Final Additions to New Detroit Water Board Members Announced

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. 

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More Money Available to Land New DWSD Director

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.   

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New Detroit Water Board Takes Shape

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.

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

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?

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?

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DWSD Management, Judicial Oversight Teams Shuffled

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.

 

Governor Snyder Urges Private Dialogue on Water Issues

As reported by MLive.com earlier today - 

"Michigan Gov. Rick Snyder on Monday refused to take sides in the ongoing dispute over the Detroit Water and Sewerage Department, but he did indirectly criticize both city and suburban leaders for fighting the battle in the media rather than behind closed doors.
 

"Appearing on WJR-AM 760 moments after Detroit City Council President Charles Pugh and Oakland County Water Resources Commissioner John McCulloch made arguments against and for regionalization of the water department, Snyder told host Paul W. Smith he was disappointed by recent developments.

"I would rather have quiet discussions with people asking them to sit down and talk about the facts," Snyder said.  "Because there are many things that should be resolved before it gets to the point it is already.  It's unfortunate it has become a divisive issue at this time given all of the discussions going on.  It would be better if people said it doesn't have to happen on the radio station."

Governor Snyder was responding to recent legislation that would create a regional water authority (See, H.B. 4112 introduced by Rep. Kurt Heise on January 20th), and Oakland County's January 26th request that a federal judge impose an interim regional board through judicial decree. 

Karegnondi Water Authority Solicits Engineering Bids for Design of New Pipeline

Earlier this month, the Karegnondi Water Authority sent out an Request for Qualifications (RFQ) for Professional Engineering Services to approximately 25 engineering firms.  KWA is seeking an engineering firm (or team) for the design and construction of 65 miles of water transmission mains, pump stations and lake intake.

After design, KWA anticipates construction will include:

• 5+ pipeline contracts
• 2 to 3 pump station contracts
• 1 intake contract
• 1 open reservoir contract

Engineering Proposals are Due February 15, 2011. KWA expects to name a Consultant by May 31, 2011.

RFQ for Professional Services - Karegnondi Water Authority

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Oakland County Petitions Court to Appoint Interim Regional Committee to Operate Detroit Water and Sewerage Department

In the wake of federal indictments last month, and state legislation to create a regional water authority introduced only 2 weeks ago, Oakland County  today filed a motion in federal court seeking the creation of an Interim Regional Management Committee "with the full power and authority to control, manage and operate" the Detroit Water and Sewerage Department and its wastewater treatment plant (WWTP).  The motion will be considered by Judge Sean Cox, who replaced Judge John Feikens after he stepped down in November, 2010. No hearing date has been set on the motion.

2011-01-26.Oakland County Motion for Appointment of Interim Regional Management Committee

Contract PC-756, Weiss Construction Submits Low Bid on DWSD Clarifier Job

Earlier this afternoon, Weiss Construction was read low bidder on the project known as “Rehabilitation of Primary Clarifiers Nos. 13 through 16 at the Wastewater Plant,” DWSD Contract No. PC-756. 

1. Weiss Construction  - - - - - - - - - $ 10,991,000
2. Walsh Construction - - - - - - - - -  $ 11,359,000
3. Lakeshore Engineering -- - - - - - $ 11,500,000
4. Tooles Construction - - - - - - - - - $ 11,990,000
5. Walbridge - - - - - - - - - - - - - - - - $ 12,150,200
6. DeMaria Building - - - - - - - - - - - $ 12,188,000
7. Detroit Contracting, Inc. - - - - - - $ 12,305,000
8. O’Laughlin - - - - - - - - - -- - - - - - $ 16,728,600

Update: On February 23, 2011, the Board of Water Commissioners approved a contract with Weiss Construction in an amount not to exceed $10,991,000 and a duration of 970 calendar days. 

Lakeshore Submits Low Bid on Sludge Pumping Station Rehab Project, PC-780

Earlier this week, on January 11, 2011, Lakeshore Engineering was read low bidder on the "Sludge Pumping Stations Nos. 1 and 2 Rehabilitation at the Wastewater Treatment Plant" project, DWSD Contract PC-780. After applying equalization credits, however, the contract could be awarded to the second bidder, Detroit Contracting, Inc., which was within $10,000. 

Lakeshore Group - - - - - - - - - - - -$ 5,690,000

Detroit Contracting, Inc. - - - - - - -$ 5,699,525

DeMaria Building - - - - - - - - - - -  $ 5,844,000

Walsh Construction - - - - - - - - -  $ 5,896,000

Weiss Construction  - - - - - - - - -  $ 6,060,000

Tooles Construction - - - - - - - - -  $ 6,111,000

Jenkins Construction - - - - - - - -  $ 6,265,744

Update: On February 23, 2011, the Board of Water Commissioners approved a contract with Detroit Contracting, Inc., in an amount not to exceed $5,699,525 and a duration of 790 calendar days. 

$4.6 Billion in DWSD Water, Sewer Revenue Bonds Downgraded

On December 20, 2010, Moody's Investor Service lowered its rating on $4.6 billion of water and sewer bonds issued by the Detroit Water and Sewerage Department.

Moody's lowered to A1 from Aa3 the credit rating on $1.43 billion of outstanding sewer bonds secured by a senior lien pledge of net revenue, and lowered to A2 from A1 on $1 billion of revenue debt secured by a second lien. At the same time, Moody’s lowered to A1 from Aa3 the rating on $1.54 billion of senior lien water bonds and to A2 from A1 on $660 million of second lien water bonds.

All of Detroit's water and sewer revenue bonds are now graded in the "Upper Medium Grade" category, down from "High Grade." Moody's also revised its outlook for Detroit's water and sewer bonds to negative.

Moody's cited the risk from interest-rate swaps and "lean financial flexibility" that could crimp Detroit's ability to service this debt. Moody’s said debt service coverage on the bonds has diminished amid the economic slump that has hit the Detroit area and because of large payments it may face to cancel interest- rate swaps.

Federal Indictments Heighten Calls for Regional Water Authority

Not unexpectedly, the federal corruption charges brought last week against former Mayor Kwame Kilpatrick, Contractor Bobby Ferguson, and former DWSD Director Victor Mercado, have led to renewed calls for the creation of a regional water authority. Many of the allegations in the 38-count indictment involve bid rigging, kick-backs and general corruption in the DWSD contracting process over the past 8 years.

Oakland County's Brooks Patterson (County Executive) and John McCulloch (Water Resources Commissioner) have been outspoken in their calls for a new regional water authority.  

"The entire system has been extremely dysfunctional, and we need to start with a blank sheet of paper as to how the system is governed and how the system is managed on a day-to-day basis," McCulloch said.

Macomb County officials, including Public Works Commissioner Anthony Marrocco also supports a regional authority citing last week's indictments as the final straw. Wayne County Executive Robert Ficano opposes a regional authority. Mayor Bing has not weighed in yet on this issue.

Of the plans being considered, including legislation to be proposed by Kurt Heise, recently elected to the Michigan House of Representatives, most involve the City retaining ownership of the water and sewerage system with management of the system shifting to a regional authority. Advocates of this approach cite the transition of Cobo Hall and the Detroit Zoo to independent authorities with ownership retained by the City of Detroit. As we reported (here) in April, under such an arrangement, the City of Detroit would likely receive a significant annual revenue stream at a time when it desperately needs money. As such, Mayor Bing is unlikely to dismiss out-of-hand  the idea of  creating of a regional water authority. 

Mayor Bing will also have to contend with an issue that is certain to arise -- privatizing daily operation of DWSD's water and sewerage plants. Contracting with a private company for such services will stir up fierce opposition by the unions representing most of DWSD's  employees, operators and professional engineering staff. This debate will play out over the next 12 months. 

Update: Local journalist and political commentator, Jack Lessenberry, has also weighed in on this issue. His December 21, 2010 essay entitled "Time for Sanity," which endorses a regional approach, is published here. 

Judge John Feikens Steps Down, Oversaw DWSD for 33 Years

More than 33 years after he became known as the "Sludge Judge," Judge John Feikens has passed the title. Nearing his 93rd birthday, and reportedly in ill health, Judge John Feikens has turned over control of the case and consent decree involving the Detroit Water and Sewerage Department. 

The 1977 case, originally filed by the EPA, has been randomly assigned to Judge Sean Cox, a man nearly 40 years his junior. A simple Notice of Reassignment was entered by the Court on November 24, 2010, and a 33 year assignment ended quietly. Judge Feikens has served as a U.S. District Court Judge for more than 40 years.   

Commentary:  Judge Feikens' departure adds to a growing leadership void at a utility that provides water and sewerage services to over 4 million residents in Southeast Michigan. While not involved in the daily operations of the Department, Judge Feikens' has played a key stabilizing role over the past 33 years. Director Pamela Turner retired in July. Her position has yet to be filled. Assistant Directors George Ellenwood and Woodrow McCarty have also retired recently. Neither have been replaced. In fact, there are currently three (3) Assistant Director positions vacant on the DWSD Executive Team.  Mayor Bing's COO, Robert Buckler, who was tasked with oversight of DWSD, abruptly retired in early October, 2010. 

At a time when there are renewed calls for a regional water and sewer authority, the Department continues to struggle with compliance issues, and the dark clouds of a 5 year federal investigation continue to loom over the Department, DWSD desperately needs strong leadership. Deputy Director Darryl Latimer, is a very capable administrator, but he cannot be expected to deal with the multitude of issues facing DWSD by himself. Leadership starts with the Mayor. And Mayor Bing must recognize that he has a very serious problem that isn't going to be solved by appointing a new Director or allowing DWSD to limp along. Major change is required.

Oh, and one more thing, within 2 months, DWSD is expected to propose another round of rate increases. Get ready for more public outrage over rates.

Smalley Named Assistant Director for Wastewater Operations

Samuel Smalley, P.E., was recently appointed Assistant Director of Wastewater Operations for the City of Detroit Water and Sewerage Department (DWSD).
 

Mr. Smalley is a registered professional engineer in California and Michigan, and has over 20 years of experience in engineering design, construction management, and utility management in the water and wastewater industry. He obtained a B.S. in Civil Engineering from San Diego State University, and holds both an F-1 Water Treatment Plant Operator license and an S-1 Water Distribution System Operator license. 

Mr. Smalley joined DWSD in June, 2007 and served two years as Assistant Director of Asset Management before his recent promotion to Wastewater Operations.

House Candidate Kurt Heise Proposes Regional Water Authority for Southeast Michigan

The former Director of the Wayne County Department of Environment, and Republican candidate for the open 20th District House seat in Plymouth, Kurt Heise, has outlined a 6-point plan for replacing the Detroit Water and Sewerage Department (DWSD) with a new regional water authority (Southeast Michigan Water Quality Authority). Heise envisions a regional authority operated by a private company.

My plan would keep ownership of the system with the people of Detroit, but would transfer decision making to a regional board elected by community customers of which Detroit would be a member," Heise said. "State law would also be amended to allow the new Authority to refinance existing and future improvements, saving hundreds of millions of dollars that could stabilize water bills and provide new investment for infrastructure repair both in Detroit and the suburbs.

Mr. Heise is not the first to to promoting the idea of a regional authority -- legislation was introduced in 1999 (S.B. 781) and again in 2003 (H.B. 4206) -- nor is he alone. Earlier this year, in April, 2010, the Citizens Research Council of Michigan issued a report (here) which detailed the financial benefits to the City of Detroit of selling DWSD to a regional authority.  Op-Ed pieces in the Detroit Free Press (here) have also pointed in the same direction. The Mackinac Center for Public Policy also advanced the idea almost 10 years ago in several articles (here and here).

 

Update: The chorus of voices calling for a regional approach to water and sewer matters has grown louder following the federal indictments announced on December 15, 2010. Many of the allegations focus on corruption within DWSD.

Former DWSD Director Testifies Before Grand Jury, Denies Being a Target of Federal Investigation

Former DWSD Director, Victor Mercado, was back in Detroit earlier this week reportedly to testify before a federal grand jury that is investigating corruption during the Kilpatrick Administration. Mr. Mercado denies being a target of the federal investigation. 

Mr. Mercado was Director of the Detroit Water and Sewerage Department between June, 2002 and July, 2008.  He currently serves as General Manager for the Bexar Metropolitan Water District in San Antonio, Texas.

Update: Despite his denials, it turns out that Victor Mercado was in fact a target of federal investigators. On December 15, 2010, Mr. Mercado, age 58,  was indicted along with disgraced, former-Mayor Kwame Kilpatrick, his father, Bernard Kilpatrick, and Contractor Bobby Ferguson, on four charges, including racketeering conspiracy, and obstruction of justice. U. S. Attorney Barbara McQuade acknowledged that there was no evidence that Mr. Mercado received any money other than his salary. Mr. Mercado was fired by the BexarMet Water District Board on December 16, 2010. He is appealing the Board's decision.

DWSD Proposes to Overhaul Operations at WWTP to Address Permit Violations

In response to Violation Notices issued by the State of Michigan DNRE on November 12, 2009 and again on April 14, 2010,  the Detroit Water and Sewerage Department has submitted a 28 page Corrective Action Plan (CAP). 

The CAP outlines DWSD's plan to bring its waste water treatment plant (WWTP) back into compliance with the City's NPDES discharge permit. The permit violations, discharging high concentrations of sludge (TSS),  are primarily the result of the City's inability to dewater and dispose of sufficient quantities of biosolids (sludge). 

Earlier reports have identified multiple causes of this problem, including equipment failures, inadequate preventive maintenance, lack of spare parts, and limitations on off-site disposal. The Synagro contract, canceled  in January, 2009 under the cloud of scandal, was designed to alleviate some of these problems.

DWSD Contractor Bobby Ferguson Facing Federal Charges

Bobby Ferguson (Ferguson Enterprises, Inc.), a major contractor on DWSD projects over the past decade, and three associates were named yesterday in an 8 count federal indictment that includes conspiracy to defraud the United States, mail fraud and money laundering. The indictment centers around a project with the Detroit Building Authority, Garden View Estates, and does not focus on any particular DWSD project. 

The Detroit News reports that since 2002, Ferguson Enterprises, Inc. was awarded about $170 million in contracts by the City of Detroit, and that about $109 million of that amount (64%) represented contracts awarded by DWSD.

The federal indictment unsealed yesterday does not come as a surprise.  To anyone.

In January, 2009, the FBI served a search warrant on Ferguson Enterprises, Inc., and Xcel Construction, a company reported to be connected with Ferguson.  Two months later, we reported (here) that the Detroit City Council had rejected a $2.2 million contract award to Ferguson on small DWSD project.

Miriam Dixon Promoted to General Manager of Contracts and Grants of DWSD

Miriam Dixon has been promoted to General Manager of Contracts and Grants for the Detroit Water and Sewerage Department. Although there has been no official announcement of her promotion (none that has made it to the web), Ms. Dixon was added earlier today to the Executive Team section of DWSD's website (here). Ms. Dixon replaces Darryl Latimer, who was promoted to Deputy Director in February, 2010.

Ms. Dixon previously served as Manager of Consultant Contracts, where she was responsible for managing the Consultant Contracts, Design/Build and Local Economic Development Units, along with the Print Shop.  Ms. Dixon has been with the Detroit Water and Sewerage Department in 1989.  She holds a B.S. degree in Public Administration from Oakland University.

DWSD Pricey Land Acquisition is Old News

Recent reports (here and here) that DWSD paid more than $5 million an acre to acquire a 3.27 acre parcel of property along the Detroit River are old news.

With all due respect to suburban officials quoted by the Detroit Free Press, this land deal occurred 2 years ago. There's no doubt that DWSD paid too much for this property,  but both Oakland and Macomb County are represented on the Board of Water Commissioners.

On June 18, 2008, the Detroit Board of Water Commissioners approved the acquisition of the 3.27 acre parcel of land, known as the Atwater West Parcel, for $17,715,708.46, or more than $5.4 million per acre.

At the same meeting, the Board of Water Commissioners also approved the acquisition of a 28.665 acre parcel of property, known as “Revere Copper & Brass,” at 5601, 5815, and 5851 W. Jefferson Ave. for $5,000,000, or about $175,000 per acre.   

The resolutions to acquire these parcels of property, both slated for future CSO control facilities, were originally tabled, but then brought back on for reconsideration. And then they were both approved. All in the same meeting.

Commissioners at the June 18, 2008 Water Board Meeting raised concerns about the high cost of the Atwater property, more than $5.4 million per acre, but the purchase was eventually approved. This Board Meeting was also Director Victor Mercado’s last meeting before he resigned his position with the Department.  

Update: On August 17, 2010, the Detroit Free Press published a story (here) about the 28 acre Revere Copper property acquisition.

DWSD Design and Construction Contracts, List of Q3 (2010) Projects

DWSD has updated its list of Proposed Construction and Consultant Contracts for Q3 2010 here. Three of the projects listed are carry-overs from 2009; DWSD has included 10 construction projects, 7 of which are in the $5 million range.

The construction projects planned include:

• Consolidated Process Control System Upgrades for Treated Water System (PC-773A) (D/B)
• Consolidated Process Control System Upgrades for Treated Water System (PC-773B) (D/B)
• Springwells Water Treatment Plant 1958 Filter Rehabilitation and Auxiliary Facilities Improvement Project (SP-563) 
• Springwells Water Treatment Plant Discharge Header Pipe System Replacement (SP-567) (Repeat)
• Southwest Water Treatment Plant Rehabilitation of the Venturi Meters and Vaults (SW-551)
• Water System Improvements; Various Streets Throughout the City of Detroit (WS-648A) (Repeat)
• Parallel 42-Inch Water Main in 24 Mile Road, from Foss Road to Fairchild Road (WS-674) (Repeat)
• Water System Improvements; Various Streets Throughout the City (WS-680)
• Water Works Park Yard Piping Replacement (WW-536) 
• Specialized Process and Facilities Equipment Purchase Installation at Water Works Park (WW-537)

DWSD Begins Search for New Director

The Detroit Water and Sewerage Department is actively searching for a replacement for Director Pamela Turner, who announced her retirement a few weeks ago. 

A June 24, 2010 posting on the Water Environment Federation's job bank (here) outlines the qualifications sought by the City for Ms. Turner's successor. In the interim, Deputy Director Darryl Latimer is expected to serve as Interim Director.

Update: On March 29, 2011, the Detroit City Council 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.  

Lapeer Votes to Join New Karegnondi Water Authority

Last week, the Lapeer City Commission voted to join the newly-formed Karegnondi Water Authority, which will own and operate a proposed $600 million water pipeline. Other members of the Authority are Genesee, Lapeer and Sanilac counties, as well as the cities of Flint and Lapeer. 

Comment: Lapeer's decision appears to be a reaction DWSD's annual cost increases, but the City of Lapeer has only three taps and about 5,000 users. There are reportedly only about 7,500 users among the seven members of the Greater Lapeer County Utilities Authority. (These 7,500 users are among the 4.3 million users in Southeast Michigan who rely on DWSD water and sewerage services.)  The $17,393 increased monthly assessment by DWSD works out to be $2.32 per month or about $28.00 per year per user. Not insignificant, but is it enough to justify a new $600 million pipeline and water treatment plant? The "savings" touted by Genesee County for the new pipeline  won't be realized for some 25 years.

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Water and Sewer Rates to Rise Again

On June 15, 2010, the Detroit City Council narrowly approved water and sewer rate increases for the suburbs and Detroit by a 5-4 vote. For suburban customers of the Detroit Water and Sewerage Department, the average increase ranges from 8.8 percent to 9.7 percent.  For Detroit residents, the average increase will be 8 percent, or about $3.97 more per month. The rate increases are effective July 1, 2010. 

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.

Genesee County Pipeline Declared "Reckless Folly" by Times-Herald Newspaper

In an opinion piece entitled "Pipeline has the look of a boondoggle," The Times-Herald in Port Huron asserts that "Genesee County's proposal to spend $600 million on a water pipeline from Lake Huron is reckless folly."

The Times-Herald takes issue with Genesee County's rationale for the new pipeline, including capacity, cost, and reliability.

• "Capacity is not an issue. The Detroit water line, which went into use about 35 years ago, was built to carry as much as 1.2 billion gallons of water each day. In actuality, demand has been far less."
• While Genesee County has complained that Detroit has doubled its water rates in the past seven years from $9 million to $18 million, "At that rate, how many years would it take to earn back [the] $600 million [Genesee County proposes to spend on a new water line]?
• "It's disturbing that Genesee County officials would complain of service disruptions . . . without mentioning how these were caused by a massive power outage in the [S]ummer of 2003 that affected much of the Midwest and Northeast."
  

Click here to read the rest of this article.

Colasanti Low Bidder on SW-548 Project

Earlier today, Colasanti Construction Services submitted the lowest bid for the SW-548 project. Colasanti beat out 5 other bidders for the project with a low bid of $49,680,368.

Colasanti------ $ 49,680,368
DeMaria------ $ 51,000,000
Walsh -------- $ 51,234,087
Walbridge ---- $ 51,397,000
Lakeshore ---- $ 52,835,824
Weiss ---------$ 57,890,000

Genesee County Withdrawal Permit Approved

On August 28, 2009, the MDEQ approved Genesee County's request to withdraw upwards of 85 million gallons per day from Lake Huron.

With an approved water withdrawal permit in hand, Genesee County can proceed with its announced plans to construct a new pipeline and water treatment plant under the auspices of the newly-formed "Karegnondi Water Authority." Approval of the withdrawal permit, may also spell doom for DWSD's Flint Loop project, which is designed to extend the DWSD system into Genesee County.

Commentary: On the other hand, having a permit in hand gives Genesee County increased bargaining leverage should it be interested in resuming talks with DWSD over sharing the cost of the Flint Loop. It appears that those discussions were active until about March (as reported here), when Genesee County submitted its water withdrawal permit application.

Right now, it will be 3-5 years of subsurface investigation, design, and construction before Genesee County will see a single gallon of water. Meanwhile, DWSD's Flint Loop project is already to proceed -- the design is complete, and a construction management contract (CS-1492) is already in place. Moreover, DWSD already has water treatment plant (Lake Huron WTP), with a current capacity of 400 million gallons per day, that was designed for expansion, and can accommodate increased water demands in excess of 1 billion gallons per day with additional pumps.

Does Genesee County really think it will save money by spending an estimated $600 million on a separate pipeline, water treatment plant, and related water transmission and distribution infrastructure? Really?

Detroit City Council Approves Sale of Oakland-Macomb Interceptor

Earlier today, the Detroit City Council approved the transfer of the Oakland-Macomb Interceptor (OMI) the Oakland-Macomb County Drainage District. The vote was 5-2 in favor of the transfer, which is part of a larger settlement reached last December between DWSD and its suburban customers.

The OMI requires approximately $125 million in emergency repairs, according to DWSD Interim Director, Pamela Turner, although other estimates have put the price tag as high as $160 million.

City of Lapeer Agrees to Back New Water Authority

On August 17, 2009, the Lapeer City Commission approved a resolution supporting formation of a new water authority. Approval of the resolution does not commit the City of Lapeer financially to any of the proposed $600 million cost of a new system. The resolution simply gives the City Manager authority to participate in discussions with Genesee County about the proposed Karegnondi Water Authority.