6042 Acme Road, Williamsburg, MI 49690 Tel. 231-938-1350 Fax 231-938-1510 www.acmetownship.org

To: Acme Township Board From: Acme Township Supervisor Sub: Creation of Sewer Authority Date: Feb 7th 2012 The Sewer Authority Committee members: Acme, East Bay, Elmwood, Garfield, and Peninsula townships and the City of Traverse City continue to meet on a regular basis to discuss creating a Sewer and Water Authority. The Acme Township board authorized the township to spend $600, as its 1/6 share of a contract with Young, Graham, Elsenheimer, & Wendling, P.C. to review current contracts, create a frame work on which to proceed, and draft a preliminary set of by-laws (see attachments.) The table below shows current expenses. I would ask the board to approve payment of East Bay Invoice 10, in the amount of $110.50, East Bay Invoice 11, in the amount of $125.88, and East Bay 11 Invoice in the amount of $55.00. These amounts represent one sixth of the cost for additional meetings between the chairman of the committee, additional documents from the attorney, and work done by Wade Trim prior to August 2011. East Bay Township is processing all invoices for this project.

Sewer and Water Authority Financial  

Vendor Invoice  Total Amount  Acme's 1 /6 02 East Bay Legal Service from Young, Graham 10482  $52.00 $8.66  pd 03 East Bay Legal Service from Young, Graham 15238  $3,640.00 $606.67  pd 10 East Bay Legal service from Young, Graham  $663.00 $110.50 

11 East Bay Legal service from Young, additional information requested by the committee chair.  $754.00 $125.88 11‐2012  East Bay Wade Trim  $330.00 $55.00 Sum  $5,439.00 $906.71 

Sample Motion: I move that the township pay East Bay for invoice 10, 11 and 2012-11 for a total amount of $291.38.

NEXT STEP The next step is to contract for a Business Analysis with a firm that has experience in creating sewer and water authorities. The contracted firm will look at financing, assets, etc., make recommendations on advantages and disadvantage of an authority, and develop a cost sharing a formula for the municipalities. The results will be presented to the municipalities for their review and to have each board vote to stop or move forward with the process. A phone bid process was conducted by East Bay Supervisor Glen Lile. Only one firm was found that had the qualifications needed to and submitted a bid – Plant Moran. The Plant Moran proposal is included in this material for your review and comment. Their proposal has two parts, The Business Case Analysis and the Implementation Plan. We can contract for one or both parts of the bid. All boards have been asked to review the proposal from Plant Moran and bring their comments to a public meeting to be held at 7:00 PM on February 21 in Garfield Township Hall. Several months ago the committee estimated that the total cost of authority project would be $70,000. The Plant Moran estimated fees:

Business Case Analysis (Part A only): $60,000 - $75,000 ($10,000 to $12,500 per community)

Implementation Plan (Part B only): $12,000 - $15,000 ($2,000 to $2,500 per community)

Combined Pricing (w/ 10% discount): $64,800 - $81,000 ($10,800 to $13,500 per community)

Comments: 1. 2. 3. 4.

M E M O R A N D U M December 1, 2011 TO: Participating Communities FROM: James G. Young SUBJECT: Water & Sewer Authority - Current Status As requested, this memo summarizes the current status regarding the formation of a legal entity that could operate water and sewer services cost-effectively and permit streamlined decision-making. Shown below is a list of what has been accomplished and remaining issues. Of course, new issues may arise as matters progress.

ACCOMPLISHMENTS & "TO DO" ISSUES A. STATUTORY FRAMEWORK. After reviewing various statutory options, the

Water and Sewer Authority statute (Act 233 of 1955) was selected as the most viable.

B.

ARTICLES OF INCORPORATION. A major accomplishment has been the drafting of Articles of Incorporation which is 80+% done. The issues that must

oting; duties & powers of

r township approval. 3. Assets: assets to be transferred to the Authority.

ri s most of these issues

that must still be resolved regarding the Articles)

C.

still be resolved include: 1. Board of Trustees: the number of Trustees; qualifications, if any; how

many from each community; how are they selected initially and in the future; compensation; meeting frequency; v officers; & whether to use service districts.

2. Budget: date for submission of proposed budget fo

(note: Tim Truax's email of 8-15-11 also summa ze

ORDINANCE PREPARATION. It must be determined what ordinance revisions are needed and the appropriate amendments must be drafted.

D.

EXISTING AND NEW CONTRACTS. A determination should be made regarding whether changes should be made to existing contracts and what ncontracts, if any, are needed fo

ew r effective operation of the Authority. Then,

appropriate documents must be drafted.

E.

INFORMATIONAL DOCUMENTS TO ASSIST IN MUNICIPAL CONSIDERATION OF THE AUTHORITY. To assist the participating communities in evaluating whether the community should approve Authority-related documents, a summary of those document would be helpful. In addition, proposed resolutions should be prepared along with an enactment checklist.

Wayne Kladder <wjktcm@gmail.com>

Grand Traverse Regional Water and Sewer Authority 2 messages

Truax, Tim <TTRUAX@wadetrim.com> Mon, Aug 15, 2011 at 10:40 AM To: "Ben Bifoss (bbifoss@ci.traverse-city.mi.us)" <bbifoss@ci.traverse-city.mi.us>, Wayne Kladder <wjktcm@gmail.com>, Jack Kelly <ElmwoodSupervisor@charterinternet.com>, "Chuck Korn (ckorn@garfield-twp.com)" <ckorn@garfield-twp.com>, "Glen Lile (glile@eastbaytwp.org)" <glile@eastbaytwp.org>, Rob Manigold <Supervisor@peninsulatownship.com> Cc: "James G. Young" <jyoung@upnorthlaw.com>

Gentlemen, At the conclusion of our meeting last Thursday, Mr. Young asked each person to think about, and address, the following topics. In order to kick-start some of the discussion, I have included a few thoughts that I had over the weekend. 1) assets to be included in the authority, both physical and financial 2) make up and rotation of the board members 3) service area boundaries 1) Understanding that Jim will include language that allows a member community to withdraw from the Authority (given a one-year notification period), the topic of what the authority will own needs to be addressed by each community. The assets should include all of the physical assets that the community wants the authority to pay for, operate, maintain, and manage. Examples of physical assets to transfer include things like booster pump stations; water treatment plants; reservoirs and elevated storage tanks; pressure reducing stations; water lines up to and including the curb stop; water meters; sanitary sewers; grinder pump stations (if any exist); sewage pump stations; force mains; air release valves; telemetry; and wastewater treatment facilities. Financial assets (and obligations) that may be transferred to the authority would include things like bond payment obligations for water and sewer improvements in the community; enterprise fund balances (and credits to it if fund balance assets were used for non-enterprise uses); and contracts for cellular tower usage. 2) Mr. Manigold suggested that representation on the authority board should not necessarily follow municipal boundaries. Considering the different investments each community has made, e.g., the City versus Acme Township, the idea that each would have equal voting stature does not make sense. A more fair allocation of votes might be based on population served. This could take the form of ‘weighted votes’ or approximately equal ‘service district population served.’ For example, a district that includes all of Elmwood Township, a portion of Garfield Township and a portion of the City, could be established and assigned a vote on the authority board. I think Mr. Manigold wanted to stress the importance of non-political decision-making when considering authority business. 3) Each community has an existing service area, defined by the pipes in the ground. They

may also have a master plan boundary beyond which the community does not want to extend water and sewer lines, in order to meet the development plans of the community and prevent sprawl. Mr. Young has asked each community to reflect on the service area that would be included when the authority is established. Each community may want to review their master plan to see if the topic of service district has already been defined, and if so, does it need revision? For the City, this is not an issue; the service district is the same as the municipal boundaries. A related idea is that by increasing the service area in a township, the township may be unintentionally reducing the volume of septage that will be produced and delivered to the STF. I thought the meeting was very productive. Many of the important concepts were addressed or identified. Mr. Young suggested that a conference call before the end of the month may be a good idea in order to keep things moving. Please let me know if there is anything that you would like to have Wade Trim do in the next few weeks relative to this issue. Tim

 

Draft 8-23-11 ARTICLES OF INCORPORATION

OF

GRAND TRAVESE REGIONAL WATER AND SEWER AUTHORITY

These Articles of Incorporation are adopted by the incorporating municipal corporations for the purpose of creating an Authority under the provisions of Act 233, Public Acts of 1955, as amended (the Act).

ARTICLE I - NAME

The name of this Authority is “Grand Traverse Regional Water and Sewer Authority.” The principal office of the Authority will be located at 400 Boardman Avenue, Traverse City, MI 49684.

ARTICLE II - INCORPORATING MUNICIPALITIES

The incorporating municipalities creating this Authority are Acme Township, East Bay Charter Township, Elmwood Charter Township, Garfield Charter Township, Peninsula Township and the City of Traverse City. Elmwood Charter Township is located in Leelanau County, Michigan. All other incorporating municipalities are located in Grand Traverse County, Michigan. Incorporating municipalities shall be collectively called the Constituent Municipalities.

ARTICLE III - PURPOSES

The purposes of this Authority are to acquire, own, improve, enlarge, extend and operate a water supply system, a sewage disposal system, or both, in accordance with the authorization of the Act. The terms “water supply system” and “sewage disposal system” as used in these Articles of Incorporation shall be as now or hereafter defined in Section 1 of the Act. The Authority shall not have any interest whatsoever in the ownership or operation Grand Traverse Septage Treatment Facility.

ARTICLE IV - POWERS

This Authority shall be a public body corporate with power to sue or to be sued in any court of this State. The Authority shall have jurisdiction throughout all of the territory embraced within the corporate boundaries of its Constituent Municipalities. It shall possess all of the powers now or hereafter granted by the Act or by any other applicable statutes and by these Articles of Incorporation. In addition, it shall have all implied and incidental powers to those powers that are listed above. The enumeration of any powers herein shall not be construed as a limitation upon its general powers unless the context shall clearly indicate otherwise. The Authority need not have a corporate seal.

In addition, the Authority and its Constituent Municipalities may enter into a contract or contracts providing for the acquisition, purchase, lease, construction, improvement, enlargement, extension, operation or financing of a water supply system, sewage disposal services, or both, as authorized and provided in the Act. The Authority shall have the power to enter into contracts with any Constituent Municipality or any other municipality for the purchase of a water supply system, sewage disposal services, or both, from such Constituent Municipality or other municipality, or to enter into a contract or contracts with any Constituent Municipality or any other public or private entity for the management, operation, lease, purchase and/or maintenance of all or any part of any water supply system, sewage disposal system, or both, owned or operated by the Authority. No contracts shall be for a period exceeding forty (40) years.

ARTICLE V - TERM OF EXISTENCE

The Authority shall continue in existence perpetually or until dissolved by act of the parties or by law; provided, however, that the Authority shall not be dissolved if such dissolution could operate as an impairment of any of its contracts.

ARTICLE VI - FISCAL YEAR

The fiscal year of the Authority shall commence on January 1 and end on December 31.

ARTICLE VII - BOARD OF TRUSTEES

The legislative body of the Authority shall be a Board of Trustees which shall be called the Board in these Articles. The Board shall be composed of XXXXXXXXXXX.

Comment from Jim Young: This section requires a number of decisions from the constituent municipalities. For example, the following issues need to be discussed and decided:

1. The number of trustees.

2. The number of trustees from each municipality.

3. If there is more than one trustee from each municipality, may one of the trustees be a non-resident?

4. Must the trustee (or one of the trustees) from each constituent municipality be a member of the legislative body of the constituent municipality or an officer/elected official of the constituent municipality?

5. May trustees be paid compensation or be reimbursed for their expenses? If compensation is to be paid, who determines the compensation - constituent municipalities or a super majority vote of the Board?

6. How often do you want the Board to meet - please note that there is another provision regarding board meetings.

7. How will voting take place at the Board? For example, does each member get one vote? Does each constituent municipality get one vote? Do you wish to grant each municipality a percentage vote based on some criteria (such as sewer capacity, number of users, etc.). If the percentage approach is taken, then the votes of all constituent municipalities should total 100 percent.

8. Should the authority have officers, and if so, what functions would they perform?

9. Should the Authority's jurisdictional area be divided into service districts that ignore political boundaries and have a board member who resides in each district? If so, how do we select the initial board and make replacements? Must members have certain qualifications? Tim Truax and I have discussed this and I have some ideas if you like the "service area" approach.

ARTICLE VIII - VACANCIES

In the event of a vacancy on the Board for any reason, the legislative body of the Constituent Municipality selecting such representative shall fill the vacancy for the unexpired term, following the same procedures and under the same terms as used for the original appointment. In the event of a vacancy in any office of the Board, such vacancy shall be filled by the Board for the unexpired term. In case of the temporary absence of disability of any of any officer, the Board may appoint some person temporarily to act in his or her stead except that in the event of the temporary absence or disability of the Chair, the Vice-Chair shall so act. All persons serving in the offices of Chair and Vice-Chair shall be members of the Board; the persons serving as Treasurer and Secretary may, but need not, be a member of the Board. Also, the Board may appoint a Recording Secretary, who may, but need not, be a member of the Board.

ARTICLE IX - BOARD MEETINGS

Meetings of the Board shall be held at least quarterly at such time and place as shall be prescribed by resolution of the Board. The Board may set additional regular meetings as it sees fit. Special meetings of the Board may be called by the Chair or any two members thereof, by serving written notice of the time, place and purpose thereof, upon each member of the Board personally, or by leaving it at his or her place of residence at least eighteen hours prior to the time of such meeting, or by depositing the same in a United States Post Office or mail box within the limits of the Authority, at least seventy-two (72) hours prior to the time of such meeting, enclosed in a sealed envelope properly addressed to him or her at his or her residence address, with first class postage fully prepaid. With written consent of a member of the Board, that member’s notice may be made by email to the member's email address that is on file with the Authority. In the absence of such written consent, notice shall be given personally to each member of the Board, left at the member’s usual place of residence, or otherwise delivered as

provided in these Articles. Special meetings of the Board at which all members are present shall be deemed to be valid even though no written notice thereof may be given as above specified. Any member of the Board may waive notice of any meeting either before or after the holding thereof. At least a majority of the members-elect of the Board shall be required for a quorum. For the passage of any resolution or ordinance providing for the issuance of bonds, or the execution of any contract, there shall be required a majority of the members-elect of the Board. For all other matters, a ftlinevote of a majority of the members of the Board present at any meeting at which a quorum is present shall be sufficient for passage. (NOTE from Jim Young: this wording may change if you decide on a different voting format.)

Public notices of all regular, special or rescheduled regular meetings of the Board shall be given pursuant to the applicable provisions of Act 267, Public Acts of 1976, as amended from time to time (the Open Meetings Act).

The Board shall adopt rules of procedure which are not in conflict with the terms of any statute or these Articles of Incorporation. The Board shall also have the right to establish rules and regulations for the use of any project constructed by it under the provisions of the enabling acts. The Board shall keep a journal of its proceedings, which shall be signed by the Secretary. All votes shall be “yeas” and “nays,” except that where the vote is unanimous, it shall only be necessary to so state.

ARTICLE X - BOARD AFFAIRS

The Chair of the Board shall be the presiding officer thereof. Except as herein otherwise provided, the Chair shall not have any executive or administrative functions other than as a member of said Board. In the absence or disability of the Chair, the Vice-Chair shall perform the duties of the Chair. Unless a Record Secretary has been appointed, the Secretary shall be the recording officer of the Board. The Treasurer or other Board designated person shall be custodian of the funds of the Authority and shall give it a bond conditioned upon the faithful performance of the duties of his or her office. The cost of said bond shall be paid by the Authority. All money shall be deposited in a financial institution to be designated by the Board, and all checks or other forms of withdrawal therefrom shall be signed by two officers, one being the Chair [in the event that the Chair is unavailable then the Vice-Chair shall sign] and the other signature shall be the Vice Chair, Treasurer or Secretary. The officers of the Board shall have such other powers and duties as may be conferred upon them by the Board.

Bonds issued by the Authority shall be executed in the name and on behalf of the Authority by its Chair and Secretary by manual or facsimile signature.

The Board shall prepare, adopt and submit to their respective legislative bodies an annual budget covering the proposed expenditures to be made for the organizing and operating of such Authority or a facsimile thereof shall be printed on or affixed to bonds.

The Board shall prepare, adopt and submit to their respective legislative bodies an annual budget covering the proposed expenditures to be made for the organizing and operating of such Authority and for the necessary funds required from each Constituent Municipality for the next fiscal year beginning January 1, such budget to be submitted to each Constituent Municipality on or before XXXXX 1 of each year. No budget shall be adopted by the Authority unless approved by a majority vote of the members-elect of the Board; provided, however, that no obligation shall be assumed by the Authority which may then or at any time in the future become in whole or in part the individual liability of any Constituent Municipality without the prior individual consent of that Constituent Municipality.

The provisions of this Article shall be considered controlling over all other provisions in these Articles of Incorporation.

ARTICLE XI - PROPERTY ACQUISITION

Subject to the limitation below, the Authority may acquire private property by purchase, lease, gift, devise or condemnation, either within or without its corporate limits, and may hold, manage, control, sell, exchange or lease such property. For the purpose of condemnation it may proceed under the provisions of Act 149, Public Acts of Michigan, 1911, now or hereafter amended, Act 87, Public Acts of Michigan, 1980, as now or hereafter amended, or any other appropriate statute. Regardless of the foregoing powers, the Authority shall not begin condemnation proceedings in any Constituent Municipality without the prior approval of the body of the Constituent Municipality in which the land to be condemned is located.

ARTICLE XII - PROJECTS - LIMITATIONS

The Authority shall not acquire, purchase, construct, improve, enlarge, extend, operate or finance a sewage disposal system within any Constituent Municipality without the prior written approval of that Constituent Municipality. NOTE - PER GROUP DISCUSSION, THIS ARTICLE MAY BE CHANGED IF THE SERVICE AREA CONCEPT IS ADOPTED.

ARTICLE XIII - BONDS

For the purpose of obtaining funds for the acquisition, construction, improving, or extending of a water supply system, a sewage disposal system, or both, the Authority may, by ordinance or resolution duly adopted by it, issue its negotiable bonds, secured by the contractual full faith and credit pledges of each contracting municipality, and in accordance with and subject to the provisions of the Act.

ARTICLE XIV - WITHDRAWAL & DISSOLUTION

Subject to the limitations contained in this Article, a Constituent Municipality may withdraw from the Authority at any time prior to the incurrence of any indebtedness by the Authority for which the Constituent Municipality may incur individual liability. After the assumption of indebtedness by the Authority for an obligation for which the individual Constituent Municipality has assumed liability pursuant to these Articles or pursuant a separate agreement, a Constituent Municipality may withdraw only with the written consent of the creditor or after the obligation assumed by the withdrawing member has been paid by the withdrawing Constituent Municipality on terms satisfactory to the creditor.

The withdrawal of a Constituent Municipality shall be initiated by resolution of the Constituent Municipality's legislative body approving the withdrawal and a certified copy of that resolution shall be provided to the Board at least 12 months prior to the beginning of the next fiscal year for the Authority. Such new fiscal year shall serve as the effective date for the withdrawal.

Notwithstanding the foregoing, the Authority shall not be dissolved if such dissolution could or would operate as an impairment in any respect of any of its contractual obligations unless the Constituent Municipalities have assumed the existing liabilities of the Authority pursuant to terms that are acceptable to all Constituent Municipalities.

ARTICLE XV - EMPLOYEES

The Board shall have power to hire officers and employees, to carry out the functions of the Authority and to fix the compensation therefor.

ARTICLE XVI - GRANTS

The Authority shall have the power to accept contributions, capital, grants, gifts, donations, services or other financial assistance from the United States of America or any agency or instrumentality thereof or from the State of Michigan or any agency or instrumentality thereof.

ARTICLE XVII - AUDIT

The Board shall cause an annual audit to be made of its financial transactions by a certified public accountant and shall furnish at least two (2) copies thereof to each Constituent Municipality. The books and records of the Authority shall be open for inspection by any Constituent Municipality at all reasonable times.

ARTICLE XVIII - PUBLICATION AND FILINGS

These Articles shall be published once in the Traverse City Record Eagle, Traverse City, Michigan and published once in the Leelanau Enterprise, Leland, Michigan. One (1) printed copy of the Articles of Incorporation as printed in either newspaper, certified as a true copy thereof as provided below, with the date and place of publication shown by a publisher’s affidavit of publication from each newspaper attached thereto, shall be filed with the Michigan Secretary of State and also the Clerk of Grand Traverse County and the Clerk of Leelanau County after the execution and publication thereof has been completed.

The Clerk of Garfield Charter Township is hereby designated as the person to cause these Articles of Incorporation to be published, certified and filed as aforesaid.

All expenses for the publication of these Articles and all other expenses incurred in the incorporation and establishment of the Authority shall be paid by the Constituent Municipality whose clerk is above-designated as the person to cause these Articles of Incorporation to be published, certified and filed as aforesaid; provided, however, that such expense shall be reimbursed by the other Constituent Municipalities on an equal basis.

ARTICLE XIX - EFFECTIVE DATE

This Authority shall become effective upon the filing of all of the certified copies of these Articles of Incorporation, as provided in the preceding Article XVII.

ARTICLE XX - AMENDMENTS

These Articles of Incorporation may be amended at any time so as to permit any county, city, village, township or charter township to become a member of the Authority, if such amendment to the Articles of Incorporation is adopted by the legislative body of such county, city, village, township or charter township proposing to become a member, and if such amendment is adopted by the legislative body of each Constituent Municipality of which the Authority is composed. Other amendments may be made to these Articles of Incorporation at any time if adopted by the legislative body of each Constituent Municipality of which the Authority is composed. Any such amendment shall be endorsed, published, and certified, and printed copies thereof filed in the same manner as the original Articles of Incorporation, except that the filed and printed copies shall be certified by the recording officer of this Authority.

ARTICLE XXI - MISCELLANEOUS

These Articles of Incorporation may be executed in two or more counterparts, each of which shall be deemed an original.

The captions in these Articles of Incorporation are for convenience only and shall not be considered as part of these Articles of Incorporation or in any way limiting or amplifying the terms and provisions hereof.

THESE ARTICLES OF INCORPORATION have been adopted by the incorporating municipalities, as set forth in the following endorsements, and in witness whereof the designated officials of each Constituent Municipality have endorsed thereon a statement of such adoption.

The foregoing Articles of Incorporation were adopted by the Township Board of the Township of Acme, County of Grand Traverse, State of Michigan, at a meeting duly held on the day of , 2011.

Wayne Kladder, Supervisor Dorothy Dunville, Clerk

Acme Township Acme Township

The foregoing Articles of Incorporation were adopted by the Township Board of the Charter Township of East Bay, County of Grand Traverse, State of Michigan, at a meeting duly held on the day of , 2011.

Glen Lile, Supervisor Susanne Courtade, Clerk

East Bay Charter Township East Bay Charter Township

The foregoing Articles of Incorporation were adopted by the Township Board of the Charter Township of Elmwood, County of Leelanau, State of Michigan, at a meeting duly held on the day of , 2011.

Jack Kelly, Supervisor Connie M. Preston, Clerk

Elmwood Charter Township Elmwood Charter Township

The foregoing Articles of Incorporation were adopted by the Township Board of the Charter Township of Garfield, County of Grand Traverse, State of Michigan, at a meeting duly held on the day of , 2011.

Chuck Korn, Supervisor Kay Schumacher, Clerk

Garfield Charter Township Garfield Charter Township

The foregoing Articles of Incorporation were adopted by the Township Board of the Township of Peninsula, County of Grand Traverse, State of Michigan, at a meeting duly held on the day of , 2011.

Robert Manigold, Supervisor Monica Hoffman, Clerk

Peninsula Township Peninsula Township

The foregoing Articles of Incorporation were adopted by the City Commission of the City of Traverse City, County of Grand Traverse, State of Michigan, at a meeting duly held on the day of , 2011.

Christopher M. Bzdok, Mayor Debbra A. Curtiss, Clerk

City of Traverse City City of Traverse City

 

Traverse City Area Water & Sewer Shared Services/ Consolidation

Project

Serving the communities of:

Acme Township East Bay Township

Elmwood Township Garfield Township

Peninsula Township The City of Traverse City

January 10, 2012

Plante & Moran is a leading provider of professional services to more than 200 governmental clients in Michigan and across the nation.

We bring a balance of technical expertise, industry insight, and commitment to our clients that is unparalleled.

2

January 11, 2012

Mr. Glen LileTraverse City Area Water & Sewer Shared Services1965 N. Three Mile RoadTraverse City, MI 49696

Dear Mr. Lile:

Plante Moran, PLLC is pleased to provide this Proposal to the Traverse City Area Water & Sewer Shared Services to provide Consolidation Consulting Services. We are very excited about the possibility of working with the Communities on this very important project.

As one of the largest consulting and accounting firms nationally, we have extensive experience in serving the public sector. Additionally, Plante Moran’s proposed project team brings to this engagement extensive knowledge and experience gained in working with governmental clients providing solutions to support their operational needs. We also offer the following benefits:

�� As certified public accountants and advisors to over 1,200 public sector clients nationally, our Firm is well recognized as a leading provider of independent, objective auditing and consulting advice.

� One of the nation’s largest government auditing practices to serve as an industry benchmark and best practice in delivering client solutions to a similar client base as State Auditors, Comptrollers, and Treasurers. Also, Plante & Moran files the second most A-133 Audits of any firm nationally.

� Substantial knowledge of and experience with governmental operations through our national government consulting practice, serving clients in 35 States.

� Advice and counsel from one of the best run accounting firms in the country, recognized in Fortune’s “100 Best Companies to work for in America” for the past 13 years consecutively, and listed by Training magazine as one of the “Top 100 Training Organizations” in the nation.

� A record of timely, thorough and insightful project analyses.

� A strong project team, blending public sector certified public accounting (CPA), government operations, information technology, financial and performance audit expertise.

We believe that based upon these experiences and the quality of our proposed team, we are an exceptional team that can deliver excellent project results to the Communities. We look forward to working with you and the Communities on this important initiative.

If you have any questions concerning this proposal or need to contact any of the project team members, please contact me at (248) 223-3328.

Sincerely,

Adam RujanPartnerPlante Moran, PLLC

3

Project Scope Plante & Moran will work closely with City and Township management and staff members to review the operations and financial costs of providing water and sewer services to the entire region, with the following objectives:

1) Feasibility to consolidate Water and Sewer Operations of all key stakeholders, considering the following:

� Current programs and services � Staffing levels, management structure � Vehicles and equipment � Human resource issues, including labor agreements, wages, benefits, retirement

options, medical and pension liabilities � Consideration of possible expansion of the existing infrastructure beyond

current system � Asset value – wastewater treatment plant, pumping stations, water towers,

distribution system � Funding/cost sharing formulas � Administrative Support functions (e.g. payroll, IT, HR, etc.)

2) Evaluation of two distinct options:

� Each stakeholder maintains ownership of their infrastructure/distribution system

� Each stakeholder “sells” or “contributes” its infrastructure/distribution system to a central entity

4

A. Business Case Analysis: Development and Communication StrategiesThe business case analysis will be compiled in a report to clearly indicate the impact to each community and the major stake holders. To accomplish these objectives, we propose the following project activities:

1. Project Initiation

Plante & Moran will work with the project sponsor(s) to schedule and invite key project stakeholders to a project kick off meeting to review and confirm the project scope, examine the project work plan, identify stakeholder expectations, further develop a schedule of project activities, and identify plans to mitigate potential project risks. We anticipate that a team of representatives from all participating communities will serve as the project Steering Committee for this initiative.

2. Document Review

Plante & Moran will review existing documentation to gain a comprehensive understanding of all water and sewer operational systems included in this review. The following list, while not all-inclusive, details the key information we will review for each community included in the analysis:

� Strategic Plan and Mission Statement � Organizational Vision � Department functional descriptions � Organizational Structure

o Organizational Chart o Organizational Components o Roles & Responsibilities o Job Descriptions

� Workload volume data � Workflow, Processes � Tools and technology utilized by organization � Performance standards and objectives � Planned and recently completed capital and maintenance projects � Contractual or other collaborative agreements

3. Leadership Interviews

Plante & Moran will conduct interviews with key leadership staff from all six communities. We anticipate 30 to 35 interviews within the overall context of the engagement to gather the required information. Interviews will be held in either group or individual format, as applicable.

� Acme Township Manager/ Supervisor (1-2) � Acme Township Elected Officials (1-2) � East Bay Township Manager/ Supervisor (1-2) � East Bay Township Elected Officials (1-2) � Elmwood Township Manager/ Supervisor (1-2) � Elmwood Township Elected Officials (1-2)

5

� Garfield Township Manager/ Supervisor (1-2) � Garfield Township Elected Officials (1-2) � Peninsula Township Manager/ Supervisor (1-2) � Peninsula Township Elected Officials (1-2) � County DPW Water & Sewer Administration (3-5) – contracted by the Townships � Traverse City Manager (1-2) � Traverse City Elected Officials (1-2) � Traverse City Water & Sewer Administration (1) � Additional personnel, or elected officials, as necessary, to gain an understanding of

current water and sewer operations and desired study outcomes (3-5)

4. Water and Sewer System Site Visits

Once the preliminary data has been reviewed, Plante & Moran will meet with both departments independently (City and County DPW operations) to supplement our data collection activities. During the site visits, Plante & Moran will conduct on-site interviews with staff from each area to evaluate current processes, staffing, workload, systems, resources, and equipment. This work-plan step is intended to build upon the initial document review and provide a more detailed view of the current water and sewer operations, technology, services, finances, facilities and assets/infrastructure. Examples of the information we will look to secure include, but are not limited to, the following:

Operational and Facility � Staffing information (position, shift, qualifications, seniority, pay range, annual budget) � Operational issues (e.g. recruiting and retaining staff, 24x7 coverage for emergencies,

treatment plant vs. distribution system operations, current service levels by community) � Staff schedules (holiday, leave, work day) � Financial operations – billing and collection � Maintenance operations – routine, heavy, water treatment plant vs. distribution system � Capital projects – historical, current and planned infrastructure investments � Statistics (main breaks and repairs, response times to emergency repair situations,

capital investment dollars over the history of the system, capital investment fund for future investment, etc.)

� Current service level performance data / Current service level expectations � Population growth statistics – current, 5 year, 10 year � Facility information (square footage, location and space, maintenance space/ area,

training space, administrative offices, etc.) � Expansion/ re-deployment capability of existing facilities � Age and upkeep of existing facilities

Technological � Radio Systems infrastructure – for communication � System discovery (type, age, channels/trunks, number and type of endpoints) � Radio users � Ancillary system (as applicable)

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� Water & Sewer information systems infrastructure � Water & Sewer utility billing system and tracking capabilities � Management information reporting � Information sharing, if any � Annual maintenance expenditures/Anticipated upgrades � System documentation

Financial � 3-year monthly and annual historical operating costs, including training funds, current

and next year expense detail (5 year total) � 3-year historical capital budget for water and sewer operations, current and next year

expense detail (5 year total) � 3-year historic revenue streams and funding sources, current and next year revenue

projections (5 year total) � Long term capital outlay projections � Current outstanding debt obligations � Existing pension, healthcare liability (as applicable) � Taxable value for each community � Current funding sources

5. Data Compilation and Review

Plante & Moran will analyze the assembled data in order to determine the feasibility of creating a regional water and sewer service delivery model, considering both long term and short term opportunities for service sharing/ consolidation. We intend to address the following:

� Primary options for approaching a regional water and sewer operation and related implications, including evaluation of the following:

o Operations o Staffing o Technology o Finances o Facilities, as applicable o Assets, including age, existing bonds, evaluation of “contribution” to the water

and sewer system � Evaluation of governance options, including but not limited to:

o Legal options o Authority vs. Inter-Governmental Agreement o Board structure and committees o Decision-making procedures o Funding /cost allocation formulas

6. Service Delivery Options and Recommendation Development

Upon completion of our analysis, Plante & Moran will review and evaluate the possible methods of service delivery through consolidation. Plante & Moran will develop recommendations pertaining to the feasibility and initial design of consolidating the water and sewer operations.

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Operational, technological, financial, facility, asset and governance information will be addressed and analyzed in developing appropriate project recommendations. The ultimate intent of this work-plan is to develop an overview of the proposed consolidated operations, in order to forecast the key technological, operational, financial, facility, asset and governance features of the proposed environment and offer suggestions regarding its implementation. The data collected during the course of the project will be analyzed in this step to identify the impact of consolidation on the participating communities. Plante & Moran will review the service delivery models with the Project Steering Committee in a visioning session for initial operational feasibility before conducting a financial analysis. Topics to be included in our analysis may include but not be limited to the following:

� Department mission

o Performance measures

o Customer / stakeholder feedback

o Major accomplishments

� Departmental organization and operations

o Staffing

o Skill set

o Centralization

o Authority levels

o Structure

� Major departmental trends

o Workload

o Costs/expenditures

o Anticipated changes

� Policies and procedures

o Management controls

o Billing processes

o Training compliance

� Governance options

o Inter-governmental agreement

o Authority

o Water & Sewer administration

� Capital investment

o Wastewater treatment plant & distribution system

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7. Financial Analysis

Upon approval from the Project Steering Committee, Plante & Moran will compile a financial analysis of the shared service/ consolidation options available to the communities participating in the study. Revenues and expenditures will be considered and modeled in this step to assist in determining the financial impacts to the participating communities, including the following items:

� Current costs � Estimated costs � Projected savings � Asset value, treatment, transfer � Assumptions � Revenue sources, if applicable

8. Visioning Session(s)

Plante & Moran will meet with the Project Steering Committee to discuss the findings to date and the results of our analysis to date. We anticipate two sessions to discuss the core service sharing/ consolidation issues and timing, including but not limited to the following:

� Governance – board structure, community representation, entry/exit � Legal options – intergovernmental agreement, authority, contract, etc. � Organizational bylaws � Cost/savings sharing and funding formulas � Financial impacts, including discussion of assets � Expansion considerations � Service levels � Implementation considerations

We anticipate one session to address the overall findings to date and preliminary thoughts/ recommendations regarding a regional service delivery system. After the initial session, Plante & Moran will compile the financial analysis for presentation to the Steering Committee at a future session. The feasibility of combining water and sewer operations, as well as any major impediments will be identified and discussed. The intent of these sessions is to gain concurrence regarding the shared service opportunities to include in the business case analysis and to identify any areas for further analysis and refinement, as the best course of action for regional police and fire operations is evaluated and recommended.

9. Business Case Analysis

Plante & Moran will refine the recommendations pertaining to the feasibility and initial design of a regional water and sewer service delivery model. The intent of the business case is to develop an overview of the proposed shared service opportunities and strategic collaboration in order to forecast the key operational, financial, technological, facility, asset and governance features of the proposed environment.

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The data collected during the course of the project, along with the input of the Project Steering Committee, will be analyzed in this step to identify the impact of collaboration on the participating communities.

Plante & Moran will review the business case with the participating communities to determine whether to continue with implementation of the proposed strategies in the business case. Our analysis may include, but not be limited to, discussion of the following key topics:

Operational Model and Facilities � Organization structure � Roles and responsibilities � Staffing requirements � Staff training requirements � Service levels/expectations � Growth projections � Facility option considerations

Technological Environment � Radio system implications � Joint management information systems � Joint utility billing systems � Operational systems � Back-up system implications, if any

Financial Estimates � Projected cost streams for operating independent water and sewer operations � Projected cost stream for operating combined water and sewer operations � Recommended financial treatment of assets � Service sharing opportunity cost savings � Financial implications impact on the six communities � Cost allocation and funding methodologies

Governance and Expansion Options � Preferred governance option � Decision-making structure � Member/User expansion methods (operational and financial)

Time to Complete: 90-120 days

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B. Implementation planUpon approval to move forward with the implementation of water and sewer shared service/ consolidation options, Plante & Moran will create a project work plan with the steps that need to be completed to reach implementation. As part of this phase of the engagement, Plante Moran will also perform the following project steps:

1. Define Governance AgreementPlante & Moran will conduct a presentation of the governance options available to the participating agencies. The presentation will outline the available options and elicit discussion of the preferred option(s) for the region, including the following:

� Governance – board structure, community representation, entry/exit strategies � Legal options – intergovernmental agreement, authority, contracts, etc. � Organizational bylaws

The draft intergovernmental agreement(s) will not be drafted by Plante & Moran as part of the scope of this engagement. It is recommended that the participating communities utilize internal or external legal counsel for the creation of the agencies’ Articles of Incorporation.

2. Develop Service AgreementsWorking in conjunction with the Project Steering Committee staff, Plante & Moran will further define and develop the service level operating agreements detailing the services to be provided by the shared water and sewer entity.

3. Finalize Detailed Organizational Chart and Staffing ApproachAfter agreement regarding the detailed services, the project team will refine the staffing approach and create a detailed organizational chart for the new, shared departments.

4. Finalize Financial FeasibilityUpon completion of the detailed staffing approach, Plante & Moran will finalize the financial feasibility analysis including the expected per-community costs of consolidation, potential savings as a result of the collaborative efforts and asset value recommendations. Plante & Moran will provide the results to each respective department for use in future budgeting and benchmarking efforts.

5. Finalize Implementation Plan Plante & Moran will finalize the remaining steps that need to be completed in order to implement the shared service/ consolidation agreement per the defined timeline of the Project Steering Committee. Plante & Moran will work with the Steering Committee to assign a lead person to each project step and the associated timelines needed to complete each project step through project implementation. Topics to be included minimally include the following:

o Governance o Asset Transfer o Labor agreements – under new legislative structure o Pension and Healthcare Issues o Communications plan o Public authorization if needed

Time to Complete: 30-45 days

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C. Estimated Fees

Business Case Analysis (Part A only): $60,000 - $75,000

($10,000 to $12,500 per community)

Implementation Plan (Part B only): $12,000 - $15,000

($2,000 to $2,500 per community)

Combined Pricing (w/ 10% discount): $64,800 - $81,000

($10,800 to $13,500 per community)