Tuesday, June 12, 2012

DWSD Sewer Bond Sale Postponed (UPDATED)

Reports in the financial media (here, here, and here) indicate that the Detroit Water and Sewerage Department is postponing the sale over $596 million in new sewer bonds, which was scheduled for June 14, 2012.  

The precise reasons for this decision are not known at present, but the decision is undoubtedly tied to reports that the City of Detroit is about to run out of cash by June 15, 2012. This follows the lawsuit by the City's Corporation Counsel seeking to invalidate the Consent Agreement negotiated between Governor Rick Snyder and Mayor Dave Bing.

Check back for more details as this story unfolds. 

Update (6/13): The Bond Buyer has a very detailed article this morning (here) about the reasons why the DWSD bond sale was postponed, as well as the swap agreements that will be terminated using some of the proceeds.  In the short, DWSD is waiting for the City of Detroit to make Friday's $34.2 million debt payment.  The Bond Buyer, citing COO Matthew Schenk, reports that DWSD will bring its bonds to market next Wednesday (6/20). According to Mr. Schenk, the one week delay will "allow time for the city and state to work through their resolution of the city's upcoming bond payment. Upon resolution and disclosure of the bond payment to the market, we will proceed with the transaction."

The Bond Buyer article also notes that DWSD "could face a liability tied to interest-rate swaps that hedge $800 million of Detroit pension obligation debt." Stay tuned. . . 

Update (6/15): Citing Water Board Chair, James Fausone, Crain's Detroit Business is reporting (here) that  DWSD will return to the bond market next Wednesday, June 20th.

Update (6/20): Despite a spate of bad news, the Wall Street Journal reports (here) that DWSD sold $667 million worth of sewer bonds today. Strong demand allowed the Department to lower yields on the bonds by 10 basis points. An uninsured 2039 bond offered a yield of 5.30%, while a 2039 bond insured by Assurance Guaranty Municipal Corp. yielded 5.00%.  

Update (9/13): Bloomberg Businessweek reports (here) that $314 million of the sewer bonds sold in 6/20/12 went to banks to pay off interest-rate swap agreements, and that $222 million raised in December, 2011 selling bonds went to pay off swap agreements. That's $536 million dollars in about 6 months! No wonder the Department has to consider slashing its workforce by some 81%. 

For more about DWSD Update, click here

Friday, June 8, 2012

Proposals Sought to Inspect, Repair and Upgrade DWSD Reservoirs and Booster Stations (DWS-874)

The Detroit Water and Sewerage Department (DWSD) has announced an RFP for Program Management Services to inspect and repair reservoirs and to rehabilitate reservoirs and upgrade booster pumping stations within a six (6) year and four (4) month period.

The scope of the RFP includes comprehensive engineering, design, pre-bid management, construction subcontract administration, construction assistance and post-bid management services.

The successful Program Manager will implement a program to provide an ongoing inspection and repair program for all thirty-three (33) reservoirs in the DWSD system. All construction services subcontracts associated with the Reservoir Inspection and Repair Program shall be prepared, awarded, held and managed by the Program Manager. In addition, task orders will be given on as-needed basis for rehabilitation of reservoirs and upgrade of booster stations.

Contract DWS-874 will be a negotiated guaranteed maximum price (GMP) contract.

Key Dates

  • RFP packages will be available beginning June 18, 2012. Contact Yolanda Pippen at (313) 964-9548 to order a copy. 
  • There will be a site tour at the Ford Road Reservoir on June 26, 2012 at 10:00 a.m. Proposers should meet at the following address: 26015 Ford Rd., Dearborn Heights, MI 48127, and bring their own safety gear.
  • A pre-proposal conference will be held on June 26, 2012 at 2:00 p.m. in the 16 th Floor Conference Room of the Water Board Bldg, 735 Randolph St., Detroit, MI 28226. 
  • Proposals must be submitted not later than August 12, 2012 at 12:00 noon. Sealed proposals will be received at the Water Board Bldg., 735 Randolph St, Room 1504, Detroit, MI 48226.
For more about DWSD Update, click here.

Friday, June 1, 2012

Design-Build Proposals Requested for Improvements to DWSD Incinerators (PC-791) (UPDATED)

The Detroit Water and Sewerage Department (DWSD) has released an RFP package for design-build services for the construction of Contract PC-791, “Sewage Sludge Incinerator Air Quality Control Improvements.” Proposals are due August 1, 2012* July 25, 2012 at 12:00 noon. 

A pre-proposal conference will be held on Thursday, June 7, 2012 at 9:00 a.m. at the Detroit Wastewater Treatment Plant at 9300 W. Jefferson, Detroit, Michigan.  For more information, contact Dan Edwards at (313) 964-9471 or daedwards@dwsd.org

In the RFP, DWSD is seeking a qualified firm to provide design-build services under a negotiated, fixed-price contract to provide all design, obtain all necessary permits, furnish all materials and equipment, perform any required demolition and removal, temporary or permanent rerouting of existing piping or electrical service, construct, start-up, and test all modifications and improvements necessary to enable the eight multiple hearth incinerators at Incineration Complex II of DWSD’s Wastewater Treatment Plant to continuously comply with new air quality regulations for Sewage Sludge Incineration Units as incorporated into 40 CFR Part 60 by the Final Rule published by U.S. EPA on or about March 21, 2011, as well as providing all other Work and obligations required by the Contract Documents. 

Optionally, DWSD may direct the Contractor to also bring two incinerators in Incineration Complex I into compliance with the new regulations.

Click here for a copy of the RFP Advertisement.  RFP documents are also available on Dodge Reports (No.

Update (7/20): The due date for proposals was extended to August 1, 2012 per Addendum No. 3.  

Update (9/26): The Board of Water Commissioners approved today a design-build contract in the amount of $37,989,471 with Walsh Construction Company. The contract duration is 1,676 calendar days. 

For more about DWSD Update, click here.