BOARD MEETING MINUTES

YPSILANTI COMMUNitY UTILITIES AUTHORITY

december 18, 2001

 

Members Present:  Brenda L. Stumbo, Larry J. Doe, Karen Lovejoy Roe, Peter J. Murdock

 

Members Absent:  Edward B. Koryzno, Jr.

 

1.         CALL TO ORDER:  Stumbo called the meeting to order at 3:00 p.m.

2.         MINUTES OF THE PREVIOUS MEETING:  Motion by Roe to receive and file the minutes of the November 27, 2001 meeting.  Support by Doe.  In favor: All.  Opposed: None.  (Motion carried)

3.         NEW BUSINESS

A.                 YCUA Resolution No. 01-16 to open bank account for YCUA accounts payable – Larry R. Thomas

Mr. Thomas stated that YCUA is requesting to move its accounts payable bank account at Citizens Bank to National City Bank in compliance with its financial plan.  He also advised that the Authority has been in the process of transferring all of its bank accounts from Citizens Bank to National City Bank as part of our financial plan.  This is the last account to be transferred.  Mr. Thomas recommended approval of YCUA Resolution No. 01-16 to open a bank account for YCUA’s accounts payable.

Mr. Thomas also advised the Board that the Authority would be sending out new proposals for banking services in the spring of 2002.

Motion by Roe to approve YCUA Resolution No. 01-16 to open a bank account for YCUA’s accounts payable.  Support by Doe.  In favor: All.  Opposed: None.  (Motion carried)

B.                 YCUA Resolution No. 01-17 to establish a bank account at the Bank of Ann Arbor – Larry R. Thomas

Mr. Thomas stated that YCUA is moving some funds from a Certificate of Deposit into the Bank of Ann Arbor and is requesting permission to open a bank account there.  Mr. Thomas recommended approval of YCUA Resolution No. 01-17 to establish a bank account at the Bank of Ann Arbor.

Larry J. Doe inquired as to whether the rate being offered by the Bank of Ann Arbor was better.  Barb Kreger responded that the rates are comparable to every other bank that she deals with and that the change is simply a way to disburse the funds into a variety of banks.

Motion by Roe to approve YCUA Resolution No. 01-17 to establish a bank account at the Bank of Ann Arbor.  Support by Doe.  In favor: All.  Opposed: None.  (Motion carried)

C.                 Orchard, Hiltz, and McCliment Revised Proposal for Engineering Services re: South Harris Road Water Main Replacement – Larry R. Thomas

Mr. Thomas advised the Board that, in September of 2001, a proposal from Orchard, Hiltz, & McCliment (OHM) was approved for the design on the water main on South Harris Road.  He stated that their proposal was for $49,750 plus $8,000 for testing.  He stated that the estimated cost of the project was $300,000.  Mr. Thomas further advised that since that time, there has been discussion regarding street improvements in conjunction with the water main replacement project.  In addition, he said, an additional water main has been identified in the road from Share Avenue to Foley Avenue that had been previously unknown.  Mr. Thomas stated that these two elements have caused an increase in the estimated for the work to be done.

Mr. Thomas advised that the estimated cost of the project is now $420,000.  He also stated that the engineering costs have been revised to $88,000, which includes topographic survey, construction engineering services, and geotechnical testing because the change of scope of the project required increased engineering.  Finally, Mr. Thomas stated that an increase in estimated project costs is $150,250.  Mr. Thomas then recommended approval of the Orchard, Hiltz, and McCliment Revised Proposal for Engineering Services regarding South Harris Road Water Main Replacement.

Karen Lovejoy Roe inquired as to how far the additional water main extended and Larry R. Thomas clarified that it runs from Share to Grove, or just over one-half mile.

Brenda L. Stumbo inquired as to whether the figures including milling costs and Larry R. Thomas responded that the $420,000 price would be for the entire road, although all of that would not be paid for by YCUA.  He stated that, presumably, the Charter Township of Ypsilanti would pay for a portion.  Mr. Thomas further advised that milling and overlay, as opposed to total reconstruction, were items that would have to be approved by the road commission and that they had been, to date, rather noncommittal.  He stated, however, that he felt the Authority could sell the commission on the plans as it had done so in the past.

Brenda L. Stumbo inquired as to when the bids would be received and Mr. Thomas advised that he expected the bids in late spring or early summer of 2002.

Motion by Doe to approve the Orchard, Hiltz, and McCliment Revised Proposal for Engineering Services regarding South Harris Road Water Main Replacement.  Support by Roe.  In favor: All.  Opposed: None.  (Motion carried)

D.        Change Order to Ash Lagoon Disposal Contract – Perry Thomas

Mr. Thomas directed the Board to a letter in their packets from him to YCUA Director Larry R. Thomas, which requested approval to have a Change Order in the Ash Lagoon Disposal Contract that was approved by the Board at the October 23, 2001 Board meeting.  Mr. Thomas advised that said Contract awarded ProLine Corporation the job of excavating and transporting 7,000 cubic yards of incinerator ash to the landfill.  He further advised that ProLine began the work on December 12, 2001 and that, after excavating 7,000 cubic yards of ash, there was approximately another 1,000 cubic yards left to excavate to get the lagoon emptied.  Mr. Thomas stated that the original contract provided for a cost of $7.39 per cubic yard.  Mr. Thomas then recommended approval of the Change Order to Ash Lagoon Disposal Contract to allow ProLine to remove the additional 1,000 cubic yards at a rate of $7.00 per cubic yard, totaling an additional $7,000.

Brenda L. Stumbo asked for confirmation that the additional $7,000 was in the budget and Mr. Thomas confirmed that it was.

Motion by Roe to approve the Change Order to Ash Lagoon Disposal Contract.  Support by Doe.  In favor: All.  Opposed: None.  (Motion carried)

E.         community development projects - presented to the Board by Sam Hu.

Sam Hu presented to the Board one community development project that applied for water and sanitary sewer permits for the month.  Mr. Hu stated that the project is located in the Charter Township of Ypsilanti.

1.         U-Lock-It – construction of a self-storage facility and office area totaling 28,200 square feet.  Estimated water use – 100 gallons per day, estimated sanitary sewer use – 70 gallons per day, project equivalency – 1 dwelling unit.  Mr. Hu stated that everything is being modeled and all the details seem fine.

Mr. Hu stated that the additional items on this month’s Community Development Report included the modeling for the pressures and fire flows in the Pittsfield Township area.  He advised that, since the engineers have been working together, the projects are ongoing on seem to be heading in a positive direction.  Mr. Hu also advised that some increase in water pressure has been seen at the Morgan Road pump station side (from approximately 17.65 psi last month to 33 psi this month), though, overall, the pressures are below the criteria.  He stated that he was confident that, within the next two to three weeks, Orchard, Hiltz, and McCliment would be ready to give a full presentation on the modeling efforts.

Informational only; no motion from the Board required.

F.         monthly progress report from wastewater treatment plant - presented to the Board by Joh Kang.

Dr. Kang stated that the main highlights of the 13th Monthly Progress Report from the Wastewater Treatment Plant were

Informational only; no motion from the Board required.

G.        Fund Balance Report (November 30, 2001) - presented to the Board by Larry R. Thomas.

Mr. Thomas presented to the Board documentation of the Authority’s City and Township Division Fund balances for the period ending November 30, 2001.

Mr. Thomas advised the Board that, in the City Division, the requirement for the Operation and Maintenance Fund has remained the same and requirement for Bond and Interest Redemption, Replacement, and Improvement Funds increased from the requirement for other contractual funds as well as the surcharge fund decreased.  He stated that total requirement in the City Division decreased by $192,000, total cash balance in the City Division increased by $5,600 from a cash excess over requirements last month of $156,000 to a cash excess over requirements of $353,000 on November 30, 2001.

Mr. Thomas advised the Board that, in the Township Division, the requirement for the Operation and Maintenance Fund has remained the same and requirement for Replacement and Environmental Cleanup and Improvement Funds increased from the requirement, and for the Bond and Interest Redemption Fund and other contractual funds have decreased.  He stated that total requirement in the Township Division decreased by $1,089,000, total cash balance in the Township Division decreased by $529,000 from a cash excess over requirements last month of $2.3 Million to a cash excess over requirements of $2.9 Million on November 30, 2001.

Informational only; no motion from the Board required.

H.        Director’s Report (Oral) - presented to the Board by Larry R. Thomas.

Mr. Thomas announced to the assembly that the new YCUA Human Resources Director Gwyn Belcher started her position with the Authority two weeks prior to the day’s meeting.  Mr. Thomas stated that Ms. Belcher comes to the Authority from Eastern Michigan University’s Corporate Education Department and EagleCrest.

Brenda L. Stumbo and Larry J. Doe welcomed Mr. Belcher to the Authority.

Mr. Thomas also discussed problems with meter readings and sewage flows into the plant and discrepancies at the Willow Run pump station and advised the Board that the source of the problems had been determined.  He stated that, for the last year and one-half, there has been a discrepancy in the flows coming into the wastewater treatment plant and that the pump station flows were lower than what would be anticipated and that they, at times, actually showing that the Authority was treating less sewage at the plant than it was selling water.  He stated that this was never the case before because, in consideration into infiltration and inflow into the sewers, the Authority always expects to treat more water at the wastewater plant than water sold to customers.

Mr. Thomas stated that the problem was finally located at a meter at the Willow Run pump station.  Mr. Thomas stated that when the YCUA maintenance department and the Authority’s calibration contractor, UIS, calibrated the meter, it indicated normal operations.  Mr. Thomas advised that it finally became apparent that there might be a problem there, so a second meter was taken to the Willow Run pump station, which showed that there was indeed a problem.  Mr. Thomas indicated that it was discovered that the original meter was under-reporting somewhere between one-half million to one million gallons per day for the past 15 or 16 months.  Mr. Thomas stated that the Authority has adjusted its reports to reflect an average of the under-reporting, or approximately .75 million gallons per day, and that the reports appear in line with historical data.

Informational only; no motion from the Board required.

4.         OLD BUSINESS

            I.          Progress Report – Fawaz Spring Street Settlement Offer – Thomas E. Daniels

Mr. Daniels indicated that YCUA has received a legitimate settlement offer on the Spring Street issue from Mr. Fawaz.  He stated that, in litigation to which the Authority has been a party since 1999 with the Huron Mini Mart and the BP Gas Station at Huron and Spring, to recover costs and expenses incurred by the Authority in responding to the discharge of free product or gasoline from the storage tank into the sewer line, which created a fire and explosion hazard which had to be addressed before the Michigan Department of Environmental Quaility (MDEQ) got involved and the defendant got his own private contractors to handle the matter.

Mr. Daniels stated that YCUA presently shows a balance on it’s a claim of $185,000 after receiving $36,400 from the defendant prior to filing the lawsuit.  He advised that the litigation has been long and drawn out mostly because the defendant filed for bankruptcy in the midst of the litigation as well as the fact that so many parties were involved.  Mr. Daniels advised that, in addition to YCUA, there are four lien holders on the property involved suing to foreclose on their mortgages as well.  Mr. Daniels also stated that an insurance company has a subrogation claim against the defendant in the amount of $35,000 as a result of a fire caused by the gasoline leak in the house next to the gas station.

Mr. Daniels advised that the Authority was party to a settlement conference a couple of weeks prior to the day’s meeting and did reach a settlement offer which would provide for the payment plan arrangement totaling $80,000 from January 4 through August 4, 2002.  Through this plan, YCUA would be secured through a mortgage on other property owned by the defendant in Wayne County.  He stated that from January 4 through July 4, 2002, the Authority would receive $40,000, with a final payment of $40,000 to be made on August 4, 2002.  He stated that these payments would be made interest free but that, if the defendant defaulted by way of untimely or missed payments, interest would being to accrue at the rate of 7% on the unpaid balance plus an additional $20,000 would be added to the balance due at that point in time as an additional incentive for the defendant to make the agreed upon payments.

Mr. Daniels also advised that upon accepting the settlement offer, the case would be dismissed but that the Authority could re-open the case in Washtenaw County and foreclose on the mortgage on the defendant’s Wayne County property if the defendant defaults on the payments in any way.  He stated that, many months prior, the YCUA Board appointed a committee consisting of Mr. Daniels, Larry R. Thomas, Edward B. Koryzno, Jr., and Peter J. Murdock to negotiate a settlement with the defendant and that the result is a proposal that said committee recommends for approval.

Mr. Daniels concluded by stating that, while the settlement offer does represent a substantial reduction from the $185,000 that is due, but that the reduction is justified by the fact that the committee believes it is the best offer the Authority will get.

Motion by Murdock to approve the settlement offer.  Support by Roe.  In favor: All.  Opposed: None.  (Motion carried)

5.         Statements and Checks:  Motion by Doe to pay the bills in the amount of $3,537,458.23.  Support by Roe.  In favor: All.  Opposed: None.  (Motion carried)

6.         Public Comments:

There were no public comments for the month.

7.         Adjournment:  Motion by Roe to adjourn the meeting at 3:22 p.m.  Support by Doe.  In favor: All.  Opposed: None.  (Motion carried)

 

Respectfully submitted,

 

 

                                                           

LARRY J. DOE, Secretary/Treasurer