Report: DWSD Should Retire One or More Water Treatment Plants

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

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

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

Over the past 5 years, the Report notes, the maximum daily demand across the DWSD system has dropped from 1,050 MGD to 800 MGD.  This change in circumstances, according to CH2M Hill, raises 2 important questions:

1. Is there a different way to operate the system by reducing the number of treatment plants and thereby reducing the [capital investment] CIP requirements?
2. Are all of the transmission mains recommended in [DWSD's 50 Year] Master Plan still needed within the time frame suggested?

The CH2M Report then lays out 3 scenarios under which DWSD would retire the Southwest WTP, the Northeast WTP, or both.

CH2M Hill makes the following preliminary recommendations:

• Northeast WTP -- "retirement of the Northeast plant is the most desireable as it is the plant with the largest capital allowance to rehabilitate the plant to an acceptable level of operation."

• Southwest WTP -- "work on rehabilitation of the treatment trains at the Southwest plant should be put on hold until a detailed analysis of the system hydraulics can be completed." 

• Water Works Park WTP -- "The CIP contains an amount of $24.5M for re-working the discharge piping . . . this expenditure should be put on hold until better decisions can be made with respect to the future needs of this plant."

• Springwells WTP -- "This water treatment plant is of strategic importance to the long term operation of the DWSD transmission system. Continuing with the work related to the filter rehabilitation and pumping is important and should continue. This includes [over $442 million worth of CIP projects]."

• Transmission Mains (NOTS and Flint Loop) -- "Base on current planning projections, all of this work [$584M] should be removed from the CIP."

The CH2M Hill Report outlines a number of other recommendations (here).

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

For more about DWSD Update, click here.

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

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

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

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

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:

• Water Supply System CIP - FY 2012-2016
• Sewage Disposal System CIP - FY 2012-2016
• Wastewater Master Plan - Volume 4: Capital Improvement Program

For more about DWSD Update, click here.

DWSD Opposes Genesee County Water Plans

Genesee County's ambitious plan to build its own $600 million water system is encountering push back from the Detroit Water and Sewerage Department. No surprise.

In a June 29, 2009 letter (below), Interim-Director Pam Turner lays out DWSD's opposition to Genesee County's plan. Among the objections, DWSD contends Genesee County's proposal violates the evaluation criteria in the Great Lakes Compact, because it fails to address the availability of existing water supply systems (ie., the DWSD system).

In particular, DWSD has already undertaken plans to improve the supply of drinking water to Genesee County.

Both the Flint Loop and North Oakland Transmission projects were designed to increase supply and provide redundancy for Genesee County and the City of Flint. DWSD has already spent $28.6 million designing these two projects, and awarded a construction management contract. Theses projects are "shovel ready," but require the City of Flint to sign a new 30 year contract with DWSD, particularly in light of previously reported declines in water revenue. Removing the City of Flint from the calculation of water rates would increase water rates for the remaining ratepayers at least 6%, according to DWSD's estimate.

Its also appears that Genesee County's plans caught DWSD a bit flat-footed. Ms. Turner complains that when DWSD and Genesee County met on March 10, 2009 to discuss a cost-sharing plan, Genesee County failed to mention that it had already filed its application for a withdrawal permit a month earlier.

However, Genesee County Drain Commissioner, Jeff Wright, has not been secret about his plans for constructing a new water authority, as reported here. Mr. Wright's response to Pam Turner's 8-page letter was outlined in a July 6, 2009 article in the Flint Journal (here).

The MDEQ will receive public comments on Genesee County's withdrawal application until July 15, 2009, and then is expected to make a decision by August 22, 2009. Given DWSD's opposition, a delay in MDEQ's decision is likely.

Genesee County Considering Alternatives to DWSD Water Supply

The Flint News reports today that Genesee County is still studying alternatives to buying water from the Detroit Water and Sewerage Department (DWSD), even as County officials continue negotiations on a possible new 30 year contract. The principal alternative would be the construction of a separate water treatment plant, which would include placing miles of new pipeline to Lake Huron.

"County Drain Commissioner Jeff Wright and a spokesman for the Detroit Water and Sewerage Department confirmed Friday they have been and will continue talking March 10 about renewing what's been an unhappy marriage -- even as the idea of water independence gets all the attention."

"A decision has to be made by August as far as I'm concerned," said Wright, who said there's at least a 50-50 chance the county will break from Detroit and build the water line at a cost of more than $300 million.

Genesee County is one of a number of counties which are studying alternatives to buying their drinking water from the City of Detroit. Meanwhile, DWSD is proceeding with plans to add capacity to its system. The Flint Loop and North Oakland Transmission System (NOTS), would add miles of additional water main and redundancy to DWSD's drinking water transmission system.

Water Demand Drops -- May Affect Rates, DWSD Construction Plans

The Detroit Free Press reported on November 30, 2008 that a drop in the demand for water among City and Suburban users may contribute to an increase and water and sewer rates by DWSD:

"Detroit officials are expected to raise water rates 6% to 10% and sewer rates by as much as 13% to 17% next month, according to some suburban leaders who have met with the department.

"The revenue dip was enough to prompt U.S. District Judge John Feikens to schedule a hearing for Tuesday [December 2, 2008] to hear how the water department and others in the region plan to deal with it.

* * *

"Feikens, who has ordered hundreds of millions of dollars in improvements to the sewerage side of the system to bring it into compliance with the Clean Water Act, said revenue is needed to fund those projects.

"If a revenue stream is affected by a certain percentage, there are rules in the Clean Water Act that say some projects may not be economically possible," Feikens said.

"It isn't yet clear whether the revenue picture is bad enough to consider such delays, Feikens said."

Comment: This article, and Judge Fekeins' comments, appear to be a reference to several ambitious, and expensive, water transmission projects announced earlier this year by DWSD, the North Oakland Transmission and Flint Loop projects, bids for which have already been delayed once, and could be delayed into 2009.