EDITOR’S NOTE: The News is rerunning this story in its entirety, as the original version of this story, published May 7, reported that Alpena City Council had approved the new rates. In truth, final approval isn’t expected until a public hearing next week.
ALPENA — Water customers in Alpena could pay a little more for water and sewer services from July 1 if Alpena City Council approves new rates at a public hearing for the budget 2022-23.
The public hearing for the new budget is scheduled for Monday at 6 p.m.
At a May 2 meeting, the board tabled the rate hike proposal, which officials say will offset increased operational costs and help cover infrastructure and maintenance needs.
The cost per 1,000 gallons of water would increase by 13 cents under the proposed increase, from $6.65 per 1,000 gallons to $6.78 per 1,000 gallons.
Sewer charges could increase by 15 cents per 1,000 gallons, from $6.79 per 1,000 gallons to $6.94 per 1,000 gallons.
At the May 2 meeting, City Engineer Steve Shultz said water and sewer volumes remain somewhat constant or have fallen slightly, but costs have increased by an average of 2%, which has necessitated a price increase.
Shultz said the city expects about $1.9 million in water and sewer revenue if the council implements the new rates. The city would reinvest this money in the water and sewer systems.
Meanwhile, city officials continue to work with the Township of Alpena to find a solution to the water and sewer rate dispute that the two sides have been in for nearly a decade.
Last month, the two municipalities agreed to hire a consultant to conduct a tariff study and review a draft agreement that could create a municipal water board overseeing the two governments’ water systems.
Alpena Pro Tempore Mayor Cindy Johnson said she understands the rate study could be completed in about three months. Until that study is complete, Johnson said, it’s unclear whether rates will rise again or not.
“We don’t see that happening, but there’s no way to say for sure,” Johnson said. “There’s no way to say that with 100 per cent certainty because there’s still a lot of work to do moving forward and a lot of moving parts to that.”
In 2014, the city sued after the township refused to pay a rate increase. Township officials believed that the city should treat the township as a wholesale customer, entitled to lower rates, due to the volume of water the township purchases from the city for township residents.
The two sides have battled it out in court ever since.
The idea of a water board is not new. The city put the option on the table in 2014, but the township rejected the proposal.
Most of the then township board members and department heads have since been replaced.
In 2017, the 26th Circuit Court ordered both parties to mediate. However, it only lasted one day, as city officials did not see enough progress to continue.
A settlement seemed imminent in early 2018, however, when the two boards voted to approve the “key terms” of a deal. This vote was not about a tariff agreement, but about finding a tariff-setting process that could end the dispute.
After further negotiations failed to reach an agreement, the local court essentially ordered both sides to abide by the “key terms” they had reached earlier in the year.
Shortly thereafter, the township appealed part of that decision to the Michigan Court of Appeals, and the city filed a cross-appeal. The appeals court also ordered mediation, which also did not result in any agreement.
The appeals court ruled that the proposed agreement discussed earlier was not binding. The township appealed to the state Supreme Court, which declined to hear the case and sent it back to Alpena Circuit Court.
Together, nearly $2 million was spent on consulting and legal fees by the two governments.