Karegnondi Water Authority and DWSD: Talks Begin

The Flint Journal reported on June 20, 2011 (here) that representatives from DWSD and the Karegnondi Water Authority (KWA) met several weeks ago. The talks reportedly focused on the potential for the KWA to purchase raw water and at least part of an existing, Detroit-owned pipeline or intake that carries water to Flint and Genesee County now. 

Comment: I don't know for certain, but it appears that the June 2, 2011 meeting reported by the Flint Journal the first time in almost 2 years that the parties have met face-to-face. We reported (here) on a meeting in March, 2009.  But it was shortly after that meeting, in May, 2009, that Genesee County applied for a water withdrawal permit. And then came the announcement of the formation of the Karegnondi Water Authority in June, 2009 (here).  Since then, preliminary engineering plans have been prepared for a new $600 million pipeline, and KWA solicited engineering proposals in January (here).

But I think that Mayor Bing's February 11, 2011 Agreement to give Wayne, Oakland and Macomb Counties greater participation in the oversight of DWSD, and appointment of the "New Water Board," may have kept the door open to discussions with Flint and Genesee County.  The key will be whether the parties can continue their dialogue and achieve sustained progress. Despite all of their planning, KWA must still confront the biggest hurdle of all - raising the money to construct a $600 million pipeline. For its part,  DWSD must continue its efforts to provide suburban customers with a meaningful voice in future rate increases and capital expenditures. 

For more about DWSD Update, click here. 

Oakland Macomb Interceptor Drain (OMID) - Contract No. 3 Out for Bids

The Oakland Macomb Interceptor Drain (OMID) Drainage District, the authority formed to own, operate and repair the sewer line bought from DWSD in 2009, has advertised for bids for Contract No. 3.  

Sealed bids are due July 19, 2011 at 10:00 a.m. Bids will be opened the Oakland County WRC at Building 95 West, One Public Works Dr., Waterford, MI 48442.

This contract will involve "Segment 2" repair work located along the Edison Corridor Interceptor and Oakland Arm Interceptor extending from the Northeast Sewage Pumping Station in the City of Detroit, through various private properties and the Amber Road Rights-of-Way; through International Transmission Company (ITC) corridor in the City of Warren; City of Sterling Heights, and through the 15 Mile Road, Dodge Park Road and Utica Road Rights-of-Way in the City of Sterling Heights. 

The work under the proposed OMID Segment 2 repair program generally includes rehabilitation and related efforts for repair of approximately 10 miles of interceptor sewer, including pump station modifications to the DWSD Northeast Sewage Pumping Station, shaft installation, flow control, leak sealing, grouting of potential voids and spot repairs. 

OMID Contracts 1 and 2 were bid in November, 2009. Both were awarded to Ric-Man Construction, the low bidder.

For more information about the OMID Rehabilitation Program, click here. 

For more information about DWSD Update, click here. 

Legal Services Agreement Signals New Chapter in DWSD Corruption Probe

Despite more than 8 years of investigation by the FBI and U.S. Attorney's Office, which culminated last December in a 38-count indictment involve bid rigging, kick-backs and general corruption in the DWSD contracting process, a new investigation is about to kick off. This one will focus on the contractors identified in the federal indictment. 

At the May 25, 2011 Detroit Water Board Meeting, Commissioners were asked to approve a new legal services contract with Miller Canfield for the purpose of investigating both contracts and contractors identified in the federal indictment against disgraced former Mayor Kwame Kilpatrick and former DWSD Director Victor Mercado. The Board recessed to discuss the matter in (private) executive session.  The resolution to begin the new investigation reads as follows:

Upon recommendation of Robert C. Walter, Assistant Corporation Counsel, the Board of Water Commissioners  authorizes the Deputy Director  to execute a legal services contract with Miller Canfield Paddock & Stone in an amount not to exceed  $250,000.00 for an investigation regarding DWSD Contracts and Contractors identified in the federal indictment in Case No. CR-10-2040, and also authorizes the Deputy Director to take such other action as may be necessary to accomplish the intent of this vote. [Note: The federal case is actually Case No. 10-cr-20403.]

Comment: While its unclear which contracts or contractors this new investigation will focus on, Article 7.10 of DWSD's standard general conditions grants the Department broad audit rights and access to project documents for up to 3 years after final payment. Given the potential number of contracts at issue, it seems likely that the investigators will exhaust the initial amount authorized for this probe before completing it. In fact, I expect the final contract amount will be 4 or 5 times higher.   

Update (7/7): City Council approved the legal services agreement with Miller Canfield on July 6, 2011. In doing so, new details have emerged concerning the direction of Miller Canfield's probe.  While its likely that DWSD will pursue claims against Ferguson Enterprises and Xcel Construction Services, the key will be locating assets or tracing funds that may already moved several times. 

For more information about DWSD Update, click here.  

Proposed New River Rouge Outfall, Public Hearing Scheduled for June 22

More than 2 years after it terminated the $299 million Detroit River Outfall  Contract No. 2 (DRO2), Contract PC-771, and more than 12 years after its first attempt under Contract PC-709, DWSD is introducing a scaled-down version of the outfall project.  (Third time's a charm?)

This time, instead of a 24' diameter x 6,200 foot tunnel, the Department plans to construct a 2,500 foot long shallow conduit comprised of two rectangular channels with dimensions of 24' wide x 14' deep. RRO-2 will maintain the same design capacity: 1,000 million gallons per day (mgd). The current engineering estimate for RRO-2 is $182 million. DWDS will be seeking funding assistance through the State Revolving Fund (SRF).  

The Department will hold a Public Hearing on June 22, 2011 at 1:00 p.m. for the new Rouge River Outfall (RRO-2) project. The meeting will be held at the Water Board Building, 735 Randolph, 5th Flr., Detroit, MI. For more information, click here.