TAWAS CITY – In an e-mail dated March 7, Tawas City officials offered up some ideas of their own for the potential restructuring of the Tawas Utilities Authority (TUA). This came after the East Tawas City Council drafted a proposed organizational transformation plan for the TUA, which was summarized in last week’s edition of this publication.
When the Tawas City Council met on March 6, they approved the correspondence containing their counteroffer, which was addressed to the East Tawas mayor, city manager and council representatives, as well as the supervisors of Alabaster, Baldwin and Tawas townships.
Signed by Tawas City Mayor Brian McMurray, the communication begins with a word of thanks to those in East Tawas for taking the time to put the proposal in writing, which Tawas City believes is a good starting point for continued discussion.
"In place of a managing/non-managing partner relationship, in which one partner would relinquish any say in the wastewater treatment plant’s operations, compliance efforts, equipment maintenance, budget priorities, or asset management, the Tawas City Council is proposing that the [TUA] rewrite the Articles of Incorporation and restructure the TUA with five (5) constituent municipalities to include all the users on the system," the counteroffer reads. This would entail Alabaster, Baldwin and Tawas townships, Tawas City and East Tawas.
(In reference to this, East Tawas officials cited a clarification that they wished to point out, which is explained later in this story).
Tawas City recommends that, similar to the Huron Shore Regional Utility Authority (HSRUA), the contributions from each constituent would be based on influent to the wastewater treatment plant (WWTP) from each unit of government. Contributions would be reevaluated at the end of each calendar year and incorporated in the budget for the TUA’s next fiscal year, beginning on July 1 annually.
The influent is currently metered from two sources – East Tawas, which includes Baldwin Township; and Tawas City, which includes Alabaster and Tawas townships.
The following numbers for the townships are based on metered water use only, and are subtracted from the influent reads to calculate the numbers for East Tawas and Tawas City:
- Alabaster Township: 0.0014%.
- Baldwin Township: 4.6621%.
- City of East Tawas: 50.3749%.
- City of Tawas City: 44.0252%.
- Tawas Township: 0.9364%.
The numbers for the townships do not account for inflow and infiltration, which represent 42.46% and 42.99% of the inflow from East Tawas and Tawas City, respectively, based on the amount of water purchased from HSRUA. The TUA would have to install meters at the limits of each township for better accuracy in calculations, the document goes on.
According to the counterproposal, the new TUA Board would consist of seven members, with one elected official of each township and two elected officials of each city. All votes would have equal weight.
The new board would also decide if there is a need to employ a manager who would work in an office at the WWTP and report directly to the board.
It is further stated in the correspondence from Tawas City that – along with other administrative duties as determined by the board – the responsibilities of the manager would include development of the annual budget, preparation of meeting packets and working with the contracted operations company of the WWTP.
The TUA would contract with an entity to complete financial responsibilities, including payroll, accounting, accounts payable, et cetera, as HSRUA currently does.
Tawas City says that restructuring the TUA would allow all users on the system to have representation when decisions are made that would impact their rates. It would also resolve the problems with tie votes and would prevent any unit of government from controlling the decisions of the TUA.
"The HSRUA Board has been proven to work well with representation from multiple units of government and we would expect the same with the redefined TUA," they also noted.
Officials added that they look forward to working with East Tawas to improve the TUA, and that they appreciate the city’s feedback.
As for the aforementioned item that the neighboring municipality wishes to clear up, East Tawas City Manager Brent Barringer stated in an e-mail to this publication that the city would like to clarify its managing partner proposal.
Although Tawas City’s counteroffer reads that the managing/non-managing relationship would "relinquish any say" for one of the partners – in such matters as budget priorities and WWTP operations – Barringer noted that with East Tawas’s proposal, the four-member board would remain the governing body of the TUA, and no members would relinquish their responsibilities of governing the organization.
Prior to voting that the counteroffer be sent to East Tawas, McMurray read the document in its entirety at the latest Tawas City Council meeting. He said it is an option that they think is very workable and could lead to a good partnership between the municipalities, as well as a more effective structure for the TUA in general.
Councilman Dave Lesinski, who also serves on the TUA Board, made the motion to move forward with the counteroffer. Supported by Councilman Mike Russo – the other Tawas City representative serving on the TUA Board – the motion passed in a 6-0 vote. Councilman Jeff Coon was unable to attend.
In other TUA topics, Tawas City Manager Annge Horning stated that the TUA has agreed to schedule regular weekly meetings to review the WWTP project plan. These will take place on Thursdays, at 4 p.m. She also advised that two special TUA meetings were to be held, on March 3 and March 8, and that, "Hopefully all these meeting will be productive so we can finalize the project plan for the State Revolving Fund."
As previously noted, this is being pursued to help with the multiple improvement projects and other upgrades that are needed at the WWTP – for which one of the two bids received in August 2022 totaled $20,094,000; and the other, $19,082,000.
As reported last week, the proposed organizational transformation plan drafted by East Tawas was discussed by the Tawas City Council when they met on Feb. 21.
The TUA is a joint, 50/50 operation amongst the two municipalities and, while East Tawas had already taken action to approve the proposal, Tawas City officials voted to table any decision, indefinitely.
Along with wanting more time to go over the proposal, some of the council members said that they, too, had ideas for the TUA; there are other things which they think should be handled before altering the organizational structure of the TUA; they didn’t feel that there was a sense of urgency to make a decision; and they believe that the main focus should be on the WWTP improvements.
According to a slide presentation prepared by East Tawas, their proposal is to reorganize the TUA and for East Tawas to serve as the managing partner to administer the operations of the plant. If Tawas City agrees that this is a viable option to improve systems, the TUA would work to prepare an agreement for both councils to review.
As outlined last week, the proposal itself notes that the TUA provides sewage treatment services to the cities, and operates under the supervision and control of a board consisting of two representatives from each municipality.
However, East Tawas says that there has been a disconnect between the board and the operations of the plant, which has recently been magnified due to many components of the plant needing reconditioning due to age. "Typical maintenance and upkeep of the plant has been neglected over the years and it appears this may be due to the lack of administration and leadership between the board and the contracted operations services."
The plan also states that without an administrator, the board functions as "management by committee" form of leadership and specific situations are left to be resolved through a board member volunteering to address the particular circumstance, or they are left unresolved until the board’s next meeting.
The operation of the plant is contracted through a private company, the document continues. But the structure of the TUA does not accommodate a point of contact, or administrator, to manage the contract and oversee the services of same. "Currently, the contractor is expected to manage their own contract and oversee their own work product. Since the Authority only meets once per month, the daily needs of the system are handled by whomever is first to respond. This sometimes causes animosity and creates an ineffective atmosphere between the operator and the two cities."
The plan goes on to describe the current framework of the TUA Board, and East Tawas’s justifications for why they feel that this can be a detriment to the TUA’s ability to govern at a high level.
East Tawas would like to transition the organization of the TUA to something more in line with city boards/commissions, which are created to be an extension of the elected council to assist in carrying out the interests of the public and to give a non-biased approach in overseeing costs related to the public services provided. The proposal reads that modifying the articles of incorporation to require board positions to be held by elected officials, will help accommodate this.
East Tawas is also recommending that the role of chairperson be at the discretion of the board annually, with the objective of maintaining stability in the position over time and without a built-in expectation to change. This differs from the present arrangement, where the position of chairperson rotates annually.
A key component of the suggested organizational adjustment, is a shift in responsibility for the operation of the system. The plan states that this won’t impact the 50/50 ownership of the TUA, but would re-organize the partnership into a managing partner and a non-managing partner. Each would provide representatives on the TUA Board, for monthly governance at the meetings, and would vote on and approve the annual budget. The managing partner, though, would also administer operations of the WWTP, maintain compliance with the discharge permit, maintain the plant’s equipment, provide a yearly budget for operations, prepare an annual asset management plan and update the board once per month at their meetings.
It is East Tawas’s recommendation that the plan be incorporated into the existing systems, with the first step being to select a managing partner by vote of the board.
Second, would be for the managing partner to prepare an operations budget for approval by the TUA Board, and then administer same at the WWTP.
The third suggested step, is to revise the TUA’s articles of incorporation to require board members to be elected officials, and include expectations for the managing and non-managing partners.
The plan also contains an estimated managing operations budget, which was summarized last week, as well.
