AGENDA. Regular Meeting Wednesday, July 13, :30 a.m. Royal Oak Senior Center, 3500 Marais

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1 * Berkley * Beverly Hills * Bingham Farms * Birmingham * Clawson * Huntington Woods * Lathrup Village * Pleasant Ridge * Royal Oak * Southfield * Southfield Township AGENDA Regular Meeting Wednesday, July 13, :30 a.m. Royal Oak Senior Center, 3500 Marais 1. Meeting Called to Order 2. Roll Call & Recognition of Visitors 3. Approval of Agenda 4. Approval of Meeting Minutes Regular Meeting June 8, Approval of Warrants - WA ADMINISTRATIVE REPORTS A. Annual Actuarial Valuation Report MERS B. GLWA Issues C. Water Rate Survey 2016/17 D. Parking Easement Agreement, Telegraph and 12 Mile E. Lead and Copper Testing F. Water Residential Affordability Plan (Wrap) G. Summary of June Operations H. Engineering for Roof Replacement 7. ITEMS NOT ON AGENDA SOCWA 3910 W. Webster Road Royal Oak Michigan Phone Fax socwa@socwa.org Printed on Post Consumer Recycled Content Paper

2 8. MONTHLY REPORTS A. Water Consumption Report June 2016 B. Budget Analysis June 2016 C. Budget Analysis July 2015 June 2016 D. Water Samples June 2016 E. Precipitation Inches (Webster Pumping Station) Notice: The Southeastern Oakland County Water Authority will provide necessary, reasonable auxiliary aids and services, such as signers, for the hearing impaired, or audiotapes of printed materials being considered at the meeting to individuals with disabilities. All such requests must be made at least five days prior to said meeting. Individuals with disabilities requiring auxiliary aids or services should contact the Southeastern Oakland County Water Authority by writing or calling: General Manager's Office, 3910 W. Webster Road, Royal Oak, MI 48073; (248)

3 SOUTHEASTERN OAKLAND COUNTY WATER AUTHORITY Regular Meeting June 8, 2016 Table of Contents Agenda Approved as Submitted MINUTES Meeting Minutes Regular Meeting May 11, 2016 Approved WARRANTS Warrant No. WA-770 Approved ADMINISTRATIVE REPORTS Public Hearing 2016/17 Budget Opened Closed Water Service Rates 2016/17 Adopted Budget Approval 2016/17 Adopted GLWA Issues Report Received and Filed Organization Meeting & Election of Officers Chair Will Appoint Nominating Committee to Select Candidates for Board s Consideration Report Received and Filed Liability and Property Insurance Approved Quarterly Report April 2016 Report Received and Filed Investments January 1, 2016 March 31, 2016 Report Received and Filed Quarterly Legal Report Received and Filed General Counsel Evaluation Report Received and Filed Lead and Copper Testing Report Received and Filed Water Residential Affordability Plan (WRAP) Report Received and Filed Workers Compensation Insurance Approved Meeting Adjourned 10389

4 5449. MINUTES OF THE REGULAR MEETING OF THE SOUTHEASTERN OAKLAND COUNTY WATER AUTHORITY Wednesday, June 8, 2016 Oak Park City Hall The meeting was called to order at 8:30 a.m. by Mr. Harry Drinkwine, Chair. Present Votes Municipality D. Schueller 1 Berkley C. Wilson 1 Beverly Hills D. Warren 1 Bingham Farms *P. O Meara 3 Birmingham H. Drinkwine 1 Clawson K. Marten 1 Lathrup Village S. Pietrzak 1 Pleasant Ridge G. Rassel 7 Royal Oak L. Schultz 13 Southfield R. Walsh 1 Southfield Township Absent TOTAL 30 C. Galed 1 Huntington Woods *Mr. O Meara, representative from the City of Birmingham (3 votes) arrived at 8:35 am. Also Present J. A. McKeen, General Manager R. Jackovich, Operations Manager K. Bever, Executive Assistant R. Davis, General Counsel

5 Page 2 Water Authority Minutes June 8, Motion by Mr. G. Rassel, supported by Mr. D. Schueller: That the agenda be approved as submitted. Yeas: Schueller, Wilson, Warren, Drinkwine, Marten, Pietrzak, Rassel, Schultz, Walsh (27 votes) Nays: None Absent: O Meara (3 votes), Galed (1 vote) Motion carried Motion by Mr. G. Rassel, supported by Mrs. D. Warren: That the May 11, 2016 Regular Meeting minutes be approved as submitted. Yeas: Schueller, Wilson, Warren, Drinkwine, Marten, Pietrzak, Rassel, Schultz, Walsh (27 votes) Nays: None Absent: O Meara (3 votes), Galed (1 vote) Motion carried Motion by Mr. D. Schueller, supported by Mr. R. Walsh: That Warrant No. WA-770 in the amount of $1,805, be approved and payments authorized. Yeas: Schueller, Wilson, Warren, Drinkwine, Marten, Pietrzak, Rassel, Schultz, Walsh (27 votes) Nays: None Absent: O Meara (3 votes), Galed (1 vote) Motion carried.

6 Page 3 Water Authority Minutes June 8, That the Chairman declare the public hearing on the proposed Budget for 2016/17 open at 8:31 a.m. There being no persons present that that wish to be heard, the Chair declared the public hearing closed at 8:31 a.m Motion by Mr. G. Rassel, supported by Mr. S. Pietrzak: That the Board adopt water service rates for the 2016/17 fiscal year of $15.13 per thousand cubic feet for the member communities and $26.67 per thousand cubic feet for Bloomfield Hills and Bloomfield Twp. Commodity Rate for Commodity Rate for Change 2016/ /16 SOCWA Members $15.13 $ $0.30 Bloomfield Hills $26.67 $ $0.52 Bloomfield Twp. $26.67 $ $0.52 Municipality Monthly Fixed Charge Berkley $ 6,668 Beverly Hills $ 5,533 Bingham Farms $ 1,429 Birmingham $15,829 Clawson $ 5,225 Huntington Woods $ 3,194 Lathrup Village $ 2,298 Pleasant Ridge $ 1,527 Royal Oak $35,119 Southfield $62,281 Detroit Zoo $ 2,003 Rackham Golf Course $ 154 Bloomfield Hills $13,259 Bloomfield Twp. $56,297 Yeas: Schueller, Wilson, Warren, O Meara, Drinkwine, Marten, Pietrzak, Rassel, Schultz, Walsh (30 votes) Nays: None Absent: Galed (1 vote) Motion carried.

7 Page 4 Water Authority Minutes June 8, Motion by Mr. D. Schueller, supported by Mr. R. Walsh: WHEREAS, this Board is required to adopt an annual budget for the fiscal year 2016/17, which budget will be effective July 1, 2016, and WHEREAS, a notice has been published of a public hearing on the budget in compliance with the provisions of Public Act No. 43 of the Acts of the State Legislature of 1963, and WHEREAS, a public hearing on the budget was held on June 8, 2016, at 8:30 a.m. at the Oak Park City Hall, Oak Park Blvd., Oak Park, Michigan, NOW THEREFORE BE IT RESOLVED, that the budget for the fiscal year 2016/17 be adopted in the following form: SOUTHEASTERN OAKLAND COUNTY WATER AUTHORITY BUDGET July 1, 2016 Through June 30, 2017 ESTIMATED REVENUES Sale of Water $16,951,000 Sale of Water - Others 8,347,000 Rentals 114,800 Water Analysis-Laboratory & Miscellaneous 10,000 Interest on Investments 25,000 $25,447,800 ESTIMATED EXPENSES Source of Supply $21,984,000 Pump Station Operations 1,000,750 Meters & Mains 150,000 Administrative & General 884,700 $24,019,450 $1,428,350 Capital Improvements (980,000) Working Capital Generated $448,350

8 Page 5 Water Authority Minutes June 8, Yeas: Nays: Absent: Schueller, Wilson, O Meara, Warren, Drinkwine, Marten, Pietrzak, Rassel, Schultz, Walsh (30 votes) None Galed (1 vote) Motion carried Motion by Mr. D. Schueller, supported by Mrs. L. Schultz: That the report on GLWA issues be received and filed. Yeas: Schueller, Wilson, Warren, O Meara, Drinkwine, Marten, Pietrzak, Rassel, Schultz, Walsh (30 votes) Nays: None Absent: Galed (1 vote) Motion carried Motion by Mr. P. O Meara, supported by Mrs. D. Warren: That the SOCWA Board hold its organizational meeting at 8:30 A.M. on Wednesday, July 13, 2016, and That the Chair appoint a Nominating Committee composed of three members of the Board who should meet to select candidates to the various offices, for consideration of the Board of Trustees at the Organization Meeting. Yeas: Schueller, Wilson, Warren, O Meara, Drinkwine, Marten, Pietrzak, Rassel, Schultz, Walsh (30 votes) Nays: None Absent: Galed (1 vote) Motion carried.

9 Page 6 Water Authority Minutes June 8, Motion by Mr. G. Rassel, supported by Mr. R. Walsh: That the Board approve contracting with the MMRMA for liability and property insurance in the amount of $32,959 per year for the period July 1, 2016 through June 30, 2017 at the current level of insurance coverage with an increase in the stop loss limit to $150,000. Yeas: Schueller, Wilson, Warren, O Meara, Drinkwine, Marten, Pietrzak, Rassel, Schultz, Walsh (30 votes) Nays: None Absent: Galed (1 vote) Motion carried Motion by Mr. D. Schueller, supported by Mrs. L. Schultz: That the Quarterly Report April 2016 be received and filed. Yeas: Schueller, Wilson, Warren, O Meara, Drinkwine, Marten, Pietrzak, Rassel, Schultz, Walsh (30 votes) Nays: None Absent: Galed (1 vote) Motion carried Motion by Mrs. L. Schultz, supported by Mr. G. Rassel: That the report on investments made by the Authority during the period January 1, 2016 through March 31, 2016 be received and filed and made a part of the Board record. Yeas: Schueller, Wilson, Warren, O Meara, Drinkwine, Marten, Pietrzak, Rassel, Schultz, Walsh (30 votes) Nays: None Absent: Galed (1 vote) Motion carried.

10 Page 7 Water Authority Minutes June 8, Motion by Mr. S. Pietrzak, supported by Mr. D. Schueller: That the Quarterly Legal Report be received and filed. Yeas: Schueller, Wilson, Warren, O Meara, Drinkwine, Marten, Pietrzak, Rassel, Schultz, Walsh (30 votes) Nays: None Absent: Galed (1 vote) Motion carried Motion by Mr. D. Schueller, supported by Mrs. L. Schultz: That the report on the General Counsel evaluation be received and filed. Yeas: Schueller, Wilson, Warren, O Meara, Drinkwine, Marten, Pietrzak, Rassel, Schultz, Walsh (30 votes) Nays: None Absent: Galed (1 vote) Motion carried Motion by Mr. G. Rassel, supported by Mrs. L. Schultz: That the report on Lead and Copper Testing be received and filed. Yeas: Schueller, Wilson, Warren, O Meara, Drinkwine, Marten, Pietrzak, Rassel, Schultz, Walsh (30 votes) Nays: None Absent: Galed (1 vote) Motion carried.

11 Page 8 Water Authority Minutes June 8, Motion by Mr. D. Schueller, supported by Mr. P. O Meara: That the report on the Water Residential Affordability Plan (WRAP) be received and filed. Yeas: Schueller, Wilson, Warren, O Meara, Drinkwine, Marten, Pietrzak, Rassel, Schultz, Walsh (30 votes) Nays: None Absent: Galed (1 vote) Motion carried Motion by Mr. G. Rassel, supported by Mr. P. O Meara: That the Board approve contracting with the MML for Workers Compensation Insurance for the cost of $13,066 for the period July 1, 2016 through June 30, Yeas: Schueller, Wilson, Warren, O Meara, Drinkwine, Marten, Pietrzak, Rassel, Schultz, Walsh (30 votes) Nays: None Absent: Galed (1 vote) Motion carried. Derrick Schueller announced that the City of Berkley has a job position open for a Finance Director and applications are due by the end of June. Jeff McKeen announced that SOCWA is also accepting applications for the manager of Accounting & Finance position Motion by Mr. G. Rassel, supported by Mr. D. Schueller: That the meeting be adjourned. Yeas: Schueller, Wilson, Warren, O Meara, Drinkwine, Marten, Pietrzak, Rassel, Schultz, Walsh (30 votes) Nays: None Absent: Galed (1 vote) Motion carried

12 Page 9 Water Authority Minutes June 8, The meeting was adjourned at 9:24 a.m. APPROVED: Chair Secretary

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14 SOCWA WA-771 CHECKS CUT FOR THE MONTH OF: JUNE 2016 CHECK PAYEE AMOUNT PURPOSE Account: CK C760 Consumers Energy Gas Service CK C950 Crestwood Associates Software Support VC D260 Delwood Supply Company 0.00 Maintenance of Meters CK D290 DTE Electric Service CK D291 DTE 2, Electric Service CK D850 Durst Lumber Company 8.99 Maintenance of Equipment CK G780 Great Lakes Water Authority 1,743, Purchase Water Supply CK H416 Hersch's Inc Maintenance of Property and Grounds CK H780 The Home Depot Maintenance of Webster Building CK I660 Industrial Painting Contractors, Inc. 1, Maintenance of Webster Reservoir CK M728 Penelope Morris Maintenance of Native Habitat Garden CK O300 Office Depot Office Supplies CK O513 O'Reilly Auto Parts 5.03 Maintenance of Vehicles CK R890 Rochester Lawn Equipment Maintenance of Property and Grounds CK S833 Standard Insurance Company Employee Life Insurance CK U600 United States Postal Service 1, Postage CK V335 Verizon Wireless Cell Phone Service CK W350 Weingartz Supply Company Maintenance of Property and Grounds CK W780 Windstream Phone Service CK W825 WOW! Internet-Cable-Phone Internet Security CK C850 Comcast Cable Internet Security CK D260 Delwood Supply Company Maintenance of Meters CK A570 Applied Imaging Copier Maintenance Agreement CK C900 Curtis 1000 Inc Office Supplies CK D238 Davis Listman Legal Services CK D260 Delwood Supply Company Maintenance of Meters CK G760 Grainger Maintenance of Tanks CK O300 Office Depot Office Supplies CK O513 O'Reilly Auto Parts Maintenance of Vehicles CK Y208 Billy J Young Janitorial Services CK M343 MERS Deferred Compensation CK U890 UWA Local Union Dues CK V325 Vantagepoint Transfer Agents Deferred Compensation CK V327 Vantagepoint Transfer Agents 1, Deferred Compensation Page 1 of 4

15 SOCWA WA-771 CHECKS CUT FOR THE MONTH OF: JUNE 2016 CHECK PAYEE AMOUNT PURPOSE CK P245 Pasquale's Restaurant Personnel Improvement CK B400 Karen Bever Petty Cash CK A180 Acme Ladder & Supply Maintenance of Mains CK A882 AT & T Phone Service CK D190 Daily Tribune Newspaper Subscription CK D290 DTE Electric Service CK D850 Durst Lumber Company Tools CK H375 Harbor Freight Tools Tools CK P820 Project Innovations, Inc Human Resources Consultant CK W825 WOW! Internet-Cable-Phone Internet Security CK A180 Acme Ladder & Supply Safety Supplies CK A350 Airgas Great Lakes Supplies CK C260 CDW-G Maintenance of Computer Hardware CK C760 Consumers Energy Gas Service SC D290 DTE 1, Electric Service CK D850 Durst Lumber Company 1.99 Maintenance of Property and Grounds CK G130 Galco Industrial Electronics Maintenance of Meters CK H375 Harbor Freight Tools 9.99 Tools CK H780 The Home Depot 9.98 Maintenance of Building CK M210 Main's Landscape Supply Maintenance of Property and Grounds CK O300 Office Depot Office Supplies CK O513 O'Reilly Auto Parts Maintenance of Vehicles CK R407 RKA Petroleum Fuel CK S790 The City of Southfield 4.24 Water Service CK T390 Terminal Supply Company Maintenance of Vehicles CK T955 City of Troy 5, Maintenance of Vehicles CK W350 Weingartz Supply Company Maintenance of Property and Grounds CK W826 WOW Internet-Cable-Phone Internet Security CK Y208 Billy J Young Janitorial Services CK A850 Association Benefits 21, Employee Health Insurance CK M493 Michigan Municipal League 13, Workers' Compensation CK M340 MERS of Michigan 20, Defined Benefits CK M340 MERS of Michigan Defined Contribution CK M447 Michigan First Credit Union Office Supplies, Supplies, AWWA Meeting/Training CK M343 MERS Deferred Compensation Page 2 of 4

16 SOCWA WA-771 CHECKS CUT FOR THE MONTH OF: JUNE 2016 CHECK PAYEE AMOUNT PURPOSE CK V325 Vantagepoint Transfer Agents Deferred Compensation CK V327 Vantagepoint Transfer Agents 1, Deferred Compensation CK A879 AT&T Mobility Cell Phone Service CK C260 CDW-G Maintenance of Computer Hardware CK C760 Consumers Energy Gas Service CK D290 DTE Electric Service CK D291 DTE Electric Service CK D850 Durst Lumber Company Maintenance of Building CK E950 Ezell Supply Corp Janitorial Supplies CK F400 Fire Defense Equipment Co Maintenance of Fire Extinguishers CK G130 Galco Industrial Electronics Tools CK G760 Grainger Maintenance of Tanks CK G797 Guardian Alarm Building Security CK H780 The Home Depot Maintenance of Property and Grounds CK M493 Michigan Municipal League Classified Ad CK O513 O'Reilly Auto Parts Maintenance of Vehicles CK S833 Standard Insurance Company Employee Life Insurance CK T955 City of Troy 1, Maintenance of Vehicles CK W780 Windstream Phone Service CK W827 WOW Internet-Cable-Phone Internet Security Account: CK M297 McNaughton-McKay 4, Scada Renovation CK M352 Metal Mart U.S.A Scada Renovation CK T930 Tringali Sanitation, Inc Office Renovation-Roll Off CK I645 Infoview Systems Inc Office Renovation-Hardware CK O300 Office Depot Office Renovation CK H780 The Home Depot 3.12 Scada Renovation CK M297 McNaughton-McKay 5, Scada Renovation CK C280 Center City Communications Inc. 3, Office Renovation CK H780 The Home Depot Scada Renovation I260 ISCG 4, Office Renovation Account Total: $1,831, Page 3 of 4

17 SOCWA WA-771 CHECKS CUT FOR THE MONTH OF: JUNE 2016 CHECK PAYEE AMOUNT PURPOSE Account: CK W450 Employee Medical, Optical, Dental Reimbursement 2, Employee Medical, Optical, Dental Reimbursement I HEREBY CERTIFY THAT I HAVE EXAMINED THE INVOICES COVERED BY THE ABOVE VOUCHERS FOR RECEIPT OF MATERIALS OR SERVICES RENDERED AND THAT THE PRICES AND COMPUTATIONS ARE CORRECT. Treasurer General Manager The payments listed above were presented to The Board of Trustees and were reviewed with no Secretary objection on July 13, 2016 Account Total: $19, Account Total: $2, Report Total: $1,854, SUMMARY OF PAYMENTS 1009 OPERATION & MAINTENANCE FUND 1,831, IMPROVEMENT FUND 19, DENTAL FUND 2, TOTAL: $1,854, Page 4 of 4

18 July 1, 2016 Board of Trustees Southeastern Oakland County Water Authority Subject: Annual Actuarial Valuation Report - Michigan Municipal Employees Retirement System Board Members: The Authority has received a copy of the Annual Actuarial Valuation Report as of December 31, 2015, covering the Water Authority's participation in the Michigan Municipal Employees Retirement System (MERS). MERS has made significant changes in their actuarial assumptions, all of which serve to increase the required funding level and reduce our % funded, see discussion below. Funding Level As of December 31, 2015, the Authority's retirement program was 78% funded. This was a small increase from the funding level of 77% that we had for last year. The overall funding level of 78% is the highest that we have obtained since The increase in funding level is due to the incremental contributions that both SOCWA and SOCRRA have made to the salaried pension plan in the last 3 fiscal years. The assumption changes from MERS served to almost completely offset our increased level of contributions. If MERS had not made the assumption changes, the funding level would be 82%. The funding levels for 2015 were 77% for the plan for salaried employees, 80% for the plan for union employees hired before 7/1/2011, 105% for the union employees hired after 7/1/2011 and 107% for the salaried employees hired after 7/1/2011. The overall funding level for the last five years is displayed in the table below: Valuation Date Funded Percent December 31, % % % % % Unfunded Accrued Liability As of December 31, 2015, the Authority s unfunded accrued liability was $2,080,760. This was a $93,399 (4.7%) increase over the unfunded accrued liability as of December 31, The unfunded liability was $1,255,430 for the salaried plans and $825,330 for the Union plans. Changes in Actuarial Calculations MERS made several changes in their actuarial calculations, all of which serve to reduce the % funded levels and to increase the amount of required funding: 1. The mortality table was adjusted to reflect longer lifetimes 2. The assumed annual rate of investment return, net of expenses, was lowered to 7.75% from 8.0%. 6-A

19 3. The amortization period for the unfunded accrued liability was reduced to 23 years from 24 years. 4. Asset smoothing was changed from 10 years to 5 years 5. The amortization period was changed to a fixed period amortization. This means that all unfunded liabilities will be fully funded by a specific date in the future. The first three changes were implemented for the December 31, 2015 valuation and the final two changes are being implemented for the December 31, 2016 valuation. MERS is offering the opportunity to phase in the 2015 assumption changes over a 5 year period. This results in lower pension contributions during the phase in period but probably results in higher pension contributions after the phase in period. SOCWA s projected pension contributions for 2017/18 are presented in the table below for both the phased in approach and for the full recognition of the assumption changes. The required level of MERS contributions for 2017/18 is set at the phased in contribution amount. However, MERS is recommending that the full recognition contributions be used in order to avoid significantly larger pension contributions in future years. The 2017/18 pension contributions do not reflect the 1% increase in the salaried employee contribution that was approved at the May Board meeting. I have requested updated MERS costs using the higher level of employee contribution. I plan to use this information to develop a recommendation to the Audit Committee regarding how we should address our unfunded pension and OPEB liabilities in the future. Asset Smoothing Since 2006, MERS has used a 10 year smoothed value of assets to reduce the amount of volatility in the actuarial funded percentage and the required employee contribution. For the 2016 valuation, the smoothing period is being reduced to 5 years. As of December 31, 2015, the actuarial value of our plan assets was 113% of the market value, which is an increase from the 106% of market value that was used as of December 31, This means that meeting the actuarial assumption in the next few years will require average annual market returns that exceed the 7.75% annual investment return assumption. MERS average rate of return has been less than the 7.75% assumption in most recent periods. Annual Cost The following is a tabulation of the cost to SOCWA for the Retirement Program: Fiscal Year Salaried % of Payroll Union Monthly Contribution Total Annual Cost 2013/ $ 5,995 $224, / $ 5,762 $244, / $ 6,361 $210, / $ 6,663 $185, /18 phased in $ 7,530 $185, /18 full impact $ 8,015 $216,900

20 The phase in amount listed above allows SOCWA to spread the increase of the new actuarial assumptions over 5 fiscal years. As of December 31, 2015, 22 retirees and beneficiaries received annual pension benefits of $572,968. The 2016/17 budgets for both SOCWA and SOCRRA budget include another incremental contribution to the salaried pension plan. The amount of the contribution will be reviewed with the Board at the November meeting. It is recommended that the Actuarial Valuation Report be received and filed. Respectfully submitted, Jeffrey A. McKeen, P.E. General Manager Suggested Resolution: That the Annual Actuarial Valuation Report, covering SOCWA s participation in the Michigan Municipal Employees Retirement System (MERS), be received and filed.

21 July 6, 2016 Board of Trustees Southeastern Oakland County Water Authority Subject: GLWA Issues Board Members: This report is intended to update the Board on the GLWA issues that have been discussed at recent Board meetings. GLWA Board The replacement for Ed Hood as the Board member representing the customer communities outside of Wayne, Oakland and Macomb Counties has not yet been named by Governor Snyder. The issues that I was concerned about from the May 25 th GLWA Board meeting were resolved at a June 27 th Board meeting. The first issue was a contract with Bart Foster, the long tenured rate consultant for DWSD and GLWA. The Board approved a one year contract with Mr. Foster that included the preparation of a plan to transition the work being done by Mr. Foster to GLWA personnel. The second issue was the staff recommendation to select Citi Group as the lead underwriter and Goldman Sachs as co-senior managing underwriter for the upcoming bond refinancing. I served as a member of the review panel that developed this recommendation with the GLWA staff. The Board approved the staff recommendations. The Board also approved the members of the underwriting pool that will be used for the bond refinancing. These actions pave the way for the bond refinancing to take place early in 2016/17 fiscal year. GLWA s current schedule calls for the refinancing to be completed by September 30, The refinancing should result in very significant savings, both in the 2016/17 fiscal year and throughout the life of the bonds. 2014/15 DWSD Audit The DWSD audit for the 2014/15 fiscal year was finally completed in late May. The audit was complicated by the many bankruptcy issues and by the GASB pension accounting rules that were implemented during this fiscal year. DWSD had an operating income of $112 million compared to $90 million in the prior year, an increase in net position of $63 million compared to $21 million in the prior year. However, the net position decreased by $416 million due to the pension accounting changes which resulted in a net position of -$353 million. System Expansion Policy GLWA has begun to solicit potential new customers for water and/or sewer service. A draft policy is being circulated for comment. Most of the potential new customers will require expansion of the GLWA infrastructure beyond its current limits. In its draft expansion policy, GLWA is proposing that expansions should be: 6-B

22 1. Beneficial to both GLWA and the new customer, 2. Cost estimates should include all costs, including financing, 3. The payback period for any common-to-all portion of the project should be less than or equal to half of the contract term, 4. GLWA net cash flow should remain neutral or positive throughout the project, 5. All cost sharing arrangements are to be reviewed with the Board prior to contract negotiations. In general, these principles seem comprehensive. However, there are several additional concerns that should be addressed: 1. How is the common-to-all portion of an expansion project determined and how would those costs be determined? 2. Does an expansion project create another dead end system that would need to be looped in the future? 3. Are there adverse long term effects on Detroit and the inner ring suburbs by encouraging people to move to areas beyond the current GLWA service area? As an example, if a transmission main required to provide service to a new customer could also serve to provide a loop to a current customer that is supplied through a dead end system, how should the costs of the transmission main be allocated between the new customer and the GLWA system (a common-to-all cost)? Should the proposed transmission main be sized for potential customers beyond the new customer under consideration? These questions will require significant debate for each new customer opportunity. Highland Park We received a response from the MDEQ regarding the letter that was sent to Governor Snyder following the May Board meeting. The response is attached and it is very similar to the response that the GLWA received regarding their letter to the Governor regarding Highland Park. I have also been working with other GLWA customers to provide similar letters to the Governor. There have been no further developments in the case regarding the Highland Park unpaid water and sewer bills which is still at the Court of Appeals. Respectfully submitted, Jeffrey A. McKeen, P.E. General Manager Suggested Resolution: That the report on GLWA issues be received and filed.

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24 July 7, 2016 Board of Trustees Southeastern Oakland County Water Authority Subject: Water and Sewage Rates Survey Board Members: Attached is a survey of the water and sewage rates effective July 1, 2016 charged by the municipalities in the Southeastern Oakland County area. Following is the amount that is charged for debt service by each of these municipalities. Municipality Per 1,000 SEV Berkley $0.00 Beverly Hills 0.00 Bingham Farms 0.00 Birmingham 0.00 Clawson 1.98 Sewer Debt Ferndale Sewer/Water Main Improvements Hazel Park 0.00 Huntington Woods 0.00 Lathrup Village 0.00 Oak Park 0.00 Pleasant Ridge 0.00 Royal Oak 0.00 Southfield 0.00 Troy 0.00 This report is submitted to the Board for its review and study. Please let us know if you have any concerns about the calculations for your community and we will update the information before it is posted on our website. Submitted by: Approved by: Karen Bever Executive Assistant Jeffrey A. McKeen, P.E. General Manager Suggested Resolution: That the survey of the 2016uer Water and Sewage Rates currently charged by the municipalities in the Southeastern Oakland County area be received and filed. 6-C

25 WATER and SEWAGE DISPOSAL RATES Delinquent Bills Municipality Late Payment Penalty Berkley 10% Beverly Hills 10% Bingham Farms 10% Service not shut off for lack of payment. 10% penalty assessed on current past due bill; interest not compounded. In March, outstanding balance of 180 days for more added to tax roll. Delinquent wks. bills over $150 placed on tax roll through Effective , new policy is to shut off delinquent w&s after an overdue bill is sent and after a warning is left at the home. Each area of service is reviewed annually for accounts more than 90 days past due and issued a shut-off notice. Properties with damaged stop boxes are certified to the taxes after 180 days delinquent. Birmingham Clawson Ferndale 1% per month +additional 15% On May 1st, balances of 6 months or more are added to tax bill. if rolled to tax bill Water is shut off 10 days after bill becomes delinquent. Shut off fee 5% +2% interest per quarter and reconnection fee also charges if water is shut off.. 10% +additional $50 penalty if Charge for shutting off water service - $50; Charge for reconnecting previous balance is not paid service after regular DPW business hours - $100; City reassess before next bill is generated delinquent bills, plus 8% penalty/interest charge, to the July and/or (60 days after due date) December tax bill. Hazel Park 10% First, regular bill is sent with due date of approximately 20 to 30 days from mailing date, then penalty added, then shut off bill is sent and then they are shut off with a $50 reconnection fee. Huntington Woods 5% After all else fails, the amount is remanded to the tax bill Lathrup Village 10% Placed on tax bill in April each year Oak Park 10% Pleasant Ridge 7% + additional 3% administrative penalty after 30 days Royal Oak 5% Southfield 2% residential 5% commercial Troy 10% Two ways: City shuts off service to customers with delinquent balances over a certain dollar amount. Any balances delinquent over 6 months on any account are rolled to property taxes. Water service is disconnected for non-payment. Delinquent accounts are added to tax bills annually. Payment arrangements may be made. Anything due on an account as of 10/31 each year and not paid by the end of February is transferred to Oakland County with additional penalties - becomes a tax lien on the property separate from the city or county taxes. Additional 15% administrative fee for all delinquent water bills that have rolled to taxes. If bills are 6 months in arrears, each March an additional 10% penalty is added and put on July tax bill.

26 BERKLEY Water Service Sewage Disposal $19.70 per 1,000 cu ft. $20.90 per 1,000 cu ft. Minimum Bill - Includes $ per quarter 8.75 Residential Refuse Charge Quarterly Meter Service Charge Sewer District 0.75" Meter $50.53 G.W.K.D.D. 1.00" Meter " Meter " Meter " Meter " Meter Storm Water Utility Fixed Charge Average Single Family Home per quarter $63.42 per equivalent residential unit $68,399 Taxable Value Water Bill Processing Fixed Charge $3.11 per Quarter

27 BEVERLY HILLS Water Service Sewage Disposal $18.25 per 1,000 cu ft. $51.50 per 1,000 cu ft. Minimum Bill per quarter ,000 cu ft. for debt service Quarterly Meter Service Charge Sewer District 1.00" Meter (up to) $6.00 Evergreen & G.W.K.D.D. 2.00" Meter " Meter $ Wells quarter flat rate 4.00" Meter Debt Service $20.00 per bill Infrastructure $65.00 per bill Average Single Family Home $121,532 Taxable Value

28 BINGHAM FARMS Water Service Sewage Disposal $25.62 per 1,000 cu ft. $23.39 per 1,000 cu ft. Minimum Bill - Minimum Sewage Bill - Sewer Flat Rate $51.24 per quarter per quarter residents with wells Quarterly Meter Service Charge Sewer District 5/8" Meter $1.73 Evergreen & Farmington 1.00" Meter /2" Meter " Meter " Meter " Meter " Meter Average Single Family Home $204,248 Taxable Value

29 BIRMINGHAM Water Service Sewage Disposal $32.61 per 1,000 cu ft. $72.41 per 1,000 cu ft. Minimum Bill - $5.00 per quarter Quarterly Meter Service Charge Sewer District 5/8" Meter $5.00 G.W.K.D.D.(33%) 1.00" Meter 8.00 Evergreen-Farmington (67%) 1 1/2" Meter " Meter " Meter " Meter " Meter " Meter Average Single Family Home $179,300 Taxable Value

30 CLAWSON Water Service Sewage Disposal $26.80 per 1,000 cu ft. $68.20 per 1,000 cu ft. Water and Sewer charges include $1.98 per $1,000 of Taxable Minimum Bill - $42.00 per quarter Includes Billing Charge Quarterly Meter Service Charge None New Sewer Debt SRF Projects $9.00 per quarter Sewer District G.W.K.D.D. Evergreen Billing Charge Per Q 16.5 Water Sewer Average Single Family Home $53,500 Taxable Value

31 DETROIT Water Service Sewage Disposal $23.50 per 1,000 cu ft. $52.02 per 1,000 cu ft. + Billing Charge $5.62 per month + Drainage Charge per month Quarterly Meter Service Charge 5/8" Meter $6.82 3/4" Meter " Meter /2" Meter " Meter 54.59

32 FERNDALE Water Service & Sewage Disposal Combined $97.78 per 1,000 cu ft. Readiness-to-Serve Charge $29.00 per quarter + Sewer/Water Main Improvements per $1,000 SEV* Quarterly Meter Service Charge None Sewer District G.W.K.D.D. Average Single Family Home* $37,419 Taxable Value

33 HAZEL PARK Water Service Sewage Disposal $49.27 per 1,000 cu ft. $54.90 per 1,000 cu ft. Minimum Bill - $20.92 per quarter Monthly Meter Service Charge Sewer District 5/8" Meter $0.00 G.W.K.D.D. Average Single Family Home $22,731 Taxable Value

34 HUNTINGTON WOODS Water Service & Sewage Disposal Combined $ per 1,000 cu ft. Minimum Bill - $17.00 per quarter Quarterly Meter Service Charge None Sewer District G.W.K.D.D. Capital Fee $17.00 per quarter Average Single Family Home $136,857 Taxable Value

35 LATHRUP VILLAGE Water Service Sewage Disposal $38.61 per 1,000 cu ft. $78.50 per 1,000 cu ft. Minimum Bill - $46.84 per month Monthly Meter Service Charge Sewer District 5/8" Meter $2.65 Evergreen 3/4" Meter " Meter /2" Meter " Meter " Meter Average Single Family Home $57,005 Taxable Value

36 OAK PARK Water Service Sewage Disposal $38.54 per 1,000 cu ft. $67.12 per 1,000 cu ft. Minimum Bill - $57.57 per quarter for Water/Sewer per quarter for garbage pickup Quarterly Meter Service Charge Sewer District 5/8" Meter $4.74 S.O.C.S.D.S. 3/4 Meter $ " Meter /2" Meter " Meter " Meter " Meter " Meter Average Single Family Home $29,634 Taxable Value

37 PLEASANT RIDGE Water Service Sewage Disposal $40.15 per 1,000 cu ft. $31.32 per 1,000 cu ft. Minimum Bill - $ per quarter Storm water charge $45.12 Ready-to-Serve Charge per bill-6 bills Sewer District 5/8" Meter $29.50 G.W.K.D.D. 3/4 Meter " Meter /2" Mete " Meter " Meter Average Single Family Home $180,000 Taxable Value

38 ROYAL OAK Water Service Sewage Disposal $35.04 per 1,000 cu ft. -1st 20 units $86.37 per 1,000 cu ft. -1st 20 units per 1,000 cu ft. -over 20 units per 1,000 cu ft. -over 20 units Minimum Bill - $11.25 per quarter Quarterly Meter Service Charge Sewer District All Meters $11.25 G.W.K.D.D. Average Single Family Home $81,351 Taxable Value

39 SOUTHFIELD Water Service Sewage Disposal $41.27 per 1,000 cu ft. $59.37 per 1,000 cu ft. Both Water and Sewer charges include $13.23 per1000 cu ft. for Capital Improvements Quarterly Meter Service Charge Sewer District 5/8" Meter $4.24 Evergreen 3/4" Meter 4.24 G.W.K.D.D. 1.00" Meter /2" Meter " Meter " Meter " Meter " Meter " Meter Average Single Family Home $85,600 Taxable Value

40 TROY Water Service Sewage Disposal $38.50 per 1,000 cu ft. $25.30 per 1,000 cu ft. Minimum Bill - $51.68 per quarter Quarterly Meter Service Charge Sewer District None G.W.K.D.D. Evergreen Average Single Family Home $108,371 Taxable Value

41 QUARTERLY Bill BASED ON WATER CONSUMPTION OF 4,000 CUBIC FEET AND SERVED THROUGH A 5/8" METER Cost of Water Meter Service Charge Sewage Disposal Water and Sewage Combined Other Total Bill Municipality Berkley Beverly Hills Bingham Farms Birmingham Clawson Huntington Woods Lathrup Village Pleasant Ridge Royal Oak Southfield LOW AVERAGE HIGH

42 COMBINED QUARTER Water & Sewer Disposal Bill (Served by 5/8"Meter) AVERAGE COST PER 1,000 CU FT BASED ON WATER CONSUMPTION OF: 4,000 8,000 12,000 16,000 20,000 Municipality Cu Ft Cu Ft Cu Ft Cu Ft Cu Ft Berkley Beverly Hills Bingham Farms Birmingham Clawson Huntington Woods Lathrup Village Pleasant Ridge Royal Oak Southfield LOW AVERAGE HIGH

43 June 21, 2016 Board of Trustees Southeastern Oakland County Water Authority Subject: Parking Easement Agreement, Telegraph and 12 Mile Board Members: SOCWA s Gare Station is located on the north side of 12 Mile Road just west of Telegraph. Our property extends north from 12 Mile approximately 650 feet and adjoins a commercial property that has frontage on Telegraph Road. A developer has approached SOCWA regarding the use of a portion of our Gare Station property in order to provide parking required to redevelop the property to include a coffee shop on Telegraph Road. The attached Parking Easement Agreement is the result of extensive conversations between SOCWA, Mr. Davis and the developer. The lease contains the following provisions: 1. An initial monthly lease rate of $800, which will increase by 3% annually until the developer begins construction of a parking lot at which time the monthly lease rate will increase to $1,200, which will also increase by 3% annually. 2. A 10 year lease term that is subject to unlimited 10 year extensions. 3. SOCWA approval of any parking lot construction plans. 4. SOCWA has the ability to terminate the lease with 12 month notice if SOCWA plans to redevelop the property for SOCWA s public purpose. The lease cannot be terminated in the first 3 years of the initial lease term. 5. The developer will pay legal expenses incurred by Mr. Davis in developing the lease up to $2,000. Our Gare Station property currently consists of a pump station and a 4.5 million gallon ground storage reservoir. There is also room to construct an additional 4.5 million gallon storage reservoir to the north of the existing reservoir. The long term plan for this station includes the construction of a second reservoir. However, the recent decline in water sales has eliminated the need for additional storage and we do not plan to build any additional storage. However, I do not want to sell the property in question in case our future plans change. The attached Easement Agreement provides some additional revenue for SOCWA, assists with a new development in Southfield and still maintains our options for future use of our property. This Agreement has been reviewed and approved by Mr. Davis. I am recommending that the Parking Easement Agreement be approved by the Board. 6-D Respectfully submitted, Jeffrey A. McKeen, P.E. General Manager Suggested Resolution: That the Parking Easement Agreement for a portion of SOCWA s Gare Station property be approved.

44 PARKING EASEMENT AGREEMENT THIS PARKING EASEMENT AGREEMENT ( Easement Agreement ) is made this day of, 2016 (the Effective Date ), by and between SOUTHEASTERN OAKLAND COUNTY WATER AUTHORITY, a Michigan public corporation ( SOCWA ), whose address is 3910 W. Webster Road, Royal Oak, Michigan 48073, and T-12 OFFICE, LLC, a Michigan limited liability company ( T-12 ), whose address is W. Eleven Mile Road, Suite 250, Southfield, Michigan SOCWA and T-12 when referred to together are sometimes hereinafter referred to as the Parties. R E C I T A L S A. SOCWA is the fee simple owner of the real property legally described on the attached Exhibit A (the SOCWA Parcel ); and B. T-12 is the fee simple owner of the real property legally described on the attached Exhibit B (the T-12 Parcel ); and C. The SOCWA Parcel and the T-12 Parcel adjoin one another. The T-12 Parcel is bordered on part of its southern boundary line by the SOCWA Parcel; and D. SOCWA (as owner of the SOCWA Parcel) has agreed to grant T-12 (as owner of the T-12 Parcel) a parking easement on the SOCWA Parcel at the location depicted on the site plan attached as Exhibit C, being the northerly sixty-five feet (65 ) of the SOCWA Parcel (the Parking Easement Area ) in order to permit the parking of vehicles for T-12 s employees or guests, and T- 12 s tenants and occupants, and their employees, guests and customers. NOW, THEREFORE, in consideration of the foregoing Recitals, the execution of this Easement Agreement by the Parties hereto, the mutual covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged by the Parties, it is agreed as follows: 1. Parking Easement. SOCWA hereby grants to T-12, its successors and assigns (for the benefit of the T-12 Parcel) an exclusive easement over and upon the Parking Easement Area for the purpose of accessing, constructing, and maintaining a parking area, and for the purpose of parking of vehicles by T-12 s employees or guests, and T-12 s tenants and occupants, and their employees, guests and customers (the Parking Easement ). The term of this Easement Agreement and the \

45 Parking Easement shall be for a period of ten (10) years, commencing on the Effective Date of this Easement Agreement (the Initial Term ). T-12 shall have the option to renew the term of this Easement Agreement and the Parking Easement for an unlimited number of ten (10) year terms (each, a Renewal Term ) by providing SOCWA with written notice of its election to renew the term at least thirty (30) days prior to the expiration of the Initial Term or any Renewal Term, as the case may be; provided, however, that T-12 s failure to timely exercise an option to renew shall not result in the forfeiture of such option to renew unless SOCWA provides T-12 with written notice of T-12 s failure to timely exercise the option to renew and T-12 thereafter fails to exercise the option to renew by providing written notice to SOCWA of such exercise within thirty (30) days thereafter. Except as expressly provided in this Section 1, this Easement Agreement and the Parking Easement may be terminated only as set forth in Section 6 below. 2. Encumbrances. The easements herein granted to T-12 are made subject to all covenants, conditions, restrictions, encumbrances, and easements of record. 3. Reservation of Rights. SOCWA hereby reserves for itself, its successors and assigns, the right to access and enter upon the Parking Easement Area for the limited purpose of performing maintenance, repairs, and replacements of SOCWA s water line located within the Parking Easement Area. SOCWA shall, except in the case of an emergency, coordinate any such access and entry upon the Parking Easement Area with T-12 so that there is no unreasonable interference with the business operations on the T-12 Parcel. SOCWA shall, at its sole cost and expense, promptly restore the Parking Easement Area to the condition in which it existed immediately prior to the performance of any activities described in this Section 3 by SOCWA or its agents, employees, or contractors. 4. Construction, Maintenance; Manner of Work. T-12 shall have the right, but not the obligation, to construct a parking area within the Parking Easement Area in accordance with all applicable laws and ordinances and at its sole cost and expense. Prior to T-12 s construction of a parking area within the Parking Easement Area, T-12 shall submit the plans for such parking area to SOCWA for SOCWA s approval, which approval shall not be unreasonably withheld, conditioned, or delayed. In the event T-12 exercises its right to construct a parking area within the Parking Easement Area, T-12, at its sole cost and expense, shall thereafter maintain the Parking Easement Area in accordance with all applicable laws and ordinances and in good order, appearance and repair, including, but not limited to all necessary patching, re-striping, repaving and replacing when necessary, and promptly removing snow, ice, dirt and debris therefrom. 5. Parking Easement Fee. As consideration for the Parking Easement granted to T-12 herein with respect to the Parking Easement Area, T-12 and its successors and assigns shall pay to SOCWA and its successors and assigns, a monthly fee of Eight Hundred and 00/100 Dollars ($800.00) per month (the Monthly Fee ), payable in advance, which Monthly Fee shall be due and payable on or before the first day of each month following the Effective Date of this Easement Agreement. Commencing on the first day of the month which follows the first anniversary of the Effective Date of this Easement Agreement, and on the anniversary of that date each year thereafter, the Monthly Fee shall increase by three percent (3%). On the date that T-12 commences construction of the parking area within the Parking Easement Area (if ever) (the Construction Commencement Date ), the Monthly Fee shall increase to One Thousand Two Hundred and 00/ \

46 Dollars ($1,200.00) per month and shall thereafter continue to increase by three percent (3%) per year at the same time and in the same manner as set forth in the previous sentence. The first payment of the Monthly Fee, which shall be prorated to cover the number of days from the Effective Date through the last day of the month in which the Effective Date occurs, shall be due and payable on the Effective Date of this Easement Agreement. In the event this Easement Agreement expires or is terminated, T-12 shall have no further obligation to pay the Monthly Fee to SOCWA. 6. Termination. (a) SOCWA s Right to Terminate for Redevelopment. At any time after the second (2nd) yearly anniversary of the Effective Date of this Easement Agreement, SOCWA may elect to terminate this Easement Agreement if SOCWA s board, in its sole and unfettered discretion, decides to redevelop or otherwise use, or caused to be used, the Parking Easement Area in a manner consistent with SOCWA s stated public purpose. In order to exercise this termination right, SOCWA shall provide T-12 with written notice of SOCWA s election to terminate this Easement Agreement at least one (1) year prior to the effective date of such termination (the Termination Notice ); provided, however, that the Termination Notice may not be given to T-12 prior to the second (2nd) yearly anniversary of the Effective Date of this Easement Agreement. For the avoidance of doubt, in no event shall the effective date of such termination occur prior to the third (3rd) yearly anniversary of the Effective Date of this Easement Agreement. (b) SOCWA s Right to Terminate for Violation of Law. SOCWA may elect to terminate this Easement Agreement if it determines that T-12 has failed to comply with any applicable ordinances or state or federal law with respect to the Parking Easement Area or any conditions attached to governmental approvals granted to T-12 for use or operations at the Parking Easement Area and T-12 thereafter fails to cure such condition within thirty (30) days after T-12 s receipt of written notice thereof from SOCWA. (c) T-12 s Right to Terminate. T-12 shall have the right to terminate this Easement Agreement at any time by providing at least thirty (30) days prior written notice of such termination to SOCWA. (d) Effect of Termination. In the event this Easement Agreement expires or is terminated, all rights and obligations of the Parties under this Easement Agreement shall cease as of the effective date of such expiration or termination. On or after the effective date of the expiration or termination of this Easement Agreement, the Parties shall execute a termination of this Easement Agreement in recordable form with the Oakland County Register of Deeds, with the cost of recording to be paid by the party that elected to terminate this Easement Agreement, or in the case of the expiration of this Easement Agreement, with the cost of recording to be paid by T T-12 s Insurance Requirements. At all times during the term of this Easement Agreement from and after the Construction Commencement Date, T-12 shall purchase and maintain a policy of commercial general liability insurance with coverage for bodily injury, personal injury and property damage (to include contractual liability), with an each occurrence limit of not less than One Million Dollars ($1,000,000) and a general aggregate limit of not less than Two Million Dollars \

47 ($2,000,000). SOCWA shall be named as an additional insured on such policy, at no cost to SOCWA. Compliance by T-12 with the requirements in this Section 7 (T-12 s Insurance Requirements) as to carrying insurance shall not relieve T-12 of its indemnity obligations under Section 8 (Indemnification). Indemnity obligations in this Easement Agreement shall not be negated or reduced on account of T-12 s failure to obtain the required insurance or by virtue of any insurance carrier s (i) denial of insurance coverage for the occurrence or event which is the subject matter of the claim; or (ii) refusal to defend any named insured. Failure to comply with all insurance requirements shall be deemed a material breach of this Easement Agreement. However, failure to provide evidence of existing insurance shall constitute a material breach only if T-12 fails to provide such evidence within ten (10) days after written notice from SOCWA that T-12 has failed to provide the evidence of existing insurance. 8. Indemnification. T-12 agrees to defend, indemnify and save harmless SOCWA and its officers, directors, board members, shareholders, partners, agents and employees (hereafter collectively Related Parties ), from and against any and all liability or claim thereof (including but not limited to reasonable attorneys fees and costs) whether for injury to persons, including death, or damage to property, which may be imposed upon, incurred by or asserted against SOCWA or its Related Parties: (i) allegedly or actually arising in connection with or as a direct or indirect result of any activity by T-12 its employees, agents, contractors, subcontractors, lessees, invitees, or licensees in, on, or about the Parking Easement Area, including the use thereof; (ii) arising out of any default by T-12 under this Easement Agreement; or (iii) arising out of any negligent act or omission to act by T-12, its agents, employees, contractors or subcontractors. The foregoing indemnity from T-12 shall include claims alleging or involving joint or comparative negligence, but shall not extend to liability directly resulting only from the sole negligence or willful misconduct of SOCWA or its Related Parties. 9. Condition of Parking Easement Area. (a) T-12 acknowledges and agrees that it has had the opportunity, prior to executing this Easement Agreement, to inspect, test and otherwise approve the Environmental Condition (as defined below) of the Parking Easement Area. Environmental Condition shall mean the physical condition of the soils, subsurface soils, surface water and all subsurface water at, upon or beneath the Parking Easement Area. (b) T-12 hereby covenants and agrees that it will not conduct any activity at or near the Parking Easement Area which will contaminate, degrade or negatively impact the Environmental Condition of the Parking Easement Area. T-12 agrees to indemnify and hold SOCWA harmless from and against any claim, suit, demand or obligation, including any administrative action brought by any government, arising from or relating to any contamination to the Environmental Condition of the Parking Easement Area caused by T-12. This includes any cleanup, study, remediation or other site activity. At all times during the term of this Easement Agreement, T-12 agrees to comply fully with all laws and regulations designed or intended to protect the Environmental Condition of the Parking Easement Area \

48 10. Covenants Running with the Land. The easements herein granted and the agreements herein contained shall be easements and covenants running with the land and shall inure to the benefit of, and be binding upon, the Parties hereto and their respective successors and assigns. 11. Subdivision of T-12 Parcel. SOCWA acknowledges that T-12 intends to seek approval from the City of Southfield to subdivide the T-12 Parcel into a total of two (2) parcels. From and after the date such subdivision is approved by the City of Southfield, (a) the T-12 Parcel for all purposes under this Easement Agreement shall mean and refer only to the one (1) parcel that is contiguous to the Parking Easement Area, and (b) the parcel which is not contiguous to the Parking Easement Area shall have no further benefits or obligations under this Easement Agreement and shall not be considered part of the T-12 Parcel for purposes of this Easement Agreement. 12. Notices. Notices permitted or required hereunder shall be in writing and shall be delivered or sent by certified mail or overnight delivery by a reputable national carrier to the addresses provided below, provided that any party may change such address by written notice to the other party: If to SOCWA: Southeastern Oakland County Water Authority 3910 W. Webster Road Royal Oak, Michigan If to T-12: T-12 Office, LLC c/o Versa Development Co West Eleven Mile Road, Suite 250 Southfield, Michigan Attention: Steve Robinson with a copy to: Kyle Hauberg, Esq. Dykema Gossett, PLLC Woodward Avenue, Suite 300 Bloomfield Hills, Michigan Governing Laws. This Easement Agreement shall be construed in accordance with the laws of the State of Michigan and any applicable federal laws and regulations. 14. Covenants and Claims; Restoration. T-12 shall pay the Monthly Fee and all other sums required to be paid by T-12 under this Easement Agreement in the amounts, at the times and in the manner provided in this Easement Agreement, and shall keep and perform all the terms and conditions on its part to be kept and performed. Upon the expiration or termination of this Easement \

49 Agreement, T-12 shall peaceably and quietly quit and surrender possession of the Easement Area to SOCWA in good order and condition, and if requested by SOCWA in writing in its sole discretion, T-12 shall, at its sole cost and expense, remove its improvements from the Parking Easement Area, if any, and restore the Parking Easement Area to the condition in which it existed immediately prior to the Construction Commencement Date. In the event T-12 did not commence construction of the parking area within the Parking Easement Area prior to the expiration or termination of this Easement Agreement, T-12 shall not have any removal or restoration obligations under the terms of this Section 14. SOCWA shall not be responsible for any resulting claim by any zoning board or government in connection with the expiration or termination of this Easement Agreement. The purpose of this provision is to legally bar any claim by T-12 that the expiration or termination of this Easement Agreement has resulted in any damage to the T-12 Parcel or the uses of the T-12 Parcel. This includes, but is not limited to, any claim or assertion that the expiration or termination of this Easement Agreement renders the T-12 Parcel as a whole non-conforming, not usable or in violation of any code or ordinance, local, state or federal. 15. No Partnership. Neither anything contained in this Easement Agreement nor any acts of the Parties hereto shall be deemed or construed by the Parties hereto, or any of them, or by any third person, to create the relationship of principal and agent, or of partnership, or of joint venture, or of association between any of the Parties to this Easement Agreement. 16. Waiver of Default. No waiver of any default by any party to this Easement Agreement shall be implied from any omission by any other party to take any action in respect of such default. No express waiver of any default shall affect any default or cover any period of time other than the default and period of time specified in such express waiver. One or more waivers of any default in the performance of any term, provision or covenant contained in this Easement Agreement shall not be deemed to be a waiver of any subsequent default in the performance of the same term, provision or covenant or any other term, provision or covenant contained in this Easement Agreement. The rights and remedies given to any party to this Easement Agreement shall be deemed to be cumulative and no one of such rights and remedies shall be exclusive of any of the others, or of any other right or remedy at law or in equity which any such party might otherwise have by virtue of a default under this Easement Agreement, and the exercise of one such right or remedy by any such party shall not impair such party s standing to exercise any other right or remedy. 17. Exhibits. All exhibits referred to herein and attached hereto shall be deemed part of this Easement Agreement. 18. Severability. If any term, provision or condition contained in this Easement Agreement shall, to any extent, be invalid or unenforceable, the remainder of this Easement Agreement (or the application of such term, provision or condition to persons or circumstances other than those in respect of which it is invalid or unenforceable) shall not be affected thereby, and each term, provision or condition of this Easement Agreement shall be valid and enforceable to the fullest extent permitted by law provided that such deletions can be made without materially changing the basic agreement between the Parties. If such deletions cannot be made without materially changing the basic agreement between the Parties, then the Parties agree to amend, or to permit the court to \

50 amend, this Easement Agreement to accomplish essentially the same transaction without said illegal, invalid or unenforceable provisions. 19. Entire Agreement. This Easement Agreement, including the attached Exhibits, contains the entire Easement Agreement between the Parties and all of the terms and conditions to which the Parties have agreed and supersedes all prior oral or written agreements or understandings concerning the subject matter contained herein. 20. Attorneys Fees. If any action at law or in equity shall be brought to recover the Monthly Fee due under this Easement Agreement, or for or on account of any breach of, or to enforce or interpret any of the covenants, terms or conditions of this Easement Agreement, or for the recovery of the possession of the Parking Easement Area, the prevailing party shall be entitled to recover from the other party, as part of the prevailing party s cost, reasonable attorneys fees, the amount of which shall be fixed by the court and shall be made part of any judgment or decree rendered. T-12 agrees to pay, at the time of execution of this Easement Agreement, the legal fees of SOCWA incurred in the preparation and negotiation of this Easement Agreement, in an amount not to exceed Two Thousand and 00/100 Dollars ($2,000.00). The final figure shall be provided to T-12 at the time this Easement Agreement is executed. 21. Counterparts. This Easement Agreement may be executed by the Parties on any number of separate counterparts and all such counterparts so executed constitute one agreement binding on the Parties, notwithstanding that all Parties are not signatories to the same counterpart. [Remainder of page intentionally left blank; signatures begin on the following page] \

51 IN WITNESS WHEREOF, the Parties have executed this Parking Easement Agreement as of the day and year first above written. STATE OF ) ) SS COUNTY OF ) SOCWA: SOUTHEASTERN OAKLAND COUNTY WATER AUTHORITY, a Michigan public corporation By: Name: Its: Date: ACKNOWLEDGEMENT On this, the day of, 2016, before me, the undersigned Notary Public, personally appeared, who acknowledged him/herself to be the of Southeastern Oakland County Water Authority, a Michigan public corporation, and that he/she, being authorized to do so, executed the foregoing Parking Easement Agreement for the purposes therein contained. IN WITNESS WHEREOF, I hereunto set my hand and official seal. Notary Public, State of, County of Acting in the County of My Commission Expires: \

52 T-12: T-12 OFFICE, LLC, a Michigan limited liability company By: Name: Its: Manager STATE OF ) ) SS COUNTY OF ) Date: ACKNOWLEDGEMENT On this, the day of, 2016, before me, the undersigned Notary Public, personally appeared, who acknowledged him/herself to be the Manager of T-12 Office, LLC, a Michigan limited liability company, and that he/she, being authorized to do so, executed the foregoing Parking Easement Agreement for the purposes therein contained. IN WITNESS WHEREOF, I hereunto set my hand and official seal. Notary Public, State of, County of Acting in the County of My Commission Expires: THIS DOCUMENT PREPARED BY: AFTER RECORDING RETURN TO: DYKEMA GOSSETT PLLC Nicholas J. Winters, Esq Woodward Avenue, Suite 300 Bloomfield Hills, Michigan \

53 EXHIBIT A TO PARKING EASEMENT AGREEMENT Legal Description of SOCWA Parcel Land situated in the City of Southfield, County of Oakland, State of Michigan, described as follows: T1N, R10E, SEC 8 115H-I-1 SECTION 8 PART OF SW 1/4 OF SE 1/4 BEG AT PT DIST E FT & N E 53 FT FROM S 1/4 COR, TH N E FT, TH N E FT TH S W FT, TH W FT, TH S 172 FT, TH W FT TO BEG EXC WLY 30 FT & NLY 100 FT OF ABOVE DESC 3.170A Tax Parcel Identification Number: Commonly known as: W. 12 Mile Road, Southfield, Michigan \ A-1

54 EXHIBIT B TO PARKING EASEMENT AGREEMENT Legal Description of T-12 Parcel Land situated in the City of Southfield, County of Oakland, State of Michigan, described as follows: A parcel of land being a part of the Southwest 1/4 of the Southeast 1/4 of Section 8, Town 1 North, Range 10 East, City of Southfield, Oakland County, Michigan, more particularly described as follows: Commencing at the South 1/4 corner of Section 8; thence due East along the South line of said Section 8, feet to the West right of way line of Telegraph Road (204 feet wide); thence North 00 degrees 04 minutes 30 seconds East along the West right of way line of said Telegraph Road, feet to the point of beginning; thence South 89 degrees 58 minutes 23 seconds West feet; thence South 0 degrees 01 minute 00 seconds West 0.58 feet; thence South 89 degrees 47 minutes 45 seconds West feet; thence South 00 degrees 06 minutes 31 seconds West feet to the North line of Twelve Mile Road (105 feet wide); thence due West along the North line of said road feet; thence North 00 degrees 06 minutes 31 seconds East feet; thence due East feet; thence North 00 degrees 06 minutes 31 seconds East feet; thence South 89 degrees 49 minutes 40 seconds West 3.23 feet; thence North 00 degrees 12 minutes 00 seconds West feet to a point on the South line of SUPERVISOR S PLAT NO. 10 (Liber 53, page 58 of Plats, Oakland County Records); thence North 89 degrees 52 minutes 04 seconds East along the South line of said Plat, feet to the West right of way line of Telegraph Road; thence South 00 degrees 04 minutes 30 seconds West along the West line of said road feet to the point of beginning. EXCEPTING therefrom that portion of the above described property conveyed to the Board of County Road Commissioners of the County of Oakland in deed recorded September 27, 1973, in Liber 6176, page 631, Oakland County Records. Tax Parcel Identification Number: Commonly known as: Telegraph Road, Southfield, Michigan \ B-1

55 EXHIBIT C TO PARKING EASEMENT AGREEMENT SITE PLAN \ C-1

56 June 24, 2016 Board of Trustees Southeastern Oakland County Water Authority Subject: Lead and Copper Testing Board Members: SOCWA staff and Southfield DPW staff have set up the lead and copper testing for the City of Southfield that will be taking place this summer. This monitoring is being performed at the request of the MDEQ to resolve a noncompliance resulting from a discrepancy regarding the required number of lead samples for the Southfield system. We are using this as an opportunity to review our entire lead and copper sampling program. Lead and copper testing for the remainder of the SOCWA communities will be conducted during Southfield will be taking the lead and copper samples from the locations that have previously been used for lead and copper testing. SOCWA, Southfield and the MDEQ staff are all in agreement that a total of 13 samples are required from the City of Southfield. SOCWA staff will transport the samples to the GLWA lab as part of our weekly delivery of water samples for toxicity testing. The lead and copper testing will be done by GLWA and the test results will be provided to SOCWA. SOCWA and Southfield will report the results to the MDEQ when the testing is completed. Respectfully submitted, Jeffrey A. McKeen, P.E. General Manager Suggested Resolution: That the report on Lead and Copper Testing be received and filed. 6-E

57 July 6, 2016 Board of Trustees Southeastern Oakland County Water Authority Subject: Water Residential Affordability Plan (WRAP) Board Members: The Water Residential Affordability Plan (WRAP) is continuing to enroll participating communities even though the enrollment deadline has passed. As of June 30, 35 communities, including Bingham Farms, Clawson, Huntington Woods, Lathrup Village, Royal Oak and Southfield are listed as being active in the WRAP program. The GLWA has not provided a community status update since the end of April. At that time, the following was the status of the WRAP enrollment for the SOCWA communities: COMMUNITY STATUS Berkley Meeting scheduled for May 12 with Berkley staff Beverly Hills Information sent to Chris Wilson Bingham Farms Enrollment completed Birmingham Information sent to Paul O Meara Clawson Enrollment completed Huntington Woods Enrollment completed Lathrup Village Enrollment completed Pleasant Ridge Information sent to Scott Pietrzak Royal Oak Enrollment completed Southfield Enrollment completed Bloomfield Hills GLWA to follow-up on status Bloomfield Twp. Opted Out The GLWA should be providing a status update as of the end of June in the near future. I will continue to work with the GLWA staff in order to get all of the member communities enrolled in the WRAP program. Please let me know if you need any assistance regarding the WRAP program. I continue to believe that this is a well-designed, although very complex, program that will provide great assistance to low income residents and I continue to encourage each community to participate in the WRAP program. Respectfully submitted, Jeffrey A. McKeen, P.E. General Manager Suggested Resolution: That the report on the Water Residential Affordability Plan (WRAP) be received and filed. 6-F

58 July 5, 2016 Board of Trustees Southeastern Oakland County Water Authority Subject: Summary of June Operations Board Members: Our water sales for June 2016 were 41.2 million gallons per day (mgd). This is substantially higher (25%) than budgeted and substantially higher (6.0%) than the actual sales for June However, this level of sales is substantially lower than water sales during a comparable hot and dry weather June, see discussion below. The increase in June sales brought our sales for the fiscal year to 1.2% below budgeted sales. SOCWA s contract with GLWA limits our water purchases to a total of 62.3 mgd on GLWA s maximum day and limits our hourly flow rate to 62.3 mgd on GLWA s peak hour between the hours of 6:00 A.M. and 11:00 P.M. So far this summer, it appears that GLWA s maximum day was June 25, which had preliminary sales of 770 million gallons per day. I expect that the GLWA system will experience higher max days yet this summer. This is the highest GLWA max day since 2012 but it is a very large decrease from the 2012 GLWA max day of 957 mgd. For June 25, SOCWA s water purchases from GLWA were 55.2 mgd with a peak hour flow of 47.7 mgd on the GLWA peak hour, both of which are below our contract limits. SOCWA s June water sales of 41.2 MGD were the highest June water sales that we have experienced since June of 2012 during which our sales were 51.0 mgd. The table below summarizes the two months: June 2016 June 2012 Sales 41.2 mgd 51.0 mgd Max Day 55.2 mgd 62.2 mgd Average Temperature 70.8 o 73.2 o Rainfall 0.50 inches 0.90 inches So far this summer, it appears as if the trend of lower water sales is continuing even in hot, dry weather. Our GLWA contract max day of 62.3 mgd is 13% higher than our max day this summer. The SOCWA system has been operating very well so far this summer and we have experienced no power outages. SOCWA staff is continuing to work with our control room operators to make sure that we operate within our GLWA contractual requirements. We are also working with several member communities to investigate problems that may have been caused by running pumps to fill storage during the hours from midnight to 6:00 A.M. This is a normal operation for SOCWA during high sales periods in the summer months but we have not operated that way since the summer of 2012 due to lower water sales. 6-G

59 The max day for Bloomfield Hills so far this summer is 3.36 mgd compared to their contract limit of 4.5 mgd. The max day for Bloomfield Twp. so far this summer is mgd compared to their contract limit of 19.0 mgd. Both contracts allow us to pass along any additional DWSD costs caused by the daily volume limits being exceeded. The month of June was an exceptionally good financial month for SOCWA due to the higher than planned water sales. The year to date financial report is at the end of the agenda package, however, the report is still subject to change as additional June expenses are still being processed. Respectfully submitted, Jeffrey A. McKeen, P.E. General Manager Suggested Resolution: That the report on the Summary of June Operations be received and filed.

60 July 6, 2016 Board of Trustees Southeastern Oakland County Water Authority Subject: Engineering for Roof Replacements Board Members: SOCWA s Capital Improvement Program for 2016/17 includes the replacement of the roofs at Shafter and Oliver Stations. In order to accomplish this work, we are proposing to contract with NTH to prepare bid specs, conduct the bid process and provide contract inspection services. A proposal from NTH to provide these services at a cost of $7,500 is attached. SOCWA staff also obtained a similar quote from HRC at a cost of $13, Both firms appear to be qualified to perform the scope of work and SOCWA has successfully used both firms for similar projects in the past. The NTH proposal includes that their construction inspection costs be included in the contract for the roof replacements. Based on their experience, this results in quicker job completions. We propose to bring the results of the bid process to the Board for review and contractor selection at either the August or September Board meetings in order to have this work completed this fall. SOCWA staff is recommending that the proposal from HRC for 2016 Roof Replacement Program be approved at a cost of $7,500. Respectfully submitted, Jeffrey A. McKeen, P.E. General Manager Suggested Resolution: That the Board approves the HCR proposal for 2016 Roof Replacement Program at a cost of $7, H

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