DOWNRIVER UTILITY WASTEWATER AUTHORITY
AUGUST 11, 2022 MEETING MINUTES
CITY OF TAYLOR COUNCIL CHAMBERS WITH VIRTUAL OPTION

1. Roll Call and Introductions
DUWA Chair Gail McLeod (Allen Park) called the hybrid 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 12 communities: Allen Park, Belleville, Dearborn Heights, Ecorse, Lincoln Park, River Rouge, 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 Mayor Bill Bazzi (Dearborn Heights) and supported by Rick Rutherford (Belleville) to approve the Agenda. The motion passed unanimously by all attending members.

3. Approval of Minutes from July 14, 2022 Board Meeting
Copies of the meeting minutes from the July 14, 2022 Board meeting were distributed by email prior to the meeting (Attachment 2). Motion by Mayor Tim Woolley (Taylor) and supported by Greg Mayhew (Wyandotte) to approve the minutes. The motion passed unanimously by all attending members.

4. Legal Update
Attorney Brandon Grysko, of Fausone Bohn, provided the Legal Update.

    a. General Counsel Monthly Report
Attorney Grysko stated that a written summary of the monthly legal update was provided in the pre-meeting Board packet (Attachment 3). Attorney Grysko stated that the legal team has provided assistance to the System Manager on a variety of projects, namely the ARPA funding request and biosolids dryer facility project. He added that the Fausone Bohn team has been involved with DUWA’s various committees and noted that the legal team is often involved in numerous matters behind the scenes.

5. System Manager Update
System Manager Lambrina Tercala, 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 Tercala noted the following highlights from the System Manager Report:

• The primary focus has been to get the biosolids dryer facility online; however reheating issues with the dried solids have delayed start-up of the 30-day acceptance test. An update by the Veolia CPM will be provided later in the meeting.
• There has been a major focus on minimizing spending considering the increased plant operating costs as well as the increased sludge hauling and disposal costs realized since the dryers are not yet online.
• EGLE has not yet provided a draft NPDES permit with the blending reduction language.
• The roof repair project is complete. A letter of notice was provided assigning liquidated damages; no further payment will be provided to the contractor.
• There are three outstanding engineering task orders:

1) HRC performed an analysis of the IPS Electrical Room air quality and Control Room egress. No major capital improvements are necessary as the Electrical Room is sealed tight with no detection of H2S, and the Control Room egress is compliant with building codes. HRC provided suggestions to add signage and physical barriers to further assist with directing traffic through the Control Room.
2) Hazen and Sawyer is working on the design of the HVAC Phase 2 Improvements project. The Technical Committee reviewed the two options provided, and Hazen and Sawyer will be proceeding with the design of the selected option. Construction will not begin until DUWA is in a position to resume capital spending.
3) Wade Trim will be performing the UV useful life analysis pending approval by the Board.

• There is a term within the EPA WIFIA loan program that allows for the deferment of loan payments by up to five years. OHM is working with the EPA to identify possible opportunities to delay loan payments recognizing DUWA’s projected budget shortfall this year with increased plant operating costs and the dryers not yet online. The EPA indicated that inquiries for loan payment deferrals have increased as capital costs have increased since the pandemic. Two WIFIA sub-projects are also requested for delay or cancellation. There will be additional discussions with the EPA to assess DUWA’s options to reduce capital spending and/or delay loan repayment.
• Delay of CCTV inspection efforts has been discussed for CY2022 to save on spending. This could save DUWA approximately $200k+. If CCTV efforts were delayed this year, then 100% of the system would not be inspected until year 12 as opposed to year 10. This matter will be discussed with the Board Officers.
• The EPA has developed a new program to evaluate a utility’s resilience to climate change. There is no cost to participate in the program, however technical assistance efforts will be required. The cost and benefits of this program will be evaluated to determine whether it will be beneficial for DUWA to participate. This program could potentially offer an opportunity to show EGLE that DUWA is actively looking for ways to adjust for climate change as it relates to reducing blending events.
• There is an opportunity to sell back excess natural gas (in storage) since DUWA does not have immediate use for it due to delay of the dryer system. The sale of gas may generate revenue as natural gas prices are currently higher than when it was originally purchased by DUWA.
• A biosolids technology and management company, EPPM, reached out to Mayor Bill Bazzi (Dearborn Heights) with a new process for further drying DUWA’s biosolids called Thermal Waste Oxidation (TWO). The process is reportedly to have clean air emissions and could generate energy that could be reused in the dryer to save on natural gas usage. EPPM met with OHM Advisors to discuss this system, and while it has its benefits, DUWA needs to concentrate on getting the dryers online before considering further drying opportunities.
• Six ARPA resolutions have been received so far to support DUWA’s request for a portion of the State and County ARPA funds for the UV disinfection project. Thanks to those communities that brought this matter to their local boards. These resolutions are seen as important documentation by Wayne County in consideration of providing ARPA funding to DUWA.
• A Town Hall was held to discuss the new rate methodology and phase-in options. Dick Hinshon will present the rate methodology and phase-in options at the September Board meeting for discussion, and the selected option must be approved by November.
• GLWA is also experiencing increased plant operating costs and they have formed a task force to address these increased costs. DUWA will stay informed of the task force discussions to gather ideas that may be applicable to DUWA.

Roberto Scappaticci (Romulus) asked if the dryers would need to make use of the natural gas in storage that is posed for sell off. System Manager Tercala responded that it is not expected the dryers can make use of the excess storage based on demands. Further, DUWA is recognizing additional fees for the storage as we are above upper threshold volumes. The sale of the natural gas is considered a positive item for the Authority since it is a potential added revenue stream.

Chairperson McLeod (Allen Park) asked how much revenue would be generated by selling off some natural gas. System Manager Tercala responded that approximately $300k would be generated if all of the gas in storage was sold based on last month’s market value. However, only about 65% of the natural gas in storage is proposed for sell off to keep a buffer volume available to the dryers. Approximately $47k was received last month for the sale of that month’s natural gas (non-stored volume) since the projected demand was not needed.

    b. Biosolids Dryer Facility Project
Jason Nash and Bill Hanley, Veolia’s CPM, provided an update on the Biosolids Dryer Facility project to the Board (Attachment 5). Walsh completed the reconfiguration of the drain line to facilitate flushing of cakes without clogging. Kruger will be working this week to resolve duct work issues that have been allowing air to get into the dryers. Kruger attempted to operate the dryers this week, but there were issues with programming and insufficient water flow, resulting in a wetter product coming out of the dryers and clogging the conveyers.

A meeting was held with Walsh and Kruger as well as the Veolia technical performance group and Tighe and Bond to evaluate the reheating issues and to determine how to proceed. The team is working to evaluate and test the material and develop a solution. Safety is the priority and the material must be able to be transported to the landfill without issue.

System Manager Tercala stated that it is disappointing that the dryers are not yet online. A notice was sent to Walsh and Kruger stating that a solution to address the reheating events needs to be provided by August 19^th recognizing that safety is a priority. It may be considered to only produce 80-90% dried solids initially if that eliminates reheating events as the volume would still be reduced and there would be a savings on hauling costs. There is also an option to screen ahead of the dryer system to remove fibers as these fibers can act as a candle wick that are easily ignitable. The installation of a cooling system has also been considered for the future.

Mayor Tim Woolley (Taylor) asked if DUWA was promised a 90% dry product and if DUWA would be settling for something less than what was promised. System Manager Tercala responded that the immediate goal is to reduce plant operating expenses related to sludge hauling and disposal, and then the focus will be to achieve a 90% dried product. Rick Rutherford (Belleville) asked if other entities with similar systems have been contacted to learn about how they have resolved similar issues. Bill Hanley, Veolia CPM, responded that the project team has evaluated similar facilities and has contacted their engineers to hear about their lessons learned. GLWA’s NEFCO facility was contacted and a site tour was conducted at the NEFCO site to learn about their system and communicate with their engineers. Sample data is being collected to determine the best solution to mitigate reheating events and provide Class A biosolids.

Roberto Scappaticci (Romulus) asked if any other costs besides sludge hauling and disposal are being incurred as a result of the delayed completion of the biosolids dryer project. He also asked what the status is of the liquidated damages that were previously being considered, noting that he had hesitations with the progressive design-build project delivery method for this project. System Manager Tercala responded that there have been no additional authorizations beyond those approved by the Board. Walsh is in the process of submitting a change order for about $75k for drain line reconfiguration, but this change order has not been advanced by Veolia CPM. Walsh completed the drain line reconfiguration at their own risk to move along troubleshooting efforts. Roberto Scappaticci (Romulus) suggested that a third party be brought in to review the project and to provide recommendations on how to resolve the issues preventing substantial completion of the project. Bill Hanley, Veolia’s CPM, noted that three people from Veolia will be onsite next week to provide a fresh set of eyes on the project as they are not affiliated with Kruger or Walsh.

6. Other Requests for Authorizations and Approvals
System Manager Mackenzie Johnson, of OHM Advisors, provided the following requests to the Board:

    a. Romulus Water Usage Analysis
Roberto Scappaticci (Romulus) and Jessica Katers, of OHM Advisors, presented the request for an adjustment to Romulus’ 2020 and 2021 base flows (Attachment 6). Multiple water main breaks occurred along Van Born Road in Romulus in November of 2019. The emergency valve connection between the Cities of Romulus and Wayne was opened during the repair of these water main breaks to maintain the level of service in Romulus. Following the repair of these water main breaks, Romulus noticed an increase in water usage. Romulus searched for locations of water loss during the spring and summer of 2020. It was discovered that the emergency valve connection between Romulus and Wayne had remained open thus allowing water from Romulus to flow into Wayne. This emergency valve connection was then closed in February of 2021.

Romulus is requesting that their 2020 and 2021 base flow data be adjusted. Romulus is requesting the base flow adjustments in consideration of the rate methodology calculations only, and is not requesting a refund for expenses already paid to DUWA based on the previously reported base flows.

Jim Taylor (Van Buren Township) stated that this type of data analysis approach is a model for other communities to follow, noting that non-revenue water is an important consideration in rate methodologies. He encouraged all communities to conduct an audit to quantify their non-revenue water within their distribution systems.

Motion by Rick Rutherford (Belleville) and supported by Mayor Bill Bazzi (Dearborn Heights) to approve the adjustment of Romulus’ 2020 and 2021 base flows for future rate making. The motion passed unanimously with all attending members.

    b. UV Remaining Useful Life Analysis
DUWA’s existing Trojan 4000 UV disinfection system model has been discontinued and the manufacturer no longer supplies spare parts. This system has been in place since the 1990s and has reached the end of its useful life. It was recommended that a third-party perform an assessment of the UV system to determine its remaining useful life. All three of DUWA’s as-needed engineers submitted proposals to complete the work, and Wade Trim was selected as the recommended firm to perform the work.

Wade Trim’s proposed scope involves performing a condition assessment of the existing Trojan 4000 UV system, reviewing the availability and pricing of spare parts based on market trends, reviewing operational and electrical efficiencies, and identifying risks associated with system failure. Wade Trim proposes to complete this work for a not-to-exceed fee of $4,950 (Attachment 7). The Technical Committee reviewed this request and recommended it for approval.

Chairperson McLeod (Allen Park) asked if this is the project for which ARPA funds are being requested. System Manager Tercala confirmed that ARPA funds were requested to replace DUWA’s existing UV disinfection system.

Motion by Greg Mayhew (Wyandotte) and supported by Roberto Scappaticci (Romulus) to authorize Wade Trim to perform a remaining useful life analysis on the existing UV disinfection system for a not-to-exceed fee of $4,950. This fee will be paid from DUWA’s Engineering Services line item of the budget. Due to this motion being related to authorizing a professional services contract, a roll call vote is required. A roll call vote was taken and the motion passed with 93.6% of the vote (affirmative vote by all attending members). Motion passed unanimously.

    c. Sell Back of Excess Natural Gas
DUWA had previously budgeted for an increased natural gas demand based on the expectation that the biosolids dryer facility would be operational in early 2022. Since the biosolids dryers are not yet online, DUWA now has excess natural gas in storage that is not being used. While natural gas in storage cannot be sold back to the market, it can instead be sold to another customer. Nominated monthly gas demand can, and has been, sold back to the market with the delay in the biosolids project.

Joe Moylan, DUWA’s natural gas utility consultant, recommended that DUWA sell enough gas such that approximately 35% of DUWA’s natural gas storage capacity remains available. This will provide a buffered volume for when the biosolids dryer facility comes online. Constellation, DUWA’s natural gas supplier, will identify a potential customer looking to purchase natural gas, and will then facilitate the negotiation of the sale price between DUWA and the potential customer. If DUWA does not sell back its unused natural gas, then DUWA will be further penalized for being above contract threshold capacities. The funds received from the sale of the excess natural gas will be credited to DUWA’s Utilities – Natural Gas line item of the budget (Attachment 8).

Mayor Bill Bazzi (Dearborn Heights) asked if DUWA will incur additional fees for the utility consultant’s efforts regarding the sale of the excess natural gas. System Manager Tercala responded that this effort is included in the consultant’s authorized fee and scope of work.

Motion by Mayor Tim Woolley (Taylor) and supported by James Krizan (Lincoln Park) to authorize the sale of the excess natural gas from storage to another customer for a to-be-negotiated price as well as continued monthly sellbacks to offset the lack of dryer demand. Funds received from the sale of the excess natural gas will be credited to the Utilities – Natural Gas line item of the budget. The motion passed unanimously with all attending members.

7. Contract Operator Update
General Manager Jason Tapp, of Veolia, provided the Contract Operator update.

    a. June 2022 MOR
The June 2022 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:

• Plant operations remain in compliance.
• About 1.27B gallons of wastewater were processed in June. The average flow rate into the plant was 42 MGD and a peak flow rate of 90 MGD was experienced.
• Only about 2.35 inches of rain fell in June, which is much lower compared to the almost 5 inches of rain that fell last June.
• Glycol loadings from the airport ceased this month so ferric dosing was increased to reduce the phosphorous concentration so that its average concentration does not exceed the limit of 0.6 mg/L.
• PFAS concentrations have been tracking as usual. The sludge PFAS concentration was 3 mg/kg, well below the limit of 125 mg/kg. The PFAS concentrations in the influent and effluent are hovering around the Water Quality Standard.
• Veolia has been stockpiling spare parts for the UV disinfection system as the manufacturer is no longer supplying spare parts.
• Veolia will be meeting with a polymer company to try to find a cheaper polymer that meets or exceeds industry standard performance.
• Contractors had to be brought in to perform some HVAC repairs.
• Veolia began dye dilution testing to improve the accuracy of the flow meters.
• A fire inspection company toured the site to determine whether fire standards were met. It was determined that eight additional fire extinguishers were needed around the dryer equipment bringing the total number of fire extinguishers at the plant up to 160. All fire extinguishers are inspected monthly.
• DUWA will receive a vacancy credit as there has been a 6-month laborer vacancy. This position was converted to an operator position that will also have laborer duties in order to try to fill the position quicker.
• 290 Miss Dig tickets were submitted in June; 68 tickets required site visits, 7 tickets were for design, and 24 tickets were for emergency calls.
• Several preventative and corrective maintenance items were addressed, including the following:
  • Screw conveyer #2 was repaired in-house.
  • Several actuators were rebuilt.
  • The primary tanks were washed, and maintenance was performed on the chains that are used to drag the solids to the conveyer and skim the surface for fats, oils, and greases.
  • Two more vent stacks were damaged from car impacts. Veolia is looking into working with a local machine shop to manufacture spare parts for the vent stacks at a cheaper price.

Chairperson McLeod (Allen Park) asked what the vent stacks are used for and how much they cost to replace. Program Manager Tapp responded that the aluminum vent stacks help displace air when flows enter the tunnel. The vent stacks are located along an easement, not in the road, and are hit by cars that veer off the road. Typically, several vent stacks per quarter need to be replaced, and they cost about $3000 each. Mayor Tim Woolley (Taylor) asked if people steal the vent stacks. Program Manager Tapp responded that the vent stacks are not stolen as it would take a considerable amount of force to snap them off. Greg Mayhew (Wyandotte) asked if police or accident reports are filed in association with these damaged vent stacks. Program Manager Tapp responded that police or accident reports are sometimes filed, but many times the drivers flee the scene.

Mayor Bill Bazzi (Dearborn Heights) asked if there is any concern with increased glycol influent at the plant from the airport. Program Manager Tapp responded that there is an agreement in place through the industrial pretreatment program that the airport will slowly increase the amount of glycol it sends to the plant on a weekly basis to allow for plant operation adjustments to accommodate the increased glycol loading. Glycol is consumed by the bugs, and that waste is accumulated in the sludge. System Manager Tercala added that the airport is charged a surcharge fee since its effluent is high in BOD. The glycol is a revenue stream to DUWA. Roberto Scappaticci (Romulus) also added that the airport has another outlet for its glycol discharge to another sewer system. The DWTF typically takes about 90% of the airport’s discharge.

Program Manager Tapp introduced Jen Darnell as a business graduate who is assisting the Veolia team in the preparation of charts, reports, and other deliverables for distribution to DUWA.

    b. Chemical & Sludge Price Updates
General Manager Jason Tapp, of Veolia, presented the summary of commodity unit price changes to the Board (Attachment 10). The largest unit price increase has been associated with sludge disposal and hauling, as this price has increased 208% since the beginning of the year. The biosolids now have to be hauled to a landfill farther away thus increasing transportation costs since the closer landfill stopped accepting DUWA’s biosolids. Increased tipping fees have also contributed to the unit price increases.

The unit price for polymer has also significantly increased. Veolia is exploring alternate polymer options that are cheaper. Veolia often researches alternative chemicals to get the best price. Pilot studies have been conducted on an alternative chemical to ferric chloride that can be used to settle out phosphorous. This chemical has a higher price but requires less volume. Veolia may explore this further depending on its business case. Veolia has also been continuing to find creative ways to reduce the plant’s water usage as water usage has decreased by 20% year over year for the past three years.

9. Treasurer’s Report

    a. Quarterly Financial Statement CY2022 Q2
Accountant Doug Drysdale (DNS; Riverview) presented the Quarterly Financial Statement (Attachment 11). On the Revenue and Expenditure report, operating revenue is at about 48% of the budgeted amount for the year, which is as expected for being halfway through the year. Revenue collected for sewage disposal charges is a bit behind, but is expected to increase later in the summer. Revenue from excess flow charges is also expected to increase during the second half of the year, especially considering that the new rates went into effect on July 1^st. Revenue from industrial surcharges has already met the expected budgeted amount for the entire year. Revenue from interest earnings has also exceeded the expected budgeted amount for the entire year, as DUWA is receiving about $3000 in interest each month compared to the $1000 per month that was budgeted. Revenue from SRF billings to the communities is on track with the budget. Overall, total revenue is at about 51% of the budgeted amount for the year.

Debt service includes payments to the SRF and WIFIA loans. The first WIFIA loan payment was paid in April and the second will be paid in October. Accruals in principal will be expensed in October. Other expenditures are at about 40% of the budget used, which is less than expected. Plant operation expenses are at ~47% of the budget used, which is on track with budget. Largest plant operation expenses include expenses for Veolia O&M, sludge hauling, electricity, and natural gas. Capital outlay expenses are at about 64% of the budget used, which exceeds the budgeted amount. This exceedance is due in large part to the biosolids project. Overall, expenditures exceed revenue by about $929k. The Quarterly Financial Statement was reviewed with the Finance Committee, and they will continue to track expenditures and identify opportunities to save on engineering and capital projects.

The balance sheet shows a high value for Accounts Receivable due to accruals from industrial surcharges as well as sewage disposal charges for May and June. Some cleanup is needed on the accruals for contract retainages, and these will be reported through expenditure accounts.

Roberto Scappaticci (Romulus) asked if DUWA has paid in full for the biosolids dryer project considering that it appears that $19.5M has been paid and the budget used for the project is at 100%. System Manager Tercala responded that the project has not yet been paid in full, and that about $1.1M remains to be paid to Walsh and another similar amount to Kruger. Accountant Doug Drysdale (DNS; Riverview) clarified that the columns on the Quarterly Financial Report show the end balance as of 12/31/21, then the budgeted amount for 2022 inclusive of any carryover costs, then the year-to-date amount spent. Roberto Scappaticci (Romulus) asked what the process is for holding on to retainage considering that $1M is not that much to withhold compared to the total cost of the project. System Manager Tercala responded that all retainage is currently being withheld. The Walsh invoices are eligible for payment as the work is complete, but retainage will remain to be held.

    b. Aging AR
Treasurer Jason Couture (Taylor) presented the Aging Accounts Receivable report (Attachment 12). Treasurer Couture stated that the total amount in the Accounts Receivable is approximately $3.55M, and about $3.48M is current. Dearborn Heights has an outstanding payment of about $3600 related to a rate correction that is over 120 days. Accountant Doug Drysdale (DNS; Riverview) will follow-up with Dearborn Heights to get this resolved.

    c. Pending Invoices
Treasurer Jason Couture (Taylor) presented the invoice register for a request for payment. The invoice register was provided in the pre-meeting packet (Attachment 13). The invoice register included 33 invoices due for a total of $1,986,549.74. Largest invoices included those to Veolia for O&M and unit cost reconciliations (of which $230k was for sludge hauling), Walsh for the biosolids dryer facility project, and Wyandotte for utility services.

Chairperson McLeod (Allen Park) asked if it would be possible to not approve the Walsh invoices for payment considering the ongoing discussions related to project delays. Treasurer Couture (Taylor) responded that the Board can omit payment for any invoices it desires. Chairperson McLeod (Allen Park) suggested amending the motion to pay the invoice register with the exception of the Walsh invoices.

Motion by Mayor Bill Bazzi (Dearborn Heights) and supported by James Krizan (Lincoln Park) to pay the invoice register with the exception of the Walsh invoices. The motion passed unanimously with all attending members.

9. Public Comment
There was no public comment. 

10. Other Business
Mayor Bill Bazzi (Dearborn Heights) stated that conversations have been held with EPPM, who specializes in thermal waste oxidation (TWO) systems that can be used to convert biosolids and trash into energy. This system requires a footprint of a few acres. EPPM would be willing to give a presentation of the TWO system to the Board at a future meeting. System Manager Tercala noted getting the dryer project online is DUWA’s current priority, and more time would be needed to vet the TWO system. If it has merit to the system, a presentation by EPPM could be planned with DUWA’s Technical Committee.

11. Next Board Meeting Date: Thursday, September 8, 2022 (9:00 AM; In-Person)
Chairperson McLeod (Allen Park) reminded the Board that the next meeting would take place on Thursday, September 8, 2022 at 9:00 AM in-person at Taylor City Hall.

12. Adjournment
There being no other business, Chairperson McLeod (Allen Park) announced that a motion to adjourn would be in order. Motion by Rick Rutherford (Belleville) and supported by Roberto Scappaticci (Romulus) to adjourn the meeting. Motion passed unanimously at 10:16 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. July 14, 2022 DUWA Board Meeting Minutes
3. Monthly Legal Update (by Fausone Bohn)
4. System Manager Report for August 2022 Board Meeting (by OHM Advisors)
5. Biosolids Dryer Facility Project July 2022 Monthly Progress Summary (by Veolia)
6. Request for Romulus Base Flow Adjustment and Water Usage Analysis Presentation (by Romulus and OHM Advisors)
7. UV Remaining Useful Life Analysis Proposal (by Wade Trim)
8. Request for Sale of Excess Natural Gas
9. Monthly Operating Report for June 2022 (by Veolia)
10. DWTF Unit Price Changes Summary (by Veolia)
11. Quarterly Financial Statement CY2022 Q2 (by Doug Drysdale)
12. Aged Accounts Receivable Report, dated August 4, 2022 (by Doug Drysdale)
13. Invoice Register, dated August 4, 2022 (by Doug Drysdale)