Are there any board members that would like to move any of those items for regular discussion under the agenda?
Not so you're saying the legal ones were
Eagle had a meeting today
was nine G through J on the agenda.
Those are legal. Those were legal committee meetings today.
And they will be moved to Item three C as 12 through 16.
Unless you'd like for something to be brought in for full discussion.
No,
we're good. Okay, and then in that case, Bill, I guess we move down to approval of the agenda.
That's correct.
Is there a motion to approve the agenda, Move approval? Move to support it all in favor? Aye. Motion to approve. The consent matters. Moved. Support. Studebaker J. All in favor? Aye. Moods is supportive public comment, Bill.
Thank you, Mr. Chairman. William Wilson, Chief Administrative compliance officer. This is the opportunity for members of the public who wish to address the board to come forward to do so if they are in the room. They can line up at podium. If they're participating by zoom, they can press star nine on their telephone or raise their hand in the application.
there anyone in the room or anyone virtually, that would like to provide public comment at this time. If so, you've got three minutes to do so. Please indicate.
Mr. Chairman, I do not see anyone in the room coming forward to the podium, nor are there any hands up so a second call would be
anyone that would like to bring public comment to the board today.
Anyone, Bill? No, Mr. Chairman, solid third and final call
anyone for public comment? hearing or seeing none. We'll close that portion of the agenda and move on to communication bill.
Thank you, Mr. Chairman. This is there are no communications for the board to be received at this time.
For all business that takes us to new business. Item A is recognition of the American Water Works Association. President Elect madam Cheryl Porter
madam Porter, congratulations. You're representing. So you want to?
I certainly do want? Yes. Thank you Chairman Hendricks. I appreciate that. I am so happy to be standing here in front of you to recognize Miss Cheryl Porter. She is making her way up to the podium with me.
So we are all well acquainted with Miss Porter, as she leads us in an excellent way with our as our chief operating officer for water and Field Services. And I am here today to formally congratulate her for being selected as the American Water Works Association next president elect if you don't know a WWE are the American Water Works Association was established in 1881 nearly 150 years ago. It is the largest nonprofit scientific and educational association dedicated to managing and treating water having more than 50,000 members aw WA is the premier Drinking Water Association in the country. Cheryl will be the first African American and the first woman of color to serve as the president of this internationally recognized organization. Cheryl it is my honor to present you with an award in recognition of your breaking barriers and your leadership in the water sector. You are certainly a trailblazer and we are so very proud. So please welcome me. Please join me in congratulating Miss Porter
give her a round of applause that
compliment we do want to take a picture
this way. Okay. All right. Get rid of these things. Can we get rid of these things? Yeah.
Make it happen. That's for Baker miss anything else was coffee.
Nothing else has had to say that we have been celebrating and we'll continue to celebrate this accomplishment for many weeks.
Thank you very much for that well deserved. You know, Miss Porter, if this was a body gave out proclamations that was certainly be one that would be deemed worthy. But since we don't we just give you a hearty congratulations, Mr. Chair,
I can take care of that city council. You're gonna
take care of that. I got it. See, our tentacles just reach to all areas of the region. So take care of that. Mr. Brown. Congratulations. It's always great to see one of our own to ascend to such lofty positions. So congratulations and good luck to you. This board I assume you're going to be missing some meetings now. Is that right? You're excused. Next item on the agenda. This is item B. This is a presentation to 120 inch water main break. Conclusion for the board. Miss Porter.
I'm here today. To first want to recap because we have presented support on what people don't want to talk a little bit about the results. They are not finalized we expect that they will be finalized in the next week or two. Is that better? Okay, sorry. So, we will just highlight what the inspection what we expect for the inspection results. Again, they should be finalized within next week or two, and then we will make that report available. We'll also talk about the conclusion of the repair as well as giving you an operational estimate on the cost. We did not engage our financial partners with a true audit of cost. Some sometimes their eyes a little bit different. And we did not have an opportunity to do that but we will do that when we finalize everything. So our largest transmission system transmission main gave us a break on 4:30am on a Saturday, never Monday through Friday. So with that, we believed or anticipated that we might have an impact on 23 of our member partners. By the end of the day, we know that down to seven communities who were actually directly impacted who had to go under a boil water advisory, taking the almost million people estimate down to 133,000. Folks, they were on a bowl of water advisory which we were able to clear within seven days. We were able to get the pipe ordered and be given to the water and prepare the site for removing the damage pipe as well as installing the new pipe. And we reestablished low because where this particular break occurred it took our Lake Huron treatment facility offline completely until we can get the repair completed. We had a opportunity and we took advantage of that opportunity to do some inspection work. This particular line has been identified in our L CIP program. And so we took advantage of the fact that that pipe was now so just a little bit of information about the pipe. It was about point six miles away from the lake current facility. It's the 1960s vintage of a pre PCC pipe 26 miles it took five contracts in order to create that 26.1 Miles pressure rating of about 214 gauges just the strength of the wiring within this pipe. This particular stretch of pipe has seen a failure before and that was in March of 1985 and it was about a mile west of the lake arm water treatment facility. Again, we took advantage of the fact that we maybe can find the evidence to see why this break occurred. So we had all the professionals come in and collect their data go back and do some analysis to see if we can figure out what that cause. And again, that report should be coming out shortly. This is just a map of the 26 miles of the connection between Lake Huron and the InLight pump station and a very generic location as to where the break occurred. We also want to emphasize that in that 26 miles, we were only able to take advantage of maybe about five miles of inspection about four and a half miles. We did some research comparing different technologies. So we got some very valuable information though it may seem just a short stretch. And with that, we'll talk about the cause a little bit. So again, we gave our professionals an opportunity to go in to see if they could identify a cause. One of the things that was identified or were noted was the rusting that was occurring underneath the mortar where the mortar had broken off from the shell of the pipe. One thing that they did determine was looking at our operations they did not see any transients that that may have resulted in this cause which is good information. It looked like we had pretty normal operations. So for the root cause, based on preliminary information, there was a loss of strength due to where this mortar coating damage occurred. That made the wiring susceptible to corrosion, as well as some hydrogen hydrogen embrittlement. So this lack of it was also a lack of cover on this pipe, which indicated that there's some other things that we want to do as far as the recommendations are concerned. Which we will do one of the things that was definitely highlighted from the investigation is that we do need to continue with our linear system integrity program, that it is very important what we're doing and that if we stay the course we will find the innovations in the in the funding. We want to make sure that this is properly funded so we can continue to improve our infrastructure. Now to close out the repair had to D water the site had to dig down to the damage pipe area which we did we cut out the damaged area, which these are some photos of this is the one particular area where the pipe actually broke. You can see that that damaged section again we ordered new pipe immediately got everything that was available in North America wasn't quite enough. We still needed another section of pipe and we got that to us as quickly as possible. Once we had all the pipe as we were preparing the area as pipe was coming to us, we began the installation of the new pipe during that piece, that's where we finally understood that there was more damage than we thought so we wanted to make sure that we were doing our due diligence and making sure that we had enough hype to effectuate this, this new news system. So just the more photos the closure pieces. We also had an opportunity to install a valve which will be instrumental for us and continuing our linear asset program inspection on this particular stretch of pipe. So we were able to install that as well. Once installed, we had to do some welding to put in the appropriate closures. And while all of that was happening in the field, what was happening in the background is that we were creating three SOPs with three specific focus areas. Again, the Lake Huron treatment plant was taken offline. So we wanted to be careful to ensure whatever unquestionable quality once we started restart a flow from that facility. There was some draw from Lake Huron to one community that would have been out of service if we couldn't, we came up with something in very innovative innovative that allowed us to continue to feed Burchill during this time, which was really critical. We also needed an SOP for the people in the field as this section of pipe has been opened, that means we needed to ensure water quality, which means that we needed to go in to disinfect. Once we do that disinfection we need to flush and then do some testing to make sure that all of that was adequately handled. So we had an SOP on how that was going to be done, as well as an SOP from systems control on how are we going to go from where we are back to normal operations. And during that process, we wanted to give due consideration we didn't want to create another situation for boil water advisory. So the team strategically looked at that to make sure that we could return to normal operations without any more disruptions. As a part of creating those SOPs. We also looked at timeframes. One of the things that we constantly got asked throughout the repair is how long is it going to take how long is it going to take so we were looking at that and then giving ourselves the best estimates based on the information that we had available to us. Once all of the hype was installed and the welding was done, we put a concrete layer over that pipe and then began to close up the area. And restore it back to its normal state took us 48 days. So from August 13 all the way up to September 30 October 1. We called it officially in public on October 3 I wanted to capture this we got hundreds of calls from our member partner residents. We responded to those calls. And we also got some kudos from folks that we were engaged with. And so I captured that those that I was aware in order to encourage the team to let them know that the work that they were doing was appreciate it and finally costs. So the current estimate for the actual repair is 2.979
or $2.9 million. And then we had the additional work with the inspection as well as getting water from gcdc. To that help assisted in making sure that we kept people in supply of water as we are effectuating the repair giving us a grand total is 3.9
million.
And with that I'll answer any questions.
Questions on this. Thank you very much. Questions on this item. This is Item B
Mr. Chair was sure was this common all costs? Yes.
This was probably bill or Sue would benefit to Detroit was
this repair.
So from a common from common to all cost perspective the piping network generally is serves everyone right. So this is how regional systems work when you say benefit. What benefit did the Repair have the city of Detroit the city of Detroit kept and kept the network flowing in place. Right so the regional system itself is a benefit to the city of Detroit shared expenses to the city of Detroit. So generally speaking, and our water network when we have multiple customers who are served by a pipe it's a common dollar expense.
Also in this instance we pumped north from the north service center to feed the customers on the northern end of the system. Having having established that can be done in another emergency if the outage were in one of the plants that serves the city to try we could probably call Sal
Yeah, you know, members of my team would would argue that that very action actually caused an emergency and that we had an inordinate number of water main breaks in the area in which water was diverted to this particular line. So I'm hoping that's for another day I think. I think I know that I put something in writing to try to get an understanding of because I just heard Sure I'll go into real detail to to make sure that when we put that line back in service that we weren't going to cause some unintended consequence and and if if, in fact, Detroit did have water main breaks that were an unintended consequence, I just would like more so to get to the bottom of it so that next time that this might happen, we would be aware of the circumstances and could learn from it. That's all and I'm not, I'm not at all objecting to the comment at all costs. I just, it comes up at this table. Quite a bit in a lot of different areas. And I just wanted to be on the record that this this expense, although I see absolutely no direct service that was provided to the city of Detroit on a line it's 120. Feels miles away from the city of Detroit, but I do understand the network and I do understand the lessons learned and I do understand that so I don't want anybody to believe that I am objecting to the comment at all costs. I want it when it comes up. And if something breaks in the city of Detroit, I just want to make sure that we we understand that the network is benefiting from this and and that's why it's coming off. So thank you. I'll leave it at that.
So Miss Porter, when you talk about the linear asset program, does that also include the inspection of that particular line from the point of the where the damage was to kind of look up and down the line and see if there were any other soft spots that we needed? To take note of to prevent? You know,
is coming to the podium because he is responsible for our linear asset program and I'll let him speak to that.
Good afternoon. Jody Caldwell, Chief planning officer. Yes, the 120 inch main was one of the higher priorities for condition assessment. One of the top priorities in this five year increment that we're working with our consultant HDR as a program manager. We quickly got them out on site. I think they were out the following day. began looking at opportunities for inspection. Miss Porter indicated that we had multiple technologies out there to do the inspection. It was a relatively new technology. So we wanted to use the newer technology in conjunction with an older technology or the same technology, different company with different techniques. Got them out, and we were only able to inspect five miles of that pipe just due to D watering issues and that I mean, the whole whole length of the pipe is 26 miles. So what this did was it got us moving forward. We have the five miles of this pipe but we're planning on doing the full 100 or full 26 miles and we're planning for that this upcoming year.
But what did the five miles we're finding Did you find so
how this condition assessments typically, what they're typically trying to do is identify wire breaks within the pipe. And as you get to a certain number of wire breaks, you may reach that pipe yield strength or ultimate strength. They didn't find any pipes that were close to the yield strength, but they did find pipe segments in that area that had five or 10 wire breaks in it but it's not. Not to the level that requires immediate repair something to continually reevaluate.
Okay, and then the other 20 Miles that's down the road something that we plan to hopefully the district is well, hopefully this year. All righty. Other questions on item be
sure. Mr. Baker? Yeah. Gear is interesting brought up come down because that was one thing I was looking at. Like for example today. I think we approved a sewer improvement and joy road and brush that serves two communities. That is a common to all expense. But then we have omitted for example, which is 23 communities where they only pay for the pipe they use right so there's 23 paying only for themselves and no one else is paying. And then we have some water customers if they're an authority, they represent many communities, but yet they only pay for like a booster station that only impacts them. So there are so many dichotomies, I think between you know, everyone's paying for two versus those two aren't paying for the others. So that's something I want to talk a little bit more about later, but Jody the or Cheryl the so we inspected the four miles right when the pipe was down. And we think we're going to inspect the other 22 Right this year. Is that in the budget to inspect the other 22?
Yeah, those those costs are on em costs and they're in the in our operating budget.
Okay, so that'll get that's funded this next year. Yes, it will get done. Yes. Okay. Now, the incident report that we just forgot, I think in December talked about that. The Authority has 435 miles of this pipe and it talked about the previous failure rate basically scattered. Here's a failure rate. So in effect, we'd have like 12 and a half failures. I don't know what time period on average of that 435 miles of pipe
over what we don't know.
That's a concern. What what is our plan for the other 400 and some miles of this pipe when on average? Pipe install the manufacturer between 68 and 71, of which we have 125,000 links and on average we'd have 12 failures in that pipe. What is the plan? For the that remaining pipe when we know there's a high failure rate?
Yeah, that's a really good question. That's the whole reason we established the linear system integrity program. We're we're just getting started with what I call Lean program and I think I brought that to the board several months ago, in which we are looking at pipe the highest consequence of failure pipes first, the 120 inch, the 96 inch. We're working through the 14 mile breaks because we've had recent failures on that as well. And there's other other pipes that are our highest priorities. You have to you have to remember to these are multimillion dollar inspection costs for this. It's very impactful for the member partners. We're using the technology right now, where we introduce a device into the pipe. It identifies broken wire wraps, but we have to float we do this live and so it also impacts the metered customers or the various connections. So it's very challenging to do and we're starting the program and we're working through this lien program to get to a point where hopefully we can get to 80 miles a year. Right now it's about 20 miles a year is what the initial plan is. So we're ramping up. We're using the lessons learned from you know, the inspections that we had here, the inspections that we had on 14 mile and we're going to bolster the program as we move through time to be able to get more
Yeah, I guess my my question directly then to Suzanne is you know, sometimes you have to spend $1 to save $10 right if you can fix it now before it breaks. Do we have enough in our either our CIP or an O nm to really tackle this as aggressively as we should? I know, we're limited, you know, with with funds with the percent charge camp and all that, but is this something we should be putting more funds towards in order to save money?
So I think so it's a good question, and I'm glad that we're on this line of questioning because I we've had presentations on the outset before and in theory, it's interesting when we talk about things like risk and but when reality hits, it's nice to have an example to say okay, we see what can happen right, what kind of risk we're taking I think we have a good program. I feel comfortable that the program is funded and ramping up within the constraints that we have. Certainly if everything were passable, we would try to do it more quickly. But one of the things I think it's really important to remember is these pipes were not built or designed with the intent of getting into inspections. Which is unfortunate, right? This is one of the reasons why it's so challenging. And sewer pipes. We've talked about this before, you can just get in there, get in a sewer pipe, right you can send a camera down a sewer pipe, contractors walk sewer pipes, these live water mains, in some cases, we don't even know necessarily have redundancy for the areas right. So getting in them live is really, really challenging. So I think we've got a good program. This was one of the highest priorities that we had in asset management where we stood up Asset Management was water transmission main and PCCP pipe, because we all knew that this was out there. So we've assessed the pipes, the risk of the pipes, the risk of failure, I can't tell you that it won't happen again. I can't tell you we won't have another break. But what I can tell you is we prioritize the highest consequence and the probability of failure with this type of pipe and we're attacking it in a very methodical fashion. So it is important one want to Cheryl's comments right at the beginning of that presentation was continue to fund this program. And so we're doing that and I think we're we're doing it as aggressively as we reasonably can operationally, because it is challenging so I feel comfortable that the program is certainly in place and reducing our risk. Until we get further along in that program years down the road. We won't be in a place where we could say we've really managed the risk entirely
talked about sure you said ground cover is that yes, ground cover and water and you know is grounding and effective remedy to or you just don't know where the missing cover is or or pipe segments that have some water getting in there.
The identification that the cover may not be as deep as what we would like has indicated to us that we want to walk that entire line and check what our cover is and compare it to what was originally designed to make sure that we have the appropriate cover. So so that's one of the recommendations that's coming out of the inspection. And I do want to highlight one little further with what Suzanne is saying that will allow us to take the L SIP further faster, is that every time we do something just like with this 120 We were able to install a valve which gives us the flexibility to get in and take the technology in and out. The more we are able to facilitate that within the system, the easier this will be in the long run. So this is just a toe in the water but it is the right direction that we're taking. Because again, my primary responsibility is to keep people with plenty of water at all times. So anytime we do this, we are shutting down systems that can minimize people's ability to use the system. Well one
last question. Do we have more funding in the CIP for valves or is that oh nm or do we have more money? You know, I think we keep seeing our KPI also valves right not working and operating but even new valves that help isolate are we putting more money into that?
Absolutely as we are we we started out with a valve exercising program as a pilot. We will be bringing to this animal body before that contract closes as to how we think this fits moving forward and what kind of funding will be needed in order to support it moving forward. Okay, so definitely
yeah, we're on I we are accelerating I think is reasonably fast. As we can, understanding that we know that this is risk. Right. It was very, very unfortunate that the break occurred where it occurred on such a large line, but certainly we had identified that line
is not the first one and it won't be the last right? That's correct. But I think when you when you frame this issue in the context of 435 miles, and multiple failures, it sounds like Mission Impossible. There's nothing we can do about this throw up our hands. But the reality is and Jody, you and Cheryl both put it into context, that if you talk about the 120 inch pipes and the 96 inch pipes, and the ones is going to have the most catastrophic impact. Now we're not talking about pouring and 35 miles of pipe, we're talking about the ones that are that have the most potential for damage. And that's where you're focusing your attention with this linear asset program. And so I get it, and I think that you know, people listening to the this meeting, you know, they should go away with not 435 miles and multiple failures. Oh God, what we're gonna do, but that you have a strategy focused on where it matters most. And it's manageable. And you're doing what needs to be done. Absolutely. Anything else? Do we need a motion on this? Oh, thank you. So most of the receiving file, so move the receiving file item be Mr. Sec, Mr. Baker, all in favor. Aye. Motion passes. Next item item C. with Nicolette Bateson, this is your FY 2425 Buying or buying by Ennio budget requests
Oh, am I now? Thank you, Cheryl. That's why she's president elect. She's making sure all of us are doing the things that we're supposed to be doing at the right time. Thank you, Sharon. So good afternoon. The matter before you is the proposed presentation related to the proposed upcoming budget and charges for the this board adopts a biennial budget. So the upcoming fiscal years are 24 and 25 as well as FY 2024 charges. So there's two items on the agenda. They are very closely aligned. So this item that I'm talking about right now, with this presentation will include both budget and charges. Both items are on your agenda to receive file and refer back to the audit committee. The cadence is the audit committee has further questions review that we go through and then that leads up to the public hearing that has been scheduled for next month on February 2020. February 22 2023 was an proposed effective date of July 1. And basically there's four key takeaways for this year's overall budget and charges. And for the budget. The overriding theme is trade offs. Due to unprecedented economic times in all areas of spending chemicals, utility labor capital, while still advancing system resiliency. And we were before you in the month of November, presenting the report from the economic outlook task force we foresaw in the previous year that we were looking at some pretty challenging and unprecedented economic times ahead of us. And we want to be prepared so that we have the appropriate funding for the things that we need to do to maintain resiliency, but always keeping a mindful eye on affordability. This year's budget was very challenging, as I mentioned at that time, our benchmark to the operating budget managers is bring us a budget with no more than a 2% increase per year and this year, it was more like 16% and which equated to about $42 million. But 27 million of that was hard costs for utilities and chemicals. Some chemicals doubled quadrupled in cost and similar increases in utility. So very challenging time. We worked through balancing the budgets. Part of that was scaling some things back, scaling back the improvement and extension fund contribution that we'd previously planned, as well as any vacant positions that we've had as Jill who is like not unlike any other employer recruiting in this academy. We have positions budgeted that we haven't been filling. So if it's if we had a vacancy, we budgeted that at 25% with an allotment of funds within the budget that if the position is filled that we can draw upon that so a lot of it in and we're also operating still within the 4% promise that was laid out in our founding documents. And what that basically means and this gets into the second bullet point is the SEC the system wide charges revenue increases 2.75% for both water and sewer. So when you look at the budget, it's a budget increase of 4%. But we have offsets with investment earnings, so that brings the system wide charge increased down to 2.75%. That's well below the rate of inflation from December from the Bureau of Labor Statistics, which is at 6.5%. I should note in the previous month, it was at 7.1%. So we're hoping that things are starting to slow down in terms of the increases in inflation. Number three on the list bad debt recovery. Highland Park a bad debt expense is not included in the FY 2024 charges. As this board is aware we've had ongoing mediation with Highland Park and through that engagement we're optimistic that we can work towards a resolution that we can not necessarily have this item in the future. The fourth item and this is for our water system only. The FY 2024 charges reflect what we call an every four year reset, which it basically in shares based on what's called the contract alignment process. So and this is the first full year of the full cap implementation and, you know, question is what do we mean by contract alignment? So we have approximately 80 customers on contract. And previously, every 1/3 of those contracts were renegotiated each year. Each time a contract was renegotiated. The contract values or demands were renegotiated. So in that year, I'm if I'm community a I may have added storage. So my my costs are going to decrease in the future. But that means that Bill and Sue's costs are going to increase because our budget pies. It's a fixed pie. We've tried to control the size of the pie, but it's basically my share of what I'm gonna pay in costs is gonna go down but that means that Bill and Sue would be paying more so so we had a lot of instability year to year because know the water customers adjustments vary wildly from what the system average was. So through member partner outreach, working with our member partners, we came up with the contract alignment process that means that everybody's contract is aligned and changes in the same year. That heavy lift on our general counsel's team, and others who renegotiate 80 Plus contracts in one year. But that way, everybody has the same data for the same time period, which takes into account same weather patterns before there might have been different weather patterns if you're looking at a different period of time. So this was the close that we could closest that we could get everybody to the same. But that means this is the year that we have variability from member partner to member partner because over the past three previous three years, some added storage. Some had large industrial customers that increased or decreased their demand. So there's a variety of changes that occurred. We have a slide later on that'll kind of show you how that varies from community to community. But clearly this is one of the more challenging things to explain when we talk about our charges for this current year. So essentially we call it a reset that happens every four years. And fy 2024 is the first year the full reset for the contract alignment process. So I mentioned a charge as well below inflation. As pointed out here we stay within the 4% promise for the first 10 years and investment earnings help us offset that increase. Highland Park bad debt expense, not included in charges and the CAP process. This is a little bit more of information. Oh and I should mention however, on the sewer system, I kind of talked about water system and shares and each member partner share on the sewer system we also have shares this year is a year where there is not a change in shares among member partners. So generally all the sewer system number partners are going to see approximately a two a 2.81% change as the system wide change to 2.75. There's one cost pool that causes some reallocation that causes it generally to be 2.81% for most member partners. So stability there we do have a year coming up where there will be next year a change in the sewer shares.
proposed budget highlights I really want to focus on this graphic because it's really tells the story. This is for the water system. You'll see us use the phrase water revenue requirements that phrasing is required in the utility sector. But this is really the water budget revenue requirements. Just another phrase for budget and in the ratios are pretty much the same. For the sewer system. So you'll see in the lower left corner 43.2% of each dollar. So each day we start the beginning of the day we're putting way 43 cents to pay our debt service and that's for all of our capital that we've constructed and has been in place as our debt service. 41% 41.3% is operations and maintenance. So that accounts for some of the things that we talked about today when we have repairs on the system. We have our operating costs. That's 41 cents on the dollar 8% we call revenue finance capital also known as the contribution to our improvement and extension fund. So if I really since it set aside for capital if I added the 8% to the 43% really over 50 over 50 cents a day. goes to our capital program. Again. If if people saw the pipes above ground, they appreciate how much we have but our assets are largely below ground other than our plants. But that's why there's so much dedicated to capital very capital intensive to provide water and wastewater services. And then of course half percent of revenue is set aside for our water residential Assistance Program. We are participants from the startup of the authority, GL WA and DWSD. Have a commitment to largely pre fund their share of the closed pension for the Detroit general Retirement System attributable to the water and sewer system that advanced payments at ends in the near term. And there is a tail liability. We do get some budget relief and future years based on this but it is something where the amount of any ongoing actuarial liability will be an outcome of the investment return from the pension system. And then last but certainly not least 6.1% funds the regional system lease. As a reminder, GL wa pays a total annual lease payment of $50 million for both the water and sewer system combined. The split is a little bit different between the water and sewer system. We call this a closed loop lease because the lease payments can only be used to fund DWSD Detroit water and sewage department. Investments in capital or debt service, excuse me get a little tickle. And in that way it stays within the system for the benefit of the overall larger regional system efficiency. So that's the water system again very similar percentages even for the sewer system. When we do our budget again based on our capital nature, we don't look at it as just one year or two year we look at it through both a five year and a 10 year lens. So when you see our budget document online, it covers five years in detail we also publish a 10 year financial plan. My overall message to you is the same as it was in November. We have some challenges ahead of us. We were living to the commitment of the 4% promise which remains in place through FY 24 and 25 on the sewer system barring any major changes in the capital program. We're looking at a subsequent need to rebalance the budget and rebuild our r&d funds that have kind of taken a hit to be able to fund the Oh nm costs for utilities and chemicals. So at this point, the plan is anticipating 5% For three years from 26 to 28. And then going back down to 3% water system a much bigger challenge there on capital investments. Traditionally the water system has not had as much low interest costs financing through the state of Michigan. So we're looking at years of 6%. Again, this is the plan based on what we know today. We would always like to beat that if we if we could and a few other details as it relates to the financial plan for the water system based comparing to the bond deal that we did back in August. And with the increase in capital as we went through the CIP, the capital improvement program draft two was presented to the board's Capital Planning Committee last week, we did do a rebalancing and a reprioritization. Within the CIP in the month of December, lots of people worked very hard on that so that we could keep our capital program within the financial constraints. And so that's reflected in CIP draft two, as we landed with that, it looks like we might need to do a bond transaction maybe about three months earlier than we had previously planned. When we did our forecasts back in August, and the grand scheme of things with the dollar amounts that we're talking about, and the plan to be in the market approximately every two years. That isn't something that necessarily is a major deviation from our previous plans. Let's see. So next, we're going to talk about proposed charges. I want to pause here for a moment. I have a few team members on the line. Matt Lane, who is our charges and outreach modeling manager, it's a new position as we build capacity internally. I'll talk about his contribution to our efforts with our member partners later on. Lisa man Seanie, who's our financial planning analysis manager, she and her team are frontline in operations and working with the teams to develop their budget. She's also on the line, and then on the line and I'm teeing up to speak next is Bart foster with the foster group. Bart it does our annual cost of service study. There was some other discussion of charges earlier in this meeting. I should note that through our outreach process, we do have two groups working there's a water charges methodology group that BART and Matt are supporting, along with outreach and a host of other team members as well as a sewer charges methodology. So we we never reach a destination of perfection. We reach a destination of Gee, that was good. There's some lessons learned how can we continue to improve. So with that, bar, I'm going to turn it over to you and just tell me when you would like me to advance the slide.
Great, thank you, Vicki, and good afternoon. Thank you for the opportunity to speak. So just a high level summary and a lot of this is consistent with what we presented in November and December actually all that's consistent for and this is really repetitive of what Nikki mentioned early on, on the water side of the utility. This is the first time since 2020 where we've done a full reset on the cost of service analysis for all member partners. And again, it's in alignment with the cap, which was designed to have some short term variability while promoting long term stability. There are other so as Nikki mentioned the how people negotiated their contract. This past year to the cap is the primary driver to why Nicky's charge might be different than bills charge different than suits Sue's charge going forward. So let's go to the next page a little more granular on that. This is the first meaningful changes in contract demands and four years via the CAP process. I will tell you that in 2021 fiscal 2021 There was only one member partner manage change in their contract demands. Everybody else all 87 other member partners received the same charge adjustments in 2022. There were 11 that had interim changes in the contract demands due to either they went over their contracts and had an exceedance and had to negotiate a higher amount or they had some interim, local operational matters that allowed them to renegotiate interim. Last year there were only four that changed. Everybody else in the last three years has received the same percentage charge adjustment to the last three years. Resetting that to get to this fourth year. cap plus impact is the biggest driver into why this charge variability. There are other elements that we talked about in our rollout meetings with member partner community. changes in relative average day sales volumes have a small impact on individual charge adjustments, changes in the tweet and they relative where the budgets being spent. The the current charge methodology has moderate impacts and individual charges amongst communities. So when we reset all of these things for the first time in four years, compared to the uniform approach we've had in the last three years, we should expect some variability around the average and on the next page. That's exactly what we're seeing. This is intended to show you the relative change in charges for all 88 Water member partners. So each data point on there is an individual member partner data point. The average is that 2.75 indicated by the dotted line. You can see that those that are to the left of the scale, below average below the average are generally those Master Master partners with reductions in demands and vice versa. If they're on the right side of the scale. There are a handful of member partners whose data showed that frankly, their contract demands needed to be increased. To at the very left end of the scale, where it's being highlighted right there. There were two communities that were able one was storage, and one with just a more refined look at the actual data were able to reduce their charges totaling about $4.5 million for just two of the EDA that $4.5 million is roughly one and a quarter percent. of total water system revenue. So even if nothing else had changed for any of the other 86. Their charge adjustment would have to be the 2.75 budget increased plus 1.25% For this reset, which would have put them up at 4%. And that will the other 86. What you're seeing is the general approach to that plus their individual change in shares that we've bracketed this a little bit to show, you know, in the middle there, there's roughly almost three quarters of the communities that are will all say clustered around that average not materially different than the average. There are 10 that are 5% lower than the average on the left hand side and 15 that are 5% over the average. On the right hand side. So frankly, honestly less diversity than I anticipated. I thought we were gonna see a lot more diversity come out of the capital product of that contract alignment process, and the steeper impact line. So that's the executive summary of individual water member partner charges.
Case, I could just put an exclamation point on this. So if you had seen a chart like this, prior to implementation implementation, that cap, there would have been much greater variability among a much greater number of member partners. So it would have been and that would have been every year. So what we're experiencing this year is what we used to experience every year. But again, to underscore to member partners out of 80 plus had a reduction of 4.5 million, equating to 1.2% of system revenue. That's pretty significant. Sorry, Bart.
Before we leave this page, the other thing I would add to that is we went back several years before the contract demands, not only would this line have been a lot steeper, the scale would have been a lot higher. Right? So we're showing minus 40% up to plus 30%. There were years when we in order to show this 1015 years ago, we had to have the scale at minus 60 up to sit up at 70%. So the stability objective has been achieved. But it's going to be like this every four years so long as the contract demands and the existing charge methodology continue to stay in place.
And Bart director Baker has a question and director Baker if I could ask to make sure that we have your microphone on just so that BART can hear you. Thank you.
Hey Bart, just while you're on this page, the the communities don't have contracts right that don't aren't metered. Are they on this page and they're not in the contract alignment, you know, four year process. How are they impacted or or what determines their demands? And are they more stable because they don't have this CIP process? The
I believe, Director Baker, you're asking about Detroit Dearborn in Highland Park, who there is one other small number partner that has not served on the model contract? It's a very small piece. Those three communities their demands are determined by the results of the Black and Veatch units the service study that was conducted in two phases and placed this last piece was placed in effect in 2020 fiscal year 2020. In effect, we take the findings from that study, which starts from the retail sales data in which they all report well Detroit and Dearborn report to GL WA, and then we add on non revenue water in the local units as determined by that study, and then we apply peaking factors as determined by that study in order to get plus operational buffers to get to the proxy for their contract demands. What I just described to you is the same process that we've done consistent since that unit to serve a study was published, one change this year that's being proposed by GL WA, is to lock those demands in over a four year period. If I could just cut to the quick, Detroit's retail sales volumes as reported and as projected for the coming year show a slight increase compared to the existing charges. So whereas a lot of number of partners who didn't change their contract demands are seeing flat contract demands. Detroit's proxy for Max day and peak hour demand is actually going up slightly compared to the remainder of the system. Going down. So a little bit different with Dearborn because Dearborn sales volumes are lower than they were in the prior year. So their demands are actually going down. So my long winded answer your question director Baker is that we follow the same principles. It's just that to your point, there aren't contractual figures 2.2 for those demand proxies.
Okay. So they're on this graph, right? They are on the graph. Yeah. Okay. Thanks. Yeah.
We've developed a Matlin live had several conversations. With number partners, one on one to help them understand and help them be able to communicate the impacts of this reset at various levels of detail. We've opted not to include that in this executive summary briefing, but we certainly have additional communication tools at our disposal upon request. So I'll stop there and water and we'll shift gears to sewer is really simple, frankly, the the water the sewer strategy is the same as it's been the last year and the same that was in place for water in 2021 2022 and 2023. The sewer shares are determined via an evaluation of historical flow contributions wastewater contributions from all 19 member partners, that was last updated for the 2022 charges, with the agreement that those would remain in place for 2024 by 2023, and 2024 and then potentially be changed in 2025 with a new data set. So Nikki mentioned this earlier, we start off with a day we need 2.75% More charged revenue. There's this little pocket of contractually specific cost pools related to the Oakland Oakland interceptor district that is going down. So in order to get that to seven, five from the rest of the charges, that's a uniform increase at 2.81%. And that's what's proposed for the 2024 charges. And then we factor in the ownership benefit this as we do on water graphically on the next slide. What that looks like it looks backwards, go the other way. Sorry, Robert, Hang on one second.
Here we go.
So the red line shows you what happened in 2022 fiscal year 2022. On the charges were when the the charge proposals were made. We wanted to hold down the impact of the share. So the actual charge adjustment and 2022 was a decrease was a six tenths of a percent decrease. And what you see on that red line is where each of those night team member partners were impacted by that sharp those charges that were put in place. What I want you to focus on is how small this scale is. So you saw the water that was going from large decreases to not large but material decreases to material increases at the margins, right? Well, even at the margins when we did the 2022 shares, this compression around the average was much more compact. So that's what happened in 2020 and 2021, the blue line didn't change shares. So everybody got the same charge adjustment 2020 2023 Excuse me, I think so the red line is 2020 is 2022. The blue line is 2023. The green line is the proposal for 2024.
So that's uniform
now,
what we should expect if we were to port and a foreshadow what we might see a year from now is on the sewer, we would see a crooked line again, because the commitment is to update the shares for additional flow volume data and anything else that impacts that equation including, you know, where money is being spent and things like that. But on the water side, we'd see a basically flatline with a caveat that as Nicky mentioned earlier, the water charge methodology is being reviewed and could result in potential changes in 2025 Even if there aren't any changes in cap demand contract demands. So Nick, I think that's that wraps my my comments.
Thank you and Mr. Wolfson, if I could impose upon you to guess he's around. So one of the things that we talked about in November with this board is the financial challenges and communications. included in your packet is a one pager series that we've done in the previous year that we've followed forward this year on the operations and maintenance budgets to explain that. Similarly, we've done a one pager that we've distributed through our member partner outreach as it relates to charges this header I apologize the slide was not updated from last year. There's no bad debt expense one pager this year because we didn't necessarily need the Act this year. And so one of the other things so we have charges rollout meetings 123 and four meeting one is focused on the capital improvement and sharing that with our member partners. Meeting number two is units of service. And that was the first time member partners started to get a feel for how their shifts in their contract values related to each other. Because everybody's adjustment is in relation to each other as we've described. Rollout number three, we present the proposed charges calculation sheets, we walk through that. We also talk about the budget and meeting and then in between meetings rollout three and four. We have specifically set aside office meetings for one on one meetings with member partner communities. Matt Bart met with about 15 Different communities during that timeframe. Now we also stress to our member partners, hey, if you could make it during that timeframe. We are available to meet with you whenever you are available to review the materials. One of the other things you know we're concerned about because this cap process just occurs every four years. Just like GL WA has some folks who retire and move on that's also going on within our member partner communities where there's some turnover. So one of the things that we did it charges rollout number four after reviewing all the material in the meetings, as kind of a wrap up we did two polling questions because we're we're looking for some indicators on how to help support our member partners, as well as our own communications related to charges because again, this is complex, you're talking about this variability, and we were pleasantly surprised by the response that we received. So one polling question Question one focused on the contract alignment process and creating short term variability with the trade off of long term stability for the following three years. To what extent did the member partners expect that and 50% 56% said the variability generally aligned with their expectations, with some saying somewhat more or less. So again, knowing that it's caught it's it's unknown, until all the contracts are negotiated and aligned and Bart does the tabulation of bringing it all together, where everybody is in relation to each other. So give given that we thought that was indicated a pretty high level of understanding. The second poll question was to what degree do you feel prepared to communicate about your charges with others? And we were pleasantly surprised to see that 60% felt that they were sufficiently prepared and 23% saying that they felt well prepared. So again, we know it's one thing when we're going through charges rollout, and then everybody's back in their individual communities. So we are preparing some additional supplemental materials, but just wanted to give you that feedback of our engagement with our member partners. I'll also say that this year, particularly leading up to charges rollout number three when we present the chargers, Matt lane, our chargers outreach and modeling manager went back to the list of who has RSVP and reached out to all those communities that did not to personally invite them to attend and let them know that he was available to them if they weren't able to attend. And so we had phone calls with some who couldn't make it but I think we had record attendance from member partners at those meetings. So that's really important to us to be able to first make sure that there's the GL WA is communicating with number of partners, but also it's a great opportunity, particularly with breakout rooms and other opportunities for member partners to also have one on one connection. So that is a very high level executive summary. The audit committee meeting scheduled for this Friday is going to be rescheduled to a date in February, but we're going to continue more detailed review of budget and charges. If those meetings and then come back to you in your binder today as draft versions of the resolutions, which are consistent with the previous year that would reflect companion actions for what we've presented to you
today. questions on this item? This is Item C seeing that there are no questions Is this a receiving file bill
is a motion to receive file refer to audit and postpone further consideration till the February 25 meeting of the board.
I'll entertain that motion. Second, it moves us support it. Got a comment? All in favor, aye. That motion passes. Alright Nick, you still up?
Yeah, and the SEC's a second item on your agenda is the same president rotate presentation materials and same proposed action except relating to the proposed schedule of charges for FY 2024. To receive file and refer back to the audit committee,
I'll entertain that motion, same motion. Move to support it. All in favor. Aye. That motion passes. That was item D. Nikki, I think that does it for you. Thank you very much. Thank you. Item e FY 2428 CIP, Jody, and Dima.
Yes, good afternoon, Jody Caldwell, Chief Planning Officer, Great Lakes Water Authority before I turn it over to Dima ELGamal, our director of Capital Improvement Planning. I just want to take a minute to thank folks part of the internal GL wa CIP delivery team. This process is a nine month process with several updates. Our finance team, our partners and finance start recording in progress water and wastewater engineering. Our own Dima and her team that helped to facilitate the development of this recording stopped a tremendous effort this year. And
recording in progress.
All right. Continue.
Yes. So it's a tremendous effort this year, and this group continuously provides updated information updated content process improvement year after year. This also applies to the valuable insight, questions comments from our member partners, as well as from GL who is capital planning committee. We've had several meetings over the last six months to talk about this capital improvement plan. What you have before you is discussion, draft number two, it was brought to the Capital Planning Committee meeting last week. And and I'd like to turn it over now. To Dima ELGamal to provide today's presentation. Team Sima. You can share your square screen.
Thank you, Jodi. I'm gonna be sharing my screen. Please let me know if you can see my screen. Not yet. Okay, I'm gonna give it another try
work now. Yes up No.
Perfect. Thank you. So good afternoon directors. My name is Dima ELGamal. CIP Director. Thank you, Jodi. For the introduction. I would like to walk you over a summary of the proposed FY 2428 CIP plan as Jodi mentioned, it is being presented today for it to you for consideration. But before I start, I would really like to thank the various GL wa leadership who just presented ahead of me because I feel that their presentations really set the stage for what I'm going to be presenting to you today. You know, the proposed five and 10 year CIP. They shed the light on multiple important points. We have an old system that requires maintenance to stay in operation. The operation of our system is extremely important, and it is a priority. And this has been a difficult year, as well. As the fact that the CIP program has constraints is constrained with funding, which is no different than any other municipality issues or challenges that are faced by many around us. So thank you, and I'm gonna move into the presentation today. So just as an overview, we are presenting a roadmap. This is this is a plan for our best customers on how we can align our projects to serve our objectives within operating the system. This will be for 24 to 28 with an outlook on the 10 year so five years with an outlook on 10 years. And this tremendous effort would not be possible without contributions from our stakeholder input and our tremendous teams who work on this so I'm talking about collaboration from the CIP delivery team themselves, engineering finance it, the CIP team as well as our program management consultant and many more, and also the contribution from our stakeholders and the involvement in providing feedback on the roadmap. The we really appreciate feedback forum had a you know, the capital planning committee member partners, including Ed Hapa, from West Bloomfield, who and any autocracy cosign from city of Detroit to participate in our scoring, and we really appreciate the feedback that came from directors Brown and SEC as well as mayor Hammoud from the city of Dearborn, City of Detroit staff, as well as Mr. Jeff McKean from southeastern Oakland County. All of the comments and the continuous improvement is extremely important for us. To take it to heart and work on improving our process. With that being said, how did we get here today? I will re emphasize this is an effort, a combined effort from a lot of people what you see in front of you is a or in your packets is it is an over 2000 page document. The document itself the preparation of it started immediately after the Board approved the previous CIP FY 23 to 27th row you know, everyone rolled up their sleeves and went through multiple stages to get us to where we are today and whether that's pre you know, pre alignment project updates, scoring alignment, and the development of draft one and draft two that you see in front of you with a small hiccup which caused us to like I said the the challenges related to to be this year being exceptionally difficult. And the alignment we ended up doing an extra level of alignment between draft one and draft two. We were faced basically with an FY 23 challenges which everyone most likely are very familiar with. And we've and that FY 23 challenges were evident that they warranted an exceptional extra alignment that we completed in December to make sure that we're moving forward with a good plan. So in a in a you know, CIP at a glance, so to speak. We do have we are still maintaining 168 projects, or we will be maintaining 168 projects in our five year CIP. We're still shooting for about 356 million average. On water wastewater, we have a balanced budget on water for five years, we're looking at 986 million versus 798 million investment on wastewater. As I mentioned, difficult decision were made to make sure that FY 24 to 28 will align with the financial plan and and we did accomplish that through the iterations and multiple meetings and decisions. But as we illustrate here, we were able to close 10 projects, we added nine new projects. Some of them are come from programs. And I want to remind everyone you know this is planning and if we fail to plan we we are planning to fail. So it is very important that we do have a plan that guides our future investment in in the system. So with that being said I would go to the 10 year outlook as I mentioned, we're looking at five year investment in water and wastewater with a 10 year outlook and we're maintaining 195 million on average on water. While we maintain 156 million on average on wastewater over the 10 years. What you would see in in this document that that is new perhaps from before is breaking down projects from programs versus projects but that's that's an enhancement to those who are reading the document to figure out where our projects lie and and how are we utilizing our our unallocated budgets, the document itself? You're gonna see you know, we're gonna continue to improve that is something that we take upon our our team is continuous improvement, we improve the BCE layout and reporting. We improve the statuses on projects, we added projects that are beyond 10 years, you still see the regular components of our document, you see the maps, the GIS maps, you see the schedules, but we've we're trying to improve how we report on scoring and one major improvement that you know I think the entire team takes pride in is providing actuals as of October 2022. Typically our CIP get becomes outdated the minute it gets approved simply because our actuals are part of the previous fiscal year. This year we kept on updating the information to end of october so that we can have as real time data as we can and and as as possible so to speak. You will you will also see our cover thank you to our engineers who proposed and went through a competition on on the cover and we have highlighted the cover and we have you know we have highlighted certain projects within the CIP through a, you know, a photo contest that we've done for the second time this year as well. So statistics, I think I think they speak a lot when you look at how are we investing and where are we investing and we do have a well balanced CIP. If you were to examine the statistics on on the CIP that is being proposed, you will find you know we are we are concentrating on both trends, you know conveyance and collection as well as treatment there's there's a lens of equity that we are providing to our to all components of our system. You will also see that we have good amount of design that feeds into construction and you know, the circle of life of a project so you'll you'll you'll see that we do have a balanced, a balanced and well thought. I CIP that can kind of keep us into maintaining the system within our construction commitment. So you can also see how many projects we have that are future planned, you know, we have 17% on water we have a little bit you know, 6% on wastewater, but we do have a lot of active projects and projects under execution. active projects are projects that are in the planning procurement phase, while projects that are under execution that means design contract is in place for construction contract isn't is already in place. So from from a recap perspective, I would say again, 168 projects 1.787 7 billion over five years and an average of 346 million over 10 years. It's we have a balanced CIP 55% on water 45% of spending is going toward wastewater. And I won't leave you without talking about what were their resiliency because not 59% of the projects that we invest in, or we're investing in within the next five years. Our weather resiliency projects and that is of course a topic that everyone is concerned about and a concern for wastewater for the wastewater system. I was asked also to highlight to you a couple of projects from the water and wastewater team that they are currently working on. So we chose a project that is under you know project that is under construction. With a construction management delivery method. That's the 96 inch
water main. I wanted to highlight here that from a scope perspective, we're looking at relocating this 96 Water inch water main to take it out of critical area which is a current landfill. And with with this project, we will be providing redundancy to the Lake Huron water treatment plan supply and we will be adding isolation valves to basically be able to provide that redundancy. We're also building a parallel main between North center nurse Service Center Station and Rochester booster station to allow for additional redundancy on the system. The project the construction is is meant to to finish in in August of 2020 of 2028 which means FY 29 With a total budget of $269 million. The other project that we wanted to highlight for you is a wastewater project and we chose a project that is under design at this point. This is the rehab of the screened final effluent pump station. This is an innovative projects we're trying to utilize the service you know we reuse the water to be able to accommodate our treatment train and this pump station has needs a lot of improvement it has been it's it has exceeded its service life and the project is at 30% design as we speak with a $63 million budget. And with that, I think I want to go to what is next. Again, a long road. We've been working over eight months on the CIP and we're happy to bring it over to you for your consideration today and if it was considered it will go into effect as of July 1 2023. And I would conclude with that I think I met my 15 minute. I hope I didn't exceed my 15 minute timeframe.
Thank you Dima God
will take any questions or comments.
Any questions on the presentation? This is Item e on CIP last
year Mr. Baker, God thanks for including the comments. It was helpful. You know, to get the comments and the response back.
Motion to receive and file
on this one. Yes, just a motion to receive and file.
J. Worth
to Baker. All in favor? Aye. Motion passes. Thank you. Oh, you know you got one more. Jody, he's still up.
Hello. This agenda item resolution guarantee approval of the fiscal year. 2004. CIP, turn it over to build health practice in the direction.
Thank you, Mr. Chairman. When the board is ready, the motion on this one will be to postpone consideration to the board's February 20 clickers to 23rd. Meeting a meeting on February 23 22nd. Excuse me. Okay, Tony. And this is the formal resolution approving the CIP so
yeah, we normally do that. Right with the budget and charges
and correct we do that as we usually do those as part of that in case there's some input to the board receives at the public hearing postponed, or is your wind Bill February 22.
So is that the motion? Yes, sir.
Move to Baker. zek.
Any questions? All in favor? Aye. Aye. Motion passes. All right. Thank you, Jody. NEMA. Mr. Brown. This is item G is amendment. Number one. Yes,
yes. The legal committee. The board has approved these under consent items. Right. So we would now take you down to That's right. Only 10 reports. There are no reports.
That's right remarks. That's right. We get right on through this, aren't we? Yes, sir. Okay. The such as a matters, reports, remarks. Any board remarks. Okay. CEO report.
Yes, sir. Thank you. Thank you very much. So, the CEO report is is appropriate starts off with a another announcements and congratulations to Miss Porter for her selection by the AW wa board as the next president elect. So we've talked a lot about that. It certainly bears repeating and we're very, very happy about that. I want to move on to retention and recruitment. You've heard me talk about this. This is certainly something that's important to us. And I want to take a pause on a couple other very talented individuals within the water operations team. So first, I want to talk about Mr. Terry Daniel. Mr. Daniels been promoted to the new position of Deputy Chief Operating Officer of water and Field Services. In this new role, Terry will assist Miss Porter in overseeing the operations and maintenance of GL Ws, five water treatment facilities as well as the systems control center, water engineering, Field Services and water quality. He has more than 30 years experience professional and technical, rising through the ranks as from a water plant operator apprentice at DWSD. To his more recent position as the water Operations Director at GL wa I think we saw Mr. Daniel present this month at operations and Resources Committee. Yep. So next I'm pleased to share that Mr. Ronald Hayes has been promoted to water Operations Director Ron spent more than 30 years in the water sector, holding increasingly and more responsibility more responsible positions of leadership within DWSD and jail wa most recently serving as the manager of our Southwest water treatment facility. So I would encourage you and to join us in congratulating them. I know both of these gentlemen will continue their good work. We see it and we're happy to have them in these new positions, and they will absolutely provide great support to Miss Porter in as she begins her a WWE leadership tenure are good. As part of workforce development efforts. I also want to let you know that we continue to focus on our apprenticeship programs. We have had had interviews for a new cohort of EIC T eyes these are our electrical instrumentation and control technicians, and the current class of maintenance technician apprenticeships are scheduled to graduate this year. So we continue to do that very, very successful program. I had the privilege this week of welcoming a number of the apprentices, the ICTI apprentices as we on boarded them, some of them moving from other positions in GL wa into that new role and others and are coming in from the outside. So we continue to focus on that and it's very, very successful. Over the last several months, we've been moving through our annual member outreach process you just heard quite a bit from Miss Bates and and her team, also from Mr. Caldwell and his team and budget charges and CIP. So I won't go through any of that in any any additional detail, except just high level to say we had our four meetings. Typically we have four rollout meetings and Miss Bates and went through that and we had a lot of good engagement this year. So very happy to be in that process. As many of you know, the US Congress passed an omnibus spending bill at the end of 2022. This legislation contain two provisions of importance to GL WA and our region. First, GL wa was allocated a congressionally directed appropriation in the amount of $3,452,972 to support our P FOSS response and mitigation efforts. Secondly, GL wa received a programmatic authorization under award of the Water Resources Development Act for the US Army Corps of Engineers to partner with us to perform a a regional flood mitigation study for for GL WA and its member partners. Both the US House and Senate individually approved funding for this study, however, in a press to finalize your underlying legislation, this appropriation could not be included in the omnibus spending bill, but the Army Corps has indicated that they may have other funds available to begin working toward this study, and will seek an appropriation from the new Congress that began its term in 2023. I want to pause for a second and just thank our congressional delegation. So this is really important stuff. P Foss and regional flood mitigation, very, very important. So happy to see that we've had some success in getting funding here. And our congressional delegation was certainly pivotal. As our you are board our member partners and everyone who worked hard to support these efforts. So happy to report that this month. As I do an all the monthly reports to you all I will end with recognition of the hard work of our team members across GL wa first it gives me great pride to acknowledge the team of our Southwest water treatment facility, who have achieved the Partnership for safe waters President's Award for treatment plant optimization. This award recognizes water treatment facilities for achieving the partnerships stringent goals for the optimization. of individual filter performance. It takes a tremendous amount of hard work by the entire team to achieve this honor. And we are all very proud of their efforts. Also, our teams have received two sets two state recognitions one from the Michigan Department of Health and Human Services for continued hard work. And collaboration on the SEC SARS cov. Two epidemiology, wastewater evaluation and reporting network. You've heard us talk about this. This continues to provide great value across the state in the fight against COVID-19. The second is from the Michigan Department of Environmental Quality, and or excuse me, a department of Great Lakes Environment and Energy commending us for our efforts to protect public health and the environment by implementing our source water protection on the on the water waterside Source Water Protection Program. So as is our way we continue to strive for excellence these teams have done great work and we're very proud of them. With that I will take any questions.
Does that complete your report and does it questions for Miss coffee? I've got a quick one for you backup to the apprenticeship program. You've been working pretty hard on that. Where do you recruit the apprentices that participate in that?
So in some cases there from you know, internally we will have team members say hey, I'm interested in a career change in terms of other recruitments Bill probably has some better details about where it is that we go to to find these individuals.
We partner with Focus HOPE. And so we rely on focus hope to do that. We have begun some partnerships with local education educational institutions. To do that we're going to be expanding that looking at high schools. And then I think we are also considering them as Kramer will correct me if I'm wrong doing putting them up on our website as well. So graduation
you say is this year when this year so
usually is around May if I recall correctly, so maintenance
maintenance technician so upon graduation we will have electrical instrument techs and maintenance techs, they will immediately be offered employment in those areas or how does that work?
So the this is a second cohort of the EIC T eyes and they're just beginning the program a new cohort this year so they won't graduate this year but the maintenance techs will and yes they will be offered positions with GL wa they rotate around the apprentices typically rotate around different facilities. And we try to do a good job of matching them to where it is that they want to want to have their career here at JL WA
and when you say graduation, what is it you had commencement speakers and
yes, we absolutely do. You are volunteering to get Mr. Brown
to come out and give the commencement address. I mean, you know if you want to elevate this thing, you know, I think having Jay come out and you know, let's get some of the board members out there okay to let these folks know how important we think what they're doing is okay, well, that makes sense. Yes, it
does. We will keep that night and thank you very much.
I got you. All right.
From volunteering me, I just want to say
what I heard is as
an example but I mean you know, you're the well, I'll just leave it right
there. We assumed as the chair of the board, he was volunteering his own talent. Yeah, no.
I want to just emphasize how important I think the program is we're having some success. And I think if we want to signal to those folks that this is important. The more participation you get from us being visible. I think it just says all the right thing. Absolutely.
Thank you for that. Mr. Brown.
Extending this meeting two minutes. Can we go back to members report for just minutes please go ahead. Thank you recently, the ACLU filed an injunction against DWSD to stop the moratorium or any shut offs. On Monday. We were in federal court in front of Judge hood. In which it came out that the Lifeline program was 7000 applicants to be processed that were waiting to be processed it further came out that the grade that Wayne metro was only able to process 100 at a time and so this threatens to derail DWSD effort at collections our collection rate has fallen from 92% to 70% Losing $40 million and I need to be able to end this moratorium. And so we have a critical situation. I want to I want to thank Nikki and her team and Bill. I've raised the issue what I'm what I'm asking for is by the next next board meeting and certainly I can't wait until the next board meeting to get this resolved. I have to figure out a way to get it resolved before then. But by the next board meeting we need a complete understanding from Wayne Metro as to how this could happen and how they're going to prevent it from happening in the future. It's my understanding that they're only allowed to use about 15% of the dollars that Gleevec allocates them for administrative costs, and that they far exceeded the 15% and had to lay off workers at a time when we've got a full court press on getting applicants in the into the program and process and so if there are dollars that are being contemplated to be reallocated in the program, I'd ask that that be considered as soon as possible. But more importantly, I think we've got to figure out a solution to this problem.
So I'm sorry. Thank you for that, Gary. So is this an issue that you're working with Nikki to at least initiate and then it goes from there to
where I think the guy and I apologize, I should have been in a meeting at one o'clock but I got I got sidetracked. There were members of my team. The first thing we need to understand from Wayne Metro is how can we help them what what is it can we do to get the people that were laid off that on the payroll and processing those claims, and then figure out a long term solution but I got an immediate problem, if publicly is being fed and the judge is considering on Friday to make a decision on whether or not to grant this injunction and it's based on a lot of it's being based on the fact that we can't execute on this project because we can't process people that have applied and so it doesn't seem unreasonable not from a legal standpoint, but just from a layman's standpoint that an injunction could be at least temporarily put in place until the 7000. I certainly my mayor is not going to allow me to end the moratorium if we've got 7000 and that number will grow. Especially once we start the disconnections people will. It will exasperate the people trying to get into the program and if we can manage it. Now, then, and so I don't have a contract with way Mexico. really
thought it through Mike. Okay.
So I'll say so director Brown and I had the chance to meet yesterday and when director brown speaks, I don't ask how high to jump, we jump. And as he referenced, we had a meeting at one o'clock today. Unfortunately, he couldn't make it but once he made me aware of the issue, we did have a meeting with Director Browns team leading customer service and CFO along with representatives from Wayne Metro. They promised me that they're bringing 30 people on that they'd have ramped up by February. Seventh. To address this and by tomorrow morning will present director Brown and I with a plan to address the backlog and what the cost of that would be. They did have layoffs in December because the zero funding came to an end. But those team members that were laid off 30 of them are in a position to be retrained to handle the Lifeline program. DWSD Lifeline program is probably the most innovative assistance program in the country. And was just launched in the fall and has a tremendous response and as director Brown mentioned, you know, there was a peak and inquiry into the program than a law. And then unfortunately, it takes the discussion of shut offs to get people to make that next round of calls and outreach efforts. So we're dealing with that. But, you know, I think what we stress is this is a partnership with DWSD, GL WA and Wayne Metro that we all need to be very much in sync and make sure that this does happen. So
thank you, Nikki. Yep, thanks. Thanks for bringing it up here like if anything else. No other matters. Yes.
There are two other matters. One is that we do think in light of the board's attention today were being in a position not to go forward with our meeting scheduled on February 8. We offer that to the audit committee that I know is looking for alternative times to meet and then the second is to advise the public that while the board has to close sessions today, we do not anticipate any action other than adjournment to take place following those closed sessions very well.
With that, we'll move on to I'm sorry,
this is just a fast question for Su. Suzanne and Nikki. Are we looking at the budget to be taken up? March the 22nd? No,
the public hearing on the budget is on Wednesday, February 22. So the budget has been referred to the audit committee we are suggesting that they could meet on the eighth to be do their due diligence, assuming that they would be ready to come back at the pot on the 22nd. Following the public hearing the board could take action on the budget at that time. If the board were not ready to act and it would go any tweaks during March there's a board meeting scheduled for the board to continue its deliberation act on that budget when
they're ready. So theoretically, it could be approved on February 22. Right and that is what the Board did last year, as I recall, but I noticed there's a number of meetings set up for March and I just was wondering if that was perhaps going to bleed over into March, march 22. For instance. So Bono's speculation. That's all I'm asking. Thank you, Mr. Chairman,
Liz, and thank you, Mr. Zack for that. One of the things that I don't want us to do is feel like we got to rush through a meeting I know you almost people apologizing for asking a question. Baker has not apologized and when he you know, ask questions, and I'm certainly not. And so look, it's 340 We got plenty of time. You got to hear me say something when we get to the bewitching hour or five o'clock and we still out here talking Okay. So, you know, just you got a question. Jump in there. Make your comments. You know, let's keep it moving. We only meet once a month. And I want to hear from everybody who want to hear it's got something to say okay, and with that,
Mr. Wilson,
that those are all the other matters unless you are a member of the Assembly as anything they wish to bring forward. And then it would we would move on to closed sessions and Mr. Brown. Mr. Brown.
Thank you Randall brown general counsel for the Great Lakes Water Authority. I do have closed session requests for you The first is to discuss pending litigation which is DWSD versus Highland Park and Gil wa versus Highland Park. This honorable body can meet in a closed session to discuss pending litigation. If a discussion in open session would have a detrimental financial effect on the litigation or settlement position of the public body. I do believe having a public session on on these two cases would have a detrimental financial effect to our litigation and settlement position. The second request is a closed session requests for attorney client communications that someone will body can meet in a closed session to discuss material that is exempt for discussion and disclosure by state or federal statute. The Freedom of Information Act exempts from disclosure information or records subject to the attorney client privilege. Both of these require a roll call vote.
Motion to go into closed session on item D. Some have moved in support it Mr. Brown Mr. Zack? Miss Willis Roll Call. Chairperson Hendry. Yes. VICE CHAIRPERSON Baker? Yes, Director Brown? Yes.
Director fides. Rosie Yes.
Directors that Yes.
All right. Then motion passes the next item for closed session a motion to go into closed session on item
E. Is there a motion? Some
anybody? Josie to Baker? Roll call Jefferson handwrite Yes, VICE CHAIRPERSON Baker. Yes.
Director Brown? Yes.
Director five drowsy. Yes. Director
said All right. We're in closed session Mr. Wolfson. Not