ALPENA — The trial that could end the nearly decade-old water and sewer dispute between Alpena Township and Alpena is slated to begin in April, according to the township’s 2022-23 audit, which will be presented to the Alpena Township Board of Trustees tonight.

The litigation over water rates the city charges the township has been ongoing since 2014. The township buys water and sewer services from the city to provide to its residents. The township has refused to pay rate increases to the city, arguing the city should treat the township as a wholesale customer because of the volume of water it purchases.

The township has already taken steps to make sure it has enough money in a court-ordered escrow account to cover a large, past-due balance the city says the township owes.

According to the audit, on March 31, the township had a total of $3.6 million in that account.

The account ensures that the township has sufficient funds for the potential liability pertaining to the dispute. The township and Alpena both must approve any disbursements from the account, but the township has sole responsibility for contributing funds to that account.

The money in escrow is well below what the city government seeks. As the township;s audit says, Alpena wants about $13.5 million in late fees added to the balance from the township not paying the higher rates.

The township’s auditor, Straley Lamp and Kraenzlein, said that, at this time, the township does not expect to be charged a penalty on the past-due amounts.

“The township had not historically recognized these late charges as a liability,” the audit says. “During the litigation, the court ordered a joint escrow account be established and the disputed difference in rates be deposited into the account. The township believes the liability booked adequately covers their potential loss contingency, however, the estimated range for the possible loss is unknown at this time.”

Over the last few years, the two municipalities have worked together with the goal of establishing a water authority that would oversee water and sewer operations for both governments. The two sides reached a draft agreement on a water and sewer authority early in 2022. However, in July, the plan to establish the authority fell apart, setting the stage for the trial.

Alpena Mayor Matt Waligora would neither confirm nor deny the trial is scheduled for April, but he did say that, at this time, no communication with the township is occurring.

“I can say unequivocally that we are not in any talks or communications,” he said. “I use the word ‘currently,’ because, although there aren’t any right now, we are always open to them. We have always been open for discussion, we just haven’t had any.”

Alpena Township Supervisor Nathan Skibbe echoed Waligora’s openness to more talks if they point in a direction that could become fruitful to water customers.

“The township always is open to any solutions to this issue that are in the best interest to the residents of both the township and city as well as the infrastructure,” Skibbe said.

There have been a lot of ups and downs pertaining to the litigation and at times it appeared a resolution could be imminent.

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 likely early in 2018, however, when both governing boards voted to approve “principle terms” for an agreement. That vote wasn’t for 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 “principle terms” they’d reached earlier in the year.

Shortly after, 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 again yielded no agreement.

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