Flint Sticks to its Guns, Will Leave DWSD for New Water Authority

The Flint Journal is reporting (here) that the City of Flint has decided (again) to stick with its original decision to join the Karegnondi Water Authority, and leave DWSD. This decision comes after DWSD made a "second" best-and-final offer last week, which included a seat on the Board of Water Commissioners.

Comment: Whether this is really the end, or just another step in an on-going negotiation is anyone's guess.  My guess? Its not over yet. 

Update (5/2): Flint's EM confirmed the City's decision to leave DWSD yesterday at a news conference. The Flint Journal covered the event and reports here on the decision. 

For more about DWSD Update, click here.  

Jay Dee Submits Low Bid on OMID Contract No. 4

Earlier this morning, the Oakland Macomb Interceptor Drain Drainage District (OMID) received and opened bids for the Segment 3 Repair, Contract No. 4. 

Jay Dee Contractors from Livonia (MI) was the low bidder:

• Jay Dee Contractors  . . . $ 46.4 million
• Michels Tunneling . . . . . $ 55.9 million
• S. J. Louis Construction  $ 60.8 million
• Ric-Man Construction . . $ 64.2 million
• SECAC Tunnel . . . . . . . . $ 65.6 million
• Kenny Construction . . . . $ 67.2 million
• Walsh Construction . . . . $ 68.8 million

For more about other OMID projects, click here. 

For more about DWSD Update, click here.

DWSD Renews, Sweetens Water Supply Contract Offer to City of Flint (UPDATED)

Just two days after notifying the City of Flint that it would terminate its water supply contract in 2014, the Detroit Water and Sewerage Department on Wednesday [April 24, 2013] renewed its efforts to keep Flint as a wholesale water customer. DWSD sent Flint a revised offer (here). DWSD is competing with the Karegnondi Water Authority, which Flint voted to join at the end of March. 

If it accepted DWSD's latest offer, the City of Flint would not only receive an immediate 45% reduction in the cost of water supply, but Flint could get "purchased capacity rights" of 40 MGD in DWSD's Lake Huron Water Treatment Plant. DWSD is also offering  representation on the Board of Water Commissioners ("DWSD is receptive to this concept and will pursue modification of the current governance structure to accommodate it.") 

DWSD is also proposing redundancy in its water supply to address a frequent criticism of present operations:

"Redundancy Solution - Emergency backup supply is provided to the Imlay pump station, with the associated standby charge. A second transmission water main from the Imlay CIty Pumping Station west to either the current connection at Baxter/Potter roads or to another location to be determined by Flint, as necessary to meet the full redundancy requirements specified is assumed for comparison purposes. To maximize Flint's interest in ownership, it is proposed that this line be constructed by Flint or KWA, and owned by Flint or KWA. 

Comment: I applaud DWSD's persistence in seeking a deal with the City of Flint. And while the Governor's Treasurer, Andy Dillon, approved Flint's decision to leave DWSD, I have to believe that when Governor Snyder met with DWSD, Flint and Genesee County officials in Detroit late last week, he urged cooperation.  With the Detroit Board of Water Commissioners already moving in the direction of a regional authority, there's probably no good reason not to make the table bigger and give Flint and Genesee County a seat.  

Note: You can read DWSD's latest offer online (here).  If you would like to read all of DWSD's latest to Flint's Emergency Manager, write me here and put "Flint Offer 2.0" in the subject line.  

Update (4/30): The Flint Journal is reporting (here) that Flint has decided to stick with its original decision to join leave DWSD and join the Karegnondi Water Authority. 

For more about DWSD Update, click here. 

DWSD Serves City of Flint with Notice of Intent to Terminate Water Supply in April, 2014

On April 17, 2013, one day after the City of Flint rejected a best and final offer to remain a customer, the Detroit Water and Sewerage Department served written notice on the City of Flint that it would terminate its nearly 50 year old agreement to provide drinking water effective April 17, 2014.

The City of Flint voted on March 25, 2013 to leave DWSD and join the Karegnondi Water Authority. Flint's decision was subject to approval by the State of Michigan, which approved the decision on  April 11, 2013, subject to consideration of a best and final offer from Detroit.

A contract to construct the raw water intake pipeline for the Karegnondi Water Authority was bid on February 26, 2013. Once bonds and are sold and a notice to proceed is issued to the contractor, construction is expected to take 30 months. 

Its unclear right now what Flint will do for water in 12 months after its contract with DWSD is formally terminated or how it will pay for the more than $50 million in capital improvements that are required for the Flint Water Treatment Plant, which currently serves only as a back-up to DWSD and is operated only a few times a year. In addition, Flint must address the problem of chronic water loss due to leaks and theft. According to a 2011 audit, 30-40% of the water Flint buys from Detroit is lost due to leaky pipes.   

Update: Late Friday, it was reported by the Flint Journal (here) that Governor Snyder met privately in Detroit with officials from Flint, Genesee County and DWSD. 

Click here to read online the full text of the Notice of Termination. If you'd like to get a copy of DWSD's Notice of Termination, write me here, and put "Flint Letter" in the subject line. 

For more about DWSD Update, click here.

DWSD Submits Best Offer to City of Flint, Outlines 48% Reduction in Wholesale Water Rates

On April 15, 2013, the City of Detroit Water and Sewerage Department furnished the City of Flint and Karegnondi Water Authority with an 8-page proposal, which offers  the City of Flint and Genesee County a wholesale water rate of $10.46 per Mcf (per thousand cubic feet of water), as compared with the current wholesale rate of $20.00 per Mcf. That amounts to a 48% immediate reduction. Over 30 years, DWSD contends that its proposal would save Flint and Genesee County $800 million.   

DWSD's proposal comes a few days after State Treasurer Andy Dillon approved a decision by the City of Flint to enter into a contract with the Karegnondi Water Authority, and leave DWSD. The State's decision allowed for DWSD to submit a best-and-final-offer by April 15, 2013 at 5:00 p.m.  As of last night, neither Flint nor Genesee County reported having received DWSD's proposal. 

Note: If you write me (here), I would be glad to send you a copy of DWSD's April 15th proposal. Just put "Flint Water Proposal" in the subject line.

To read DWSD's April 15th proposal online, click here.   

Update (4/16): MLive.com reports here that Flint and Genesee County officials met this morning to discuss Detroit's proposal.  No word yet on whether the proposal offers enough to change Flint's minds.

Update (4/17): No surprise -- the Detroit News reports here that Flint and Genesee County have said "Thanks, but No Thanks" to DWSD's last offer to retain Flint as a customer. Both Oakland and Wayne County executives have openly criticized Flint's decision.        

For more about DWSD Update, click here. 

State Approves Flint Decision to Leave DWSD, Subject to Receipt, Review of Best and Final Offer

On April 11, 2013, State Treasurer Andy Dillon approved the City of Flint's decision to join the Karegnondi Water Authority, but he is giving Detroit until April 15, 2013 to submit a best and final offer to Flint to remain with DWSD. 

The Flint City Council voted to join the KWA on March 25, 2013, but this decision was subject to approval by the State since Flint is under the control of an Emergency Manager. Flint represents approximately 6% of DWSD's annual water revenue.   

Click here to read the full text of the Treasurer's letter.

For more about DWSD Update, click here.

Fitch Downgrades Detroit Water and Sewer Bonds

On April 1, 2013, Fitch Ratings downgraded its rating of $5.87 billion in Detroit water and sewer bonds. Fitch revised its Rating Outlook to Negative from Stable.  

About $1.9 billion of senior lien water revenue bonds were cut to BBB-plus from A, $1.1 billion of second lien water revenue bonds were downgraded to BBB from A-minus, $1.9 billion of senior lien sewer revenue bonds were cut to BBB-plus from A-minus, and $974 million of second lien sewer revenue bonds were lowered to BBB from BBB-plus.

The factors ininfluencing Fitch's decision are discussed here. 

For prior posts about DWSD's debt rating, click here.

For more about DWSD Update, click here. 

Judge Cox Orders End to EPA Lawsuit, 35 Year Federal Court Oversight

Earlier this morning, Judge Sean Cox entered an order concluding the EPA lawsuit and federal oversight of DWSD which began in 1977.

"The Court concludes that, after more than thirty-five years of federal oversight, the DWSD has achieved substantial compliance with its NPDES permit and the Clean Water Act. This Court shall therefore terminate the Second Amended Consent Judgment and close this case because the existing Administrative Consent Order is a sufficient mechanism to address any future issues regarding compliance with the DWSD's NPDES permit and the Clean Water Act."    

With regard to the request made in the Director's March 15, 2013 Final Compliance Report, that the Court sanction the conversion of DWSD into an independent public authority, Judge Cox declined such a request, which his opinion indicates was unsolicited:

"This Court has no intention of ordering the creation of a regional authority and has no intention of ordering or approving the transfer of DWSD's assets to a regional authority. This Court lacks the authority to do so.  Moreover, even if this Court had the authority to order what is not being proposed, the Court would not do so for multiple reasons."

Comment: I suspect that Judge Cox's ruling this morning caught many by surprise. If DWSD still plans to become an independent authority, it either needs to convince the new EM, Kevyn Orr, that this is a good idea or throw its support behind Kurt Heise's legislative approach.  

(Note: If you write me (here), I would be glad to e-mail you a full copy of Judge Cox's Opinion and Order. I'll try to get it posted later in the day, but no time now.)

Related press coverage: 

• Crain's Detroit Business   
• Detroit News
• Detroit Free Press  

For more about DWSD Update, click here.  

Flint Approves Deal with Karegnondi Water Authority, Plans to Leave DWSD

Last night, the Flint City Council voted 7-1 to approve a resolution to buy its water from the Karegnondi Water Authority (KWA), rather than Detroit.  Flint would buy up to 16 million gallons of raw water per day from the KWA, which took bids on February 26, 2013 to construct an intake pipeline. No contract has been awarded, and work has not started.

Under the new plan, Flint will be required to treat the raw water it buys from KWA, and also rely on the Flint River as back-up. In either case, Flint will have to rely on its existing water treatment plant to process the raw water it receives from KWA. In 2011, a Flint engineering firm (Rowe) estimated that Flint's water treatment plan needed $61 million in capital upgrades. Because Flint is still under the control of an Emergency Manager, state approval is required to sign a new water supply contract with KWA.

For previous posts about the Karegnondi Water Authority, its creation and history to date, click here.    

For more about DWSD Update, click here. 

DWSD Challenges Savings Touted by Karegnondi Water Authority

On March 19, 2013, the Detroit Water and Sewerage Department took off the gloves publicly took issue with claims made by the Karegnondi Water Authority that joining the new authority would save money for communities like the City of Flint, which is weighing a decision to leave DWSD. 

Citing a report prepared in February, 2013 by Tucker Young Jackson & Tull for the State of Michigan, DWSD asserts that the plan advanced by Genesee County and other members of the KWA "is rife with financial discrepancies and false assumptions." As an example, DWSD cites Tucker Young's analysis of estimated construction costs, which puts construction costs at $357 million(*), or more than $80 million higher than KWA's estimate of $274 million. 

To read the entire report, entitled "City of Flint Water Supply Assessment Final Report," prepared by Tucker Young, click here. 

Update (3/20): The Flint City Council is scheduled to meet later today at 5:30 p.m. to discuss a new 25 year contract with KWA. 

Comment: DWSD's press release cites a construction cost figure of $374 million from the Tucker Young report, but I only saw $357 million when I read it. See page 15 here.      

For more about DWSD Update, click here. 

Water Board Approves Historic Plan to Convert DWSD into an Independent Water Authority

On March 13, 2013, the Board of Water Commissioners voted 6-0 to approve a resolution moving forward with the plan outlined by the Root Cause Committee's Final Report to convert DWSD into a regional water authority. 

DWSD's Matt Schenk presented the plan to the Board of Water Commissioners, which discussed the plan and asked questions for nearly 2 hours before voting to approve it.  Chairperson James Fausone said during his comments that inaction was not option under the circumstances and that the Water Board must pursue this dramatic course of action in order to protect DWSD,  its customers, and bond holders.   

Commissioner Bryan Williams abstained from voting due to his personal concerns about the plan, and a lack of time to study the details. From comments made by Williams and other during the meeting, it appears that Commissioners received the Root Cause Committee's March 13th report only a few hour(s) before meeting to approve the plan to convert DWSD into an independent Authority.  

A vote on the the Root Cause Committee's plan was required so that Director Sue McCormick could incorporate the plan (or not) into the Director's Final Compliance Report, which was to be filed with U.S. District Judge Sean Cox by March 15, 2013.

The plan to convert DWSD into an independent authority is subject to approval by U.S. District Judge Sean Cox, who has scheduled a Status Conference on March 21, 2013 at 10:00 a.m.  The plan must also pass muster with Emergency Manager Kevyn Orr, who was appointed March 14th Governor Snyder. Its too soon to know whether the EM will support or oppose the plan.  

For more about DWSD Update, click here.      

Root Cause Committee Recommends Converting DWSD into Regional Water Authority (UPDATED)

On March 10, 2013, the Detroit Free Press reported (here) on a proposal advanced by the Root Cause Committee to convert the Detroit Water and Sewerage Department into a regional water authority. 

Under the Committee's proposal, outlined in a slide presentation dubbed "Proposal to Control Our Own Destiny," the City of Detroit would retain ownership of a reversion interest in DWSD, but a new regional authority would provide water and sewerage services independent of city bureaucracy. The new authority would pay the City $35 to $50 million per year. The Committee's proposal would proceed through the courts, and require the consent of all of the parties to the case pending before Judge Sean Cox. 

In contrast to the Root Cause Committee's proposal that would be approved by a U.S. District Court, Rep. Kurt Heise in January, proposed legislation that would create a regional water authority. To date, Rep. Heise's bill has not gained traction in the legislature.

The Board of Water Commissioners has scheduled a Special Meeting on Wednesday, March 13, 2013 at 2:00 p.m. The Agenda is expected to includes consideration of a report by the Root Cause Committee's proposal, among other pressing matters.

Comment: The calls for a regional water authority to replace DWSD are not new. But with the Governor's March 1st declaration of a financial emergency, and the appointment of an Emergency Financial Manager for the City of Detroit appearing imminent, a little more than days away, the time for a regional water authority may have arrived. But is it better to create such an authority through the courts, albeit by the consent of the parties to the litigation, or through the legislature? What do you think?  

Update (3/13): The Board of Water Commissioners today voted 6-0 to approve a resolution moving forward with the plan outlined by the Root Cause Committee's Final Report to convert DWSD into a regional water authority. DWSD's Matt Schenk presented the plan to the Water Board, which discussed the plan and asked questions for 2 hours before voting to approve it. Commissioner Williams abstained from voting due to his personal concerns about the plan, and a lack of time to study the details. From comments made during the meeting, it appears that Commissioners received the Root Cause Committee's March 13th report only a few hour(s) before meeting to approve the plan to convert DWSD into an independent Authority.  Approval was also needed so that Director Sue McCormick could incorporate the plan into her Final Compliance Report, which is due to be submitted to U.S. District Judge Sean Cox by March 15, 2013.      

For more about DWSD Update, click here. 

 

D'Agostini Submits Low Bid on Karegnondi Water Intake Pipeline Project

Earlier today, Genesee County received and opened bids for the first phase of the new Karegnondi water pipeline. The first phase involves construction of a 78" intake pipeline that will extend 2 miles into Lake Huron. The low bid was submitted by L. D'Agostini & Sons.

1.     L. D’Agostini & Sons . . . . $24,600,000
2.     JayDee / Schoolcraft . . . . . . $25,800,000
3.     Southland JB . . . . . . . . . . . . $26,800,000
4.     RicMan / Super Exc . . . . . .  $27,900,000
5.     Durocher / Michels . . . . . . .  $29,830,000

For previous posts concerning the creation and evolution of the Karegnondi Water Authority, click here. 

For more about DWSD Update, click here. 

Oakland Macomb Interceptor Drain, RFP Issued for Segment 3 Repair Program, OMID Contract 4

Last week, the Oakland Macomb Interceptor Drain Drainage District issued a request for bids for the Segment 3 Repair, Contract No. 4.  

This fourth project involves lining of portions of the Edison Corridor Interceptor downstream of CS9, lining of the Oakland Arm Interceptor (OAI) from CS6 to CS7, and from CS6 to PCI-7. The contract also includes construction of 6 access structures.

A mandatory Site Tour and Pre-Bid Meeting will be held on March 11, 2013. The Site Tour will be held from 10:00 a.m. to 12:30 p.m. The Contractors must meet at 9:30 a.m. at the OMID/NTH field office at 13347 15 Mile Road, Sterling Heights, Michigan, 48312 (586-977-2140) and complete the mandatory registration forms for the site tour. The site tour will be followed by a Pre-Bid meeting at 2:00 p.m. Mandatory Registration for the Pre-Bid Meeting will begin at 1:30 p.m. Bids are due and will be opened on April 25, 2013 at 11:00 a.m.

For more information about this project, contact Abdulnasser Almadhoun, P.E. at NTH Consultants - 313-237-3942 or by e-mail: aalmadhoun@nthconsultants.com 

For more about DWSD Update, click here. 

Rep. Kurt Heise Introduces (Second) Bill to Create a Regional Water Authority (UPDATED)

On January 22, 2013, Rep. Kurt Heise (R. Plymouth) introduced H.B. 4009, a bill that would incorporate the Detroit Water and Sewerage Department into a regional water and sewer authority. Rep. Heise campaigned in 2010 on a similar plan, and introduced a similar bill in January, 2011 [H.B. 4112] shortly after his first election to the Michigan House of Representatives.

Rep. Kurt Heise (R. Plymouth)

Under Section 4 of the current proposed legislation, H.B. 4009, a new regional water and sewer authority would be incorporated and be governed by a board of directors whose members would be the chief executive officers from each county, city, village and township located in the service area of the regional system.  Board members would then select 5 members to serve a single, 2-year term on the executive committee.  The executive committee would have powers similar to the current Board of Water Commissioners. 

DWSD currently provides water service to 126 communities; 76 communities are served by DWSD's wastewater treatment facilities.  Source: DWSD Factsheet.

For more about DWSD Update, click here.

Update (3/4): Rep. Heise's legislation is featured in the March, 2013 issue of American Water Intelligence (here), in which he describes his legislation as a "firewall against the current state of affairs. If Judge Cox cannot or will not make this happen, then my bill is ready to go."    

DWSD Picks the New England Fertilizer Company (NEFCO) to Negotiate Biosolids Project, Contract PC-792 (UPDATED)

On February 8, 2013, less than three weeks after receiving proposals, DWSD identified the New England Fertilizer Company (NEFCO) as the highest ranked proposer for its "Biosolids Dryer Facility" project, Contract No. PC-792.

 DWSD advised the other two bidders last Friday that it would be seeking to negotiate a contract with NEFCO, but reserved the right to proceed to the next highest ranked proposer. DWSD did not identify the second ranked proposer. 

DWSD received proposals on January 23, 2013 from three teams competing for this 20 year contract. 

Update (3/26): A proposed $683 million contract with NEFCO has been placed on the Agenda for the March 27, 2013 Monthly Water Board Meeting. Up-front construction costs will be $143 million, plus $540 million for operation and maintenance over 20 years.

For more about DWSD Update, click here.

DWSD Seeks Proposals to Manage its Green Infrastructure Program

The Detroit Water and Sewerage Department is seeking proposals from professional service contractors to develop and implement Phase I of DWSD's "Green Infrastructure Program."  This will be a 5 year contract and is being procured as Contract CS-1522.  

RFP documents are available from the Department beginning January 28, 2013 for $50 (certified funds). Contact Yolanda Pippen at (313) 964-9548 or Miriam Dixon at (313) 964-9465 for more information. 

There will be a mandatory pre-bid meeting for prospective bidders on Tuesday, February 5, 2013 at 2:00 p.m. at the Water Board Building, 735 Randolph St., 15th Floor, Detroit, MI 48226.   

Proposals are due on Wednesday, February 27, 2013 not later than 12:00 p.m. (EST).  Click here for a copy of the Bid Announcement.

Update (1/31): The Model D website has a very interesting article (here) about Detroit's "Blue Infrastructure," which discusses DWSD's plans and how it will tie into the Detroit Future City strategic framework. 

For more about DWSD Update, click here.

DWSD Receives Proposals from 3 Teams for Biosolids Contract, PC-792

On January 23, 2013, the Detroit Water and Sewerage Department received proposals from three teams in response to the RFP for the project known as "Biosolids Dryer Facility" (Contract PC-792). 

Proposals were received from the following teams:

• NEFCO
• Synagro/Walsh Construction
• We Care Organics /DeMaria

According to the January 23, 2013 Director's Report (here), the proposals will be "evaluated promptly by the joint DWSD and county representative evaluation team."

Contract PC-792 was advertised for bids last October. 

For more about DWSD Update, click here.  

   

City of Detroit Wastewater, CSO Discharge Permit Considered for Renewal

On January 18, 2013, the Michigan Department of Environmental Quality (MDEQ) published DWSD’s request to renew and reissue its wastewater and CSO discharge permit, NPDES Permit No. MI0022802. Comments or objections are due by February 19, 2013.

In accordance with Rule 323.1103 of the Michigan Water Quality Standards, the MDEQ proposes to grant a variance from the water quality standard that is the basis for the water quality-based effluent limit for Mercury in the draft permit.

The Discharge-Specific Level Currently Achievable for Total Mercury was developed in accordance with the Department's approved Multiple Discharger Variance (MDV). A copy of the MDV may be obtained via the Internet at (http://www.michigan.gov/deqnpdes - click on ‘Applicable Rules and Regulations’) or at the District Office.

Copies of the permit application, Public Notice, Fact Sheet, and draft permit may be obtained via the Internet (http://www.deq.state.mi.us/owis - click on ‘Permits on Public Notice’) or at the Water Resources Division Southeast Michigan District Office located at 27700 Donald Court, Warren, Michigan 48092-2793, telephone: 586-753-3750. 

(Note: If you write me (here), I would be glad to e-mail you a copy of DWSD's permit application and all related documents in a single zip file.  Even compressed, its almost 11MB. Just put “NPDES Permit” in the subject line when you write.)
 
Comments or objections to the draft permit received by February 19, 2013, will be considered in the final decision to issue the permit. Persons desiring information regarding the draft permit, procedures for commenting, or requesting a hearing should contact Matthew Staron, Permits Section, Water Resources Division, Department of Environmental Quality, P.O. Box 30458, Lansing, Michigan 48909, telephone: 517-335-4491, e-mail: staronm@michigan.gov.

A Public Meeting on the draft Permit has been scheduled on Wednesday, February 13, 2013, from 7:00 to 9:00 p.m. at the Western High School located at 1500 Scotten Street, Detroit, Michigan. Persons needing assistance with hearing, mobility, or visual accommodations should contact Susan Ashcraft at 517-241-1346 or e-mail at ashcrafts@michigan.gov to request these accommodations.


For more about DWSD Update, click here.  

Genesee County Advertises for Bids for 78" Intake Pipeline for Karegnondi Water Project

The Genesee County Drain Commissioner has released bid documents for the construction of a 78" diameter water intake pipeline that will extend nearly two miles into Lake Huron. This work signals the start of the raw water pipeline project for the Karegnondi Water Authority. 

Bids for the project entitled:

"Lake Huron Water Supply Initiative - Water Supply Intake - Contract S-4000 - Worth Township" 

will be received on February 26, 2013 at 2:00 p.m. 

Work includes tunneling and marine excavation, including two time crib intakes, a 30' diameter x 70' deep concrete junction chamber, and related appurtenances and site work.

A mandatory pre-bid Meeting will be conducted on January 24, 2013 at 10:00 a.m. at the Worth Township Hall, 6903 S. Lakeshore, Lexington, MI 48450.

Engineers for the project include: Lockwood, Andrews & Newman, Inc. (Houston, and Flint) and Rowe, Inc. (Flint). 

The project is located in Sanilac County located at 7705 Fisher, Worth Township, MI 48450, which is only about 6 miles North of Detroit's (DWSD) Lake Huron Water Treatment Plant in Fort Gratiot.

For more about DWSD Update, click here.