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ALPENA -- Alpena Township officials said they had to raise water and sewer rates on Monday in part because of a recent rate hike by the city, but the township has paid the same rates to the city since 2019, according to township and city officials.
Alpena Township's water and sewer customers now pay more than double what the township pays Alpena for water and sewer service.
After learning from The News that the township has not increased its payments to the city despite increasing charges to its own customers, township Trustee Russ Rhynard requested a special meeting to discuss the matter.
"If the city is raising its rates, whether legally justified or not, and we're not paying those percentage increases ... then we have to go back and look at it, because we don't want to mislead anyone," Rhynard said.
The meeting is scheduled for 5:30 p.m. Monday.
In a statement, township attorney Bill Fahey said the city hasn't provided data the township needs to help determine what the township should pay.
"The Township has not had cost data from the City since 2018 to make any rate adjustments," Fahey said in an emailed statement. "We last adjusted the rates we pay to the City in 2019, based on the last cost data the City provided."
The city sells water to the township, which in turn resells it to its residential and business customers. The city and township have fought in court for more than eight years over water and sewer rates and continue to discuss creating a new water authority to oversee water and sewer operations for both governments.
Rhynard said he suspects revelations that the township has hiked rates far beyond what it pays the city could negatively impact negotiations.
"Absolutely, I think it will," he said. "I think both sides will harden their positions."
As of June, the township's past-due balance with the city is $18 million, including late fees, City Clerk Anna Soik said in a text.
According to its most recent audit, the township had about $7 million in its water and sewer fund as of March 31, 2021. The township also has deposited nearly $4 million in a joint escrow account established by the court. The township was required to deposit money into that account in case it lost the court fight and had to pay the city.
The township is no longer required to make such deposits.
The township says that, in 2018, when both sides were in court and represented by a pair of consultants, a formula was established to figure fair rates. But Fahey said the city hasn't provided the information needed to plug into that formula.
"In March 2018, the City agreed that it would annually provide the Township the necessary cost data for the Township to calculate its appropriate rate increases for the years after 2014," Fahey said. "Unfortunately, the City has not complied with that agreement since 2018."
City Attorney Bill Pfeifer said the Michigan Court of Appeals ruled that agreement was not valid and returned the litigation back to the local court, where it remains today. The Michigan Supreme Court refused to hear the case.
The Alpena Township Board of Trustees voted to raise water and sewer rates earlier this week, and officials claimed the increase was justified partly because the city raised its rates by about 2% earlier this summer. Township officials said the higher rates also were needed because of higher operational and infrastructure costs on its water system.
The city charges $6.78 per 1,000 gallons of water and $6.94 per 1,000 gallons of sewer for all of its customers.
A copy of the township's most recent water bill from the city shows the township only pays $4.05 per 1,000 gallons of water and $3.75 per 1,000 gallons of sewer.
The increase the township approved on Monday sets its new rates at $11.20 per 1,000 gallons of water and $11.72 per 1,000 gallons of sewer.
That equates to township customers paying $15.12 more per 1,000 gallons of water and sewer than what the township pays the city at this time.
The township charges its customers for a minimum of 7,000 gallons of water, which means customers are paying at least $105.84 more per quarter than the township pays the city every three months. The township also charges a $5 infiltration charge and a $5 administrative charge.