Mediator's Tenure Extended, May Signal Extension of June 14th Deadline to Reach Deal with GLWA (UPDATED)

Update (6/8): At 8:37 a.m. this morning, the order entered on Friday extending Judge Cox's role as mediator was vacated by the Clerk of the Court. The order indicates that Friday's order was entered in error.   

Last Friday, June 5, 2015, the judge overseeing the remainder of Detroit's Chapter 9 bankruptcy entered  an order extending until January 1, 2016,  Judge Sean Cox's appointment as mediator of matters involving DWSD and the Great Lakes Water Authority.

Without an extension, Judge Cox's appointment would have expired on June 14, 2015, which is the deadline for DWSD and the Great Lakes Water Authority to finalize and execute the terms of a long-term lease. 

Under the contemplated lease agreements, the GLWA would operate and maintain DWSD's water and wastewater treatment facilities for 40 years in consideration of annual lease payments to the City of $50 million.

Under the terms of the Amended Plan of Adjustment submitted in the City's Chapter 9 bankruptcy, which created the Great Lakes Water Authority effective November 26, 2014, the new authority and the City of Detroit have 200 days to completion negotiations and execute the contemplated lease agreements. That deadline is June 14, 2015.

To date, these negotiations have occurred behind closed doors with Judge Cox serving as mediator, but subject to a court order prohibiting the participants from discussing any of the matters.  Macomb County Executive Mark Hackel has been very outspoken in his criticism of these confidential (secret) negotiations. Reports indicate that Macomb County has been shut out of the process. 

Comment: I have no inside information (which I couldn't share with you anyhow), but entry of last Friday's order, extending Judge Cox's tenure as mediator to the end of 2015, strongly suggests to me that the June 14, 2015 deadline to complete a deal on a long-term lease agreement is going to be extended. I don't know how you can finalize a deal if Macomb County is not part of the process. That makes no sense to me. If I were to guess, I would say the parties will ask (or have already asked) for a new deadline that goes to mid-October or early November. What do you think? 

For more about DWSD Update, click here. 

New Program to Keep the Water Running, Receives $1 Million Donation

With about 21,000 residents due to receive shut-off notices, the Detroit Water and Sewerage Department (DWSD) announced over the weekend that The Heat and Warmth Fund (THAW) had received a $1 million donation  aimed at helping City residents pay their water bills. 

The money was donated by Miller Buckfire, a New York investment firm that help shepherd Detroit through its historic bankruptcy in 2013-14 and earned $22 million in fees.

According to CEO, Saunteel Jenkins, the donation will be used for THAW's Water Assistance Program, which will launch on June 1, 2015. The program will pay up to $2,500 per household for families that are subject to shut-off and have incomes at 200% of the federal poverty level.  The new program will help about 1,000 families. 

News reports here indicate that Miller Buckfire's donation was part of a settlement it reached in December, 2014 with the City of Detroit, which had disputed its fees as part of the City's Chapter 9 bankruptcy proceeding. During mediation ordered by Judge Rhodes, Miller Buckfire reduced its fees from $28 to $22 million. 

Comment: I don't mean to diminish this significant contribution, but helping 1,000 families accounts for less than 5% of the households facing shut-off. There is nearly $49 million owed on delinquent accounts. There simply has to be a better long-term solution to the City's residential water needs.

For more about DWSD Update, click here. 

L. D'Agostini & Sons is Low Bidder on DWSD Water Main Project, WS-684 (UPDATED)

On May 5, 2015, L. D'Agostini & Sons, Inc. submitted the low bid for the project known as "36-Inch Water Main in Telegraph Road, Cherry Hill Avenue to Warren Avenue," DWSD Contract WS-684. LDS' bid was about 8.7% lower than the second bidder.

 The as-read bids are as follows:

1. L. D'Agostini & Sons . . . . . . $9,173,049
2. Tooles Contracting  . . . . . . $10,046,819
3. Lawrence M. Clarke, Inc. . .$10,234,748
4. Ric-Man Construction.  . . .$10,620,821

The Scope of Work for Contract WS-684 includes furnishing and installing 10,526 lineal feet of 36" water main, approximately 2 miles, together about 300 feet of 24" and 164 feet of 12" water main. 

Update (11/17): This project is being rebid on November 30, 2015 as Contract WS-684A. 

For more about DWSD Update, click here.

Imperial Construction Submits Low Bid on Water System Improvements Project, WS-686

On February 26, 2015, Imperial Construction submitted the low bid for the project known as "Water System Improvements, Various Streets" DWSD Contract WS-686. The as-read bids are as follows:  

1.  Imperial Construction . . . . . . .$7,547,121
2.  Major Cement Company . . . . . $7,894,134
3.  Lakeshore Global Corp. . . . . . $10,463,330 

The scope of this project includes replacement of approximately 30,626 lineal feet of ductile iron water main and related fittings.

Imperial Construction was low bidder in 2012 on a similar project, WS-682A.

For more about DWSD Update, click here. 

 

Lakeshore Global Low Bidder on PRV Vault Improvements Project, DWS-891

On December 23, 2014, Lakeshore Global  Corporation submitted the low bid for the project known as "Pressure Regulating Valve Vault Improvements," DWSD Contract DWS-891.  Lakeshore's bid was about 14% lower than the second bidder.

 The as-read bids are as follows:

1. Lakeshore Global . . . . . . . . . $1,849,500
2. Trojan Development . . . . . . $2,125,000
3. Tooles Contracting . . . . . . . $2,178,440
4. Lawrence M. Clarke, Inc. . . $2,190,000
5. Detroit Contracting, Inc. . . .$2,460,338
6. Weiss Construction . . . . . . . $2,596,000

The Scope of Work for Contract DWS-891 includes demolition and reconstruction of pressure regulating valve vaults in five different locations: at Sixth and Porter, Park and Elizabeth and Chane at Maple in the City of Detroit; Marquette and Inkster in Garden City; and South Boulevard at North Service Center in the City of Troy. 

The Scope of Work also includes removal and replacement of PRV and gate valves at all five locations, plus installation of ship ladders and sump pumps. 

For more about DWSD Update, click here.

Great Lakes Water Authority Seminar planned by Oakland County Bar Association

The Oakland County Bar Association is planning a lunch seminar on January 13, 2015 from 12:00 to 1:00 p.m. to discuss the Great Lakes Water Authority.

Hosted by the Energy, Sustainability and Environmental Law Committee, this event will feature speakers L. Brooks Patterson, Oakland County Executive, and J. Bryan Williams, who is the Oakland County representative on the current Board of Water Commissioners. 

For more details concerning this event, check out the OCBA's Facebook page here. The Oakland County Bar Association is located at 1760 S. Telegraph Rd., Ste 100, Bloomfield Hills, MI 48302-0181. 

For more about DWSD Update, click here.   

Wayne County Appoints Nardone to Great Lakes Water Authority

The Detroit News reported last Friday [12/19] that the Wayne County Commission voted unanimously to appoint Joseph Nardone as the County's representative to the Great Lakes Water Authority. Mr. Nardone currently serves as Director of Development for the Wayne County Airport Authority. 

Mr. Nardone's LinkedIn profile (here) doesn't reveal very much information about his education or background prior to his appointment to the Airport Authority in November, 2012. The Detroit News reports here that Mr. Nardone previously worked for the Wayne County Parks Division and is a 1985 graduate of Michigan State University. 

For more about DWSD Update, click here.

Great Lakes Water Authority Schedules First Public Meeting (UPDATED)

The Detroit Free Press reports this morning (here) that the Great Lakes Water Authority is scheduled to hold its first public meeting on Friday, December 12, 2014.  The meeting will  be held in the Water Board Building, 5th Floor Board Room and begin at 1:30 p.m.

Notice for the meeting, published on the DWSD website, describes the meeting as an organizational meeting. To date, only two members of the GLWA Board have been appointed -- Robert Daddow for Oakland County and Brian Baker for Macomb County --  which is not enough for a quorum.  

The GLWA Board consists of 6 members, one appointed by Oakland, Macomb and Wayne Counties; two appointed by the City of Detroit; and one by the State of Michigan. The remaining four board members have not been announced publicly. 

Comment: Presumably, the new authority would not be meeting unless the remaining board members had been selected privately. I anticipate a public announcement of the remaining four board members within the next 24 hours. There's no reason to delay things further. Time to get down to business.   

Update (12/12/14 - 8:45 a.m.): Mayor Duggan has reportedly appointed Gary Brown and Ike McKinnon to the Board, both of whom are members of the Mayor's Administration. Governor Snyder has reportedly appointed Edward Hood, a retired attorney from Ann Arbor. Mr. Hood previously practiced with Dykema Gossett. No word yet on who has been selected to represent Wayne County. 

For more about DWSD Update, click here.    

Peter Cavanaugh Appointed to Pure Oakland Water Board of Directors

On November 7, 2014, Attorney Peter Cavanaugh was appointed to the Board of Directors of Pure Oakland Water for a three-year term.

Pure Oakland Water is a Michigan not-for-profit organization dedicated to protecting Oakland County and regional water resources through public education, community organizing, environmental advocacy, and promotion of a sustainable future. 

Oakland County Water Resources Commissioner, Jim Nash, is Chairman of Pure Oakland Water. 

Peter Cavanaugh is a Construction Attorney and Partner with the law firm of Cavanaugh & Quesada, PLC.

Detroit Bankruptcy Plan Approved

Well, that didn't take too long, did it? 

On Friday, November 7, 2014, just 16 months after filing the largest municipal bankruptcy in U.S. history, Judge Stephen Rhodes approved the City of Detroit's Plan of Adjustment. Crain's has the details here. 

For more about DWSD Update, click here.

DES Electric Submits Low Bid on Joy Road Pump Station Project, DWS-896

On October 23, 2014,  DES Electric, LLC submitted the low bid for the project known as "Joy Road Pumping Station - Replacement of Outdoor Plant Switchgear," DWSD Contract DWS-896. 

The as-read bids are as follows:  

1. DES Electric . . . . . . . . $668,300.00
2. Rotor Electric . . . . . . . $715,900.00
3. J. Ranck Electric . . . . $749,465.00
4. McGraw Electric . . . . $777,225.00
5. Shaw Electric. . . . . . .  $939,600.00
6. Lake Erie Electric . . .  $1,297,972.00

For more about DWSD Update, click here.

Wayne, Oakland, and Macomb Counties Approve New Regional Water Authority (UDPATED)

On  October 9, 2014, Macomb County joined Wayne and Oakland Counties in approving plans to join the new Great Lakes Water Authority, which will lease DWSD's water and sewerage assets for 40 years.

Update (10/16): Oakland County has appointed Robert Daddow, deputy county executive, to serve on the Board for the new Great Lakes Water Authority.  Daddow is quoted by the Detroit News: 

"I'll have two measuring sticks while serving on the board," Daddow said. "One will determine whether a matter before the board helps or harms ratepayers. The other will ascertain whether it makes monetary sense."

Update: (10/21): Macomb County has appointed Brian Baker, finance and budget director for the City of Sterling Heights, to serve as its representative on the new Authority. 

For more about DWSD Update, click here.    

Detroit Water Board Adopts Resolution Endorsing MOU, Great Lakes Water Authority (UPDATED)

On September 17, 2014, during a Special Meeting, the Board of Water Commissioners adopted a resolution endorsing the Memorandum of Understanding (MOU) and the formation of the Great Lakes Water Authority.  

The Detroit City Council is expected to vote on September 19th on a similar resolution. However, if the City Council fails to endorse the new authority, the Emergency Manager Kevyn Orr has the power to do so. 

Oakland and Macomb County Commissions are also in the process of reviewing and voting on adoption of the MOU and the Great Lakes Water Authority. 

Oakland County has a website here with much more information about the Great Lakes Water Authority, including draft Articles of Incorporation here.  Macomb County has posted information about the new authority here. 

Earlier this week, Crain's Detroit Business published two terrific articles here and here explaining the details of the new authority and how it will impact Detroit and the suburbs. 

Update (9/19): Detroit City Council voted 7-2 to approve the plan for a regional water authority. 

For more about DWSD Update, click here. 

Detroit, Suburbs Strike Deal to Create Regional Water Authority (UPDATED)

Earlier this morning at a joint press conference, county executives from Wayne, Oakland and Macomb County, and Detroit Mayor Mike Duggan announced their agreement to the creation of a regional authority, the Great Lakes Water Authority.  

This agreement was just announced. More details will details will follow. 

   MOU Regarding Formation of Great Lakes Water Authority

For more about DWSD Update, click here.

Board of Water Commissioners, Bankruptcy Court Approve Bond Exchange

On August 22, 2014, the Board of Water Commissioners approved a deal under which 28% of existing water and sewer bond holders agreed to tender back their bonds. The Water Board's decision came just a day after the deadline for bond holders to accept DWSD's tender offer, which expired August 21st at 5:00 p.m. (EDT).  

Earlier today [8/25], the Bankruptcy Court overseeing the City of Detroit's bankruptcy proceedings approved DWSD's decision to buy back and redeem $1.67 billion worth of water and sewer bonds.

According to DWSD's Chief Financial Officer, Nicolette Bateson, refinancing these bonds will save $11.4 million a year fro the first 19 years. Refinancing will also allow DWSD to raise $150 million for capital improvements to the sewerage system. 

The Detroit News explained on Friday [8/22] that acceptance of the tender offer would also remove bondholders from the bankruptcy process, "taking the wind out of ongoing litigation over the water and sewer bonds" and increase the likelihood that the City's plan of adjustment will be approved by Judge Rhodes. 

For more about DWSD Update, click here.

Tracking DWSD's Bond Tender (UPDATED)

If you're interested in tracking DWSD's bond tender offer, there's a website that's providing real time coverage of the bonds and amounts that have been tendered back so far -- 

https://www.bondcompro.com/dashTNA0/1/dashTickerTNA.asp

As of 1:00 p.m. EDT, 27.21% of the outstanding bond debt has been tendered back. The tender offer expires on Thursday, August 21, 2014 at 5:00 p.m. EDT. 

For more about the DWSD tender offer, Crain's Detroit Business had a terrific article this morning, click here.Fitch Ratings also has a good discussion here. 

Update (8/21): As of 5:00 p.m. EDT today, 28.35% of bonds had been tendered back.

Update (8/22): Its unclear whether the 28% of bonds that were tendered back by yesterday's deadline is enough.  The Board of Water Commissioners is scheduled to meet today in a Special Meeting at 1:00 p.m. EDT to discuss the matter and vote on a resolution either accepting or rejecting the tender. Click here to see the Agenda for today's special meeting.     

For more about DWSD Update, click here. 

Deal for Creating Regional Water Authority May Be Near, Detroit News Reports

Nolan Finley, columnist with the Detroit News, reports this morning that the City of Detroit and its suburban customers are close to a deal that would see the formation of a regional water authority. The City would reportedly be paid $50 million per year over 40 years as part of the deal being negotiated with Judge Sean Cox. 

Specific details are not available due to a gag order issued for the talks, however, Mr. Finley reports the following outline: 

A six-member board would be formed, with two appointments coming from the city of Detroit, one each from Wayne, Oakland and Macomb counties, as well as one from the state. Currently, the authority that runs the city-owned water system has four members appointed by Detroit and three by the suburbs.

All major decisions by the new authority, including contract awards, rate increases and construction projects, would require five votes.

That’s similar to the protocol at the Cobo Center authority, which requires a unanimous vote on major issues, a stipulation demanded by Oakland County Executive L. Brooks Patterson. In exchange for acquisition of the water system and its assets, the authority would pay the city $50 million a year for 40 years. That premium was the major sticking point of the talks.

Stay tuned for more details. 

For more about DWSD Update, click here. 

Oakland Macomb Interceptor Drain, RFP Issued for Segment 4 Repair Program, OMID Contract 5

Last week, the Oakland Macomb Interceptor Drain Drainage District issued a request for bids for the Segment 4 Repair, Contract No. 5.

A mandatory Pre-Bid Meeting will be held on August 13, 2014 at the Macomb Intermediate School District (MISD) Educational Service Center located at 44001 Garfield, Clinton Township, Michigan, 48038. Registration begins at 9:30 a.m. The Pre-Bid Meeting will begin at 10:00 a.m.

Bids will be opened on September 11, 2014 at 11:00 a.m. Office of the Oakland County Water Resources Commissioner, Building 95 West, One Public Works Drive, Waterford, Michigan 48328-1907. Only bids received from registered contractors in attendance at the Pre-Bid meeting will be opened. All other bids will be rejected as non-responsive.

Scope of Work
Contract 5 repair work is located along the Oakland Arm Interceptor in PCI-9 and PCI-10A/B extending mostly along Utica Road in the cities of Sterling Heights and Utica and the Township of Shelby. PCI-10A/B reaches of sewer extend through the southern and northern parts (respectively) of a nature preserve, now comprised of Riverbends Park and Holland Ponds Park. In order to facilitate financing, Contract 5 work will be split into two separate Contracts, hereafter referred to as Contract 5 Phase 5A and Phase 5B, both to be awarded based on a single combined bid from a Contractor who is the lowest responsible and responsive bidder for both combined phases.

Phase 5B will be awarded and executed only if and when Federal Financing is obtained.

Work items for both phases of Contract No. 5 include the following:

Phase 5A
- Construction of permanent gravel roadways.
- Construction of temporary crossings.

Phase 5B
- Construction of 2 access shafts.
- Repair hole in the PCI-9 interceptor.
- Repair visible reinforcement and where reinforcement outline is visible.
- Inject cementitious grout (from in tunnel) in areas with suspected voids surrounding the interceptor; seal running and gushing leaks with chemical grout.
- Access manholes modification/restoration.
- Repair localized crack/fracture using chemical grout.
- Interceptor lining of selected locations.
- Interceptor lining at meter tap locations.
- Perform CCTV inspection after completion of repairs.
- Sewage flow management.           

The project will be funded under the Stormwater, Asset Managment, and Wastewater  Program. Click here for more information about the SAW program.

For more information about this project, contact Abdulnasser Almadhoun, P.E. at NTH Consultants - 313-237-3942 or by e-mail: aalmadhoun@nthconsultants.com

For more about DWSD Update, click here.  

Ric-Man Submits Low Bid on Middlebelt Tunnel Project for Oakland County WRC

Earlier today, Ric-Man submitted a low bid of $28,179,498 for the project known as "Middlebelt Transport and Storage Tunnel." Ric-Man's bid was one of 9 bids received by the Oakland County Water Resources Commissioner, who is the Owner for this project. 

1. Ric-Man Construction . . . . . $28,179,498
2. Jay Dee Contractors . . . . . . . $31,679,620
3. Triad Midwest Mole JV . . . . $33,020,000
4. SAK Construction . . . . . . . . .$35,383,320
5. Super Excavators . . . . . . . . . $35,943,000
6. S. J. Lewis . . . . . . . . . . . . . . . $37,668,000
7. Guy F. Atkinson . . . . . . . . . .$42,473,660
8. Kenny Construction . . . . . . .$44,931,200
9. McNally . . . . . . . . . . . . . . . .  $62,562,000

The Project involves the construction of approximately 7,600 linear feet of 108 inch diameter storage and transport tunnel with primary and secondary liner, two diversion chambers, six tunnel structures and other related Work. The tunnel runs along Middlebelt Road between 11 1/2 Mile and 13 Mile in Farmington Hills, Michigan. The Engineer's Estimate for the Project was $32.2 million.

For more about DWSD Update, click here.

DWSD Water and Sewer Bond Rating Nears Bottom (UPDATE)

Detroit's water and sewer bond rating isn't at the bottom of Fitch's credit rating scale, but its getting very close. 

As reported earlier this week by Bond Buyer and today by the Detroit Free Press, the Fitch Ratings is warning that DWSD's $5.7 billion water and sewer debt could fall to "D" rating if the bankruptcy court approves the Emergency Manager's current plan of adjustment. 

Under the Fitch bond rating scale, there is nothing below a "D" rating. That's as low as it is. 

Comment: In my view, the negotiations concerning a regional water authority should be coming to a head very soon. With Governor Snyder poised to participate in the process, if his staff isn't already involved in the secret settlement talks, and the pressure from Wall Street beginning to build, I anticipate a tentative deal to be announced very soon. I think there is still much work to be done before any deal regarding the new authority can be finalized, but I think the outline of a deal is taking shape. 

Update (6/16): Earlier today, Fitch Ratings withdrew its "D" bond rating of Detroit's water and sewer debt. If I'm reading Fitch's ratings definitions correctly, Fitch is no longer providing a rating for DWSD's bonds. I think this is the equivalent of a stock being delisted by one of the stock exchanges. In other words, not good.     

For more about DWSD Update, click here.