By Mary Drier
Staff Writer
CARO — The $90,000 check Denmark Township gave Tuscola County to help pay off its $395,000 debt from a failed water project was directed to be bounced back to the township by the Tuscola County Board of Public Works (BPW) Tuesday.
Also, the BPW recommended handing back the financial responsibility of the 2010 water project to the township.
“Rural Development (who is helping finance project) realizes the township didn’t have to go through the county but did because of its experience in dealing with bonding. The township could have financed it on its own,” explained BPW Chair W. Donald Duggar. “Rural Development wants the county’s name taken off the debt and the township’s put on. That was their recommendation on how to handle this.
“It can be done by a resolution.”
That is the latest suggestion to address the problem created when public out cry over excessive costs and other issues caused the 2010 water project to be abandoned in 2012.
Because Tuscola County Commissioners had pledged the “full faith and credit” of the county to finance the project, it became the county’s financial obligation when the township abruptly dropped the project.
“What the county did was kind of like when someone co-signs for a loan for someone else to help them,” said Duggar.
The township had planned to create a special assessment district to capture money to pay off the project. When the project was stopped, a special assessment district wasn’t created; but by then, a nearly $400,000 debt had been incurred.
The county has two ways to protect itself in such a situation. It can capture a township’s state revenue sharing, or take legal action to levy a millage over the entire township to cover the debt. Denmark Township’s revenue sharing isn’t enough to pay of the debt in time so the county started a lawsuit. It would take special tax levy of approximately 5 mills to pay off the township’s obligation to the county.
“The county’s attorney, John Axe, suggested this board pass the resolution for the county to give the obligation back to the township that, and to make that recommendation to the (county board of) commissioners to approve it,” said Duggar. “Rural Development is willing to transfer the debt from the county to the township and then pay off the Hastings Bank’s note.”
BPW members present who approved the resolution for Denmark Township to be responsible for the debt were Robert Montey, Elwyn Helwig, Jim McMinn, Joe Hembling.
“We (BPW) are only the conduit to recommend to the county commissioners. This resolution transfers the responsibility to the township,” said Duggar. “The commissioners have to approve it.”
If the county commissioners and Rural Development approve the shift in responsibility and nothing happens to stop the 2013 water project, the county’s lawsuit might become a moot point; but if the new project doesn’t go through, then the county is still responsible for the debt.
The bond anticipation note with Hastings Bank is due May 1.
Rural Development’s plan is to include the cost of the blueprints, engineering, and survey work and such that were done in the 2010 project in the new proposed 2013 water projects.
However, that plan is being contested.
There are some township residents who contend money owned from the previous project cannot be forwarded to the new proposed water projects.
“When the 2010 project was stopped the judge said that can’t be done,” said audience member Gary Johnson who acted as a spokesperson for a group of concerned citizens. “The first project was driven by those on the township board then not by the people. It wasn’t handled properly back then with legal notice and no due process… They basically didn’t follow the law so it was stopped.”
Johnson stated some township residents would be fling a lawsuit against the new water projects, and one was filed in Tuscola County Circuit Court Wednesday. (See related article)
Mary Drier is a staff writer for the Tuscola County Advertiser. She can be reached at drier@tcadvertiser.com.