BOARD MEETING MINUTES

YPSILANTI COMMUNitY UTILITIES AUTHORITY

may 28, 2002

Members Present: Brenda L. Stumbo, Larry J. Doe, Edward B. Koryzno, Jr., and Karen Lovejoy Roe

Members Absent: Peter J. Murdock

1. CALL TO ORDER: Stumbo called the meeting to order at 3:07 p.m.

2. MINUTES OF THE PREVIOUS MEETING: Motion by Doe to receive and file the minutes of the April 23, 2002 meeting. Support by Koryzno. In favor: All. Opposed: None. (Motion carried)

3. NEW BUSINESS

A. Upgrade of Pumps #1 and #3 – Merritt Road Pump Station - Larry R. Thomas

Mr. Thomas presented to the Board the Authority’s capital improvement plan for this year, which includes upgrading two pumps at our Merritt Road Booster Pump Station. He advised that YCUA staff has been planning the upgrade, in order to continue to supply the southern and western portions of our service area, and has gotten quotes from the Authority’s supplier, Kerr Pump and Supply, Inc. Mr. Thomas also stated that Kerr is the sole representative of Aurora Pump in southeastern Michigan and, therefore, the Merritt Road pump upgrade is non-competitive bidding process

Mr. Thomas further informed the Board that the cost of the materials and services for the two pumps is $56,112 and that YCUA’s Maintenance department will do the installation. He indicated that YCUA staff recommends the use of Township Division Reserve for Construction Funds for this expenditure, which will require the approval of the Township Board as well as this Board.

Mr. Thomas recommended approval of the purchase of pump materials and services from Kerr Pump and Supply, Inc. in the amount of $56,112.

Motion by Doe to approve Request to Upgrade Pumps #1 and #3 at the Merritt Road pump station and the purchase of pump materials and services from Kerr Pump and Supply, Inc. in the amount of $56,112. Support by Koryzno. In favor: All. Opposed: None. (Motion carried)

B. Change Order No. 2 – Willow Run Interceptor - Larry R. Thomas

Mr. Thomas advised the Board that the Willow Run Interceptor Project is close to completion. He stated that the interceptor is, at this time, in operation and restoration is in progress.

Mr. Thomas then presented to the Board Change Order No.2, which was enclosed in their packets. He explained that the change order represents a net increase of $3,015.38. He indicated that this, along with a fee reduction negotiated with Tetra Tech for their services of $27,000, has this project within YCUA’s original budget projections. He advised that the additional work reflected by the change order was needed due to various changes in site conditions and various savings were realized for the same reasons.

Mr. Thomas stated that sufficient funds are available from the bond sale. He advised that there will be one additional balancing Change Order presented to the Board prior to the closing out of this project.

Mr. Thomas recommended approval of Change Order No. 2.

Motion by Doe to approve Change Order No. 2 relative to the Willow Run Interceptor Replacement Project. Support by Koryzno. In favor: All. Opposed: None. (Motion carried)

C. Request to Purchase – Folding/Inserting Equipment - Cathy Moorman

Ms. Moorman advised the Board that YCUA staff is recommending the replacement of the Authority’s present folder/inserter mailroom equipment. She stated that technology has advanced, producing more dependable equipment and will allow YCUA to use postal bar codes in its address labels, which will reduce annual postage costs.

Ms. Moorman indicated that, because staff was unfamiliar with all of the equipment and options available, bidding specifications could not be written. She indicated that providers of this type of equipment were contacted and invited to meet with Authority staff. Ms. Moorman stated that YCUA staff then explained the Authority’s needs and requested proposals from the two providers that would best meet YCUA’s needs. She advised that the Authority’s staff then analyzed the proposals and the equipment using various criteria.

Ms. Moorman then presented to the Board materials outlining the costs associated with the proposals. She directed their attention to the Neopost SI 76 with print machine software at a total cost of $42,581. Ms. Moorman explained that, although this is not the lowest cost proposal, YCUA staff feels it will serve the Authority’s needs more reliably than the other proposed equipment. She further indicated that this item is budgeted as a capital acquisition in the current budget.

Ms. Moorman also advised the Board that her biggest concern is the cost of postage, which is going up again in June 2002. She indicated that the Neopost system would enable the Authority to get lower postage rates.

Ms. Moorman recommended the purchase of the Neopost SI 76 with print machine software at a total cost of $42,581.

Brenda L. Stumbo inquired as to whether Ms. Moorman had researched leasing the equipment as an option. Ms. Moorman responded that Neopost provided leasing prices but Pitney Bowes did not. She indicated, however that, in the past, the Authority had never leased equipment but rather always purchases out right due to the fact that, over the time of the lease, it would be much more costly to rent.

Larry J. Doe requested clarification on the charges for maintenance and training on the Neopost model. Ms. Moorman explained that the hardware maintenance contract is $2,700 annually, software maintenance, service, and updates is $3,000 annually, and training is included in the $18,000 purchase price of the software.

Karen Lovejoy Roe then inquired as to whether Ms. Moorman’s department had ever looked into out–sourcing for printing of the YCUA bills and folding and mailing. Ms. Moorman responded that she was of the opinion that out-sourcing would create conflict with the union.

Mr. Doe inquired as to the origin of Ms. Moorman’s estimated $8,000 annual savings in postage as indicated in her proposal. She stated that the figure was the difference between the current first class rate used by the Authority versus pre-sorted, bar-coded mail.

Ms. Stumbo inquired as to the length of the warranty and Ms. Moorman stated she did not have that information. Thomas E. Daniels indicated that there should be some type of contracted warranty period.

Edward B. Koryzno, Jr., inquired as to whether the new software availability is what prompted Ms. Moorman’s request to purchase or if it was because the current machine “falling apart.” Ms. Moorman responded that the current machine was not “falling apart” by any means, but that it is increasingly troublesome as there are many adjustments that are required due to the nature of the design. She also indicated that the required equipment was also much more user friendly than the current machine.

Mr. Koryzno interjected that, taking into consideration Ms. Moorman’s estimated yearly savings of $8,000 for postage, the unit should pay for itself in five years. Ms. Moorman and Mr. Doe concurred that that was correct.

Mr. Doe inquired as to the print time presently. Ms. Moorman responded that it is about two days. He then inquired what it will be with the new equipment. Ms. Moorman responded that the new equipment would cut the printing process by at least one-third, possibly one-half.

Ms. Roe inquired as to how many people were working on the bill printing and mailing process. Ms. Moorman responded that there are four.

Mr. Doe inquired as to how many bills go out a month. Ms. Moorman responded that 10,000 bills a month are mailed in addition to 1,000 to 1,200 collection letters. She reminded the Board that the equipment is also used to stuff paycheck envelopes each week and the bi-annual tax rollover letters.

Mr. Doe and Ms. Stumbo went on to explain a mailing service being used by the Township Treasurer’s office. Ms. Stumbo said that no employees were laid off in the out-sourcing and process and indicated that, rather, they were happy to get rid of that part of their jobs.

Ms. Stumbo inquired as to whether the requested purchase was budgeted for and Ms. Moorman responded that it is.

Mr. Doe inquired as to how much paper and envelopes cost and Ms. Moorman indicated that she did not have that information. Mr. Doe indicated that those costs needed to be examined in order to define the actual savings of the new machine.

Mr. Koryzno requested clarification that the new equipment would not print the bills, only fold and stuff them. Ms. Moorman stated that that as correct.

Mr. Doe stated that he was of the opinion that it was a good idea to find out how much would be saved by out-sourcing. He also stated that it was important to add in the costs for paper and envelopes to the equation in determining how quickly the equipment could be paid off.

Ms. Roe concurred and then offered the possibility that, due to technology changes, the equipment could be out-dated in three years and customer service will want to but a new one. She stated that, with that said, leasing should be considered as an option.

Motion by Doe to table the purchase with direction to the Authority’s customer service department to compile more information and then again recommend a purchase to the Board at the next meeting. Support by Roe. In favor: All. Opposed: None. (Motion carried)

D. Resolution No. 02-4 to Discontinue Funding – Environmental Reserve (Township Division) - Larry R. Thomas

Mr. Thomas advised the Board that, several years ago, the Authority entered into a clean-up agreement regarding Willow Creek with several other parties. He stated that YCUA’s total liability was calculated at $1,150,000. Mr. Thomas indicated that the bulk of the liability is to be paid beginning this year and that the Authority is funding $125,000 per year into the Township Division Environmental Reserve to have available funds when the payments were due.

Mr. Thomas advised that there are now sufficient funds in the Reserve to pay the Authority’s liability. He stated that, therefore, makes sense to now discontinue the funding of the Environmental Reserve with $125,000 per year additional to the one cent per unit of sewage billed in the Township.

Mr. Thomas then presented to the Board a resolution authorizes the discontinuance of the additional funding.

Mr. Thomas recommended approval of Resolution No. 02-4.

Karen Lovejoy Roe inquired as to whether the resolution could be amended to allow for the $125,000 to go into the Reserve for Construction Fund. Mr. Thomas indicated that it could.

Edward B. Koryzno, Jr. inquired as to what fund the demolition of the Township water treatment plant would come out. Mr. Thomas responded that it would come out of the Reserve for Construction Fund.

Motion by Roe to approve Resolution No. 02-4 to Discontinue Funding – Environmental Reserve (Township Division) with revisions reflecting the Board’s decision to amend the resolution to allocate the annual Township Environmental Reserve monies to the Reserve for Construction Account. Support by Doe. In favor: All. Opposed: None. (Motion carried)

E. Fiscal Year 2001 – 2002 Budget Revisions - Barb Kreger

Ms. Kreger presented to the Board a detailed budget analysis and a recommendation to amend the current budget based on activity in the first and second quarter and some changes in presentation due to GASB-34.

Ms. Kreger explained that several changes to the budget are necessary to account for changes in presentation and differences in revenues and expenditures than were anticipated when the budget figures were originally estimated. She stated that overall, there is a decrease in water revenue of $359,329 and sewage revenue of $540,825. She also advised that there is an increase in expenditures of $589,607.

Ms. Kreger recommended approval of the suggested budget amendments.

Motion by Doe to approve the Fiscal Year 2001 – 2002 Budget Revisions. Support by Koryzno. In favor: All. Opposed: None. (Motion carried)

F. Annual YCUA Committee Appointments – Larry R. Thomas

Mr. Thomas advised the Board that YCUA Committee appointments are done once per year. He stated that the Authority has not made the appointments as of yet this year. Mr. Thomas indicated that Committee appointments are made annually.

Mr. Thomas advised that, pursuant to usual procedure, the following individuals, who have served the longest on their respective committees, are to be replaced this year:

Operations Committee – Henry Gerst

Finance Committee – Wayne Dudley

Planning Committee – Mike Jessee

Public Relations/Grant Acceptance Committee – Tim Stachlewitz

In addition, Mr. Thomas stated that Preston Harris has resigned from the Operations Committee and has requested an immediate replacement.

Mr. Thomas indicated that, also pursuant to usual procedure, replacement members were chosen from YCUA staff members who have voluntarily expressed interest in serving on specific committees. He stated that those replacement committee members, who were chosen at random as follows:

Operations Committee – Kurian Joychan and Jeremy Rippey

Finance Committee – Gust Bovoletis

Planning Committee – Carla Sanderson

Public Relations/Grant Acceptance Committee – Robert Fry

Mr. Thomas indicated that these individuals will serve on the committees indicated until further notice.

Mr. Thomas recommended the approval of committee chairs and the filling of vacancies on the committees with employees.

Motion by Roe to approve the Annual YCUA Committee Appointments. Support by Koryzno. In favor: All. Opposed: None. (Motion carried)

G. Request to Revise – YCUA Policy Manual Hiring Policy - Gwyn Belcher

Ms. Belcher presented to the Board a new hiring policy that was prepared with assistance by the YCUA Personnel Committee. She stated that the new hiring policy would better meet the Authority’s needs as the old policy was cumbersome in its requirements.

Ms. Belcher recommended approval of the revisions to the YCUA Policy Manual Hiring Policy.

Edward B. Koryzno, Jr., indicated that the changes went before the Personnel Committee and that the committee recommends approval as well.

Motion by Koryzno to approve the Request to Revise – YCUA Policy Manual Hiring Policy. Support by Roe. In favor: All. Opposed: None. (Motion carried)

H. YCUA Employee Residency Statistics - Gwyn Belcher

Ms. Belcher advised that Board that, at last month’s Board meeting, one commissioner requested information on the residency of YCUA employees. She presented to the Board analysis depicting, by raw number and percentage, where YCUA employees reside.

Informational only; no motion from the Board required.

I. Community Development Projects - Samuel Hu

Larry R. Thomas presented to the Board the Monthly Community Development Plan Review for May 2002, in the absence of Sam Hu, who was on vacation. The report is summarized as follows:

1. Project Name: Unimerco

Proj. Location: State Street between Michigan Ave.

and Textile,

Pittsfield Twp.

Project Stage: Detailed Engineering and

Permit Application

(Water and Sewer Permits)

Received by YCUA: April 12, 2002.

(Model Water and Sewer)

Developer: Unimerco (Owner), Michigan

Engineer: Harley Ellis, Southfield, MI

Background: The Owner proposes to construct

a manufacturing office building in

a planned business district.

Area of Development: 10.53 acres

Building Area 45,710 sq. ft.

Parking Spaces 157 parking spaces including 5 barrier

free spaces

Estimated water use: 7,850 gpd (50 gpd/pkg. x 157 pkgs.)

Estimated sanitary sewer use: 5,495 gpd (35 gpd/pkg. x 157 pkgs.)

Equivalent to: 17 detached dwelling units.

2. Project Name: Lincoln Farms Subdivision (Phase 1)

Proj. Location: Southeast corner of Bemis and Whittaker,

Augusta Township

Project Stage: Detail Engineering and Permit Application

(Water and Sewer Permits)

Received by YCUA: April 9, 2002.

(Model Water and Sewer)

Developer: Whittaker Development, LLC,

Troy, Michigan

Engineer: Midwestern Consulting, Inc., Ann Arbor, MI

Background: The developer proposes to develop

Phase 4 of the single-family

residential development.

Phase 1 All 5 Phases

Area of Development: 113.60 acres 231.90 acres

Number of Lot: 204 lots 418 lots

Estimated water use: 91,800 gpd (450 gpd/lot x 204 lots)

Estimated sanitary sewer use: 61,200 gpd (300 gpd/lot x 204 lots)

class=Section2>

3. Project Name: Sumpter Township Phase IIA

Sanitary Sewer Extension

Proj. Location: Vicinity of Rawsonville and Willis Roads,

Augusta Township

Project Stage: Detail Engineering and Permit Application

(Sewer Permit Only)

Received by YCUA: April 2, 2002.

(Model Sewer Only)

Developer: Sumpter Township, Michigan

Engineer: JCK & Associates, Inc., Novi, MI

Background: The developer proposes to construct

approximately 9.5 miles of low pressure

force main, two new pump stations, and

replacement of the pumps at the existing

Rawsonville Pump Station.

Area of Development: Vicinity of Rawsonville and Willis Roads

Force main length: 9.5 miles

Estimated water use: N/A (Water source directly from DWSD)

Estimated sanitary sewer use: 244,300 gpd (to Martz Road Pump Station)

Existing sanitary sewer use: 141,500 gpd (to Martz Road Pump Station)

Sumpter Township Contract

with YCUA Capacity: 0.65 MGD (1.0 cfs)

Karen Lovejoy Roe inquired as to whether there was an update on the Pittsfield water main improvements. Scott Westover responded that Vicki Putala is spearheading that project and that she has indicated that there was preliminary work done on the model revisions and that she would be contacting Pittsfield Township with those results shortly regarding the reservoir and getting the rest of their capital improvements prioritized.

Brenda L. Stumbo inquired as to whether the establishment of a method to assign costs for new developments regarding the water demand was ever researched formally. Ms. Thomas responded that this has been done, however, there is no way to do this.

Karen Lovejoy Roe interjected that it was her understanding, from the work session recently held on this topic, that the Authority was working on getting Pittsfield on track and on who was going to be paying for what.

Thomas E. Daniels interjected that, several months ago, there was a committee appointed of people that were working on the Pittsfield project and that one major meeting with Pittsfield officials was held some time ago in addition to the recent YCUA Board work session. He stated that the information is still coming and that, hopefully, is going to be funneled to the committee once is finalized.

Informational only; no motion from the Board required.

J. Monthly Progress Report - Wastewater Treatment Plant Expansion - Joh Kang

Dr. Kang presented to the Board the 18^th Monthly Progress Report from the Wastewater Treatment Plant, listing the progress for the period of March 16 through April 15, 2002 and summarized as follows:

1. Overview: This project is progressing well in all areas. The design team is in the final stages of detailed design. The full project team continues to meet once a month to handle conceptual issues as they arise. Weekly subcommittee meetings with smaller focused attendance occur every week to resolve specific technical issues.

2. Project Progress and Schedule: The total design is over 90% done. The entire project design is scheduled for completion by late June. The application for a Construction Permit from MDEQ with accompanying drawings were submitted to MDEQ for approval and a construction permit on May 14, 2002. The specifications will be submitted before the end of May 2002. The schedule calls for Bids to be received in August, and a Contract Awarded in December of this year. Construction is expected to take approximately three years with substantial completion in December 2005, and final completion in May 2006.

3. Status of UV Irradiation process for disinfection: The project was bid in February and the YCUA Board in the February meeting approved the low bidder, Spence Brothers, for the contract. The preconstruction meeting was held on April 9, 2002. The contract will be signed by YCUA this month once the trust account is established. We anticipate substantial completion with the equipment in service before the end of 2002.

4. MDEQ Air Permit: The permit application was submitted to MDEQ in February 2002.

5. FAA Permit Application: The FAA permit was received in April 2002, for a stack height 120 feet above ground. The FAA then in a subsequent letter, lowered the allowable height to 109 feet above ground. We plan to submit a follow-up letter in May 2002.

There are no outstanding issues that require resolution at this time.

Brenda L. Stumbo inquired as to whether the plans for the new stack plans had been changed in light of the FAA’s refusal of YCUA’s request for a stack 120 feet above ground and lowered by them to 109. Dr. Kang responded affirmatively and indicated that the Authority was drafting a supplemental letter to MDEQ and that the letter would be sent in a week or two. Dr. Kang further advised that a consulting firm in Chicago was hired to analyze the air space and that it was their recommendation to go with 120 feet however the FAA, for emergency situations, wanted the extra air space.

Ms. Stumbo inquired as to the height of the current stack and Dr. Kang advised that it is 94 feet high.

Informational only; no motion from the Board required.

J. Director’s Report - Larry R. Thomas

Mr. Thomas presented to the Board a letter received from a resident, expressing his appreciation for YCUA’s assistance as well as a memo from Gwyn Belcher, who received a call, also from a resident expressing their appreciation to the Authority’s employees.

Brenda L. Stumbo expressed her approval.

Mr. Thomas then turned the Board’s attention to the Prospect Road Sewer Replacement project. He indicated that a school is being on Prospect Road between Holmes and Clark Roads and that a sewer is being installed in conjunction with that construction. Mr. Thomas stated that the Authority hopes to add 250 – 300 feet to that sewer so that it can serve several properties to the north of the school which are problematic with their septic tanks. He advised that a proposal had been received from the school’s engineer and that the addition was approved by the YCUA Board back in August. Mr. Thomas indicated that the school’s contract had been awarded to Meyers Excavating, however YCUA’s portion of the contract was not yet available.

Mr. Thomas stated that the Authority’s cost share of the contract is just under $84,000 and that, in order to approve that, he requires Board approval. He stated, however, that he had no contract to present to the Board yet the matter cannot wait until next month’s Board meeting as the installation of the sewer was about to begin the following week. Therefore, Mr. Thomas requested that the Board approve the contract with Meyers Excavating, not to exceed $84,000, relative to the Prospect Road Sewer Extension.

Brenda L. Stumbo inquired as to whether the expenditure was budgeted and Mr. Thomas advised that a portion of the monies would be recouped through benefit charges. Ms. Stumbo suggested that the remainder be taken from the Township Reserve for Construction Funds.

Motion by Roe to authorize attorney’s review of the signing of a contract with Meyers Excavating for an additional 350 feet of sewer on Prospect Road, not to exceed $84,000. Support by Doe. In favor: All. Opposed: None. (Motion carried)

4. OLD BUSINESS

There was no old business for the month.

5. OTHER BUSINESS

There was no other business for the month.

6. Statements and Checks: Motion by Doe to pay the bills in the amount of $2,090,782.89. Support by Roe. In favor: All. Opposed: None. (Motion carried)

7. Public Comments:

There were no public comments for the month.

8. Adjournment: Motion by Doe to adjourn the meeting at 3:53 p.m. Support by Koryzno. In favor: All. Opposed: None. (Motion carried)

Respectfully submitted,

LARRY J. DOE, Secretary/Treasurer