HUDSON - A water utility agreement from the 1980s is at the center of a years-long debate between Hudson and North Hudson.

The current system has the city of Hudson providing water service directly to residents in the village of North Hudson, through lines owned by North Hudson and leased out to the city. That agreement has been found to be outdated, but the two municipalities are struggling to develop a new solution.

Village President Stan Wekkin said he has seen major issues between the neighboring municipalities be resolved to mutual benefit in the past, and he hopes this issue will be no different.

History

The outdated agreement from 1983 was first called to the municipalities’ attention in December 2016. The two began to meet on what direction to take, with options including separating utilities, updating the current agreements or coming under a Hudson utility commission.

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At that time, updating the agreement or combining were considered the two options to pursue, North Hudson Village President Stan Wekkin said.

After three years, no resolution has been found.

Current concerns

Village Trustee Tim Zais said two possible consolidation agreements were drawn up, but there were a number of things in them the village did not agree with. At that point, a few months ago, the village said it was not interested in consolidation.

Utilities Director Kip Peters said the city contacted an attorney about the agreement, as it seemed the two municipalities weren’t getting anywhere.

The attorney, Lawrie Kobza, has advised that the agreement is no longer viable, and recommended terminating it.

The city is required to give a 90-day notice before the first of the new year, Peters said, so the city would have to decide on termination by Oct. 1. Services would still be provided as they have been until a new arrangement is made.

If the city doesn’t terminate the contract, it will have to wait another year on this, Peters said. North Hudson attorney Paul Mahler said that’s not the case, and the parties can agree to terminate it at any time. Terminating the contract puts the parties on equal footing, Kobza said, though Mahler disagreed.

The main concern for the city with the old agreement is liability. Kobza said the city is liable for the quality of the water it provides, but the lines are owned by North Hudson. The city can’t guarantee the quality of the water if the lines it’s delivered in aren’t owned by the city, she said. A lot has changed since that agreement was first made, she said, and the state Public Service Commission, which regulates public utilities, would not approve it today.

Reeves said the city’s legal, staff and utility commission all agree that the agreement is not how the city should move forward. The two options feasible for the city are either consolidation or providing water wholesale to the village of North Hudson.

A wholesale system means the city would provide the water service to the village at one or two locations, and the village would then deliver that water to the customers.

Peters said he would prefer to see a consolidation, though the details of one could be worked out between the city and the village. Consolidation means the village would turn over its system to be run as one overall Hudson utility.

Wekkin said the original consolidation proposal meant North Hudson handed over its infrastructure to Hudson without compensation.

Reeves said the city never heard the specific issues the village had with the consolidation proposal. If consolidation is still on the table for the village, he asked that it sends a list of concerns so they can address them.

Village Trustee Tim Zais said the key factor for the village’s decision is finances. Village and city representatives disagreed repeatedly about whether those finances had been previously sent. City Administrator Aaron Reeves said if there’s anything more the village needs, they just need to ask.

Next steps

Next steps would include the two sitting down with the PSC and the Wisconsin Department of Natural Resources.

The village will also ask the city for detailed financial information, Zais said.