HIGHLAND PARK, Mich. (WXYZ) — The city of Highland Park has paid the Great Lakes Water Authority (GLWA) $1 million Friday as a part of interim deal to settle tens of millions of dollars in unpaid water bills.
The debt is a result from two separate case settlements for unpaid water bills. One of the cases is from 2014 and the other is from 2020. GLWA says the city owes them more than $50 million. GLWA says in the last decade, the city has paid less than 1% of their water charges.
Highland Park officials have said they paid what they believe they owed and the debt is made up of “manufactured overcharges.” As a result, the two have gone back and forth over the last several months about who should foot the bill and how.
Last month, after the city called for a state of emergency, Governor Whitmer's office got involved in the mediation. The two finally struck an interim agreement earlier this week which held that the city would make a good faith payment of $1 million toward the 2014 debt, which totals about $24 million. In turn, GLWA agreed to suspend court activities in both ongoing cases until October and December, respectively.
The city released the following statement Friday morning:
After over a month of Mediation, the City of Highland Park and GLWA reached an interim agreement to stay all pending litigation and allow the parties to continue to work to resolve outstanding points of legal disagreement. In consideration of the interim agreement, the City of Highland Park agreed to pay GLWA $1,000,000 as a good faith payment against the 2014 judgment and or final settlement.
The Interim agreement states:
If Highland Park's city council approves of the $1,000,000 payment on or before June 5, 2023, the Parties agree to (a) staying the 2014 Case and the lawsuit styled Great Lakes Water Authority v City of Highland Park, Case No. 20-011589 (the "2020 Case") until October 1, 2023 and (b) adjourning the 2020 Case trial currently scheduled for July 25, 2023 to begin on or after December 5, 2023 on a date set by the court.
As of today, June 9th the deadline, the City of Highland Park has the $1,000,000 check ready while GLWA has failed to uphold its end of the deal by staying both cases in the form of an order from the court. In order for the City of Highland Park to move forward, GLWA needs to maintain their end of the agreement.
GLWA said in an early Friday statement that they submitted the stay orders to a judge but it was out of their control when the court would enter the orders.
Around 4:30 p.m. GLWA said they received the $1 million payment and would be moving forward with the interim agreement.
GLWA sent 7 Action News the following statement:
The Great Lakes Water Authority (GLWA) has received payment from the city of Highland Park in the amount of $1 million, as stipulated in the interim agreement reached earlier this week related to the collection cases against Highland Park, including the $24 million judgment owed to GLWA by Highland Park for unpaid water and wastewater services in the 2014 case.
With the funds received, GLWA will communicate a proposed method for how the $1 million will be returned to eligible member partner communities in the form of credits after presentation to the GLWA Board of Directors at their June 28, 2023, board meeting. GLWA expects that these credits will be issued during the first quarter of Fiscal Year 2024 (which begins July 1, 2023).
“It is important for everyone to understand that GLWA will not directly benefit from the $1 million, rather it will be utilized to begin to reimburse those member partner communities who have absorbed portions of Highland Park’s bad debt expense,” said Suzanne R. Coffey, GLWA Chief Executive Officer.
With the extra time resulting from the interim agreement, GLWA will continue to participate in court ordered facilitation, and remains committed to working in good faith with all parties involved, including the state of Michigan, toward a comprehensive solution.
-GLWA
Despite the step forward, city residents say they're still concerned about the future.
"I want to know what’s going to happen today," said Asha Kelly who has lived in Highland Park for 13 years.
Kelly says she's concerned about where the rest of the money owed to GLWA will come from.
"A lot of people have been paying their bills and paying them on time, me being one. And it doesn’t make sense to me how if we’re paying our bills on time, where is the money going," said Kelly.
Longtime resident Claudine Collins shared similar concerns. Collins says if taxpayers are ultimately left to foot the remainder of the bill, she fears residents will begin moving out of the city.
"How could you owe $24 million? Look at how many people, It’s not even 10,000 people in Highland Park. So something is wrong. It’s something missing," said Collins. " I tell you one thing that’s going to happen, you won’t have any people here in Highland Park cause they’ll move elsewhere."
Collins says she’s holding out hope the state will help them come to a final resolution.
"I feel positive that something will come out of this. Like I said you can’t let a city fold up," Collins added.
It remains unclear when the court stays requested GLWA will take effect.
