Wastewater systems transfers provides local communities control, helps to reduce legacy costs

Last week marked another key milestone in Wayne County's Recovery Plan as the County successfully transferred ownership of the Northeast and Downriver Sewage Disposal Systems to local communities in separate transactions. In closing the deals, the County received approximately $64.2 million, which will be used to pay down unfunded liabilities, including retiree health care (OPEB) and pensions.

"This is a win-win. The local communities wanted control over their own systems and Wayne County was looking to get out of the wastewater business and reduce legacy costs as part of our Recovery Plan," said Wayne County Executive Warren C. Evans. "We continue to streamline Wayne County government and stay the course. There were many communities and different parties involved, and I applaud the hard work by all involved to get this done."

Under the terms of the sale of the Downriver system, the Downriver Wastewater Utility Authority (DUWA) paid $54 million at the closing and will deliver a $3.5 million subordinated bond, payable within 5 years. In the Northeast sale, the Southeast Macomb Sanitary District purchased the system for $6.7 million. As part of its Recovery Plan, the County will use the proceeds from the transfers toward unfunded liabilities such as retiree health care and pensions. The County still owns the Rouge Valley Sewage Disposal System, but is negotiating to sell that as well.

"This (Downriver) agreement is a win for the communities that make up the Downriver Utility Wastewater Authority, which now have control of their own future," said Taylor Mayor Rick Sollars, who also serves as DUWA Chairman. "It is the also a major victory for good government, as leaders from different communities and differing backgrounds and experiences came together to join hands for the greater good of their residents."

Each community's city council passed a resolution in support of the transfer and the DUWA board unanimously approved the sale on May 10, 2018. In May of 2016, DUWA and Wayne County reached a tentative agreement, followed by months of negotiations to finalize the agreement, which required approval by the County Commission and the DUWA board.

"I want to congratulate members of the Board for all of the work they have done over the past three years to make this vision a reality," Sollars added. The Mayor also welcomed twenty-six employees who have worked at the (Downriver) facility as employees of the County, who under terms of the transaction will continue to perform their key roles as employees of Veolia North America.

The Downriver System is the second largest wastewater system in Michigan with a service area population of 350,000. The 13 communities that make up DUWA are: Allen Park, Belleville, Brownstown Twp., Dearborn Heights, Ecorse, Lincoln Park, River Rouge, Riverview, Romulus, Southgate, Taylor, Van Buren Twp. and Wyandotte.

The Northeast Sewage Disposal System is owned by Wayne County and serves parts of the communities of Eastpointe, Roseville, St. Clair Shores, Harper Woods, Grosse Pointe Woods and Grosse Pointe Shores. The Southeast Macomb Sanitary District serves parts of Eastpointe, Roseville and St. Clair Shores.