By Mary Drier
Staff Writer
TUSCOLA COUNTY — The anticipated easy solution to resolve Denmark Township’s financial obligation to Tuscola County over a failed water project didn’t happen during Wednesday’s county meeting.
“Yes. We have the check the township said they would give us, but our attorney advised us not to cash it yet,” explained Tuscola County Controller Mike Hoagland. “There are other steps that have to happen first.”
During Monday’s Denmark Township meeting, board members passed two resolutions towards paying off the $395,000 debt it accrued from the proposed 2010 water district, which was abandoned in late 2012. When the township backed away from the project, that left the county on the hook to pay off the obligation because county officials had pledged the “full faith and credit” to back it.
The township’s resolutions are to: use any leftover funds from the three new proposed water projects currently in planning stages by using part of the engineering plans for the failed 2010 project for them, and to use some of the USDA loan from the new project to pay off $305,000 towards the obligation to the county. And, also for the township to write the county a check for $90,000; which they did, and the county is holding at this point.
“The way the process works, is the issue now has to go before the Tuscola County Board of Public Works for their recommendation on how to proceed,” explained Hoagland.
That meeting is 1:30 p.m., Tuesday, Feb. 4, in the board room at the Purdy Building at 125 W. Lincoln St., Caro.
Even if the Board of Public Works agrees to the township’s offer, it still might not be a done deal.
The first water project was stopped because of public outcry over costs and other issues. Some residents in the proposed new water district are talking about taking legal action again.
In the meantime, the county’s lawsuit against the township to recover the money is still pending in court.
A county pledging its credit on costly municipal projects is standard practice because it helps a municipality in qualifying for a lower interest rate, explained commission Chair Thom Bardwell.
Tuscola County has backed numerous municipal projects over the years. This is the first default case in the county.
Furthermore, there are options for the county to protect itself from a default, like this. A county can divert a township’s revenue sharing from the state, and also has to authority to levy a tax millage over the entire township to pay of the debt. Because Denmark doesn’t receive enough revenue sharing to meeting the obligation, the county had to initiate at lawsuit.
It will take approximately 5 mills spread over the entire township – even residents who weren’t in the water project area.
“Options continue to be explored other than having to proceed through court,” noted Hoagland. “Everyone is hopeful this can be worked out.”
Township officials said they are also hopeful of resolving the issue without undo burden to those in the township.
Both the township’s and county’s attorneys have been working together on this as well as USDA representatives.
Mary Drier is a staff writer for the Tuscola County Advertiser. She can be reached at drier@tcadvertiser.com.