Board of Water Commissioners, Bankruptcy Court Approve Bond Exchange

On August 22, 2014, the Board of Water Commissioners approved a deal under which 28% of existing water and sewer bond holders agreed to tender back their bonds. The Water Board's decision came just a day after the deadline for bond holders to accept DWSD's tender offer, which expired August 21st at 5:00 p.m. (EDT).  

Earlier today [8/25], the Bankruptcy Court overseeing the City of Detroit's bankruptcy proceedings approved DWSD's decision to buy back and redeem $1.67 billion worth of water and sewer bonds.

According to DWSD's Chief Financial Officer, Nicolette Bateson, refinancing these bonds will save $11.4 million a year fro the first 19 years. Refinancing will also allow DWSD to raise $150 million for capital improvements to the sewerage system. 

The Detroit News explained on Friday [8/22] that acceptance of the tender offer would also remove bondholders from the bankruptcy process, "taking the wind out of ongoing litigation over the water and sewer bonds" and increase the likelihood that the City's plan of adjustment will be approved by Judge Rhodes. 

For more about DWSD Update, click here.

Tracking DWSD's Bond Tender (UPDATED)

If you're interested in tracking DWSD's bond tender offer, there's a website that's providing real time coverage of the bonds and amounts that have been tendered back so far -- 

https://www.bondcompro.com/dashTNA0/1/dashTickerTNA.asp

As of 1:00 p.m. EDT, 27.21% of the outstanding bond debt has been tendered back. The tender offer expires on Thursday, August 21, 2014 at 5:00 p.m. EDT. 

For more about the DWSD tender offer, Crain's Detroit Business had a terrific article this morning, click here.Fitch Ratings also has a good discussion here. 

Update (8/21): As of 5:00 p.m. EDT today, 28.35% of bonds had been tendered back.

Update (8/22): Its unclear whether the 28% of bonds that were tendered back by yesterday's deadline is enough.  The Board of Water Commissioners is scheduled to meet today in a Special Meeting at 1:00 p.m. EDT to discuss the matter and vote on a resolution either accepting or rejecting the tender. Click here to see the Agenda for today's special meeting.     

For more about DWSD Update, click here. 

Deal for Creating Regional Water Authority May Be Near, Detroit News Reports

Nolan Finley, columnist with the Detroit News, reports this morning that the City of Detroit and its suburban customers are close to a deal that would see the formation of a regional water authority. The City would reportedly be paid $50 million per year over 40 years as part of the deal being negotiated with Judge Sean Cox. 

Specific details are not available due to a gag order issued for the talks, however, Mr. Finley reports the following outline: 

A six-member board would be formed, with two appointments coming from the city of Detroit, one each from Wayne, Oakland and Macomb counties, as well as one from the state. Currently, the authority that runs the city-owned water system has four members appointed by Detroit and three by the suburbs.

All major decisions by the new authority, including contract awards, rate increases and construction projects, would require five votes.

That’s similar to the protocol at the Cobo Center authority, which requires a unanimous vote on major issues, a stipulation demanded by Oakland County Executive L. Brooks Patterson. In exchange for acquisition of the water system and its assets, the authority would pay the city $50 million a year for 40 years. That premium was the major sticking point of the talks.

Stay tuned for more details. 

For more about DWSD Update, click here. 

Oakland Macomb Interceptor Drain, RFP Issued for Segment 4 Repair Program, OMID Contract 5

Last week, the Oakland Macomb Interceptor Drain Drainage District issued a request for bids for the Segment 4 Repair, Contract No. 5.

A mandatory Pre-Bid Meeting will be held on August 13, 2014 at the Macomb Intermediate School District (MISD) Educational Service Center located at 44001 Garfield, Clinton Township, Michigan, 48038. Registration begins at 9:30 a.m. The Pre-Bid Meeting will begin at 10:00 a.m.

Bids will be opened on September 11, 2014 at 11:00 a.m. Office of the Oakland County Water Resources Commissioner, Building 95 West, One Public Works Drive, Waterford, Michigan 48328-1907. Only bids received from registered contractors in attendance at the Pre-Bid meeting will be opened. All other bids will be rejected as non-responsive.

Scope of Work
Contract 5 repair work is located along the Oakland Arm Interceptor in PCI-9 and PCI-10A/B extending mostly along Utica Road in the cities of Sterling Heights and Utica and the Township of Shelby. PCI-10A/B reaches of sewer extend through the southern and northern parts (respectively) of a nature preserve, now comprised of Riverbends Park and Holland Ponds Park. In order to facilitate financing, Contract 5 work will be split into two separate Contracts, hereafter referred to as Contract 5 Phase 5A and Phase 5B, both to be awarded based on a single combined bid from a Contractor who is the lowest responsible and responsive bidder for both combined phases.

Phase 5B will be awarded and executed only if and when Federal Financing is obtained.

Work items for both phases of Contract No. 5 include the following:

Phase 5A
- Construction of permanent gravel roadways.
- Construction of temporary crossings.

Phase 5B
- Construction of 2 access shafts.
- Repair hole in the PCI-9 interceptor.
- Repair visible reinforcement and where reinforcement outline is visible.
- Inject cementitious grout (from in tunnel) in areas with suspected voids surrounding the interceptor; seal running and gushing leaks with chemical grout.
- Access manholes modification/restoration.
- Repair localized crack/fracture using chemical grout.
- Interceptor lining of selected locations.
- Interceptor lining at meter tap locations.
- Perform CCTV inspection after completion of repairs.
- Sewage flow management.           

The project will be funded under the Stormwater, Asset Managment, and Wastewater  Program. Click here for more information about the SAW program.

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.