HomeMy WebLinkAboutResolutions - 2024.04.11 - 41126
AGENDA ITEM: Pledging the Full Faith and Credit of Oakland County for Oakland-Macomb
Interceptor Drain Bonds
DEPARTMENT: Water Resources Commissioner
MEETING: Board of Commissioners
DATE: Thursday, April 11, 2024 6:31 PM - Click to View Agenda
ITEM SUMMARY SHEET
COMMITTEE REPORT TO BOARD
Resolution #2024-3959 _ 24-19
Motion to adopt the attached suggested resolution.
ITEM CATEGORY SPONSORED BY
Bonds Yolanda Smith Charles
INTRODUCTION AND BACKGROUND
The Oakland-Macomb Drain is an interceptor wastewater collection system that was constructed in
the 1970s and has experienced significant degradation due to sulfuric acid corrosion of the pipes
and has experienced excessive odor issues that must be addressed. The Oakland-Macomb Drain
Drainage District has approved a $14 million construction project that will address the corrosion
issues and eliminate much of the public health odor problems.
POLICY ANALYSIS
This is a request to pledge the full faith and credit of Oakland County for the prompt payment of the
principal and interest on a series of bonds issued by the Oakland-Macomb Interceptor Drain
Drainage District in the aggregate principal amount not to exceed $4,634,000 which represents
33.1% of the total $14 million project cost.
As noted in the attached memo, the purpose of the project is to address substantial damage to the
Oakland-Macomb Drain Drainage District pipes, coupled with a pervasive odor issue caused by
hydrogen sulfide. The hydrogen sulfide must be addressed to prevent further degradation, extend
the interceptor system life, and reduce odor complaints throughout the system. The Drainage
District will construct a new corrosion control and odor mitigation system at a maximum estimated
cost of $14 million. The 13 benefitting municipalities in Oakland County will cover 33.1% of the cost
representing a not to exceed amount of $4,634,000 while the 11 benefiting municipalities in
Macomb County will be responsible for the remaining 66.9% of the total representing a not to
exceed amount of $9,366,000.
State law requires a 2/3 majority vote by the Board of Commissioners for adoption of the proposed
resolution to pledge the full faith and credit of the County for the prompt payment of the principal of
and interest on the Bonds pursuant to Section 474 of the Act.
BUDGET AMENDMENT REQUIRED: No
Committee members can contact Michael Andrews, Policy and Fiscal Analysis Supervisor at
248.425.5572 or andrewsmb@oakgov.com or the department contact persons listed for additional
information.
CONTACT
Jen Cook
Joe Colaianne
Steve Burke
ITEM REVIEW TRACKING
Aaron Snover, Board of Commissioners Created/Initiated - 4/11/2024
David Woodward, Board of Commissioners Approved - 4/11/2024
Hilarie Chambers, Executive's Office Approved - 4/12/2024
Lisa Brown, Clerk/Register of Deeds Final Approval - 4/16/2024
AGENDA DEADLINE: 04/21/2024 6:31 PM
ATTACHMENTS
1. 2024-04-03 EDI Memo for Bond Issue
2. ATTACHMENT I
COMMITTEE TRACKING
2024-04-03 Economic Development & Infrastructure - Forward to Finance
2024-04-03 Finance - Recommend to Board
2024-04-11 Full Board - Adopt
Motioned by: Commissioner Michael Gingell
Seconded by: Commissioner Penny Luebs
Yes: David Woodward, Michael Spisz, Michael Gingell, Penny Luebs, Kristen Nelson, Christine
Long, Robert Hoffman, Philip Weipert, Gwen Markham, Angela Powell, Marcia Gershenson,
Yolanda Smith Charles, Charles Cavell, Brendan Johnson, Ajay Raman, Ann Erickson Gault,
Linnie Taylor (17)
No: None (0)
Abstain: None (0)
Absent: Karen Joliat, William Miller III (2)
Passed
April 11, 2024
RESOLUTION #2024-3959 _ 24-19
Sponsored By: Yolanda Smith Charles
Water Resources Commissioner - Pledging the Full Faith and Credit of Oakland County for
Oakland-Macomb Interceptor Drain Bonds
Chair and Members of the Board:
WHEREAS pursuant to a petition which was filed with the Director of the Michigan Department of
Agriculture on June 18, 2009 by the Charter Township of Clinton of Macomb County, through the
Macomb County Public Works Commissioner, and on June 22, 2009 by the Charter Township of
Independence of Oakland County, through the Oakland County Water Resources Commissioner,
proceedings have been carried out by the Drainage Board for the Oakland-Macomb Interceptor Drain
Drainage District (the “Drainage District”) authorizing the establishment, construction, operation,
maintenance, extending and improving the Oakland-Macomb Interceptor Drain (“OMID Drain”) and
for the financing projects, said projects having been determined to be necessary for the public health;
and
WHEREAS the OMID Drain, is an interceptor wastewater collection system that was originally
constructed in the 1970s and is approaching 50 years in age; and
WHEREAS the system has experienced degradation due to sulfuric acid formed from hydrogen
sulfide (H2S) which has been the source of excessive odor complaints; and
WHEREAS H2S poses a threat to unlined components as well as continual excessive odor issues in
certain locations that must be addressed; and
WHEREAS on February 21, 2024, the Drainage Board for the Drainage District approved the OMID
Odor and Corrosion Control Project (“Project”) as described in Attachment I, that includes new odor
and corrosion control systems to reduce excessive odors escaping the system; and
WHEREAS the estimated cost of the Project is $14,000,000 which will be apportioned and assessed
against certain public corporations within Macomb and Oakland counties by the Drainage Board; and
WHEREAS pursuant to the authorization provided in Chapter 21 of Act 40, Public Acts of Michigan,
1956, as amended (the “Drain Code”), the Drainage Board for the Drainage District proposes that the
Drainage District issue its Drain Bonds, Series 2024 (the “Drain Bonds”) in the aggregate principal
amount not to exceed $14,000,000 to finance all or part of the cost of the design and construction of
improvements relating to the Project, and the costs of issuance of such bonds; and
WHEREAS such bonds will be payable in part from the collection of special assessments against
public corporations located in Macomb and Oakland Counties in the Drainage District, said special
assessments to be duly confirmed as provided in the Drain Code; and
WHEREAS the Drainage Board has, or will adopt a Final Order of Apportionment on March 20, 2024,
and 33.10% of the Project cost will be assessed to the public corporations served by the OMID Drain
within Oakland County and 66.90% of the Project cost will be assessed to the public corporations
served by the OMID Drain within Macomb County; and
WHEREAS the Drainage Board has or will adopt a Final Order of Apportionment on March 20, 2024,
and the cost of the Project has or will be apportioned against the following public corporations as
indicated in the Chart below:
33.1000% Estimated Amount
County of Oakland Percentage Assessed
PUBLIC CORPORATIONS of Project for Project
City of Auburn Hills 4.9705% $695,870
Independence Township
(incl. City of Clarkston) 2.4213% 338,982
City of Lake Angelus 0.0185% 2,590
Village of Lake Orion 0.3409% 47,726
Oakland Township 1.0393% 145,502
Orion Township 3.1494% 440,916
Oxford Township 1.2468% 174,552
Village of Oxford 0.5928% 82,992
City of Rochester 1.9526% 273,364
City of Rochester Hills 8.1106% 1,135,484
Waterford Township 7.6159% 1,066,226
West Bloomfield Township 1.6414% 229,796
County of Oakland Total 33.1000% $4,634,000
66.9000% Estimated Amount
County of Macomb Percentage Assessed
PUBLIC CORPORATIONS of Project for Project
Chesterfield Township 4.9783% $696,962
Clinton Township 13.9899% 1,958,586
City of Fraser 2.8103% 393,442
Harrison Township 4.1896% 586,544
Lenox Township 0.7827% 109,578
Macomb Township 9.4656% 1,325,184
Village of New Haven 0.5614% 78,596
Shelby Township 6.5484% 916,776
City of Sterling Heights 20.6591% 2,892,274
City of Utica 1.0966% 153,524
Washington Township 1.8181% 254,534
County of Macomb Total 66.9000% $9,366,000
Combined Total: 100.0000% $14,000,000
WHEREAS the statutory limit for County debt is $9,768,281,836 (10% of State Equalized Value). As
of February 29, 2024, the total pledged debt is $567,086,870 or approximately 5.805% of the S.E.V.;
and
WHEREAS Section 526 of the Drain Code authorizes a county to pledge its full faith and credit for the
payment of obligations issued pursuant to Chapter 21 of the Drain Code, if the county board of
commissioners has adopted a resolution by two-thirds (2/3) vote of its members-elect to that effect;
and
WHEREAS the Drain Bonds are to be designated as the Oakland-Macomb Interceptor Drain
Drainage District Bonds (Limited Tax General Obligation), Series 2024, will be dated as of such date,
will bear interest at such rates not to exceed 6%, will be in the aggregate principal amount not to
exceed $14,000,000, will mature in such years and principal amounts, and will be subject to
redemption prior to maturity, as shall be determined by resolution of the Drainage Board; and
WHEREAS said Project is immediately necessary to protect and preserve the public health, and it is
in the best interest of Oakland County that the Drain Bonds be sold and secured by a pledge of the
full faith and credit of Oakland County, as authorized by Section 526 of the Drain Code; and
WHEREAS the Board of Commissioners of Macomb County is expected to adopt a similar resolution
pledging its full faith and credit for the payment of the Drain Bonds.
NOW THEREFORE BE IT RESOLVED that the Oakland County Board of Commissioners, pursuant
to the authorization provided in Section 526 of the Drain Code, by a majority vote of at least two-thirds
(2/3) of its members-elect, does hereby irrevocably pledge the full faith and credit of Oakland County
for the prompt payment of the principal of and interest on that portion of the Drain Bonds not to
exceed $4,634,000 and representing 33.10% apportioned to Public Corporations within Oakland
County (which said total amount of the Drain Bonds shall not to exceed the aggregate amount of
$14,000,000), and does agree that in the event any Public Corporations in Oakland County shall fail
or neglect to account to the Oakland County Treasurer (“County Treasurer”) for the amount of any
special assessment installment and interest (in anticipation of which the bonds are issued) when due,
then the amount thereof shall be advanced from the funds of Oakland County, and the County
Treasurer is directed to make such advancement to the extent necessary.
BE IT FURTHER RESOLVED that in the event that, pursuant to said pledge of its full faith and credit
Oakland County advances out of Oakland County funds all or any part of the principal and interest
due on the bonds, it shall be the duty of the County Treasurer, for and on behalf of Oakland County,
to take all actions and proceedings and pursue all remedies permitted or authorized by law for the
reimbursement of such sums so paid.
BE IT FURTHER RESOLVED that the County Treasurer or the Drainage District’s financial
consultant, MFCI, LLC, is authorized to file with the Department of Treasury of the State of Michigan
on behalf of the County an Application for the State Treasurer's Approval to Issue Bonds with respect
to the Drain Bonds.
BE IT FURTHER RESOLVED that the County Treasurer is authorized, if necessary, to approve the
circulation of a preliminary and final official statement for the Drain Bonds, to cause the preparation of
those portions of the preliminary and final official statement that pertain to the County, and to do all
other things necessary for compliance with Rule 15c2 12 issued under the Securities Exchange Act of
1934, as amended (the “Rule”). The County Treasurer is authorized to execute and deliver such
certificates and to do all other things that are necessary to effectuate the sale and delivery of the
Drain Bonds.
BE IT FURTHER RESOLVED that the County Treasurer is hereby authorized, if necessary, to
execute and deliver in the name and on behalf of the County (i) a certificate of the County to comply
with the requirements for a continuing disclosure undertaking of the County pursuant to subsection
(b)(5) of the Rule and (ii) amendments to such certificate from time to time in accordance with the
terms of such certificate (the certificate and any amendments thereto are collectively referred to
herein as the “Continuing Disclosure Certificate”). To the extent a Continuing Disclosure Certificate is
executed and delivered, the County hereby covenants and agrees that it will comply with and carry
out all of the provisions of such Continuing Disclosure Certificate. The remedies for any failure of the
County to comply with and carry out the provisions of the Continuing Disclosure Certificate shall be as
set forth therein.
BE IT FURTHER RESOLVED that all resolutions and parts of resolutions insofar as they conflict with
the provisions of this resolution be and the same hereby are rescinded.
BE IT FURTHER RESOLVED that no budget amendment is required. No General Fund appropriation
is required.
Chair, the following Commissioners are sponsoring the foregoing Resolution: Yolanda Smith
Charles.
Date: April 11, 2024
David Woodward, Commissioner
Date: April 12, 2024
Hilarie Chambers, Deputy County Executive II
Date: April 16, 2024
Lisa Brown, County Clerk / Register of Deeds
COMMITTEE TRACKING
2024-04-03 Economic Development & Infrastructure - Forward to Finance
2024-04-03 Finance - Recommend to Board
2024-04-11 Full Board - Adopt
Motioned by Commissioner Michael Gingell seconded by Commissioner Penny Luebs to adopt the
attached Bonds: Pledging the Full Faith and Credit of Oakland County for Oakland-Macomb
Interceptor Drain Bonds.
Yes: David Woodward, Michael Spisz, Michael Gingell, Penny Luebs, Kristen Nelson, Christine
Long, Robert Hoffman, Philip Weipert, Gwen Markham, Angela Powell, Marcia Gershenson,
Yolanda Smith Charles, Charles Cavell, Brendan Johnson, Ajay Raman, Ann Erickson Gault,
Linnie Taylor (17)
No: None (0)
Abstain: None (0)
Absent: Karen Joliat, William Miller III (2)
Passed
ATTACHMENTS
1. 2024-04-03 EDI Memo for Bond Issue
2. ATTACHMENT I
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 April
11, 2024, 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 Circuit Court at
Pontiac, Michigan on Thursday, April 11, 2024.
Lisa Brown, Oakland County Clerk / Register of Deeds
Form DC–001
OAKLAND COUNTY WATER RESOURCES COMMISSIONER
Page 1 of 1 Rev.: 02/12/2018
OAKLAND COUNTY
WATER RESOURCES COMMISSIONER MEMORANDUM
TO: Commissioner Yolanda Charles Smith, Chairperson Environment, Economic
Development and Infrastructure Committee
FROM: Jen Cook, P.E., Civil Engineer III, Project Manager
SUBJECT: Oakland-Macomb Interceptor Drain – Full Faith and Credit 2024 Drain Bonds
DATE: April 3, 2024
To adequately address substantial damage to its pipes coupled with a pervasive odor issue, the
Oakland-Macomb Drain Drainage District will construct a new corrosion control and odor mitigation
system at a maximum estimated cost of $14 million. The 13 benefitting municipalities in Oakland
County will cover 33.1% of the cost representing a not to exceed amount of $4,634,000 while the 11
benefiting municipalities in Macomb County will be responsible for the remaining 66.9% of the total
representing a not to exceed amount of $9,366,000.
The Oakland-Macomb Interceptor Drain was originally constructed in the 1970s as a sewage
collection system and is approaching 50 years in age. The system, which serves both Oakland and
Macomb Counties, has experienced significant degradation due to sulfuric acid formed from hydrogen
sulfide (H2S). The H2S emitted from the system has also been the source of numerous odor
complaints. While many sections of the drain have been lined, the H2S still poses a threat to unlined
components and continues to be an unresolved odor issue in certain locations.
Financing this project will be accomplished through the issuance of limited tax general obligation
bonds issued in one or more series in an amount not to exceed $14 million as detailed in the
accompanying resolution.
Requested Action: Adopt the resolution as presented pledging the full faith and credit of
Oakland County for the prompt payment of the principal and interest on a series of bonds
issued by the Oakland-Macomb Interceptor Drain Drainage District in the aggregate principal
amount not to exceed $4,634,000 which represents 33.1% of the total $14 million project cost.
Presenters: Jen Cook, P.E. 947-955-6560 cookjm@oakgov.com
Joe Colaianne, Esq. 248-431-0769 JColaianne@ClarkHill.com
Steven Burke, CFA 804-986-1419 Steveb@mfci.com
ATTACHMENT I
Oakland-Macomb Interceptor Drain Drainage District Bonds, Series 2024
Project and Project Costs
OMID Odor-Corrosion Project
The Oakland-Macomb Interceptor Drain (OMID) interceptor system was originally constructed in the 1970s
and is approaching 50 years in age. The system has experienced degradation due to sulfuric acid formed
from hydrogen sulfide (H2S). The H2S emitted from the system has also been the source of odor complaints.
While the OMID system has been lined in many sections, the H2S still poses a threat to unlined components
as well as a continual odor issue in certain locations. Accordingly, the H2S must be addressed to prevent
further degradation, extend the interceptor system life, and reduce odor complaints throughout the system.
The OMID Odor and Corrosion Control Project will provide the Drainage District with new odor and control
systems at two sites in Sterling Heights, Macomb County, Michigan to reduce the impact of H2S in the
system. The capital improvements (“Work”) includes the following:
1. Meter ST-S-1 Site (Utica and Dodge Park):
a. Demolition of existing odor control unit and associated ductwork at
Meter ST-S-1 at Utica Road/Dodge Park Road.
b. Demolition of irrigation system, guardrail, concrete sidewalk, and other site
features as needed to facilitate the work.
c. Installation of an activated carbon vessel, exhaust fan with variable frequency drive
(VFD) and ancillary facilities.
d. Installation of 480V 3-phase power and ancillary wiring and panels.
e. Modifications to the irrigation system.
f. Restoration of landscaping and other site features impacted by the work.
g. Installation of emergency pressure relief vent.
h. Make other improvements to on-site structures as needed to facilitate the Project
2. Meter ST-S-3 Site (Sorrento and Dodge Park):
a. Demolition of above-grade facilities associated with the Meter ST-S-3 vault at
Dodge Park Road/Sorrento Boulevard.
b. Demolition of existing site fencing and other site features as needed to facilitate
the work.
c. Demolition of partial underground sheeting.
d. Installation of an activated carbon facility, exhaust fan with variable frequency drive
(VFD), and other appurtenance facilities.
e. Installation of 480V 3-phase power and ancillary wiring and panels.
f. Construct a replica house structure with a basement foundation to contain the new
equipment.
g. Make other improvements to on-site structures as needed to facilitate the Project
3. Other sites:
a. Installation of emergency pressure relief vents at control structures CS-5, CS-9,
PCI—7-107 and PCI-7-109 in the ITC corridor and Sterling Heights.
The estimated cost of the Project is not to exceed $14,000,000.