DOWNRIVER UTILITY WASTEWATER AUTHORITY
November 9, 2023 MEETING MINUTES
CITY OF TAYLOR COUNCIL CHAMBERS

 

1. ROLL CALL AND INTRODUCTIONS
DUWA Chair Gail McLeod (Allen Park) called the 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, Brownstown Township, Dearborn Heights, Ecorse, Lincoln Park, Riverview, River Rouge, 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 Jeff Dobek (Riverview) to approve the Agenda. The motion passed unanimously by all attending members.

 

3. APPROVAL OF MINUTES FROM OCTOBER 12, 2023 BOARD MEETING
Copies of the meeting minutes from the October 12, 2023 Board meeting were included in the pre-meeting Board packet (Attachment 2). Motion by Mayor Joseph Kuspa (Southgate) and supported by Mayor Tim Woolley (Taylor) to approve the minutes. The motion passed unanimously by all attending members.

 

4. LEGAL UPDATE
Attorney Brandon Grysko, of Fausone & Grysko, 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 it was a typical month of activities as Fausone & Grysko assisted the System Manager with various matters particularly related to the Biosolids Dryer Facility project.

b. Annual System Manager Evaluation Reminder
Attorney Grysko reminded the Board Commissioners that the System Manager’s work performance is evaluated by the Board on an annual basis per the System Manager contract. Fausone & Grysko compiled a list of performance evaluation survey questions that will be distributed to the Board later today via an online survey platform (Attachment 4). The Board is requested to provide responses by November 17th. Survey responses may be submitted anonymously, but participants may also identify specific community issues within the survey if so desired. Fausone & Grysko will review the survey results with the System Manager and the DUWA Chair.

 

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 5).

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

• • • EGLE provided a draft version of DUWA’s NPDES permit renewal on October 24, 2023. The NPDES permit allows DUWA to discharge treated wastewater into the Detroit River in accordance with the permit requirements. DUWA has been waiting to receive the draft NPDES permit from EGLE since 2021 when DUWA’s NPDES permit renewal cycle was initiated. The draft permit recognizes the increased capacity of the secondary clarifiers, includes requirements to develop PFAS local limits, and also has a greater focus on mercury concentrations. The draft permit is currently under review by OHM and Veolia, and has also been provided to the Technical and Legal Committees for review. The draft permit will also be provided to the Board Commissioners for feedback. EGLE initially requested that comments be received by November 10, 2023, but DUWA requested an extension to January 26, 2024 and the extension was approved by EGLE. Comments from the Committee members and Board will be compiled to develop a response letter to EGLE.
    • DUWA is in receipt of a Class A permit application from a proposed Taco Bell development in Taylor. The Class A permit allows for direct connections from the local sanitary sewer into DUWA’s interceptors provided that the permit requirements are met. The developer requested an expedited review of the permit application as they desire to complete construction before the winter months. Time was lost when the developer was told that the nearby assets were owned by Taylor rather than DUWA. The System Manager authorized Wade Trim to review the proposed design and connection plans for a not-to-exceed fee of $2,000. Costs incurred will be passed to the permittee for reimbursement to DUWA. Fausone & Grysko is working on the legal terms of the permit to set a precedent for future permit applications.
    • Veolia submitted its annual Asset Management report on October 30th as required by EGLE. The Asset Management report incorporates work from late last year as well as this year, so there is a short turnaround time for review. Veolia will update the report with OHM’s revisions and will provide an updated version to EGLE.
    • DUWA last performed PFAS local limits sampling in 2021. Local limits are set by DUWA based on sampling and lab analyses, and indicate the maximum PFAS concentrations that the DWTF can accept to maintain compliance. PFAS is considered an emerging contaminant and the NPDES permit requires development of PFAS local limits within six months of the permit renewal. Thus, DUWA must perform a second round of sampling to develop PFAS local limits.
    • At the last Board meeting, it was requested to explore whether DUWA’s tax-exempt status could be extended to Veolia. Upon further research by Fausone & Grysko and Plante Moran’s tax expert, it was determined that DUWA’s tax-exempt status cannot be extended to Veolia because DUWA is considered the end user. Additionally, a use tax would still apply to Veolia even if the materials were purchased by DUWA with the sales tax exemption. A summary of the tax exemption determination was provided in the Board’s pre-meeting packet (Attachment 6). The potential to use DUWA’s tax-exempt status on future capital projects or other purchases will be considered where it may make sense, such as paying for natural gas and electricity costs directly as is the case currently.
    • Aon, DUWA’s insurance provider, has provided final quotes for insurance premiums for 2024. The property insurance premium will increase by about 10% and the package liability insurance premium will increase by about 2.8%. The Inland Marine insurance premium, which covers DUWA’s collection system assets, will increase by about 6.2%. The Inland Marine insurance premium has not increased since the time of system transfer, however DUWA updated the Schedule of Values this year to reflect a 3% increase and the insurance provider also proposed a 3% increase to the premium. The proposed costs are in line with Aon’s expectations as they are on the lower end of the range for market increases. Aon indicated that they may go out to market next year to verify that DUWA continues to receive competitive insurance coverages and premiums. Aon will be available at the December Board meeting to present the insurance renewal premiums and to answer questions.
    • SEMCOG hosted two strategic planning workshops with DUWA. A vision and mission statement as well as “HICOPs” (Hurdles/Issues/Concerns/Obstacles/Problems) were developed during the April workshop, and the September workshop focused on identifying target areas to overcome the HICOPs. A major takeaway from the September workshop was the importance of sharing institutional knowledge and maintaining engagement of those who know the system well. A summary of the items discussed during the September workshop was provided in the Board’s pre-meeting packet (Attachment 7). As a next step, DUWA’s Professionals and Board Officers will prioritize the target areas to advance upon and identify leaders for each of the near-term items. Annual updates on the progress of the target areas will be provided.

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 8). Black & Veatch is progressing towards the 50% design which will also include a Basis of Design deliverable and updated cost estimate. This effort is currently tracking behind schedule due to increased coordination with Trojan to identify and select an alternative equipment layout configuration that would minimize the structural improvements necessary for the flow channels. Trojan originally proposed three banks per channel which provides for one redundant channel during peak flows. However, the project need is for straight replacement of the aging UV equipment. Redundancy at peak flows was not assumed or included in the existing channel design. To minimize equipment cost and structural improvement requirements, Black & Veatch worked with Trojan to review the alternatives. Black & Veatch is moving forward with their 50% design per their recommended alternative, which includes two banks per existing channel. The extra coordination was beneficial as it should save on project capital costs. Current equipment cost projections demonstrate a $300k savings in proceeding with this alternative.

PFM (DUWA’s Financial Consultant) and Dykema (DUWA’s Bond Counsel) are assisting DUWA with the bond process. A Notice of Intent to bond up to $20M will be presented to the Board later in the meeting. The Notice of Intent should indicate the highest amount that DUWA would consider bonding, but does not require DUWA to bond that amount. DUWA plans to bond between $8M-$10M and this amount will be reviewed by the Board Officers. The Series Ordinance will then be presented to the Board for approval at the December Board meeting. The bond closing and disbursement is expected to occur in Q1 2024 around the time that the Notice to Proceed is issued to the selected General Contractor.

c. Biosolids Dryer Facility Project
Mayor Robert DeSana, Wyandotte’s mayor, addressed the Board regarding the numerous odor complaints received from Wyandotte’s residents. Mayor DeSana stated that Wyandotte residents have been noticing significant increases in odor from the DWTF and there has been much discussion of the odors on social media. He added that the odors seem to be particularly noticeable when there is a southwest wind. Mayor DeSana requested that a timeline of the dryer project and chemical changes be provided so that he can share the information with the residents via City Council meetings and via social media to show the residents that Veolia and DUWA are actively working to resolve the problem. The residents are blaming the City for the odors, but the City is not at fault and hopes that this timeline summary will help educate the residents. He added that he appreciates that Veolia is spending $30k per month on an odor control system to help address the problem.

Mayor Bill Bazzi (Dearborn Heights) suggested that DUWA work with Wyandotte to develop a press release that could be circulated to the DUWA communities, noting that there is a need for better communication with the residents. Mayor Joseph Kuspa (Southgate) added that he supports providing assistance to the DWTF’s host community. He stated that one of DUWA’s target areas developed during the SEMCOG strategic planning workshop was to improve DUWA’s marketing and suggested that DUWA issue a newsletter to inform the public about DUWA’s involvement and that the odors are caused by DUWA and not the City of Wyandotte. Mayor DeSana further suggested that it might be helpful to have a local television crew film the treatment process at the DWTF to educate the public on DUWA and the DWTF. Mayor Bill Bazzi (Dearborn Heights) supported this suggestion and added that this video could be shared with all DUWA community residents for their awareness and information. Chairperson McLeod (Allen Park) added that additional information on the DWTF’s treatment processes can also be found on DUWA’s website. Mayor Tim Woolley (Taylor) emphasized the importance of communication with the residents, but also noted that residents should understand the negative aspects of living near a wastewater treatment facility.

System Manager Tercala confirmed that a timeline of events related to the biosolids dryer project and associated chemical changes would be provided to Mayor DeSana. She added that a Michigan House Representative reached out to DUWA for more information after receiving odor complaints. She reminded the Board that the odors have increased since Veolia stopped the use of ferric chloride as the ferric chloride was causing reheating events with the dried solids after they were hauled away. The hydrogen peroxide pilot odor control system is online and has been successfully eliminating hydrogen sulfide, however there are still noticeable odors present at the DWTF and prevailing winds may also exacerbate the odors.

Jason Nash (Veolia CPM) provided an update on the Biosolids Dryer Facility project to the Board (Attachment 9). The dryers were in operation between October 5th and October 19th. On October 19th, there was an issue with the polymer dosing system, which resulted in water being dumped into the cake bin. The dryers were shut down for one week to address this issue and to perform maintenance. The dryers were placed back in operation on October 26th, but condensation began to buildup in the south dryer. It was determined that the media in the condensing towers was fouled due to biological growth. On November 1st, the dosing pump discharge pressures dropped to very low levels resulting in shut down of the dryers. The cause of the pressure drop is currently under investigation. The dryers will remain offline until November 13th after the scheduled repair and maintenance work for the week of November 6th is complete.

The demisters in the condensing towers had to be cleaned after only two weeks of operation. A long-term solution to prevent biological growth is currently begin explored. The media was cleaned this week and 25% of the media was found to be damaged requiring replacement. The condensing towers can run with 75% of the media, but Kruger is purchasing additional media that will be installed during the next scheduled shut down of the dryers. Kruger is also installing flashing in the dryers to prevent material from accumulating in the dryers. Currently, when material drops from the upper belt to the lower belt of the dryer, some of the material falls into the gap and accumulates. During the last cleaning, 20 contractor bags were filled with material after only one month of dryer operation.

Kruger has replaced the final cake pump that needed replacement. The operations team performed pump tests on four of the dosing pumps, and all pumps were shown to be operating within their expected ranges. Each pump will be tested next week when the dryers are back online to verify that all 16 dosing pumps are operating properly. Kruger will also be onsite next week to make modifications to the temporary Variable Frequency Drives (VFDs) that are currently operating the dryers. The VFDs have experienced voltage fluctuations which have triggered alarms and unintended shutdowns of the dryers.

Chairperson McLeod (Allen Park) asked whether Kruger has ever provided a dryer system similar to that of DUWA’s given the numerous issues that have been experienced. Mayor Tim Woolley (Taylor) seconded the question and also asked whether the problems are related to the dryers themselves or the process of conveying the material into the dryers. Jason Nash responded that this is the largest dryer system that Kruger has built in terms of the volume of solids it handles. DUWA’s sludge also has the highest percentage of solids that have been handled by any of Kruger’s dryer systems. He added that the dryers seem to operate as intended once the material reaches the dryer, but it seems that when one issue gets resolved, another issue arises. Chairperson McLeod (Allen Park) stated that the accumulation of material inside the dryers and the need for flashing is due to a flawed design as this could occur regardless of the size of the dryer system. Mayor Bill Bazzi (Dearborn Heights) stated that it appears that the issues are being resolved by trial and error and asked if a third-party consultant should be contacted for technical assistance. Chairperson McLeod (Allen Park) responded that DUWA is currently engaged with a third-party consultant who is assisting with the technical issues.

Mayor Joseph Kuspa (Southgate) asked what percentage of the dryer system is working properly. Jason Nash responded that there have been issues with almost every part of the dryer system, and 95% of the dryer system may be working properly, but the remaining 5% of issues continue to move around to different parts of the system. Mayor Joseph Kuspa (Southgate) stated that the operations team needs to be informed of the expected maintenance needed for each part of the dryer system to confirm that ongoing issues are related to the technical components of the dryer system and are not a result of inadequate operation and maintenance. He asked how this will be addressed. Jason Nash responded that there are several maintenance tasks that are not included in the O&M manual that was provided by Kruger. For example, the infrared sensor beams in the dryers have been working properly for the past 18 months until they recently stopped working. It was discovered that the sensors needed to be cleaned and calibrated, but this maintenance task was not included in the O&M manual. Jason Nash added that he will ask Kruger for another training on operation and maintenance of the system.

Lou Arapakis (River Rouge) asked whether Kruger has completed all of their tasks that were expected of them per the contract. Jason Nash responded that Kruger has been paid for the equipment delivery, but has not been paid for startup and commissioning of the dryers as this task is not yet complete. Kruger has borne the cost of ongoing operations and maintenance of the dryer system as well as the pump rebuilds as the various commissioning issues have been addressed. The dryer system has not yet achieved its design capacity nor system stabilization which are both required in order to perform the 30-day acceptance test. Mayor Joseph Kuspa (Southgate) noted that DUWA continues to incur additional expenses related to hauling and disposal of the dewatered sludge in the meantime.

Attorney Kerry Morgan (Riverview’s attorney) asked whether Kruger has offered an opinion on the cause of the low pressures at the dosing pumps. Jason Nash responded that Kruger stated they have never seen this happen before and think it may be due to the low percentage of solids going into the dryer. However, the sludge going into the dryer was found to be no lower than 18% solids, which is typical of a belt filter press discharge that is common at other wastewater treatment facilities. Kruger recommended removing the existing sludge in the tank and restarting the system with new sludge.

Attorney Kerry Morgan (Riverview’s attorney) asked if the tolerances on the existing grinders could be adjusted to grind the material into smaller pieces to help prevent clogging of the dosing nozzles. Jason Tapp responded that the tolerances cannot be adjusted but the grinders could be replaced with macerators which would minimize the particle size. The equipment would cost about $250k and there is currently a three-month lead time on delivery of the equipment. DUWA’s third-party consultant is unsure of the benefit of replacing the grinders with macerators, but recommended that only one grinder be replaced with a macerator to see if it helps reduce clogging before replacing all of the grinders. Jason Tapp added that very little time is required to unclog the dosing nozzles and suspects that there are other problems contributing to the lack of dryer system operation. Mayor Joseph Kuspa (Southgate) asked what particle size the dryer system could handle. Jason Tapp responded that this question has been asked of Kruger many times, but Kruger has not provided a clear response. Attorney Grysko added that Kruger has mentioned that a 5-millimeter strainpress has been used at other facilities. Mayor Joseph Kuspa (Southgate) requested that diagrams of the DWTF and dryer system could be provided to the Board for future reference during these discussions, and System Manager Tercala confirmed that diagrams would be provided.

Roberto Scappaticci (Romulus) asked whether any of the other dryer manufacturers that bid on this project has built a dryer system of similar size. He also asked if one of these other manufacturers could assist with commissioning this dryer system. System Manager Tercala responded that the project was bid as a Request for Proposals and three or four proposals were received by dryer manufacturers. She stated that she will review the proposals to understand whether the other manufacturers have had experience commissioning a dryer system as large as DUWA’s, and added that at the time of the proposal reviews, it was not made clear that this was the largest dryer system built by Kruger. System Manager Tercala added that Kruger’s dryer system is proprietary, so it may not be feasible to have another manufacturer assist with its commissioning. The various manufacturers offered different dryer products that have different processes for indirect heating of biosolids. She stated that she will review the proposals received and possibly reach out to the other vendors to see if they may be able to assist with commissioning of the dryer system. Mayor Bill Bazzi (Dearborn Heights) asked which part of the dryer system is proprietary and whether Kruger has a patent for its system. System Manager Tercala responded that the dryer itself is proprietary to Kruger, but not the pumps or other equipment that convey the sludge to the dryers. She added that she will ask Kruger whether they have a patent. Jim Taylor (Van Buren Township) recalled that during the proposal review process, there was discussion around installing a larger dryer system, but reconfiguration of the existing Solids Handling Building would be required to create enough space for a larger dryer system. After further discussion, it was believed that Kruger’s originally proposed dryer system would be sufficient to meet DUWA’s requirements.

Jeff Dobek (Riverview) suggested that Veolia visit another facility with a dryer system to identify common practices and any lessons learned. System Manager Tercala responded that Veolia visited another wastewater treatment facility with a smaller dryer system, and this system ran smoothly. Jason Tapp, of Veolia, added that there is not another dryer system in the country that is of similar size to DUWA’s system. He also noted that DUWA’s dryer system seems to have issues when the throughput exceeds 75% of the design capacity, but runs relatively well at 50%-60% of design capacity. In order to meet DUWA’s annual production capacity, the dryers must run at 100% design capacity. Chairperson McLeod (Allen Park) asked whether the current dryers are large enough and whether another dryer is needed. Jason Tapp responded that the two dryers are as large as the existing Solids Handling Building would accommodate. Mayor Joseph Kuspa (Southgate) asked if the dryer system operates as intended when the throughput is less than 75% of the design capacity. Jason Tapp responded that the dryer system mostly operates as intended at lower throughput. He added that additional maintenance activities are necessary for ongoing operation, and these maintenance tasks take more time than was initially expected to be needed.

Lou Arapakis (River Rouge) asked whether it would be possible to have a different manufacturer install a different dryer system if Kruger is unable to commission their dryer system. Attorney Grysko responded that a third-party consultant is providing technical assistance to resolve the outstanding issues. He added that modifying Kruger’s dryer system would be impossible and it would be cost-prohibitive to completely replace the current system. Fausone & Grysko is working with Kruger’s legal team to find a solution or progress towards litigation. Mayor Joseph Kuspa (Southgate) asked when litigation might commence if that path is desired. Attorney Grysko responded that the Board approved the Tolling Agreement with Kruger last month to pause the clock on the warranty and performance bond. The Tolling Agreement expires on March 1, 2024 which would be the date by which DUWA would need to decide whether to pursue litigation.

Mayor Tim Woolley (Taylor) stated that he appreciates Jason Nash attending each Board meeting to provide an update on the Biosolids Dryer project and to hear the frustrations of the Board given that Kruger representatives are not in attendance. He added that he believes Veolia CPM and Veolia OM are doing a great job and encouraged Jason Nash to pass along the Board’s frustrations to Kruger. Lou Arapakis (River Rouge) shared this sentiment.

 

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

a. PFAS Local Limits Development
DUWA is required by EGLE to develop PFAS local limits to control pollutants that may adversely affect the quality of the wastewater effluent discharged by the DWTF. EGLE has published Water Quality Values for five PFAS compounds, two of which were recently established this past October. DUWA’s previous local limit sampling effort, which was conducted in 2021, did not require analysis of all five of these PFAS compounds that are now required to be analyzed, so a second round of local limit sampling to include these compounds is now required.

Development of the PFAS local limits is not a task that is covered under Veolia’s existing O&M Agreement, so Veolia prepared a proposal for this effort. Veolia’s proposal includes third-party laboratory costs to analyze 58 samples including samples at the DWTF and in the collection system. Veolia’s proposal also includes the labor effort related to analyzing the lab results, developing the local limits based on the data analysis, coordinating with EGLE, and updating the Sewer Use Ordinance to include language regarding PFAS. Veolia’s proposed fee for this effort is $32,731.28 (Attachment 10). The current Rate Package and the FY2024 budget accommodate the local limit development costs. This request was reviewed by the Technical Committee and was recommended for approval.

Motion by Greg Mayhew (Wyandotte) and supported by Mayor Bill Bazzi (Dearborn Heights) to authorize Veolia for sampling and labor efforts related to development of PFAS local limits for a fee of $32,731.28. This fee will be paid from DUWA’s Miscellaneous Expenditures line item of the budget. The motion passed unanimously by all attending members.

b. SEMCOG Designated Management Agency Dues
DUWA is a partner of SEMCOG’s Designated Management Agency (DMA) program. This is a perpetual program that DUWA has participated in since before the system transfer. Under the DMA program, SEMCOG collects a financial contribution from each DMA partner to support regional water resource management planning activities. The program also supports activities related to member compliance with stormwater, drinking water, and wastewater requirements. SEMCOG provides an annual report that provides additional details on this program along with a summary of the various water resource planning activities in the region. A motion is proposed to approve this current year’s membership fee of $4,022 (Attachment 11).

Mayor Joseph Kuspa (Southgate) suggested that DUWA work with SEMCOG to utilize the DMA annual report as another form of media to help educate the public about DUWA.

Motion by Mayor Joseph Kuspa (Southgate) and supported by Jeff Dobek (Riverview) to approve payment to SEMCOG for the 2023 Designated Management Agency fee of $4,022. The invoice is included in this month’s invoice register. This fee will be paid from DUWA’s Other Services & Charges – Professional Services budget line item. The motion passed unanimously by all attending members.

c. Wayne County Annual O&M Permit Application
DUWA maintains an annual permit with Wayne County that allows Veolia to occupy the road rights-of-way of Wayne County roads to perform operation and maintenance activities throughout the system. This permit is set to expire at the end of 2023, and the permit renewal package for 2024 has been provided by Wayne County (Attachment 12). The signed permit along with a copy of Veolia’s certificate of insurance must be submitted to Wayne County. Signatures from the permit holder (System Manager as authorized agent for DUWA) and contractor (Veolia) are also required. The annual permit fee is $1,000.

This year’s permit format is different than previous years as it appears Wayne County is now using a universal Utility permit for all types of utilities. Additional clarification on the changes from last year’s permit to this year’s permit was requested from Wayne County, but a response has not yet been received. However, the terms and conditions of the permit have been reviewed and are agreeable to DUWA’s legal team.

Greg Mayhew commented that Wyandotte experienced the same issue as Wyandotte’s permit renewal package also appeared to be different this year compared to last year’s permit package. He added that he provided Wayne County a copy of last year’s permit for reference, and Wayne County then amended the permit renewal package accordingly. System Manager Johnson added that OHM and Veolia will wait to sign the permit renewal until clarification is received from Wayne County.

Motion by Mayor Bill Bazzi (Dearborn Heights) and supported by Mayor Tim Woolley (Taylor) to authorize the System Manager to sign the Wayne County permit package and pay the $1,000 application fee upon DUWA’s legal agreement to the revised permit terms. The permit fee will be paid from DUWA’s Plant Operations – Operating Permits budget line item. The motion passed unanimously by all attending members.

 

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

a. Annual Asset Management Report Summary
Jason Tapp, of Veolia, stated that Veolia prepared its annual Asset Management report and submitted it to EGLE on October 30th per the NPDES permit requirements. The System Manager provided some comments and revisions, and these will be incorporated as part of an updated version of the report that will be submitted to EGLE next week. The Asset Management report includes information about the various work items completed over the past year. A condition assessment inclusive of a vibration analysis was performed on key equipment as a preventative measure to identify potential items that could contribute to a failure. In a review of the work orders completed, about 2800 work orders were completed in the past year, of which 350 work orders were corrective. All other work orders were preventative. About 6.7 miles of interceptor pipe were inspected via CCTV and about 700 manholes were inspected. Six manholes were identified as needing repair and those repairs were completed. The updated Asset Management report will be posted to Basecamp once the revisions are incorporated.

b. September 2023 MOR
The September 2023 Monthly Operating Report (MOR) was provided in the Board’s pre-meeting packet (Attachment 13). Highlights from the summary and other updates included the following:

• • • The plant treated over one billion gallons of wastewater this month, and experienced an average flow of about 34 MGD and a peak flow of about 54 MGD. No bypasses have occurred this year, and it has been almost two years since a bypass has occurred.
    • There are currently open positions for an operator, a maintenance technician, and an electrician.
    • A small amount of ferric chloride was being dosed for odor control, however the use of ferric chloride has now been stopped as the hydrogen peroxide odor control system is now online. DUWA’s dried solids hauler reported that DUWA’s dried solids were experiencing reheating events three weeks after the dried solids arrived onsite. The hauler asked about minimizing the ferric concentration in the solids, so the use of ferric at the DWTF was stopped and the use of PACl for phosphorous removal was increased. Once the use of ferric was stopped, odors at the DWTF significantly increased so the hydrogen peroxide pilot odor control system was then brought online.
    • The dryers were offline for most of September. During this time, the thermal oil skids were found to be leaking, bolts needed tightening, and other dryer maintenance items were addressed. This past week, seven mechanics were assigned to work on the dryer, and no work was performed elsewhere around the DWTF. Their work included cleaning out the dryers and cleaning, inspecting, and replacing 5-6 cubic yards of media in the condensing towers which requires several days to accomplish. The team also double-checked the thermal oil skids to ensure there were no leaks. The dryers are expected to be online early next week.
    • The Veolia OM team continues to find debris upstream of the dryers. The debris is often comprised of flat pieces of plastic and rubber pieces. The sludge material is sent through two grinders which should grind the material enough to prevent clogging, however some larger pieces of debris are able to make it through the grinders. The debris is inspected and catalogued and shared with Kruger as well as the third-party consultant.
    • Veolia staff was able to inspect primary tank #4 now that the solids levels are reduced.
    • The circuit board for the cranes was replaced. The cranes are now obsolete as they are from the late 1970s and the manufacturer no longer provides repair assistance. However, the electrical team was able to replace the circuit board to restore proper operation of the cranes. This effort saved about $20k-$30k for the cost of a new crane.
    • During the month of September, Veolia had its international health and safety week which included a variety of interactive activities.
    • There were 231 Miss Dig tickets received in September, of which 14 were emergency requiring a quick response time. The number of Miss Dig tickets received is beginning to slow down as construction season winds down.

c. Chemical & Sludge Price Updates
Jason Tapp presented the summary of commodity unit price changes to the Board (Attachment 14). There have been no significant increases on chemical unit pricing. Hydrogen peroxide is now being dosed at the DWTF for odor control at a unit price of $3.65 per gallon. The 5000-gallon hydrogen peroxide tank located at the DWTF has many safety protections in place including an emergency shutoff and safety shower. The hydrogen peroxide supplier will be onsite next week to fine tune the dosing locations. The peroxide is currently dosed at the recycle stream that flows back to the plant’s headworks, but the dosing location may be moved to the sludge thickening tanks. A split stream or separate dosing location may also be necessary to dose to the plant headworks directly to help mitigate the odors that residents are noticing. The odors are likely due to volatile organic compounds (VOCs) as opposed to solely hydrogen sulfide as the peroxide is proving to reduce hydrogen sulfide from 5-10 parts per million (ppm) to 0 ppm around the DWTF. A VOC meter was ordered to assist in mapping the odors around the DWTF to determine their source which will help identify the best odor control chemical to be used and its optimal dosing location. There is also a significant amount of hydrogen sulfide coming from the floor drains near the centrifuges in the Solids Handling Building. Options are being explored to properly ventilate those manholes and to push the odor down into the drains.

Mayor Tim Woolley (Taylor) asked for clarification on the reasoning behind eliminating the use of ferric chloride. Jason Tapp responded that the iron from the ferric chloride reacted with the sulfur in the sludge to produce a chemical reaction that caused reheating of the dried solids. Travis Tuma added that ferric chloride is cheaper than PACl, which is now being used for phosphorous removal, but was needed at a much higher dosing rate. The ferric chloride was previously dosed directly into the primary tanks. Mayor Joseph Kuspa (Southgate) asked if there are other odor control options. Jason Tapp responded that additional data is needed to determine what odor control options might be feasible. Odors can be treated chemically or physically. Physical treatment would require capturing the odors from every tank and pipe and conveying them to an air scrubber which would necessitate a large capital project. Hydrogen peroxide or other odor control chemicals would be cheaper and more readily available than physical treatment.

d. Biosolids Disposal Outlets
Jason Tapp stated that the dryers are currently offline and thus the dewatered solids are being sent to the landfill for disposal. The cost for hauling dewatered solids is much higher compared to the cost for hauling dried solids because the dewatered solids are 70% water and are much heavier so there is more weight to transport. Once the dryers are back online, the dried solids can be used for beneficial reuse as opposed to going to the landfill for disposal. The sludge storage level at the DWTF remains consistent and there are no compliance concerns.

DUWA’s dried solids hauler wants to receive at least one truckload of dried solids per day which has been difficult to achieve when the dryers are shut down. Veolia is continuing to coordinate with the dried solids hauler noting that it is very important to get the dryers consistently online in order to continue to foster the relationship with DUWA’s only dried solids hauler. Additionally, DUWA’s agreement with one of its landfill disposal outlets expires at the end of the year. The landfill hauler is willing to renew the agreement, but is requesting Veolia commit to providing a minimum load (in tons) per day in the renewal agreement. It is unclear at this time how much dried solids will be produced beginning in January, so Veolia will wait to sign the renewal agreement until there is a better idea of how much dewatered versus dried solids will be produced on a daily basis. Mayor Joseph Kuspa (Southgate) asked when Veolia will know how much dewatered versus dried solids will be produced. Jason Tapp responded that he is optimistic that they will know more next month, and will at least know whether the agreement needs to be renewed by the end of the December based on the status of the dryer project at that time.

e. Existing Disinfection System Performance & Remaining Life Update
Jason Tapp stated that Veolia has been steadily using up the inventory of spare parts to maintain operation of the existing UV system. Veolia also found an inventory of spare parts for sale on a government auction site. The spare parts, which include bulbs, ballasts, and quartz sleeves, are from a decommissioned Trojan UV system in Boise, ID where the new Trojan UV system has been installed. The spare parts have the same model numbers as the parts used by DUWA’s UV system, and the spare parts are in new condition. Veolia was able to purchase about $230k worth of spare parts for a very cheap price of about $6,000. The spare parts arrived onsite today, and should help keep the existing UV system online until the new UV system is commissioned in 2025.

 

8. TREASURER’S REPORT

a. UV Project Bonding: Notice of Intent
Treasurer Jason Couture (Taylor) presented the Resolution to authorize publication of the Notice of Intent to Issue Revenue Bonds (Attachment 15). The first step in issuing bonds is to publish a Notice of Intent. The bond funds would be used to fund the UV Disinfection Replacement Project which is currently estimated to cost between $13M-$16.5M. The Notice of Intent includes a not-to-exceed bond amount of $20M. The Notice of Intent lists the maximum bond amount that DUWA would consider issuing even though DUWA plans to issue a bond amount of $8M-$10M. If there are excess bond proceeds after the UV project is complete, the remaining bond proceeds can be used for other capital projects. DUWA also expects to receive $10M from the State of Michigan for the UV project and other capital projects, and these funds will be administered on a reimbursement basis.

The bond would have a term of 40 years and the interest rate will be determined at the time of sale. The Series Ordinance will be brought to the Board for approval next month. PFM (DUWA’s financial consultant) and Dykema (DUWA’s bond counsel) have been assisting in the bond process and recommend that the bond method be by Negotiated Sales given the complexity of the bonds and the current bond market. Treasurer Couture (Taylor) noted that he agreed with that recommendation. This bond method requires pre-selection of a bond underwriter, which will be done through a Request for Proposals (RFP) process.

Ann Fillingham, of Dykema, added that publication of the Notice of Intent does not require DUWA to issue bonds. The Notice of Intent provides notice to the public on the potential for upcoming financing. Sean Wahl, of PFM, added that the PFM team has been working on developing the RFP for underwriting services. Proposals will be received, tabulated, and summarized by PFM to develop a recommendation to DUWA. It is expected that the bonds will be issued in early 2024.

Mayor Bill Bazzi (Dearborn Heights) asked if the Notice of Intent will be published in the local newspaper for every DUWA community. Ann Fillingham (Dykema) responded that the Notice of Intent will only be published in the Detroit Legal News or the Detroit Free Press adding that it can otherwise be difficult and expensive to achieve complete newspaper coverage throughout all of the local communities.

Motion by Mayor Bill Bazzi (Dearborn Heights) and supported by Mayor Joseph Kuspa (Southgate) to authorize the Chair or Vice Chair to sign the Resolution authorizing publication of the Notice of Intent to Issue Sewage System Revenue Bonds. A roll call vote was taken, and the motion passed unanimously with 98.7% of the vote (affirmative vote by all attending members).

b. Quarterly Financial Statement – 2023 Q3
Accountant Doug Drysdale (DUWA Accountant; DNS Financial Services) presented the Quarterly Financial Statement for Q3 of 2023 (Attachment 16). Total cash is about $1M less than the cash balance at the beginning of the year because principal payments were made on the WIFIA loan, and the Wayne County bond and Accounts Receivable balance is about $1.5M higher than the balance at the beginning of the year. There are also a couple communities with outstanding payments. The fixed assets and depreciation will be adjusted at the end of the year. Insurance is paid at the beginning of the year but is amortized over the course of the year. The amount in Accounts Payable is $5.1M compared to the $4.4M at the beginning of the year. Short-term debts are items that are due this year. The long-term debts will be adjusted at the end of the year because the budget is based on a cash basis. The debts also include the Wayne County bond amendment which includes payment of $700k each year for five years instead of paying the total $3.5M to Wayne County this year.

A column was added to the Revenue and Expenditure report to show the balance through Q3 of 2022 for comparison. The targeted percentage of budget used is 75% for Q3. Operating revenue is about $1.6M higher than last year and is at 75% of the expected budget. The increase in revenue is attributable to the increased revenue from industrial surcharge payments. Industrial surcharges are expected to continue to increase. Other revenues include SRF billings to the communities for bond payments and these are essentially at 100% of the expected budget. Interest revenue was originally budgeted at $240k, but $1.1M has been received which has helped to offset other increased costs that were not expected. The debt service amounts are on a cash basis and will be adjusted at the end of the year when the audit is performed. All principal and interest payments have been made for the year, but the debt line item is at 70% due to accruals. It will be adjusted to 100% at the end of the year.

The Other Services category, which includes administration, financial, and engineering services, is at 54% of the budgeted amount which is on pace with last year. Banking fees are higher than expected due to the trustee fees with US Bank. Audit fees are also higher than expected due to the single audit that was performed for the WIFIA loan that was not expected to be required. Plant Operations are at 72% of the budgeted amount, and expenses are about $1.4M higher than this time last year. Veolia’s annual O&M fee is about $600k higher than last year due to the inflationary increase. The cost for sludge hauling is at about 78% of the budgeted amount and the cost for electricity is at about 72% of the budgeted amount. Natural gas is now paid directly by DUWA instead of through Veolia. The cost for ferric chloride is only at about 33% of its budgeted amount because of the reduction in use due to the dried solids reheating events. The Capital Outlay includes the Biosolids Dryer project which has cost DUWA about $584k so far this year and the UV Disinfection Replacement project which has cost DUWA about $260k for engineering design fees.

c. CY2024-2025 Budget Preview
Accountant Doug Drysdale (DUWA Accountant; DNS Financial Services) presented the CY2024-2025 draft budget to the Board (Attachment 17). DUWA’s bylaws require that a 2-year budget be developed each year. OHM, Veolia, Plante Moran assisted DNS Financial Services with development of the budget. The draft budget was reviewed with the Finance Committee, and they have until next week to provide revisions or comments. The budgeted values for 2025 are based on general assumptions, but the values for 2024 are more precise.

The 2024 budgeted revenues include the $10M earmark from the State of Michigan, the $10M municipal bond that is expected to close in early 2024, and SRF billings from the communities in the amount of $4.9M. The budgeted amount for Operating Revenue is expected to increase from $27.5M to $28.3M due to the sewage and excess flow charges that will be partially calculated using the new rate methodology. Industrial surcharges are expected to be reduced as the Wayne County Airport Authority plans to continue to reduce its discharge to DUWA. Several municipal reimbursements are also included in the budget as the Board has approved the Wyandotte overpayment request and overpayment requests for Allen Park and Dearborn Heights are currently under review. Interest revenue is expected to be about the same as what was received this past year.

The 2024 budgeted expenditures include the principal and interest debt service payments. About $140k was budgeted for bond issuance fees for the municipal bonding effort for the UV Disinfection Replacement project. Expenditures also include the various administration costs and engineering and financial services. About $424k was budgeted for attorney fees as additional legal assistance will be necessary for the Biosolids Dryer project, UV Disinfection Replacement project, and bond issuance efforts. Both the Veolia O&M fee and flow metering fee were increased by about 5% based on the inflationary increase to 2024. Budgeted utility costs are based on this year’s actual costs to date and expected increases. A budget line item was added for hydrogen peroxide which may be used for continued odor control. The budgeted amount for ferric chloride is $0 as this chemical is expected to no longer be used. The Capital Outlay budget includes the standard small capital budget of about $2M. About $1.1M was budgeted to complete the Biosolids Dryer project, and $17.5M was budgeted for the UV Disinfection Replacement project which includes construction and construction administration efforts. The budgeted net revenue to the system is $118k.

Roberto Scappaticci (Romulus) asked why the cost for natural gas is expected to be higher in 2024. Accountant Doug Drysdale (DNS Financial Services) responded that the natural gas cost is expected to be higher because the dryers are expected to be consistently online and there is not expected to be any unused natural gas that could be sold back to the market.

d. Aging AR
Treasurer Jason Couture (Taylor) presented the Aging Accounts Receivable report (Attachment 18). Treasurer Couture stated that the total amount in the Accounts Receivable is approximately $1.6M of which 92% is less than 90 days delinquent. Taylor has an outstanding invoice of about $270k related to debt service that is over 60 days delinquent, however it was discovered that the payment was accidentally sent to the wrong location and has now been received by Accountant Doug Drysdale for processing. River Rouge has several outstanding invoices over 60 days. Treasurer Couture (Taylor) asked Lou Arapakis (River Rouge) to follow up with the City’s billing department to address the unpaid invoices.

e. 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 19). The invoice register included 40 invoices due for a total of $2,531,165.90. The largest invoices included those to Veolia for operations and maintenance, unit cost reconciliations, and equipment repairs, Wayne County for the first payment of the amended bond from the system transfer, and Wyandotte Municipal Services for utility services.

Motion by Mayor Bill Bazzi (Dearborn Heights) and supported by Roberto Scappaticci (Romulus) to pay the invoice register. The motion passed unanimously by all attending members.

 

9. PUBLIC COMMENT
Jim Taylor congratulated the elected officials present at the Board meeting on their re-elections. He added that the DUWA Board is comprised of a great team and is happy to have continued engagement of these elected officials.

 

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

 

11. NEXT BOARD MEETING DATE: Thursday, December 14, 2023 (9:00 AM; In-Person)
Chairperson McLeod (Allen Park) reminded the Board that the next meeting would take place on Thursday, December 14, 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 Bill Bazzi (Dearborn Heights) and supported by Roberto Scappaticci (Romulus) to adjourn the meeting. The motion passed unanimously at 10:57 AM.

 

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

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

 

ATTACHMENTS

1. Meeting Agenda
2. October 12, 2023 DUWA Board Meeting Minutes
3. Monthly Legal Update (by Fausone & Grysko)
4. Annual System Manager Evaluation Survey (by Fausone & Grysko)
5. System Manager Report for November 2023 (by OHM Advisors)
6. Strategic Planning Workshop Summary (by OHM Advisors)
7. Tax Exemption Summary (by OHM Advisors)
8. UV Disinfection Replacement Project Update (by OHM Advisors)
9. Biosolids Dryer Facility Project October 2023 Monthly Progress Summary (by Veolia)
10. PFAS Local Limits Development Proposal (by Veolia)
11. Request to Pay SEMCOG Designated Management Agency Dues
12. Wayne County Annual O&M Permit Application
13. Monthly Operating Report for September 2023 (by Veolia)
14. DWTF Unit Price Changes Summary (by Veolia)
15. Resolution to Authorize Publication of Notice of Intent to Issue Bonds (by Dykema)
16. Quarterly Financial Statement for 2023 Q3 (by Doug Drysdale)
17. CY2024-2025 Budget Preview (by Doug Drysdale)
18. Aged Accounts Receivable Report, dated November 2, 2023 (by Doug Drysdale)
19. Invoice Register, dated November 2, 2023 (by Doug Drysdale)