HIGHLAND PARK, Mich. (WXYZ) — The city of Highland Park is hoping to resolve a $24 million debt by filing for municipal bankruptcy.
At a city council meeting Monday night, council members agreed in a 3-2 vote to ask the governor for an expedited decision to allow the city to proceed under Chapter 9.
The $24 million debt is a result of unpaid water and sewer fees to the Great Lakes Water Authority. GLWA's CEO told 7 Action News back in February that the city has paid less than 1% of water charges since 2012.
Highland Park city officials disagree. They say they have overpaid and are supposed to be paying a fixed rate from 1996. City officials are adamant that the $24 million debt is "manufactured overcharges."
Mayor Glenda McDonald was not available for an interview Tuesday but sent the following statement:
On April 17, 2023 the Highland Park City Council came to the resolution recommending and asking Governor Whitmer to expedite her decision and allow Highland Park to proceed under chapter 9 pursuant to MCL 141.1565(23) of Public Act 436 of 2012.
The Michigan Supreme Court denied the City of Highland Park's application to appeal the Court of Appeal's August 18, 2022, unpublished opinion which overruled the trial court's February 26, 2021 ruling which vacated an April 30, 2015, partial summary judgement.
GLWA has just sent a letter demanding $2.7 million for a 90-day stay of the new case (No. 20-011589 in the Honorable Judge Annette J. Berry's court) conditioned upon Highland Park's dropping its Motion to Stay any turn-off of potable water and dropping Highland Park's Motion to Stay the imposition of the tax levy, thereby giving GLWA a second opportunity to turn off Highland Park's drinking water as they threatened in 2015.
In order to keep GLWA from turning off Highland Park's water, the City of Highland Park had to get a restraining order (Case No. 14-001974-CK: Order Restraining the City of Detroit and the Detroit Department of Water and Sewage from Suspending Water and/or Sewage Service to the City of Highland Park) which was in force while the matter was on appeal. Now that it is over, GLWA is opposing the Stay in court on Thursday, April 21, 2023.
GLWA has threatened to shut of water and/or sewage in 2015 to the residents of Highland Park which is a threat to their health, wealth and safety and are doing it again by opposing our Motion to Stay in court this Thursday.
GLWA says the claim that they want to shut water off to city residents is false.
"That statement is untrue and counterproductive. GLWA hopes, for the entire region, that an amicable solution can be achieved in the near future," said CEO Suzanne Coffey.
During Monday night's meeting residents had mixed opinions about the city's next step forward. Some were in favor of filing for bankruptcy while others were concerned it will impact city services and taxes.
"You’re going to raise my taxes three times what they are plus you’re going to take my pension. I don’t agree," said one retiree in reference to the city filing for bankruptcy.
"This could go on indefinitely unless you put a stop to it. In order to do that you’re going to have to choose Chapter 9," said another homeowner in favor of the city's move to file.
David Garrett lives in Highland Park and says he has been paying his monthly water bill on time for more than 30 years. Garrett says it would be unfair for the city to make residents take on the burden of repaying the debt.
"That’s not right when we be paying our bills. We pay our water bill every month. Now, if you’re not paying your bill that’s not our fault, so why should we pay for your mistake," said Garrett who has lived in Highland Park since 1984.
As the city has worked to sort out its debt, other municipalities say they've been forced to endure rising water rates to pay what Highland Park has not.
"I think this litigation is what finally got them to say we need help and rightfully so," said Macomb County Executive Mark Hackel.
Hackel says he believes the bankruptcy filing is the city's best choice as other debt collections loom. He says going forward he hopes the process is fully transparent.
"I gotta believe it has more to do with other issues going on in the city than it is just the issue of the water. I think on behalf of the residents they need to be more upfront about here’s why we believe we need to do this so that the residents understand," said Hackel.
7 Action News reached out to Whitmer's office regarding next steps and received the following statement:
“Every Michigander should be able to live in a community that can deliver safe, affordable, and accessible water. The dispute between GLWA and Highland Park has been ongoing for nearly a decade, and the two parties need to come together to find a solution to the debt without transferring the burden to homeowners or businesses. In the meantime, as they work toward a solution, the governor brought the legislature together to deliver $25 million that is intended to offset costs, keep water rates affordable, and, most importantly, keep safe water flowing to homes in the region. We remain hopeful that they can reach a resolution that puts residents first.”
A motion hearing is set for Thursday at 1p.m.
