By Mary Drier
Staff Writer
CARO — If a lawsuit filed Wednesday is successful in stopping new proposed water projects, Denmark Township could be awash in debt.
Forty-eight township residents formed an unincorporated voluntary association called the “Citizens Against Unfair Taxation,” (C.A.U.T), and hired Owosso Attorney Lynn Bowne to file a complaint against the township to stop the proposed water projects that were started in 2013.
The crux of this lawsuit by C.A.U.T. is the township’s and USDA – Rural Development’s plan to include the $395,000 in costs that were incurred during the proposed 2010 water project which was abandoned in 2012 because the cost was more than anticipated as well as the determination proper procedures were not followed.
The suit also claims: the new districts are not uniform, it gerrymanders to omit areas of those who are against the projects, and includes large land acreage that have no need for water because it is in a special set aside program to protect and preserve agricultural land.
“We are challenging the process of this latest water project and challenging the sufficiency of the petitions that drove it, ” said Bowne citing the Michigan Tax Tribunal findings in the 2010 project that the township is not ‘entitled to allocate’ the preliminary costs of the water project in a special assessment.
“If that was so for the first project, then that is true of this (latest) one.”
Another point made in the C.A.U.T. legal complaint is land enrolled in the farmland preservation program Public Act -116 shouldn’t be included.
“Their contention is that more than 50 percent want this project is not a true reflection because it includes PA-116 land that is set aside to protect farmland and therefore cannot be assessed,” Bowne pointed out. “That should make the petition insufficient and void because there is no reasonable expectation that with waterlines going through PA-116 land will be developed for commercial, residential, or industrial use.
“Plus, they want to create a special assessment on land frontage rather than acreage served, which isn’t a equal (division) of assessing cost.”
Under PA – 116, farmers enter into a contract with the state of Michigan to keep their land as a farm and not develop it. For doing that, the state gives the farmer a state income tax credit. Michigan was one of the first states in the nation in 1974 to develop a program to protect farmland.
“We doubt most of the farmers in the water districts plan on developing the land… now much commercial or industrial development has there been in the township?” questioned Bowne. “It isn’t right to include PA-116 land as a whole to get to 50 percent when farmers don’t plan to develop the land to start with and then to only do assessment on frontage rather than the entire area. PA-116 (land) doesn’t pay assessments.
“It’s not fair to the small property owners.”
According to Denmark Township Clerk Charles Heinlein, who was not on the township board back in 2010 when the first water project was started, the township has tried several times to get the township’s insurance company to cover the $395,000 that is at issue.
If this latest court action blocks the 2013 water project, the $395,000 has to be paid one way or another.
“We’ve submitted that bill for payment three times, and three times the insurance company denied it because of some technicality or another that we didn’t meet,” said Heinlein.
“The township doesn’t want to have to tax all of the township to pay for that.”
It is C.A.U.T’s stance the debt should be footed by every property owner in the township.
In order to cover the $395,000 debt, about 5 mills would have to be lived unless a different arrangement can be worked out with USDA – Rural Development and Hanstings Bank.
If this lawsuit is successful in blocking the new water district, the financial obligation would still fall to the county because the proposed agreement to have the county’s name taken of the obligation is contingent on the new project to absorb the debt.
Besides filing a complaint in Tuscola County Circuit Court, Bowne also filed a complaint with the Michigan State Tax Commission over the issue.
Mary Drier is a staff writer for the Tuscola County Advertiser. She can be reached at drier@tcadvertiser.com.