DOWNRIVER UTILITY WASTEWATER AUTHORITY
JUNE 8, 2023 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 9:01 AM and asked for roll call to be taken. At the time of roll call, voting representatives were in attendance from 9 communities: Allen Park, Belleville, Lincoln Park, 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 Jeff Dobek (Riverview) and supported by James Krizan (Lincoln Park) to approve the Agenda. The motion passed unanimously by all attending members.

 

 

3. APPROVAL OF MINUTES FROM MAY 11, 2023 BOARD MEETING
Copies of the meeting minutes from the May 11, 2023 Board meeting were included in the pre-meeting Board packet (Attachment 2). Motion by Mayor Tim Woolley (Taylor) and supported by Kevin Lawrence (Van Buren Township) to approve the minutes. 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). Attorney Fausone stated that it has been a typical month of activities as Fausone Bohn has been assisting the System Manager with various contract matters and has participated in virtual meetings with the Legal, Finance, and Technical Committees.

Attorney Fausone also stated that preliminary discussions were held with Wayne County on the possibility of paying the $3.5M payment due to Wayne County over the course of five years. This would equate to an annual principal payment of $750k with a proposed 4% interest rate. A total of approximately $345k in interest would be accrued over the five years, and transactional fees would also apply. This proposed payment plan would improve DUWA’s cash flow and would still allow Wayne County to contribute to their employees’ pension funds as planned. Additional negotiations of the terms and amendment to the bond are still required. The bond amendment would need to occur within the next 60-90 days ahead of the September due date. Fausone Bohn proposes to engage Dykema as their subconsultant to assist with the bond amendment. Dykema’s effort would total approximately $7,500. Attorney Fausone asked the Board if they would like Fausone Bohn to move forward with the bond amendment effort as well as finalizing the terms and agreement of the payment plan with Wayne County.

Mayor Tim Woolley (Taylor) agreed to move forward with the proposed bond amendment and payment plan process, but suggested that the terms allow DUWA to pay the remaining debt earlier than five years, if desired. Attorney Fausone stated that the terms will be negotiated such that DUWA can pay off the loan early without additional fees. Rick Rutherford (Belleville) asked if this payment plan is beneficial to DUWA considering an additional $345k above the $3.5M would be paid over the five years. Attorney Fausone stated that the payment plan will improve DUWA’s cash flow such that DUWA will have more cash in reserves that could be used for other more immediate needs, such as UV project financing and rate stabilization. The reserve accounts are also receiving a relatively high interest rate and Wayne County will not agree to a lower interest rate than 4% to ensure that they are not losing money over the five years considering inflation.

Attorney Kerry Morgan (Riverview’s attorney) asked if there is a legal principle associated with the interest term. Chairperson McLeod stated that comments were received from the Treasurer. Attorney Fausone stated that further negotiations of the terms of this bond amendment are still necessary, and will be completed with the assistance of Dykema, DUWA’s bond counsel.

 

 

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:

• • • Activities this month focused on working through the dryer project challenges. The small group met informally with Walsh to discuss their Request for Equitable Adjustment (REA), and Walsh will provide an updated REA for consideration later this week.
    • Black & Veatch spent much of this month preparing the RFP for a UV equipment manufacturer. The UV project contract will be with a single entity, but it is necessary to select a named manufacturer to allow Black & Veatch to complete the UV system design, which is expected to be complete in October 2023.
    • OHM and Veolia will be presenting at the MWEA Annual Conference on June 20th on the topic of “Improving the Management of Regional Collection System Assets” showcasing DUWA as the example.
    • DUWA is still pending the NPDES permit from EGLE.
    • The North dryer was turned off because it was only running at 30% of its capacity and the costs of utilities (namely electricity and natural gas) to run the dryer are high. Pump repairs and replacements will take place while the dryer is offline.
    • The FY2024 rate package has been finalized and is included in the Board package for approval later in the meeting.
    • Three of the PLC-5s have failed and need to be replaced. Veolia has reached out to vendors for quotes to perform the work, but no quotes have been received to date. OHM will reach out to DUWA’s as-needed engineers to request their support on this effort and so they can engage their preferred system integrators.
    • A kickoff meeting was held with Doetsch for the Goddard chamber investigation. Doetsch is planning to perform the investigation in late June or early July.
    • Mini videos of the dryer and UV systems have been shared with the Board, and another set of mini videos explaining the PLC-5 system are planned to be developed.
    • The permit for BASF’s discharge from their groundwater treatment system was finalized and issued to BASF.
    • SRG Global has closed its facility, and Calder’s Dairy has moved its production operation out of DUWA’s service area to Flat Rock. These companies are no longer a part of DUWA’s IPP program.
    • The EPA is planning to visit the DWTF on July 12th to see some of the projects that were funded by the WIFIA loan and to review the documents indicating compliance with the federal cross-cutters.

Attorney Kerry Morgan (Riverview’s attorney) asked for more detail on the EPA Climate Change Resiliency Program that was listed on the System Manager Update in the Board packet. System Manager Tercala responded that the EPA reached out to utilities in various regions of the country inquiring about their interest in participating in the EPA’s new Climate Change Resiliency Program that will utilize the EPA’s new CREAT tool. This tool will identify potential projects for consideration to improve the system’s resiliency to climate change. DUWA and the City of Toledo are grouped in the same region. A high-level kickoff meeting was held with DUWA, the City of Toledo, and the EPA to discuss this project. Several workshops will be held with the utilities, totaling about 30-40 hours of meetings, and the EPA will provide technical assistance throughout the project. Vyto Kaunelis and Mackenzie Johnson will support this effort. Attorney Kerry Morgan (Riverview’s attorney) expressed concern on how the EPA may use the information collected in the workshops for additional rulemaking or regulation.

Chairperson McLeod (Allen Park) clarified that while Calder’s Dairy moved its processing plant to Flat Rock, the retail store will remain open in its current location.

b. UV Disinfection Replacement Project Update
System Manager Lambrina Tercala, of OHM Advisors, provided an update on the UV Disinfection Replacement Project to the Board (Attachment 5). The SRF Project Plan was submitted to EGLE on May 1st in support of DUWA’s request for an SRF low-interest loan. It is expected that EGLE will publish its draft list of projects to receive SRF loans in August, and it is expected that DUWA will know whether it will receive SRF funding by November of this year. If DUWA is selected to receive a SRF loan, it is expected that loan closing will occur no earlier than February 2024. If DUWA is not selected for SRF financing, then municipal bonding will be pursued, which has a similar milestone schedule as SRF financing. PFM, DUWA’s financial advisor, and Dykema, DUWA’s bond counsel, are aware of DUWA’s upcoming financing needs and are preparing letters for engagement to assist with this effort.

c. Biosolids Dryer Facility Project
Jason Nash provided an update on the Biosolids Dryer Facility project to the Board (Attachment 6). The South dryer was shut off on April 24th for maintenance and to remove the pumps so that they could be sent back to Seepex to be rebuilt. The condensing towers also needed substantial cleaning. The rebuilt pumps are currently being installed and the South dryer is planned to be turned on next Tuesday. The North dryer was also recently shut off so that its pumps could be sent back to Seepex to be rebuilt. The pumps are expected back onsite within the next few weeks. The redesigned cake bin is planned to be installed on June 26th, and the rebuilt pumps are planned to be installed on the North dryer during this time as well. The North dryer is then expected to be turned back on in early July.

Seepex was onsite a few weeks ago to evaluate the pump operations as the pumps were operating at higher pressures than desired. Seepex recommended that the BLIS system be installed and operated 24/7 to lubricate the pipes and reduce the friction losses in order to reduce pressures. The new rotor material and the reduced pressures should increase the life expectancy of the pumps.

As requested at the last Board meeting, several graphs were provided in the Board packet that show the dryer production versus design capacity over the last few months based on the pump tests. The graphs show the times when the dryers were operating at capacities below the design capacity. Production of dried solids significantly decreased when the South dryer was turned off at the end of April and dropped again when the North dryer was shut off at the end of May due to the reduced pump production. As a result, the amount of solids removed from the plant has decreased causing solids to build up at the plant. Additional solids will need to be removed in order to maintain compliance.

Mayor Tim Woolley (Taylor) asked if the new pumps on the South dryer are better pumps than those used before. Jason Nash responded that the pumps are the same, but the stainless steel rotors were replaced with ductile iron with a chromium coating, which has increased corrosion resistance and should last longer. Attorney Fausone asked if the rubber stators were planned to be replaced with urethane stators. Jason Nash responded that Seepex will be providing a quote for the urethane stators this week. It is important that the materials of the rotors and stators are compatible, otherwise the pumps could degrade at a faster rate. Seepex will provide their recommendation of materials for the rotors and stators and a quote for consideration.

Roberto Scappaticci (Romulus) asked if the plant is able to keep up with hauling and disposal of the dewatered solids. Jason Tapp responded that the plant is unable to keep up with the volume of dewatered solids building up. Veolia is working with vendors to find alternate disposal sites to increase the volume hauled each day. Veolia is hopeful to haul up to ten truckloads per day with the help of another partner beginning this week. Several weeks of increased hauling should help the plant catch up.

Dan Marsh (Southgate) asked if the dryers are expected to operate at 100% of their design capacity when they are turned back on. Jason Nash responded that the dosing pumps are expected to operate at 100% capacity, but the entire system will need to operate as a whole to see if there are other issues that arise. When the dryers are turned on, they will operate at a low production rate and the team will slowly increase the throughput as settings are adjusted accordingly. Jeff Dobek (Riverview) asked how much additional cost is attributed to the additional trailers and down time of the dryers. Jason Tapp responded that the cost for sludge hauling and disposal is about an additional $250k-$300k per month from the Veolia monthly sludge limit.

Mayor Tim Woolley (Taylor) expressed frustration with the project considering that the residents had to recognize rate increases in order to fund the project, and the dryers are consistently not working. Rick Rutherford (Belleville) agreed with this sentiment, and Chairperson McLeod (Allen Park) agreed and added that this sentiment is shared amongst all of the Board members and the communities and residents they represent. Greg Mayhew (Wyandotte) added that the solids backup at the plant has also impacted air quality in the City of Wyandotte as odor complaints have increased.

Attorney Kerry Morgan (Riverview’s attorney) asked if Kruger can provide the life expectancy of the rebuilt pumps. Jason Nash responded that Kruger relies on Seepex for this information, and Seepex cannot provide this information at this time. Once the pumps are operating at a reduced pressure, then Seepex can provide an estimate on longevity based on the pump configuration. Attorney Kerry Morgan (Riverview’s attorney) asked what the next step would be if the pumps do not provide improved production. Mike Gutshall, of Kruger, responded that the pumps have worn faster than expected, and the team is working to begin operation of the BLIS system in order to reduce pressures. Kruger seeks to have the abrasiveness of the sludge evaluated as Kruger feels this could be contributing to the wear and tear of the pumps.

Chairperson McLeod (Allen Park) asked how the operating capacities of the pumps were verified. Jason Nash responded that he observed the pump tests and confirmed that the pump tests were performed properly, with all pumps running simultaneously during the tests. The March pump tests showed the pumps could operate at 100% of their capacities. When the header pressure was increased to reach 100% operational capacity, the pumps quickly degraded and the pump seals failed. The pumps could not continuously be run at 100% capacity. Roberto Scappaticci (Romulus) asked who reviewed and approved the pump curves. Jason Nash responded that Kruger provided the operational criteria to Seepex who then recommended the pumps to be used. The pumps are operating on their pump curves based on their pressures. Mayor Tim Woolley (Taylor) added that it seems the pumps are either faulty or incorrectly sized. Mike Gutshall, of Kruger, stated that Seepex continues to reiterate that the pumps are appropriately sized, and that operation of the pumps needs to be optimized to minimize wear.

Attorney Fausone asked how abrasiveness of the sludge is measured. Mike Gutshall, of Kruger, responded that Seepex indicated that the abrasiveness of the sludge could be the cause of the pump degradation. However, Seepex did not provide specific grit characteristics that can be measured. Kruger does not normally test for nor evaluate abrasiveness and is working to identify ways to quantify this. Kruger is also identifying potential labs that could be used to perform a solids composition and grit analysis. Mayor Tim Woolley (Taylor) requested that the same lab analyses that are performed by Kruger should also be replicated by Veolia at the lab at the DWTF.

Jeff Dobek (Riverview) asked if sludge characterization was performed during the design process. Mike Gutshall, of Kruger, responded that Kruger does not typically characterize sludge. Kruger was aware that the sludge contained grit and understood that screening was in place, so the presence of grit did not raise concern. Attorney Kerry Morgan (Riverview’s attorney) asked how much grit will result in premature pump degradation and if Seepex can provide heavy-duty pumps. Mike Gutshall, of Kruger, responded that grit is comprised of sand, asphalt, and other fine particles washed into the sanitary sewers. Gutshall further stated DUWA’s wastewater influent is not unique compared to other wastewater treatment plants.

Grit content may not solely represent the amount of abrasive material present in the sludge. Kruger will continue to investigate the system. Kruger will also reach out to Seepex about their heavy-duty pump options. Kruger stated they will have additional information to present at the July Board meeting after the South dryer is turned on next week.

 

 

6. OTHER REQUESTS FOR AUTHORIZATIONS AND APPROVALS
System Manager Mackenzie Johnson, of OHM Advisors, presented the following requests to the Board.

a. FY2024 Surcharge Fees
The surcharge rates that are charged to industrial users are directly tied to DUWA’s operating costs. DUWA has experienced significantly increased plant operating costs due to increases in sludge disposal and hauling costs as well as chemical and utility costs. In response to these increased costs, DUWA had previously increased the surcharge rates that were in effect from August – December 2022. The surcharge rates now need to be updated again to reflect current operating costs.

OHM reviewed DUWA’s surcharge rates to assess if the current surcharge rates meet actual and projected costs through 2023. Based on this review, an increase in DUWA’s surcharge rates is recommended. The increase in surcharge rates will be applied beginning July 1, 2023 through June 30, 2024 to align with DUWA’s rate year. The proposed BOD surcharge rate will increase slightly from $0.39 to $0.40, the Total Suspended Solids surcharge rate will remain the same at about $0.27, and the proposed Total Phosphorous surcharge rate will increase from $3.02 to $3.45 (Attachment 7). The proposed surcharge rates were reviewed by the Technical Committee and were recommended for approval.

Motion by Greg Mayhew (Wyandotte) and supported by Rick Rutherford (Belleville) to approve the proposed FY2024 surcharge rates as presented that will be in effect from July 1, 2023 through June 30, 2024.

b. BASF-DUWA Agreement for Purchase of Surplus Materials
The BASF Corporation, a chemical company located in Wyandotte, has requested to purchase small amounts of the wet biosolids material that is produced as a part of the DWTF’s treatment processes to be used for research and development purposes associated with their new biodegradation laboratory. BASF proposes to purchase the Materials for the aggregate price of $1.00 per year, and will remove, transport, and properly dispose of the purchased Materials from the plant site at no cost to DUWA or Veolia. Per the proposed agreement, BASF will be allowed to remove, transport, and dispose of a maximum total amount of 300 kg per year of Materials on a dry weight basis, and at a rate of a maximum of 75 samples per year (Attachment 8). The Agreement has also been reviewed by both the Legal and Technical Committees, and their comments have been incorporated.

This motion is being brought forward now that BASF’s outstanding invoices have been paid and they are up to date on their Aging Accounts Receivable.

Greg Mayhew (Wyandotte) asked if Veolia will be assisting with the biosolids sample collection. Jason Tapp, Veolia’s General Manager, responded that BASF staff have performed dry runs and know how to collect the samples with the appropriate PPE. It is understood that BASF is developing a mini wastewater treatment plant to evaluate the breakdown of microplastics, which may be an emerging contaminant of the future.

Motion by Mayor Tim Woolley (Taylor) and supported by Mayor Joseph Kuspa (Southgate) to authorize the Chair or Vice Chair to sign the Purchase Agreement between BASF and DUWA for BASF’s purchase of DUWA’s surplus or byproduct materials produced from the DWTF’s treatment processes.

 

 

7. CONTRACT OPERATOR UPDATE
Jason Tapp, of Veolia, provided the Contract Operator update.

a. April 2023 MOR
The April 2023 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:

• • • April was a wet month. The maximum flow into the plant was 141 MGD on April 1st, and the average flow for the month was 61 MGD.
    • The DWTF was still receiving glycol from the airport in April, but that has since tapered off, and glycol is not expected to be received again until November.
    • The PACl trial is ongoing and is proving to be very effective for phosphorous removal. The use of PACl is exceeding expectations on a cost per day basis as it is more expensive than ferric chloride, but less volume is needed. The use of PACl is also providing better settleability of the fine solids.
    • The reduction in use of ferric chloride has caused increased odor due to the increased amount of sludge that is recycled. USP Technologies performed two pilot studies with the use of hydrogen peroxide for odor control, and both pilot studies were successful. USP Technologies will develop a proposal to perform a full-scale test of hydrogen peroxide dosing for consideration.
    • The wooden bearing inserts were replaced on screw conveyors #1 and #2 that take the biosolids from the dryer to the truck. This work required large cranes to be used.
    • An 8-inch water line break was discovered 12 feet deep under the DWTF. The repair was completed in-house as Veolia staff rented equipment to excavate the area and perform the repair.
    • Maintenance work was completed on the primary tanks. These tanks now have a thicker sludge blanket than usual due to the sludge backup at the plant. The thicker sludge blanket causes wear and tear on the plows that skim the surface. Additional maintenance and repairs will be required when the sludge levels at the plant return to normal.
    • The drain pits were cleaned on clarifier #5. The 12-inch drain lines are scrubbed each week to prevent clogging from excess material. This involves pumping down the clarifier to access the lines. It is important to keep this as a preventative task as opposed to a corrective task.
    • Kruger continues to focus on resolving the cake pump and dosing pump issues. The depositor hoses downstream of the dosing pumps are experiencing bulging failures. This was originally thought to be caused by a manufacturer defect, but replacement depositor hoses are also experiencing bulging failures. Kruger is working on a resolution.
    • The Cla-Val valve regulator was replaced on the industrial water skid. This valve functions as a backflow preventor that creates an air gap to prevent cross contamination as City water is sent through the industrial water skid.
    • Various pumping and electrical repairs have been performed.
    • A terminal block on the UV system overheated and failed. A replacement terminal block was purchased from a local manufacturer. Trojan products are expensive since they no longer manufacturer new parts.
    • The Veolia collection system team replaced the single-use flow meter battery packs with rechargeable battery packs that were fabricated in-house by Veolia’s electricians. The single-use battery packs were wasteful.
    • The 2022 CCTV inspection effort of the collection system is 95% complete. Veolia is working to find a different contractor to perform the 2023 CCTV inspections as the current contractor is not reliable.
    • Safety training was performed in April. The industrial hygienist was onsite and took samples and placed meters on employees to analyze the air particulates in the Solids Handling Building. This air quality testing was performed in conjunction with the MIOSHA air quality analysis. No issues of concern were identified from the industrial hygienist nor the MIOSHA analyst.
    • There were 223 Miss Dig tickets received in April, of which 22 tickets were emergency. The number of tickets is expected to increase in the summer months.
    • There will be no vacancy credit for the month of April.

Jeff Dobek (Riverview) asked if Veolia has been cited by EGLE or Wayne County for the odors. Jason Tapp responded that no citations have been issued from EGLE or Wayne County related to the odors.

Attorney Kerry Morgan (Riverview’s attorney) asked if results are available from the tests Kruger performed on the wet solids at the start of the project. Jason Tapp responded that Kruger was provided with two 55-gallon drums of wet biosolids for their analysis at the start of the project. Kruger assessed the solids per their discretion but did not provide information on the abrasiveness or grit content of the material to Veolia or DUWA. Attorney Kerry Morgan (Riverview’s attorney) asked if the pump issues could be attributed to the location in the cake bin from which they are pulling material, such as a location where grit is allowed to settle. Jason Tapp responded that the auger pulls the sludge from the bottom of the bin.

Roberto Scappaticci (Romulus) asked if the use of hydrogen peroxide for odor control could cause reheating of the dried solids. Jason Tapp responded that the hydrogen peroxide is dosed on a parts per million basis and reacts only with the liquid before the sludge is separated, so it would not have an effect on the solids stream.

b. Chemical & Sludge Price Updates
Jason Tapp presented the summary of commodity unit price changes to the Board (Attachment 10). Per the Amendment 7 Extension, the cost for sludge hauling and disposal was budgeted at approximately $89k per month. The cost for sludge hauling and disposal in April was less than the contract value as most of the biosolids went through the dryers, so Veolia will provide about a $34k credit to DUWA for this cost difference. The sludge hauling and disposal cost for April (about $50k) is indicative of the monthly cost DUWA should expect when the dryers are online. The unit prices for the other commodities have remained relatively stable.

c. Biosolids Disposal Outlets
Jason Tapp stated that Veolia has struggled to find landfills that will accept DUWA’s dewatered biosolids because when wet, the sludge becomes odorous and undesirable. Veolia expects to be able to find more facilities that will accept DUWA’s Class A dried solids. The dried solids will also have a significantly reduced volume for disposal compared to the wet biosolids. Veolia continues to leverage their contracts with large landfills, and some have been willing to accept DUWA’s dewatered biosolids for a couple of months until the dryers are consistently online. Veolia has three hauling contractors who have helped to haul more sludge per day (4-6 truckloads/day) to the landfills. Synagro has also offered Veolia to use its landfill space for a few months until enough of the sludge is removed for the plant to return to its normal sludge storage capacity.

d. Existing Disinfection System Performance & Remaining Life Update
Jason Tapp stated that Veolia staff spends a lot of time on the UV disinfection system each week. The UV system is experiencing degradation of bulbs and power failures on the internal system. Veolia was recently able to source a terminal block from a local manufacturer in Wyandotte. Complete replacement of control boards would be very expensive, and some electrical components are proprietary to Trojan and cannot be sourced from a third-party manufacturer. Given the availability of spare parts and the current performance of the UV system, Jason Tapp feels comfortable that the UV system can continue to be in operation for another 20 months.

 

8. TREASURER’S REPORT

a. Authorization of FY2024 Rate Package (July 1, 2023 – June 30, 2024)
Accountant Doug Drysdale (DUWA’s Accountant; DNS Financial Services) presented the FY2024 rate package. The FY2024 rate package was reviewed in length at the last Board meeting. The Finance Committee also reviewed the rate package and had no comments. The Resolution to approve the FY2024 rate package was included in the Board packet (Attachment 11).

Motion by Greg Mayhew (Wyandotte) and supported by Jeff Dobek (Riverview) to approve the resolution adopting the FY2024 rate package. A roll call vote was taken, and the motion passed with 80.4% of the vote. The motion passed unanimously with all attending members.

b. Approval of Audit and Single Audit

i. Audit for 2022
Beth Bialy, of Plante Moran, presented the audit of DUWA’s CY2022 Financial Statements (Attachment 12). The audit opinion states that the financial statements are presented fairly in all material respects, which is the desired outcome. The statement of net position shows DUWA’s cash in investments and receivables (amounts owed by the communities to DUWA). DUWA’s liabilities include the normal amounts owed to vendors and professionals as well as the $3.5M payment due to Wayne County. The overall unrestricted cash is just over the limit set in DUWA’s reserve policy. Payment of the $3.5M to Wayne County would result in the reserve amount falling below the limit set in the policy. However, DUWA should realize some financial savings once the dryers are online. DUWA paid about $5.3M in bond payments over the year.

DUWA’s net position totals about $104M and includes about $71M in assets, about $16M in restricted cash (which includes debt service, rate stabilization, and the tunnel reserve), and about $17M in unrestricted cash. The unrestricted cash amount is about $1M less than last year due to the unexpected commodity cost increases. System operating expenses increased by about $1.3M from last year due to the $1.1M increase in costs for sludge hauling and disposal as well as the $700k increase in cost for utilities. DUWA earned about $317k in interest over the year, and the overall net position increased by about $2.9M.

The end of audit letter to the Board includes two sections. The first section provides various information required by the audit standards, such as indication of issues encountered during the audit process, none of which were encountered. The second section includes legislative and other informational updates for all local units of government in the state of Michigan.

Motion by Rick Rutherford (Belleville) and supported by Jeff Dobek (Riverview) to approve the 2022 annual audit performed by Plante Moran, along with the end of audit letter, and to direct Plante Moran to upload the financial statement and letter to the Michigan Department of Treasury, as required by Public Act 2 of 1968. The motion passed unanimously with all attending members.

ii. Single Audit for 2022
Rumzei Abdallah, of Plante Moran, presented the single audit to the Board (Attachment 13). DUWA is required to complete a single audit per WIFIA loan compliance requirements. The single audit must be reported to the CFIA each year until the remaining WIFIA debt is below $750k. The single audit identified no instances of non-compliance. However, one deficiency was identified related to the lack of segregation of duties. Bank reconciliations should be prepared by someone who does not have access to cash or the general ledger, however bank reconciliations are performed by DUWA’s Accountant who has access to cash and the general ledger. Additionally, the Southgate and Wyandotte self-reported billings should require a formal secondary review process. Currently, DUWA has detective control, but not preventative control. Also, DUWA’s financial reporting should be backed up to the cloud or an offsite/remote location as opposed to being stored on an external hard drive that is stored in the same location as the computer. This has since been corrected.

Motion by Mayor Tim Woolley (Taylor) and supported by Rick Rutherford (Belleville) to approve the 2022 single audit performed by Plante Moran, and to direct Plante Moran to upload necessary documents to the Michigan Department of Treasury and/or EPA to fulfill WIFIA funding requirements. The motion passed unanimously with all attending members.

c. Aging AR
Treasurer Jason Couture (Taylor) presented the Aging Accounts Receivable report (Attachment 14). Treasurer Couture stated that the total amount in the Accounts Receivable is approximately $695k. The AR report shows that Ecorse has outstanding invoices over 60 days totaling about $296k; however, the outstanding payments have since been received and Ecorse is now current on their payments.

d. 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 15). The invoice register included 30 invoices due for a total of $489,936.04. The largest invoices included those from Black & Veatch for engineering services related to the UV disinfection project and Wyandotte for utility services.

Motion by Rick Rutherford (Belleville) and supported by James Krizan (Lincoln Park) to pay the invoice register. The motion passed unanimously with all attending members.

 

9. PUBLIC COMMENT
There was no public comment.

 

 

10. OTHER BUSINESS
Treasurer Jason Couture (Taylor) thanked Beth Bialy from Plante Moran for her hard work and dedication to DUWA over the years. She will be retiring at the end of this month and Rumzei Abdallah from Plante Moran will take her place. Many Board members and DUWA professionals expressed their gratitude to Beth and wished her well in retirement.

 

 

11. NEXT BOARD MEETING DATE: Thursday, July 13, 2023 (9:00 AM; In-Person)
Chairperson McLeod (Allen Park) reminded the Board that the next meeting would take place on Thursday, July 13, 2023 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 Mayor Joseph Kuspa (Southgate) and supported by Roberto Scappaticci (Romulus) to adjourn the meeting. Motion passed unanimously at 11:16 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. May 11, 2023 DUWA Board Meeting Minutes
3. Monthly Legal Update (by Fausone Bohn)
4. System Manager Report for June 2023 (by OHM Advisors)
5. UV Disinfection Replacement Project Update (by OHM Advisors)
6. Biosolids Dryer Facility Project May 2023 Monthly Progress Summary (by Veolia)
7. Request to Approve FY2024 Surcharge Fees
8. BASF-DUWA Purchase Agreement for Surplus or Byproduct Materials
9. Monthly Operating Report for April 2023 (by Veolia)
10. DWTF Unit Price Changes Summary (by Veolia)
11. Resolution to Adopt the FY2024 Rate Package (July 1, 2023 – June 30, 2024)
12. Audit of CY2022 Financial Statements
13. CY2022 Single Audit of Federal Awards (WIFIA)
14. Aged Accounts Receivable Report, dated June 1, 2023 (by Doug Drysdale)
15. Invoice Register, dated June 1, 2023 (by Doug Drysdale)