Title
Shared Services Exhibits - Facilities Improvement
Body
Agenda of: October 22, 2025
Item No.: 2025-325
Amount: $5,146,939.87
TO: The Honorable
Board of Directors
Great Lakes Water Authority
FROM: Suzanne R. Coffey, P.E.
Chief Executive Officer
Great Lakes Water Authority
DATE: October 22, 2025
RE: Shared Services Exhibits - Facilities Improvement
MOTION
Upon recommendation of Nicolette Bateson, Chief Financial Officer & Treasurer, the Board of Directors (Board) of the Great Lakes Water Authority (GLWA), authorizes the Chief Executive Officer (CEO) to execute the Shared Services Exhibits - Facilities Improvements at a total cost of $5,146,939.87; and authorizes the CEO to take such other action as may be necessary to accomplish the intent of this vote.
BACKGROUND
The Shared Services Agreement between the City of Detroit and the Great Lakes Water Authority (GLWA) provides for collaboration between GLWA and the Detroit Water & Sewerage Department (DWSD) for the efficient operation of both systems. An attachment to that agreement, “OPS-006 Shared Services Agreement Schedule - Operations: Shared Facilities Cost”, addresses improvements to shared areas. Excerpt is below.
“Phase 2: Commencing on July 1 2016, or such later date as agreed to by the [DWSD] Director and [GLWA] CEO, Facilities Expenses for both 735 Randolph and 6425 Huber will be assessed to each party based on a per square foot basis as determined by the space utilization study.
Any capital improvements to the Randolph and Huber facilities during the Phase 2 cost methodology that exceed $100,000 shall be approved by the Director and the CEO.”
It should be noted that 735 Randolph is referred to as Main Office Building (MOB) and 6425 Huber is referred to as Central Services Facility (CSF) in the attachment and exhibits to this report.
The GLWA Procurement Policy Section 4.8 Intergovernmental Agreements and Cooperative Procurements states the following.
“The [GLWA] CEO or the CEO’s designee may enter into intergovernmental agreements with other local units of government to achieve regional infrastructure objectives increase efficiency, reduce administrative expenses, and to leverage economies of scale.
…
All procurements via intergovernmental agreements or Cooperative Procurements are subject to the same approval requirements as other procurements.”
In addition, the GLWA Procurement Policy Section 10.1 Approval Requirements states:
“Contracts and any Contract Amendments shall be recognized as “Authorized” when approval Requirements have been met in accordance with Table 1.”
Table 1 indicates that the Representative with Authority to Encumber Funds at amounts at $1 million or more is the Board of Directors.
JUSTIFICATION
There are three Shared Services Facilities projects that require Board approval as listed on Attachment 1. Two of these projects were presented to the Operations and Resources Committee last year (Legistar #2024-164). While the Committee approved the projects, the item did not move forward to the full Board at that time because a funding source had not been identified.
The GLWA budget conundrum is that these projects were likely believed to have been fundable from Improvement & Extension (I&E) funding when the regional authority was established. Since GLWA does not own or operate the facilities being improved, however, capital funding sources (such as I&E) are not allowed. Instead, the funding source needs to be the Operations & Maintenance (O&M) Fund. Once these larger items were billed to GLWA, this issue became evident. Cost sharing for high dollar projects creates a significant impact on the O&M budget which is sensitive to annual charge adjustments. Time was needed to rebalance the budget to accommodate these costs.
FINANCIAL PLAN IMPACT
Summary: As of June 30, 2025, O&M funds were accrued for expenses incurred and billed by DWSD through that date. For FY 2026, a budget amendment of $1,823,260.32 will be needed for the Central Services Facility (CSF) Parking Lot which began in May 2025 and is expected to be completed in FY 2026.
Funding Source: Operations & Maintenance (5910 - Water & 5960 - Sewer)
Cost Center(s): Facility Operations (882421)
Expense Type(s): Contractual Operating Expenses
The most recently adopted DWSD Capital Improvement Plan will require an additional $3.6 million in capital improvements from FY 2026 through FY 2030. An approach being contemplated for the upcoming financial plan is to budget an allotment each year to smooth out the O&M budget impact.
COMMITTEE REVIEW
This item was presented to the Operations and Resources Committee at its meeting on October 8, 2025. The Operations and Resources Committee unanimously recommended that the GLWA Board adopt the resolution as presented.
SHARED SERVICES IMPACT
This item aligns with the shared services agreement between GLWA and DWSD.