Wednesday, August 24, 2011

DWSD Receives a Dozen Proposals for New Biosolids Contract (PC-781)

At the conclusion of today's Water Board Meeting, Deputy Director Darryl Latimer reported that DWSD had received (and was currently evaluating) 12 responses to the Department's RFP for Biosolids Management Services (PC-781).

Responses to the RFP for Contract PC-781 were received on August 17, 2011 from the following teams:
There was no discussion about when a decision might be made about this project.

For more about DWSD Update, click here.

Thursday, August 11, 2011

Oakland County Opposes Dismissal of Federal Case, Seeks Greater Authority for Detroit Water Board

Oakland County opposes dismissal of the 34 year old federal lawsuit involving the Detroit Water and Sewerage Department, and seeks changes to the Water Board's by-laws, which would give the Board greater authority over the affairs of DWSD.

Earlier this week, in response to the City of Detroit's July 25, 2011 Motion to Dismiss, Oakland County filed a Response, which challenges the assumption that transferring oversight of DWSD to the Michigan DEQ, through the Administrative Consent Order (ACO), will solve DWSD's compliance problems.

Citing over 30 years of efforts to bring the Detroit Wastewater Treatment Plant (WWTP) into long-term compliance with the Clean Water Act, Oakland County has "grave concerns" with DWSD's ability to achieve the milestones set forth in the ACO.  

Among the chronic problems cited by Oakland County, which are the same problems identified in more than half a dozen reports and findings by the late Judge John Feikens, are the following: 
  • insufficient number of adequately trained personnel
  • inadequate repair and maintenance of dewatering equipment
  • cumbersome bidding and arcane purchasing policies 
To address these long-standing problems, Oakland County contends, requires more than another recovery plan or another set of milestone dates.  Citing a 2010 report by one of Judge Feikens' technical experts (Prof. Jonathan Bulkley), Oakland County argues that now is the time for fundamental change: 
"It may be appropriate to consider more fundamental corrective measures to address the institutional problems which are adversely impacting the performance of DWSD's wastewater treatment plant." 
Oakland County requests that Judge Cox order amendments to the Water Board's by-laws that would provide for the following: 
  • allow the Water Board to adopt its own procurement policy and allow DWSD to contract in its own name for construction and professional services
  • allow the Water Board to control the expenditure of funds from the DWSD enterprise fund and limit transfers to the City of Detroit's general fund
  • allow the Water Board to develop a policy for ensuring and maintaining the financial health of DWSD
  • give DWSD exclusive authority to handle all human resources and employee matters, including hiring and firing, notwithstanding any contrary provisions or prohibitions of any collective bargaining agreements, civil service rules or past practices
  • allow DWSD to hire its own legal counsel, both general and special counsel, as needed
Oakland County also requests an order "enjoining the City of Detroit and each of its executives, officers, managers, departments, boards, contractors, employees . . . from attempting to interfere with or exercise authority over any of the matters vested in the Board [of Water Commissioners] by the Amended By-Laws." 

Click here to read Oakland County's Response in its entirety. 

Comment: Without using the word, Oakland County is really seeking autonomy for DWSD and the Water Board.  Autonomy from the City of Detroit's arcane purchasing and hiring practices. Autonomy from outside interference.  With all signs pointing toward an end to the 1977 federal lawsuit, Oakland County's request, if granted, would require that Judge Cox keep the case open to enforce a new order.  There will probably be changes to the Water Board's by-laws, but I don't think it will come by court order.  Much like the changes to the Water Board in February, Oakland County's request will likely precipitate negotiations with Mayor Bing that will lead to changes. 

For more about DWSD Update, click here.

Tuesday, August 9, 2011

Report: DWSD Should Retire One or More Water Treatment Plants

A recent report by CH2M Hill, a national engineering firm, questions whether the City of Detroit (DWSD) should continue to operate all 5 of its existing water treatment plants (WTP) in light of major population losses and large projected capital improvement costs.

In a June 28, 2011 report, CH2M Hill begins by noting that DWSD currently operates 5 water treatment plants, which have a combined capacity of 1,640 million gallons per day (MGD).

Lake Huron . . . . . . .  400 MGD
Northeast  . . . . . . . . . 300 MGD
Water Works Park . . . 240 MGD
Springwells . . . . . . . . 540 MGD
Southwest . . . . . . . . . 160 MGD

Over the past 5 years, the Report notes, the maximum daily demand across the DWSD system has dropped from 1,050 MGD to 800 MGD.  This change in circumstances, according to CH2M Hill, raises 2 important questions:
  1. Is there a different way to operate the system by reducing the number of treatment plants and thereby reducing the [capital investment] CIP requirements?
  2. Are all of the transmission mains recommended in [DWSD's 50 Year] Master Plan still needed within the time frame suggested?
The CH2M Report then lays out 3 scenarios under which DWSD would retire the Southwest WTP, the Northeast WTP, or both.

CH2M Hill makes the following preliminary recommendations:
  • Northeast WTP -- "retirement of the Northeast plant is the most desireable as it is the plant with the largest capital allowance to rehabilitate the plant to an acceptable level of operation."
  • Southwest WTP -- "work on rehabilitation of the treatment trains at the Southwest plant should be put on hold until a detailed analysis of the system hydraulics can be completed." 
  • Water Works Park WTP -- "The CIP contains an amount of $24.5M for re-working the discharge piping . . . this expenditure should be put on hold until better decisions can be made with respect to the future needs of this plant."
  • Springwells WTP -- "This water treatment plant is of strategic importance to the long term operation of the DWSD transmission system. Continuing with the work related to the filter rehabilitation and pumping is important and should continue. This includes [over $442 million worth of CIP projects]."
  • Transmission Mains (NOTS and Flint Loop) -- "Base on current planning projections, all of this work [$584M] should be removed from the CIP."
The CH2M Hill Report outlines a number of other recommendations (here).

Comment: The CH2M Hill Report appears to have been published during the time period in which DWSD was evaluating the CIP, between early May and late July. It is unclear, however, whether the report was part of the decision making process. It was distributed only yesterday to attendees of a TAC Meeting.  

For more about DWSD Update, click here.

Wednesday, August 3, 2011

Detroit Board of Water Commissioners Seeks Technical and Financial Advisors

At its July 27, 2011 meeting, the Detroit Board of Water Commissioners approved a resolution authorizing efforts to hire an interim technical advisor and/or a financial advisor.
Advisors will assist the Board in its efforts over the next 3 to 6 months. The main tasks will include reviewing rate setting, capital projects and financial implications. Advisors will work directly for the Board of Water Commissioners, not DWSD senior management.

The Board is soliciting names and resumes until August 17th and plans on making a decision at its August 24, 2011 meeting.  The interim advisors could be loaned or detailed from a municipal entity or private industry. 
Interested persons should e-mail a letter with their availability and salary requirements (if any) and a professional resume to Chair Mary Blackmon or Commissioner James Fausone.  Applications are due by August 17, 2011

Update: At its August 24, 2011 meeting, the Board of Water Commissioners extended to September 14, 2011 the deadline to submit applications and resumes. Through August 17th, the Board had received 6 applications, 5 for the technical advisor position and 1 for the financial advisor position. The Board indicated that it would accept applications from existing DWSD employees. 

The Water Board plans to interview candidates on September 27th, and make a decision at the regular Board Meeting on Wednesday, September 28th.

For more about DWSD Update, click here.

Tuesday, August 2, 2011

Detroit Water Board Approves 5 Year Capital Improvement Program (CIP)

At its July 27, 2011 meeting, the Board of Water Commissioners approved a $1.3 billion Capital Improvement Program (CIP) for 2012-2016. 

Of this amount, $740.4 million is earmarked for new construction and improvements to DWSD's water and wastewater facilities; $591 million is for projects that are already under construction.

Of the new construction funding, $422.5 million is designated for water projects, and $317.9 million is designated for wastewater projects. 

After completing this review, a Draft CIP was submitted to the Board of Water Commissioners for approval at its July meeting.

During the July 27th meeting, a number of Commissioners expressed concern about the amount and timing of information provided to suburban (wholesale) customers of the Department.
  • Commissioner Bryan Williams in particular expressed his concern that the CIP doesn't reflect current needs and that the whole process for approving capital projects should be changed radically. He recommended (i) starting the process earlier; (ii) providing a formal schedule for customer input; and (iii) circulating an original and red lined version of the CIP to show changes.
  • Commissioner James Fausone echoed those concerns, that the wholesale customer base needed more time to review DWSD's proposed spending plans.
  • Commissioner Fred Barnes reported hearing from suburban customers who hadn't seen the revised CIP and weren't involved in the process.
Deputy Director Daryl Latimer and Assistant Director James George indicated that suburban communities had been briefed about DWSD's capital spending plans through the Technical Advisory Committee (TAC), and that the CIP has generally not been subject to Board approval. 

Acting Director Chris Brown requested that the Board approve the revised CIP with the condition that the Assistant Director George answer the Commissioner's remaining questions. 

The Board approved the 2012-2016 CIP on a 6-1 vote. Commissioner Williams was the lone dissent.

Comment: While we haven't had time to thoroughly compare the updated CIP with last year's version, it appears that the Springwell's Water Treatment Plant (SP-563) project has survived and will be coming out for bids shortly.  The most recent list of proposed construction contracts indicates a September, 2011 bid advertisement date.

Among the projects that appear to have lost out, both the Flint Loop and North Oakland Transmission System (NOTS) water main project appear to have been cut. There is no money allocated to the oversight contracts (CM-2017 and CM-2016), which were previously awarded. 

Additional Resources:
For more about DWSD Update, click here.