our open requisitions. Currently, we have a team that score less than last month. And we have a total of 24 open positions here on just one page. Are there any questions? I don't see any.
We did have a career fair. On November 14 at Wayne State University. It was a job and resource fair. We partnered with the city's recruitment team. And we participated in this resource fair, it was open to students and residents. And we partnered also with our public affairs division, and representatives and we answer inquiries regarding DWSD and provide information regarding the Lifeline program.
Commissioner black,
do we have any information about how many we directly had kind of had direct contact with
that total number and uncertain? I know that there were around 100, but I don't have the exact number, but it was around 100.
That made contact with us in particular.
Yes. Okay. Thank you. Close to 100.
Miss Thornhill, someone I don't know if there's one of the commissioners that may have been someone who spoke during public comment spoke to the number of people who attend these resource fairs. And for lack of a better term, they seem to think that it was ineffective. That the numbers were not what we would like to see. Can you speak to that and going forward, make another column on your pipeline sourcing meetings to show the number of people who attended I think that one time we used to do that, where we show the number of people who attended or who. And you know, what your results are what you got, you know, I reached X number of people and we achieved X.
Absolutely. And let me answer your the first part of that question, Commissioner, please, during the pandemic, and after the pandemic, when we tried virtual recruiting theories that there was low attendance once in person, recruiting fairs started back up, the attendance where it wasn't, wasn't where it used to be. Now, we're getting those numbers back again. So there has been a lot of participation in the hiring and recruiting fairs, but the pandemic, you know, it's we suffered a bit during that time. Okay, never suffered.
All right, um, let me just ask, Trump's Do you know, what, my public sector? What about recruitment?
And when we haven't set a date is B after the new year? All right.
Well, as you can see, you know, all of us, every board member has some concerns about this recruiting issue. And, you know, we really want to try to be a part of the solution, and not have this issue linger out there. I think that's the sense of the body here. Because it's, it's, it's, it's near and dear. So if someone could, you know, try to make that a priority of getting us a date on that retreat. So, preferably, I think before our next meeting. Can you make sure that that's a priority, Sam?
Absolutely will do.
Thank you very kindly. Are there any questions? I'm sorry, I'm just going to
call it update. But numbers are steady from where they were last month. And we currently had nine positive as of November 28. certainly nowhere near the highest number of 40 since the pandemic, but still enough to be concerned across the board.
Any questions?
Oh, Commissioner Blackmon
what I have been hearing recently is that there was a very high spike in in the nation and in the State this past at that brown after Thanksgiving. Have we updated our records to or do our records reflect anything that around validated caused us to have additional cases?
We didn't see a spike here with our employees.
Good, thank you.
We did Last year, but not this year, thankfully. Thank you.
All right, please continue to miss going in.
I will next half hrs Workforce Development Manager, Carla Calhoun, come and give you a presentation on our workforce development and training.
Yes, please. Good afternoon, everyone. I'm here to talk about our training, update and workforce development, in an effort to make sure that we're in a continuous progressive environment when it comes to training and development. I'm always looking at ways to improve our training portal a few months back, I introduced our training portal and some of the new updates. And since then, I've had an opportunity to really meet with managers and just get some feedback on how things were going. And one of the things that I want to make sure is that we have training access that actually matters. When we look at our training portal. We have a new update, we have ut Pro. With this subscription, we have access to a few different features, that's going to be a little bit more beneficial to our employees, one of the things that we had to look at is that when we go into the system, and we register for class, sometimes the training date is not beneficial to an immediate need. Sometimes I could register for class, and it can be offered in January. But it's something that I actually mean within the week or the next week. So with RT Pro, we get an opportunity to subscribe to a subscription, which is ulti pro subscription and what the subscription, we get a variety of different benefits, the benefits that we have access to is that we'll have training that's going to be available at our fingertips, one of the departments within the organization, customer service, they actually use this, the training portal, often I have a lot of dialogue with some of the managers there, and sometimes their request training. But the training date is a little far in advance. So I was able to work with United training to really update what we have in our system. So when we look at what's being offered, you have live training, access to over 700 classes, it's going to give us unlimited access for a year. I want you guys to understand that right now with the training portal I've paid, it's a two year contract that we have. And all of our employees will have access to these classes at no additional cost. So whenever they go into the training portal, whatever dollar amount that they see, it's already been paid for. But now they can get these classes at their fingertips. And as you can see, in the presentation, it says they will have access to over 700 classes that was available. We will have access to on demand videos up to 750 hours of video. So now instead of a person having to wait a month or three weeks to take a class that will actually be able to go into their subscription, select the class that they would like to take and look at a live recording of the class. And that's something that we currently do not have access to right now. NetSuite will have access to unlimited amounts of quick reference guides and job aids. A lot of times when they use the Microsoft Office Suite, they'll take Excel classes, PowerPoint classes, word classes access. Now they will have relevant job aids and quick reference guides for those beginners, that's learning the application that took notes in class. But now they need something that they can really go back and reference beyond their notes, they don't have unlimited access to that as well. As well as the classroom recordings, again, the classroom recordings gives us the benefit to have what we need at our fingertips now, instead of a delayed response, because of the actual training class that's available. Now this is still in addition to what's already being offered. So this is just something that we're adding to the course to make sure we're meeting not only the long term needs of our employees, but the immediate needs. And like I said, I work a lot with customer service. I also work with operations as well, with these classes. Now you get a full day of training, you have short term, their duration of training, again, that's quickly available to you and then we'll have access to just in time training. Do we have any questions about the new update?
I don't see any hands. Okay,
and again, this is an effort to make sure that we're providing our employees with the latest and greatest and make sure they have all of the tools and resources to be successful. We don't want training to be the actual school that hold them back. If we don't have any other questions I want to say thank you for your time and I'm going to turn it back over to Patricia Thank you.
Thank you, Carla. Great job. Next commissioners we have the HR Planning calendar. And up next for the month of December is an update on negotiations. And during the month of August when I gave a presentation you asked for some more information on the unions. So I have provided that for you. A DWSD. We have seven unions. The Association of municipal engineers, also called ame. The Utility Workers Union of America UWA. The Michigan Building and Construction Trades Council and BTC, Michigan Council 25 of the American Federation of State County and Municipal Employees, local 2920. You're asked me, senior accountant, analyst and appraiser so sociation s AAA and the teamsters state county and municipal workers local to 14 and the Association of Professional contract construction inspectors APCI. So I'm gonna give you a breakdown of each union, because I believe this is what would have helped before. So first, let's talk about a&e, the Association of municipal engineers. Their current contract status is current or the contract status is current. It expires in 2024. So the new contract was ratified last year. There are currently 24 DWSD employees who are members of ame. Classification is engineer and there are four different levels. Where do those engineers work? They work at the Central Services facilitate your CSF and the division they work in as an engineering operations. Are there any questions on me?
I have. I'm sorry. I misspoke. I do have a question. And this will be helpful before so that I don't have to ask you repeatedly in some of these unions, do we also have to say we but does glue also have an agreement with similar classifications? Yes. Okay.
But GL wa does have some different classifications. But they do have collective bargaining agreements with the same union? Yes. And they do have one with me. Okay, thank you. Next, we have the Utility Workers Union of America, or UWA. A contract status is current, expire September of 2025. Just ratified it. They're eight DWSD employees and their classification is field service coordination specialists. levels one and two, and we just received approval to have that second level at it. You've also heard them referred to as dispatchers, but the proper classification title is skilled service coordination specialists. They work in CSF and they work in field operations. Are there any questions? Next, we have MBTC. Their contact contract Status is Pending union ratification. We finished negotiations. We worked with the city council and updated their rates and we're waiting on them to ratify their contract. The former contract expired back in 2016. They're eight DWSD employees that are a member of this union. And the classifications include maintenance technician, field service technician, and electrical instrumentation control technician and next to the first two classifications maintenance technician and field service technician. You see specialty license in parentheses or journeyman card. Those specialty licenses can be for carpenters, plumbers, electricians, pipe fitters, cements finishers and bricklayers. In some cases, the maintenance technicians may have a specialty license, and they may be needed at InMobi as well. But they work at mainly at CSF divisions, field operations, engineering operations and facilities. Are there any questions?
Asked me, we're in the final stages of negotiations like the final point 2% of negotiations very excited about that. At DWSD they have 200 and 67 employees, the classifications their seven album, automotive fleet technicians or mechanics, Customer Service Specialist levels one through four, field service technician or to fsts. Maintenance Technician, materials management specialist. They work in the warehouse, office support specialists levels one through three and security officer. They work in bulk CSF, and you're at the main office building. And they work in divisions such as build operations, engineering, facility finance and customer service. Customer service specialists work in meter operations, storm drainage, customer service and billing and collections. Are there any questions? As AAA negotiations will begin in January, we'll be meeting every Tuesday and Thursday. And those meetings are already set up. They did not have a contract at DWSD after the bifurcation, so they were on or they're currently on the city employment terms, which isn't. It's not a contract, but they aren't good employment terms. So we have been partnering with them and meeting with them preparing for negotiations and we're really excited to get to work with them to get a contract. Currently they have 10 employees here at DWSD with classifications such as accountant and procurement specialists, and they work here at MLB, in finance and in procurement. Next, we have the Teamsters. The negotiations are in progress. There are 23 employees. The classification is filled service technician level two, and they work at CSF and field operations. Lastly, we have a PCI our inspectors union. Negotiations are planned for mid to late 2023. There are 28 DWSD employees in this union, the classification is Inspector levels one and two. And they work at our CSF facility or field and engineering operations. Lastly, this is this chart I showed three months ago and you indicated you want it more detail Commissioner. So I hope that detail helped. This is just a one page snapshot view of where we are with the seven unions. red yellow green status. And we are progressing positively. Are there any questions? No, I have a thank you very much.
Thank you Miss Thornhill. Colleagues. Very, any other questions? We'll move on to planning calendar. Restore here. Are you gonna do the planning calendar? You just covered? What was?
Yes, I can put it back up. I'm sorry, Commissioner. I didn't put it up. For this month. I will have next year's planning calendar next month. Is that okay? Commissioner Davis?
Yes, it is unless there's someone who has an objection. That's fine. Thank you. Thank you again, other matters? Hearing none, our next meeting is January 10. Next year.
Chairman Davis Yes. May I make an impromptu announcement. Of course. Every two times a year our employees sit to take an exam from the Michigan Department for the eagle environment, Great Lakes and energy on water distribution operation. And while this is just a very impromptu announcement, we have six employees who have been notified of passing that exam. So I'd like to just give a brief recognition. Mason Mason, a tabi pass his s four. So Connie Howard s for Ms. Shara Hayes parks s3, John Lilly s for Marwin salehoo doing this for and Leon right. S for this is a mixture of field up field technicians, meter technicians, engineers and other engineering technicians. So we have a wide swath, you know, in reference to some of the earlier conversations. These people are relatively new employees for the most part. So they're coming in they're learning and what this license means that they could go to other parts of the state and run a utility run a small utility, but still have responsibility for their own operation. So hopefully we'll recognize them more formally, but I want to To share that, that greatness,
thank you for that. And we'll include a round of applause for our to Neptune recipients today as well as the people that you just met. Thank you. Thank you. All right, Commissioner Blanton?
Well, I need to get mentioned that we already have maybe some other formal recognition. How would that be done? And would the word be a part of it?
Yes, ma'am. I will try to put something together for the formal board meeting. Maybe we can actually have them at least attend virtually so that they can get some recognition. And you can see their faces. Thank you.
All right. If there are no other questions before us, we'll entertain a motion to adjourn. All right. We are adjourned. Thank you.
At this time, I'd like to call the capital improvement committee back to order. And we have a motion to approve the agenda as presented was there a second? Support is moved and seconded. All in favor? Aye. The opposition Hearing none motion passes. Next I'd like to ask for a motion to approve the minutes as presented. So moved. Mr. Chair. The point that has been moved, and it has been supported All in favor, aye. Aye. Abstentions? Hearing on the motion passes. line item five, public participation.
We will have Sonali Pitso. Read the message for participants. Thank you.
Good afternoon. To make a comment. If you are in person, please sign the sign in sheet Your name will be called and you can proceed to the microphone. If you're online, please raise your hand by using the raise hand icon on your desktop or mobile device. If you are calling into the meeting by phone, press star nine to raise your hand. If you're online or on the phone after a name is called it will give permission to unmute. In order to begin speaking, you will have to unmute yourself. To do so press the unmute button, which is a microphone icon. If you're online, or star six if you are calling in. As a reminder, you will have a limit of three minutes to make your comment. There will be a timer indicating your remaining time. If you're online and make a comment we kindly request you fill out the credit card link that's located in the chat. By filling out the card we will have your contact information to follow up appropriately. If you're unable to click the link, please let us know and a phone number will be provided for you to call to provide the needed information. You will be only called upon once once that you are closes public comment. There will be no from and all attendees will remain muted for the duration of the meeting. On site comments will go first followed by online and on the phone. Thank you for your attention.
Mr. Chair, there are no in person, attendees and no one has their hand raised online.
Okay. All right. Next item on our agenda is communication. I see. None. line item seven unfinished business. I see there's no line item number eight new business 22. Tax 0996 capital improvement. First quarter, September 3020 22. There's someone here to present Yeah,
good afternoon, commissioners. Good afternoon, Mr. Chair is stuck around one chief financial officer at WSD. Today I'll be presenting the CIP first quarter report. It's been a practice to present to the committee on a quarterly basis. All our projects that are active in terms of what the contract amounts for how much of the contract amount has been expended. Is it going over budget under budget and the reasons there are. So this is the first quarter for the fiscal year 2023. And I'm just gonna go through a few highlights of the list Budget to Actual expenditures comparison. There are no projects in these lists that exceed the contract amounts that whatever the board approved for each of these contracts, and we've been monitoring all the expenditures there are no contracts that have exceeded the board approved on the contract amount There's one contract which is ws 714. This is with MDOT. The work has been completed, there's some additional amounts that are due to them, which would be paid pending final close of books. And there is also comes construction inspection services which was not contemplated at the time of when the contract was set up and this is MDOT to do their own inspection services and they bill us for it. In due course of time that will come for ratification of the contract. Majority of the projects are currently active and all the unexpended money is expected to be spent during the course of the contracts. Again, this is the first quarter of the fiscal year I think we will see expenses coming up more and more on these contracts as we move on the fiscal year. There are two contracts and on the water projects ws 714 and VSM. One eight, with a contract periods have expired. The contract has funds but the period the timeframe is expiring. These contracts are awaiting final invoices and close out. The former one we just talked about is an MDOT contract, which we have prepared when it when it comes available. These contracts are aware both these contracts are awaiting close outs. There are two projects on the source side the delivery is 908 and AWS 916. The contract terms have expired and engineering department, dw is engineering department will be coming to the board for extension of time. GObject CS 1522 of the sewer project list will be expiring shortly. But there are funds available within that contract, contract PCE 800 and expired set available in the country. And all these active CIP projects for both the water and sewer funds, including the contract period, the contract amounts and their mom's pencil bar in the variances and the reasons for the variances all summarized in the next few slides. So this is a staple of all the CIP projects that relate to waterfall on their end. Now the highlighted ones are the ones where the contract terms have expired, as I just mentioned. And the reason for variances, as you'll see most of the projects are are in process. And so there will be very insistent upon amounts of money expended. But the important thing to note is no no contract has expired or exceeded the contract amendments. The next slide is the same slide. But for sewer funds. Again, there are few projects where the contract terms have expired. And engineering and becoming for extension of time. And a couple of them are close out contracts. There's some money still available. Is this our presentation, we just wanted to give you an update on the Budget to Actual comparison for all these projects. And this will be presented on a quarterly basis. That concludes this presentation. I'll be happy to answer any questions.
Any questions? Thank you very much. Appreciate it. Thank you. Next item is our planning calendar 18 tactical zero for review of the fleet and facilities program.
Cherenkov Cohen, we believe that to January, as you may know, we, our facility manager went on to other opportunities a couple of months ago, we've been recruiting, we found an individual that was highly qualified, there's an offer in place. They'd like to have that person at this present for that presentation. So we hopefully, hopefully we can accomplish that in January. Thank you.
Any other questions? Seeing none. Any other matters to bring before the by the next meeting will to be determined. I'd like at this time call appointed chairman.
I move we adjourn.
Thank you. committee is adjourned.
Like to resume the Finance Committee meeting and start our action item with the approval of the agenda. Is there a motion?
For more manager?
Thank you. Moved and seconded All in favor signify by saying aye. Aye. Any opposed? Motion is approved. The next item is approval of the meeting minutes or motion
I will be a production of the minutes as presented or
support it. All in favor signify by saying aye. Aye. Any opposed? The motion is carried. The next is public participation.
We will have somebody read the comment for the participants
Good afternoon. If you're online and would like to make a comment, please raise your hand by using the raise hand icon on your desktop or mobile device. If you're calling into the meeting by phone, press star nine to raise your hand. If you're online or on the phone after your name is called it will give permission to unmute. In order to begin speaking, you will have to unmute yourself. To do so press the unmute button, which is a microphone icon. If you're online, or star six if you are calling in. As a reminder, you will have a limit of three minutes to make your comment. There will be a timer indicating your remaining time. If you're online and make a comment, we kindly request you fill out the comment card link that's located in the chat. By filling out the card we will have your contact information to follow up appropriately. If you're unable to click the link, please let us know and a phone number will be provided for you to call to provide the needed information. You will only be called upon once. Once the chair closes public comment. There will be no other comments from the public and all attendees will remain muted for the duration of the meeting. Side comments will go first, followed by online and then on the phone. Thank you.
Thank you. Is there any public participation?
Madam Chair, there is no one present in the gallery and there is no one online with their hand raised.
Thank you. We will close public participation and we'll move on to communications. Is there a motion? With regards to 22 desks Cheryl 95.
Madam Chair, I would move that we receive and file the communication
indicator support. It's been moved and supported. All in favor signify by saying aye. Aye. Any opposed? The motion is approved. We do have an item under unfinished business the procurement policy I see it's slated here for February and under new business the first item we have is an external audit update from regarding plant Moran.
Yes ma'am is stick around again. DWSD. CFO. We have plant Moran we have Timothy St. Andrews, our partners Glenn Moran DWSD is external audit. He's going to give us an update on on the status of the fiscal year 2022 external audit. Thank you.
Thank you, sir. Good afternoon, commissioners. As Sue mentioned, my name is Tim St. Andrews plant Moran and I started had asked that I provide the finance committee an update on the status of the financial statement audit for the year ended June 320 22. So the team has been working hard the past two plus months getting through the audit. And I am happy to report that we are very, very close to the finish line. Just a reminder for everyone. The audit is due to the state by December 31. And we do plan on issuing the financial statements in conjunction with the city's financial statements, likely the week of December 19. So we are substantially through the odd procedures as a relates to DWSD. And is to current hell have been provided draft financial statements for review. All audits have to go through a technical review at the end. And our technical review happens to be today. So once that review is completed, we'll work through the final questions with your team and be ready to issue the financial statements like I mentioned in conjunction with the city. At this point in time, the only finding that we'll have and these letters will come out later in the month. But it does relate to the bank reconciliation process. If you recall from last year, there was an issue with a bank reconciliation in the water fund. And that same issue was resolved in 22. But throughout the first half of 22, the staff the team was still working through the issue, working through how to resolve the reconciliation differences. And when we evaluate internal controls, it's not just at the end of the year that we have to look at but we do have to consider whether the controls were in place for the entire year. And since the bank reconciliation item issue did exist In 22, that is a finding that will report to you again this year. Important to note, though, that the issue was resolved in 22. And the bank reconciliations presently are being prepared and reviewed timely and reconciled. So I wouldn't anticipate this issue to repeat in 2023.
That's good news. Thank you for the update. Is there anything further? Each car on the internal audit? I mean, external audit update?
No, Madam Chair. That's it. Thanks for the opportunity.
Thank you. Our next item of business is item 22. Dash 09 86. Manager. Yes, Commissioner Coleman.
I'd like to recommend to the Board of Water commissioners for the city of Detroit water sewer department authorized directors to approve amendment number nine to DWSD contract number 6001278 ls tech 1773 to $500,000 in funding for a total amended contract not to exceed the amount of $2,400,000 for legal services related to all drainage charges charged matters and Michigan warehousing group versus the city of Detroit with Miller Canfield paddock and stone PLC. This also authorizes directors and take such such other actions as may be necessary to accomplish the intent of this vote.
Second, it's been moved and properly seconded. Miss Welch,
good afternoon Board of Commissioners and attendees. The contract that is before you is a contract amendment to a funding in the amount of 500,000 for the continuation of legal services related all trains charged matters. Michigan Supreme Court has remanded the case back to the Court of Appeals for fact finding and rehear. And so the additional funding is to cover depositions to prepare and preparation of witnesses so that the DWSD legal team is able to provide what it needs as it relates to those cases.
Thank you. Are there any questions?
About on chair? Yes. I would appreciate it if perhaps in a closed session, we can get an update on the status of this litigation.
Thank you. If we could note that for our minutes so that we can have an action on that
this motion suggests nothing's coming to a close anytime soon.
Any other questions, comments? Hearing none all in favor of the motion signify by saying aye. Aye. Any opposed? That motion is approved. We'll move on to item 22 Dash 09 87.
Madam Chair, I want to finance committee recommend to the Board of Water commissioners the approval of amendment three to DWSD contract number 6001117 ls 1784 with gilpatrick and Associates can see $300,000 for a new total amended amount of $500,000 for continued collection enforcement services.
Thank you for your support, or it's been moved and properly ordered Ms. Welch.
Good afternoon. Again, this amendment is to add funding for a continuation of legal services. These legal services are related to the enforcement of collection and bankrupt bankruptcy efforts of DWSD delinquent accounts. Those accounts don't include commercial, industrial and residential. This is a revenue generating account, as DWSD does retain 80% of all of the proceeds that are collected from these efforts. The original path track was approved in April of 2016. And the previous amendments are just to a tie only. This amendment here is to air funding. Self procurement is recommending Board approval for the addition funding requested by the legal department.
Madam Chair, I think you answered you would have answered the question I'm about to ask because most contracts for collection are profitable. If the people are good at collecting and getting more money than we're spending, I assume that's the case here.
Yes. Kirkpatrick and associates get 20% of the amounts recovered and DWSD retains 80%.
And going back to it You said 2016 when the contract was first enacted, we've gotten more than $500,000.
I will not be able to answer that question and maybe something that you can add for the closed session for the legal team to provide an update on.
The board was putting in legal advice, an agenda for a closed session. Thank you.
Thank you. Good questions. Any other questions or comments? Hearing none, all in favor of the motion signify by saying aye. Aye. Aye. Any opposed? That motion is approved. We'll move on to Item D 22. days 09 86. I'm sorry. 988.
Okay, Madam Chair. Madam Chair, I move that the Finance Committee for the Board of Water commissioners for the city of Detroit water and sewer department, authorize the director to approve amendment two to DSD contract numbers 6003769. With Brous cipher ciphers P LLC, to add $500,000 for a new total immense amount of 1,050,000 $50,000 for continued legal services for a representation in litigation related to the summer 2021 rain events. This also authorizes the director to take such other action as may be necessary to accomplish the intent of this vote before
It's been moved and properly seconded as well. This while she may be frozen. Okay, she is frozen.
Madam chair can speak to this one at the board. Okay, thank you. I hear brands Deputy General Counsel, this contract is to cover additional costs for the litigation relating to the rain events. We can also add this one into a closed session to give more details. But as more lawsuits are found more subpoenas, more document requests, the cost of the contract needs to be increased.
Thank you. Thank you. Any other questions or comments? Hearing none, all in favor of the motion signify by saying aye. Aye. Any opposed? The motion is approved. We'll move on to Item e 22. desk 09 89. Chair, Commissioner Coleman,
like to recommend to the Board of Water commissioners for the city of Detroit water sewer department to authorize directors to approve DWSD contract number 6004817. With security archives for records management consulting services will total contract amount not to exceed $300,000 in a term of one year. This also authorizes directors to take such other actions as may be necessary to accomplish the intent of this phone
support. And key has been moved and properly supported. On I see Miss Welch's back. Yes, my apologies internet connection.
This is a contract to establish a record management system for DWSD. It will provide an assessment of our inactive and Active Record services and full creation of the needs assessment report records inventory management, creation of record management, policy and procedure manuals and training for our staff to continue future maintenance. Once that has been established. It was competitively solicited as a co op contract and we posted it for local Detroit businesses to be able to respond to the solicitation security archives did respond. They met the deadline and they offer superior pricing in relation to the co op contract that was initially set to go for. And so at this time, DWSD has pulled back from the Pollachi to award to the local vendor, which is security archives and we're recommending for Board approval today.
Thank you. Are there any questions or comments? It gets good news to hear that the award was
earned by security archives. Any other questions or comments? Hearing none all in favor of the motion signify by saying aye. Aye. Any opposed? The motion is approved. Move on to Item F 22 Dash 09 at
the chair of the committee recommend to the commissioners the adoption of or to enter into a mutual aid agreement with the Michigan water and wastewater agency response network and also to authorize the director to take other appropriate action necessary to accomplish this agreement. Support
has been moved and properly supported as well.
This, my Warren is a mutual aid agreement that is at no cost to DWSD. However, we do need Board approval before we can enter into that agreement. It enables us to participate in a program that provides intrastate mutual aid assistance in the event of a emergency DWSD is able to benefit from it because it will allow us to respond in the crisis in the event of an emergency where we can obtain training personnel, equipment, other resources or whatnot in the event of an emergency. This is we will still request approval throughout the internal DWSD chain, but it allows us to network for instance, if Detroit had experienced significant flooding and other cities had not seen received that flooding, we would have been able to MOU with them so that they can provide us with unnecessary trucks to help back up or staff to be able to call, you know, saying after hours that will allow us to get through the prices and vice versa, we will be able to help them. And so we're just recommending approval to be able to go into this agreement with them.
Thank you. Are there questions? Hearing none, all in favor the motion signify by saying aye. Aye.
Any opposed? That motion is approved. We will move on to Item G 22 Dash 0992.
Madam Chair,
Mr. Commissioner,
I move that the finance committee recommends to the Board of Water commissioners for the city of Detroit water and sewage department to recommend the adoption of an amendment to DDS DWSD investment policy and also authorizes the director to take such other action as may be necessary to accomplish the intent of this vote.
Or it's been moved and properly supported. And this is sponsored by us to come.
Yeah, good afternoon, commissioners. Again, this is a resolution to amend the investment policy to align the DWSD s investment policy with government finance associations, best practices and standards and code. We did discuss about this, the changes to the investment policy in our last meeting in November and decided to hold off till this meeting to to pass in the resolution adopting those changes. So we left it that there any questions regarding the changes to the policy we can discuss now. But this this amendment is just to make those changes in our investment policy.
Okay, so um, do remember week Madam Chairman? I do remember we did discuss this? It? Can you just go over the, I guess the top? You know, the top overview of exactly what we discussed at the time.
So, there were a few recommendations PFM, who was our investment consultant, we provided our investment policy to PFM to just review and make sure it's in accordance with not only Michigan Public ag but also in accordance with best practices. Industry, right. So they came up with a few recommendations just to enhance the policy. Our current policy is in accordance with the Michigan Public act 20 of 1943 but in addition to the compliance, we wanted to seek out some best practices, so couple a few of them I'll just read again. The first recommendation was the standard of care PMF PFM recommended that the inclusion of certain language in the in relation to prudence due diligence, ethics and conflict of interest and delegation of authority. New language in our in our policy. There was also a recommendation to have the credit quality requirements to the two highest classifications for commercial paper. The third recommendation was indicating permissible mutual fund investments are limited to securities whose intention is to maintain and net asset ratio of our value of $1 per share. And also recommended to include securities whose net asset value per share may fluctuate on a periodic basis. Additionally, they suggested that we remove certain language relating to investment pools in UK earnest Republic Act 2020. Another recommendation was to include language detailing the types of investment tools permitted or PA public act 21 recommendation was, was to prohibit funds to be deposited or invested in financial institution that is not eligible to be a depository of funds in the state of Michigan. They also recommended the addition of subsection two appeal, sub six and three to be records of the K 20. And the final recommendation was addition of a sub section or the GFSI standards. It recommends inclusion of performance standards and specification of frequency at which market value of the portfolio is calculated to ensure their view of investment portfolio in terms of value and placement and volatility. So those were the recommendations made.
So basically, what it did was just reinforced, so highlighted and clear. Compliance, what compliant way all of the restrictions and and transparency requirements for investing public dollars. That's basically what it sounds like.
You're I would add to that, that it was consistent with
20 with the NBF hallway, and just with clarifying all the highlighting actually improved. Yes.
clarified it actually
improve it. Yeah, cuz I guess it was missing. Yeah. Okay. So, um, we made the motion.
So the motion has been properly moved and seconded. Are there any other questions? Hearing none, all in favor of the motion signify by saying aye. Aye. Any opposed? The motion is approved. We'll move on to Item H 22. Dish 0993.
I'm not sure. I'd like to. I'd like to make a recommendation to the finance committee would like to make a recommendation to the Board of Water commissioners for the city of Detroit water sewer department. approves the amendment to the reclassify the retail revenues and water operating fund for fiscal year 2023. Further authorize director and the chief financial officer to take such other actions as may be necessary to accomplish the intent of this vote.
It seems support for a moved in properly supported.
Yeah, Madam Chair and commissioners. This is a resolution just to amend the the water of fund revenues. Amongst the three, three categories of revenues we have we have commodity revenues, we have fixed charges and fire line. So this amendment just move funds from one one line to the other with no impact on the total revenues. And then this is based on Stantec, our rate study consultant to move funds from fixed charges to volumetric charges. So we had to make some adjustments within their revenue categories without having any impact on the total revenue or raise.
I'm sure so is this a a routinely done reconciliation of those funds?
No, this is not routine, this was be just a one time change based on the rate study
based on a race study. So, so I just saw so we expected how often is this study done?
Study is expected to be done in three to five years, once every three to five years. And then, but this change will not happen because initially we have this the revenue set by different classifications, and then the rate study moves some some revenues from fixed to volumetric, which is not done in a regular basis without having an impact on the totals. So we just wanted to make sure those changes are made because in future we'll need to Budget to Actual comparisons, then we'll be comparing apples to apples. Okay, thank you. Thank you.
Thanks for the question. Any other questions, comments, discussion? Hearing none, all in favor the motion signify by saying aye. Aye. Any opposed? The motion is approved. And we'll move on to item I 22 Dash 1000.
Madam Chair, I move that the Finance Committee recommend to the Board of Water commissioners. The sale of the 35 South mckinty Street, Detroit Michigan 42 to nine to newer horizons LLC for the price of $1.4 million, and authorize the director to take any other appropriate actions to accomplish this.
Thank you, sir support for the motion, or it's been moved and supported. And the key I'm sure, that's you,
guys. Thank you, Madam Chair. So this property involves this property is under the jurisdiction of the Great Lakes Water Authority, and it was purchased years ago for storage of large equipment. However, currently, the the building is in a serious state of disrepair, I believe the roof is caved in. And that actually no longer supports their purposes. So they are proposing to sell this property to newer horizon LLC for the price of $1.4 million. This these funds will go to Cleveland will be distributed pursuant to the lease agreement. And they're looking to get this done rather quickly. Because, you know, they're eager to close with his buyer. After or assuming that this board approves the sale, it will be taken to the Detroit City Council
question. You know, since this bifurcation, any sell anything, you know, will forever ring the flag in my head, raise a flag, man. Okay, so this RFQ How did this sale come about? Were there other? Did they? Because you know, consider any other offers, need to know more?
Okay, so, if I can make a quick suggestion that we can go to the next item I will have, I'll give a quick call to Randall Brown, the general counsel for Great Lakes Water Authority and see if you come down real quickly and answer your question because I do.
Okay, so we'll come back to this item for a vote. But in the meantime, let's move on to the Finance Committee presentation. 22 Dash 0994.
Yeah, commissioners event chair, this is the September 2022. monthly financial review. We'll go through the September 2022. Highlights. Can you hear me?
Yes, we can hear you. Okay.
Yeah, we'll go through the September 2222 highlights the first item on the on this agenda was the audit status. Damn, San Andreas already gave you an update on the external audit. So I don't have to repeat that. Cash and investments DWSD. We continue to maintain adequate cash reserves to support our operating and capital programs. As of the month end of September. Our cash and investments portfolio had $238.2 million 134.5 of those 230 $8 or are in the water fund, and 103 point 7 million in the sewer fund. On slide nine, we are summarizing our cash and investment position by financial institutions since 2020. In addition to the money we have in our in our cash and investment portfolio, we have an additional $21.9 million in the trust account, which is held by God 11 and a half million dollars in water fund and $10.4 million in the sewer. As far as capital spending is concerned, our combined Iranian construction deposits amounted to 19 $119.4 million for water funds and about $76 million for the sewer fund. As of the one pin DWSD we continue to spend money done to our capital programs. approximately nine and a half million dollars were expended during the month of September. Give you a little highlight about billing and collection. The average age of residents accounts continue to increase. As of the month end We had residential accounts average 307 days which is almost like 10 months worth of receivables in the pipeline. And that represented an increase of 26 days since June of 2020 to the three month rolling average or average collection rate for residential customers was holding steady at 70. In the mid 70s and or September it was 74%. As we all know, by comparison, the prepaid and collection rate was much higher, whichever is about 95%. When I'm talking to summer 2020 2019 The drainage only accounts every 179 days and that represents an increase of 30 days combined Assuming investment customer average 90 days and 80 days respectively, respectively, and that represents an increase of 10 days for commercial customers and six days for industrial customers. The good news is the three month average collection rate for non residents and customers is still approximate, accurate, approximating 90%. And this is certainly due to our stepped up collection effort. We continue to renew, review and evaluate bad debt estimates based on the current circumstances and the current environment. And specific attention is given to residents and accounts in the average age of election for those accounts. allowance for bad debt has increased approximately $3 million dollars since June of 2022. When our accounts receivable actually went on by approximately 20% 58 point 4 million since June 2021. We anticipate resuming service interruptions on delinquent residents and accounts in January of 2023. This could potentially have a positive impact on collections, and reducing our receivables and improving our cash flows. Now normally in in this presentation, we present a way provide you revenue metrics and trends. But due to changes in the billing method, and also delayed implementation of our new rate structure, the revenue matrix and trends are not included in this presentation. We are working on making sure that they're all aligned with the new new grade structure and the new method. We'll be collecting data as it becomes available and bring it to you in future meetings. briefly go through the operating cash position. total cash and GL WA, which is held in trust is $11.5 million, which is an increase of six cents $6.7 million, the others over last year. At the end of August, our balance was $13.5 million. So there's a reduction $2 million. And the graph on your left on the left of this slide would show you that decrease of $2 million when we compare it to August. And this is because approximately $3.3 million collected in September could not be posted to our our billing system, which is in questa. There was a there was an issue within Callisto posting cash receipts for a few days in September. And this has caused the you know, the the graph declined from August to September of approximately $3.3 million. This issue has since been corrected. And Cass has been posted in October. So you see a decline in from August to September. You see you should see an increase in October because all of the September collections for those few days are posted in October. Now if he posted the caspin in September, that would bring the balance to $14.8 million, which would be an increase of $1.3 million dollars over August balance and $1.6 million over August collection. Again, zooming if we had posted the entries without the glitch in the system, our collection would have been $10.1 million. And that would have produced a $1.3 million dollar surplus over our target collection $8.8 million. So this is all good news because we collected $1.3 million in reality over our collection target. The water operating cash account had a balance of one $15.6 million on deposit. And this represents represents about $1.5 million over the last year and an increase of $2.7 million over the span of a significant part of the difference is due to budgetary savings. The next slide is similar. It is this the suicide or operations where again, due to the glitch in the system. In the case of sore about $7.4 million could not be posted in September. They are September collections, but we could not post them for a few days. And that caused the variance in the graph on the on the left side of the slide where you see a sharp decline in September balances as opposed to the August the $7.4 million. However, we corrected the glitch and posted in October. Once again you'll see an increase in cash for October in relation to September because of the chain because of the timing differences. Is there mean we had collected and posted the cash in the $7.4 million into our request system. By September, we would have ended with a $25.6 million and that would have produced $1 million excess surplus over our target collection requirement of $24.6 million. For the sewer system. The sewer operating cash of 27 point 5 million as of the end of September represents an increase of $8.3 million over last year, and an increase of 2.4 million in August Americans. Once again the increases representing some budgetary savings.
Is Tucker. I want to pause here. We're gonna go back to the other issue. Okay, and then we'll come back. Okay. So I'm going to turn it back over to Kia.
Thank you, Madam Chair. This is relating to letter i 22 1000. A question was asked by Commissioner Kim light and I do have Randall Brown, who is the General Counsel Great Lakes Water Authority on the line he will need to be able to speak to the panel to answer the questions.
So Randall, as your hand is raised, you can go ahead okay. Mr. Brown? Randall back, can you hear us? Can you hear us?
Thank you. Can you hear me now?
Yes, we can hear you now.
Great. They just have the give me a little bit better access. I don't think you guys have video of me, which is fine. I'm just sitting here in a mediation. I appreciate the Board of Water commissioners time today. My name is Randall Brown. I'm the General Counsel for the Great Lakes Water Authority. I think what's before this honorable body is the sailo 235. South McKinstry. This is a property that was previously used by gol WA, is storing large equipment and other materials for the purpose of serving both the water and sewer side of the house a couple of years ago. After assessing the condition of the building, and for the health and safety of Joe wa team members, there was a decision to move out of that facility and move to a facility that is actually located in Melvindale to store our large equipment that we need for both water and sewer. At that time, God anyway had a broker JLL that put the property up for sale. Since the property has been up for sale, there have been a number of folks that have toured the facility. And we have been under I believe, at last count, at least for purchase agreements to move forward with the sale of this property. Each and every time until now. The entity has backed out of the deal after completing their due diligence. This entity I believe is affiliated with the brand silly construction company is interested in purchasing this facility. This is also the highest amount at the end of the day that has been offered for this property. But it has been on the market for over two plus years. I want to say it's going on three years with just only four real offers, which like makes this a a more real deal than we've seen before. The purchaser has already deposited the funds to purchase the property into escrow with the title company, which none of the prior purchasers have done. Just yesterday. My job is to assist with real estate but I'm not the one that that like puts them on the market etc. But I did have an opportunity to tour the site when I was outside of the building. I think if you're on McKinstry is a brick facade and you see a number of the bricks that are literally falling off the side of the building. I was allowed access inside the building and it is a mess. If you are on clark street I believe you will see at the top of the building. It has a basically a glass roof that allows natural light to go into the building. Most of the glass has lost either the frames or it's just leaking in water. So what I saw when I was inside the building, and unfortunately, I don't think I have access to share photos. But there are areas in the building where you can see up to the sky, and the size of the stability and the costs associated with putting a new roof and getting it up to a condition that would allow you to the way to use it. It was cost prohibitive. So we do believe that this is in the best interest of kill wa to sell this asset. I will note that when the leases were generated between the city of Detroit in Great Lakes Water Authority, it did give GW eight the right to dispose of assets that were assigned to it. And it does request or it does say within the leases that the city of Detroit cooperates in, in this process of aiding kill WA and selling these assets that it no longer needs. For for regional purposes. Mr. Brown? Yes,
Madam Chair, that language right there further reinforces the fact of this being a shotgun wedding, I understand it exists. And it's something that we have to operate within, that shall cooperate is before us first to make a determination. Keeping in mind, what I'm saying is, is that yes, we have this relationship. Yes, it is a lease long term lease those things there. But what we hope is for the generations to come that if by some strange purpose, some reason or whatever, that this system revert back to the legacy of the folks in the future, that we are not, we don't basically have piecemealed off the various assets, various parts, and then is a resemblance in the future. Yes, I understand where this this issue that you stated, but in the future, I want it to come to us earlier, so I can go out there and see it for myself. Also, I want to say that, you know, you mentioned GL wa Glee, while in the need, has determined the need for it to be sold. But I'm gonna ask you, where is that money going to go? Where does it go up? You're gonna explain what the lease says. I mean, that's agreement says but, you know, how does the city of Detroit water and sewage department benefit from this sale? Besides just having a sort of fiduciary role or part in disposing of this asset? Sure. I
believe that's director camlog. Speaking and that's a good question. This property was purchased with what is called Common to all funds. So every one that was a part of a part of the region, everyone that's a part of the regional system includes the city of Detroit, the money goes to is considered common to all so I think the benefit of selling this property to the Rams silly Corporation and securing the proceeds is it's additional revenue that offsets charges for, for for the regional system to residents of Detroit, but also throughout the region. But this is this was an asset that was purchased with what they consider to be regional slash common to all funds. So the funds would stay with God WA. But the US just like investment income, to offset charges to some degree. Madam Commissioner,
and this question is directed to either Council. We all we have legal title to the property. And GL WA has a lease interest in the property. So I understand if we don't adopt this year, we're not going to get very clean title work on the sale. The question, though, that I had, is it part of the lease agreement that when the real estate we own is sold, the proceeds of that sale goes to jail wa instead of us? It depends
on the property properties pursuant to the leases that were transferred or leased to jail WA. It gives Joe wa the right to sell and then when the determination is when a determination is determination is made as to how it was paid for common to all 8317 You Whatever it may be. That's how the funds are ultimately allocated. There is a provision within the leases that makes it very clear that if it is a Detroit local facility that is currently being used to support the retail system, then that is within the purview of DWSD. To sell and to keep the profits of that sale. What what was intended here, I think, is to make a very complex situation clean for disposing of property where, yes, Jo WA has the right to make the determination whether it seeks to sell property, but so that the next purchaser has clean title. That's when when the city comes in and supports by executing a deed, I will note that this is and I
take it your position is we really have no discretion in the manner
I would say get the vote no,
no, I'm sorry.
I would say given that it is a leased asset based upon the lease agreement, then it falls into that category of of assisting Gil, wha dispose of the property. I will note that we have had transactions before not in the city of Detroit, but there was a property in Grand Blanc Embry row property that too was disposed of pursuant to this provision. It doesn't happen often. But but this is something that was contemplated in the leases, that to date, both parties have abided by all the terms and conditions there. And certainly we are requesting that that we can do continue to do it in this regard.
Random, just by to clarify, for me, the property in Grand Blanc was that also, when we look back, when you took a look back, was that common to all funds that were used to purchase that property? Or was it at 317? I mean, what was
for that one, it was a water property, I think it was to build a pump station before. So it was common to all and which again, the city of Detroit benefits from finding other revenue sources beyond charges. And this is again, a benefit in terms of bringing in revenue for them an asset that is no longer being utilized. And and getting the revenue from that. The other benefits obviously would be that this property then goes back on the tax rolls for the city of Detroit. And presumably, it is a facility that will need utility service again, which is also a benefit to both the local and regional system based upon usage of it so that those are some of the other intangibles that that it's not just the sale. But there are long term benefits of getting this property back in private hands.
Manage Chair, if I may add, just to piggyback off of what Randall said is that this company has indicated that they plan on using the the establishment to also store equipment, because they're going to have a number of contracts in this area. So it is bringing a company that I believe they're in Macomb and they will be coming to the city of Detroit, we hiring Detroiters, so and as Rando mentioned, they will go back on the tax roll. So those are some benefits,
sometimes here.
And again, I'm not even questioning this particular deal. I'm trying to understand, and I have not read the lease in a couple of years. But in what 45 years, we're going to take this we may or may not take possession of the property when the lease expires. And am I understanding the process correctly that under the terms of the lease that were a party to GL wa as the unilateral right to sell property and to retain the proceeds?
So short answer is yes, the determination has to be that a it is no longer needed for the regional system. And then it all goes down to how the property was paid for. So if there is a circumstance where the property was paid for, with solely retail funds, that I personally I don't think GLBA would be even selling it. But it would be a decision that would be made by this honorable body. But for regional funds. This is something that was contemplated that there would be properties that go beyond their useful life there. And I have to be candid with you that there will probably be more as, for example, we are building new pump stations on the water side. And we're not building them on the same site, right. So why keep a property that has gone beyond its useful life, just because where we could sell it and bring in additional revenue that I believe supports the entire region. And there's a host of examples, the Ypsilanti pump station, we're looking to build a new pump station and the old site that's on or nearby the campus to Willow Run, there may be an opportunity to sell that there's on Newberg road and other pump station that sits literally inside a golf course and is too small of a footprint for our needs. So we're buying new land to build a new pump station, and there may be an opportunity to sell both of those assets in the future. So this is this is something that yes, we want to be in constant communication with this honorable body. We want to be in constant communication with DWSD in the city about this, but there are opportunities that we should take advantage of to dispose of assets that no longer have a purpose when there's alternatives.
And is the determination that it's no longer a useful asset? Is that made by the GL wa board? Yes, that is made by God weighing in our board has is the sale of an asset, an extraordinary decision that requires two thirds?
It does not. But I believe this decision was unanimous by the judge who board
random just for clarification to in terms of killed who is retainage or retaining the net proceeds of the sale? Again, I think I heard you earlier say that based on how the purchase was processed, whether it was common to all then really those net proceeds would be allocated based on the formula to the credit of those entities.
That's correct. I mean, it's new revenue that's coming in. So I wouldn't say that we're, we're cutting checks to every member partner. That's not the case. But it's additional revenue, just like investment income. That offsets charges, right, the direct charges that we that we provide to communities and then from there, they then set their rates in including their local system charges to residents. But that's how it would work. It's not it a check that's coming back to the city of Detroit of their portion of $1.4 million dollars. That's
correct. But is that is that a line item that's clearly identifiable in an audit?
I believe it is. But I I will tell you, I'm not the right person. I can I can check on that. But I believe we do identify other revenue, including investment income that's listed and I believe whenever we dispose of property that we also identify that because we have to keep obviously Ledger's of what we own or what we lease and what we what we do not. So there is a process. And I believe it is it is noted when we do sell assets as well as purchase them.
Yeah, I'd be interested in the answer to that question. Yes, as well. Okay. Any other questions or comments? Okay, anything else to add?
No, I don't have anything else to add. Was there any additional questions?
Okay, we do have a motion on the floor. If there's no further discussion or questions, all those in favor of the motion signify by saying aye. Aye. Any opposed? Okay, that motion is approved. Thank you, Randy, for coming. To explain that to us. Thank you. Nicaea. Okay, we'll go back to the Finance Committee presentation. And it's Tucker. I think you were wrapping up on water I and II and construction cash.
Belcher? Yes. Just a comment. I'm almost going to extend from this vote, because I would have liked to have Gary Brown here, because I know he sits on their board. And he probably could have given us better clarity. But then I know we're at the end of the year. And we want to get this wrapped up. But I mean, now with the questions that, you know, the other Commissioners as it's just opening up questions when they want to sell other assets? And I think at some point, we should have a discussion on that, because I didn't realize somebody could go sell my asset. And I have no say,
get the proceeds. Right back any of the proceeds?
Let's also clarify, I'm Sue Mr. Brown is going to be here the week after next when this has to be approved by the entire board.
So we still have this is a recommendation
recommendation. So opportunity to vote no, or even up saying, yeah, we've got the entire
board that has to. And I know he sits on that board, so he could probably give us the difference.
So my vote was moving forward.
Yeah, this is moving it forward to recommend it.
That was just my comment. So ya
know, the lease says what it says, and we're uploading to it.
This was never on my radar.
So just curious if we would have said if we say no, can they not sell?
Yeah, cuz I asked that.
They never Oh, they could sue us for breaching
provisions that triggers and yeah, yeah, no, no, no. says Yeah. Okay.
Thank you. Thanks for the comment. Okay, it's Tucker. Okay.
Sweet back here.
If you can summarize the remaining pages in either way.
Yeah. So I just finished the operating cash. We're on the water and sewer, I'm sorry, water it and construction cash. Again, at a very high level water it is we have 43 and a half million dollars as of September 30. This is a decrease of $8.2 million over the over the past 12 months. And 12 point 2 million decrease compared to August. And the reason for the decreases the spend here we've started spending our ad dollars for our capital expenditures. And more so during the month of September, so that's causing the decrease in our cash balance. Construction gases again, pretty much holding steady, we have 75 of them to $5.4 million. approximately a million dollar was paid out of this fund during the month of September. Once again, there are no plans for the issuance of new bonds in the immediate future. The same story here and then the next slide here, Michelle, on the sewer it cash pretty holding pretty steady and $32.6 million as of September 3 yet. No, not saying no significant change in the construction guests either. So I'm not gonna go through in any detail. The rate of spin on this suicide has been a little bit slower due to delay in executing certain projects. Again, no plans for issuance of new bonds in the immediate future for the sewer fund either the one previous to this. Yeah, so this is the water cash in inter fund. This shows you on a graphical presentation of combined operating cash and into fund balances, inter fund balances of the balances that one fund owes to the other. So if there's if one fund is going to the other fund that's taken into account to show the net cash position. The good news is we are holding steady in terms of our net operating cash and intra fund balances for the waterfall. And to see the red line hero pretty steady across the across several months. There was a slight spike in the month of April in 2022. It happens sometimes they do hire collection rate, but has since been pretty steady. For the last several months. Our net operating cash and interfund position amounted to 2727 and a half million dollars, which represents an increase of $8.1 million over the last 12 months. The next slide would summarize the sewer position. Slightly better news here as we see the curve moving up over the recent months here and this is good news because after paying off 50 $50 million in shortfall for the first two years of our operations. Since the bifurcation, we have slowly been showing an increasing trend in our combined operating cash and inter fund balances. This is the change in cash and investment I mentioned in the in my first slide, but basically a depiction of our cash position. As you can see on the slide, approximately 73% of our cash and investment is being held in government which is, which is a longer term investments in term in and manage portfolios. And then what we do is anytime there's unused money available in our, you know, Kasen and general gas and bank accounts, we just sweep that money to to government for higher yield. And this has actually produced a very positive results for us, as I'll show you in the next slide. And as man Chairman asked me in the past to show her you know, a brief comparison of what we were before we changed our investment strategy to what we are now. So this this like kind of captures in a summary on what the change causes. So the chain strategy included closing and combining some certain accounts. Part of the strategy also involve moving on use funds to those term investment portfolios. And the end result is that we have higher yields in our investment income as summarized below. So this table tells you our activities for the first eight months of FY 21, before we adopted the new strategy, and then the second column here shows you the same results for the next for the same period in FY 22 After we implemented the new strategy. So as you'll see our net net investment income after expenses. Before we started, the new strategy was $39,225. Once we started moving funds to the managing manage and term portfolios, our investment income increased significantly. And it was $1.2 million for those eight months of the same period. So even after we take out the expenses, we have a net gain of $1.24 million in our investment portfolio.
These are accounts receivable slides and I'm gonna go through quickly because there hasn't been any significant change since the last time we spoke. Our receivables have increased about 21%. Over the past 12 months again residents and customers is the main component of their duties. The sewer receivables have also increased $35.3 million dollars. And over the last 12 months. Residents and sewer accounts receivable increased $37.1 million, which is 23 and a half percent increase over the past several months. non residents and accounts have remained relatively flat over the same period. And I'm just going through the slides please stop me if you have any questions on any of these slides.
Now you can keep going. Okay.
Similarly here is the trend and accounts receivable not a whole lot of change in terms of you know operating results from August to September. The slider at the bottom shows us the total receivable versus net receivables continues to be unchanged from a year ago. Increase in allowance and that kept pace with imprisonment total receivables. My total allowance for doubtful accounts at this point in time is $260.5 million, which represents 81% 81.5% of our total receivables. This is a snapshot of our receivables and their historical perspective which just kind of backs up the information on those slides. Now, just one point to remember here and I mentioned before, approximately $7.4 million in the sewer fund and $3.3 million in the water fund did not get posted to our investor billing system, you do a glitch. This chart here of receivables does not reflect those cast positions those cast posting. So we could say this would be lower by $11 million across all customer classes. The next slide is a receivable aging and I intend presenting this laid on a quarterly basis, not to overkill it every month. But just to give you a snapshot of our aging position once in a quarter, a summary of receivable by customer class. uncollected receivables are generally carried for five years during tanning system. Currently, we are not writing off any receivable pending completion of arrival policy. Almost 70% of our receivable is 180 days past due, which is six months or more. More than half of those are residential accounts. Once again, the receivables did not reflect that and reflect on posted September cash receipts of approximately $11 million dollars. I don't see a slide there, Michelle.
Yes, there's an ERISA slot reflected on the left. Okay. Okay, it appears to be an error on the pages there, that will not be reflected.
Just show us the basic features that can be
shown. There doesn't appear to be anything beyond page 16.
Yeah, so yeah, we went as hard copies. Yeah, we've got all have hard copies. And I think they're only three more pages. So beginning with collection rates and the graph on that,
right. So the collection rate is would be the next slide here. But this is not able to show it. But if you have hard copies, I'll quickly go through the the collection rates showing non residential collection show improvement over the winter months. Again, due to the tax rolls that we have, we turn over to the city of Detroit. And then customers have little choice over that they must be in delinquencies to the City Plaza before April or there is the risk of losing the property tax foreclose or residents
without commercial real estate Did you say commercial,
commercial and industrial, industrial or commercial industrial, not residential? Residence residents of collection which is the blue line here I have appeared to flatten out following significant disruption due to the pandemic. We do expect improvement next year, as the Department resumed service interruptions on the delinquent residences customers supposed to be effective from January 120 23. Once again, that that cast that could not be posted in September is also having an impact on the chart. And you will see a declining trend for all the categories across customer classes. And this does not reflect the 10 $11 million that we collected in September, but could not be posted on time.
It's a car. Yeah. I'm sure yes. Okay. Can you tell the I guess by the board meeting, can you let let us know the impact of of not interrupting service and say it on this system? And also I'm asking if there I'll I'll contact the director and ask him this ask him a question offline as associated as relates to this issue.
So are you asking what's the impact of not having the moratorium?
You're right, I've having a moratorium or extending a moratorium?
Yeah, one immediate impact is the is the decline in the collection rate. Residential collection rate pre pandemic used to be in excess of 85%. During the pandemic, when we started the moratorium, when in service interruption or collection rate fell pretty significantly. And right now we are averaging about in the mid 70s When it comes to residents of collection rate. So we were hoping you know, the expectation is once this moratorium is lifted, it might have a positive impact on cash collections on those receivables and thereby on our cash flows. Well, we can give you numbers if that that's what interesting. Thank you. All right. So next next three slides is ma'am chair is the Budget to Actual comparison. This is the first quarter of the fiscal year. So we will see some variances because of timing of expenditures. And when the money's spent, I'm not going to spend time going line by line. But just to give you an overall flavor of what's going on here. Two things I want to point out. One is the impact on the revenues, both for water and sewer fund. And the impact is one month delay in incorporating the new rate structure. So the new rate structure will be implemented month and in delay, because of because of the encuesta, our billing system not configured for that purpose, starting July 1, so our new rates went into effect July 1, but we couldn't really implement until September, which means August usage. So the delay has some impact on the on the revenues. For blood, the water in the sewer fund, and you can see some variances. More significantly. On the sewer side, there's the $9.3 million difference, because the because the sewer cap on residential customers could not be implemented on a timely basis, which resulted in us billing the customers using the old rates that caused the variance there. Everything else the variances are not significant. And kind of typical in the first quarter of fiscal year. Expectation is as we go through the fiscal year, they're gonna even out over the next two or three quarters.
Yeah, as Tucker, as you've said, this is first quarter and for the intestine delay, and it's not as meaningful as it will be. next quarter.
Yeah. And as we, as we implement the new the rate structure, it's going to be more meaningful down the road. And being the first quarter, you know, as you know, that expenditures may or may not equal the budget, because of timing differences. The same thing about here on the last page, this is my natural classification of expenses, again, no significant variances in that variance column. We'll be monitoring these variances closely as we move along. That kind of completes my presentation. Again, any questions I'd be happy to answer.
Are there any additional questions? Hearing none, we'll go on to 22 Dash 0995, which is the preliminary budget presentation. And you all may recall about this time of the year, it is preliminary, we'll be revisiting a budget of the next several months. So go ahead is two, oh,
can we? Can we, you know, you know, since we're going to be presenting and can we hold this one often the next means, and just refer this to the full board as if information,
you know, is secure. If maybe if you can make, you know, just spend about the next three minutes making very summery comments about what we can expect to see in the budget. In fact, those items that may be different and distinctive from prior budgets,
if I may. There's only four of us here, I think the whole thing.
And on the whole board here
while you're talking about when we can afford it and we're talking now,
well, yeah, let me the way the process would work and this is just a preliminary as Madam Chair mentioned, this is very, very preliminary budget, it just to give you a flavor of what we are thinking of in terms of our FY 24 budget, we do not take into the board till after the second or third presentation to the Finance Committee. So this is the first time we are presenting to the Finance Committee. We will make changes in January, based on more information available. And then we make another presentation to the Finance Committee in hopefully in early February. And after that, if the finance committee recommends that we take it to the board and mid February or in March. So this one it just to give you a flavor of what the department is thinking in terms of are retailing revenue increases or revenue requirements at a very high level? It does not talk about rates or, you know, revenues by classifications. So if you if you want me to just give you a two minute highlight, I could do that. And then when we come back in March, I'm sorry, in February, we can go through in detail.
Yeah, just two minutes.
Okay. Then I just go through the summary here. As I mentioned, this is a this is a budget based on revenue requirement. It's a it's a revenue requirement and model, which means that we collect or compile all the expenditures from different departments to make sure what do we need to operate for FY 24. And those revenues become the basis for determining are those expenses I'm sorry, become the basis for determining how much of revenue we need to raise to meet our expense obligation. As of September in our preliminary review, here, we are showing go to the first time you're showing a 3.2% increase in our revenue requirement. And then this chart tells you the three important components of our cost structure, the operation and maintenance maintenance expense, the old surcharges and the our debt service and capital. So these are the three important components. And it shows a 3.2% increase based on preliminary preliminary data. And significant part of that increase on the next slide would be you see is, is for salaries basis and employee benefits. And this is based on our management strategic decision to to focus our resources more into operational areas to improve customer service level and service delivery. So none of the other lines, you'll see any significant increases in expenses except for personal costs. On an overall basis, this incorporates the wholesale charges. On the next slide, Michelle. And this is a function of GL WA, they determine what what they're going to charge us for wholesale charges. At this point, we're we're estimating a 2% increase on water and 3% or sewer fun with this could very well change depending on what GL who comes up sometime in January. The third and the final component is Devin capital, the previous slide. And then this is made up of debt service. net debt service cost and our legacy cost and revenue payments capital. I just want to highlight this point before we before we leave here. The legacy pension cost commitment that we had with the City of Detroit's Retirement System is coming to an end on June 30 of 2023. Which means that the huge amount of money that we set aside for legacy pension costs will no longer be required. That will be a saving in our in our non operational costs. Going forward, our pension obligation will be determined by an actuarial firm, and then the funding would be based on that determination. So just want to keep you abreast of that change that's coming up in the future, or will impact FY 24 budget. So fundamentally, again, I just want to conclude by saying that we are looking at a three point about 3% increase in our retail revenue requirement for both the water and sewer fund. And that'll lead us to total revenue requirement, reduction of 3.3% in the water fund and 1.7% in the sort of.
Great, thanks for that overview. Are there any other Sam's guys hand up?
Madam Chair, I just wanted to also in reference to what we talked about earlier this afternoon. This budget includes a significant increase in the number of field service technicians, approximately 60 to help make up for the backlog and reduced level of service that we've experienced since the pandemic. So there's a significant increase in the number of workers out there that will reduce the amount of time it takes us to respond to water main breaks, sewer investigations, service leaks, etc.
This is a good preliminary view of what we'll be discussing for the next couple of months. Any questions any further questions or comments? Thanks, Mr. Carr, any comments on the planning calendar?
No, ma'am. Nothing changes.
Are there any other matters?
Just want to clarify for the record, I would like to see added to the agenda of the full meeting of the commissioners, the discussion of the terms of the lease that we talked about, just so we can understand. And I want to go back and read it tonight, but before our meeting, because if if I understand, you know, it's a very simplistic analogy, but I rent my house to somebody else, he or she is a tenant, but has the right to sell the house without asking me and keeping the money. And if that's what it says, that's what it says. But I think we need to understand that. And the second thing I would like to see on the agenda is a status report on the moratorium on service interruptions. So let's just to hear, you know, what's going on. And, in fact, that shouldn't be in a private meeting that you'd be in a public meeting. So we understand. And, look, we know, if we if if we end the moratorium, or if the more moratorium ends, our collections are going to go. I mean, we know that they're in every situation, commercial situation. There's a certain number of people who can pay but won't pay if they don't have to. We want that money. Now, hopefully, the Lifeline program, at least has provided a dent in the people who can't pay. And so let's, let's just take a look at that.
Okay, so I think Sam and Akia got those points down. Yeah. On the 21st Okay, so, our next meeting is scheduled for Tuesday, January the 10th. Is there a motion to adjourn? I move we adjourn the war. And we are adjourned. Thank you all. Thank you. Thanks. Bye. recording stopped. Yes.