By Megan Decker
Staff Writer
DENMARK TOWNSHIP — After over an hour was spent in closed session on Monday with the township’s attorney Peter Poznak, the Denmark Township board of trustees unanimously voted to pay the remaining balance of $306,408 on its bond anticipation note to the county.
The money will come out of the township’s general fund and was to be delivered in the form of a certified bank draft on Tuesday. The township has until today’s deadline to make payment on the bond before it would go into default. The bond anticipation note with Hastings Bank is due May 1.
“This is not something we looked at lightly,” said Denmark Township treasurer Dennis Weber. “This can be something that is seen as righted by the township. We do not want to go into default. We will be operating under a shoestring budget, but this is better than the alternative.”
See BOND A8
The bond repayment became an issue when public outcry over excessive costs and other issues caused the township’s 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.
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 off the debt in time so the county started a lawsuit. It would take a special tax levy of approximately 3.5 mills to pay off the township’s obligation to the county.
“I see this as our best option,” said trustee Steven Schwab. “It would be unfair to impose the additional tax on the residents.”
The township board will begin addressing next year’s budget in coming weeks and look at what cuts need to be made in order to accommodate for the bond repayment.
“Our budget is going to be very, very tight and our full budget (proposal) next month will reflect that,” said Clerk Charles Heinlein.
The next regular meeting of the Denmark Township Board of Trustees will be held at 6 p.m. May 19 at the township hall.