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Highland Park must repay debt to Great Lakes Water Authority - Energy And Water Development Corp

Highland Park must repay debt to Great Lakes Water Authority


HIGHLAND PARK, Mich. – A Wayne County court has ordered the city of Highland Park to pay the money to the Great Lakes Water Authority that has gone unpaid for years, which caused other cities to pay more for their services to cover the debt.

The Great Lakes Water Authority (GLWA) announced Tuesday that the Wayne County Circuit Court has taken their side following years of litigation over Highland Park’s decision not to pay GLWA for water and sewer services. Highland Park officials claimed that its payments to GLWA were capped by settlement agreements made in 1996, and that Highland Park would no longer pay.

A judge on Tuesday said that Highland Park “breached its escrow obligations under the 1996 settlement agreements,” and that city leaders incorrectly interpreted previous court orders by their decision to stop making escrow payments to GLWA. Under the new court order, Highland Park is required to pay 65% of its water and sewer revenue to GLWA “for every month it has not deposited such funds into the parties’ escrow account” until the court says otherwise.

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The state of Michigan stepped in 10 years ago and shut down Highland Park’s water treatment plant due to water quality issues. The city was placed into GLWA on an emergency basis.

According to the water authority, the city of Highland Park has paid less than 1% of its water bill since 2012 — though city officials dispute that claim. Residents of Highland Park have still been paying for their water services while the issue has been in court, but that money has not gone to GLWA.

Other Metro Detroit communities have been paying more money to GLWA to cover the debt owed by Highland Park. It is estimated that everyone living in the Metro Detroit area has likely paid between $75 and $100 each for Highland Park’s unpaid bills.

Related: Interview: Local leaders discuss Highland Park, GLWA water dispute

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Within the last few months, city and county leaders have expressed their anger toward the situation, claiming that their jurisdictions and residents are not responsible for covering Highland Park’s unpaid bills.

Several communities, including Macomb Township, have voted to withhold funds from GLWA that are meant to cover Highland Park’s costs, and instead place that money into escrow. Officials said in April that Macomb Township has already paid $1.43 million because of Highland Park, and is expected to pay another $178,000 in the next fiscal year — but the township is refusing to do it.

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The move comes after GLWA in February approved a 3.7% rate increase for water services, and a 2.4% rate increase for sewer services. GLWA officials say nearly half of the sewer rate increase is to help recover Highland Park’s sewer service debt, and that Highland Park has paid about half of its sewer bill between 2012 and 2021.

In total, it is believed that Highland Park owes $54 million in GLWA service arrearages. Some Metro Detroit municipalities are hoping to get the state to take action by placing their extra expenses into escrow, rather than paying it to GLWA directly.

“What we have here is theft. That’s what it is. Let’s call it what it is,” said Shelby Township Supervisor Rick Stathakis. “There’s (also) a lack of oversight. Now, who’s to blame? I don’t know, and I don’t care. But somebody owes us $1.2 million, and we’re getting that money.”

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Highland Park Mayor Hubert Yopp previously said the case has been in court for years, and that the city won the last round and GLWA is expected to pay the city $1 million. The city may face contempt sanctions if it does not comply with the Wayne County Circuit Court’s latest order within 21 days.

GLWA said Tuesday’s court ruling is a “big step forward, (but) it is not a final order, and we will continue to pursue full recovery of amounts due from Highland Park and manage this case through its final resolution.”

Copyright 2022 by WDIV ClickOnDetroit – All rights reserved.



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