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HomeMy WebLinkAboutResolutions - 2014.11.19 - 21594MISCELLANEOUS RESOLUTION '014 2 6 1 November 19, 2014 BY: General Government Committee, Uhristine Long, Chairperson IN RE: COUNTY EXECUTIVE — 2014 COMPETITIVE GRANT ASSISTANCE PROGRAM (CGAP) — GRANT APPLICATION/ACCEPTANCE To the Oakland County Board of Commissioners Chairperson, Ladies and Gentlemen: WHEREAS Oakland County has entered into an agreement with the City of Detroit, Macomb County, and Wayne County to form the Great Lakes Water Authority (GLWA), authorized by Miscellaneous Resolution #14229; and WHEREAS the Oakland County Executive's Office, under court order, has applied for and been awarded funding for a Competitive Grant Assistance Program (CGAP) Project from the Michigan Department of Treasury, Office of Revenue and Tax Analysis (ORTA) to assist with the research, creation and implementation of GLWA; and WHEREAS the CGAP award is for Oakland, Macomb and Wayne Counties and the City of Detroit with Oakland County acting as the fiduciary; and WHEREAS the maximum award amount of $3,800,000 is for reimbursement of identifying and quantifying the legal, financial, and accounting issues, negotiating proposed transactional documents, seeking approval of county commissioners to establish an authority and then implement a new authority; and WHEREAS the grant period is October 1, 2013 through September 30, 2018 and reimburses approved expenditures back to June 1,2013: and WHEREAS this grant award has completed the Grant Review Process in accordance with the Board of Commissioners' Grant Acceptance Procedures. NOW THEREFORE BE IT RESOLVED that the Oakland County Board of Commissioners approves the acceptance of the Competitive Grant Assistance Program award from the State of Michigan, Department of Treasury, in the amount of $3,800,000 for the period of October 1, 2013 through September 30, 2018. BE IT FURTHER RESOLVED that the Chairperson of the Board of Commissioners is authorized to execute the grant award and to approve any grant extensions or changes, within fifteen percent (15%) of the originat award, which are consistent with the original application as approved. BE IT FURTHER RESOLVED that the Chairman of the Board of Commissioners is authorized to execute inter-local agreements with the participating communities incorporating the conditions required by the grant. Chairperson, on behalf of the General Government Committee, I move the adoption of the foregoing resolution. GENERAL GOVERNMENT COMMITTEE GENERAL GOVERNMENT COMMITTEE Motion carried unanimously on a roll call vote with Hoffman and Crawford absent. From: West, Catherine To: Poisson, Jerry; Bob Daddow; Lynn Sonkiss; elgrabiykaoakgov.com Subject: GRAM- REVIEW.SIGN OFF: County Executive - 2014 Competitive Grant Assistance Program (CGAP) - Application/Acceptance Date: Monday, November 03, 2014 9:33:42 AM Attachments: Grant Acceptance Sign Off.Pdf Oakland County - Intent to Award Letter,pdf Application Filed to State.pdf Detroit DWSD Mocicl.vs Rot Oct 2014 DWSD Impact.pq .ExNbir 1 MOU for BOC 091514.pdf RESPONSE TO REQUEST FOR FURTHER INFORMATION.docx GRANT REVIEW SIGN OFF — County Executive GRANT NAME: 2014 Competitive Grant Assistance Program (CGAP) FUNDING AGENCY: State of Michigan, Department of Treasury DEPARTMENT CONTACT PERSON: Jerry Poisson 248-858-1650 STATUS: Application/Acceptance DATE: November 3, 2014 Pursuant to Misc. Resolution #13180, please be advised the captioned grant materials have completed internal grant review. Below are the returned comments. The captroned grant materials and grant application/acceptance package (which shoulcl include the Board of Commissioners' Liaison Committee Resolution, the grant application, grant agreement/contract (intent to award letter), Finance Committee Fiscal Note, and this Sign Off email containing grant review comments) may be requested to be placed on the appropriate Board of Commissioners' committee(s) for grant acceptance by Board resolution. DEPARTMENT REVIEW Department of Management and Budget: Approved. — Laurie Van Pelt (10/28/2014) Department of Human Resources: HR Approved (No Committee) — Lori Taylor (10/28/2014) Risk Management and Safety: Approved by Risk Management. — Robert Erienbeck (10/29/2014) Corporation Counsel: There are no outstanding legal issues in the above grant application/acceptance. Katie West verified with the State that there are no additional terms other than what was provided above. —Joellen Shortley (10/30/2014) 7,2 (Rev, 11-13) STATE OF MICHIGAN RICK SNYDER DEPARTMENT OF TREASURY R. KEVIN CLINTON GOVERNOR LANSING STATE TREASURER October 27, 2014 L. Brooks Patterson County Executive Oakland County 2100 Pontiac Lake Road Waterford, Mt 48328 Dear Mr. Patterson: Re: Notification of Intent to Award - CGAP FY 2014 (Round 2) The Michigan Department of Treasury (Treasury) - Office of Revenue and Tax Analysis (ORTA) received your grant application for the Competitive Grant Assistance Program (CGAP). We are pleased to inform you that the project your governmental unit submitted entitled Due Diligence Examination of Business Issues Related to Proposed Creation of A Water and Sewerage Authority has been selected for a grant award in the maximum amount of $3,800,000.00. Enclosed is the intent to award approved budget for your grant project. Grant Application Conditions For your reference, enclosed is a copy of the CGAP Information and Conditions. Please review the conditions of the grant award. The conditions contain important information pertaining to the grant award (i.e. requirements for final award, reporting, reimbursement, etc.). Reminder, grant funds are distributed on a reimbursement basis. Next Step To receive the Grant Notice of Final Award, Treasury must receive all the required Board Resolution(s), Board Meeting Minutes, or Inter-local Agreements for all participating local units (as indicated in the Conditions of the grant application packet) by Monday, December 29, 2014. if the resolutions, minutes or agreements have not been received for all participating local units, the project funding will be subject to automatic cancellation. Submission of the resolutions, minutes or agreements will be considered an agreement to all provisions specified in the grant application packet and this intent to award letter, and will signify acceptance of the grant award. 430 WEST ALLEGAN STREET • LANSING, MICHIGAN 48922 www.mIchlgen.00vitreasury • (517) 373-3200 Miagan Department of Treasury 4921 (Rev. 04-14), Page 6 Application Due Date: June 25, 2014 Competitive Grant Assistance Program Application (FY 2014 - Round 2) Issued under aulhority of 2013 PuNic Act 59. 1. Primary Applicant Name Oakland County Executive 2, Primary Applicant Code 63-0000 3. Primary Applicant FEIN 386004876 4. Primary Applicant County Oakland County 5. Mailing Address 2100 Pontiac Lake Road 6. City Waterford 7. State MI 8. ZIP Code 48328 —" ----;1 'aid Atli . 4A. 9. Project Title Due Diligence Examination of Business Issues Related to Proposed Creation of A Water and Sewerage Authority 10, Project Type Merger I Consolidation X1 Cooperative Effort/Collaboration 11. Estimated Start Date 06/01/2013 12. Estimated Completion Dale 12/30/2014 13, Estimated Total Project Cost $3,800,000,00 14. Grant Amount Requested $3,800,000.00 15. Additional Applicants Participating in Project (include county and local unit code or school district code). Attach letters of support from each of the participating applicants. Macomb County 50-0000 Wayne County 82-0000 16. Are the applicant(s) involved willing to devote appropriate resources and time to this project'? to devote appropriate resources and time to the project, X Yes No If no, explain why the applicant(s) are unable 17. Is there potential for expansion of the project to include additional applicant(s) at a later date? IX Yes I I No If yes, explain how the project would be expanded to include additional applicants at a later date. Detroit may desire to join in order to receive reimbursement. IPAITfl':-:104_ 0 _ .-OTActilfiptignijA -iTSIWIECW Note: The project contact individual should be a vital part of the grant project and will be the Michigan Department of Treasury's Contact. 18. Contact Name Gerald ID Poisson 19. Contact Title Chief Deputy County Executive, Oakland County 20. Contact Telephone Number (248) 858-2090 21. Contact Fax Number (248) 858-9215 22. Contact E-mail Address poissong@oakgov,com 23, Contact Entity Name Oakland County Executive's Office PART WIElittilt e,, t--- - 24. Current Services: How are the services currently being provided? The Detroit Water and Sewerage Department (Dwsn) is a branch of the City of Detroit government that provides water service to the entire city of Detroit and many neighboring southeastern Michigan communities throughout Wayne, Oakland, Macomb, St. Clair, Lapeer, Genesee, Washtenaw and Monroe counties, The 1,079-square-mile water service area includes Detroit and 127 suburban communities and serves approximately 40 percent of the state's population. Wastewater services are also provided to a 946-square-mile area that encompasses Detroit and 76 neighboring communities Michigan Department of Treasury 4921, Page 7 25, Shared Service Analysis: Describe the status of any shared service analysis undertaken to dale related to this project. If a shared service analysis has been completed, attach a copy of the shared service analysis or feasibility study. The City of Detroit through the Office of Emergency Manager approached Macomb, Oakland and Wayne Counties with the proposal to have those Counties join to form a water and sewer authority under the provisions of 1955 PA 233. The Authority would lease the assets of the DWSD and then provide water and sewer services to the current DWSD service area for at least the next 40 years. If created, the new authority would assume operational control of DWSD's wholesale and common-to-all assets and become responsible as an operator for servicing the water and sewerage needs of DWSD's customer base, both today and as that base may increase or decrease in the future. 26. Project Description: The Project to be funded is the execution of the due diligence inquiry necessary to develop the information necessary for the Counties to make an informed decision as to whether the creation of an authority is in the best interest of the parties, the communities they represent, the region at large and the State of Miohigen. To that end, and as a good faith demonstration, the County applicants have already retained UHY Advisors to undertake preliminary analyses of system finances, all Counties engaged both inside and outside counsel to provide a legal evaluation and Macomb County retained consultants to advise as to future capital needs of the wholesale (i.e. non-Detroit) customer community. A written report of those capital needs has been prepared. Numerous issues remain to be addressed including legal, financial, engineering, technical and political/jurisdictional concerns. 27. Goals, Measures, and Business Objectives of this Project: What are the outcomes you hope to achieve? How will you measure the outcomes? Provide the measures which will be used to determine the success of the project. The objective of the Due Diligence Project will be to develop a factual basis for determining whether or not the formation of an Authority is in the best interests of the parties, region and state of Michigan. Any Authority will be required to provide sustainable, cost-effective water and sewerage services to governmental entities in Southeast Michigan in full compliance with all environmental laws and permits and pursuant to financial sustainable business plan. A regional governing structure will permit an Authority to avoid undue political influence from any individual customer. It is posited that a new Authority, one separate and bankruptcy remote from the City of Detroit, will be able to borrow for infrastructure improvements at a lower cost than will be the case for future borrowing by Detroit. 28. Potential Barriers: Describe any barriers that currently exist that may have an impact on the Implementation of the proposed project. Detroit's bankruptcy, the on-going fiscal distress being experienced by the City and its retail customer base, the restructuring of $5.5 billion in existing DWSD debt at affordable rates, the likelihood of competitive access to credit markets and the negotiation and implementation of new labor contracts essential to a sustainable system going forward pose substantial barriers as does the development and Implementation of a sound plan to improve the financial health of the system. 29. Cost Savings: Will the project save money?1-5-1‹ Yes n No A. SHORT-TERM (1 year or less) E Yes IXI No Estimated Short-Term Savings $0.00 B. LONG-TERM (Greater thanl year) !XI Yes Estimated Annual Long-Term Savings $5,000,000.00 Estirhated 6 Year Total Savings $50,000,000.00 C. Did you attach a detailed calculation of the cost savings and provide an explanation of how the cost savings were calculated? El Yes tgr)No 30, Work Nan and Project Timeline: What are the implementation stops to ensure this project's success? What are the projected outcomes at each step? The Work plan involves two phases. Phase I is intense due diligence to identify and quantify the legal, financial and accounting issues presented. Building on work to date, these items after funding, can be completed in 90 days. Phase 2 will involve negotiation of proposed transactional documents, the seeking of approval from county boards of commissioners to establish an authority and then the implementation of a new authority, a process that could be completed in an additional 90 to 180 days. Michigan Department of Treasury 4921, Page 8 ,,,PART-- , ri •fterAiks., o ANti '''''-'----,--- ,... 31. Total Grant Budget Worksheet: For each budget category, attach a detailed list of proposed expenditures. Explain how the expenditures support and are essential to the merger, consolidation, or cooperative effort/collaboration. Budget Category Estimated Total Project Cost Grant Budget Amount Requested Phase 1 Legal $250,000.00 $250,000.00 Phase 1 Accounting $250,000,00 $250,000.00 Phase 1 Financial Advisor Bonds, Rates $350,000.00 $350,000.00 Phase 2 Legal $1,000,000.00 $1,000,000.00 Phase 2 Bond Counsel $500,000.00 $500,000.00 Phase 2 Financial Debt, Pensions $900,000.00 $800,000,00 Phase 2 Accounting $300,000,00 $300,000.00 Phase 2 Actuary $250,000.00 $250,000.00 Phase 2 Gov't and Public Education $100,000.00 $100,000.00 TOTAL ESTIMATED PROJECT COST $3,800,000.00 TOTAL GRANT AMOUNT REQUESTED $3,800,000,00 32. Additional Information and Comments: It is suggested that an Authority will be able to expedite the current EMA project to streamline operations and that it will permit more open and competitive bidding. This could accelerate $5 million to $15 million in savings in the short term. With the State's commitment, an Authority may be able to increase the use of low-cost SRF and Drinking Water revolving funds to finance critical and long-neglected infrastructure needs, When Detroit emerges from bankruptcy, its access to capital markets will be limited and it will pay a substantially higher interest rate on borrowing, further restricting its ability to carry out infrastructure improvements. By comparison, an Authority is expected to have better access to capital markets and the ability to borrow at interest rates lower than Detroit. This could lead to savings in the tens of millions in debt service over the medium term and much greater savings over the long term, Elimination of local preference bidding will expand the list of bidders and result in more competitive bidding for infrastructure projects thereby reducing operational costs. 33. I certify that all statements in this application, including all requested supplemental information, are true, complete and accurate to the best of my knowledge. If awarded, I agree to allow the Michigan Department of Treasury and the State Auditor General's Office (and/or any of their duly authorized representatives) access, for the purposes of inspection, audit, and examination, to any books, documents, papers, and records of the grantee which are related to this project. I agree to allow the Michigan Department of Treasury to conduct periodic program reviews of the project. The purpose of these reviews will be to determine adherence to stated project goals and to review progress of the project in Meeting Its objectives, [agree to submit quarterly and final narrative and financial status reports and a one-year Fine! Follow-up Report to the Michigan Department of Treasury I understand that failure to submit any required reports may result in the termination of the grant. I understand that this grant may be terminated if the Michigan Department of Treasury concludes that I am not in compliance with the conditions and provisions of this grant, or have falsified any Information. By way of signature, I agree with all conditions of this grant program. Primary A. r. lc. • 's Chief Ad r Eli • r. e Officer Signature (as defined In MCL141.422b) ' e. . ,.,(----- Date - ,o --- Printed Name of Primary ApplIcant's Chief Administrative Officer (as defined in MCL 141.422b) L. Brooks Patterson Title County Executive Applications are due June 25, 2014. Completed applications submitted via mail or e-mail must be received by the Michigan Department of Treasury no later than 11:59 p.m. on Wednesday, June 25, 2014. Incomplete applications may not be considered. A signed and completed application (Including attachments) can be submitted by e-mail to TreasRevenuaSharing@michigan.gov or by mail to: Michigan Department of Treasury Office of Revenue and Tax Analysis PO Box 30722 Lansing, Ml 48909 Robert A. Ficano Wayne County Executive VIA UNITED STATES MAIL June 13, 2014 Michigan Department of Treasury Office of Revenue and Tax Analysis P.O. Box 30722 Lansing, Michigan 48909 RE: Oakland County's Competitive Assistance Grant Application Dear C-GAP Coordinator! This letter is in support of the application submitted by Oakland County on behalf of itself and Wayne and Macomb Counties (Counties) to secure financial assistance through the Competitive Grant Assistance Program (C-GAP). Assistance through C-GAP is necessary to support a joint due diligence exercise to be performed by the Counties as they cooperatively consider creating a regional water and sewerage authority (Authority). I believe the requested support will directly stimulate and assist further regional collaboration and cooperation by the Counties as they examine the feasibility of creating a viable regional authority. I believe creating a regional water and sewerage authority has the potential to, among other things, obtain greater rate stability for water and sewer customers, better manage costs and more efficiently execute needed system-wide capital improvements. Due diligence and support from C-GAP is an essential component to the system evaluation which the Counties need to complete. Specifically, it is imperative to examine the near and long-term obligations and financial condition of the water and sewer system. Issues such as capital improvement needs, rate revenue collection from various customer classes, and potential debt financing costs must be fully analyzed. For all the reasons stated above, 1 fully support the application's submission and asked that it be immediately considered for approval. Cc: Oakland County Executive — L. Brooks Patterson Macomb County Executive — Mark A. Hackel Macomb County Office of Public Works Commissioner — Anthony V. Marrocco EXECUTIVE OFFICE 500 GRISWOLD • DETROIT, MICHIGAN 48226 • (313) 224-7766 • www.waynecounty.com :3,14223 es, Macomb County Executive Mark A. Hackel June 11,2014 Bill Rustem Executive Office of the Governor 111 South Capitol Avenue P.O. Box 30013 Lansing, Ml 48909 Please accept this letter as support from Macomb County on the joint application of the Competitive Assistance Grant, authored by Oakland County for the exploration of a joint water and sewer authority between Macomb, Oakland and Wayne counties. Macomb County and its communities are supportive of a regional solution to the long-term integrity, affordability and competitiveness of the Detroit Water and Sewer system. To that end, external expertise in finance, rate setting, legal, governance and infrastructure management is necessary to come to a viable solution. The grant funds will be a starting foundation to attaining that goal. Thank you for your consideration. Sincerely, /1'4' Mark A. Hackel Macomb County Executive One South Main * 8`h Floor * Mt. Clemens, Michigan 48043 * Phone (586) 469-7001 * Fax (586) 469-7257 RESPONSE TO REQUEST FOR FURTHER INFORMATION (DRAFT 10/12/14) Competitive Grant Assistance Program Application (FY 2014 — Round 2) PART 1: PRIMARY INFORMATION 1. Primary Applicant: Oakland County 2. Primary Applicant Code: 63-0000 3. Primary Applicant FEIN: 386004876 4. Primary Applicant County Oakland County 63-0000 5. Mailing Address: 2100 Pontiac Lake Road 6. City: Waterford 7. State: MI 8. Zip Code 48328 PART 2: PROJECT OVERVIEW 9. Project Title DUE DILIGENCE EXAMINATION OF BUSINESS ISSUES, CREATION AND IMPLEMENTATION OF THE GREAT LAKES WATER AND SEWER AUTHORITY 10. Project Type: Cooperative Effort/Collaboration 11. Estimated Start Date: June 1,2013 12. Estimated Completion Date: July 1, 2015 13. Estimated Project Cost: Budget: up to $3,800,000 14. Grant Amount Requested: Budget: up to $3,800,000 15. Additional Applicants: Macomb County - 50-0000 Wayne County — 82-0000 City of Detroit — 82-2050 16. Applicants involved are willing to devote appropriate resources and time to the project. 17. There is potential for expansion of the project to include additional applicants at a later date. PART 3: PROJECT CONTACT INFORMATION 18. Contact Name: Gerald D. Poisson 19. Title: Chief Deputy County Executive, Oakland County, MI 20. Contact Telephone Number 21. Contact FAX Number: (248) 858-2090 (248) 858-9215 22. Contact E-mail Address 23. Contact Entity Name poissong@oakgov.com Oakland County Executive's Office PART 4: PROJECT DETAILS ADDITIONAL DETAILS: 1. INQUIRY: Please provide a brief narrative regarding whether or not the project is a feasibility study versus and implementation plan. RESPONSE: This project is a full implementation project. The agreement to form the Great Lakes Water Authority was evidenced by the execution of a Memorandum of Understanding (MOU) entered into on September 9, 2014, by the Mayor of the City of Detroit, the County Executives of Wayne, Oakland and Macomb Counties, the Emergency Manager for the City of Detroit and the Governor of the State of Michigan. The MOU is attached hereto and evidences the support of the parties for this project. Subsequent to MOU execution, the Detroit City Council and the Boards of Commissioners for Wayne, Oakland and Macomb Counties have all formally adopted articles of incorporation formally establishing the Great Lakes Water Authority. 2. INQUIRY: What is the likely outcome if this project is not successful in taking water and sewer operations to an authority? RESPONSE: If this project is not successful it is likely that the Detroit Water and Sewer Department (DWSD) will remain an operating department of the City. Given the City's recent bankruptcy, the rating agencies indicate that continuing to operate as a City department makes it likely that the DWSD will remain fiscally challenged and it will be unable to borrow for its substantial capital needs at affordable rates. The DWSD needs to borrow and invest at least $1.2 billion dollars in capital improvements over 2 the next five years if it is to maintain compliance with Clean Water Act mandates, provide affordable waterand sewer services and remain a viable public utility serving 4 million Michigan residents. In addition, if the City is unable to realize the $50 million annual benefit provided by the Authority lease payment, it will be unable to invest in its aged, decaying retail infrastructure that is already experiencing some 2000 water main breaks per year. Finally, if the project fails the system's continued deterioration will adversely affect Michigan economy as some 40% of the State's population and approximately 49% of its domestic economic output comes fromthe southeast Michigan communities that rely on the DWSD's water and sewer services. Neither business nor residential communities can thrive without safe, sustainable and affordable water and sewer services. 3. INQUIRY: Does the project have the potential to bring more units of government onto the water and sewer network? If so, please explain. RESPONSE: The project certainly has the potential to bring more governmental customers onto the water network. The DWSD has falling flow demands for its water services, so much so, it is currently estimated that at least one of its water filtration plants will be taken off-line by 2019 and perhaps a second plant, shortly thereafter. Properly maintained, the system's 5 water filtration plants are capable of serving thousands of more customers. It is realistically believed that a professionally run, efficient, transparent and honest system will attract communities searching for high- quality, affordable water services, communities currently served by groundwater wells. 4. INQUIRY: Provide a narrative regarding how the cost savings were calculated. RESPONSE: Cost savings associated with the formation of the GLWA come from two primary sources: savings associated with the separation of the Authority for the City of Detroit and the corresponding lessening of exposure to the City's continuing fiscal challenges, and savings associated directly from actions taken in the bankruptcy process that inure to the benefit of ongoing authority operations. As to the first savings, bond rating agencies and financial advisers involved in the bankruptcy and some independent of the bankruptcy were consulted and all indicated that separating the Authority from the City will save on future borrowing. Savings estimates range from a savings of 35 to 50 basis points. Given that some $1 billion of outstanding debt is eligible for refinancing in the near term and an additional $1.2 billion is estimated to be borrowed and invested in capital improvements over the next 5 to 10 3 years, a 50 basis point improvement in interest rates translates to tens of millions of dollars in savings over the life of a standard borrowing. The exact amount saved depends on the amount borrowed, the length of the borrowing, call features and the final market interest rates. (See the attached Moody's Report indicating a net positive.) The second tranche of savings comes from actions to be taken in bankruptcy that will benefit the Authority's ongoing operations. Changes in OPEB obligations will save an estimated $18 million per year. Modification of the Certificates of Participation will save and estimated $14 million per year. Finally, the due diligence examination of operations being conducted by the independent operator Veolia, Inc. is anticipated to produce best practice operational changes that could result in operational savings of $10 to $50 million per year if successfully implemented. 5. INQUIRY: For each of the budget line items provide a narrative how the item will assist in the cooperative effort/collaboration. RESPONSE: Phase I: (Feasibility / Foundation Building) Legal $ 250,000 - provided support for review of legal framework for creation of an Authority and the development of initial Terms & Conditions and Articles of Incorporation that provide legal foundation for Authority implementation. Accounting $250,000 — provided support for evaluation of the DWSD's existing financial position and savings that may be realized from creation of an independent Authority. Financial Advisor, Bonds, Rates $250,000 — provided support for evaluation of potential implications of Authority creation in terms of pension refinancing, refinancing of existing DWSD debt (largely for purposes of initial feasibility phases of implementation planning effort. Firms Engaged: Operational Due Diligence — Veolia North America / Applied Sciences Inc. Accounting — UHY/PFM Financial Advisor First Southwest/ PFM Legal —Miller Canfield / Ottenweis, Schenk/ Dickenson Wright! Badman/ Roger Young and Associates Governance / Strategic Planning / Utility Management — Galardi Rothstein Group 4 Phase II: (Implementation Planning & Creation) Legal - $1,000,000 provides support for the development of definitional documents, leases, authorizing legislation, etc. Bond Counsel - $500,000 provides legal support for the prospective issuance of Authority debt to effectively supplant existing DWSD debt and to support establishment of appropriate debt and investment policies of new Authority Financial, Debt, Pensions - $800,000 provides support for defining administrative procedures, business processes and performance metrics to guide the prospective Authority's general financial management and specifically its future debt/investment management and oversight of going-forward pension/OPEB obligations Accounting $300,000 provides initial support for the development of financial statement presentations of new Authority (and partner units of government) as well as definition of prospective financial reporting protocols. Actuary $250,000 - provides support for the evaluation of pension and OPEB liabilities that will be assumed by the Authority (recognizing the impacts of the Plan of Adjustment provisions related to these liabilities). Government and Public Education $100,000 - provides support for (ongoing) efforts to educate potential County partners in the Authority, customer communities / utilities within these counties (and others served by DWSD) and the general public about the potential implications of Authority creation. Firms Engaged: Operational Due Diligence - Veolia North America Accounting - Plante Moran Financial Advisor- First Southwest/PFM Legal -Miller Canfield / Ottenweis, Schenk/ Dickenson Wright! Roger Young and Associates/ Bodman Governance / Strategic Planning / Utility Management - Galardi Rothstein Group 5 FISCAL NOTE (MISC . #14261) November 19, 2014 FINANCE COMMITTEE, ruivi MIDDLETON, CHAIRPERSON RE: COUNTY EXECUTIVE —2014 COMPETITIVE GRANT ASSISTANCE PROGRAM (CGAP) — GRANT APPLICATION/ACCEPTANCE TO THE OAKLAND COUNTY BOARD OF COMMISSIONERS Chairperson, Ladies and Gentlemen: Pursuant to Rule XII-C of this Board, the Finance Committee has reviewed the above referenced resolution and finds: 1) Oakland County has entered into an agreement with the City of Detroit, Macomb County, and Wayne County to form the Great Lakes Water Authority (GLWA), authorized by Miscellaneous Resolution #14229. 2) The Oakland County Executive's Office, under court order, has applied for and been awarded funding for a Competitive Grant Assistance Program (CGAP) Project from the Michigan Department of Treasury, Office of Revenue and Tax Analysis (ORTA) to assist with the research, creation and implementation of GLWA, 3) The CGAP award is for Oakland, Macomb and Wayne Counties and the City of Detroit with Oakland County acting as the fiduciary, 4) The maximum award amount of $3,800,000 is for reimbursement of identifying and quantifying the legal, financial, and accounting issues, negotiating proposed transactional documents, seeking approval of county commissioners to establish an authority and then implement a new authority, 5) The grant funding period is October 1, 2013 through September 30, 2018 and reimburses approved expenditures back to June 1,2013. 6) The Chairperson of the Board of Commissioners is authorized to execute the grant award and to approve any grant extensions or changes, within fifteen percent (15%) of the original award, which are consistent with the original application as approved. 7) A budget amendment is recommended as follows: COMPETITIVE GRANT ASSISTANCE PROGRAM FUND *29225 FY 2015 Grant Number #GR0000000699 Amendment Revenue 1010101-181000-615571 Grants State $3,800,000 Total Revenue $amclo Expenditures 1010101-181000-731458 Professional Services Total Expenditures $3,800,000 $3 800 000 FINANCE COMMITTEE VOTE: Motion carried unanimously on a roll call vote with Crawford absent. Resolution #14261 November 19, 2014 Moved by Spisz supported by Quarles the resolutions (with fiscal notes attached) on the amended Consent Agenda be adopted (with accompanying reports being accepted), AYES: Gershenson, Gingell, Gosselin, Hatchett, Jackson, Long, Matis, McGillivray, Middleton, Quarles, Runestad, Scott, Spisz, Taub, Weipert, Woodward, Zack, Bosnic, Dwyer. (19) NAYS: None. (0) A sufficient majority having voted in favor, the resolutions (with fiscal notes attached) on the amended Consent Agenda were adopted (with accompanying reports being accepted). I HEREBY APPROVE THIS RESOLUTION CHIEF DEPUTY COUNTY EXECUTIVE ACTING PURSUANT TO MCL 45.559A (7) STATE OF MICHIGAN) COUNTY OF OAKLAND) I, Lisa Brown, Clerk of the County of Oakland, do hereby certify that the foregoing resolution is a true and accurate copy of a resolution adopted by the Oakland County Board of Commissioners on November 19th, 2014, with the original record thereof now remaining in my office. In Testimony Whereof, I have hereunto set my hand and affixed the seal of the County of Oakland at Pontiac, Michigan this 19th day of November 2014. Lisa Brown, Oakland County