Black’s ruling in Alpena, Alpena Township dispute could change water rates

News Photo by Steve Schulwitz Clearview Car Wash employee Deven Ulch washes down a wall at the car wash while at work on Wednesday. The car wash and other businesses in Alpena might be paying higher water bills in the future after a recent court ruling determined Alpena was charging Alpena township excessive water rates.

ALPENA — After 26th Circuit Court Judge Ed Black ruled last week that Alpena charged Alpena Township unfair and unreasonable rates for water services, it is likely township water customers will pay lower rates while city customers will see increased charges.

Black, while ordering the two sides back to the negotiating table to iron out specific rates, ruled that the city can only charge the township for operational and maintenance costs on the portion of the water and sewer system from which the township benefits. That means the township will not have to help cover capital improvement costs on parts of the system the township doesn’t use.

Alpena customers will likely have to pay higher rates to cover the costs of maintaining, repairing, and improving the system.

“Of course, we are doing everything we can to keep rates as low as possible, but we also have a system we need to make sure operates,” City Attorney Bill Pfiefer told The News. “Right now, until we reach an agreement with the township, we don’t know what the rate structure will look like.”

Alpena Township Supervisor Nathan Skibbe said he considers Black’s ruling a victory for the township and its water customers, now and hopefully in the future.

“Judge Black’s ruling means that Township water and sewer customers should receive reduced rates as the City and the Township work towards an agreement on reasonable rates,” Skibbe said in an email to The News. “In the short term, if those numbers are amicably reached, then the Township customers will see those reductions sooner than later. In the long term, Judge Black has set a process for the City to present a reasonable rate for review if the parties cannot amicably resolve the issue.”

The township, which Black declared a wholesale customer of the city, purchases water from the city and resells it to its own customers, with additional charges added on.

For a decade, the two governments have been in negotiations and in courtrooms over the water and sewer issue. The case made it to the Michigan Court of Appeals and back to Black’s Circuit Court for a trial that happened last week.

Each year, before the beginning of the city’s new budget year on July 1, the Alpena Municipal Council considers a water and sewer rate recommendation from the city Engineering Department.

If the Municipal Council approves a rate hike in the coming weeks, that will be based on current costs and not on Black’s ruling or whether the two governments strike a deal.

The News reached out to Alpena City Manager Rachelle Smolinski and Councilman Mike Nowak seeking comment on what’s next for water and sewer customers after Black’s ruling, but both directed questions to Pfiefer, though The News told officials its questions were not legal in nature and though Pfiefer doesn’t propose or vote on rates.

Wayne Kowalski, owner of a pair of Clearview Car Wash locations in Alpena, said that, for years, Alpena has had some of the lowest water rates in the state and he understands the need for increases.

He added that the added expense from higher water rates, coupled with inflation and increased costs for other operational needs, backs business owners into a corner and forces them to raise prices.

Kowalski said the prospect of raising prices also depends on how large any rate increase is and whether it is done all at once or over time.

“If you raise rates, the customer takes the hit,” he said. “Nobody wants to raise prices for their customers, but that is just how business works.”

The two governments are scheduled to be back in court at 8:30 a.m. July 9 for a status conference at which Black will receive an update on any progress made in negotiations.

If the two sides fail to come to an agreement, the city could propose a rate and Black could hold a hearing to determine if the proposed rate is reasonable or not.


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