Detroit Water Board Fills Financial, Technical Advisory Staff Positions

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.

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.

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

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

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. 

Update (5/31/12): This contract is being rebid as Contract PC-784a on June 19, 2012. If you have Dodge Reports, its Project No. 200400858901. 

Flint Urged to Break Ties with Detroit Water Department

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

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

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

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

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

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

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)

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

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

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 Board of Water Commissioners Seeks Technical and Financial Advisors

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)

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.

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

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:

• City of Detroit's (DWSD) Motion to Dismiss and for Relief from Second Amended Consent Judgment - 07-25-2011 
• Exhibit A - Administrative Consent Order with MDEQ - 07-22-2011  

For more about DWSD Update, click here.

Clintondale Pump Station, Walsh Construction Submits Low Bid on Project

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

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

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

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

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

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

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

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

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

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

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)

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

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

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