmodified opinion that states that the financial statements are fairly stated in all material respects in accordance with all accounting rules. The Statement of Net Position shows that DUWA has operating cash of about $21M. The Receivables of $3.5M are from the communities, which are self-reporting, so there is a small time lag of past due amounts. Restricted assets include cash restricted for debt service, rate stabilization reserve, and tunnel repair and replacement reserve. The working capital of $21M will be spent down as the biosolids project progresses, and this spend-down is incorporated in the rate package. Capital assets total about $180M after depreciation. Liabilities include accounts payable, unearned revenue, and bonds payable. The unearned revenue of $1M is for the remaining 2 years of payments to Allen Park for their previous overpayments. The bonds payable is the amount that will be paid in the upcoming year. There is approximately $116M of outstanding debt.

The Income Statement shows that the sewage disposal and excess flow charges are up quite a bit from last year due to increasing the base rates and the excess flow rate in addition to the initiative to correctly report Non-Residential Units. These additional charges resulted in a $150k increase. These increased charges were offset by the decrease in IPP charges that were realized as a result of the shutdown of a large industrial user as well as the impacts that COVID had on many industrial users. The total operating revenue is about $28.5M. The operating expense of $12M is for Veolia’s contract. The system management expense of $242k is for OHM’s services as System Manager. The engineering expense is about half of what it was last year. The utilities expense of $3.3M includes costs for electric, gas, and ferric usage. Sludge hauling and disposal expenses are down from last year, however there was a backlog of sludge to handle last year. Insurance premiums of $462k are less than last year due to the negotiating skills of the System Manager. The flow metering expense is about the same as last year. The professional services expense has increased this year due to the WIFIA financing efforts. Investment income is substantially less than last year, and an even more significant decrease is expected next year due to the extremely low interest rates. These low interest rates have heavily impacted the budget. The grant revenue includes the SEMCOG grant, and the interest and bond issuance charges are for the interest payments, not principal payments. The overall change in net position is about $2.2M.

The capital asset additions include ongoing construction projects totaling about $5.8M and sewer system and building improvements totaling about $1M. Doug Drysdale (DUWA’s Accountant) provided information on contracts that extend over two years. Ongoing commitment for these infrastructure and capital improvement contracts totals about $7.5M. Long term debt activity includes paydown of the principal balance of the junior lien of about $3.6M. The total debt issuance of $55M is for the system transfer. Thus far, payments have only been going towards the interest, but as of this year, payments will now be going towards the principal of this debt. There is an increase in the debt service payments in 2023 due to the $3.5M payment due to Wayne County after 5 years from the date of system transfer, which will be in 2023. The annual debt payment of $8.8M is an increased amount due to payments being made on the principal of the system transfer debt. A standard end of audit letter was also provided to the Board members. Beth Bialy thanked Doug Drysdale and Jason Couture for their assistance in preparing the Audit Report.

Jim Taylor (Van Buren Township) left the meeting.

Motion by Dave Flaten (Ecorse) and supported by Dustin Lent (Southgate) to accept the FY2020 Audit Report. A roll call vote was taken, and the motion passed with 69.7% of the vote. Motion passed unanimously with all attending members.

b. Pending Invoices
Jason Couture presented the invoice register for a request for payment. The invoice register was provided in the pre-meeting packet (Attachment 12). The invoice register included 35 invoices due for a total of $2,461,934.35. Largest invoices included those to Inland Waters for the Alkali Sewer Rehabilitation project, Veolia for O&M services and unit cost reconciliation, Walsh for Phase 2 of the biosolids dryer facility project, and Wyandotte for utility services.

Motion by Rick Rutherford (Belleville) and supported by Dustin Lent (Southgate) to pay the invoice register. A roll call vote was taken, and the motion passed with 69.7% of the vote. Motion passed unanimously with all attending members.

9. Public Comment
Attorney Fausone noted an article he read on published on April 7 titled “Wastewater Has the Best Green Jobs Workers Don’t Know About”. This article is pertinent to Veolia’s update on hiring quality candidates. This information could be passed along to students at the high school and college level who may be interested in working public health and/or green jobs. Attorney Fausone will circulate the article to System Manager Tercala and the Downriver leaders who may want to share this with their local communities to increase the interest in this job sector.

10. Other Business
Patrick McCauley stated that this will be his last DUWA Board meeting as he will be retiring. He will be turning over his legal representation of Van Buren Township, Dearborn Heights, and Taylor to his legal partner Dave Greco.

11. Next Board Meeting Date: Thursday, July 8, 2021 (9:00 AM; Virtual)
Chairperson McLeod (Allen Park) reminded the Board that the next meeting would take place on Thursday, July 8, 2021 at 9:00 AM virtually via Zoom. Chairperson McLeod (Allen Park) urged the Board to consider resuming in-person meetings if possible. While additional travel would be involved, City Council has resumed meeting in person. System Manager Tercala offered to provide support to conduct a hybrid meeting. There has not yet been enough interest to resume in person meetings, and it would be desired to have a majority of the Board present in person. Chairperson McLeod (Allen Park) also asked System Manager Tercala to confirm that there will be a quorum the week of July 4th considering some Board members may be out of the office that week.

12. Adjournment
There being no other business, Chairperson McLeod (Allen Park) announced that a motion to adjourn would be in order. Motion by Dustin Lent (Southgate) and supported by Rick Rutherford (Belleville) to adjourn the meeting. Motion passed unanimously at 10:19 AM.

Meeting Minutes Prepared by:
Mackenzie Johnson, OHM Advisors, Engineer

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

1. Meeting Agenda
2. May 13, 2021 DUWA Board Meeting Minutes
3. Monthly Legal Update (by Fausone Bohn)
4. System Manager Report for June 2021 Board Meeting (by OHM Advisors)
5. Biosolids Dryer Facility Project May 2021 Monthly Progress Summary (by Veolia)
6. 2021 Critical Roof Repair and Maintenance Construction Project (WIFIA Prj 4-10) Indication of Supply Chain Disruptions – Timing and Costs
7. Wayne County Annual Right-of-Way Permit Fee
8. Influent Pump Station, Pump No 5 Soft Start Purchase
9. Control Measure ‘A’ Implementation Fee Increase due to Steel Pricing
10. Monthly Operating Report for April 2021 (by Veolia)
11. FY2020 Audit Report
12. Invoice Register, dated June 4, 2021 (by Doug Drysdale)