Sister Bay, Liberty Grove Make Leaps in Wastewater Talks

Two years after the last meeting between officials of Liberty Grove and Sister Bay replete with tension and inflexibility, the two municipalities took major steps toward agreement over ownership and management of the shared wastewater treatment plant.

The first step was an explicit recognition that the plant was in fact owned by the Village of Sister Bay, a point the village has contended based on the language of the original intergovernmental agreement in 1988. Both groups agreed to hold off on litigation initiated by Liberty Grove in September, again attempting to reach a settlement out of court. The joint meeting on Nov. 2 was promising.

“The village owns the plant outright in perpetuity,” said Liberty Grove town board member Lou Covotsos. “Assuming the ownership is unconditionally that of the village in perpetuity, the other question is how much the town would have to contribute in capital investments in the plant expansion.”

Liberty Grove invested approximately $2 million in the initial joint plant, including interest payments. Now the town is wondering whether to pursue partial ownership of the plant that will likely be decided in a courtroom before a judge, or cut its losses and relinquish all control of the plant and future capital expenses to the village.

“If we take the $2 million investment that Liberty Grove has made and set that aside, how do you feel about the idea of just being a customer and not having to worry about capital ever again?” asked Denise Bhirdo, Sister Bay village board member.

Sister Bay officials proposed that all future expenses to expand or maintain the plant would be put to the ratepayers, some of which are in Liberty Grove. But Liberty Grove would not be using general town funds to maintain and invest in the plant. The town was receptive to the idea.

“If we are declared owner, we will continue to pay capital toward the plant,” said Covotsos. “If we don’t have ownership we don’t have to pay anymore. It doesn’t mean we will be able to recoup [the initial $2 million]. Maybe you stop the bleeding.”

The town bristled most at a provision in Sister Bay’s Land Division Code that states any property owners outside the village that wants to be hooked up to the sewer lines must be annexed into Sister Bay.

Liberty Grove board member Nancy Goss said the town pays for approximately 47 percent of the capacity in the plant, meaning its residents are in fact paying for the plant even if they are not hooked up. She believed requiring them to annex into Sister Bay to use the sewer they are already paying for is not fair.

Sister Bay Village Administrator Zeke Jackson said the annexation piece is a way to ensure development doesn’t happen just outside the Sister Bay village lines, tapping into Sister Bay utilities while paying taxes in Liberty Grove.

“By ceding that particular point you would effectively cede your ability to control growth of the village,” said Jackson.

Jackson’s concern arises out of potential large development projects in the future. Liberty Grove has the lowest tax rate in the county, less than half the municipal rate of Sister Bay. A developer of a multi-unit housing development would likely prefer Liberty Grove’s property tax climate to Sister Bay’s, especially if they could still hook up to sewer and water required by large projects.

“It’s not uncommon… for cities or villages to hold the sewer system ability or the freshwater as a carrot for neighbors in neighboring towns to come in and annex,” said Sister Bay attorney Randy Nesbitt. “That’s something that I know the village has to deal with – if that incentive is gone, will there ever be growth in the village?”

The annexation provision ensures that Sister Bay wouldn’t miss out on development that would be a large drain on the wastewater capacity and provide a big tax base for the municipality.

Nesbitt and Liberty Grove attorney Jack Bruce will look into extraterritorial zoning jurisdiction, a way for Sister Bay to exert zoning control over properties in Liberty Grove but near the municipal line.

The agreement would trigger if a development exceeded some terms set by both municipalities. At that point, Sister Bay would have some control over the development.

“It might be to indicate certain kinds of development must unconditionally agree to annex,” said Attorney Bruce.

The two boards both appeared to be in favor of resolution, already setting another meeting date for Nov. 13. They will continue discussion of possible repayment of Liberty Grove’s initial $2 million investment and other funds Liberty Grove is seeking as part of a property sale.

“I’d like to say I’m happy with what happened tonight,” said Hugh Mulliken, Liberty Grove board member. “I think we got the cart going down the road.”