DWSD Director's Retirement Confirmed

More than a month after reports first surfaced that DWSD Director Pamela Turner was going to retire, Crain's Detroit Business reports today that it has confirmed Ms. Turner's retirement from the federal judge who oversees the Detroit and Sewerage Department, Judge John Feikens. 

Ms. Turner began her career with DWSD in 1977. She was promoted Interim Director in September, 2008 By Mayor Cockrel and later to Director a year later by Mayor Bing. 

Ms. Turner's retirement comes at time when DWSD revenues are falling due to lower water consumption and Detroit's shrinking population.  In addition, DWSD is expecting to lose many of its engineering and middle management staff over the next couple of years.  The next director will face many challenges, plus an ever aging physical infrastructure.  

 

Genesee County Hired Sam Riddle to Assist in DWSD Pipeline Negotiations

The Flint Journal reported on May 14, 2010 (here) that Sam Riddle served as a political consultant to the Genesee County Drain Commission for nearly two years, from March, 2007 to November, 2008. Riddle, who faces prison under federal corruption charges, was reportedly paid $2,000 per month, plus expenses. According to John O'Brien, Director of Water and Waste Systems, Riddle's consulting company, Meridian Management Systems, was hired to assist Genesee County in its negotiations with the City of Detroit in connection with  a new 30-year water supply contract. No contract was ever signed. 

Genesee County has since formed a new water authority (the Karegnondi Water Authority) and announced plans to move forward with the installation of a new $600 million water pipeline and water treatment plant. 

Update: On May 20, 2010, the Flint Journal reported (here) that Genesee County's contract with Sam Riddle included services related to its new pipeline.  

Update: On June 4, 2010, the Flint Journal reported (here) that Genesee County paid the now-imprisoned Sam Riddle $44,000 in consulting fees.  However, in response to a FOIA request for documentation concerning the scope and nature of Riddle's consulting services, the Genesee County Drain Commissioner (Jeff Wright) reported having no documentation. Adding now to the mystery of Riddle's role, if any, in Genesee County's (unsuccessful) negotiations with DWSD are reports (here)  that the Jeff Wright was cooperating at the same time with the FBI in its efforts to build a public corruption case against Sam Riddle.  Hmmm. . . Was Genesee County's consulting agreement with Riddle legitimate or part of a sting operation?   

Update: On October 6, 2010, Sam Riddle was sentenced to 37 months in federal prison for his role in the Synagro bribery scandal. 

Detroit Water and Sewerage Department, Is Sale to Regional Authority a Solution for Detroit's Financial Crisis?

The Citizens Research Council of Michigan recently released a report on the dire fiscal condition of the City of Detroit.  Among possible solutions to  Detroit's $300-400 million budget deficit, the CRC report explores the idea of selling the Detroit Water and Sewerage Department to a regional water authority, which in turn would provide the City with desperately needed revenues. 

The city has only one asset that could be “monetized”at a rate sufficient to make a major contribution to resolving the accumulated deficit: the  Water and Sewerage Department, which wholesales services to suburban communities. Because this is a self supporting function, transferring the function would not contribute to resolving the city’s general fund structural operating problem.  However, the sale of all or part of the assets of the department to a regional authority could provide much needed revenues. State enabling legislation could authorize the creation of a regional water and sewerage authority with bonding capacity. The city could agree to sell its interest in [DWSD] to the authority for an amount sufficient to resolve the accumulated and current deficits, and representative of the investment the city has made in the system. Provisions in the sale agreement could require that rates in Detroit could be no more than 80 percent of the lowest rate charged in any suburb, or the system would revert to Detroit ownership. The authority could sell revenue bonds that would be the source of the payment to the city, and could include the annual debt service on the bonds in the annual charges to customers. Currently outstanding debt would also have to be addressed, and perhaps defeased.

The effect of this would be higher water and sewer-age rates for all residents and businesses in the service area, to pay debt service on bonds sold to purchase the system from the city.  ["The Fiscal Condition of the City of Detroit," CRC Report 361, April, 2010, p. 60]

Click here for a copy of the CRC's Report. 

Detroit Urged to Sell Water and Sewerage Department

Today's (April 12, 2010) Detroit Free Press includes an Op-Ed piece by a local business consultant, Marcus Hudson, urging the City of Detroit to consider selling the Detroit Water and Sewerage Department. Entitled "Dump the Myths Sell Detroit's Water Department," Mr. Hudson's article seeks to debunk two of the most frequently cited reasons for maintaining DWSD as a public agency: profits and jobs. The principal reason to consider the sale of DWSD: money. Or the lack thereof. 

Given its current state of disrepair, Detroit needs to start raising revenue and acknowledge that cost-cutting can only get the city so far. Selling DWSD could be an important part of the solution and the impetus for longer-term growth. 

Mr. Hudson's Op-Ed piece may be a trial balloon by the Bing Administration as it wrestles with huge City budget deficits and is looking for ways to raise cash.  In 2009, the City of Detroit sold the Oakland-Macomb Interceptor to Oakland and Macomb Counties. This transfer was more about shedding responsibility and debt then raising cash. And despite requiring immediate and significant repairs (discussed here, and here), these two counties were glad to assume this responsibility.

Update: Mr. Hudson is quoted again in this May 12, 2010 Fox2 Detroit article promoting the notion of selling DWSD.   

 "I would suggest that they sell it or at least look at the option of selling it. If the deal doesn't make sense, don't sell it. However, not to understand the value of the water department is derelict."

MLive.com also reported May 12, 2010 on this issue (here). 

Posen Low Bidder on Fischer Pump Station, PC-772

Yesterday, March 23, 2010, Posen Construction was read low bidder on the Fischer Pumping Station project, DWSD Contract PC-772.

Posen Construction ------------ $5,130,844
DeMaria Building Company --- $5,828,658
Detroit Contracting, Inc. ------- $5,840,250

Detroit Water Board, Agenda and Meeting Minutes Online

The Final Agenda and Approved Minutes from the monthly meeting of the Board of Water Commissioners are now being posted on DWSD's website (here). 

The Water Board approves contracts that range from several thousand dollars worth of manhole covers to  $300 million dollar tunnel contracts. 


Upate (3/8/12): Fixed dead link to Water Board's calendar. 

Oakland-Macomb Interceptor Receives Second Round of ARRA Funding

The Michigan DEQ has awarded $15.9 million of additional funding for the Oakland-Macomb Interceptor repair project. This is the second round of funding for the OMI drain repair project, and comes courtesy of the ARRA federal stimulus program. 

While local reports indicate the OMI is a $42 million project, it is in fact part of a $160 million project to repair and restore a 21 mile sewer line that serves most of Macomb County. The first two phases of the project, totaling almost $29 million, were bid in late November, 2009. Ric-Man Construction was the low bidder both times.

When a portion of the OMI collapsed in Fraser several years ago, emergency repairs cost more than $50 million. The OMI was owned at that time by the Detroit Water and Sewerage Department, which has since sold this aging sewer line to Oakland and Macomb Counties. 

Plans for New Water System Gain Momentum in Genesee County

Plans for a new water authority and a proposed $600 million pipeline project in Genesee County appear to be gaining momentum, despite some who have declared the project "reckless folly." 

The new Chairman of the Genesee County Board of Commissioners, Jamie Curtis, has come out squarely in favor of the plan advanced last year by Genesee County Drain Commissioner, Jeff Wright. 

"I'm not going to settle for anything less than for us to complete that waterline," Curtis said of the long-talked-about project. “It is priority-one."

 Click here for the rest of the story from the Flint News.

DWSD Water and Sewer Rates to Increase (Again)

DWSD's rate consultant, Bart Foster, reports that declining water consumption is the key variable driving this year's proposed 9.5% in Metro-Detroit water and sewer rates.  Declining revenue was also a key factor in DWSD's decision last year to delay construction of new water mains into Genesee County. The other critical factor was Genesee County's announced plans to build their own water system.   

Oakland-Macomb Interceptor Drain District: 2010 Meeting Schedule Set

The Board for the Oakland-Macomb Interceptor Drain District (OMID), the legal entity that owns and operates the Oakland-Macomb Interceptor (OMI) as of October 22, 2009, has published its schedule of meetings for 2010 (here).  Half of the meetings will be held in Oakland County, and half in Macomb County.

The OMID recently bid out the first two contracts for what is planned to be a $160 million repair and rehabilitation project spread out over 6-8 contracts. 

Click here for more information about the Oakland-Macomb Interceptor Drain project.

Detroit Water Board Approves Sewer Repair Contracts to Inland Waters, Rejecting Lakeshore Engineering Protest

On December 16, 2009, the Board of Water Commissioners narrowly approved two sewer repair contracts, worth upwards of $80 million, to Inland Waters Pollution Control, Inc. 

Lakeshore Engineering, the second bidder, protested the award to Inland Waters. Anthony Adams, former Deputy Mayor and Interim Director of DWSD, spoke on behalf of Lakeshore Engineering during the public comment session. 

Despite concerns about awarding both contracts to one contractor, the Board later approved  the award of both contracts (DWS-876 and DWS-877) to Inland Waters. The votes were 6-1 and 4-3 respectively. Each contract was approved at a cost not-to-exceed of $40 million.  Both contracts must still be approved by the Detroit City Council.

These two contracts replace earlier sewer repair contracts that had been held by Inland Waters and Lakeshore Engineering.  

Monica Conyer's Sentencing Delayed (Again)

The Detroit Free Press reports (here) that the sentencing date for Monica Conyers, in connection with her guilty plea in the Synagro Scandal, has been pushed off again to March 10, 2010, from January 15th. The disgraced former City Council Member admitted earlier this year accepting a $6,000 bribe for voting to approve a $1.2 billion contract for sludge hauling contract. 

Weiss Construction Low Bidder on PC-776 Project

Earlier today, Weiss Construction submitted the lowest bid for the PC-776 project. Weiss beat out 7 other bidders for the project with a low bid of $25,312,000. Weiss' bid was $182,000 lower than the Engineer's Estimate for this project, which involves replacement of 25 pumps at Detroit's main waste treatment plant at 9300 W. Jefferson, and related electrical work. 

Weiss --------- $ 25,312,000
Walsh --------- $ 25,550,771
Lakeshore ---- $ 25,972,000
Walbridge ---- $ 26,360,000
Tooles -------- $ 26,420,104
DeMaria ----- $ 26,892,000
White -------- $ 28,145,000
DCI ---------- $ 28,626,000

Contract PC-776 involves providing new power supply cable to and from the secondary clarifiers and substation MCCs, providing new MCCs at each secondary clarifier, providing short-circuit analysis and fault rating, providing detailed hydraulic analysis and sizing of the pumps related to secondary clarifiers RAS pumping, providing 25 RAS pumps at the secondary clarifiers and completing all miscellaneous electrical work such as replacement of cables, conduit, pull boxes, panels and junction boxes.

Genesee County Proceeding with Plans for New Water System, Pipeline

Genesee County is reportedly proceeding with plans announced earlier this year, and reported here, to construct a new $600 million water transmission pipeline and water treatment plant.

Under the auspices of the new Karegnondi Water Authority, Genesee County Drain Commissioner Jeff Wright is spearheading this effort, which is aimed at giving Genesee and Sanilac Counties, along with the cities of Lapeer, Imlay City, and Flint more control over their water rates. Mr. Wright has touted significant ($200 million) savings for Genesee County residents, but a recent article in The Davison Index notes that those savings are projected to be "in the long run, after a slight increase over the course of a 25-year bond to pay for the pipeline."

Comment: Unless I'm misreading things, this means the projected savings for Genesee County residents won't materialize for more than a generation. Isn't that like promising a tax cut . . . that doesn't kick in until 2034?

Oakland-Macomb Interceptor Repair: Ric-Man Construction Scores First 2 Contracts

The first two contracts for repair of the Oakland-Macomb Interceptor were bid on November 23 and 24th and Ric-Man Construction was read low bidder on both projects.

OMI Contract No. 1

• Ric-Man Construction       $12,486,880 
• Jay Dee Contractors          $12,821,800
• Dan’s Excavating               $14,488,800
  

OMI Contract No. 2  

• Ric-Man Construction      $16,338,600 
• Jay Dee Contractors        $18,814,000 
• Dan’s Excavating             $20,973,000

James Rosendall Sentenced to 11 Months for Role in Synagro Scandal

Earlier today, former executive, James Rosendall, was sentenced to 11 months in federal prison for his role in the Synagro sludge scandal. Rayford Jackson was sentenced to 5 years in prison earlier this month, as reported here. Disgraced former Council Member, Monica Conyers, is due for sentencing on her guilty plea in January.

Rayford Jackson Sentenced to 5 Years for Role in Synagro Scandal

On Friday, November 13, 2009, Detroit businessman Rayford Jackson was sentenced to a 5-year prison term for his role in the Synagro sludge-hauling bribery scandal that also ensnared former Councilwoman Monica Conyers. The 5-year sentence was the maximum that Judge Avern Cohn could have imposed.

SW-548 Contract Approved By Water Board

On September 23, 2009, less than a month after bids were opened, the Board of Water Commissioners yesterday approved Contract No. SW-548 with Colasanti Construction Services for $49,680,368.

DWSD Contract SW-548, which was bid on September 1, 2009, involves a major overhaul of the Southwest Water Treatment Plant Sludge Treatment and Waste Washwater Treatment Facilities. The contract duration is 1,285 calendar days.

Promoted to DWSD Director from Interim Director, Pamela Turner Winning Praise

The Detroit Free Press has a nice article today praising Pamela Turner's role as Director of the Detroit Water and Sewerage Department. Initially promoted to Interim Director in September, 2008, Ms. Turner was recently appointed to Director by Mayor Bing a few months ago. The Mayor's appointment also brought to a halt a national search for a new director.

Water Consumption Continues to Decline, Rate Increases Predicted

The Detroit Water and Sewerage Department reports that water consumption in 2008 fell 12%, or about 16 billion gallons. From 2007, water consumption has dropped 15%, or 23 billion gallons.

Due to DWSD's significant fixed costs, including bond debt and other fixed operating costs, a significant decline in water consumption (revenue) will mean that rates for next year are bound to increase even more than usual.

And as we reported last December, a decrease in water revenues may contribute to further delays in court-ordered improvements to DWSD's system. Earlier this year, DWSD canceled two major tunnel contracts -- the Upper Rouge Tunnel and the Detroit River Outfall (DRO) Contract No. 2 -- worth over $600 million on grounds that they were too costly. Many other projects, which were slated for bidding earlier this year have been delayed.