City, township at odds over water rates

ALPENA – The City of Alpena could be close to raising water rates for both city and Alpena Township customers. A public hearing on the matter is slated for Monday and higher rates could be implemented on April 1.

On Thursday the township released a statement voicing concerns over the new rates and challenge the city’s authority to do so. If the rates increase for the township from the $2.90 per 1,000 gallon to $4.95 per 1,000, the township trustees will determine how much of the bill it will pay, or if the bill will be paid at all. If passed Monday, the new rates for city residents and the township will be $4.95 per 1,000 gallons and $5.35 for sewage treatment.

Township Supervisor Marie Twite said there is a possibility the township will pay for the water purchased with the current rate and she will follow the direction of the board and attorney. She said she believes the township is being bullied by the city and ithe township won’t stand for it.

“The bill will go before the board and our attorney and they will direct me what to do with it,” Twite said. “The city is trying to push this on us. We are willing to enter into negotiations to find common ground, but we will not be willing to move forward if we are being forced or threatened into a solution.”

The statement expresses objections about the possibility of the two parties sharing one unified system, with the city handling management, repair and operation responsibility, as well as the expiration of an agreement which was ratified in 1977.

In January, the city proposed a potential plan for a unified system in a joint meeting of the township board of trustees and Alpena Municipal Council. The city stressed the numbers used were not concrete and if the township decided to move forward with the plan, or rework the formula and agreement, any concerns would be addressed via talks.

City Manager Greg Sundin said future rates, infrastructure matters and any decisions regarding the unified system, would have included the township in the decision process. The township, on the other hand, believes the city cannot exit out of the water agreement because another viable option was not presented.

During the joint meeting Sundin and City Engineer Rich Sullenger said there were three possible solutions. One being a unified system, the second being an authority and the third to tweak the formula and agreement. Sundin said the city believes it was within its right to terminate the agreement and there are viable proposals for water and sewer service. He said at this point the city will not use the formula, as it is, again. Sundin said if the two sides can’t find a middle ground, the best course of action might be for someone from outside to rule.

“From the city’s perspective the days of using the formula is over. It had no language in it to extend it beyond the termination in July,” Sundin said. “We are either going to have to come to an agreement, or somebody else is going to have to decide.”

The township is accusing the city of under reporting total volume production numbers at the water plant, which has resulted in an inflated proportionated cost for the township. As a result the township is prepared to make the city reimburse it more than $1.7 million and will pursue refunds from years prior to 2005.

Sundin said the city’s data is accurate and said water loss from things like busted pipes play a role in how the production and billing numbers are figured. He said he didn’t want to comment on the issue and said it is best at this time to let the attorneys handle it.

Twite said the extra money the township has paid to the city has allowed the city’s system to be supported by the township more than what it should have been.

“This has resulted in a direct and massive subsidy of the city’s water and sewer system that now they can’t afford to lose,” Twite said. “That subsidy for the city’s systems, has come out of the pockets of the Alpena township rate payers.”

The township insists it has been paying a wholesale cost for the water from the city. Sundin said that is not the case. He said instead the township has been receiving a break in the amount it was being charged because of the formula, which was outdated. He said city residents in the city pay $4.18 for water and $4.99 for sewer, per 1,000 gallons. Sundin said the township has not had an increase in more than three years and the time has come for it to happen.

He said it is important for the people in the township to know that the township has only been charged $2.90 for water for the four years and that the brunt of their bills are from added costs imposed by township leaders. He said the city is not trying to charge the township more to make improvements or pay off debt because the current rate does that sufficiently. Sundin is adamant, however, than a lot of work is needed still and both the water and sewer systems.

“The township has been receiving a discounted rate, but it is still paying for our operations and maintenance, as any other customer’s bill does,” Sundin said. “There isn’t as much to go toward capital improvements, because their rate was less.”

The city is going to have its water permit renewed and before it is granted one, it has to prove the rates it charges are sufficient to cover the cost of maintaining and operating the system. Sundin said the city’s financials are open for everyone to look at and that there is significant cause to raise the rates. He said in a perfect world the rates would be the same for everyone, but said it will be up to the township to see what its customers are charged in the end.

Steve Schulwitz can be reached via email at sschulwitz@thealpenanews.com or by phone at 358-5689. Follow Steve on Twitter ss_alpenanews. Read his blog, Upon Further Review … at www.thealpenanews.com.