Dear City of Alpena Residents,

I regret to inform you that the water and sewer authority work group comprised of City
and Township representatives has come to an impasse.

In my opinion, forming this authority was the best way to end the litigation between the
two parties and prevent it from happening again in the future. An added benefit would
have been equal base rates and services for residents of both the Township and the
City.

The rate study for a combined system indicated the necessity to decrease the rates for
Township users and increase the rates for City users, both of which I fully expected.

City Council insisted that our staff continue to provide a scope of services to the
authority for the life of the agreement. These compensable and audited clerical,
managerial, and engineering related services have been performed by City staff for
many years and will continue to be whether there is an authority or not. The main
template the authority work group proposed has been used by others in the State with
no issues. We cannot compromise the integrity of these services or threaten the
stability of these vital City staff positions. I made it clear to the Township Trustees that
this was a deal-breaker over a year ago, but they recently decided not to agree to it, so
the authority is currently off the table.

The City has spent approximately $775,000 on attorneys and legal experts since 2014, a
number I never thought we’d reach and most of which occurred early in our lawsuit. But
I can only hope you understand that City Council decided to bear this cost in the best
interest of our residents in the long term.

As an example, to put the issue into perspective, for the quarter of March through May
of 2023 the Township was charged $795,490 for water and sewer they in turn sold to
their residents. Their payment to the City was $430,905 ($364,585 underpaid in just one
quarter). Because this has been the pattern of payment for so long, the Township is
past due
$23,247,676 as of May of 2023.

The City is barred by law from shutting off the Township’s water supply for lack of
payment, nor would we want to because the residents have individually paid their bills to
the Township.

The 1977 contract between the City and Township is outdated and flawed, but the
Township Trustees have shown no interest to negotiate a new agreement. There were
two options for City Council and Township Trustees to end the litigation, form an
authority or negotiate a new contract.

Not being able to make either happen is truly my biggest failure in the nearly twelve
years I have served the City. Looking back, the last couple of years of biweekly meetings
seem wasted, but the City spent very little and we will use the lessons learned as we
move forward.
I appreciate the trust and support I’ve been given, and I will continue to work for a long-
term solution.

Sincerely,

Matthew J. Waligora
Mayor, City of Alpena