NILES — The city of Niles and Niles Township reached a settlement Monday night, ending a three-year lawsuit and reducing the rates of PILOT (payment in lieu of taxes) charge on water and wastewater services.

Township officials initiated the lawsuit in in 2015 after they felt township residents were being asked to pay an unfair amount in PILOT charges to use the city’s water and waste water services. The PILOT called for a 10-percent rate charge on the services.

In the lawsuit, the township alleged that the city’s 10-percent PILOT was not permitted by contract and “were otherwise unlawful in their amount,” according to a joint statement released Monday by city and township officials.  The 10 percent PILOT charge was halted when the lawsuit began, according to township officials.

Prior to voting on the settlement, the Niles Township board of trustees had a closed meeting with their attorney, Ron Redick, a special counsel litigator with the law firm Mika Meyers. After the consultation, the board opened the meeting back up to the public. The board then voted unanimously to accept the settlement, which calls for the reduced PILOT charge of 2.95 percent and the wastewater PILOT would be 4 percent.

For the approximate 3,500 township sewer and 600 township water customers which utilize the city of Niles services, the reduced PILOT will result in considerable savings over the remaining term of the 30-year contract, township trustees said in a written statement.

During Monday night’s meeting, Ringler said township officials felt that the city’s selection of the 10 percent rate  on the PILOT “was arbitrary and wrong.”

Niles City Administrator Ric Huff said the PILOT charges had been implemented to help cover the cost of providing the city’s services to township residents. The PILOT charges were first implemented in 2013.

The case was brought before Berrien County Circuit Judge John Donahue, who ruled that while the city may lawfully implement a PILOT charge on its water and wastewater funds, a 10 percent amount violated the parties’ contracts and was otherwise not permissible. 

An evaluation to determine the city water and waste water assets was conducted and helped the two parties to settle upon the reduced rates. 

On April 4, a court ordered facilitative mediation was issued to settle the lawsuit.

Like the township, members of the Niles city council also met Monday, where they voted unanimously to agree to the established settlement.

While township officials said they do not know for sure, they expected the reduced PILOT to be implemented in the next two months.

In released statements, both city and township officials said they were glad to have resolved the dispute and come to mutually agreeable settlement terms.