Water District Board Faces Questions About Lack of Insurance at Time of Calumet Explosion

Metropolitan Water Reclamation District (MWRD) Board Meeting  -  December 6, 2018

This was the first Board meeting attended by the 3 new Board members elected in November:  Cameron Davis, Kimberly DuBuclet, and Marcelino Garcia.  All actively took part in the meeting, which was notable more for the discussion that occurred, than for the decisions made.

Issue of Property Insurance

• During the Public Comment portion of the meeting, Michael Archey raised concerns about the timing and process followed by the District regarding the Purchase Order for Furnishing Property Insurance Coverage (Item 18: #18-1234) and said he would welcome the opportunity to speak more on this issue if invited by the Commissioners.  Commissioner Davis did invite him to so speak when the item was being considered.  Mr. Archey said that a prior Purchase Order for greater coverage (with a lower deductible and a higher premium) had been presented to the Board first at the June 21 meeting where it was deferred.  The Board then unanimously voted to delete this item at the July 12 meeting (Item 28:  #18-0560).  While the Board is self-insured, starting in 2013 the Board began purchasing “excess” coverage in the event of a catastrophic event.  As explained at the June 21 meeting, the Board has $30 million to cover losses, but has $11 billion in property assets.  
• The prior property insurance policy expired on July 17, 2018.  The explosion at the Calumet Water Reclamation Plant, which injured workers and the plant, occurred on August 30 when no policy was in effect.
• Mr. Archey said that the Board’s failure to timely enter into a new policy left taxpayers exposed to footing the bill for the costs associated with the Calumet explosion.  He urged that the Board look into the reasons for the delay in obtaining coverage and why the current proposal is better than the one in effect rejected (by virtue of the Board deleting the item) in July, even as he welcomed the Board approving this item to reduce future taxpayer exposure.
• The Board did approve the new insurance policy with no further discussion.  Question:  should/will the Board follow-up on the issues raised by Mr. Archey?

MBE/WBE Paricipation

• Commissioner Garcia made clear that one of his primary focuses will be on increasing the use of Minority and Women Owned/Run Business Enterprises (“MBE/WBE”) in contracts and purchase orders at the MWRD.  Accordingly, Commissioner Garcia inquired about participation by MBE/WBE with all contracts and purchase orders presented for approval by the Board.  He questioned whether the District could become more creative in seeking such participation.  
• All such contracts and purchase orders were ultimately approved as presented, but expect to hear more about this in the future.  

Award to Chicago Tribune

• Ultimately, the Board approved using the Chicago Tribune for publishing legal notices and invitations to bid for a one-year period beginning January 1, 2019 for $56,000.  The Sun-Times, the low bidder by $1,400, was disqualified because the paper did not have a minimum daily circulation of 100,000 as set by the request for proposal (“RFP”).  (Other, much higher, bids were from the Lawndale New Group for $196,000 and from the Chicago Defender Newspaper for $227,500.) During the discussion, the Commissioners expressed concern that this requirement (which is there to ensure wide circulation) currently results in only the Tribune being qualified to win such an RFP.  The Sun-Times misses the threshold by 407.  The Tribune has a circulation of over 400,000.  
• Staff did say that the District uses other outlets, including online services, to get the word out about employment and contract opportunities.  The Commissioners asked for a list of such online sites and other publications being used and will provide a list of others that the Commissioners think the Staff should consider.  In addition, the Staff is to provide information on the history of the circulation requirement and the circulations of publications.  
• Commissioner McGowan lifted her request for deferral of awarding this contract because the Board did not have the ability to change the circulation requirement for this RFP that had been previously approved to be issued.  Thus the award was approved.  (Item 24:  18-1254)

Observer - Priscila Mims  
​                       Length of meeting:  2 hours, 5 minutes, including a 5-minute break and 25-minute Executive Session.