John Wisely

Detroit Free Press

City claims the bills result from the storm water runoff from state and county roads.

Highland Park is suing MDOT and Wayne County seeking repayment.

Cost of Highland Park's delinquencies is being spread out over other suburban customer bills.

Beginning July 1, sewer bills in the suburbs will rise an extra 3.2% to offset almost $30 million in unpaid bills by the city of Highland Park.

The Great Lakes Water Authority, which took over management of the region's water and sewer system from Detroit on Jan. 1, said the average rate increase will be 4.9% once Highland Park's debt is included, because the city is years behind on paying and the tab is growing at about $13,000 a day.

"If they’d been paying their sewer bills on a regular basis, the average increases would be 1.7%," said authority Chairman Robert Daddow.

The customers who are about to pay the bill aren't necessarily aware of it yet, said Macomb County Executive Mark Hackel.

"When they find out that there's an additional cost to the region because of Highland Park, it's going to be very upsetting to them," Hackel said. "It's no surprise to me that it's finally coming to a head."

Last month, Daddow and the five other members of the authority board wrote to Gov. Rick Snyder, asking for his "personal intercession and involvement" in the issue. Snyder spokesman Ari Adler said the governor would not be personally involved in the discussion, but the state plans to talk with Highland Park and the water authority about the issue and advise the city further about finances.

Highland Park officials dispute the bill, saying most of it comes from runoff from the Davison Freeway, its service drive, Woodward Avenue and parts of McNichols, which are the responsibility of Wayne County and the Michigan Department of Transportation. They have sued the Wayne County and the Michigan Department of Transportation in an effort to recover their costs.

The suits claim that both Wayne County and MDOT "paid for storm water services up to the border ... of Highland Park for all of their storm water runoff with full knowledge that they are paying nothing for the same services provided within Highland Park city limits."

"(The city) can't afford to pay for Wayne County's and MDOT's stormwater treatment," said Jeffrey Thomson, Highland Park's lawyer in both lawsuits.

Wayne County spokesman James Canning declined to comment because the case is pending.

In a separate lawsuit, the water authority sued Highland Park for non-payment. In April 2015, Wayne County Circuit Judge John Murphy awarded the authority more than $19 million, the amount outstanding at the time, but Highland Park is appealing the judgment.

"I respect their position but my position is, we don't owe them the money," said Highland Park City Attorney Terry Ford. "Had Judge Murphy actually known the amount of the money that we as a city have paid on behalf of MDOT and Wayne County, that amount would absolve our debt and give us money to put in our bank."

In the letter to Snyder, the authority said that Highland Park owed the Detroit Water and Sewerage Department $11 million as of June 30, 2012. Highland Park has paid about $7 million toward that $11 million balance, but it hasn't paid anything for water and sewer service rendered since that time, the letter said.

"If a community lacks the resources to utilize its police power to provide for the basic sanitary health needs of its residents and fails in its basic administration efforts to bill its citizens for services rendered, isn't it time for the state to step in and assist?" the letter asked.

Highland Park's balance has ballooned to $29.6 million as of March 31.

The authority inherited the dispute with Highland Park when it took over management of the system from Detroit. The cost of Highland Park's bills are spread out across all other suburban sewer customer communities as a result of a lawsuit in the 1990s. Suburban leaders then objected to Detroit's delinquencies being spread across the entire customer base, including the suburbs.

The lawsuit was settled with an agreement that required Detroit ratepayers to cover any delinquencies that occurred within the city and delinquencies within the suburbs would be recovered by raising the rates on all suburban communities that receive sewer service.

The letter goes on to note that in 2013-15, Highland Park wasn't even billing its residents and businesses for water and sewer service. Ford blamed the billing troubles on internal problems and noted that the city has now outsourced the billing function to a consulting firm but the authority said in its letter "this effort has provided virtually no additional revenues."

Highland Park's financial difficulties are long running. It was under state emergency management for years. Currently, it is under neutral evaluation, a condition short of having a state-appointed emergency manager.

Contact John Wisely: 313-222-6825 or jwisely@freepress.com. Follow him on Twitter @jwisely.