News Photo by Steve Schulwitz Alpena Township attorney Eric Conn, left, points out some information to William Stannard while he is on the witness stand. Stannard was a witness for Alpena during the trial over water and sewer rates.

ALPENA — After the last witness left the stand, attorneys for Alpena Township filed a motion to 26th Circuit Court Judge Ed Black to grant the township an involuntary dismissal of the litigation between Alpena and the township.

Township Attorney Eric Conn said after the fourth day of the trial over water and sewer rates that the motion was made because the township believes the city didn’t present a solid enough case to continue forward.

“Essentially, in a jury trial, this is the equivalent of a motion for direct sentencing, but we don’t have a jury, we have a judge,” Conn said. “The city put out all of its proofs and we argue that it didn’t meet its burden of proof, which they are required to demonstrate a breach of contract.”

The township purchases water from Alpena and, for years, the city used a formula in a contract from 1977 to set rates.

Beginning in 2013, Alpena elected not to use the formula any longer saying the deal had expired, which was the beginning of the more than decade-long disagreement over water rates. The township claims a rate-making formula should have been used to set rates in 2013 when the city increased water rates for the township by more than 50%. The higher rate for the township was the same Alpena customers paid, but the township claimed it was a wholesale customer and should receive lower rates.

Last week, in court, Alpena admitted it named Alpena Township as a wholesaler in water test reports and a loan application. They discontinued the classification in more recent reports to the state after the litigation began.

Litigation began in 2014 and as the litigation moved forward, the two parties continued to bargain on the side but made little to no progress over the years.

The two sides have spent millions of dollars on attorney and consultant fees.

In 2017, the circuit court ordered the two sides into mediation. That lasted only one day, however, as city officials didn’t see enough progress to continue.

A settlement appeared likely early in 2018, however, 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 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 then ruled that the proposed agreement was non-binding, which the township appealed to the state Supreme Court. The state’s highest court declined to hear the case and sent it back to the circuit court in Alpena.

During the initial hearing in circuit court, then-judge Michael Mack ordered the opening of an escrow account in the name of both governments. Mack required the township to deposit into that account the difference between the old rates the township had paid and the higher rates the city set for all of its customers.

The township’s latest audit shows $3.6 million in that account as of March 31, 2023.

The audit says Alpena wants the township to pay about $13.5 million in late fees.

Over the last few years, the two municipalities have worked together toward establishing a new 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, that plan fell apart, setting the stage for the trial.

The trial continues at 8:30 a.m. today where the two sides will give their closing arguments to Black. Then, the judge will rule on the involuntary dismissal motion.

Before court wrapped up on Tuesday, Black said he intends to issue an oral ruling, but it is still unknown if he will do so today, or another day this week.

No matter what his ruling is, it is possible one of the two municipalities could seek an appeal to the case.