05/19 - County Executive, Press Release Application, Public Works

New funding to the Great Lakes Water Authority totaling $25 million should be given as a refund to the communities that have "unfairly absorbed" Highland Park's unpaid water and sewer costs, Macomb County Executive Mark Hackel and Public Works Commissioner Candice S. Miller announced Thursday.

In a letter dated May 17, 2022 to officials in the communities in Macomb County that contract with GLWA for water and/or sewer service, Hackel and Miller said the entire $25 million amount in new federal funds allocated by the state to the regional authority, be refunded to the 111 communities in southeast Michigan that have shouldered Highland Park's bad debt.

"These communities have had to pass on higher water and sewer rate increases for the past 10 years to subsidize over $54 million in unpaid costs of another community - a community whose leaders claim it alone has the right to pay in perpetuity the same fixed GLWA rate it paid over 25 years ago," Hackel and Miller said. "Despite years of litigation, appeals and prior State involvement, the amounts owed have only grown with possible court judgments likely bankrupting that community."

Last week, Gov. Gretchen Whitmer said in a letter to GLWA Interim Chief Executive Officer Suzanne Coffey that she is "troubled" by GLWA's recent announcement that a rate increase is partly due to the ongoing collection dispute with Highland Park.

Since late March, Hackel and Miller have repeatedly called on Gov. Whitmer to become directly involved and seek a solution to the Highland Park non-payment controversy which has been fought in the courts.

Whitmer has since said she has encouraged GLWA and Highland Park to work toward a mutually agreeable resolution and that she would not take a side in the dispute. In her letter to Coffey, she urged GLWA to pause the portion of the rate increase linked to Highland Park's past and ongoing costs and to use the $25 million in funding to invest in infrastructure.

"We appreciate the Governor's May 11 response to the Great Lakes Water Authority (GLWA) regarding the $54 million unfairly billed to 111 communities for unpaid water and sewer charges by Highland Park officials. We share the Governor's frustration, as well as the frustration of the community leaders and their 4 million ratepayers," Hackel and Miller said.

"The governor noted she recently signed a bipartisan bill which allocated $25 million in new federal funds to the GLWA. In the same spirit of bipartisanship and regional collaboration upon which GLWA was formed, we recommend GLWA use the entire $25 million as a refund to the communities who have unfairly absorbed Highland Park's bad debt," the county executive and the public works commissioner said.

GLWA has not yet budgeted or committed these new State funds.

"While the $25 million is less than half the amounts paid, it is a good first step. The refund will help these communities maintain water affordability. It can also serve as a down payment toward the total amounts paid, which unfortunately continue to increase, albeit at a slower rate if Highland Park complies with Judge Groner's recent ruling," Hackel and Miller wrote. "The local communities can best decide how to use this partial refund. The refund will not relieve Highland Park of its obligations, but will provide partial relief to those ratepayers unfairly burdened over the past 10 years."

Judge David Groner recently ruled that Highland Park, which stopped paying all charges from GLWA to that city, must make at least partial payments.

In recent weeks, elected officials in a growing number of communities in Macomb and Wayne counties have voted to withhold - starting in July -- their municipality's share of payments to GLWA that cover Highland Park's debt.

Hackel and Miller are now recommending that communities no longer withholding payments to GLWA if the authority issues the individual refunds to its member municipalities because withheld payment could negatively impact GLWA's bond rating which would increase the interest costs GLWA would have to pay for the next 30 years on the sale of $300 million in bonds planned this summer.

Attachments:

*The May 17, 2022 letter from Macomb County Executive Mark Hackel and Public Works Commissioner Candice S. Miller to city, township and village officials in Macomb County.

*Gov. Gretchen Whitmer's letter, dated May 11, 2022, to GLWA Interim CEO Suzanne Coffey

*The March 29, 2022 letter from Hackel and Miller to local officials in Macomb County, explaining that Highland Park's arrearages charged by GLWA to the other 111 communities that a members of the authority, had reached $62.9 million - with Macomb County's share at $13.5 million.

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