What’s next?

City and township officials mum on future fights, water rates

News Photo by Steve Schulwitz Hands are washed with tapwater in Alpena on Thursday. The City of Alpena and Alpena Township will still need to negotiate future water rates for the township after 26th Circuit Court Judge Michael Mack released a court order on the issue on Wednesday. Both municipal boards will consider options at upcoming meetings to see if future legal action is warranted.

ALPENA — The City of Alpena and Alpena Township had little to say Thursday on whether further legal maneuvering is possible or what residents may pay in the future after 26th Circuit Court Judge Michael Mack on Wednesday ended a years-long dispute over water and sewer rates.

The two sides have for nearly five years fought over rates the city charges the township for water and sewer services. On Wednesday, Mack used many of the aspects of an agreement reached between the city and township on March 1 after both parties negotiated a settlement during trial, but the deal fell apart as talks stalled over the details.

Mack ruled only on the rates from June 2014 through June 2018 and granted the city $1.5 million from a joint escrow account that was created so the township could deposit the difference between the old rates and the new rates the township claimed were excessive and refused to pay. Overall, about $3 million was in the account.

Mack also ordered a few amendments to the old rate-making agreement, created in 1977, but the rest of it will remain in effect. In simple terms, the township and city still have to work together to create rates in the future.

Several Alpena Township Board of Trustees and Alpena Municipal Council members declined to comment individually, referring questions to their legal counsel.

In a statement, township attorney Bill Fahey praised a portion of Mack’s ruling which he said saved the township $2.2 million on water fees over the last five years. However, he said Mack’s order failed to solve the long-lasting fight over how rates will be established in years to come. That, Fahey said, could set the stage for future litigation between the two municipalities.

“This was a great result for the community, but unfortunately the judgment does not clearly settle how the water and sewer rates will be set in the future,” Fahey said in the statement. “The March 1 settlement agreement clearly set a rate methodology for the past and future, but the city has been trying to back away from the settlement almost since the day it was reached. We hope this does not mean the city intends to sue the township again over future rates.”

City Attorney Bill Pfeifer said he hasn’t been able to meet with members of council to discuss Mack’s order. He said there is a 21-day appeal deadline and he anticipates the city and township will carefully consider what action, if any, they will take next.

Pfeifer said the best outcome may be for both parties to attempt to hash-out any differences each has.

“We have been and are willing to sit down with the township and work toward a long term agreement that best serves the interest of the city, township and utility,” Pfeifer said. “There have been large sums of money expended and nobody wants to go back to court, but the bottom line is we will look at all of our options and move on from there.”

The Alpena Township Board of Trustees is scheduled to meet at 6 p.m. Monday and the board is slated to go into closed session to discuss litigation matters. The township said in a news release that officials will soon decide if further legal action is warranted and the township’s goal is to ensure township residents and utility customers get the best water rates and service possible.

“The Alpena Township board will be consulting with its attorneys to determine what further actions may be necessary to protect township citizens against future city attempts to set excessive rates,” the release said. “After all the work and expenses by the parties and their rate experts to develop a rate methodology in the case, the township hopes to find a permanent solution that will avoid similar conflicts.”

The litigation is moving close to its fifth year after the city sued the township over past-due balances on its account. The township, which buys water from the city but conducts its own billing and system maintenance, had refused to pay a higher rate the city had demanded. The city was charging the township as if it were a typical customer, but the township considered itself more of a wholesale buyer.

The city and township have each spent near or more than $1 million in attorney fees. Residents have been forced to pay higher rates and fees to help cover the cost of the legal fees and it is unknown if there will be any relief for them now that the case has wrapped up.

It is also unknown at this time when the city and township will resume ratemaking talks, but both sides hope they can spring a long term water rate method both sides find fair.

Steve Schulwitz can be reached at sschulwitz@thealpenanews.com or 989-358-5689. Follow Steve on Twitter @ss_alpenanews.