Grosse Pointe Shores

Shores, yacht club reach settlement in longstanding water bill battle

By K. Michelle Moran
C & G Staff Writer

GROSSE POINTE SHORES — After years of wrangling and months of very public controversy and squabbling, city officials came to an agreement over a water bill dispute with the Grosse Pointe Yacht Club with surprisingly little fanfare.

The GPYC claimed that it was overcharged by more than $1 million — a figure the club recalculated in July 2011 to about $500,000 — between 1997 and 2008, according to city documents and memos. A tolling agreement requested by the GPYC and signed by former City Manager Brian Vick that halted additional running of the statute of limitations to give the city a chance to review the matter became a bone of contention among some residents and officials.

During a June 19 City Council meeting, City Council member Bruce Bisballe, who chairs the finance committee, said the committee met with GPYC representatives and a facilitator in Ann Arbor recently and reached an agreement that calls for the Shores to pay the GPYC $25,000 a year for the next 16 years, a total of $400,000. According to the agreement, the payment “can be made by either cash or credit in accordance with” the city’s normal billings for water and boatwell leases. Bisballe said they determined that because of a change in personnel, the Shores made an administrative error in reading GPYC water meters and erroneously charged them more than $200,000 for water. The city believed the statute of limitations in the case only covered the last four years, but the GPYC argued that it was six, he said.

“I think it’s a very fair settlement to both sides, and it’s something we can put behind us,” said Bisballe, adding that the 2012-13 budget reflects the settlement, and it’s something that can be built into future budgets.

Bisballe commended his fellow finance committee members and City Attorney Mark McInerney for hanging in throughout the long and challenging process.

“The Grosse Pointe Yacht Club wishes to extend its sincere gratitude to the village of Grosse Pointe Shores and its council in approaching the water issue head on and resolving the matter through good faith negotiations,” GPYC club manager Tom Trainor said in a press release. “The GPYC always has and will continue to value its relationship with the Shores.

“The GPYC has always expressed its desire to resolve the issue without resorting to litigation, and is appreciative of the Shores embracing the club’s desire and approach,” Trainor’s statement continued. “Certainly, being able to resolve the matter to the parties’ satisfaction is in their respective best interests and that of the entire community.”

According to the press release, the GPYC Board of Directors approved the agreement June 12.

The GPYC is the only commercial entity in the almost exclusively residential Shores and is, by far, its biggest consumer of water.

The council held a special, closed-door session prior to its regular meeting June 19 to discuss a city attorney opinion on the proposed GPYC settlement, as well as a tentative contract with the city’s public safety and command officers.

The council unanimously approved the settlement, although Mayor Ted Kedzierski recused himself from the vote because he’s a GPYC member.

Resident Greg Walton praised the council for the deal, which he called a “very fair and advantageous settlement.”

“I think it was a great thing to do for the city,” Walton said.

Bisballe said the GPYC is “very interested” in about 20 boatwells it currently leases from the Shores, whose Osius Park harbor neighbors the club. He said he wasn’t sure if they could legally give the wells to the GPYC, but if that proved to be true, Bisballe said that could be negotiated separately. The settlement wasn’t contingent on any future assignments of city rights, he said.

During a Dec. 20, 2011, City Council meeting, Vick said that during a July 2011 meeting with the GPYC, the club suggested that the city could settle their claim that the Shores owed them $500,000 in overcharges by giving them a portion of Osius Park property and boat slips. Vick told the council this suggestion “was never entertained by city staff nor considered a negotiable matter.”

The billing dispute became a pivotal issue during the 2011 council and mayoral race, in which voters ousted almost all of the incumbents, including the mayor, amidst allegations of backroom deals. Officials vehemently denied any wrongdoing and charged their opponents with a smear campaign.

You can reach C & G Staff Writer K. Michelle Moran at kmoran@candgnews.com or at (586)498-1047.