Whitmer to Great Lakes Water Authority: Delay Highland Park debt-related price hikes

Highland Park — Gov. Gretchen Whitmer is urging the Great Lakes Water Authority to "pause the portion of the rate increase that it has attributed to Highland Park" in its upcoming fiscal year that starts July 1.

Highland Park has $54 million in debt from not paying for emergency service from the Detroit water and sewer system, a development that has prompted communities in Wayne and Macomb counties to pass resolutions promising to withhold the Highland Park debt portion of their payments to the authority. Highland Park insists it owes no money based on a 2021 court ruling.

"I take no side in that dispute," Whitmer wrote in a Wednesday letter provided to The Detroit News to Great Lakes Water Authority interim CEO Suzanne Coffey. "But I share the frustration of communities in Oakland, Macomb, and Wayne counties that GLWA has asked them to bear expenses that remain the subject of ongoing litigation."

The Great Lakes Water Authority approved in February a 3.7% hike in wholesale water rates and a 2.4% increase in sewer rates for the 2023 fiscal year. Almost half or about 1.15% of the 2.4% sewage rate hike in 2023 owes to Highland Park's debt.

More:Regional water authority OKs 3.7% water rate hike

This is the increase Whitmer wants paused and which has prompted a mutiny in Wayne and Macomb counties, where multiple communities have said they'll no longer pay toward the Highland Park debt. One community in Oakland County has reserved the right to do so.

Whitmer added that "there is currently no court judgment supporting GLWA’s claim that Highland Park is $52 million in arrears. To the contrary, the amount and very existence of the debt remains a subject of controversy and the collections process has not run its course."

Whitmer noted that Michigan had appropriated $25 million in federal stimulus funds to GLWA to promote access to drinking water.

The Democratic governor, who is running for re-election, issued the letter after a Wayne County Circuit Court judge ruled this week that Highland Park should restart making payments to GLWA, but also found that the authority had failed to rebut Highland Park's allegations that the authority had overcharged the city for water and sewer services.

Whitmer's letter arrived the day after Wayne County Circuit Court Judge David Groner ruled that Highland Park must resume water and sewer payment to Great Lakes Water Authority at 65% of system revenues.

More:Highland Park must resume GLWA payments, Wayne County judge rules

In her response to Whitmer Thursday, Coffey noted Groner's ruling before writing that "I will consult with our board of directors about your suggestion of rolling back the allocation of bad debt expense to GLWA's water and sewer partners for fiscal year 2023."

She ended the letter by asking for a meeting with the governor "to discuss next steps in the coming days."

As Coffey wrote in her response, GLWA was ineligible for direct access to stimulus funds. Coffey called those funds "a helpful start."

The governor urged the regional authority serving 84 communities to "to use the latest investment in its infrastructure to continue to deliver clean water at affordable rates." 

Whitmer's letter noted her reluctance to get involved in a local dispute, writing that "my administration has encouraged GLWA and Highland Park to work towards a mutually

agreeable resolution of the complex litigation that has arisen between the parties."

But the Wednesday letter signaled a shift in the governor's approach.

Whitmer said her office would support an "independent audit to clarify what amounts may be owed" and help "reset expectations in this long-running dispute over water and sewer payments."

"The state stands ready," Whitmer wrote. 

Great Lakes Water Authority did not immediately respond to a request for comment. 

For months, government leaders in Southeast Michigan had urged Whitmer's leadership in the decade-long dispute, which predates her administration.

In November 2012, the state of Michigan shut down the Highland Park water plant after the city had exercised water independence for about a century. But problems with turbidity, or cloudy water, led to a series of violations over several years. 

The state "requested" Highland Park connect to Detroit's water system on an emergency basis that has now lasted nearly a decade, GLWA said in a February letter to communities.

The debt began to rack up immediately, and at about $20 million, was a sticking point in negotiations in the formation of the Great Lakes Water Authority. The Oakland and Macomb County executives both voiced objections that the debt was not resolved. 

But on Jan. 1, 2016, the Great Lakes Water Authority opened for business anyway.

Brian Baker, Macomb County's representative on the GLWA board, has said many times in urging state involvement that "GLWA is a creature of the state." 

Whitmer ended her letter by noting "GLWA was created by an unprecedented level of collaboration between the communities of Detroit and southeast Michigan.

"I urge GLWA and all involved to call on that same spirit of collaboration to ensure that GLWA can continue to serve those communities in the future," she wrote.

Kurt Heise, supervisor of Plymouth Township and a Republican former Michigan lawmaker, said Whitmer's letter was a welcome "step forward."

Between this week's Wayne County Circuit Court ruling that Highland Park must resume water and sewer payments to GLWA and Whitmer's letter, "things have been very favorable to the communities. It's all good news," Heise said.

The Plymouth official noted that federal stimulus funds usually can't be used to pay down debts or judgments.

"There's still a lot of unanswered questions" about what will happen next, Heise said. 

He said he plans Friday to ask the Conference of Western Wayne, which led the GLWA mutiny, to pass a resolution requesting that the authority stop passing on Highland Park debt to its communities. 

"We would be a much better ally" if the Highland Park debt were no longer passed along to communities, Heise said.

"I don't like being bullied, by virtue of these assessments," he added.

In Highland Park, City Administrator Cathy Squares said of Whitmer's letter: "I would like to see that independent audit."

jdickson@detroitnews.com