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.

Genesee County Launches Website for New Karegnondi Water Authority

In support of his effort to kick-start a new regional water authority, the Genesee County Drain Commissioner recently launched a new website for the nascent Karegnondi Water Authority -- www.Karegnondi.com. Included on the website is the executive summary of a feasibility study prepared by Wade Trim and Rowe Professional Services.

Genesee County Responds to DWSD's Criticism of Plan for New Water Authority, 85 Million Gallon Withdrawal Request

On July 13, 2009, John F. O'Brien, Genesee County's Director, Division of Water and Waste Services, provided a 10 page, point-by-point response and refutation of DWSD's June 29, 2009 letter, which is critical of the County's plans to form a new water authority.

DWSD Opposes Genesee County Water Plans

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

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

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

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

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

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

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

Synagro Woes Continue: City of Houston Terminates Contract

Six months after the City of Detroit terminated Synagro's sludge contract for convenience (T4C), following allegations of corruption, allegations which were followed by convictions here and here, the City of Houston has elected to terminate its $28 million contract with Synagro. The issues in Houston, however, center on how Synagro was handling the sludge it was contracted to recycle. Apparently, Synagro was disposing of the sludge in landfills instead of hauling it off to be recycled.

If you're interested in reading the underlying correspondence from the City of Houston, the documents have been posted on the Houston Chronicle's website here.

Oakland Macomb Interceptor -- Court Orders Repair Schedule for OMI

Earlier today, the U.S. District Court (Judge John Feikens) entered an "Order Establishing Compliance Schedule for Interceptor Repairs," which establishes a schedule for upcoming repairs to the Oakland Macomb Interceptor (OMI). The Court entered this order following a request by Macomb County that a repair schedule be set by the Court. Ownership of the OMI is scheduled to pass from the City of Detroit (DWSD) to Oakland and Macomb Counties shortly.

The Court's June 30, 2009 Order sets an 8 year repair schedule, which is much longer than the 5 year schedule outlined at the June 10, 2009 public hearing on the OMI project. Its unclear why an 3 extra years was tacked onto the schedule when significant portions of the 21 mile long sewer are severely deteriorated and reportedly in danger of collapse.

Monica Conyer's Resigns

Earlier today, "Council Member A," Monica Conyers, submitted her letter of resignation. Enough said.

Synagro Scandal: The Timeline

For those of you who are following the Synagro Scandal, or want more of the back story, the Detroit News updated its blow-by-blow timeline of the scandal (here) to include Monica Conyer's recent conviction.

Update (11/18/2011):  Apparently the Detroit News has moved the above cited story behind a pay wall. Not to fear. The Detroit Free Press published a similar timeline in July, 2010, which is still an active link here.

 

Synagro Scandal, "Council Member A" Pleads Guilty to Conspiracy Charge

Ending months of speculation, Detroit City Council President Pro Tem Monica Conyers pleaded guilty today to a single charge of conspiracy to commit bribery in connection with approval of the $1.2 billion Synagro sludge contract in 2007. Ms. Conyers accepted payments totaling $6,000 in exchange for her vote.

In his statement, U.S. Attorney Terrence Berg closed the door Friday on additional prosecutions of elected Detroit City Council members in a corruption probe in connection with a sludge-hauling contract.

“Today’s guilty plea by Ms. Conyers marks the completion of the government’s investigation of the role that elected members of the Detroit City Council had in approving the Synagro contract, though the investigation regarding the Synagro contract continues as to others,” he said. “This investigation has not uncovered evidence sufficient to support charging any other elected members of the Detroit City Council with taking bribes or engaging in acts of corruption relating to the Synagro contract.”

Click here for the rest of the story from Crain's Detroit Business, and here for the Detroit Free Press story.

Genesee County Proposes $600 Million Water Pipeline, New Water Authority

A month after applying to withdraw up to 85 million gallons a day from Lake Huron, Genesee County today laid out an ambitious plan to construct its own water supply system. The projected cost is $600 million.
 
Genesee County Drain Commissioner Jeff Wright told representatives of communities in Genesee, Lapeer and Sanilac counties at a meeting on June 25th that construction on the pipeline project could start by this time next year. He added that the chance to build the pipeline might never come again.

"If we don't take this opportunity -- in 30 years there won't be another opportunity to build this," Wright said. "Interest rates are favorable right now and there are government programs that could help pay" the cost of the borrowing.

The $600-million construction estimate includes the cost of several pumping stations, an inland reservoir in Lapeer County, twin pipelines along part of the route and water treatment facilities in each of the three counties. Wright said the pipeline construction would create more than 500 jobs for three to five years.

The pipeline would be owned by a new Karegnondi Water Authority, which could include the city of Flint, the city of Lapeer, Sanilac County, Lapeer County, Genesee County and St. Clair County.

Communities that agree to join the authority would pay a proportional share of the cost of building the pipeline, according to Wright. He said his goal is to establish the authority within 120 days, complete engineering, design and surveying work in the next nine months, and start construction of the buried pipeline by the time next year.

[Note: Although Oakland contributed $125,000 to a joint study looking at the feasibility of a new regional water authority in 2007, it does not appear that they are ready to join Genesee County as part of the new Karegnondi Water Authority.]

Detroit City Council Approves Rate Increase, Reluctantly

Just 2 days after it rejected an increase in rates, the Detroit City Council earlier today voted today 4-3 to approve an 8% hike in water and sewer rates. Monica Conyers, who voted against the increase on Tuesday, was absent for today's vote. Reports the Detroit News --

The Detroit City Council today passed a water rate increase, averting a potential move by a U.S. District judge to unilaterally set higher rates for 4 million customers in 126 communities.

Customers are set to see bills go up about 8 percent, an amount Detroit Water Department officials say is needed to bolster declining revenues and counter surging interest rates on money the system has borrowed for capital improvements.

The measure passed in a 4-3 vote this afternoon. Members JoAnn Watson, Kwame Kenyatta and Brenda Jones continued their stance on not supporting the proposal that hurts city residents who are facing substantial financial issues. Monica Conyers, who voted against the measure Tuesday, was absent, as was Martha Reeves.

For the complete story, click here.