DWSD Update - Digesting the Detroit Water Department

Walsh Construction Awarded $92.9 Million Contract for Ann Arbor WWTP Project

2012-02-06T22:05:00.008-05:00

Earlier this evening, the Ann Arbor City Council tentatively approved a $92,929,000 contract to Walsh Construction for major renovations to the City of Ann Arbor's wastewater treatment plant (WWTP). As we reported (here), Walsh Construction was third bidder at the time this project was bid on January 11, 2012.

After the bid opening, the City and its engineering consultant, Malcolm Pirnie, met with the three low bidders and solicited additional information about their bids and prior experience building comparable projects.

At tonight's meeting, officials cited a lack of comparable wastewater construction experience by the low and second bidders. City officials discounted Granger's recently-completed $70 million D.K. Shine Water Treatment Plant expansion for Wyoming Twp. because it wasn't a wastewater project and only had one tie-in at the end of the project, rather than the multiple tie-ins that will be required over the course of the Ann Arbor WWTP project.

Tentative approval of Walsh Construction's contract is required for the City of Ann Arbor to obtain a low interest loan from the State Revolving Fund (SRF) program administered by the Michigan Department of Environmental Quality (MDEQ) to finance construction.

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Flint Emergency Manager Considers Sale of City Sewer and Water System (UPDATED)

2012-01-30T14:27:00.004-05:00

The Flint Journal is reporting (here) that Michael Brown, the City of Flint's Emergency Manager, is considering the sale of Flint's water and sewer system. Shaky finances and the need to raise cash are part of the reason Brown is considering "all options."

The sale of Flint's water and sewer system would complicate plans by the Karegnondi Water Authority, which has urged Flint to break ties with the Detroit Water and Sewerage Department. KWA officials recently have been lobbying Flint's Emergency Manager to join the new authority.

No word about who might be interested in buying Flint's water and sewer system or who will foot the bill for the $61.5 million worth of upgrades to Flint's water treatment plant that will be required, according to Rowe Engineering (here and here); KWA would only be furnishing Flint with raw water, not the finished water currently supplied by DWSD.

Want more information about the Karegnondi Water Authority?

Karegnondi Water Authority (Homepage)
Karegnondi Water Authority (Wikipedia)
DWSD Update (Prior Posts)

Update (2/3): The Flint Journal reports (here) that the Flint Emergency Manager is also considering interim use of the Flint River until the new KWA pipeline is completed. Still no word as to how Flint would finance the necessary upgrades to its water treatment plant.

For more about DWSD Update, click here.

Tarolyn Buckles to Serve as Technical Advisor to Detroit Board of Water Commissioners

2012-01-27T21:15:00.002-05:00

On January 25, 2012, the Board of Water Commissioners hired Tarolyn Buckles to serve as the Board's Technical Advisor. The Board approved a one-year, $100,000 contract with Ms. Buckles.

Tarolyn Buckles - Technical Advisor

Ms. Buckles is President and CEO of Onyx Enterprise, Inc., a firm providing engineering consulting, project management, and construction management services. She previously served as Project Manager for METCO Services, and Project Engineer and Diversity Manager for Arcadis. Ms. Buckles earned a Bachelor of Science in Civil and Structural Engineering from the University of Michigan in 1993.

Ms. Buckles joins Butler Benton, who was hired as the Board's Financial Advisor in October, 2011. Ms. Buckles and Mr. Benton will assist the Board in reviewing rate setting, capital projects and other financial and operational matters.

Staff positions were created under the February 11, 2011 Order, and formalized under Article VII of the Board's Amended By-Laws. A third staff position, not yet filled, will advise the Board on legal matters.

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Detroit Water Board Adopts Suspension and Debarment Policy, Clarifies Earlier Actions (UPDATED)

2012-01-25T22:27:00.004-05:00

The Detroit Board of Water Commissioners today approved a resolution rescinding ab initio the suspension resolution it adopted on December 21, 2011 and amended its January 11, 2012 resolution, which lifted suspensions as to 5 contractors, to cover all contractors originally suspended on December 21, 2011. The Board then took up and adopted a formal Suspension and Debarment Policy.

DWSD's new Suspension and Debarment Policy starts by declaring that the Department will only do business with responsible vendors (contractors). The policy then spells out the criteria for determining who is a responsible contractor and establishes notice and hearing procedures (due process) for the Water Board to follow before it suspends or debars a contractor.

The new Suspension and Debarment Policy(*) addresses criticism of the Board's earlier actions, which suspended contractors without prior notice and without providing the affected contractors with an opportunity to review and respond to charges against them. (Comment: These are due process requirements that should have been followed in the first instance. The Board took the right steps today by stopping, backing up, and putting things in the right order.)

With the new policy in hand, Chairperson James Fausone announced: (1) that the Board would conduct "Responsible Bidder Hearings" for (some of) the previously suspended contractors (I'll update this post when I confirm the exact list of names), (2) that the Ad Hoc Hearing Committee would consist of Commissioners Thrower, Kenoyer and Williams), and (3) that "Responsible Bidder Hearings" would be conducted on the following dates:

Friday, February 10, 2012 (p.m.)
Wednesday, February 15, 2012 (a.m.)

Hearings will be subject to the Open Meetings Act.

Then, there will be a Special Water Board Meeting on February 15, 2012 at 2:00 p.m. to consider the Hearing Committee's findings and recommendations. Some of the same contractors named in the previous resolutions could find themselves suspended again.

Due perhaps to the planned consideration and adoption of the Suspension and Debarment Policy(**), the Chairperson announced at the start of today's Board Meeting that resolutions to approve 3 design-build and construction contracts were being pulled from the Agenda -- PC-787 (Belt Filter Presses), PC-783 (Underground Electrical Ductbank Repair), and DWS-862A (Department-Wide Security Upgrades).

The Board did approve a contract with Metco Services for CS-1498 (Aeration System Improvements) and a one-year contract with Onyx Enterprises, Inc. (Tarolyn Buckles) to provide technical advisory services to the Water Board. Ms. Buckles replaces Jim Ridgway, who apparently could not come to terms with the Board on a contract.

* Copies of the new DWSD Suspension and Debarment Policy have been posted here. ~~were not immediately available, pending the addition of a small change requested by one of the Commissioners, but it should be posted on the Department's home page within a few days~~.

** There was no reason given publicly for pulling these contracts from the Agenda, and only 1 of the 3 contractors, Lakeshore Engineering Services, is caught up in the on-again, off-again suspension saga. The Chairperson gave some indication at the end of today's meeting, however, that these 3 contracts would return to the Agenda at the Regular Water Board Meeting on February 22, 2012.

For more information about DWSD Update, click here.

Lakeshore Engineering Submits Low Bid on City of Ann Arbor WWTP Project (UPDATED)

2012-01-14T22:15:00.005-05:00

Last Wednesday, January 11, 2012, Lakeshore Engineering Services submitted the low bid to the City of Ann Arbor for a project known as “WWTP Facilities (Renovations) Phase II.”

Lakeshore Engineering - - - $83,302,048
Granger Construction - - - - $89,990,000
Walsh Construction - - - - - $92,929,000*
Walbridge Aldinger - - - - - -$95,380,441
Colasanti Construction - - - $99,990,000
Barton Malow - - - - - - - - $102,884,000

Renovations to the Ann Arbor WWTP include demolition and reconstruction of the existing West Plant structures and facilities and the rehabilitation of the East Plant.

Construction includes, but is not limited to: primary clarifiers, primary building, aeration tanks, blower building, central electrical building, ferric buildings, secondary clarifiers, new administration building, renovation of existing maintenance building, environmental abatement, new storm water system, removal of the existing 4800 V electrical distribution system and replacement with a new 13.2 KV electrical distribution system, and the rehabilitation of the east primary clarifiers, east aeration tanks, east blower building (including new blowers) and east secondary clarifiers.

Work also includes depressurizing an artesian groundwater condition, groundwater dewatering, geotechnical instrumentation, construction sequencing, earth retention systems, concrete pier foundations, concrete and gate repairs, earthen embankment improvements, and utility relocation and replacement.

(Comment: We're taking a slight detour by reporting on this project, but the Ann Arbor WWTP is a significant project and most of the bidders are regulars on DWSD projects. The Project is scheduled to take 5 years to complete. Sharp-eyed observers will also note the photo used in the title block for DWSD Update is in fact a photo of the Ann Arbor WWTP. (Hat-tip: NS) I tried using several photos of DWSD's wastewater treatment plant, but all of them ended up obscuring the title text. So, I confess to taking a bit of editorial license. If you have a good photo from 9300 W. Jefferson, please send it along and I'll give it another try.)

Additional Information:

“Ann Arbor City Council gives initial approval to utility rate increases, budgets for wastewater upgrades,” AnnArbor.com, June 8, 2011.

*Update (2/6): AnnArbor.com is reporting (here) that WWTP Staff and the City's Consulting Engineer, Malcolm Pirnie, will recommend tonight to the City Council that Walsh Construction be awarded the contract for this project for $92,929,000. A copy of the Resolution is here.

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Detroit Biosolids Contract to be Re-Opened to allow Changes, New Proposers

2012-01-13T15:45:00.007-05:00

During the Director's Oral Report at the January 11, 2012 Special Water Board Meeting, DWSD Director Sue McCormick reported that the Department has decided to reopen the submittal process for the biosolids contract (PC-781) for a period of 45 days, beginning January 18, 2012.

The Director indicated that DWSD would allow new proposals, corrections to existing proposals, and permit teams to change or substitute their lineup based on recent decisions of the Water Board.

The Department will receive new and revised proposals by March 5, 2012. Existing teams will be contacted by the Department. Look for additional details on DWSD's procurement page (here).

The Director also reported that DWSD will expand the evaluation committee to include representative from Wayne, Oakland and Macomb Counties. These representatives, who were not disclosed, will be required to sign confidentiality agreements and not have any connection to any of the proposing teams.

For more about DWSD Update, click here.

Water Board Lifts Contractor Suspensions, then Authorizes Lawsuit Against Most of the Contractors (UPDATED)

2012-01-12T21:23:00.057-05:00

At a Special Board Meeting on January 11, 2012, the Detroit Board of Water Commissioners voted to lift the suspension resolution it passed just three weeks ago on 5 of the 13 cited contractors. The following contractors are no longer suspended, but the resolution included the caveat -- "pending further action of the Board":

Lakeshore Engineering Services, Inc.
Inland Waters Pollution Control, Inc.
DLZ Laboratories, Inc.,
D'Agostini & Sons, Inc., and
Walbridge Aldinger Company, Inc.

The Water Board then (a) approved an extension of its attorney's legal services contract, and (b) authorized Miller Canfield to intervene in the federal lawsuit initiated by the Macomb Interceptor Drain Drainage District in July, 2011 (the "15 Mile Sewer Repair" case) and file a lawsuit against approximately 17 Defendants, including 4 of the 5 contractors whose suspensions were just lifted (D'Agostini & Sons, Inc. is excluded).

The Board also directed its Legal Committee to work with Miller Canfield to draft a (new) suspension policy for presentation to the Board at its next regular meeting on January 25, 2012.

Then the Board voted to accept (for consideration) a bid protest filed by Walbridge Aldinger, on Contract PC-786, which the Board had approved for award to Walsh Construction on December 21, 2011. The Board voted to conduct a public hearing to determine whether Walbridge Aldinger is a "responsible bidder."

(Does this mean the Board might rescind its award to Walsh if it finds Walbridge to be a responsible bidder? And what about the policy of not contracting with persons you're suing? Why conduct such a hearing if you've already directed your legal counsel to sue Walbridge and the other contractors for racketeering and civil conspiracy?)

(Confused? You're not alone!)

Additional Resources:

Detroit water department seeks $60 million in suit tied to 'Kilpatrick enterprise' contractors, Crain's Detroit Business, January 11, 2012.

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Water Board Schedules Special Meeting - January 11, 2012 at 1:00 p.m.

2012-01-09T10:39:00.006-05:00

The Detroit Board of Water Commissioners has scheduled a Special Meeting for Wednesday, January 11, 2012 at 1:00 p.m. ~~There is no published Agenda yet for this meeting, but~~* Given the significant decisions taken at the last Special Meeting on December 21, 2011, attendance on Wednesday is highly recommended.

Comment: If I were to speculate, I think the Board might use this occasion to adopt the administrative rules to be followed in the suspension appeals. The Board's suspension resolution adopted on December 21, 2011 mentions an ad hoc committee to review appeals, but did not set forth any procedure or rules to be followed. At least one contractor has already filed a lawsuit contesting the Board's decision. If the Board plans to argue that the suspended contractors have to first exhaust their administrative remedies before contesting the matter in court, a standard defense under these circumstances, they'd better articulate those remedies soon. The Hearing on L. D'Agostini & Son's Motion for Temporary Restraining Order and Preliminary Injunction has been scheduled for Wednesday, January 11, 2012 at 2:45 p.m. before the Hon. John Corbett O'Meara.

*Update (1/10): The Agenda for the January 11, 2012 Special Meeting was published earlier today (here).

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Suspended Contractor Files Lawsuit Challenging Detroit Water Board's Suspension Policy (UPDATED)

2012-01-05T17:48:00.009-05:00

Earlier today, L. D'Agostini & Sons, one of the 13 contractors suspended for 3 years by the Detroit Water Board on December 21, 2011, filed a federal lawsuit contesting the Board's decision.

The lawsuit alleges that the Water Board's actions violated the contractor's due process rights and violated its rights under 42 USC 1983, a federal civil rights statute.

In addition, L. D'Agostini & Sons (LDS) has also filed a Motion for a Temporary Restraining Order (TRO) and Preliminary Injunction. The contractor requests that the Court (1) enjoin the City of Detroit from enforcing the debarment order; and (2) order that the debarment as to LDS be expunged. ~~No hearing date has been set on this motion~~.*

2012-01-05.L D'Agostini v City of Detroit - Complaint

Additional Related Articles:

Water Board to Review Suspensions, Crain's Detroit Business, January 1, 2012
Macomb contractor sues Detroit over bidding ban, Detroit News, January 5, 2012
Construction firm sues over ban, Detroit Free Press, January 5, 2012
D'Agostini & Sons opts for "Damned if you do. . .", Crain's Detroit Business, January 6, 2012
Contractor's Decry Suspensions by Detroit Water and Sewerage Dept., Engineering News-Record (ENR), January 16, 2012

For more about DWSD Update, click here.

*Update (~~1/9~~) (~~1/10~~) (1/19): The Hearing on L. D'Agostini & Son's Motion for Temporary Restraining Order and Preliminary Injunction has been re-scheduled ~~scheduled~~ for Wednesday, ~~January 11, 2012 at 2:45 p.m.~~ ~~January 18, 2012 at 2:00 p.m.~~ February 2, 2012 at 1:45 p.m. before the Hon. John Corbett O'Meara.

CORRECTION to List of Suspended Contractors

2011-12-23T10:55:00.002-05:00

DWSD Update confirmed earlier this morning that one of the contractors we originally included in the list of contractors affected by the Water Board's December 21, 2011 suspension resolution -- D'Alessandro Contracting Group -- was NOT included in the final resolution that was voted upon by the Water Board. D'Alessandro Contracting Group is NOT suspended and NOT barred from being awarded contracts with the Detroit Water and Sewerage Department. Crain's Detroit Business has also noted this correction (here).

Detroit Water Board Declares 13 Bidders Non-Responsible, Suspends them from Bidding DWSD Work for 3 Years (UPDATED)

2011-12-21T17:27:00.016-05:00

Earlier this afternoon, the City of Detroit, Board of Water Commissioners conducted a Special Meeting and adopted a resolution declaring 14 13* contractors to be non-responsible bidders and suspended them from bidding DWSD work for a period of 3 years.

The contractors suspended from bidding on DWSD contracts until December 31, 2014 are among the contractors cited in the federal indictments unsealed last December against disgraced-former Mayor Kwame Kilpatrick, his father, Bernard Kilpatrick, contractor Bobby Ferguson, and former DWSD Director Victor Mercado.

The contractors affected by the Water Board's action today include the following:

A&F Environmental
A&H Contracting, Inc.
D'Agostini & Sons, Inc.
*
DLZ Laboratories, Inc.
E&T Trucking
Ferguson Enterprises, Inc.
Inland Waters Pollution Control, Inc.
Inland Management and Inland Rehabilitation Pipe Co.
Johnson Construction Services a/k/a Johnson Consulting Services
Lakeshore Engineering Services, Inc.
Maestro Associates, LLC
Walbridge Aldinger Company, Inc.
Xcel Construction Services, Inc.

The Water Board included the following administrative appeal procedures as part of its resolution:

The Board shall reconsider the parties and suspension period upon receiving additional information from the U.S. Attorney's office. A company may appeal the application of this policy to an ad hoc committee of the BOWC, appointed by the Chair, which shall receive evidence and information and report to the entire Board. The suspension can only be modified by motion of the Board.

Following adoption of the suspension resolution, the Board proceeded to approve a $13,117,000 contract for the Rouge River Outfall No. (RRO-2), Contract PC-786, with the third bidder, Walsh Construction, bypassing Walbridge Aldinger, who was second in line for the contract after the low bidder, Lakeshore Engineering, retracted their low bid.

Comment: The Water Board's actions today have enormous implications for the affected companies, many of which perform federal contracts, and a huge impact on the local contracting community. The Board's actions, which the Chair reported were supported by Oakland, Macomb and Wayne Counties, will be felt well beyond DWSD. Two of the named contractors are among teams who proposed on the bio-solids contract (PC-781). If their suspensions are upheld, it would surely jeopardize their proposals.

Update (12/22): Crain's Detroit Business has an article (here), which quotes several of the Water Board Commissioners and adds further insight into the reasons for yesterday's suspension resolution.

Update (12/23): DWSD Update confirmed earlier this morning that D'Alessandro Contracting Group was NOT among the contractors included in the final suspension resolution adopted by the Board of Water Commissioners on Wednesday. They were included in the proposed resolution, outlined in the Board Agenda, but NOT included in the actual resolution, as read into the record by Commissioner Fred Barnes, and NOT included in the final vote. To be clear: D'Alessandro Contracting Group has NOT been suspended nor barred from receiving DWSD contracts.

For more about DWSD Update, click here.

PC-783, Detroit Contracting (DCI) Submits Low Bid on Electrical Ductbank Repair Project

2011-12-20T18:43:00.000-05:00

Detroit Contracting, Inc. (DCI) submitted the low bid earlier this afternoon on the project known as DWSD Contract PC-783, "Underground Electrical Ductbank Repair and EB-1, EB-2 and EB-10 Primary Service Improvements at WWTP and Replacement of Selected Roads at WWTP."

1. Detroit Contracting - - - - - - $26,921,543

2. Lakeshore Engineering - - - $27,107,427

3. Weiss Construction - - - - - $27,620,000

4. Walbridge - - - - - - - - - - - - $28,488,000

5. Motor City Electric - - - - - - $29,839,970

The electrical portion of the project consists of installation of a new 120KV electrical feeder from DTE, replacement and addition of transformers, switchgears, MCC's and motor starter line ups. In addition, other electrical work including lighting, ground and lightning protection for buildings EB-1, EB-2 and EB-10.

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Second Verse, Same as the First: Judge Cox Denies Second AFSCME Motion to Intervene

2011-12-19T17:14:00.000-05:00

For the second time in less than a month, Judge Sean Cox has denied a local union's motion to intervene in the 34 year old lawsuit against the City of Detroit, Water and Sewerage Department.

This time, Judge Cox considered and denied a Motion to Intervene by AFSCME Local 207 and the Senior Accountants, Analysts and Appraisers Association (SAAA). The reasons cited by the Court were virtually the same ones Judge Cox cited when he denied AFSCME Council 25's motion on November 18, 2011: Local 207's motion was untimely.

2011-12-13.Opinion and Order Denying AFSCME Local 207 Motion to Intervene

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40th Anniversary of Tunnel Explosion Marked in Fort Gratiot

2011-12-13T10:32:00.001-05:00

On Sunday, December 11, 2011, some 80 people gathered at the Fort Gratiot County Park to mark the 40th Anniversary of the Port Huron (Detroit) "water tunnel explosion," an accident that claimed the lives of 22 tunnel workers who died in a methane gas explosion.

The men were working at the time on a intake tunnel for the Port Huron Water Treatment Plant, then being constructed by the Detroit Water and Sewerage Department. The accident still ranks as one of Michigan's worst industrial accidents.

Additional resources:

Daisy, Michael. “Disaster under Lake Huron.” Michigan History Magazine 89.2 (2005): 46+. [Gale Document No. GALE A163097965]

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City of Detroit Seeks 10 Percent Cut from Suppliers, Including DWSD Contractors

2011-12-12T08:54:00.007-05:00

Detroit Mayor Dave Bing is seeking a 10 percent price reduction from City of Detroit suppliers effective January 1, 2012. Crain's Detroit Business reports today that the Mayor's request extends to companies that do business with the Detroit Water and Sewerage Department.

In a December 2, 2011 letter, which was received by suppliers last week, Mayor Bing writes:

The financial participation of all stakeholders, including suppliers, has been identified as a key component in this overall cost reduction strategy. Given the importance of the supplier community, the City of Detroit will be contacting all suppliers to begin an earnest dialogue around the City's financial position and its implications.

2011-12-02.City of Detroit - Letter to Suppliers Re 10 Percent Price Reduction

Update (12/13): The Detroit Free Press (here) and Crain's Detroit Business (here) are reporting that the City of Detroit has already stopped paying some of its vendors. I've not heard or read of anything similar happening on DWSD projects, however. Have you?

Update (12/14): The Chair of the Board of Water Commissioners, James Fausone, indicated at today's regular Water Board Meeting that the 10 percent cut requested by Mayor Bing would be discussed further at a Special Meeting of the Water Board on December 21, 2011.

For more about DWSD Update, click here.

Emergency Financial Manager, Appointment Would Trigger "Credit Event" and Hit DWSD Hard

2011-12-05T21:49:00.018-05:00

Governor Snyder's announcement last Friday that the State of Michigan was initiating a review of the City of Detroit's finances, the first step in the appointment of an Emergency Financial Manager (EFM), has triggered concerns about the financial impact such an appointment would have on the Detroit Water and Sewerage Department.

Following the Governor's announcement, The Bond Buyer, a national trade publication that covers the municipal bond industry, warned (here) that DWSD could face "huge fees" triggered by the appointment of an EFM, which would be a "credit event" under insurance policies that accompany $1.6 billion worth of water bonds.

[T]he appointment of an emergency manager . . . would trigger termination events on [credit default] swaps that hedge $948 million of pension obligation certificates issued in 2006 and $1.6 billion of water bonds. Detroit in early 2009 narrowly avoided a $400 million termination fee tied to the pension certificates after it was hit with a downgrade that prompted a termination event. Local officials negotiated for months with the two counterparties to achieve an amended agreement that avoided the payment. If the state appoints an emergency manager, Detroit would face the same problem again.
* * *
Last April, Fitch Ratings downgraded the city's $2.1 billion of water bonds, citing in part an extensive derivative program at the Detroit Water and Sewerage Department that hedges $1.6 billion of the debt. "In recent years the negative fair value of the department's swaps have risen, increasing the termination risk associated with the swaps," Fitch's Doug Scott wrote. "Should the department be required to post collateral, it would negatively affect the department's financial profile to some extent."

The city is planning to come to market with a water bond refunding to shed the swaps and avoid termination payments. The price tag of the termination fees remains uncertain, but it would likely be in the hundreds of millions. At the end of 2010, the negative valuation of the water and sewer bond swaps was $165 million. (emphasis added)

Cite: "Detroit May Face Huge Termination Fees for Swaps." The Bond Buyer 2 Dec. 2011

The issue (and risk) of termination fees is discussed in the financial notes section of DWSD's 2010 Water Fund Financial Statement (here) beginning at p. 25.

Comment: I profess no expertise in this area, but this report seems rather alarming to me. At a minimum, faced with penalties in the "hundreds of millions" range, DWSD would have to delay or defer a number of significant capital improvement projects. If someone with a background in public finance or municipal bonds (or credit default swaps) can shed light on this issue, please comment. Your input would be appreciated.

Update (12/6): The Detroit News reports this morning (here) that "The [State of Michigan] has yet to approve a deficit elimination plan Detroit submitted in July, a delay that puts a hold on the sale of about $900 million in bonds for capital improvements of the city water-sewer system."

Additional Resources:

“Moody’s: Detroit Ratings On Review For Cut On Possible State Takeover,” Wall Street Journal, December 7, 2011 (subscription required)
“Detroit on Review by Moody’s Will Pay $211 Million to Cut Swaps,” Bloomberg Business Week, December 8, 2011
“Moody’s Puts Detroit GO, Water Debt on Negative Watch,” The Bond Buyer, December 8, 2011

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Detroit Water Board Votes to Hire Ridgway to Advise on Technical Matters (UPDATED)

2011-12-01T10:29:00.005-05:00

Update (1/11): At the Special Meeting on January 11, 2012, Commissioner Mary Blackmon, reported that Jim Ridgway had declined the contract offered by the Water Board. It appears that the Board will consider another candidate for this position.

The Board of Water Commissioners voted yesterday to approve the hiring of Jim Ridgway as Technical Advisor to the Water Board.

Mr. Ridgway has a B.S. in Environmental Engineering and a M.S. in Civil Engineering, both from the University of Michigan. Mr. Ridgway also has prior DWSD experience. He served as Assistant Director of Wastewater Operations for 5 years during the mid-1980s. Click here for his LinkedIn profile.

Mr. Ridgway joins Butler Benton, who has been hired as the financial advisor to the Board of Water Commissioners. Messrs. Ridgway and Benton will assist the Board in reviewing rate setting, capital projects and other financial and operational matters.

Staff positions were created under the February 11, 2011 Order, and formalized under Article VII of the Board's Amended By-Laws. A third staff position, not yet filled, will advise the Board on legal matters.

For more about DWSD Update, click here.

Rouge River Outfall Project, MDEQ Issues Finding of No Significant Environmental Impact

2011-11-30T18:08:00.001-05:00

On November 23, 2011, the Michigan Department of Environmental Quality (MDEQ) issued a Finding of No Significant Impact after conducting an Environmental Assessment of the Rouge River Outfall Project (RRO-2), DWSD Contract PC-786.

Unless the DEQ receives any substantive comments within 30 days of its finding, its preliminary decision will become final. At that point, DWSD will be eligible to receive loan assistance from the State Revolving Fund (SRF).

The Rouge River Outfall Project was bid on November 17, 2011 (here). Contract PC-786 will likely be awarded to Walbridge Aldinger after the low bidder asked the City of Detroit to retract its bid.

Due to the 30 day comment period, January, 2012 is the earliest that this contract could be presented to the Board of Water Commissioners for approval.

2011-11-23.Michigan DEQ Finding of No Significant Impact re Rouge River Outfall Project (RRO-2)

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Lakeshore Engineering Asks to Retract Bid on Rouge River Outfall Project, PC-786

2011-11-22T17:35:00.002-05:00

Lakeshore Engineering has asked the City of Detroit for permission to retract its bid on the Rouge River Outfall Project (DWSD Contract PC-786), which was submitted last week. Lakeshore was read the low bidder on this project (here) at $11,855,749.

In a November 17, 2011 letter to the Purchasing Division, Lakeshore explained that one of its employees had retrieved the bid after it was submitted, but before the filing deadline, to make corrections. Lakeshore reports that it resubmitted the corrected bid before 2:00 p.m., but that its actions had raised concerns among the other bidders. To avoid a dispute, Lakeshore explained, it was asking to withdraw its bid.

Assuming the City of Detroit grants Lakeshore Engineering's request, Walbridge Aldinger stands to get the contract as the second low bidder at $12,970,000.

For more about DWSD Update, click here.

Judge Cox Denies as Untimely AFSCME Council 25 Motion to Intervene in EPA Lawsuit

2011-11-18T14:06:00.003-05:00

Less than a week after AFSCME Council 25 filed its Motion to Intervene in the EPA Lawsuit in order to block implementation of the U.S. District Court's November 4, 2011 Order, Judge Sean Cox earlier today issued an Opinion and Order DENYING the motion on grounds that the motion was untimely.

Timeliness of a motion to intervene is a threshold issue for any court to consider. In this case, Judge Cox found that "this Court's analysis begins, and ends, with timeliness."

Judge Cox considered four (4) elements related to timeliness:

1. How long did AFSCME know of their interest in the case?

The first factor, the length of time preceding the application for intervention during which the proposed intervenor knew or reasonably should have known of his interest in the case, is the most significant factor here and weighs heavily against intervention.

The DWSD has been under federal court oversight since 1977. This case has garnered considerable media attention over the past four decades. . . . [T]he risk that orders in this action may affect collective bargaining agreements and union work rules, as they relate to DWSD, has been apparent for decades. [Court then cites reports from 1977-2009]
* * *
In addition, there is no question that AFSCME had actual knowledge, no later than September 9, 2011 [when the Court issued its Opinion and Order Denying Detroit's Motion to Dismiss the EPA Lawsuit], that its interests would likely be impacted by orders that would be issued in this case on an expedited basis.
* * *
Nevertheless, neither AFSCME nor any of the other 19 unions that represent employees of the DWSD sought to intervene after this Court issued its September 9, 2011 Opinion & Order. Rather, union representatives met with members of the Root Cause Committee to voice their views and adopted a "wait-and-see" approach . . .

2. What is the purpose for intervening in the lawsuit?

Under Rule 24 of the Federal Rules of Civil Procedure (Fed. R. Civ. P. 24), a motion to intervene must be accompanied by a pleading that sets out the claim or defense for which intervention is requested.

In this case, AFSCME Council 25 did not attach a proposed complaint or other pleading.

3. Will there be prejudice to the original parties to the lawsuit?

Judge Cox concludes in his Opinion and Order that the answer to this question is a resounding -- Yes.

The EPA initiated this action [in 1977] to address violations of the Clean Water Act, the objective of which is to restore and maintain the chemical, physical, and biological integrity of the Nation's waters. It is undisputed that, over the course of the past four decades, the DWSD has had serious and recurring NPDES permit violations, which constitute violations of the Clean Water Act.
* * *
This Court has already concluded that certain collective bargaining provisions and work rules are impeding the DWSD from achieving compliance with its NPDES permit and the Clean Water Act and issued an order enjoining those provisions. If the Court's Order is not implemented immediately, the DWSD's ability to function and reach compliance with its NPDES permit, the ACO, and the Clean Water Act will be jeopardized. That would prejudice the City of Detroit, the DWSD and its customers, the general public, and the DEQ -- the entity current charged with enforcing the DWSD's NPDES permit, which has spent considerable resources monitoring DWSD over many years.

4. How far has the case already progressed?

Judge Cox also answers this question in the affirmative citing the long duration of this case and numerous reports citing issues with the collective bargaining agreements, work rules and job descriptions.

2011-11-18.Opinion and Order Denying AFSCME Council 25 Motion to Intervene

For more about DWSD Update, click here.

Update (11/29): AFSCME Council 25 filed a Notice of Appeal to the Sixth Circuit Court of Appeals today. See, USA v City of Detroit, Case No. 11-2517.

PC-786, Lakeshore Engineering Submits Low Bid on Rouge River Outfall (RRO-2) Project

2011-11-17T14:47:00.009-05:00

Lakeshore Engineering submitted the low bid earlier this afternoon on the project known as DWSD Contract PC-786, Rouge River Outfall No. 2 (RRO-2) Segment 1, WWTP Modifications:

1. ~~Lakeshore Engineering - - - $11,855,749~~*

2. ~~Walbridge Aldinger - - - - - $12,970,000~~**

3. Walsh Construction - - - - - $13,117,000

4. Weiss Construction - - - - - $13,391,000

5. Detroit Contracting - - - - - $14,021,000

6. L. D'Agostini & Sons - - - - $14,702,250

7. O'Laughlin Construction - $15,232,600

This project was previewed at a June 22, 2011 public hearing and reported here.

For more about DWSD Update, click here.

* Update (11/22): DWSD Update has learned that Lakeshore Engineering asked the City of Detroit to retract its bid on this project in a letter dated November 17, 2011.

** Update (12/21): Earlier this afternoon, at a Special Meeting, the Board of Water Commissioners approved a contract with Walsh Construction for $13,117,000. This followed adoption by the Water Board of a resolution suspending Walbridge Aldinger, and 13 other contractors, for a period of 3 years.

Detroit Water Board Approves Hiring of New Director, Sue McCormick

2011-11-16T15:44:00.017-05:00

The Detroit Board of Water Commissioners earlier this afternoon approved Mayor Bing's candidate for Director of the Water and Sewerage Department. At a Special Meeting held earlier this afternoon, the Water Board voted unanimously to approve the hiring of Sue McCormick as the new Director. She will be paid $195,000 annually and begin work on January 2, 2012.

According to Chris Brown, Mayor Bing's COO, Ms. McCormick was selected after considering a pool of some 85 candidates for the position.

Under the terms of the Plan of Action adopted by Judge Cox on November 4, 2011, the new Director will have broad new powers to bring DWSD back into compliance with the Clean Water Act.

DWSD has been without a permanent Director since Pamela Turner retired (or was forced out) more than 18 months ago.

The Water Board also used the occasion of the Special Meeting today to approve a one year contract with Butler Benton (B2 Advisors, LLC), who will serve as the financial advisor to the Water Board. B2 Advisors will be paid an amount not to exceed $100,000.

For more about DWSD Update, click here.

Union Moves to Intervene into EPA Lawsuit, Challenges Judge Cox's Recent Order

2011-11-14T17:22:00.001-05:00

Making good on threats made last week to challenge Judge Sean Cox's November 4, 2011 Order adopting the Plan of Action, AFSCME Council 25 earlier today filed a Motion to Intervene in the 1977 EPA Lawsuit seeking to block implementation of the Court's order as it pertains to collective bargaining rights.
2011-11-24.Motion to Intervene in EPA Lawsuit by AFSCME Counil 25

For more about DWSD Update, click here.

Mayor Bing Announces Choice for New DWSD Director

2011-11-10T11:56:00.007-05:00

Sue McCormick was introduced to the Detroit Board of Water Commissioners on November 9, 2011 as Mayor Bing's choice for the new Director of the Detroit Water and Sewerage Department.

Ms. McCormick, who currently serves as the Administrator of Public Services for the City of Ann Arbor was introduced by Chris Brown, Mayor Bing's COO, to members of the Water Board who were participating in a workshop meeting. The Board must vote to approve her selection at its next scheduled meeting on November 16, 2011. If approved, Ms. McCormick would start January 1, 2012.

Update (11/11): ~~The next Water Board meeting is November 30, not the 16th as originally reported.~~ Click here for the Board calendar. Also, AnnArbor.com has a story (here) detailing Ms. McCormick's responsibilities with the City of Ann Arbor.

Update (11/14): The Water Board will be holding a Special Meeting on November 16, 2011 to consider and vote on Sue McCormick for Director.

For more about DWSD Update, click here.

Former DWSD Head Engineer Weighs in on Changes Ordered by Judge Cox

2011-11-09T12:00:00.000-05:00

Former Head Water Systems Engineer, Dennis L. Green, P.E., who retired from DWSD in 2009 after more than 40 years of service, recently weighed in on the recent changes ordered by Judge Cox in a Letter to the Editor published by the Detroit Free Press published (here) on November 8, 2011:

U.S. District Judge Sean Cox’s call for structural changes in the Detroit Water Department (“Judge Sean Cox’s ruling” Nov. 5) came on the heels of the disbanding of the DWSD Engineering Division. It’s no coincidence that the decades of struggle with EPA compliance similarly began on the heels of another event involving Engineering.

In 1975, a new Detroit City Charter replaced the tenured chief engineer with a director serving at the pleasure of the mayor and removed the requirement for a Professional Engineer (PE) license.

With civil service tenure’s protection from arbitrary dismissal, the chief engineer could take his objections regarding any ill-conceived policy of the mayor or Board of Water Commissioners to the public without fear of reprisal. A PE license requires an oath to protect the public health and safety, but serving at the pleasure of the mayor, an unlicensed director’s loyalty is to the administration before the public.

Prior to 1975, DWSD had a worldwide reputation for its engineering and operational success, and its professionals dominated the committees writing the industry's standards. Then, without the check and balance between public safety concerns represented by a licensed engineer and the politics of the Board of Water Commissioners, it took only two years for the politicians to wreck the nation's most respected water system, provoking acrimony with its customers and the EPA.

U.S. District Judge John Feikens’ oversight of DWSD was an abject failure. The billing squabbles between DWSD and its suburban customers festered for years. They eventually ended not because of the negotiating skills of his approved politicians and consultants, but as a result of an in-house engineering breakthrough that restored integrity to the billing process.

After years of failure by outside consultants, the Archer administration listened to me, my staff and people doing the actual work. Just like creating a credible water bill, creating a functional, efficient and maintainable treatment plant also begins as an engineering problem that can't be solved by imposing capricious court-ordered deadlines on politicians who won't or can't comprehend the problem.

If Judge Cox and Mayor Dave Bing want a working sewage treatment plant, they need to do what the proposed and existing charters fail to do: demand a director with a PE license, and make sure that director has sufficient political independence to do the job.

For more about DWSD Update, click here.

Judge Cox Adopts Plan of Action for Overhaul of DWSD

2011-11-07T06:25:00.049-05:00

On November 4, 2011, Judge Sean Cox entered an Order adopting the Plan of Action submitted by the Root Cause Committee that was created by his September 9, 2011 order.

Comment: We are studying the Court's Order and Plan of Action, and will have a complete review and analysis shortly. Suffice it to say, the Plan of Action put forward by the Root Cause Committee, which Judge Cox has now adopted by his Order, requires major changes to the way DWSD operates going forward, including its procurement policy. These changes are long overdue.

2011-11-04.Judge Cox Order Adopting Plan of Action for DWSD Proposed by Root Cause Committee

For more about DWSD Update, click here.

McCulloch Updates Status of Oakland-Macomb Interceptor Project

2011-10-27T16:31:00.000-04:00

Oakland County Water Resources Commissioner, John McCulloch, recently provided the following update on the status of the Oakland-Macomb Interceptor project:

Construction of the first phase of the Oakland-Macomb Interceptor Drain (OMI) Rehabilitation Project, which began in February of 2010, is now complete. The first phase, also known as Segment 1, consisted of two construction contracts, both of which were completed by Ric-Man Construction, Inc. These two contracts included the construction of five new permanent flow control / access structures and modifications to an existing flow control structure. Four of the five new structures include a very large steel stop gate. One of the structures includes a temporary pump station. These new facilities, operated in cooperation with Macomb County’s Clintondale Pump Station and Detroit’s Northeast Pump Station, will provide a means of controlling flow in the OMI system by using the upstream pipes for storage and temporarily backing up flow. The flow control plan will utilize alternating periods of storage and release to provide working time downstream to conduct rehabilitation work in subsequent phases of the project.

Design for the second phase of the project has been completed and plans and specifications have been issued for bids. Bids will be received on October 25, 2011. Construction is expected to begin by January of 2012. Rehabilitation of the pipe in the lower half of the OMI system will begin with this phase, utilizing the flow control made possible by the facilities constructed in the first phase. Work will include cementitious grouting of voids outside the interceptor, chemical grouting of leaks and localized repair of the pipe wall. In addition, modifications will be made to the Northeast Pump Station including the installation of a new 1,250 horsepower variable frequency drive pump. Construction costs are estimated at $20.2 million. This phase of the work is scheduled to take approximately two years.

As construction on the second phase of the project gets started, design efforts will begin on the third phase. The third phase has two major components: 1) installation of a permanent liner in sections of the interceptor where hydrogen sulfide has affected the long-term integrity of the pipe, and 2) rehabilitation of a restricted section of the interceptor that was previously repaired but is again in need of attention. Various rehabilitation methods are being evaluated to determine the type of lining to be used. Slip lining and spiral wound lining are the two methods being given the most consideration at this time. The rehabilitation of the restricted section of pipe likely will include construction of a new parallel sewer. Construction of phase three is expected to overlap with phase two and is expected to begin in 2013.

For more information about the Oakland-Macomb Interceptor project, click here and here.

For more about DWSD Update, click here.

Inland Waters Submits Low Bid on OMID Contract 3 Re-Bid

2011-10-25T10:18:00.017-04:00

Earlier today, Inland Waters Pollution Control submitted the low bid on the Oakland Macomb Interceptor Drain (OMID) Contract 3, Re-Bid.

1. Inland Waters - - - - - - - - $17,965,840
2. Lanzo Lining Services - - - $18,347,000
3. Jay Dee Contractors - - - $21,556,900

As we noted here, bids for Contract 3 were originally received on July 19, 2011, but thrown out because they reportedly exceeded the Engineer's Estimate. Macomb County officials denied their decision was motivated by the lawsuit they had filed against Inland Waters and 39 other contractors on July 18, 2011. When the bids were opened this morning, the Engineer's Estimate was reported to be $20,195,000.

For more about DWSD Update, click here.

PC-787, Lakeshore Engineering Submits Low Bid on Belt Filter Press Project

2011-10-20T14:20:00.019-04:00

Earlier today, Lakeshore Engineering submitted the low bid on the project known as DWSD Contract PC-787, "WWTP Upper Level Belt Filter Presses Rehabilitation."

1. Lakeshore Engineering - - $28,960,000
2. Weiss Construction - - - - $30,216,000
3. Walbridge Aldinger - - - - $30,525,000
4. Walsh Construction - - - - $30,975,000
5. Tooles Contracting - - - - $32,397,000

As we noted here, Contract PC-787 involves the replacement of 22 belt filter presses in Complex I and Upper Level Complex II at the Detroit WWTP.

For more about DWSD Update, click here.

Detroit Water Board Fills Financial, Technical Advisory Staff Positions

2011-10-12T16:55:00.003-04:00

At a Special Meeting on October 6, 2011, the Detroit Board of Water Commissioners selected Butler Benton and ~~Douglas Buchholz, P.E.~~ to advise the Board on financial and technical issues.

As we reported in August, staff will assist the Board in reviewing rate setting, capital projects and other financial and operational matters. Staff are hired by, and report directly to, the Board of Water Commissioners, not DWSD or the Mayor's Office.

Butler Benton

Butler Benton is the former Director, Department of Environment, for Wayne County. He served with Wayne County for 15 years. Mr. Benton has a Bachelor of Science in Accounting and an MBA, both from Wayne State University.

Mr. Benton is a member of the Clean Water Steering Committee of the ESD Institute.

Douglas A. Buchholz, P.E. is Director of Operations for Oakland County Water Resources Commission (WRC). Mr. Buchholz has worked for Oakland County since 1974. He became Manager of Operations and Maintenance in 1998 and was promoted to Director of Operations in 2009.

Mr. Buchholz directs the overall operations and maintenance of the Oakland County WRC field and office staff for water supply, wastewater and storm water disposal, lake level control, permits and inspections and customer service and billings.

He also represents WRC and Oakland County cities, villages and townships on Detroit Water and Sewage Department (DWSD) committees and work groups as a:

~~Co-chair of the DWSD Water Technical Advisory Committee (TAC)~~
~~DWSD Sewer Steering Committee member~~

~~Background~~

~~He is a 1970 graduate of General Motors Institute with a Bachelor of Mechanical Engineering degree. He earned a Master of Science: Civil Engineering degree from the University of Michigan in 1973.~~

~~Mr. Buchholz is also a:~~

~~State of Michigan Registered Professional Engineer~~
~~State of Michigan Certified Wastewater Operator Classification: A, B, C or D~~
~~Member of American Water Works Association~~
~~Member of Michigan Water Environment Association~~

For more about DWSD Update, click here.

Update (11/30): The Board of Water Commissioners today voted to approve the hiring of Jim Ridgway as Technical Advisor to the Board. The Board reconsidered its earlier decision (reported above) concerning Doug Buchholz.

Mr. Ridgway has a B.S. in Environmental Engineering and a M.S. in Civil Engineering, both from the University of Michigan. In addition, Mr. Ridgway was an Assistant Director with DWSD for 5 years during the mid-1980s. Click here for his LinkedIn profile.

Board of Water Commissioners, Updated By-Laws Posted Online

2011-10-10T19:42:00.000-04:00

By-laws for the Detroit Board of Water Commissioners have been posted on the DWSD website (here).

The by-laws were updated on July 27, 2011 to incorporate changes made by virtue of two federal court orders entered by Judge Sean Cox on February 11, 2011 and April 29, 2011. This is the first time that the by-laws have been made available online.

PC-784, Ric-Man Submits Low Bid on Sewer Meter Project

2011-10-02T11:58:00.002-04:00

Last Tuesday, September 27, 2011, Ric-Man Construction submitted the low bid on the project known as DWSD Contract PC-784, "Sewer Meter Installation."

1. Ric-Man Construction - - - $4,379,000
2. Weiss Construction - - - - - $5,084,000
3. Lakeshore Engineering - - $5,192,119.60
4. Detroit Contracting - - - - $5,752,300

The Work for DWSD Contract No. PC-784, “Sewer Meter Installation Sites DT-S-1, DT-S-3, DT-S-4, DT-S-5, DT-S-8, DT-S-10, DT-S-13, OC-S-1 and WM-S-2”, includes, but is not limited to construction/rehabilitation of existing sewerage metering facilities.

Flint Urged to Break Ties with Detroit Water Department

2011-09-19T11:35:00.005-04:00

The City of Flint is being urged to break ties with the Detroit Water and Sewerage Department and join the Karegnondi Water Authority.

On September 7, 2011, officials from Genesee County and the Karegnondi Water Authority met with the Flint City Council to present a report prepared by Rowe Engineering, which compared the cost of upgrading the City of Flint's Water Treatment Plant ($61.5 million) with the cost of getting its water from the KWA (not specified).

Analysis indicates that the cost of supplying water from the Flint River on a continuous basis will be greater than the proposed KWA Raw Water Supply Contract, but less than continued supply from Detroit.

On September 18, 2011, an Editorial in the Flint Journal urged Flint officials to "fish or cut bait" on their decision whether to continue buying water from Detroit or join the Karegnondi Water Authority. The Flint Journal recommends that Flint support the new pipeline plan.

Additional Resources:

Rowe Engineering, Analysis of the Flint River as a Permanent Water Supply for the City of Flint (July, 2011) (Flint River Study)
Flint River Study, Appendices 1 to 8
Karegnondi Water Authority (Homepage)
Karegnondi Water Authority (DWSD Update)

Comment: Maybe I'm missing something, but if the City Flint will only be buying raw water from the KWA, the City will still need to make capital upgrades to its water treatment plant. No? As things stand now, Flint's WTP is a back-up to the water it buys from DWSD. Won't Flint have to make the capital improvements outlined by Rowe Engineering to bring their water treatment plant into compliance? So that it can process the raw water it receives from the KWA pipeline? If someone knows the answer to these questions, please let me know.

For more about DWSD Update, click here.

Committee to Plan Overhaul of DWSD Operations is Named

2011-09-15T10:43:00.001-04:00

The Committee ordered by Judge Cox to develop a plan to overhaul the Detroit Water and Sewerage Department by November 4, 2011 (the "Root Cause Committee") will include the following members:

Charles Pugh, City Council President
Gary Brown, City Council President Pro Tem
Chris Brown, Mayor Bing's COO and Acting Director of DWSD
James Fausone, Board of Water Commissioners

Update (10/12): Judge Cox entered an Order today expanding the authority of his Special Master, David M. Ottenwess, to "direct and facilitate discussions" with the parties noted above and "to report to the Court [on] the progress and status of those discussions and the proposed plan." [Dkt #2405]

ESD Consensus Action Report: DWSD, The Road to Compliance and Beyond

2011-09-13T17:03:00.003-04:00

One of the reports cited in Judge Sean Cox's September 9, 2011 Opinion and Order Denying the City of Detroit's Motion to Dismiss the 1977 EPA lawsuit was a 2010 report prepared by the Engineering Society of Detroit (ESD) Blue Ribbon Advisory Panel. A copy of this report was filed by the Court earlier today.

Engineering Society of Detroit, Detroit Water and Sewerage Department Waste Water Treatment Plant: The Road to Compliance and Beyond (July, 2010).

Comment: In my view, the ESD Report and the Recommendations of the ESD Institute will be the blueprint followed by the Committee ordered by Judge Cox to devise a plan within 60 days. For those of you with personal knowledge of the WWTP and its operation, I invite your comments as to whether you think the ESD report is accurate or off-base.

Judge Cox Denies Request to End Federal Oversight of DWSD, Orders Plan for Fundamental Changes within 60 Days

2011-09-09T12:26:00.007-04:00

Earlier today, U. S. District Judge Sean Cox denied without prejudice a motion filed by the City of Detroit in late July to dismiss the 34 year old federal lawsuit by the U.S. EPA.

Instead, Judge Cox has ordered that within 60 days, Mayor Bing, City Council President and President Pro Tem, and a current member of the Board of Water Commissioners meet and devise a plan to address the root causes of DWSD's chronic non-compliance with the Clean Water Act.

The parties are to submit their plan to Judge Cox at a Status Conference on November 4, 2011 at 8:30 a.m.

As we reported here, the City of Detroit petitioned Judge Sean Cox in July to dismiss the 1977 federal lawsuit citing the Administrative Consent Order (ACO) it entered into with the Michigan Department of Environmental Quality (DEQ) on July 21, 2011.

In Denying the City of Detroit's request to dismiss the federal lawsuit, Judge Cox noted that even after executing the ACO, "the DWSD self-reported serious violations of its NPDES permit to the DEQ."

Thus, the City has not established that the DWSD has achieved even short-term compliance with the ACO and the Clean Water Act. Moreover, this Court concludes that the record in this case establishes that, unless more fundamental corrective measures are taken to address the institutional and bureaucratic barriers to compliance, sustained compliance with the Clean Water Act and the ACO will simply not occur.

In ordering that the City, City Council and Water Board devise a plan within 60 days, Judge Cox noted:

In doing so, they shall not be constrained by any local Charter or ordinance provisions, or by the provisions of union or other contracts. If these local officials fail to devise and propose a workable solution to remedy the underlying causes of the serious and recurrent violations of the Clean Water Act in this case, the Court will directly order a more intrusive remedy.

To read the entire text of Judge Cox's Opinion and Order, click here.

Additional resources:

Judge issues dire warning to Detroit over Water Department violations (Detroit News, September 9, 2011)
Union criticizes judge's direction to ignore contracts, clean up Detroit sewage plant (Detroit Free Press, September 9, 2011)
Engineering Society of Detroit (ESD) Consensus Action Report, DWSD: The Road to Compliance and Beyond (July, 2010)

For more about DWSD Update, click here.

DWSD Belt Filter Press Replacement Project (PC-787), Bidding October 20th

2011-09-08T10:35:00.002-04:00

Earlier today, DWSD issued an Invitation for Bids for Contract PC-787, Replacement of Belt Filter Presses for Complex I and Upper Level Complex II.

This is a 5 year contract, which will involve replacing 22 belt filter presses at the Detroit Wastewater Treatment Plant (WWTP), including related belt conveyors, new screw conveyors, polymer feed systems, and related electrical and instrumentation controls.

DWSD has projected the cost of this project in its latest CIP at $37 million.

Update (10/11): DWSD has reportedly issued another Bulletin, although not yet posted, which puts the bid opening date back to October 20th.

~~Update (9/29):~~ ~~Per Bulletin 1, the Bid Date for this project has been moved up~~ ~~a week to October 13, 2011 from October 20th~~.

Photo Credit: http://www.beltfilterpress.com/

Re-Bid Scheduled for Oakland Macomb Interceptor Drain Contract 3 Project

2011-09-02T06:59:00.002-04:00

On September 1, 2011, the Oakland-Macomb Interceptor Drain Drainage Board voted to rebid Contract 3 and established a tentative bid opening date of October 25, 2011.

The OMID Board voted on July 26, 2011 to reject all bids received the week before.

Bid documents should be available beginning September 16, 2011, according to a Pre-Advertisement Notice.

Update (9/16): Bid documents for Contract 3 were made available today. The Bid Opening is set for October 25, 2011 at 10:00 a.m. at the Office of the Oakland County WRC, Bldg 95 West, One Public Works Dr., Waterford, MI 48238-1907.

FOX 2 Detroit Questions DWSD Sludge Hauling Contract

2011-09-01T09:00:00.002-04:00

FOX 2 Detroit has a new story raising questions about DWSD's sludge hauling contract with Bankston Construction. This contract was let following termination of the City's contract with Synagro in 2009, and before DWSD began soliciting contracts for a new BioSolids Management Services Contract (PC-781).

Detroit Sludge Hauling Deal Up to Snuff?: MyFoxDETROIT.com

Update: The Bankston contract was approved during the February 23, 2011 Water Board Meeting. See, Approved Meeting Minutes (here) at pp. 22-23.

For more about DWSD Update, click here.

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

2011-08-24T17:07:00.005-04:00

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:

DTEES/NEFCO
GeoEnvironment Technologies
GreenGro Renewables, LLC
Lakeshore Group
Praxair, Inc.
Terra Sync International, LLC (f/k/a American Biodiesel Resources, LLC)
Tooles Contracting
Trinity Environmental Solutions, LLC
Veolia Water
ViTag Michigan, LLC
Waste Management
We Care Organics

There was no discussion about when a decision might be made about this project.

For more about DWSD Update, click here.

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

2011-08-11T22:14:00.007-04:00

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.

Report: DWSD Should Retire One or More Water Treatment Plants

2011-08-09T07:45:00.005-04:00

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:

Is there a different way to operate the system by reducing the number of treatment plants and thereby reducing the [capital investment] CIP requirements?
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.

Detroit Board of Water Commissioners Seeks Technical and Financial Advisors

2011-08-03T06:37:00.004-04:00

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.

Financial Advisor - Position Summary
Technical Advisor - Position Summary

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.

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

2011-08-02T14:32:00.005-04:00

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.

In early May, Deputy Director Darryl Latimer announced that DWSD would postpone revisions to the 2011-2015 CIP pending a detailed review of 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.

City of Detroit Petitions Federal Court to End Decades-Long Oversight of DWSD

2011-07-28T18:30:00.019-04:00

On July 25, 2011, the City of Detroit petitioned U.S. District Judge Sean Cox to dismiss the federal lawsuit originally filed in 1977 by the U.S. Environmental Protection Agency to remedy violations of the Clean Water Act by the Detroit Water and Sewerage Department.

For the past 34 years, the federal court (Judge John Feikens) has overseen the City of Detroit Water and Sewerage Department (DWSD) and enforced a series of consent judgments designed to bring the Department's waste water treatment plant (WWTP) into compliance with its NPDES discharge permit.

On July 21, 2011, DWSD and the Michigan Department of Environmental Quality (DEQ) entered into an Administrative Consent Order, which is designed to supersede the Second Amended Consent Judgment entered by the federal court in August, 2000.

In its July 25, 2011 Motion to Dismiss and for Relief from Second Amended Consent Judgment, the City of Detroit requests that Judge Cox dismiss with prejudice the 1977 lawsuit because the Administrative Consent Order will serve the same purpose as the Second Amended Consent Judgment and the DEQ will provide for more appropriate oversight and enforcement:

"[The Administrative Consent Order] provides a more comprehensive and current structure for addressing the compliance issues that DWSD is facing and for ensuring DWSD's long-term compliance. While the DWSD has made substantial progress under the [Second Amended Consent Judgment], ultimately the SACJ was not sufficient to sustain long-term compliance. The ACO will take DWSD through to full compliance."

No hearing date has been set for the City's motion.

Comment: The City's motion to dismiss the 1977 federal case should not come as a surprise. The City has sought for years to end federal oversight of DWSD. But it took the retirement of Judge Feikens to clear a path to the end of the case. Shortly after Judge Cox took over the case in November, 2010, he signaled a desire to end the decades-long oversight of DWSD. In February, 2011, Judge Cox disbanded the advisory groups that had grown up around the case. Public opinion favored ending federal oversight.

As part of Mayor Bing's breakthrough agreement with Wayne, Oakland and Macomb Counties, and the February 11, 2011 Stipulated Order that led to a more autonomous Board of Water Commissioners, the Court allowed for any party to seek dismissal of the case upon a showing of substantial compliance with the Second Amended Consent Judgment.

The City's pending motion represents that DWSD has achieved substantial compliance with the federal consent judgment and that the new Administrative Consent Order with the Michigan DEQ will see it through to full compliance. Time will tell, but now is the time to end 34 years of federal supervision.

Resources:

For more about DWSD Update, click here.

Clintondale Pump Station, Walsh Construction Submits Low Bid on Project

2011-07-27T14:27:00.059-04:00

Earlier this afternoon, Walsh Construction was read low bidder on the construction project known as “Clintondale Pump Station Improvements," Macomb County Public Works Project No. 10-0004.4. There were 4 bids submitted and received.

The bids were as follows:

1. Walsh Construction - - - - - - $ 22,929,000

2. Walbridge - - - - - - - - - - - - $ 25,720,000
3. Ric-Man Construction - - - - - $ 26,654,606
4. Weiss Construction - - - - - - - $ 32,100,000

The Engineer's Estimate for this project was $25,338,000.

The Clintondale Pump Station was originally owned and operated by the City of Detroit (DWSD), but was part of the agreement that transferred ownership of the Oakland-Macomb County Interceptor to Oakland and Macomb Counties. The Clintondale Pump Station is now part of the Macomb Interceptor Drain Drainage District.

(*Congratulations to Sam Bahou and his Team at Walsh.)

Update: On August 19, 2011, the Macomb County Department of Public Works approved award of this project to Walsh Construction. Three days earlier, Standard & Poors affirmed Macomb County's AAA bond rating. All good news for Macomb County.

Update (10/13): The Detroit Free Press reports today that Macomb County has sold $30 million worth of bonds for this project.

Oakland Macomb Interceptor Drain (OMID) Contract 3 - Owner Rejects All Bids

2011-07-26T12:47:00.006-04:00

Earlier this morning, the Oakland Macomb Interceptor Drain Drainage Board voted to reject both bids submitted for OMID Contract 3 that were submitted on July 19, 2011 (here).

The principal reason cited for rejecting the low bid of Inland Waters Pollution Control and second bid of L. D'Agostini & Sons, Inc. was that the bids exceeded the engineer's estimate by some 38%. However, the Drainage Board also rejected a second resolution that would have deducted more than $19 million from Contract 3, which would have brought the project into line with their budget.

Board Members also voiced concerns over the lawsuit filed on July 18, 2011 by the Macomb Interceptor Drain Drainage District against some 40 contractors, including Inland Waters and L. D'Agostini & Sons. In addition, Board Members noted that under Contract 3, Inland Waters apparently identified D'Agostini as one of its subcontractors; D'Agostini's second bid had included Inland Waters as a proposed subcontractor.

Update (7/26): Crain's Detroit Business has additional coverage (here) of the OMI Board Meeting and the Board's decision to reject both bids.

For more about DWSD Update, click here.

Oakland Macomb Interceptor Drain (OMID) Contract 3 - Inland Waters Submits Low Bid

2011-07-20T17:34:00.001-04:00

On July 19, 2011, the Oakland Macomb Interceptor Drain (OMID) Drainage District received and opened bids for Contract 3. Two bidders submitted bids:

Inland Waters Pollution Control . . . . .$34,773,040
L. D'Agostini & Sons . . . . . . . . . . . . . . . . $36,127,338

The details of this project were in an earlier post (here).

Comment: There is great irony in the fact that both of these bidders were named in the federal lawsuit filed by Macomb County on July 18, 2011. That lawsuit arises out of repair work performed by Inland Waters and L. D'Agostini & Sons on the very same interceptor in 2004.

Update (7/25): The OMI Drain Board is meeting on July 26, 2011 and is scheduled to vote on a resolution to award Contract 3 to Inland Waters Pollution Control.

Macomb County Takes Aim At DWSD Contractors Involved in 15 Mile Sewer Repair Project

2011-07-18T23:55:00.006-04:00

While the Detroit City Council was still considering a legal services contract with Miller Canfield, to investigate contractors linked to disgraced former Mayor Kwame Kilpatrick, former Director Victor Mercado and contractor Bobby Ferguson (here), Macomb County was busy preparing its own lawsuit to recover millions of dollars in allegedly inflated sewer repair bills dating to 2004.

Earlier today, the Macomb Interceptor Drain Drainage District fired the first volley when it filed a six-count civil lawsuit in U.S. District Court against 40 contractors involved in the repair of the 15 Mile sewer interceptor in Sterling Heights.

The lawsuit alleges that the Co-Defendants, led by Kwame Kilpatrick, Victor Mercado, Bobby Ferguson and Inland Waters Pollution Control, participated in a scheme to inflate repair costs associated with the 15 Mile sanitary sewer interceptor that collapsed on August 22, 2004. The sewer was repaired by DWSD under an emergency contract.

Macomb County alleges that Inland Waters originally proposed a repair budget of $31.7 million to DWSD, but that final costs ballooned to $54.4 million due to inflated invoices submitted by Inland Waters and its subcontractors, including $350,000 paid to Ferguson Enterprises for which no work was allegedly performed.

Macomb County seeks to recover $23 to $26 million from the 40 Co-Defendants under counts for civil racketeering (RICO), anti-trust violations, both the Sherman Anti-Trust Act and Clayton Anti-Trust Acts, and fraud.

Macomb County first signaled its interest in pursuing these claims in January, 2011 (here).

For a copy of Macomb County's lawsuit, click here.

For more about DWSD Update, click here.

Former DWSD Director Files Federal Lawsuit, Alleges Discrimination in Pay

2011-07-11T18:49:00.005-04:00

Former DWSD Director Pamela Turner last Friday filed a lawsuit in U.S. District Court alleging 2 counts of sex discrimination against the City of Detroit. Ms. Turner seeks unspecified money damages.

Ms. Turner, who was appointed Interim Director in September, 2008 and reportedly retired in May, 2010, alleges that her immediate (male) predecessors, Victor Mercado and Anthony Adams were paid an average $240,000 per year, while she was paid only $130,000. Ms. Turner won praise, but apparently only a modest pay increase (to $155,000) during her tenure as Director. Ms. Turner's lawsuit alleges that her departure in 2010 was by way of resignation, not retirement as the press reported at the time.

DWSD has been seeking Ms. Turner's replacement for more than a year. In March, Detroit City Council approved Mayor Bing's request to increase the money that could be offered to potential Directors to $256,000.

2011-07-08.Pamela Turner v City of Detroit - Lawsuit

New Details Emerge on DWSD Efforts to Recover Kick-Backs and Illegal Profits

2011-07-07T15:08:00.004-04:00

New details have emerged about DWSD's nvestigation into contractors linked to the corruption probe and federal indictments of disgraced former Mayor Kwame Kilpatrick, former Director Victor Mercado and contractor Bobby Ferguson (Ferguson Enterprises, Inc. and Xcel Construction Services).

As we reported last month (here), the Board of Water Commissioners on May 25, 2011 approved a $250,000 contract to retain the Miller Canfield law firm to investigate both contracts and contractors identified in the 38-count federal indictment handed down last December.

When this agreement went to City Council for approval earlier this week, head of the City of Detroit Law Department, Krystal Crittendon reportedly told Council Members that Miller Canfield would be paid $250,000 to research possible claims, but that any lawsuits to recover kick-backs or illegal profits would be handled on a contingency fee basis.

For more about DWSD Update, click here.

Update (9/28): Acting Director Chris Brown indicated at today's Water Board Meeting, in response to a question from Chairperson Mary Blackmon, that Miller Canfield will be submitting their report to the Board by the October 26, 2011 Board Meeting.

Karegnondi Water Authority and DWSD: Talks Begin

2011-06-21T11:59:00.002-04:00

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

2011-06-13T13:37:00.003-04:00

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

2011-06-02T06:00:00.006-04:00

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

2011-06-01T06:00:00.003-04:00

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.

Commissioners Can Only Be Removed for Cause, City of Detroit Concedes

2011-05-31T06:40:00.026-04:00

When Mayor Bing agreed on February 11, 2011 to give Wayne, Oakland and Macomb Counties greater participation in the oversight of the Detroit Water and Sewerage Department, it remained an open question whether members of the Board of Water Commissioners would serve at the pleasure of the Mayor or whether they could only be removed for cause.

In a recent federal court filing, the City of Detroit agreed that Commissioners can only be moved for cause. Judge Sean Cox accepted this as a stipulation and entered an Order on April 29, 2011 to the effect that Detroit Board of Water Commissioners can only be removed for cause.

Comment: A "for cause" standard is a much higher standard than merely "serving at the pleasure of the Mayor." It means that a Commissioner cannot be removed absent a showing that they are unfit or unable to perform their duties as a Commissioner. Suburban stakeholders in the Department pressed for this higher standard and now it appears they have prevailed. In my view, this is designed to protect the integrity of the Board of Water Commissioners, which should exercise more oversight and ask more questions about how DWSD functions.

2011-04-29.ORDER.Members of Detroit Board of Water Commissioners Shall Only Be Removed for Cause

DWSD - Crain's Article Highlights Operational Woes at Detroit Wastewater Treatment Plant (WWTP)

2011-05-23T09:44:00.000-04:00

Crain's Detroit Business published a feature article on May 22, 2011 outlining the problems at the City of Detroit's main wastewater treatment facility. Problems include inadequate sludge de-watering, leading to a build-up of the "solids inventory," delayed repairs, cumbersome purchasing practices, and a looming personnel problem as a large percentage of DWSD management personnel approach retirement without an effective succession plan in place.

DWSD Update outlined these same issues in an article published last September, 2010 shortly after DWSD submitted its Corrective action Plan to the federal court.

Judge John Feikens Dies, Oversaw DWSD for 33 Years

2011-05-16T11:01:00.007-04:00

U.S. District Judge John Feikens died May 15, 2011. He was 93 years old. Judge Feikens oversaw the Detroit Water and Sewerage Department for 33 years until stepping aside last November. Details of his death and funeral are not known.

Update: The State Bar of Michigan blog published an In Memoriam (here).

DWSD Suspends Upcoming Projects, New Strategic Plan in the Works

2011-05-10T06:18:00.052-04:00

On May 3, 2011, the Detroit Water and Sewerage Department announced that it would revisit the spending outlined in its 2011-2015 Capital Improvement Program (CIP), for both water and wastewater construction projects. The CIPs are updated annually; the last update was in July, 2010.

Deputy Director Darryl Latimer notes that DWSD "will be engaging in a detailed review of every project in the CIPS, striving to produce revised plans to be published by July 1 [2011]."

Therefore, effective immediately, ALL projects that have not yet been initiated are to be halted until further notice. Work can only proceed with specific and formal authorization from the office of the Assistant Director of Financial Services prior to the final authorization from the Deputy Director. This includes task authorization of as needed services, amendments and new contracts.

Commentary: It is unclear whether Mr. Latimer's reference to "projects that have not yet been initiated" means some or all of the projects listed on DWSD's April, 2001 "Proposed Quarterly Construction and Consultant Contracts." If so, this would mean further delays in bidding and construction of the Springwells Water Treatment Plant 1958 Filter Rehabilitation Project (SP-563). The Springwells WTP project is listed as a "New Project" in the July, 2010 Water Supply System CIP, with an estimated budget of $120 million. This highly-anticipated project was to have come out for bids in late-2010, and then early-2011. Stay tuned as things develop.

DWSD Strategic Planning Initiative - May 3, 2011

Final Additions to New Detroit Water Board Members Announced

2011-04-04T15:22:00.003-04:00

On April 1, 2011, Mayor Bing appointed Linda Forte, and Bradley Kenoyer to the City of Detroit Board of Water Commissioners. Mayor Bing retained Commissioners Mary Blackmon and James Thrower. These four join the three Commissioners appointed in March by Wayne, Oakland and Macomb County.

Linda Forte, is a senior vice president of business affairs at Comerica Bank and has more than 30 years of business and finance experience. Bradley Kenoyer is 33 year old mechanical engineer with Ford Motor Co. He has a bachelor's degree from Rensselaer Polytechnic Institute (RPI) in New York and a master's degree in product development from the University of Detroit Mercy.

The newly reconstituted Board of Water Commissioners is scheduled to meet for the first time on April 27, 2011 at 2:00 p.m.

Update: DWSD has now updated its website to include background information and pictures of all the new Water Board Member.

For more about DWSD Update, click here.

More Money Available to Land New DWSD Director

2011-03-29T14:03:00.005-04:00

More than 9 months after starting the search process for a new DWSD Director, the Detroit City Council today approved Mayor Bing's request to increase the salary range for a new Director to a maximum of $250,000 from the previous $156,000.

It appears that the City is looking at national candidates rather than promoting someone like Deputy Director Darryl Latimer for the Director position. If you believe that $250,000 is too much to pay a new Director, please check out the job description (here). DWSD is one of the largest water utilities in the United States. The Director plays a huge role in the successful operation of the Department.

Update: The Detroit Free Press reports (here) that the amount approved was $256,000.

For more about DWSD Update, click here.

New Detroit Water Board Takes Shape

2011-03-25T13:03:00.003-04:00

The New City of Detroit Board of Water Commissioners is taking shape. Following the February 11, 2011 Agreement between Mayor Bing and Wayne, Oakland and Macomb Counties, the suburban appointees to the Water Board have now been announced:

Oakland County - J. Bryan Williams, Esq
Wayne County - James Fausone, Esq
Macomb County - Fred Barnes, P.E.

Mr. Williams was selected by Oakland County on March 15, 2011. He is an attorney who practices in Bloomfield Hills with Dickinson Wright. Among his clients, Mr. Williams represents the Oakland County Water Resources Commission. Mr. Williams replaces Marilynn Gosling, who served on the Water Board since 2003.

Mr. Fausone was selected by Wayne County on March 16, 2011. He is an attorney who practices in Northville with Fausone Bohn, LLP. Mr. Fausone is an experienced environmental attorney. Mr. Fausone replaces Hilliard Hampton.

Mr. Barnes was selected by Macomb County on March 17th. He is a former public works chief engineer and West Point graduate. He worked for the Macomb County public works office from 1976 until his retirement in 2000. He has 40 years experience in the field of engineering. Mr. Barnes replaces William Westrick.

Comment: Under the terms of the Mayor's February 11, 2011 Agreement, two of the existing Board Members will be reappointed to maintain continuity. In my view, Mayor Bing should retain Mary Blackmon and Carla Walker-Miller, both of whom have significant experience serving on the Board, and have a deep understanding of the challenges facing DWSD.

Of the two remaining positions, I would strongly encourage Mayor Bing to appoint John McGrail, P.E., who served DWSD as Head Engineer, Wastewater Construction, for more than 30 years. Mr. McGrail, a long-time resident of Detroit, has considerable experience and understanding of the engineering, procurement, and personnel issues facing DWSD, particularly at the main wastewater treatment plant.

For more about DWSD Update, click here.

WW-536, Lakeshore Submits Low Bid on DWSD Water Works Park Project

2011-03-15T14:39:00.004-04:00

Earlier this afternoon, Lakeshore Engineering was read low bidder on the project known as “Water Works Park Yard Piping Replacement," DWSD Contract No. WW-536. There were 11 bids received. The lowest bids are as follows:

1. Lakeshore Engineering - - - - - - - $ 31,837,949

2. Walsh Construction - - - - - - - - - $ 31,925,000
3. Ric-Man - - - - - - - - - - - - - - - - $ 33,580,000
4. Tooles Construction - - - - - - - - - $ 36,228,000
5. Lawrence Clark - - - - - - - - - - - $ 39,595,000
6. Weiss Construction - - - - - - - - - $ 40,357,000
7. L. D'Agostini & Sons - - - - - - - - $ 42,281,961
8. Detroit Contracting (DCI) - - - - - $42,995,700
9. Walbridge - - - - - - - - - - - - - - - $ 44,750,000
10. Colasanti Construction - - - - - - $ 45,294,000
11. DeMaria Building Co. - - - - - - - $ 49,108,830

Update (7/26): Dodge Reports indicates as of this morning that Contract WW-536 is on indefinite hold, pending future funding. Other sources have reported that the project has been canceled outright by DWSD.

Should Federal Oversight of DWSD End?

2011-02-08T14:33:00.001-05:00

A recent Detroit News Editorial (here) urges an end to 33 years of oversight of the Detroit Water and Sewerage Department by the U.S. District Court:

While the Detroit mayor and council are understandably reluctant to cede any control of the system and justifiably note that the city put a lot of money into water and sewerage infrastructure over the decades, there may be room for some discussions to give suburbs more input to defuse regional tensions. But any changes ought to come about as a result of regional negotiations, not because of a federal court order or legislation from Lansing. Federal courts are not designed to manage municipal water systems indefinitely.

What do you think?

For more about DWSD Update, click here.

DWSD Management, Judicial Oversight Teams Shuffled

2011-02-07T21:50:00.003-05:00

In the past several weeks, Mayor Dave Bing has taken steps to fill major gaps in DWSD's Management Team, and U. S. Judge Sean Cox has taken steps to clear away some of the supporting elements crafted by his 93 year old predecessor.

Judicial Oversight

In his first official moves since taking over control of the 33 year old federal lawsuit involving the Detroit Water and Sewerage Department, U. S. District Judge Sean Cox last week issued orders disbanding and discharging an advisory panel and special master appointed by Judge Feikens.

The Southeast Michigan Consortium for Water Quality was an advisory panel of regional business leaders and stakeholders formed in 2001 by the Court to provide a forum for discussing and resolving problems between DWSD and its suburban customers. The Consortium was led by Timothy O'Brien, an attorney and an executive with Ford Motor Co. Judge Feikens clarified the role of the Consortium in a 2003 Order. It was that Order that Judge Cox recently vacated.

Thomas Lewand was appointed in 2002 as Special Master by Judge Feikens. His role was detailed in a December 8, 2008 Crain's Detroit Business profile (here). Judge Cox also vacated the order appointing Thomas Lewand. It is unclear whether Judge Cox intends to replace Mr. Lewand.

There were reports last week that Judge Cox was meeting privately with stakeholders, such as Macomb County Public Works Commissioner Anthony V. Marrocco, but no details have been disclosed.

In the coming months, Judge Cox will have to grapple with Oakland County's motion to appoint an Interim Regional Committee to Operate DWSD. This motion, and Rep. Kurt Heise's proposed legislation to create a regional water authority, both threaten to reignite a long-simmering dispute between the City of Detroit and its suburban customers over water, water rates, and control over DWSD.

Executive Management Team

Meanwhile, with much less fanfare, Mayor Bing has been quietly filling in most of the gaps in DWSD's Executive Management Team naming three (3) Assistant Directors in the past month. All three have extensive experience.

A. B. Davis, Jr., P.E. - Assistant Director of Asset Maintenance. Mr. Davis is registered professional engineer with 37 years of experience. He has worked for DWSD for more than 31 years, and formerly served as Assistant Director Facilities and Materials Management Operations. (Welcome back, A.B.!)
James George - Assistant Director Financial Services Group. Mr. George was Assistant Director - Financial Services and Financial Manager with DWSD from 1987 to 2005. He served a stint with Wayne County before returning to DWSD.
Rodney Johnson - Assistant Director of Commercial Operations and Public Affairs. Mr. Johnson has worked for DWSD since 1981. He has a B.S. from Wayne State University (MIS) and an MBA from the University of Phoenix.

Despite these appointments, and the progress they represent, Mayor Bing has yet to find a new Director to replace Pamela Turner, who retired last July.