News Photo by Steve Schulwitz The Alpena Water/Wastewater Utility Administration Office prepares to close for the day on Wednesday. Alpena and Alpena Township will be back in court on Friday over water rates the township claims are unfair.

ALPENA — On Nov. 1, Alpena Township requested a joint working session with Alpena officials to work with an independent mediator to help settle the decade-old water and sewer litigation over rates.

In a press release last week, the township said the bargaining session, which was proposed for this week, would have Montmorency County Probate Judge Lora Greene oversee the bargaining sessions.

The township also said the city never “formally” responded to the request for mediated bargaining.

Township attorney Eric Conn, of Fahey, Schultz, Burzych, Rhodes of Okemos, said he talked to City Attorney Bill Pfeifer during a phone call briefly about the proposal, but no official response from the Alpena Municipal Council was received.

Now, Alpena and Alpena Township will return to court on Friday to continue litigation over water rates the township claims are unfair.

Conn said in a press release that the recent offer to meet with city officials outside of court isn’t the first request the township has made. He said for one reason or another, the city balks at the idea.

“The Township has made many fair and reasonable settlement overtures to resolve this litigation over the years,” Conn said in his press release. “The City responded that it would discuss the Township’s invitation and settlement overtures during its closed session meeting on November 4. To date, the Township has not received a formal response to its invitation and proposal. While the Township is disappointed that it has not received a formal response from the City, it remains hopeful that one will come with enough time to avoid the November 22 trial.”

Pfeifer said the township’s proposal was reviewed and shared with the Alpena Municipal Council at its meeting during closed session on Nov. 4, and it was decided the timeline was too narrow to be productive. He said in the past, the City has also proposed talks to negotiate and the township shot them down.

“The city did consider the letter and we rejected it,” Pfeifer said. “The city has made multiple efforts to negotiate, before and after the trial, all of which have been rejected by the township.”

Pfeifer said having Greene act as a mediator would have been a good idea if it could have happened months ago, but with the upcoming court hearing on Friday, he said he didn’t believe there would be enough time left.

“I don’t see how we could sit down with the judge and expect her to tell us what we should do,” he said. “Maybe that would have worked this past summer, but not now that court is so close.”

The two municipalities have been in litigation for many years because the township believed it was being charged too much for the city’s water and sewer services.

During a court hearing last month, 26th Circuit Court Judge Ed Black ruled after a trial that the new water rates Alpena proposed were not fair and reasonable. He ruled that the township is a wholesale customer and is being charged for portions of the water and sewer systems that the township doesn’t benefit from.

Black also ruled that the sewer rates proposed by the city were fair. During the trial in October, Black also indicated that he believed that one of the municipalities would appeal any ruling he made. Under law, Black does not have the authority to set rates and can only rule if rates are fair and reasonable.

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

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 when 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.

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, that plan fell apart, leaving the fate of the matter in the court’s hands.

The two sides have spent millions of dollars on attorney and consultant fees since the litigation began.

Steve Schulwitz can be reached at 989-358-5689 or sschulwitz@thealpenanews.com. Follow him on X @ss_alpenanews.com.