Water authority sues state, Highland Park for nine years of unpaid water bills

Beth LeBlanc
The Detroit News

The Great Lakes Water Authority filed suit against the state of Michigan this week seeking payment for nearly nine years' worth of water service the authority and its predecessor provided to the city of Highland Park. 

The Wayne County city — which was forced by the state in 2012 to close its potable water facility — owes at least $9.9 million in unpaid services to Metro Detroit water authority, according to the Wednesday complaint first reported by Michigan Information and Research Services. After shuttering Highland Park's water facility in 2012, the state directed the Detroit Water and Sewerage Department and, later, the Great Lakes Water Authority to continue providing that water. 

Nine years into the agreement, neither the state nor Highland Park has paid for the water and the city has no means of providing its own water again "in the foreseeable future," the complaint said.

"The state acted in bad faith by mandating that DWSD and now GLWA provide — and continue to provide — potable water services to Highland Park, knowing that Highland Park could not, and would not, pay for those services," the complaint said.

The Great Lakes Water Authority did not immediately respond to requests for comment. Attorney General Dana Nessel's office said it still was reviewing the suit. 

Highland Park Mayor Hubert Yoop said the city was working on a plan to begin supplying its own water again but he didn't respond to questions regarding whether the city paid for the water it has received for the past nine years. 

The complaint alleges breach of contract, unjust enrichment and a violation of a Headlee Amendment provision that prohibits a state agency from requiring a community to provide a new service without a state appropriation to fund it.

The complaint requests that Court of Claims Judge Christopher Murray order the state to pay past and future fees for Highland Park water services — at least $1.2 million over the last year — and stop the state from leveling unfunded mandates on GLWA in the future. 

The case dates back more than a decade to when the state environmental department temporarily took over administrative actions of Highland Park's fresh potable water production facility because of various operational problems that were affecting water quality. 

In late 2012, when Highland Park still was experiencing issues with its facilities, the state forced the city to shut down its potable water facility and accept emergency water from the Detroit Water and Sewerage Department for what was supposed to be a temporary arrangement. 

The state treasury declared a financial emergency for Highland Park in 2014 and the water aAuthority took over the "temporary" water arrangement when it entered a long-term lease with the city of Detroit for water services on Jan. 1, 2016. 

"During those nine years since Detroit began providing water to Highland Park, the state has insisted that Detroit, and now GLWA, continue to provide water to Highland Park despite the fact that the situation represented to be 'temporary' has become nearly a decade-long supply requirement," the complaint said. 

The Detroit Water and Sewerage Department and, later, the Great Lakes Water Authority have billed Highland Park consistently for the water since Nov. 12, 2012, the complaint said, but "neither Highland Park nor the state has paid for the water service."

"Highland Park collects monies from its residents and businesses, address by address, for the retail water supplied to the individual addresses, and collects funds for the water service made possible by DWSD and now GLWA," the complaint said. 

"However, Highland Park has not and does not pay the wholesale water invoice bills sent to it by Detroit (and now GLWA) for that water service."

The complaint alleges the state "expressly agreed" that the Detroit Water and Sewerage Department would be paid for the water provided to Highland Park. The complaint also notes that the state told the Great Lakes Water Authority in 2016, when it took over the water system, that the bill "would be paid by the state if Highland Park did not pay."

The state and Highland Park, the complaint said, knew or should have known that Highland Park would be billed the same wholesale water rates charged to other municipal customers.

Not only were there "implied agreements," the filing said, but state law prohibits a regional water supplier from providing free water services to another municipality.