When the dispute over Highland Park’s disputed $58 million water debt came to a head this Spring, Planet Detroit reported that the state was considering $20 million in state assistance to help the small city.
But this money was left out of Gov. Gretchen Whitmer’s recently signed 2024 state budget. However, the state issued a $10 million grant around the same time as the new budget to fund water infrastructure in the city.
Highland Park City Administrator Cathy Square said the legislature may have “punted” on the issue of debt assistance because of ongoing mediation between Highland Park and the Great Lakes Water Authority. Yet city and state officials are optimistic that outside help is coming as water system repairs progress and talks between Highland Park and GLWA conclude.
“I fully expect and will continue to advocate for state funding to help support Highland Park, whatever the result of the mediation is,” State Sen. Stephanie Chang, whose district includes Highland Park, told Planet Detroit. She added that the situation needed to be viewed “holistically” to include money for water infrastructure needs like meters and removing lead service lines.
Although the Drinking Water State Revolving Fund dollars will not help directly to resolve the city’s disagreement with GLWA, Square said it will be “drying up the system,” answering a key complaint from the utility that the city’s infrastructure is hemorrhaging water. It also suggests state leadership is paying attention and willing to help the city of around 8,700, where the poverty rate is 41%.
“There’s some serendipity there,” Square said of the timing of the funding.
So, what exactly does this new tranche of funding do for the city? The money will allow the city to replace water mains along Brush, John R., Tennyson streets, Oakland Blvd and Hamilton Avenue. The city will also replace 138 lead service lines on Tennyson and elsewhere in the city.
Removing these service lines could help address problems with elevated lead levels in drinking water. In 2019, nine homes tested above the 15 parts per billion action level. To comply with state law, the city must replace 5% of its lead drinking service lines each year.
Square says the $10 million, which is underwritten by federal money, adds to the $20 million the city has already borrowed for water system improvements, getting Highland Park about a third of the way to the roughly $100 million the city estimates it needs to upgrade its water lines. These improvements are required under an administrative consent order between the city and the Department of Environment, Great Lakes, and Energy to replace city lead lines.
Highland Park will have another chance to apply for money through the state revolving fund next year, allowing the city to chip away at the needed upgrades.
“But the lawsuits rage on,” Square said, referring to the litigation over Highland Park’s alleged water debt.
In early June, the city made a $1 million payment to GLWA as part of an interim agreement as the parties engage in mediation over two lawsuits involving as much as $58 million in debt. Part of the disagreement relates to an unmetered, emergency water hookup ordered by the state in 2012.
Square previously said that meters the city installed found the city was using a fraction of the water GLWA was charging it for. However, Randal Brown, general counsel for GLWA, told Planet Detroit that leaks accounted for the high charges. Square contradicted such claims in 2022, saying that Highland Park hired experts to look for leaks and found none.
If an agreement isn’t reached, GLWA could collect the debt by adding to the property taxes of residents and businesses, potentially devastating to a city where yearly property taxes are just $9.6 million.
The city had previously requested an expedited bankruptcy filing from the governor, which would mean selling off city assets and nullifying contracts like the one with GLWA. Gov. Whitmer denied this request.
However, Chang and city leadership don’t expect the state will leave Highland Park to deal with the GLWA debt independently.
“They don’t want another Flint on their hands,” Highland Park Mayor Glenda McDonald said in April, referring to the lead drinking water crisis that saw former Gov. Rick Snyder briefly facing criminal charges.
Meanwhile, the current drinking water grant will keep the city from taking on additional debt as it works to reach an agreement with GLWA. If nothing else, Square says, “It certainly is a recognition that there is a problem there, and they need some level of assistance.”