DOWNRIVER UTILITY WASTEWATER AUTHORITY
February 8, 2024 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, Belleville, Brownstown Township, Dearborn Heights, Ecorse, 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 Mayor Joseph Kuspa (Southgate) to approve the Agenda. The motion passed unanimously by all attending members.

 

3. APPROVAL OF MINUTES FROM JANUARY 11, 2024 BOARD MEETING
Copies of the meeting minutes from the January 11, 2024 Board meeting were included in the pre-meeting Board packet (Attachment 2). Motion by Rick Rutherford (Belleville) and supported by Jeff Dobek (Riverview) to approve the minutes. The motion passed unanimously by all attending members.

 

4. LEGAL UPDATE
Attorney Jim Fausone, of Fausone & Grysko, 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 the legal team has participated in Legal, Technical, and Financial Committee meetings over the past month, and has also supported the System Manager on matters regarding the Biosolids Dryer project as well as the bonding process for the UV project.

b. Request to Set Special Meeting with Closed Session
Attorney Fausone stated that Fausone & Grysko and the System Manager met with the Board Officers, and after discussions with the Officers and pursuant to the bylaws, the Chair will call a Special Meeting to be held on February 29, 2024 at the Romulus Athletic Center (35765 Northline Road, Romulus, MI) from 10AM-12PM to discuss legal matters and strategies related to the Biosolids Dryer project (Attachment 4). The Special Meeting will be called to order, then the Board Commissioners will enter into a Closed Session. Attendees of the Closed Session will be limited to DUWA’s primary and alternate Board Commissioners, Mayors and Township Supervisors, as well as communities’ attorneys.

Chairperson McLeod (Allen Park) stated that she and Mayor Joseph Kuspa (Southgate) plan to make calls to DUWA’s Mayors and Township Supervisors, and also recommended that the Board Commissioners encourage their Mayors and Township Supervisors to attend the Special Meeting. She added that lunch will be provided and the System Manager will send a calendar meeting invitation.

Motion by Mayor Joseph Kuspa (Southgate) and supported by Mayor Tim Woolley (Taylor) to hold a closed session on February 29th during the Special Meeting of the DUWA Board for the reasons allowed per Open Meetings Act, MCL 15.268(e) and (h). A roll call vote was taken, and the motion passed unanimously with 87.9% of the vote (affirmative vote by all attending members).

 

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:

• • • In late January, the DWTF experienced its first blending/bypass event since October 2021 due to large snowmelt and precipitation.
    • At the last Board meeting, three requests for authorization related to the condensing towers for the Biosolids Dryer Facility were presented to the Board. These requests were recommended by Stantec, the Dryer Project Task Leader. The Board approved the $172k that was requested under the condition that the System Manager solicit input from the Technical and Legal Committees on these three requests for authorization. A survey was sent to the Technical Committee, and responses were received from representatives from five different communities. All responses were in favor of proceeding with the recommended authorizations.
      • Since the last Board meeting, the contractor provided a quote for this work for about $300k, which is higher than the amount authorized by the Board. Stantec will work with the contractor to review the scope of work and will also request quotes from two other contractors. This work is of high priority to get the dryers online, but cost efficiency must also be considered.
    • HRC and ICS are currently working on the design of the PLC-5 replacements in the Solids Handling Building. The 100% design is expected to be complete and ready for bid in mid-May.
    • DUWA is in receipt of three wastewater exemptions for the 2024-2025 rate year. Wastewater exemption applications are due by the end of February in order to be considered for an exemption for this current year. Johnson Matthey Testing (Taylor) and Wyandotte Municipal Services have submitted their wastewater exemption renewal applications, and these applications are currently under review. Superior Materials (Brownstown Township) submitted their wastewater exemption application last year, but based on timing of receipt of their application, their wastewater exemption will not take effect until this year. All three wastewater exemptions will be in effect from July 1, 2024 through June 30, 2025. Industrial users who wish to apply for a wastewater exemption (not including irrigation exemptions) should reach out to their local community Public Works Department and DUWA.
    • The System Manager authorized two expenditures:
      • EGLE issued an invoice to DUWA for $400 for a land application administration fee. DUWA produces Class A biosolids that are currently sent to a beneficial reuse facility in Canada. Since the biosolids are not land applied within the state of Michigan, only an administration fee of $400 was assessed. When DUWA land applies its Class A biosolids within the state, an additional fee will be assessed.
      • The condenser towers associated with the Biosolids Dryer Facility take the hot air from the dryers, condense it into a liquid, and send the liquid back to the plant headworks. Stantec noticed that the instrument readings on the condenser towers were outside the desired ranges. Seaway Mechanical provided a quote for $2,000 to inspect the pressure reducing valve on the condenser towers and perform the necessary repairs. Seaway Mechanical completed their investigation and identified solids/debris that were clogging the valve. Stantec will investigate the need to add screening in the future. Seaway Mechanical provided their final invoice for about $3,000, and Stantec is working with Seaway Mechanical to verify the costs for the scope of work that was performed.

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 6). Black & Veatch has provided the 90% detailed design. Black & Veatch, OHM, and Veolia OM met yesterday to review the 90% design submittal, and the final detailed review is in progress. Fausone & Grysko is also reviewing the front-end specifications.

The updated cost estimate for the project is $13.8M, with a lower and upper cost range of $12.6M to $15.6M based on a Class 2 cost estimate. The upper cost range will be used in consideration of bond sizing. DUWA will receive a $10M grant from the State that will be used toward the UV project. The Notice of Intent to Issue Bonds included a bond amount not to exceed $20M. An underwriter has been engaged, and the next step is to adopt the Series Ordinance. It was proposed to include a bond amount not to exceed $10M in the Series Ordinance, but upon review with the Board Officers, the Officers requested additional information related to the UV project, Biosolids Dryer project, Small Capital Budget, and bonding schedule to support the proposed not-to-exceed bonding amount. This information will be reviewed with the Board Officers prior to the next Board meeting when the Series Ordinance will be presented for approval.

i. Financing Timeline for 2024 Revenue Bond
The Series Ordinance is planned to be brought to the Board for approval at the March Board meeting per PFM’s proposed bonding schedule (Attachment 7). Bids for General Contractor of the UV project are due at the end of March, and recommendation of General Contractor is planned to be brought to the Board for approval at the April Board meeting. Tentative bond pricing would then be established in late April, after review of the UV project bids, with the intent to close on the bond in mid-May. Contract negotiations with the recommended General Contractor are planned to occur in May prior to issuing the Notice to Proceed. An updated UV project schedule will be provided to the Board once finalized.

 c. Biosolids Dryer Facility Project
Jason Nash (Veolia CPM) provided an update on the Biosolids Dryer Facility project to the Board (Attachment 8). The North Dryer was off for most of January due to pump performance issues. The pump manufacturer rebuilt two cake pumps with urethane stators, which should provide more longevity than the rubber stators that were previously used as the urethane stators are more abrasive-resistant. Pump tests performed on the South Dryer pumps indicated that there is a 40% reduced pump capacity due to wear. Kruger had installed new stators on all 16 dosing pumps, and indicated that they would no longer provide materials or repairs on the pumps as the wear items should be covered by Veolia OM/DUWA going forward.

The South Dryer was offline between January 11-19, 2024 due to condensing tower issues, and was started back up on January 19th. The North Dryer was started up on January 25th. There have been continuous issues with the condensing towers that have caused moisture to remain in the dryers impacting the ability of the dryers to produce Class A solids. Cake pump 4 is being replaced today, which requires the dryers to be taken offline, and the operations team is cleaning the dryers to be ready for startup. The maintenance team is installing fittings on the south condensing tower to facilitate testing of the peroxide cleaning system. The state of Michigan boiler inspector was onsite on January 31st to inspect the thermal oil system. The inspector identified several code issues, but the thermal oil system is not classified as a boiler because it heats oil and not water. Veolia CPM will work with the manufacturer to resolve the issues identified.

There was much discussion surrounding the cake pumps. The pumps are degrading faster than expected as degradation appears to be occurring after about 1200 hours of run time. Is has been proposed to use tungsten-carbide rotors and urethane stators which are the most abrasive-resistant materials, however these materials have longer lead times as they are not readily in stock. The motors on the cake pumps are planned to be upsized from 5 hp to 7.5 hp. Pump manufacturers do not provide performance guarantees nor pump life expectancies because pump uses and operations are different between facilities. Mayor Bill Bazzi (Dearborn Heights) suggested that a root cause analysis be performed to help resolve the various issues with the dryer system.

Mayor Tim Woolley (Taylor) asked if DUWA’s sludge material is different from other wastewater treatment facilities. Jason Nash responded that there are no defined grit tests so it is hard to compare DUWA’s grit to grit levels at other facilities. A partially combined sewer system may also contribute more grit than fully separate sewer systems. Kerry Morgan (Riverview’s attorney) asked if Kruger currently pays for other repairs besides the pumps. Jason Nash responded that Kruger does not currently pay for any other maintenance items.

Attorney Fausone asked for elaboration on the current operation of crushing the dried material. Travis Tuma (Veolia OM) responded that crushing of the dried solids began on February 5th to allow for more dried product to fit in the trucks thus increasing the weight as there is a minimum weight requirement for trucking. There was an issue with the crusher yesterday in that the screen downstream of the crusher is clogging. Veolia OM is looking for guidance from Kruger on this issue.

Jason Nash presented the dryer production and capacity charts to the Board (Attachment 9). The charts show the reasons why the dryers were offline based on daily reports from February 2023 to January 2024. The dryers were operational about 38% of the time in this time period. When running, the dryers typically ran at about 65-70% of their design capacity. One dryer was able to run at its full design capacity for 6 hours. The charts show that pump issues were the biggest contributor to dryer downtime, but in recent months, condensing tower issues have been the primary reason for dryer downtime. The categories for dryer maintenance and dryer cleaning are part of expected, normal operations, but pump repairs and dryer repairs are not part of expected operation. The plant issue category may include issues with trucking, centrifuges, polymer, or other plant issues that prevented the dryers from running.

Several Board members requested revisions to the charts including separating the charts for the North Dryer and South Dryer, adding a category for time delays such as delivery delays, adding total run hours for each dryer, and showing quarterly data as well as annual data. Jason Nash confirmed that these charts would be revised as requested.

i. Updated Pro Forma
Jason Nash (Veolia CPM) presented the updated Biosolids Dryer Project pro forma to the Board (Attachment 10). The first table in the pro forma shows the expected cost savings with 50% of dryer uptime and with both dryers running at 82% of design capacity. The chemical costs for peroxide usage in 2024 were based on the anticipated peroxide need for the clean-in-place system for the condensing towers. This value could vary. The amount for biosolids hauling and disposal in 2023 is the actual total amount spent in 2023, including Veolia’s contracted amount. The pro forma does not account for DUWA’s hedging of natural gas nor natural gas sellbacks. The projected cost savings for 2024 is about $600k. The second table in the pro forma shows the expected cost savings if the dryers were running at design uptimes and capacities. The cost for biosolids hauling and disposal in the first table is much higher than the expected cost in the second table.

System Manager Tercala asked if Veolia’s contract amounts for ferric chloride and PACl were included in the pro forma. Jason Nash responded that the total costs for chemicals used at the DWTF are included in the pro forma. System Manager Tercala also asked if the cost for Major Repairs/Replacements (R&R) decreased since the last version of the pro forma because the dryer uptime was reduced. Jason Nash confirmed that fewer run hours of the dryers results in reduced R&R frequency and thus lower costs. Kerry Morgan (Riverview’s attorney) asked what the breakeven point would be of dryer operation to recognize zero cost savings. Jason Nash responded that there is a breakeven point, but more information would be needed to calculate. Jason Tapp added that the biosolids project was intended to not only reduce hauling and disposal costs, but also to provide another outlet for biosolids, such as beneficial reuse, as landfill space is becoming less available.

 

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

a. Plant Performance
Jason Tapp, of Veolia, stated that the contract with one landfill has been extended through 2024 as this landfill is allocating some of their landfill space to DUWA, if needed in an emergency, but their price is higher and they use smaller trailers. Veolia continues to use another landfill for their primary hauling and disposal of dewatered solids. About 5-6 truckloads of solids are filled each day.

b. December 2023 MOR
The December 2023 Monthly Operating Report (MOR) was provided in the Board’s pre-meeting packet (Attachment 11). Highlights from the summary and other updates included the following:

• • • The DWTF remained in compliance in the month of December and there were no violations. December was a relatively dry month.
    • A bypass event occurred between January 26-29, 2024 due to significant snowmelt combined with over an inch of rainfall. The highest flow received during this time was 217 MGD, which required bypassing a portion of the treatment process. All flow still goes through UV disinfection, and the DWTF still met its compliance and permit requirements during the bypass event. The DWTF handled the high flows well as there were no major failures or equipment issues. This bypass event was also good training for newer staff who have not yet experienced a bypass event as 80% of the operations staff have not experienced a bypass event in their tenure.
    • Veolia continues to dose between 0.2 – 0.3 gpm of ferric chloride for odor control.
    • Veolia staff completed several maintenance items including the following:
      • Performed general maintenance on the primary and secondary sludge tanks.
      • Cleaned fouled drains on the condensing towers and installed a port and flanges on the condensing towers to facilitate cleaning and media removal. Veolia is also working with Stantec to develop a permanent clean-in-place system on the condensing towers.
      • Added sample ports to obtain real-time samples of the true influent to the DWTF. Previously, samples had to be collected in a pit that was 60-feet deep and required confined space entry.
    • Routine maintenance and troubleshooting on the flow meters throughout the collection system was performed.
    • Several communities reported locations of surcharging during recent wet weather events, and collection system staff investigated these areas for signs of surcharging.
    • Veolia currently has two maintenance positions and one operator position open. A new electrician was recently hired, and he appears to be a good fit.
    • Veolia has been performing Job Safety Analyses where they identify potential issues that could arise with a certain job and review the work process to make sure everyone is on the same page to get the job done.
    • Veolia received 117 Miss Dig tickets in December, of which 28 were emergency tickets.

Mayor Bill Bazzi (Dearborn Heights) asked if combined sewer overflows would impact the flows at the DWTF. Jason Tapp responded that surface water does not generally flow to the DWTF, so there should be little to no impact. System Manager Tercala added that communities along the Riverdrive Interceptor have Maximum Allowable Flow Limits (MAFLs) and communities should review their MAFLs as they plan and prepare for new developments.

c. Chemical & Sludge Price Updates
Jason Tapp presented the summary of commodity unit price changes to the Board (Attachment 12). There have been no recent significant increases on chemical unit pricing, and no chemical price increases are currently expected going into 2024.

Chairperson McLeod (Allen Park) asked about the large price increase from January 2023 to December 2023 associated with one of the landfills. Travis Tuma explained that the cost increase is attributed to fuel as the landfill is relatively far away, but their cost is still lower than the alternative landfill. Mayor Joseph Kuspa (Southgate) asked what the anticipated cost for biosolids hauling will be once the dryers are online. Jason Tapp responded that a reduction in hauling costs of about 80-90% can be expected once the dryers are consistently online and when running at higher design capacities. An all-in cost of about $50k per month can be expected for hauling of dried solids. With the dryers only intermittently online and at reduced design capacities, some dewatered solids must bypass the dryers and are hauled to the landfill. Dewatered solids are heavier than dried solids and thus cost more to haul.

d. Existing Disinfection System Remaining Life Update
Jason Tapp stated that Veolia found wholesale spare parts to help extend the life of the existing UV system, but most of the spare parts have now been consumed. Veolia recently ordered more spare parts from the original equipment manufacturer, and these should arrive onsite in the next couple of weeks. Veolia will continue to stockpile spare parts as needed. The UV system is currently working very well as the DWTF is achieving its required fecal disinfection even with the recent high flows into the plant.

Attorney Fausone asked about the availability of spare parts. Jason Tapp responded that he expects bulbs, ballasts, and quartz sleeves to continue to be available through 2026 when the new UV system is expected to be online, but circuitry is difficult to replace. A wiring failure could result in a failure of the UV system. Veolia continues to contact other wastewater treatment facilities that are switching to the new UV system to acquire their unused spare parts, if possible.

 

7. TREASURER’S REPORT
Veolia’s General Manager Jason Tapp provided the Contract Operator update.

a. Quarterly Financial Statement – 2023 Q4
Accountant Doug Drysdale (DNS Financial Services/Southgate) presented the Quarterly Financial Statement for 2023 Q4 (Attachment 13). The balance sheet shows the assets and liabilities. These values are preliminary year-end numbers on a cash basis and these values will change during the audit this spring. DUWA’s year-end cash balance is about $35.5M compared to the cash balance of $37.5M at the beginning of the year. There is about $3.6M in Accounts Receivable. The Fixed Assets and short-term and long-term liabilities will be adjusted during the audit. The amount in Accounts Payable decreased from $4.4M at the beginning of the year to $2M at the end of the year, but this will increase as DUWA receives invoices from work performed in 2023.

The Revenue and Expenditure report compares the 2023 year-end balance to the 2022 year-end balance. The targeted percentage of budget used is 100% for Q4. Operating revenue, inclusive of the sewage disposal charges, excess flows, industrial surcharges, and non-residential user fees, is just over 100% of what was budgeted. Other Revenues are at 85% of the budgeted amount because no SRF project reimbursements were received. Interest Revenue received was about $1.5M compared to the $240k that was budgeted. The overall revenue of $34.2M exceeded the $33.7M that was budgeted.

The debt service includes the Wayne County bond amendment that recognizes this year’s payment of $700k instead of the original $3.5M payment. Other Services and Charges are at about 76% of what was budgeted, but the audit fees are at about 153% of what was budgeted because it was not recognized that another single audit was necessary this year per WIFIA requirements. Plant Operations is at about 97% of what was budgeted. Unit prices for water and oxygen were higher than expected this year, and the use of hydrogen peroxide for odor control was not anticipated in the budget. Under Capital Outlay, $1M was budgeted for the UV project and $2.06M was budgeted for small capital projects, but the overall Capital Outlay is at about 31% of what was budgeted as only about $1.9M was spent on capital projects. The net of Revenues and Expenditures totals a surplus of about $649k.

Roberto Scappaticci (Romulus) asked how there is about a $4M difference between what was budgeted compared to what was spent for the year. Accountant Drysdale responded that DUWA budgeted about $38M in expenditures this year, and $2.8M was saved due to the revised Wayne County bond payment of $700k instead of $3.5M. The amount spent to date is then $33.5M.

b. Aging AR
Accountant Doug Drysdale (DNS Financial Services/Southgate) presented the Aging Accounts Receivable report (Attachment 14). Accountant Drysdale stated that the total amount in the Accounts Receivable is approximately $1.3M of which $777k is current. He noted that River Rouge has several outstanding invoices over 90 days totaling about $382k and added that he has not been able to connect with the River Rouge Finance Department to address these outstanding invoices. He asked Lou Arapakis (River Rouge) to connect with the Finance Department to pay these invoices. Dearborn Heights has an outstanding invoice over 90 days in the amount of about $59k. Mayor Bill Bazzi (Dearborn Heights) stated that they recently hired a new comptroller and that he would provide his/her contact information to Accountant Drysdale to coordinate payment of the invoice.

c. Pending Invoices
Accountant Doug Drysdale (DNS Financial Services/Southgate) presented the invoice register for a request for payment (Attachment 15). The invoice register included 29 invoices due for a total of $1,907,518.47. The largest invoices included those to Veolia for operation and maintenance and flow metering services, Black & Veatch for engineering design of the UV project, and DTE and Wyandotte Municipal Services for utility services.

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

 

8. PUBLIC COMMENT
There was no public comment.

 

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

 

10. NEXT BOARD MEETING DATE:

a. Special Meeting: Thursday, February 29, 2024 (10:00 AM; In-Person)
Chairperson McLeod (Allen Park) reminded the Board that the Closed Session Special Meeting will take place on Thursday, February 29, 2024 from 10:00 AM to 12:00 PM at the Romulus Athletic Center. The meeting information will be sent out to the Board Commissioners. She asked the Board Commissioners to encourage their Mayors, Township Supervisors, and municipal attorneys to attend.

b. Regular Meeting: Thursday, March 14, 2024 (9:00 AM; In-Person)
Chairperson McLeod (Allen Park) reminded the Board that the next regular meeting would take place on Thursday, March 14, 2024 at 9:00 AM in-person at Taylor City Hall.

 

11. 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 Mayor Joseph Kuspa (Southgate) to adjourn the meeting. The motion passed unanimously at 10:31 AM.

 

Meeting Minutes Prepared by:
Mackenzie Chamberlain, OHM Advisors | DUWA System Manager

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

Attachments:

1. Meeting Agenda
2. January 11, 2024 DUWA Board Meeting Minutes
3. Monthly Legal Update (by Fausone & Grysko)
4. Special Meeting & Closed Session (by Fausone & Grysko)
5. System Manager Report for February 2024 (by OHM Advisors)
6. UV Disinfection Replacement Project Update (by OHM Advisors)
7. Bond Financing Timeline (by PFM)
8. Biosolids Dryer Facility Project January 2024 Monthly Progress Summary (by Veolia CPM)
9. Biosolids Dryer Production and Capacity Charts (by Veolia CPM)
10. Biosolids Dryer Pro Forma (by Veolia CPM)
11. Monthly Operating Report for December 2023 (by Veolia)
12. DWTF Unit Price Changes Summary (by Veolia)
13. Quarterly Financial Statement – 2023 Q4 (by Doug Drysdale)
14. Aged Accounts Receivable Report, dated February 1, 2024 (by Doug Drysdale)
15. Invoice Register, dated February 1, 2024 (by Doug Drysdale)