Officials to withhold payment for alleged Highland Park debt
Board latest to place funds in escrow
Macomb Township Board of Trustees recently added its voice to the growing number of communities resolving to withhold payment of shares for Highland Park’s alleged Great Lakes Water Authority debt.
On April 6, the board voted to withhold a portion of the township’s water bill payment until there is a resolution in the lawsuit against Highland Park for alleged unpaid water bills.
“Basically, the resolution calls for the township to withhold any portion of the billings for water and sewer services that represent Highland Park’s debt,” Supervisor Frank Viviano said. “This would take effect July 1 with the new water rates.”
As Macomb Township residents pay their water bills, a portion that would have gone to Great Lakes Water Authority (GLWA) to cover the alleged Highland Park debt will go into escrow.
“Those funds will be put into escrow until such time as a resolution is reached between Highland Park and the Great Lakes Water Authority,” Viviano said.
In the resolution, Macomb Township “demands” the state and GLWA stop requiring the township and 86 other GLWA communities to pay for Highland Park’s alleged debt to GLWA, and declares the alleged debt not to be due retroactively or in the future.
“When Highland Park’s water system was deemed to be unpotable, the state shut it down with promises to rehabilitate it within two years. They failed to do that. They simply walked away and allowed this debt to accumulate over the last 10 years,” Viviano said.
According to the resolution, the township will begin withholding payments on July 1 of its portion of water and sewer costs attributable to the alleged Highland Park debt, with the funds put in escrow “while a just settlement of this matter is pursued.”
The board’s resolution calls upon the state to become directly involved in resolving the dispute, and asks it to create a system in which debts of non-paying water and sewer customers will no longer be charged to paying customers. In addition, the resolution asks the state legislators and county commissioners to prevail on the state to provide a resolution of the matter, including reimbursement of $1.4 million already paid by the township to cover Highland Park’s alleged debt.
“I am asking the governor to finally step in and do what the state promised to do 10 years ago,” Viviano said.
Trustee Frank Cusumano read the resolution during the meeting. It indicates Highland Park’s water treatment plant was unpotable, and repairs to the plant would be done in three to four days. In the interim, Highland Park was to receive water and sewer service from the Detroit Water and Sewer Department, now GLWA.
The resolution indicates that neither the state nor Highland Park ever fixed the water treatment plant, and it remains closed. It quotes a figure of $54 million of debt that could rise to almost $61 million by the end of the 2023 fiscal year.
GLWA had allocated Highland Park’s alleged debt to 87 its other members, including Macomb Township since 2012.
On March 23, the Macomb Township Board of Trustees authorized Viviano to send a letter with a request for state intervention in the dispute between GLWA and Highland Park. In March Viviano said the GLWA requested that its member communities ask the governor’s office to intervene in the dispute with Highland Park. He confirmed the township is contractually bound with GLWA to pay for all costs of services, which includes any single member’s debt in the suburbs. Tim Tomlinson, the township’s attorney, said last month Highland Park has disputed over time that the way they were charged was inappropriate and that is why they did not pay.
“GLWA did go to court to try to force them to pay and/ or that the water would be shut off, and the court said no, absolutely not, you are not abandoning that entire city. Fight it out in court and figure it out from there,” Tomlinson said.
He added although the issue remained in the court system, Macomb County groups are trying to determine the next course of action, which could be some type of legal action. On March 23 Tomlinson said that although there was a time when Highland Park made a certain percent of payments, now they have stopped.
Macomb Township is not the only local community to adopt a resolution regarding GLWA and Highland Park. On March 30 a news conference was held in Mount Clemens at the county Administration Building in which leaders of multiple communities discussed asking governing bodies to withhold the amount that covers the alleged debt. Macomb County officials requested all county communities impacted by the situation to pass resolutions and write letters to the governor demanding a fix.
Macomb County communities have paid $13.5 million to cover water and sewer payments Highland Park has not made since its water plant went offline in 2012, officials said. Other communities through metro Detroit that pay for GLWA water have covered the remaining $41 million debt allegedly incurred by Highland Park, although Highland Park has denied it owes the money. On April 4, the Lenox Township Board of Trustees approved a resolution similar to Macomb Township’s.
“Let me make this crystal clear, we are only in this situation due to the fiscal irresponsibility of the City of Highland Park, its mayor and its city council,” Lenox Township Supervisor Anthony Reeder wrote in the April 5 press release. “As of last night’s meeting, Lenox Township has officially called upon the State of Michigan to intervene in this case and fix the mess that the state has originally caused. It is present and clear that Highland Park needs an emergency manager once again.”
Reeder wrote that Lenox Township will also withhold any further payment towards Highland Park and “demands” reimbursement of $71,740 paid by Lenox Township.
On April 5 the Sterling Heights City Council adopted a resolution similar to Macomb Township’s resolution. Sterling Heights’ share of the alleged debt amounts to $2.3 million, a number that is projected to grow by June 30, 2023. Highland Park officials have said the city was overcharged for years and cite a 2021 Wayne County Circuit Court ruling that says it does not owe money but is owed $1 million from Detroit. Sterling Heights leaders requested the governor’s office to get involved, but as of April 5 the state Department of Treasury had only “encouraged” Highland Park and GLWA to resolve the matter.