News File Photo The Alpena water tower is seen in this November 2018 photo.

ALPENA — Water customers in Alpena will pay a little more for water and sewer services beginning July 1.

At Monday’s Alpena Municipal Council meeting, the council voted to increase rates because of increased operational costs and infrastructure and maintenance needs.

The cost of 1,000 gallons of water will climb 13 cents, from $6.65 per 1,000 gallons, to $6.78 per 1,000 gallons.

Sewer fees will increase 15 cents per 1,000 gallons from $6.79 to $6.94.

With the increase, the cost for a customer, per 1,000 gallons of water and sewer, will be $13.72, plus the additional fees included on the city’s water bills.

At the meeting, City Engineer Steve Shultz said water and sewer volumes remain somewhat constant or have decreased slightly, but costs increased by an average of 2%, which necessitated the need for the rate increase.

Based on past practice, Shultz said, the volumes and dollars in the calculations are based on a five-year rolling average.

Shultz said the city expects about $1,917,577 in water and sewer revenue, which will be reinvested into the water and sewer systems.

The city continues to work with Alpena Township to find a solution to the litigation both sides have been in for nearly a decade.

Last month, both municipalities agreed to hire a consultant to conduct a rate study and review a draft agreement that could create a municipal water authority.

Alpena Mayor Pro Tem Cindy Johnson said it’s her understanding the rate study could be completed in about three months. Until that study is complete, Johnson said, it’s hard to know if rates will increase again or not.

“We don’t see that happening, but there is no way to say for sure,” Johnson said. “There is no way to say that with 100% certainty because there is still a lot of work to do moving forward and a lot of moving parts to this.”

In 2014, the city sued after the township refused to pay a rate increase. Township officials believed the township should be considered a wholesale customer, entitled to lower fees because of the volume of water it purchases from the city for township residents.

The two sides have been in litigation since.

The idea of a water authority isn’t a new one. The city put the option on the table in 2014, but the township shot the proposal down.

Most of those on the township board of trustees and department heads at the time have been replaced since then.

In 2017, the Alpena County Circuit Court ordered the two sides into mediation. That lasted only one day, however, as city officials didn’t see enough progress being made to continue.

A settlement appeared imminent early in 2018, however, when both governing boards voted to approve “principal terms” for an agreement. That vote wasn’t on a deal on rates, but on seeking a process for establishing rates that could end the dispute.

After continuing negotiations failed to yield a deal, the local court essentially ordered the two sides to adhere to the “principal terms” they’d reached earlier in the year.

Shortly afterward, the township appealed a portion of that ruling to the Michigan Court of Appeals, and the city filed a cross appeal. The appellate court also ordered mediation, which also yielded no agreement.

The appeals court ruled the proposed agreement being considered earlier was non-binding, which the township appealed to the state Supreme Court, which declined to hear the case, and sent it back to circuit court in Alpena.

Combined, nearly $2 million has been spent on consultant and attorney fees by the two governments.