Metropolitan Water Reclamation District (MWRD) Board Meeting - September 2, 2021

All Items were approved, except for Agenda Item #63, which was deleted (see below for more info on that item).  

Board Highlights:

2020 Report of the Retirement Fund presented by the Fund Executive Director, Jim Mohler (Agenda Item 54, File # 21-0769)

• The presentation for the year ending Dec. 31, 2020 was delayed until now due to COVID.
• Actuarial and Market values of assets were at record highs of $1.56B and $1.588B, respectively.
• Actuarial fund ratio had jumped to 57.3% from 55.9% in 2019 and 50.4% in 2010.  
• Net pension liability dropped by $123M over the last 2 years.
• Fund Net Rate of Return exceeded Actuarial Assumed Rate of Return.
• Investment management fees reduced by over 10%.
• The additional contributions over the actuarial determined contribution that have been approved by the Board have had positive benefits.
• Going forward, need to keep an eye on deficits of cash flows (more money being paid out than contributions).  For 2021, deficit is projected at $81M, about 5%.  However, expected rate of return is higher (7.25% actuarial).  Problem when the deficit percentage exceeds the rate of return.

Stormwater Management

• A representative from a citizens’ group called “Dry Up LaGrange” spoke during public comments asking for help from the MWRD in dealing with flooding problems on the south side of LaGrange.  The group and village officials have met with several Commissioners and staff, as well as their U.S. Representative, State Senator and Representatives, and Cook County officials.  There are several proposed projects which need funding.  There is a lawsuit against the owner of a quarry in McCook which some believe is the cause of the flooding.  The group would also like to send the village’s combined sewage and stormwater into the Deep Tunnel.  President Steele said that the MWRD will continue to meet with both the village and the group and look for ways the MWRD can be of help.
• In response to a question from Comm. Davis regarding an intergovernmental agreement with Berwyn to help fund green alley improvements, staff said that the MWRD continues to inspect the infrastructure at least yearly – in perpetuity – even though the other entity is obligated to do the on-going maintenance.  (Agenda Item 58, File # 21-0759)

Affirmative Action

• With regard to two proposals to advertise “furnish and deliver” contracts for unleaded gasoline and diesel fuel, Comm. Garcia asked for an update of the disparity study.  Executive Director Perkovich said that last update he had was by the end of September.  Comm. Garcia and others think that at least some of these “furnish and deliver” contracts should have affirmative action goals.  Currently, these types of contracts are exempt from such requirements.  (Agenda Items 19 & 20, File # 21-0765 and 21-0766)

Settlement with two persons (not MWRD employees) for injuries stemming from the 2018 explosion at the Calumet Water Reclamation Plant (Agenda Item #52, File # 21-0782)

• Comm. Shore stated she supported the settlement, but asked about where things stood with the MWRD employee who was severely injured.  Exec. Director Perkovich confirmed that that was being handled through a workers’ compensation claim.
• The total amounts to be paid to the two non-employee claimants are $5.6M and $500,000 (for a total of $6.1M).  The MWRD will expend $1.12M, which is the remaining self-insurance amount, while the district’s excess casualty insurance company will pay the rest.

What to watch for: 
Proposed change to the Board Rules to allow for Members to participate remotely

• After questions and discussion, this item was deleted to allow time for Commissioner input and possible revisions. (Agenda Item #63, File # 21-0795).  
• The General Counsel explained that under the Open Meetings Act, entities may provide for members to participate remotely (video or audio calls) as long as there is a quorum physically present.  In the case of the Board, a quorum is 5, meaning that up to 4 members could be allowed to participate remotely.
• As proposed, and consistent with the language of the Open Meetings Act, a member unable to participate due to personal illness or disability, business of the MWRD, or a family or other emergency, could request to participate remotely by submitting such request via email by 9 am of the day of the meeting to the President and Clerk.  The Board would then vote at the beginning of the meeting whether to grant that request.
• Comm. Garcia and others questioned why the proposed change submitted only allowed for remote participation at Regular Board meetings, and not Special meetings, Executive sessions, Committee meetings, or Study sessions.  Comm. Shore and President Steele both supported at least excluding Executive Sessions.  Comm. Shore was concerned whether the District could be assured an Executive Session was truly confidential if someone was participating remotely.
• Comm. Davis suggested that the MWRD may want to talk to Illinois legislators about further amending the Open Meetings Act to allow more opportunities to have remote participation, citing the example of a snow storm, given the successful experience of holding remote meetings over the last year due to COVID.

Length of meeting:  2 hours and 45 minutes (with a 45-minute Executive Session at 1 hour and 55 minutes into the meeting)

Observer:  Priscilla Mims 

Metropolitan Water Reclamation District Special Study Session – February 23, 2017

Three Items were on the Agenda for Discussion – Presentation by David St. Pierre, Executive Director

1. Background and rationale for purchase of farm land and Nutrient Trading.
2. Extension of Survivor Pension Benefits for MWRD retired employees that married after it became legal for LGBT community to marry.
3. Presentation on proposed investment vehicle to maximize income from leased MWRD properties.

Purchase of Farm Land/Nutrient Trading

• By 2025 the national and Illinois EPA(s) require a 25% reduction in Phosphorus [fresh water] and a 15% reduction in Nitrogen [salt water] effluent in the waters leading to the Mississippi River and Gulf of Mexico.  
• Most of the phosphorus comes from point sources such as the MWRD [83%].  
• A huge reduction has already been achieved, but to get to the last percentage needed to reach the target goal of .1 discharge requires as much as $211 million additional expenditure per year by the MWRD without the guarantee that .1 can be reached.    
• Currently the discharge acceptable by the EPA is 1.0 with a targeted reduction to .072 by the end of 2018.  
• Since 17% of the runoff comes from agriculture which is not regulated, and MWRD's Ex.Dir, St. Pierre, does not expect it to be regulated in the foreseeable future, a pilot program is being undertaken to see if by purchasing agriculture land and eliminating the use of phosphorus on the land, enough reduction can occur to get to the required target.  
• Another discussed approach is called Nutrient Trading.  If the regulations and parameters can be worked out, this could be the most affordable way of getting to the target.  Farmers would be encouraged to use Best Practices to reduce runoff and could sell Nutrient Trades to utilities such as the MWRD.  St. Pierre estimates the cost could be $20 million per year which is a 10 times reduction.  
• Mr. St. Pierre posits that this plan needs to be adopted state wide for it to be effective and several entities including the state's Pollution Control Board support nutrient trading including "downstream" trading.

Survivor Pension Benefits Extension

• Several board members want the extension to happen yet this year.  
• St. Pierre would like the opportunity to research the number and ramifications involved, if any, and implement in 2018.  
• One problem is that the MWRD currently does not know how many retired employees entered into a marriage after 2011 when gay marriage became legal.  Stay tuned as this likely will come up in future board meetings.

Proposed Investment Vehicle to maximize income from Leased MWRD Properties

• Mr. St. Pierre said he was not prepared to make a presentation on this proposal for this  study session.  Further analysis is necessary by the legal teams to ensure that this type of investment is possible for a public body.​
  

Post Meeting on-line Observation by Diane Edmundson​

Public Hearing on 2017 MWRD Budget - December 1, 2016

The Civic Federation was the only speaker at this Public Hearing.  However, Commissioner Avila at the end of the hearing raised concerns about the process being followed for selecting people for Deputy Director positions.

Laurence Msall, President of the Civic Federation, a non-partisan government research organization, expressed support for the proposed $1.13 billion proposed budget, stating that:

• it reflects a sensible and pro-active approach to meeting the MWRD’s financial challenges
• it maintains substantial reserves and liquidity which bodes well if there are any emergencies or unexpected financial needs, as opposed to having to resort to short-term borrowing
• it includes additional contributions to the pension funds
• it reflects an exemplary capital planning process that the Civic Federation wishes other governments would emulate
• it is being considered under a process that allows for sufficient time for review and consideration.

However, Mr. Msall also expressed the concern over the size of the unfunded liabilities under the pension fund, despite the strides that the MWRD has taken and is taking.  The Civic Federation’s report on the budget can be found HERE. 

While not pertinent to the budget, Commissioner Avila expressed concern that only one person (presumably the Executive Director) was making decisions about who would be hired for Deputy Director positions.  Executive Director St. Pierre stated that Deputy Directors are only hired when an existing Director states an intention to retire.  When that happens and the Board approves a deputy position, there is a 3-person team who interviews candidates and makes a recommendation as to whom should be hired.  President Spyropoulos suggested that the process be circulated for review by the Commissioners.  Commissioner Shore pointed out that if any employee feels the process has been unfair, there are procedures in place to deal with any complaints.

Observer - Priscilla Mims

Metropolitan Water Reclamation Board Meeting - June 2, 2016

Topics Discussed:

• The MWRD received the best possible results from the audit of the 2015 Comprehensive Annual Financial Reports of the MWRD and the MWRD Retiree Health Care Trust.  Both audit letters contained no recommendations for any changes to the controls in place or in the numbers on these financial reports.  In the words of the auditor, both letters reflect “unmodified opinions.”  
• One contact for up to $13 million was not awarded to the low bidder for failure to comply with the Minority Business Enterprise (MBE) requirement of 2%.  Instead, the contract was awarded to the second lowest bidder who did comply with the MBE, Women Business Enterprise, and Small Business Enterprise requirements, at an additional cost of about $700,000 (agenda item 17, 16-0587). 
• Commissioner Santos requested deferral on an item so she could discuss it with staff. The item concerned an intergovernmental agreement with the Cook County Sheriff’s office for up to $100,000 for drug collection receptacles and collection and safe disposal of the drugs collected.

Study Session on Pension Funding

• As of December 31, 2015, the Pension Plan is deemed funded at 55%, and is expected to be fully funded by the end of 2049. 
• The Retiree Health Care Benefits program is deemed funded at 52%, and is expected to be fully funded by the end of 2026. 
• Finance Chair Avila expressed concern about the current funding percentages.  However, the MWRD is capped by statute as to how much it can contribute to fund the plans each year.
• While employees are vested in the Pension Plan at 10 years (which is fairly standard), vesting in the Retiree Health Care Plan occurs after only 6 years.  Commissioner McGowan said she remembered the time for vesting was reduced to 6 years in 2008 when Commissioner Horton was leaving the Board, the inference being that it was done to cover her.  Executive Director St. Pierre said that the staff should be able to find out more about the circumstances of the change in vesting.

Study Session on Rain Barrel Program
Executive Director St. Pierre presented an overview of the MWRD free rain barrel program.  

• Under a consent decree entered into in January 2014, the MWRD was required to distribute 10,000 rain barrels by January 6, 2017 and 15,000 rain barrels by January 6, 2019. 
• To date, the MWRD has already exceeded those requirements by distributing 52,000 rain barrels.  In addition, 17,000 have been ordered. 
• From January 2014 thru May 2016, the cost has been $2.7 million, with the cost thru 2016 to jump by an additional $3.4 million to $6.1 million. 
• Should the program continue through 2017, the additional cost is estimated to be $4.8 million.  

Given these costs and the fact that the consent decree has been complied with, Mr. St. Pierre is recommending that the program be discontinued at the end of 2016, but that the MWRD continue to offer rain barrels at cost to municipalities and non-governmental organizations.  The Committee members all agreed, with the emphasis on the need to have a good plan in place for publicizing this change.  During the public comments at the end, George Blakemore noted that the MWRD had failed to require municipalities to report on how many rain barrels had actually been connected to downspouts, and he urged that accountability be included in any “at cost” distribution so the success of the program could be properly evaluated after 2016.

Items to watch for in the future:: 

• More Information on why vesting for the Health Care Plan is only 6 years.
• Will the full board discontinue the free rain barrel program?

Observer:  Priscilla Mims