Highland Park estimates reduction of water leaks will help reduce sewer bill

After the Michigan Supreme Court's rejection of its appeal of a ruling last year that said the city of Highland Park had to pay more than $21 million in unpaid water and sewer fees to the Great Lakes Water Authority, the city is weighing its options to pay back the debt and says the reduction of water leaks will lead to lower rates in the future.

“The reduction of our leaks by two-thirds will reduce our sewer bill from $7 million to $2.4 million a year,” Damon Garrett, director of the city’s water department, said Thursday in a news release.

Reached Thursday night by The News, city spokesperson LaKisha Brown said the $4.6 million annual savings "will establish a new affordable contract rate going forward in any new agreements. By fixing the leaks, the Highland Park rates will be reduced considerably on future charges."

The city is holding a special meeting Monday night to consider options on paying back the debt.

According to Highland Park’s 2021 Leak Survey Report, there were 24 identified water leaks, resulting in 1.289 million gallons per day or 896 gallons per minute leaking from Highland Park’s water distribution system and ending back into the combined sewers. In other words, according to GLWA, for every gallon of water consumed by a Highland Park resident, two gallons leak out of Highland Park’s water system.

Water leaks can lead to water and energy waste and have significant health and economic impacts, according to the state, and can affect water affordability.

The sources of the 24 leaks included distribution mains and abandoned service lines. Ninety-nine percent of the estimated loss came from three water main sources, Garrett said: East Grand Boulevard at Brush, Manchester between Woodward and Oakland and Tyler west of Woodward. They were all repaired in 2021.

“The City of Highland Park looks forward to moving to a metered system where its usage can be accurately measured and replacing infrastructure to redevelop the city,” Garrett said.

Brown said the city is currently under an administrative consent order with the Department of Environment, Great Lakes, and Energy to replace all of the water, sewer and lead lines in Highland Park. "We are currently in the process of doing so and additional funds will help to speed up the process and stop many of the leaks," Brown said.

The water authority said it supports the use of infrastructure grant money to improve the city’s water and sewer systems, of which a large portion is more than 120 years ago.

GLWA officials lauded the high court’s decision Wednesday, adding the water authority will continue to work with the city to seek a long-term solution to the ongoing regional issue.

“As we have maintained throughout this litigation, ... the city of Highland Park is obligated to pay and is deficient in paying for the water and sewer services it receives from Detroit and now, GLWA. This decision reaffirms that Highland Park has the same obligation to pay as the other member partners in the regional system," GLWA General Counsel Randal Brown said.

"Once the judgment is paid, GLWA will reimburse the other member partners that have incurred additional charges for the city of Highland Park’s nonpayment. If a long-term resolution is reached, addressing the city of Highland Park’s local water and sewer infrastructure will be an important component.”

In Tuesday’s ruling, the justices denied to hear the city’s appeal of an August Court of Appeals ruling, saying in part: “… We are not persuaded that the questions presented should be reviewed by this court.”

In August, the appellate court reinstated a Wayne County Circuit Court case that alleged Highland Park owed the water authority for unpaid water and sewerage bills.

Highland Park was first sued in 2014, accused of failing to comply with a 2009 agreement that was negotiated in an attempt to address the amount of outstanding debt at the time for several years of sewage service, and that Highland Park’s accrued arrearages had grown.

Highland Park’s debt grew, and in 2015, the Court of Appeals affirmed the city must pay. With interest, the sum is now approximately $21 million.

Years of counter-claims and legal arguments have ensued, with Highland Park claiming the city had been overcharged and that it was not obligated to pay years of rate increases.

The debt has been a source of contention regionally.

Macomb County Executive Mark Hackel and county Public Works Commissioner Candice Miller praised the court’s ruling, saying Highland Park’s mounting debt topped $56 million over the last 11 years and has been shouldered by the other 111 member communities of the regional authority, including 18 in Macomb County.

“Simply put, this has always been a fairness issue. Although there is always a willingness to help our neighbors, it is unacceptable to expect that other communities should be paying for another who is unwilling to do so," Hackel said. "We will continue to work together as a region to keep costs fair and reasonable for everyone."

In February, the authority board of directors unanimously approved a 2.75% increase in wholesale water and sewerage water rates for the 2024 fiscal year starting July 1. Highland Park's debt expense is not included in the 2024 charges. An official with the water authority said that since May 2022, Highland Park resumed making payments for sewerage services but not yet for water.