DOWNRIVER UTILITY WASTEWATER AUTHORITY
June 13, 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 11 communities: Allen Park, Dearborn Heights, Ecorse, Lincoln Park, Riverview, River Rouge, Romulus, Southgate, Taylor, Van Buren Township, and Wyandotte. A quorum (at least 7 members) was present.

a. DUWA Commissioners
The DUWA Board Commissioners present at the time of roll call introduced themselves as follows: Mayor Bill Bazzi (Dearborn Heights), David Hall (Ecorse), Lisa Griggs (Lincoln Park), Mayor Joseph Kuspa (Southgate), Chairperson and Mayor Gail McLeod (Allen Park), Roberto Scappaticci (Romulus), Dean Workman (Riverview), Lou Arapakis (River Rouge), Mayor Tim Woolley (Taylor), Kevin Lawrence (Van Buren Township), Greg Mayhew (Wyandotte).

b. Other Meeting Attendees
Board meeting attendees present in the audience at the time of roll call introduced themselves as follows: Jim Taylor (Van Buren Township), Gerry Barr (Allen Park), David Fredrick (Taylor), Kerry Morgan (Riverview attorney), Steve Hitchcock (Romulus attorney), Dave Greco (Taylor and Van Buren Township attorney), Jim Fausone (Fausone & Grysko; DUWA Legal), Bill Brickey (Plante Moran, DUWA Financial Consultant), Doug Drysdale (DNS Financial Services, DUWA Accountant, Southgate Finance Director & Assistant City Manager), Jason Couture (Taylor CFO, DUWA Treasurer), Jason Nash (Veolia CPM for Dryer project), Travis Tuma (Veolia OM), Jason Tapp (Veolia OM), Lambrina Tercala (OHM Advisors, DUWA System Manager), Mackenzie Chamberlain (OHM Advisors, DUWA System Manager).

 

2. APPROVAL OF AGENDA
Copies of the Agenda were made available prior to the meeting (Attachment 1). Motion by Mayor Joseph Kuspa (Southgate) and supported by Mayor Bill Bazzi (Dearborn Heights) to approve the Agenda. The motion passed unanimously by all attending members.

 

3. APPROVAL OF MINUTES FROM MAY 9, 2024 BOARD MEETING
Copies of the meeting minutes from the May 9, 2024 Board meeting were included in the pre-meeting Board packet (Attachment 2). Motion by Roberto Scappaticci (Romulus) and supported by Mayor Joseph Kuspa (Southgate) 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 it was a typical month of activities as the legal team supported the System Manager on various matters and participated in virtual Technical Committee, Financial Committee, and Board Officer meetings over the past month. He also noted that several recent court cases within the State of Michigan have issued rulings in support of utilities regarding how revenues from rates are spent. The court case involving Mackinaw City ruled, in a 2-1 vote, that revenues from rates can be used to fund capital improvements to infrastructure. These court case rulings could set precedents for future cases involving utilities, which may be of interest to DUWA and the member communities.

Mayor Bill Bazzi (Dearborn Heights) asked if Fausone & Grysko is involved with the Act 345 court case as this case also impacts Dearborn Heights. Attorney Fausone responded that Fausone & Grysko is tracking this case and has one of its client municipalities involved in this case.

b. Draft Changes to Articles of Incorporation and Bylaws
At the April Board meeting, DUWA Commissioners inquired about the possibility of changing DUWA’s fiscal/budget year such that it aligns with its rate year. DUWA’s fiscal year is currently January 1 – December 31 and its rate year is July 1 – June 30. Plante Moran indicated that a change in the fiscal year will require additional due diligence by DUWA’s financial professionals as to how this change would be implemented and how it might impact reporting requirements to the State of Michigan and EPA (as it relates to the WIFIA loan). The fiscal year is set by DUWA’s Articles of Incorporation (AOI), and a change in the fiscal year would require an amendment to the AOI. Considering that the AOI would need to be amended, Fausone & Grysko identified a number of other potential revisions to the AOI that could be considered (Attachment 4). Some of the revisions are minor such as changing DUWA’s official address from Taylor to Wyandotte or clarifying the process for appointing alternate Board Commissioners. Other potential revisions such as changing the weighted voting percentages or the supermajority voting process will require further discussion.

Fausone & Grysko will draft a revised version of the AOI and Bylaws for review by the Board Officers and Legal Committee. Once the revised version has been accepted by both groups, the revised AOI will be brought to the full Board for approval. Fausone & Grysko will then develop a Resolution to amend the AOI and Bylaws, and the resolution will be provided to each Board Commissioner to bring to their local City Councils/Township Boards for adoption, as a resolution to amend the AOI must be adopted by each member community. This is expected to be a long-term process that will take many months to implement.

Mayor Joseph Kuspa (Southgate) appreciated the due diligence by Fausone & Grysko to review the AOI and Bylaws as a whole to identify areas for improvement or clarification as part of this process. He added that the AOI should also be reviewed to identify areas where more generic statements can be made to reduce the need for additional amendments in the future. Chairperson McLeod (Allen Park) noted that changes to the AOI require a resolution to be adopted by every member community, but changes to the Bylaws only require approval by the DUWA Board, not by every member community. Some of the proposed revisions overlap between the AOI and Bylaws, while other revisions apply only to either the AOI or Bylaws.

 

5. SYSTEM MANAGER UPDATE
System Manager Mackenzie Chamberlain, 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 Chamberlain noted the following highlights from the System Manager Report:

• • DUWA is still pending EGLE’s response to the NPDES Permit renewal response letter that was submitted in January 2024. However, recent correspondence with EGLE seemed to indicate that their response may be forthcoming soon.
  • Fine Screens 1 and 2 are in need of replacement due to wear and tear. A request to rebuild the fine screens will be brought forward later in the meeting.
  • HRC has completed their design of the PLC-5 replacements in the Solids Handling Building, and the project is currently out to bid with bids due on July 12th.
  • CCTV efforts along the Eureka Interceptor are complete. HRC is in the process of reviewing the inspection videos to identify repair needs in those areas showing degradation from hydrogen sulfide.
  • Wyandotte Municipal Services Power Plant submitted a wastewater exemption request, and upon inspection of their facility, the exemption request was approved. There will be three industries with wastewater exemptions in effect for this coming rate year beginning on July 1st.
  • Veolia finalized a 3-year agreement with a landfill that will accept DUWA’s biosolids. Use of this landfill will reduce DUWA’s hauling costs as this landfill is closer than the other Ohio-based landfills that were previously being utilized.
  • In mid-May, EGLE performed an audit of DUWA’s Industrial Pretreatment Program. No violations were identified, but DUWA’s Sewer Use Ordinance will need to be updated to reflect some corrections related to the definition of ‘Significant Non-Compliance’ as well as the daily fines that can be collected for infractions. The Sewer Use Ordinance is expected to be updated accordingly by the end of this year.
  • OHM is working with Aon, DUWA’s insurance provider, to discuss DUWA’s cybersecurity needs. Opportunities are being explored to potentially execute a no-cost retainer with a forensic firm that could be used if a cyber breach were to occur and also to perform an assessment of DUWA’s data storage to identify weaknesses in DUWA’s cybersecurity.
  • The proposed Rate Package and surcharge rates will be presented later in the meeting for approval.
  • OHM updated the benchmark comparison of wholesale wastewater rates to compare DUWA’s rate to the rates of other wholesale wastewater providers in the region. Based on this comparison, DUWA remains to be the best-value provider in the region.
  • Plante Moran has completed their annual audit of DUWA’s financial statements as well as the single audit related to WIFIA financing. The final audit reports were provided via email earlier this week, and request to approve the audit reports will be brought forward later in the meeting.

Mayor Joseph Kuspa (Southgate) commended the efforts in developing the rate comparison and asked if a brief narrative can be drafted to further describe the rate comparison such that it can be publicly shared. Chairperson McLeod (Allen Park) added that a key describing the acronyms used in the rate comparison table should also be added. System Manager Chamberlain responded that a narrative and key would be drafted and provided to the Board. Mayor Tim Woolley (Taylor) suggested that the rate comparison table be shared with City Councils and Township Boards as well.

Attorney Kerry Morgan (Riverview’s attorney) asked if DUWA has its own data storage cloud and if OHM’s cybersecurity will be evaluated as part of the risk assessment effort. System Manager Chamberlain responded that the focus of the cybersecurity analysis will be on the data stored at the DWTF as well as data stored within DUWA’s accounting software. System Manager Lambrina Tercala added that DUWA is considering a cybersecurity evaluation in response to the recent cyber hack that occurred at a water tower in Texas. Mayor Joseph Kuspa (Southgate) added that the City of Southgate recently started using the YubiKey for computer logins and access, which utilizes two-factor authentication to minimize vulnerability. He offered to connect OHM with the City of Southgate’s IT department to obtain more information if desired.

b. DUWA’s Draft Vision and Mission Statements
Last year, DUWA worked with SEMCOG to facilitate two strategic planning workshops. During the April 2023 workshop, draft vision and mission statements were developed and HICOPs (hurdles, issues, challenges, obstacles, and problems) were identified. During the September 2023 workshop, target areas were identified to address those HICOPs. Some of these target areas included increasing system resiliency, improving public outreach, and working with the member communities to reduce the risks of flooding, among many others (Attachment 6).

The next step in the strategic planning process is to begin advancing upon the various target areas that have been identified. Before advancing upon these target areas, the Board Officers suggested that DUWA’s draft vision and mission statements first be reviewed with the Board.

The Vision Statement currently reads as follows:

The collaboration of 13 Downriver communities to provide cost-effective, reliable, and sustainable wastewater services.

The Mission Statement currently reads as follows:

DUWA is committed to ensuring efficient and effective management of the wastewater system with a focus on public safety, environmental sustainability, and the quality of life of the DUWA member communities.

Mayor Bill Bazzi (Dearborn Heights) asked if an internal audit was completed to identify the HICOPs. System Manager Chamberlain responded that the HICOPs were identified by DUWA’s Representatives and Professionals who participated in the strategic planning workshop held in September 2023. Mayor Bill Bazzi (Dearborn Heights) requested that DUWA’s Vision and Mission Statements be included on the rate benchmarking comparison table as well as other materials that could be shared with the public. Mayor Joseph Kuspa (Southgate) appreciates the efforts involved with developing the Vision and Mission statements as part of the strategic planning process.

Attorney Kerry Morgan (Riverview’s attorney) asked if the Mission Statement should include an emphasis on compliance. Mayor Joseph Kuspa (Southgate) responded that the statement of ‘effective management’ incorporates compliance as well.

Motion by Mayor Bill Bazzi (Dearborn Heights) and supported by Mayor Joseph Kuspa (Southgate) to approve DUWA’s Vision and Mission Statements as presented. The motion passed unanimously by all attending members.

 c. UV Disinfection Replacement Project Update
System Manager Chamberlain provided an update on the UV Disinfection Replacement Project to the Board (Attachment 7). OHM is working with CCC, the UV General Contractor, to finalize and execute the contract documents, and the Notice to Proceed is expected to be issued next week. Additionally, Black & Veatch’s construction phase services proposal will be presented later in the meeting for consideration of approval. Once the Notice to Proceed is issued, a construction kickoff meeting will be held with CCC, Black & Veatch, Veolia, and the UV Project Subcommittee.

The first grant reimbursement request was submitted to EGLE in the amount of about $635k, which includes costs related to Black & Veatch’s design efforts as well as OHM’s project support, and after a couple revisions, EGLE has indicated that the reimbursement request has been passed along to their budget staff for payment. Additionally, since the construction bid value was less than the $10M grant value, DUWA’s Financial Team performed a cash flow analysis which indicated that bonding is not necessary as long as the total project cost remains as projected at $11.5M. As such, bonding efforts are not being pursued at this time.

 d. Biosolids Dryer Facility Project
Jason Nash (Veolia CPM) provided an update on the Biosolids Dryer Facility project to the Board (Attachment 8). Both dryers are currently online. The South Dryer was offline for a short period for repairs and was restarted on May 9th. On May 19th, both dryers were shut down so that the 7.5 hp motors could be installed on the cake pumps. With the previous 5 hp motors, the pumps were running above their full load amperage, but with the larger motors, the pumps are now running at about 90% of their full load amperage.

Several alarms on the dryers were experienced throughout the month, and Kruger reprogrammed the settings to resolve the issue. Kruger is also performing an analysis to determine why the alarms went off. These alarms have not been experienced since. Additionally, the boiler inspector confirmed that the thermal oil system is not a boiler so a boiler permit is not required.

The dryers had been operating at 85% dosing pump speed, which translates to about 77% dryer capacity. A bucket test was performed yesterday, and the results showed that the pumps have degraded substantially over the last couple weeks as the dryer is now operating at 60% of its capacity. When the dryer was operating at 85% dosing pump speed, the pumps were running faster which would cause them to wear quicker, but they are still not expected to wear this fast. Tungsten carbide rotors and urethane stators have been ordered which should provide additional resistance to wear compared to the current rotor and stator materials. The new rotors and stators will be installed on the cake pumps this week and on the dosing pumps in August when the additional parts arrive.

A Joint Technical Committee (JTC) has been created to discuss the dryer system issues and to develop a plan to analyze and identify solutions. The JTC is led by Stantec and includes members from OHM, Veolia OM, Kruger, Veolia CPM, and an expert from Veolia’s technical performance team in Paris, France. The JTC had an all-day meeting on June 4th and has another meeting tomorrow.

The dryer performance pie charts show that the dryers have had about 40% of uptime since February 2023 compared to the expected uptime of 91.5%. Pump repairs have been the major cause of downtime. Since January 2024, the dryer uptime has significantly improved.

Chairperson McLeod (Allen Park) asked that the dryer performance be shown in a table in addition to the pie charts so that the raw numbers can be shown as opposed to percentages. Roberto Scappaticci (Romulus) asked if the pumps are still manufactured from the same manufacturer, or if a third-party pump manufacturer has been considered. Jason Nash responded that they had tried using rotors from a third-party manufacturer, but they failed after a couple weeks, so the pump components are still being provided by the same manufacturer that has been used previously. Roberto Scappaticci (Romulus) asked if Kruger could specify a different manufacturer’s pump for comparison of operation and lifecycle. Jason Nash responded that this has been considered by Stantec and Kruger, but the pumps are installed in a tight space so it would be difficult to install a different or larger pump. However, he will bring this up to the JTC for consideration. Mayor Tim Woolley (Taylor) agreed stating that it appears that an engineering flaw is causing the pumping issues and asked if there is a way to reroute or reconfigure the area so that the pumps do not have to pump straight up or as high.

Mayor Bill Bazzi (Dearborn Heights) stated that several pump manufacturers should be able to meet the pump specifications noting that a substantial amount of time and money has been spent on pump replacements with the same manufacturer. He also suggested that a subject matter expert be consulted regarding the pump issues. Mayor Joseph Kuspa (Southgate) asked if larger pumps will be installed. Jason Nash responded that larger pumps are not being installed, but the rotors and stators are being replaced with more abrasive-resistant pump component materials. Mayor Joseph Kuspa (Southgate) suggested that alternative pump manufacturers be considered in case the new rotors and stators do not provide additional benefit, and added that pump comparisons should be performed. Jason Nash responded that the pump manufacturer continues to state that grit and fiber are contributing to the pumps’ wear and tear, but there is no method to measure grit and fiber content, so this cannot be specified to manufacturers for pump considerations and the manufacturer cannot guarantee the pumps’ lifetimes. System Manager Tercala responded that these options have been explored. Attorney Fausone suggested that OHM provide a report to the Board on the various items that have been explored to date. He also suggested that bench testing of other pumps by other manufacturers be performed for comparison.

Chairperson McLeod (Allen Park) asked why the South Dryer was started for a few minutes then shut down on May 8th. Jason Nash responded that when the dryer was warming up, a high temperature alarm caused it to shut down. Veolia OM then attempted to restart the dryer several times, but without success. The midnight shift was able to start the dryer later that night. The alarm was caused by a programming issue, which has since been resolved by Kruger. Mayor Bill Bazzi (Dearborn Heights) asked if abrasion is causing corrosion or deterioration of the pumps. Jason Nash responded that abrasion is causing deterioration of both the rubber and urethane pump components. Tungsten carbide rotors have been ordered which should be more abrasive-resistant. It is difficult to find materials that are abrasive-resistant but also soft enough to move through the pump.

Mayor Joseph Kuspa (Southgate) asked how long the dryers ran at 77% of their capacity. Jason Nash responded that assuming linear degradation, the dryer capacity decreased from 77% to 63% from May 28th to yesterday. The rate of pump degradation is based on the dryer runtime. The pumps were originally operating above their design capacity, but after two weeks, they were operating below their design capacity.

Lou Arapakis (River Rouge) asked if Kruger is still involved in the decision-making process and if they will continue to pay for pump replacements. Jason Nash responded that Kruger continues to be involved and has paid for all pump replacements to date. Attorney Fausone added that Kruger should be the expert on this dryer system, and they rely on the pump manufacturer to be the expert on the pumps. The JTC continues to discuss these issues and Kruger is currently paying for the replacement pump components. Lou Arapakis (River Rouge) asked if other facilities have issues with this pump manufacturer. System Manager Tercala responded that DUWA is unique, but bulging hoses and other various pump issues have been experienced at other facilities as well. Kruger continues to state that the pumps currently installed are the appropriate pumps for this project.

Mayor Joseph Kuspa (Southgate) asked if the use of a different pump would jeopardize potential litigation. Attorney Fausone responded that this could be a concern as the use of a different pump or pump manufacturer could violate or impact the warranties currently in place. Attorney Kerry Morgan (Riverview’s attorney) asked if the dryer can be operated at a lower capacity to minimize wear and tear of the pumps. Jason Nash responded that the dryers cannot be run slower and there is a certain rate of operation below which the dryer equipment will not work. Attorney Kerry Morgan (Riverview’s attorney) asked if additional auxiliary pumps need to be added to help pump the product to the top of the dryers. Jason Nash responded that this option has not been discussed, but noted that the dosing pumps are the limiting factor as the cake pumps have provided longer run times than the dosing pumps. The cake pumps can keep up with the dosing pump speeds, and degradation of the dosing pumps have been the primary cause of dryer downtime. The dosing pumps have been sized to provide the required pressure.

 

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

a. UV Disinfection Project: Black & Veatch Construction Phase Services Proposal
Black & Veatch was previously authorized in 2023 to perform engineering and design of the new UV system for a not-to-exceed fee of $601,510. This effort is now complete. Black & Veatch has now provided a separate proposal to provide Construction Phase Services for the duration of the construction of the new UV disinfection system. Their proposal includes Project Management and Administration, Construction Administration and Engineering, progress meetings, resident project representative (RPR) services and site visits, as well as startup and commissioning services. Black & Veatch proposes to provide these services for a not-to-exceed fee of $710,150 (Attachment 9). OHM negotiated with Black & Veatch to reduce their fee from over $900k while keeping the base of the scope intact. Adjustments to the original proposal included minimizing Engineering Manager hours to reduce overlap of personnel, reducing meeting attendees for progress meetings, and right-sizing RPR hours to critical construction periods.

It should also be noted that Black & Veatch’s Project Manager, Emily Schlanderer, has taken on a new role and is no longer with Black & Veatch. A new Project Manager, Dave Diehl, will be assuming the Project Management duties for the construction phase of the project, and a meet and greet is scheduled with him next week. However, Black & Veatch’s technical team will remain the same.

DUWA had originally budgeted about $17.5M for UV project expenses in 2024, but since the General Contractor’s bid was less than the engineer’s opinion of probable construction cost, UV project expenses are anticipated to total about $11M in 2024 rather than the budgeted amount of $17.5M. Additionally, Black & Veatch’s labor and direct expenses are reimbursable through the $10M grant. Black & Veatch’s proposal was reviewed by the UV Project Subcommittee as well as the Technical Committee and was recommended for approval.

Mayor Joseph Kuspa (Southgate) asked for the length of Black & Veatch’s contract term. System Manager Chamberlain responded that the contract will be in effect through June 2026 for Black & Veatch to see the project through construction and to perform construction project closeout tasks.

Motion by Mayor Bill Bazzi (Dearborn Heights) and supported by Roberto Scappaticci (Romulus) to approve the Chair or Vice Chair to execute Black & Veatch’s Construction Phase Services proposal for a not-to-exceed fee of $710,150. This fee will be paid from DUWA’s Capital Outlay budget line item. A roll call vote was taken, and the motion passed unanimously with 92% of the vote (affirmative vote by all attending members).

b. Small Capital: Rebuild of Find Screens 1 and 2
There are seven fine screens at the headworks of the DWTF that remove debris larger than 0.5-inch in size. Fine Screens 1 and 2 operate continuously during average day flow conditions. The chain linkages and pins that are used to operate the arms that clean the screens are showing signs of wear and tear and are in need of replacement. The need to rebuild these screens was previously identified in Veolia’s 2022 Asset Management Plan, but the work was deferred as a physical inspection showed that rebuild of the fine screens was not critical at that time. Upon recent inspection, rebuild of the fine screens is now deemed critical.

The cost to DUWA for the rebuild, inclusive of taxes and Veolia’s 10% markup, is $91,037.96 (Attachment 10). This fee will be paid from the Small Capital Budget. This request was reviewed by the Technical Committee and was recommended for approval.

Mayor Joseph Kuspa (Southgate) asked where the fine screens are located. System Manager Tercala stated that the fine screens are located at the headworks of the DWTF and pointed out their location on the DWTF layout map provided in the room. Jason Tapp, of Veolia OM, added that Veolia is in the process of developing videos that provide an overview of the fine screens, and these videos will be shared with the Board once finalized.

Motion by Mayor Joseph Kuspa (Southgate) and supported by Greg Mayhew (Wyandotte) to authorize Veolia to rebuild Fine Screens 1 and 2 for a not-to-exceed fee of $91,037.96. This fee will be paid from DUWA’s Capital Outlay budget line item. The motion passed unanimously by all attending members.

c. FY2024-25 Surcharge Rates
As part of the annual rate package development, the surcharge rates are reviewed to assess whether the current surcharge rates are sufficient to meet projected costs as the surcharge rates that are charged to industrial users are directly tied to DUWA’s operating costs. OHM reviewed DUWA’s surcharge rates and an increase in the surcharge rates is recommended. The proposed FY2024 surcharge rates for Biochemical Oxygen Demand (BOD), Total Suspended Solids (TSS), and Total Phosphorous (Total P) are as follows:

BOD: $0.421/lb (compared to current rate of $0.403/lb)
TSS: $0.300/lb (compared to current rate of $0.269/lb)
Total P: $3.717/lb (compared to current rate of $3.450/lb)

The surcharge rates for BOD, TSS, and Total Phosphorous are proposed to increase between 4-11% (Attachment 11). The increase in surcharge rates will be applied beginning July 1, 2024 to align with DUWA’s rate year. The proposed surcharge rates were reviewed with the Technical Committee and were also shared with Veolia’s IPP team to notify the industries of the pending rate increases.

Motion by Mayor Joseph Kuspa (Southgate) and supported by Mayor Tim Woolley (Taylor) to approve the proposed FY2024-25 surcharge rates as presented that will be in effect starting July 1, 2024 to align with the next rate year. 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. Plant Performance
Travis Tuma, of Veolia, stated that one odor complaint was received this week, so peroxide is currently being dosed for odor control. Peroxide dosing is typically stopped when there are high flows into the DWTF and/or when hydrogen sulfide levels are low.

b. April 2024 MOR
The April 2024 Monthly Operating Report (MOR) was provided in the Board’s pre-meeting packet (Attachment 12). Highlights from the summary and other updates included the following:

• • The DWTF remained in compliance in the month of April and there were no violations.
  • In April, the average flow into the DWTF was 62 MGD and the peak flow into the DWTF was 112 MGD. No bypass events occurred in April, and there has still only been one bypass event this year (which occurred in January).
  • Veolia has worked with Stantec to implement measures to reduce the rate of biofouling of the condenser towers associated with the Biosolids Dryer System. A clean-in-place (CIP) system has been incorporated that doses peroxide on a continuous basis to prevent biofouling. The CIP system also allows for one tower to be isolated at a time to heavily dose peroxide when needed while keeping the tower in service, thus reducing downtime of the dryers. The peroxide supplier has provided a competitive unit price of $4.84/gallon, which is about $1 less than the previous unit price, per the 3-year agreement executed last month. The peroxide supplier will support both the CIP and odor control systems under this agreement. Peroxide is dosed for odor control on an as-needed basis only.
  • Veolia staff completed several large maintenance jobs including the following:
    • Veolia OM staff removed the warm zone fan unit for repair due to a greasing issue that caused the bearing to fail. Veolia OM staff assisted the manufacturer’s representative with the fan removal, which was a good learning opportunity for OM staff. This fan is the size of a small car and was repaired under warranty. Veolia OM staff inspected the other fans and determined that the others were still in good condition.
    • Veolia OM staff assisted the centrifuge manufacturer with replacement of the bearings on the centrifuge. The greaser fed two bearings, but one bearing received more grease than the other causing the other bearing to fail. The manufacturer’s representative adjusted the orifice to allow more grease to reach the other bearing. There have been no issues since.
    • Preventative maintenance was performed on the tunnel pump station pumps, which required a crane to be rented to lower OM staff down into the 60-foot shaft to pull, clean, and inspect the pumps. The pumps looked to be in good condition.
  • The towbro in the secondary clarifier has been replaced and the secondary clarifier is now back online. The old towbro was rusted and experienced corrosion, so it was replaced with a stainless steel towbro assembly. Additionally, Veolia OM staff discovered that the truss was failing and needed to be replaced. Veolia replaced the truss with stainless steel. This work was performed in-house and was paid by Veolia. Other trusses will be replaced as needed.
  • The crusher in the Solids Handling Building crushes the dried biosolids to increase the volume hauled per truckload. The crusher appears to be undersized as it consistently experiences clogging. Kruger is working with the crusher manufacturer to determine whether a plate with a larger orifice size needs to be installed.
  • The installation of the redundant soft start on raw sewage pump #5 is complete, and Veolia’s electrician is in the process of completing the work on raw sewage pump #6. Implementation of the soft starters was delayed as the electrical equipment had a long lead time.
  • Routine maintenance was performed throughout DUWA’s collection system.
  • DUWA will be credited about $7800 for one vacant operator position in April. This position has since been filled.
  • Veolia’s Health and Safety Manager tracks the number of confined space entries performed each month. In April, five confined space entries were performed, two of which involved a ‘hot work’ permit for welding and grinding activities.
  • Veolia received 421 Miss Dig tickets in April, of which 24 were emergency.

Mayor Tim Woolley (Taylor) asked how many gallons of peroxide are typically used each day. Jason Tapp responded that approximately 300 gallons of peroxide are used each day when the CIP and odor control systems are online.

c. Chemical & Sludge Price Updates
Jason Tapp and Travis Tuma presented the summary of commodity unit price changes to the Board (Attachment 13). There have been no recent significant increases on chemical unit pricing. There is a small reduction in sludge hauling costs in May because Veolia finalized a 3-year agreement with a landfill in Michigan that now accepts DUWA’s dewatered (not dried) biosolids. This landfill is in closer proximity than the current landfills in Ohio. This Michigan landfill has a higher tipping fee than the Ohio landfills, but the reduced hauling distance translates to an overall reduced sludge hauling and disposal cost. However, the beneficial reuse facility in Canada that accepts DUWA’s dried solids continues to be the cheapest option for solids disposal/reuse as there is no tipping/disposal fee, only a hauling fee.

Jason Tapp and Travis Tuma presented the sludge hauling volume tracker to the Board (Attachment 14). On a monthly basis, at least 35% of DUWA’s solids have been hauled to the beneficial reuse facility in Canada since January 2024. The dryers evaporate about 66% of the total weight of the product. The production of dried solids saved DUWA about $200k in landfill costs in April.

Mayor Tim Woolley (Taylor) commented that while DUWA is saving money with the production of dried solids, DUWA is not getting its money’s worth out of the Biosolids Dryer Project, especially considering the additional OM effort necessary to keep the dryers online. Mayor Joseph Kuspa (Southgate) asked why there was such a high volume of dried solids production between February 2023 and April 2023. Jason Tapp responded that DUWA had no available landfill outlets during that time, so sludge was backing up (stored) at the DWTF as there was no ability to discharge wet cake to a landfill. Only dried solids were hauled from the DWTF during that time. A landfill was later acquired at a premium price which allowed for discharge and disposal of the wet cake. Mayor Joseph Kuspa (Southgate) asked whether sludge has been stored at the DWTF since April 2023. Jason Tapp responded that the DWTF is disposing of the appropriate sludge volumes needed each day and is not experiencing a backup of sludge at the DWTF.

d. Existing Disinfection System Remaining Life Update
Jason Tapp stated that the UV system is currently running well and is achieving the required fecal disinfection. The contractor for the UV replacement project was onsite earlier this week to ask about the isolation of gates and maintenance of plant operations in preparation for construction. There are currently enough spare parts to maintain the UV system for approximately 12-18 months, which should accommodate the anticipated timeline of the commissioning of the new UV channels as they are constructed. Veolia will continue to work with Trojan to replenish the inventory of OEM spare parts, as needed. Veolia is also continuing to search for opportunities to purchase spare parts from other facilities that are decommissioning their existing UV systems in preparation for installation of their new UV systems.

 

8. TREASURER’S REPORT

a. Approval of FY2024-25 Rate Package
Accountant Doug Drysdale (DNS Financial Services/Southgate) presented the FY2024-25 Rate Package (Attachment 15). The rate package was updated to reflect a slight reduction in anticipated sludge hauling and disposal costs. The total all-inclusive rate is $13.68/unit, of which $11.71 is attributable to the commodity charge and $1.97 is attributable to the debt retirement charge. The proposed rates reflect a rate increase of 8.23% compared to last year’s rates. Of the 8.23% increase, 4.8% is attributable to expenditures while the remainder is attributable to the reduction in flow volume from 2.8 million cubic feet (MCF) to 2.5 MCF over the last five years. A reduction in flow results in an increased rate to meet the revenue requirement since the revenue requirement is spread over a smaller denominator. The updated rate package was circulated to the Finance Committee, and no comments were received.

Attorney Fausone noted that the $13.68 all-inclusive rate is also reflected on the wholesale rate comparison table.

Motion by Mayor Bill Bazzi (Dearborn Heights) and supported by Roberto Scappaticci (Romulus) to approve the resolution adopting the FY2024-25 rate package. A roll call vote was taken, and the motion passed unanimously with 92% of the vote (affirmative vote by all attending members).

b. UV Disinfection Project Financing Update
Accountant Doug Drysdale (DNS Financial Services/Southgate) stated that Plante Moran (DUWA’s financial consultant) performed a cash flow analysis to support discussions surrounding the potential for bonding to finance the remainder of the UV project that would not be covered under the $10M ARP grant received from the State. The cash flow analysis estimated costs associated with the UV project (including design, construction, and construction administration) to total about $11.5M. Upon review of the cash flow analysis with DUWA’s Officers and Financial Professionals, it is recommended that DUWA not pursue bonding as the excess project costs of $1.5M can be paid from reserves while still meeting target reserve levels and coverage ratios (Attachment 16).

c. Approval of Audit and Single Audit
Ahead of the presentation of the audit reports, Mayor Bill Bazzi (Dearborn Heights) left the meeting.

Bill Brickey, of Plante Moran, was in attendance to present the audit reports in place of Rumzei Abdallah as Rumzei Abdallah was absent due to the birth of his child, which occurred earlier this morning. The draft audit reports were included within the pre-meeting packet, but the audit reports have since been finalized and were circulated to the Board earlier this week. There were no changes in the content or numerical values between the draft and final reports.

i. Audit for 2023
Bill Brickey, of Plante Moran, presented the 2023 Financial Statement audit report to the Board (Attachment 17). The first few pages of the audit report list items that the auditor must communicate as well as provides generic information regarding accounting-related matters not specific to DUWA. The audit did not detect any misstatements, and the books and records appear to be in good shape. The independent auditor’s report provides the opinion that DUWA’s financial statements are in compliance with rules and regulations.

On the 2023 financial statements, the statement of net position shows that DUWA has about $16.9M in operating cash and has about $18.4M in restricted cash for debt payments. Revenue received from rates covers DUWA’s operating expenses. DUWA also received a substantial $1.5M in investment earnings. DUWA’s overall change in net position is a positive $3.7M. Regarding capital assets, about $25M related to the biosolids dryer project was reclassified as “in service” as opposed to “in progress” since construction is complete and despite the ongoing commissioning challenges. This reclassification is solely for accounting purposes. DUWA’s overall capital investment is about $190M. Additionally, DUWA paid about $6.5M in debt payments in 2023 and has a remaining debt load of about $117M. No new debt was incurred in 2023.

There was one audit finding that was classified as a significant deficiency (which is less severe than a material weakness). The deficiency relates to the proper segregation of duties as one person currently performs the billing, collections, and cash deposit activities. It is best if these duties are segregated and performed by different personnel. Additionally, the storage of accounting records on a single computer may also create cyber concerns. It is recommended that DUWA consider performing a cost/benefit analysis to add additional resources to segregate these activities, or to determine whether DUWA is comfortable with the current allocation of duties.

Treasurer Jason Couture (Taylor) stated that providing for a proper segregation of duties is currently difficult because the data is stored on a single computer. However, he and Accountant Doug Drysdale (DNS Financial Services/Southgate) are exploring opportunities to switch to a cloud-based version of their accounting software that would allow for Treasurer Jason Couture (Taylor) to access the data and would reduce the cyber risks associated with storing the data on a single computer. He will provide an update to the Board once this option is further explored.

Motion by Mayor Joseph Kuspa (Southgate) and supported by Roberto Scappaticci (Romulus) to approve the 2023 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 by all attending members.

ii. Single Audit for 2023
Bill Brickey, of Plante Moran, presented the 2023 single audit report to the Board (Attachment 18). A single audit is required to be performed each year per the WIFIA loan requirements. The single audit tests DUWA’s compliance with disclosure requirements and rate setting. There were no audit findings and DUWA is in compliance with rules and regulations.

Motion by Mayor Tim Woolley (Taylor) and supported by Lou Arapakis (River Rouge) to approve the 2023 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 by all attending members.

d. Community Self-Reporting Status Log
Treasurer Jason Couture (Taylor) presented the Community Self-Reporting Status Log (Attachment 19). All communities except Dearborn Heights and River Rouge have reported their flows through February 2024. Accountant Doug Drysdale (DNS Financial Services/Southgate) will continue coordinating with personnel from Dearborn Heights and River Rouge to receive their self-reported flow worksheets.

e. Aging AR
Treasurer Jason Couture (Taylor) presented the Aging Accounts Receivable report (Attachment 20). He stated that the total amount in the Accounts Receivable is approximately $1.8M of which 94% is less than 90 days delinquent. The City of Taylor and the City of Riverview are shown to have outstanding payments over 60 days delinquent, however payment from the City of Taylor was recently received and is currently being processed, and payment from the City of Riverview was provided this morning. These payments will be reflected on next month’s aging AR report. Treasurer Jason Couture (Taylor) reminded the Board that a 1.5% late fee will begin to be assessed on July 1, 2024 for outstanding payments over 60 days delinquent.

f. Pending Invoices
Treasurer Jason Couture (Taylor) presented the invoice register for a request for payment (Attachment 21). The invoice register included 53 invoices due for a total of $3,179,318.37. The largest invoices included those to Veolia for two months’ worth of operation and maintenance services and unit cost reconciliations and Wyandotte Municipal Services for utility services.

Motion by Greg Mayhew (Wyandotte) and supported by Kevin Lawrence (Van Buren Township) to pay the invoice register. The motion passed unanimously by all attending members.

 

9. PUBLIC COMMENT
There was no public comment.

 

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

 

11. NEXT BOARD MEETING DATE: THURSDAY | JULY 11, 2024 (9:00AM; IN-PERSON)
Chairperson McLeod (Allen Park) reminded the Board that the next meeting would take place on Thursday, July 11, 2024 at 9:00 AM in-person at Taylor City Hall. Chairperson McLeod (Allen Park) wished everyone a happy Independence Day and a happy Father’s Day.

 

12. ADJOURNMENT
There being no other business, Chairperson McLeod (Allen Park) announced that a motion to adjourn would be in order. Motion by Mayor Tim Woolley (Taylor) and supported by Lou Arapakis (River Rouge) to adjourn the meeting. The motion passed unanimously at 10:48 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. May 9, 2024 DUWA Board Meeting Minutes
3. Monthly Legal Update (by Fausone & Grysko)
4. Proposed Changes to Articles of Incorporation Memo (by Fausone & Grysko)
5. System Manager Report for June 2024 (by OHM Advisors)
6. DUWA’s Vision and Mission Statements (by OHM Advisors)
7. UV Disinfection Replacement Project Update (by OHM Advisors)
8. Biosolids Dryer Facility Project May 2024 Monthly Progress Summary (by Veolia CPM)
9. Black & Veatch Proposal for Construction Phase Services for the UV Project
10. Request to Rebuild Fine Screens 1 and 2 (by Veolia OM)
11. Request to Approve FY2024-25 Surcharge Rates
12. Monthly Operating Report for April 2024 (by Veolia OM)
13. DWTF Unit Price Changes Summary (by Veolia OM)
14. Sludge Volume Tracker (by Veolia OM)
15. FY2024-25 Rate Packages (by Doug Drysdale)
16. UV Disinfection Replacement Project Funding (by Doug Drysdale)
17. 2023 Financial Statement Audit Report (by Plante Moran)
18. 2023 Single Audit Report (by Plante Moran)
19. Community Self-Reporting Status Log (by Doug Drysdale)
20. Aged Accounts Receivable Report, dated June 6, 2024 (by Doug Drysdale)
21. Invoice Register, dated June 6, 2024 (by Doug Drysdale)