EDITOR’S NOTE: The News is rerunning this story in its entirety because the original version of this story, published May 7, reported that the Alpena Municipal Council had approved the new rates. In truth, final approval is not expected to happen until after a public hearing next week.
ALPENA — Water customers in Alpena could pay a little more for water and sewer services beginning July 1 if the Alpena Municipal Council approves new rates during a public hearing for the 2022-23 budget.
The public hearing for the new budget is slated for 6 p.m. Monday.
At a meeting on May 2, the council tabled the proposed rate hike, which officials say will offset increased operational costs and help cover infrastructure and maintenance needs.
The cost per 1,000 gallons of water would climb 13 cents under the proposed hike, from $6.65 per 1,000 gallons to $6.78 per 1,000 gallons.
Sewer fees could increase 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 decreased slightly, but costs increased by an average of 2%, which necessitated the need for the rate 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 that money into the water and sewer systems.
Meanwhile, city officials continue to work with Alpena Township to find a solution to litigation over water and sewer rates the two sides have been in for nearly a decade.
Last month, both municipalities agreed to hire a consultant to conduct a rate study and review a draft agreement that could create a municipal water authority overseeing the water systems for the two governments.
Alpena Mayor Pro Tempore Cindy Johnson said it’s her understanding the rate study could be completed in about three months. Until that study is complete, Johnson said, it’s hard to know if rates will increase again or not.
“We don’t see that happening, but there is no way to say for sure,” Johnson said. “There is no way to say that with 100% certainty, because there is still a lot of work to do moving forward and a lot of moving parts to this.”
In 2014, the city sued after the township refused to pay a rate increase. Township officials believed the city should treat the township as a wholesale customer, entitled to lower fees, because of the volume of water the township purchases from the city for township residents.
The two sides have been in a court fight since.
The idea of a water authority isn’t a new one. The city put the option on the table in 2014, but the township shot the proposal down.
Most of those on the township Board of Trustees and department heads at the time have been replaced since then.
In 2017, the 26th 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 imminent early in 2018, however, when both governing boards voted to approve “principal terms” for an agreement. That vote wasn’t on 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 “principal terms” they’d reached earlier in the year.
Shortly afterward, 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 also yielded no agreement.
The appeals court ruled the proposed agreement considered earlier was non-binding. The township appealed to the state Supreme Court, which declined to hear the case and sent it back to circuit court in Alpena.
Combined, nearly $2 million has been spent on consultant and attorney fees by the two governments.