On Thursday, a judge ordered the city of Highland Park and the Great Lakes Water Authority to come up with a plan by May 31 for how residents and businesses in the tiny Wayne County community will begin to pay the suburban water authority an estimated $24 million in water and sewage bills.
The final cost, including interest, is still being calculated, but it is expected to be around $24 million. This is more than twice as much as the $9.6 million that Highland Park receives annually in property tax receipts. With a per capita income of only $19,401 and a poverty rate of 41% in 2021, as reported by the Census Bureau, city officials in this majority-Black city have already stated that they do not see a method to pay off the debt.
On Thursday, Wayne County Circuit Judge Edward Joseph set the deadline for late May, admitting that the county’s 8,900 citizens face a frightening amount of debt. Joseph remarked, “This is a truly remarkable occurrence.” That’s a tremendous amount of judgment to make. The court is worried that someone will get a bill three times as much as their usual tax amount in July.
Stay informed with the most recent news by clicking the link below:
- Mackenzie Dern Divorce Fueled Her UFC Vegas 73 Main Event Versus Angela Hill
- Family Say Garrett Warren Missing Harlem 13, In The East River
The judge was probably thinking about the summer property tax bills that typically go out in early July and must be paid by the end of August. Joseph has set a deadline of May 31 for the two parties to try to agree.
To quote him: “It’s difficult to see on a practical level how simply taking the $20 million judgment and adding it to the tax rolls is going to work.“
Joseph scheduled a hearing for June 6 to hear the parties’ proposed settlement agreement. According to a statement posted by municipal officials late Thursday afternoon, Highland Park will follow the judge’s decision. Conflict with the suburban water authority throughout the lengthy court struggle was also disclosed in the statement.
“Highland Park is hopeful that this court-ordered facilitation… will allow for the extended payment plan that the City has wanted since 2014,” the statement read.
CEO Suzanne Coffey received word late Thursday that GLWA was ready to resume negotiations. Coffey reaffirmed the authority’s dedication to working with all parties to reach a negotiated settlement within the timeline set by the court. Coffey said the decision to reinstate the multimillion-dollar judgment on Thursday was “consistent” with the Michigan Court of Appeals’ order upholding the tab in August.
Hence, the water authority was “pleased” with the outcome. Officials from Highland Park expressed their optimism that the judge’s order will lead to the city’s long-sought financial arrangement with GLWA.
Throughout the several court processes that ordered mediations since 2014, “payment plans have been rejected by GLWA staff numerous times,” said Highland Park spokeswoman LaKisha Brown in a statement released on Thursday. According to the city’s official report,
“Highland Park is hopeful that this court-ordered facilitation by Judge Edward Joseph will allow for the extended payment plan that The City has wanted since 2014 and which DWSD/GLWA has refused because they wanted a tax levy.”
On Wednesday, Senator Stephanie Chang (D-Detroit) and Representative Mike McFall (D-Hazel Park) discussed the next steps with Whitmer’s office and the Michigan Department of Treasury in light of the recent court verdict.
“This complicated issue has years of history,” Chang and McFall stated in a joint statement on Thursday. Highland Park residents, many of whom live in poverty or low-income households, do not have the financial means to take on this verdict without suffering terrible effects, even thought being in better financial health than in years past.
The Michigan Court of Appeals previously ruled that the city must pay the outstanding water and sewer costs, and on April 4, the Michigan Supreme Court declined to revisit that decision. Although the town and GLWA are still involved in other cases on the topic, the Supreme Court’s decision ultimately ended the years-long legal war between the two.
Dismissal of Water-Shutoff Dispute
The city’s lawyers requested a legal injunction to ensure that GLWA will not turn off Highland Park’s water supply. The City Council of Highland Park petitioned Governor Gretchen Whitmer’s office for a speedy bankruptcy on Monday after Mayor Glenda McDonald and others in the city government claimed that GLWA’s recent court filings prove that a cutoff of water service is possible.
The judge stated that none of GLWA’s documents suggested the utility would attempt to sever the city’s water supply. According to GLWA CEO Suzanne Coffey, the rumors coming out of Highland Park are “false and counterproductive,” the authority is working toward “an amicable solution” shortly.
Joseph reassured everyone that there was no threat or imminent statement to cut off the water service. I cannot grant an injunction or stay based on a mere possibility. Not even an inkling of it has appeared. Highland Park’s legal team argued that GLWA’s 2015 filings gave it the power to cut off the city’s water supply.
Months ago, Whitmer’s office suggested that GLWA use a state clean drinking water grant worth $25 million that the state’s Democratic governor and Republican-led Legislature approved last year to help alleviate the debt problem. On Thursday, the Whitmer administration did not immediately reply to a request for comment.
According to a statement released by Whitmer’s office late Tuesday night, “the dispute between GLWA and Highland Park has been ongoing for nearly a decade,” and the two sides need to come together to find a solution to the issue without passing the cost to residents or businesses.
“While they work on a solution, the governor has rallied the Legislature to provide $25 million to help cover expenses, maintain cheap water rates, and, most crucially, keep clean water flowing to residents in the region. We still have faith that they’ll find a solution that benefits locals.”
The local water board has not made any firm promises. Awaiting the arrival of the $25 million, GLWA’s Coffey has said that the agency “will spend the money following the language of the Legislature’s appropriation.”
Officials in the Metro Detroit area have supported allocating $25 million to repay municipalities that have taken on the cost of Highland Park’s unpaid water and sewer bills in previous years.
According to Macomb County Public Works Commissioner Candice Miller, “GLWA should take the $25 million the state gave them and apply that as reimbursement to the suburbs, and then the state should appoint an emergency manager to help Highland Park with this issue and all the financial challenges the city has,” released on Tuesday. They need to figure out how Highland Park can continue to pay its water and sewage costs.
Prolonged Urgent Request
Highland Park and GLWA officials are getting ready to discuss a payment settlement. Still, the city is waiting to hear back from state officials on whether it can declare a financial emergency and whether the solution to a potential financial stress finding would be to file for Chapter 9 bankruptcy to get out of paying the GLWA bill.
After conducting a preliminary study, the Michigan Department of Treasury must decide whether to send a financial review team to Highland Park for a more in-depth look at the city’s finances. Whitmer would next determine whether or not to approve the team’s recommendation that a financial emergency existed.
Here ChristineFerretti said:
Water debt mediation could determine Highland Park’s financial future
Multiple options are under debate. But residents argue they shouldn't be held accountable or left in the dark about what's next, @JGabinator reports.https://t.co/JQ53payXKU via @bridgedet313
— ChristineFerretti_Det (@cferretti_Det) May 17, 2023
The time it takes to review a document varies. After declaring a financial emergency, Highland Park officials would have to choose between four possible courses of action: mediation (an impartial review of the situation), a consent decree with the state outlining financial benchmarks for the city to achieve, the appointment of an emergency manager by the state, or a Chapter 9 bankruptcy filing.
Experts agree that filing for bankruptcy in federal court requires the state’s approval. On Thursday, Brown of Highland Park said the state agreed to let the city declare a financial emergency in 2014 because of the ongoing battle with the water authority.
A prior Court of Appeals judgment stated that the water authority owed Highland Park $1 million in overcharges, which sparked her claim that “at least three mediations” were held. That decision, however, was reversed subsequently. Whitmer’s administration has downplayed the city’s chances of filing for Chapter 9 municipal bankruptcy quickly.
Whitmer’s spokesman Bobby Leddy told The Detroit News on Tuesday, “They cannot skip to the end.” To file for municipal bankruptcy, “they must go step by step” through the appropriate legal channels. Infrequently ci, ties file for bankruptcy. In July 2013, Detroit filed the largest one in the country.
“Stay connected to your community with lakecountyfloridanews.com’s latest news and updates”
