Augusta Township officials made deal that cost the utility department at least $400,000, documents show
Augusta Township Trustee Bill Tobler stands in the Lincoln Pines subdivision, where construction has stalled.
Tom Perkins | For AnnArbor.com
Several former Augusta Township leaders made an agreement with a developer in 2004 that cost the township’s utility department more than $400,000 in revenue, newly released documents show.
And the current board recently halted an internal investigation into the circumstances of that deal.
The agreement was investigated by a committee in March 2008 - but was not publicly disclosed - just as some township residents saw the first of what will likely be several significant increases in their water and sewer bills because of the utility department’s deep financial problems.
Residents packed two public meetings on the issue last spring to ask for answers and voice anger over rate hikes of 20 percent or more for homes with higher than average water usage.
What they didn’t know is that part of the utility department’s roughly $1.5 million operating deficit is tied to lots in the Lincoln Pines subdivision.
In that development, former supervisor and current Augusta Township Trustee Kathy Jackson, former township attorney and current Washtenaw County Commissioner Ken Schwartz and former township treasurer Bill Babut allowed the developer, Dale LaClair, CEO of LaClair Builders, to pay $407,000 less than township ordinances called for in water and sewer connection fees without the knowledge of some members of the board.
In return, LaClair’s company made a $33,000 donation to the township fire department.
By the time the subdivision is built out, the township’s total loss of potential revenue could exceed $500,000.
Trustee Bill Tobler, who investigated the deal, expressed disappointment.
“I was shocked. The utility department desperately needs these funds,” Tobler said. “It is very important to treat all citizens and applicants equally according to our ordinances and procedures, and to make all decisions in open public meetings, with the necessary documentation.”
Jackson and Babut did not return repeated phone calls or e-mails from AnnArbor.com. Schwartz denied any wrongdoing and said proper consent was given by the board to allow the developer to pay the lower amount.
Early in 2008, Tobler and several other officials formed the Accounts Receivable Committee to collect outstanding debts from developers.
That committee discovered the deal and questioned Jackson about it in March 2008, but the investigation was put on hold until after the fall election.
When the committee got back to work earlier this year, current Supervisor Pete Hafler supported a motion to “evaporate” the group. The motion passed 4-3. Jackson, who was appointed back on the board by Hafler in April after losing her re-election bid to him in November, voted yes.
“Your first reaction to something like this is dismay of your local government,” Tobler said.
The Agreement
Augusta Township is a rural, bedroom community southeast of Ann Arbor.
LaClair was the first in a line of developers to see its potential some 10 years ago.
During the early stages of the housing boom, he began planning the 132-lot Lincoln Pines subdivision at Whittaker and Bemis roads, receiving board approval in 1999.
A water tap in the Lincoln Pines subdivision is shown.
Tom Perkins | For AnnArbor.com
At the time, developers were to pay $1,500 per lot to tap into the Ypsilanti Community Utility Authority’s water and sewage systems, per section 6.5 of Augusta Township’s 1999 planned unit development agreement.
The PUD agreement details ordinances and guidelines that residential developers must follow in building homes, along with the fees required. The connection fee is in an ordinance set by the Augusta Township board. It charges all developers the same rate to connect into the systems and notes that it can’t be changed, extended or altered without a board vote.
Section 6.5 also stipulated the $1,500 fee was valid for a 42-month period after the first building permit for a home in a development was pulled. At the conclusion of the 42-month window, developers pay fees in effect at that time.
The Washtenaw County Building Department Web site shows the first building permit for LaClair’s Lincoln Pines development was pulled on May 18, 2000. Under the 42-month window, the company had until Nov. 18, 2003, to pay the $1,500 connection rate.
According to documents provided to AnnArbor.com, LaClair Builders paid for 58 connections on Lincoln Pines’ 132 lots before Nov. 18, 2003. That left 74 to be charged at the new rate, set at $7,000 by the board on Jan. 28, 2003.
But LaClair Builders still paid $1,500 on the remaining 74 lots - a $5,500 difference for each connection. That amounts to $407,000.
LaClair contends he deserved the break because construction was behind schedule, and his company paid for a substantial portion of the piping. He added his company was the first to build a subdivision in Augusta Township in 60 years, and it paid for the sewer main, water main and physical taps.
“Had the township told me ‘Hey, even though you paid for everything, we’re going to make you pay the additional amount to build these lots,’ it wouldn’t have made me feel nice and warm and fuzzy toward them,” he said.
Tobler said the board didn’t question the deal because the treasurer’s office, which was run by Babut, collects and deposits money from developers. The board only sees summary statements, which offer few details, Tobler said.
The deal
Documents, recordings and e-mails obtained by AnnArbor.com show how Jackson, Babut and Schwartz arranged the deal with LaClair in 2004 to continue paying the lower rates beyond Nov. 18, 2003.
Others on the board when the deal was arranged - including trustees Lynda Dew, Tobler, and JoAnn Kidder and Clerk Kathy Giszczak - told AnnArbor.com they were unaware of the deal. Trustee Bill Manty couldn’t be reached.
Jackson did not return calls requesting comment. But in a recorded interview with the committee and in an e-mail exchange between LaClair and Jackson, she discussed the deal and said LaClair should have been paying $7,000 per connection after the 42-month period elapsed.
The last building permit in the subdivision was pulled in 2007.
Tom Perkins | For AnnArbor.com
“He blew the deadline for that,” she said on the tape. “He came to the township and asked for reprieve … between Bill (Babut) and Ken (Schwartz), (they) negotiated that he could go ahead and pay the lower rate, just pay them late.”
Jackson told the committee she, Schwartz and Babut weren’t going to cut the deal for free and informed LaClair, “You need to do something nice for us.”
“So he donated $33,000 for the fire department,” she told the committee.
LaClair denied anything inappropriate occurred.
“This was done with the township supervisor and attorney, so if it was (inappropriate), I have no idea,” he said.
Later in the tape, Jackson told the committee LaClair said he would pay the $33,000 donation, “As a thank-you for not sticking it to me for being a couple days late on my fee.” Records show he was actually six months late paying for most of the connections.
In the e-mail exchange with LaClair, Jackson identifies Schwartz as the one who came up with the idea.
“Ken suggested that we should cut you some slack whereby we would allow you to pay the fees at the original rate … and you donated the $33,000 (negotiated by you and I) to the fire dept,” she wrote to LaClair.
Schwartz denied it was his idea and said proper consent was given for the extension.
“Anything that happened was approved by that board,” he said.
The township clerk’s office said it could find no record of the board approving the deal. AnnArbor.com asked Schwartz to provide any documentation or dates of such approval; he didn’t respond to the request.
Schwartz also said there was a grace period for the developer to pay lower fees after the 42-month period in the PUD agreement, but the document lists no such exception.
Receipts from the Augusta Township Treasurer’s Office confirm LaClair’s company made the donation of $33,000 on March 31, 2005. And an oversized check is displayed on a wall at the township hall.
More potential lost revenue
As the economy nose-dived, construction in Lincoln Pines halted.
Empty lots sit overgrown, and just 22 building permits were pulled after 2004. Yet receipts from the treasurer’s office show LaClair Builders paid for 64 water and sewer connections on May 12, 2004 - before the final 22 permits were pulled.
The PUD agreement says connection fees are to be paid at the time building permits are pulled, not before. By paying for all the remaining permits with no immediate plans to build, LaClair will save even more money. The last building permit was pulled in 2007.
Augusta Trustee Bill Tobler has been investigating the deal involving water and sewer tap fees at Lincoln Pines.
Tom Perkins | For AnnArbor.com
“I don’t think the intent (in the PUD agreement) was to allow anyone to pay tap fees without also pulling the building permits - that’s how I interpret it,” current township attorney Doug Winters said.
Tobler said the township is already considering raising the connection fees to $11,000 per lot based on a recommendation from a utility consulting firm.
If building resumes at those rates, LaClair will have saved an additional $120,000 to $150,000 that would have gone to the township’s utility department.
Jackson spelled out what the deal meant to the financial health of LaClair Builders in an e-mail to LaClair.
“The long and short of this is that if we had required you to pay the fees at the new rate, it would have cost you several hundred thousand dollars that you said you didn’t have,” she wrote.
LeClair did not return calls requesting a response to the e-mails.
The investigation
Early in 2008, Giszczak, Tobler, Winters and Jackson formed the Accounts Receivable Committee to collect an estimated $500,000 in outstanding debts owed to the township. Those debts are unrelated to the deal the committee investigated involving LaClair.
Giszczak said she had heard “whispers” about the deal, but the group was shocked at what it found.
“You just say to yourself ‘Oh my gosh! This is unbelievable that these events were taking place,’” Tobler said.
Tobler said the investigation was put on hold as the 2008 election approached, but the committee revisited it early this year.
Hafler came to a meeting to ask what the committee was investigating and said he was told of the deal and other matters. He then voted for a motion sponsored by Trustee Mike King to “evaporate” the committee at the next board meeting on April 28.
The vote was 4-3, with Jackson, Hafler, King and Trustee Dan Lula saying yes. The usual voting bloc of Giszczak, Tobler and Trustee Angela Sherbine voted against it.
Hafler said he voted to disband the committee because it never reported back to the board and raised Open Meetings Act concerns.
Tobler called the charge untrue. He said the committee had no decision-making powers, and said he believes it was dissolved for discussing Jackson’s activities.
He said he doesn’t understand why elected officials aren’t pursuing recourse.
“I’m dismayed that the township is potentially going to lose out on all this needed revenue for a utility department that is failing financially,” Tobler said.
From here, the township’s options appear limited.
Winters said a decision to try to recover the money through civil means or any other action lies with the board, and declined to comment or speculate on the case.
“I can only proceed to investigate the possibility of trying to recoup those dollars if authorized by the township board,” he said. “I think it would stick in anyone’s craw if someone benefits at the expense of the taxpayer, but it’s up to the board.”
Tom Perkins is a freelance writer for AnnArbor.com. Reach the news desk at news@annarbor.com or 734-623-2530.
Comments
ActiveParticipant
Thu, Jan 14, 2010 : 2:11 p.m.
I would like to congrate Augusta Township for having and holding on to a very smart attorney, Mr Doug Winter. It seems that Salem Township is not as smart.
Capt. Music
Tue, Jan 12, 2010 : 1:27 p.m.
To read these comments I had to put on a wet suit because of all the mud slinging. Its obvious we have opposing political groups on the board. Opinions are like well you all know everyone has one. I hope the truth is sought out for the next article to clear the innocent and expose the guilty.
michaywe
Thu, Jan 7, 2010 : 11:22 a.m.
BigJohnson comments: "I would like to clarify that the money that was given or donated by Mr. La Clair to the Augusta Fire Department should have been given to friends of Augusta Fire Department which is a political action committee (PAC) established to raise money to be put towards the construction of a fire station. I dont want people to think that the fire department, its union or the officers of the fire department took aure bribe or were in agreement with this deal Really? Township officials are NOT empowered to wiave or adjust collection of fees in trade for a contribution to a PAC! Doesn't matter what the PAC promises to do with the money. Time for Augusta to enact a two term limit; First Term- Served as an elected official. Second Term- Served as an inmate at a Federal Prison! US Attorney needs to see this thread if he hasn't!
DanL
Thu, Jan 7, 2010 : 10:50 a.m.
Let me ask all of you some questions that no one seems to be considering concerning this issue. The first question; do home builders have a few extra hundred thousand dollars lying around right now? Second: if youre broke and on the verge of losing your job, or in this case going out of business, what are you going to do if your creditors raise your rates and come after you with a vengeance? Third: does Kathy Jackson own the fire department or stand to gain anything if the fire department is able to build a new fire station? Fourth: does Bill Tobler seem like someone that really didnt know what was going on when all of this took place? Fifth: do you as a taxpayer want to continuously pay a lawyer to sit around on a regular basis and consider how to get money from housing developers that have gone out of business or are on the brink of going out of business? Sixth: if the accounts receivable committee were able to somehow extract blood from a turnip, would this affect your water bill? Now let me tell you some truths of which I am certain. Number one: Mike King is an honorable man, literally a boy scout (one of a rare few Eagle Scouts, look into it). Second: he and I became aware of this whole Lincoln Pines fiasco when we received word of this article. Third: as you may have seen above, Mike was the one who initiated the motion to dissolve the blood from a turnip committee because he didnt want to continue to waste taxpayers money paying attorney fees (one of our larger financial burdens). Fourth: Kathy Giszczak is acutely aware of every financial transaction that occurs within Augusta Township (she keeps the records of those transactions). Last: receipt of the 400k or 500k would not change your water bill, which is calculated based on the township's ability to pay the YCUA bill in the future. Now let me ask you the most important question. If Kathy Jackson did not do an evil deed and if there wasnt a conspiratorial cover up attempt: why did Bill Tobler spend so much time putting together this painstaking investigation? You should be aware of the fact that he and his constituents currently do not have a majority on the board (very important) and that Kathy Jackson must run for re-election to retain her position as Trustee in the upcoming election. Lets talk about your water bill. Do you think Tobler and his constituents would like you to pay less? If you had been in the meetings you would have seen that we were given several options and that all of them were too costly. After some debate the board went with the least expensive option. There was a public outcry and, as a result, Supervisor Hafler insisted that we quash that resolution. Trustee King spent considerable effort reviewing the options available and contacted the township engineering firm to discuss possible areas where costs could be cut. The firm then presented an additional, less expensive option, which the board adopted. The board also included in the resolution a review of the chosen option after a six-month period to determine if the amount the township receives is consistent with the amount needed to pay the necessary expenses to YCUA. Im sure no one has reason to believe me over Tobler or anyone else when it comes to determining who was fighting for a lower water bill but if you know anyone who attended those meetings you might be able to determine the truth for yourself.
Bull Dozer
Wed, Jan 6, 2010 : 5:02 p.m.
Im hearing you Susan, if you had trouble paying your mortgage, you might ask your mortgage company for an extension, and they may even be willing to grant you one, but I know one thing for sure, they arent going to be raising your mortgage payment by 466%..... If you do the math, thats what this breaks down to be, a 466% increase, the builder has a agreement to pay $1500 per lot until X-date, then one day past that date the price goes from $1500 to $7000, I dont think so...give me a break. If your mortgage company tried to stick you with a 466% increase for being late with your payment, I think you might go postal on them. It seems to me this builder did what you or I might do confronted with this situation, plead our case, see if we can get an extension, then pay to the best of our ability... The politicians can spin this anyway they want to get us common folks all riled up, but I dont see it, I dont see the big scandal every one is getting all worked up about.... Blessings, Dozer
Susan Burek
Wed, Jan 6, 2010 : 10:13 a.m.
A simply stunning news story. I am dumbfounded. I hope Mr. Perkins continues with this investigation because there is either more unlawfulness (that is what it is) to be uncovered, or we had here the most incompetent set of elected officials and previous township attorney ever, who traded $33K for at least $407K due to our township. For what? That is what Mr. Perkins needs to find out. And Mr. LaClair, too, either joins the ranks of inept businessmen, or is used to making deals and knows his way around unscrupulous public servants. I think the next time I run short of cash, and unable to pay my mortgage, I am going to ask my lending bank if it is OK if I pay it six months later, with a reduction to pay only 21% of what I owe, because, well, I simply dont have the money and it doesnt make me feel all warm and fuzzy. Think that will fly? We need board members in this township who stand on the right side of the law, and the right side of its tax paying residents. This whole article make it very clear to me just who those board members are....and arent.
mking
Tue, Jan 5, 2010 : 9:41 p.m.
Wow, there is so much wrong with this story I don't even know where to begin, but just as disturbing as the story itself are some of the comments left by a number of you readers. There is no way to respond to everything, but I do want to start with a few things. First and foremost, there is no smoking gun here, I know some of you love a good conspiracy story, but your going to have to look else where for that, there is no conspiracy here! I took office as Trustee in November of 2008, with no prior experience as a Trustee. In my second or third board meeting, I was the one that asked about the accounts receivable committee. All I knew was our township attorney was a member of this committee and was spending significant time in meetings with a few of our trustees. I was not clear at the time, but having paid enough lawyers in my days, I knew that it was going to be expensive to the township having the attorney serve on this committee. The explanation offered at the meeting was simply, the committees purpose was to collect monies owed to the township by the developers. Knowing most of the developers were defunct, and that a number of them had already packed up and left the area, I struggled with the concept of an accounts receivable committee and whether this was going to be an efficient use of the township attorney. I explained that I fully supported the efforts by the clerk and treasurer to continue working to collect from these accounts as a part of there normal township responsibilities, and further explained that once an action plan was developed, that the attorney could be used, as determined by the board, to pursue what ever actions the board felt were necessary. At that time, I made a motion to dissolve the accounts receivable committee, and as the article states correctly, the motion passed. Now, this past Sunday, I pick up the paper and read, for the first time, about this investigation. This is all news to me, I am more then a bit disappointed with Mr. Perkins as he was just on the phone with me a week ago Monday on another topic. Mr. Perkins could have asked me Mike, why did you make a motion to dissolve the accounts receivable committee? I would have been happy to explain my reasons on my motion to him. Tom knows how divided our township board can be on most issues, and he knows I insist he call to attempt to get both sides of the story. I placed a call to Mr. Perkins after reading this article and I am still waiting on his return call.
mr54
Tue, Jan 5, 2010 : 8:25 p.m.
Why does this story or any other that comes out of the Twp hall surprise people. This underhanded coverup crap has been going on for years. And, it will never stop as long as we keep electing people who's only interests is their own and to further themselves politically. Do our elected officials want to help out the taxpayers in our township? STOP RAISING OUR TAXES!!!!!
LyndaD
Tue, Jan 5, 2010 : 5:49 p.m.
BillT, You didn't reply to my questions. In the article written by Tom Perkins he states that "Documents, recordings and e-mails obtained by AnnArbor.com".. Who made these recordings? How were these e-mails obtained? How do we know that these emails, documents and recordings have not been tampered with? In your reply you failed to mention how you raced out from the meeting you spoke about. What was your hurry to get home? Maybe a little computer work to take care of? I would love to have this conversation in person with BillT but when I tried he started screaming profanity at me. Yes, there were many witness that heard his outburst, hardly the behavior of an honorable man. Lynda H. Dew
BillT
Tue, Jan 5, 2010 : 12:41 p.m.
Once again, I disagree with former Treasurer Lynda Dews statements. Just before the 2008 election and without Board authorization of the expenditure, Supervisor Jackson had our IT company co-owner Mike King, who was also a candidate for Trustee on their slate including Jackson and Dew, to make an unannounced public presentation regarding alleged manipulation of the Board minutes as shown on the township website. And yes, I am the webmaster, so the intent was to attack me in a public Board meeting. In the following Board meeting attended by Dew, I made a rebuttal presentation showing that the website minutes were verbatim, letter by letter, identical to the official Board minutes signed by Supervisor Jackson. Further, the minutes in question (2005) were on the website for years. The website minutes are shown in color provided by the track changes feature of Microsoft Word, while the copy in the official Book of Minutes was printed on a black and white printer. And so, changes required by the Board made between the draft minutes and final signed minutes are shown in red, and are EXACTLY as provided to me to post. Kings IT company subsequently charged the township for the 5 hours that his IT technician sat in the audience in order to implement their political stunt that contained entirely false insinuations. I wonder how the citizens feel about how their tax money was spent? So as Lynda Dew stated, Please take the time to read between the lines.
LyndaD
Tue, Jan 5, 2010 : 11:31 a.m.
In the article written by Tom Perkins he states that "Documents, recordings and e-mails obtained by AnnArbor.com".. Who made these recordings? How were these e-mails obtained? How do we know that these emails, documents and recordings have not been tampered with? This would not be the first time that data in Augusta Township has been tampered with after all Bill Tobler is the Web Master in Augusta. When I was on the BOT board minutes had been manipulated just before the last election. The timing of these so called "deals" is way to convenient for me. Please take the time to read between the lines, there is a story there. Lynda H. Dew
girlhunter
Tue, Jan 5, 2010 : 9:20 a.m.
I think it is sad that people who live in what seems to be a very rual and quiet little town.. think that "curruption" and back door deals are nothing new.. Where is the truth in goverment.. where is the open door policy we should be repersenting.. where?? I belive the other writer is correct that a little bit of power turns people bad..The next ellection that is held out here I hope the residents of Augusta township remeber 99.9% of what the hopefully to be elected is what is called LIP SERVICE.... I don't think that the people think that the fire dept. or any of it's employees, volunters, unions, etc think that they were the ones in the wrong.. we all pretty much know who the ones to blame are....
Firefighter363
Mon, Jan 4, 2010 : 9:04 p.m.
I would like to clarify that the money that was given or donated by Mr. La Clair to the Augusta Fire Department should have been given to friends of Augusta Fire Department which is a political action committee (PAC) established to raise money to be put towards the construction of a fire station. I dont want people to think that the fire department, its union or the officers of the fire department took a bribe or were in agreement with this deal. This article and subsequent investigation is great and next time, please bring a backhoe so you can dig through all of the crap and mistakes that have been made over the years. These blunders and lost revenue could have gone to pay for the construction of a new fire station or to pay for police services from the Washtenaw County Sheriff. Keep digging.
and9801
Mon, Jan 4, 2010 : 8:37 p.m.
I too live in Augusta Township. This article discusses things that surprises no one in Augusta Township that I know-potential corruption or improprieties. For as long as I've lived here there have been major problems with at least several elected officials. In 1999 there was a recall election that removed clerk Carol Kovalak from office. However, her replacement proved to be just as bad. It seems that having a little power out here turns good people bad. The township refuses to enforce its own codes, regulations or court orders issued by a Washtenaw County judge. Complaints about the lack of reactions to the county or state level has produced no results. Sadly, I will believe just about anything bad someone has to say about Augusta Township because they've proved it over and over again. This township has always shown extreme favoritism. Favoritism and back door deals are nothing new here, nor is paying for services that residents never see. While I wish good things for anyone who tries to clean up the township, I have little faith that things are going to change anytime soon. Just because it's a rural community doesn't mean it's actually a nice place to live.
wbkt
Mon, Jan 4, 2010 : 7:16 p.m.
"I don't understand all the ins and outs of this story, and I don't have a personal interest in it." cjm Augusta residents need to realize that we are ALL potentially affected by the financial condition of the Utilities Department, whether were part of the Special Assessment District or not. When a township borrows federal money, paying back the loan is non negotiable. If the township spends the USDA Repayment Fund monies elsewhere, to, for example, subsidize actual expenses which havent been covered by adequate hookup and user fees, the government isnt going to forgive our debt. The first people wholl be hit by the township to come up with additional debt money will be those in the SAD who are connected to the services. Next in line will be those in the SAD who arent connected. And finally, all else failing, the entire township will have to cough up the necessary funds to satisfy the federal loan. Protection by the Headlee Amendment wont apply in this scenario, so our property taxes could catapult into the nightmare zone.
girlhunter
Mon, Jan 4, 2010 : 6:07 p.m.
My family and I live and pay taxes in Augusta township.. I am NOT shocked that this has been going on..I am not shocked that the investigation has been halted.. if you go back in township history you will see a pattern of wrong doing, and a history of sweeping it under the rug.. you will also see these type of "shady" deals and the amount of money walking out the door freely.. or on the backs of the tax payers is just a crime.. and to no great surprise.. there is no one to stand up and take the responoisablitly.. although everyone claims to "to be in the know".. we all now know.. who is in the "know".. I am ashamed and reather angry that we as tax payers are going to foot the bill for what seems to be a very underhanded deal. Now I understand making deals with the large companies to come in and build.. if the "wiggle" room is there... there has been no "wiggle" room in the budget.. weather it be general fund, or Utilities, or the FD for such a "deal" Augusta Township has been in financial straits for quite awhile. Now Pete is my nieghbor.. and being our nieghbor and our supervisor..I would like to know why he would apoint someone to the board after not only losing the election in November, but with this hanging over her head.. The whole situation just stinks of imporpriety. and if Pete wants a second term.. these are things people remember.. when Pete ran the one thing that he ran on.. is TRUTH in goverment...HUM??? a 33 thousand dollar doantion to the fire dept... does nothing for those of us who have to adhear to the letter of the law.. Basically all it tells us "common folk" is that our laws and ordinacnes are up for sale and that if you have enough money you can do anything...Shame on our "leaders"!!!!!
Kathleen McDonald
Mon, Jan 4, 2010 : 5:16 p.m.
Don't believe everything you read in print. Only about 10% is credible. I dare any of you to go into the township hall and try to get any information out of either the Clerk's or Treasurer's office like I have. If you do, be sure to be very specific about what you're requesting, or you may not get what you want. Then you can decide for yourself what is truth or fabrication; who is honorable and who is blowing political smoke. Good luck!
ypsiman
Mon, Jan 4, 2010 : 3:48 p.m.
Hrad to make the budet work when your trying to make as much as you can for yourself
goblue7182
Mon, Jan 4, 2010 : 3:24 p.m.
Sounds to me like it is time for Lynda Dew to go! Seems like she has plenty of blame to pass around, but no personal accountability. I live in Willis and it always seems like the sames names are screwing up around here. Bill Tobler has my support in cleaning this mess up and rooting up any other shady deals. Thanks Bill T!
BillT
Mon, Jan 4, 2010 : 2:14 p.m.
Michaywe, In January 2009, the Board initiated a lawsuit against former township attorney Schwartz for "legal malpractice". At issue was a pair of linked contracts that committed Augusta Township to pay YCUA $2.3M over 15 years to reserve capacity at the treatment plant for developers that have since failed. Lynda Dew and Kathy Jackson voted for these contracts and I voted against them. In December 2008 we were able to buy our way out of the $2.3M commitment, but at great expense for absolutely nothing. The lawsuit was undertaken by an attorney who specializes in legal malpractice, and who took the case on a contigency basis. This alone speaks volumes. Unfortunately, this story is just the tip of many financial icebergs, some larger, which is why I ran for office.
LyndaD
Mon, Jan 4, 2010 : 1:13 p.m.
BillT is doing what he does best and that is distorting information to discredit others. There was no need to hire a CPA to balance the bank accounts and waste taxpayer's funds. That is the job of the Treasurer! all accounts were reconciled by the appointed Treasurer Lynda Dew. The BOT were kept informed with monthly progress reports of account balances. In regard to "purpose" of the accounts, Dew already knew because she was the Deputy Treasurer when the accounts were set up in 1996-1999. Clerk Giszczak was in office for over 3-1/2 years when Dew was appointed Treasurer. How did Giszczak write checks for township invoices if she didn't know the purpose of the accounts? How did she balance the general ledger to the bank statements? "H" said BillT is an honorable man. Many Augusta residents used to think that also but his motive to run for office soon revealed as self serving. How ironic that this "scandal" is about municipal water. Toblers were the last people to agree to the water lines because he didn't care if his neighbors had municipal water.
michaywe
Mon, Jan 4, 2010 : 1:13 p.m.
BillT.,obviously the gentleman pictured in the article, hearing his comments and not many from the former attorney Schwartz or Sup'v. Jackson makes me hope this story isn't dead. No audit/no bids??? No surprise here. Seem to remember former Supervisor Kathy Jackson is or was related to the CEO of the non-competitive beneficiary, Utility Mgt. Services. Wonder why twp. is not able to pursue collection of the $400k if deal was in fact, made 'under the table'? Also; BillT., seems attorney Schwartz may have some financial liability if facts prove his advice was bad.
goblue7182
Mon, Jan 4, 2010 : 9:57 a.m.
Great story, keep digging, I think there is more than meets the eye here.
cjm
Mon, Jan 4, 2010 : 7:58 a.m.
I don't understand all the ins and outs of this story, and I don't have a personal interest in it. But there will be local issues I will have a real stake in, and I hope they'll get the same attention this one has. The danger of losing newspapers is that relatively unglamorous local stories will not be heard. I'm glad to see AA.com doing some real reporting. Thanks.
H.
Sun, Jan 3, 2010 : 9:06 p.m.
Thanks for the input BillT. You seem like an honorable man. You commented "the actual cost per parcel of installing 26 miles of water line was around $10,000 (per unit), and this was for the water line to go by on the road and not be connected to the home." This implies that the Lincoln Pines developer was not required to pay for the infrastructure, which gets built into the cost of the home purchase. This would not shock me since many elected officials thought the housing boom would never end. If this is true, it was a poor foresight. It is not a crime, just plain stupid. The department operating losses are being subsidized by the township general fund. The $1.5 million in losses (I assume over many years) would be accounted for in the township fiscal year audit. There may have been no details explaining the losses, but the line items should have been present in the audit. If they were not, I seriously question the legitimacy of previous fiscal year audits. These were tax dollars that must be accounted for in an audit. Since the Township does not promote openness and transparency by posting its fiscal year budgets and audits on its website, the public can only make assumptions. The current/previous Supervisor and Board are still accountable for ignoring these losses and not taking action to erase or at least reduce operating losses. I give you credit for raising the red flag. So the question now becomes what are the Supervisor and Board doing to eliminate losses since you mention he/she is responsible for drafting the department budget and reviewing expenditures over the course of a year? To my knowledge, the majority of the water system only serves a small percentage of users in the Township: primarily Lincoln Pines, Bellemeade, and the Lincoln Consolidated School District. Raising rates by as much at 20% across the board (I'm making an assumption that rate hikes are being levied on all users) has a negative impact on the school district which spans its borders into Ypsilanti Township. If this is true, there must be accountability and heads should roll. Lincoln Schools has its own set of financial problems. Inefficiencies and poor practices cannot be passed on to others. The price of water is what it is since it is purchased from YCUA through the City of Detroit. The users have to pay for these costs. But the waste you mention that was 'approved by the other side' must be eliminated.
Sandman
Sun, Jan 3, 2010 : 7:48 p.m.
That is politics...people dealing with people, only on a community-wide basis. I think this was a good decision, based on the issues at the time.
LyndaD
Sun, Jan 3, 2010 : 6:28 p.m.
The real reason these accusations are being made and at this time is to discredit Kathy Jackson. She will be required to run for office and win, if she wishes to keep her seat until 2012. Giszczak & Tobler don't want that to happen because they can't control her vote. Sherbine just votes along with them, she can't possibly know what's really going on there because she is rarely in her office! The reason the Accounts Receivable Committee was formed was because clerk Giszczak was so far behind in billing and collecting monies due to the township that she dumped it into the supervisor's lap to collect. Bill Babut and the previous treasurer invested township funds wisely to insure revenue for the future. Giszczak and Tobler could care less about the residents of Augusta, they just want control. P.S. Angela Sherbine was NOT on the Augusta Township Board in 2004, she was elected in 2008.
dading dont delete me bro
Sun, Jan 3, 2010 : 3:48 p.m.
a heck of a deal if you're not a utility paying, tax paying resident of augusta township. laclair and the crooked officials should be run out of the township...keep them away from ypsi township too, we've got our own problems to deal with.
BillT
Sun, Jan 3, 2010 : 3:26 p.m.
A couple of comments are in order: 1) The deal went down in 2003/2004 and the "final" payment was made by the developer on May 12, 2004. Giszczak, Tobler and Sherbine first took office in November 2004. 2) Even if I was in office in 2004, a Trustee would not have seen these receipts. These payments are made only to the Treasurer's Office, and this information was not provided by Treasurer Babut for review. Especially, those receipts related to the Utility Department were kept from the Trustees. This only came to light because we formed the Accounts Receivable Committee to investigate the deteriorating financial condition of the township. The committee was then "dissolved" by the Board majority after they learned of this connection-fee investigation. 3) Michigan statutes do not require an audit of the Utility Department, whose funds must be kept separate from other accounts. Previous Augusta Township Boards chose not to audit the Utility Department accounts (you can wonder why). When an audit was done for 2007 (in 2008), this was when I first learned of the operating deficits. For last year's audit, the "other side" tried hard not to have the same auditor return. The $1.5M operating deficit is for the seven years prior to March 31, 2008, and does not include "losses" related to this connection fee issue, and does not include the "losses" related to the depreciation of the system, which runs into many millions. Sooner or later, these losses must be passed on when the system must be replaced. 4) The $1500 connection fee for combined water/sewer for developers was established in 1997. Private citizens paid $2500. This was increased to $6200 in 2001, and then to $7000 in 2003. This price is still well below actual cost. In 1995, the actual cost per parcel of installing 26 miles of water line was around $10,000, and this was for the water line to go by on the road and not be connected to the home. Townships can't print money; the actual costs must be eventually paid by the residents. 5) The Supervisor is in charge of the Utility Department, and is also statutorily responsible for developing all draft budgets and monitoring the budgets and expenses throughout the year. Each month we argue about expenditures in the Utility Department that 3 of us think are inappropriate, and these expenditures amount to about $10K per month. On December 22, 2009, the majority of the Board voted to issue a new $160K contract without bids or review, to increase the payment to the Utility billing company by about 150%, and to renew the expired contract to Utility Management Services for another year, all without prior discussion of need. Further, they proposed to pay for these expenditures using funds that 3 of us believe are restricted funds collected by Special Assessments to pay loans to the USDA.
Patrick Maurer
Sun, Jan 3, 2010 : 12:58 p.m.
We that live in Augusta Twp. are not surprised that our "elected" leaders play favoritism. Those of us that live in the newer communities have been treated very unfavorably when it comes to our assessed valuation of property, water rates to cover for the special favors given to a select few. We attended a meeting to hear about the special study the township board authorized for the water rates and the costs associated. Nothing was said at this meeing about the real reasons the water department is in the shape it is in financially although it was surely known by the board. We looked at the figures in the documentation provided by the contractor. What it shows is there is something terribly wrong with the way the system is being run and the representation the citizens of this community is given. It seems that the ruling elitist class decides what is best for them and the citizens come after everyone else. Shame on them for thier abuse of priviledge.
H.
Sun, Jan 3, 2010 : 12:45 p.m.
Taking a second read, I think this article is missing another story: "What they didnt know is that part of the utility departments roughly $1.5 million operating deficit is tied to lots in the Lincoln Pines subdivision." If this is true, why is the Utility Department $1.5 million in the red? This 'deal' went down in 2003/2004. That was 6 years ago. The Department and township should have made adjustments to balance expenditures with revenues. Don't get me wrong, this 'deal' is a story. But that is in the past. Blaming the developer for this short fall is too convenient. Why are the taxpayers starring down the barrel of a $1.5 million utility department deficit? Somebody at the department needs to provide answers.
Jed I Knight
Sun, Jan 3, 2010 : 12:18 p.m.
Initial cost for a tap: $1,500 dollars. Cutting a deal to save hundreds of thousands in costs: $33K dollars Pushing inflated costs of 7-11K for all future taps on to others and sinking the budget: Priceless.
Capt. Music
Sun, Jan 3, 2010 : 12:05 p.m.
Could there still be a investigative reporter left? Thanks at last Tom.
H.
Sun, Jan 3, 2010 : 11:31 a.m.
I concur with Mike D. comments. As the saying goes stupidity is not a crime. But there are two occurances mentioned in this story which raises a red flag: (1) Why was this a backwoods deal and not voted on by the entire board? (2)Why was the current supervisor so quick to squash discovery and potential facts by making a motion to disolve the Committee that had no decision making power, and also not object to letting the then Supervisor vote on the issue? That was a clear conflict of interest. These two occurances are usually tied to fraud and/or wrong doing. Maybe the truth will never be known. It will be interesting to see if the residents ban together and push for a recall. If a recall is done, place it on the August or November 2010 ballot. That way it will not cost the taxpayers an extra $8-$12k for a special election.
Pat Ivey
Sun, Jan 3, 2010 : 11:19 a.m.
"AnnArbor.com asked (Ken)Schwartz to provide any documentation or dates of such approval; he didnt respond to the request." I should think it would be in his best interest to respond. Perhaps he's too busy, or maybe he thinks that voters will forget about this when it comes time to choose a candidate for the state house this fall.
SD
Sun, Jan 3, 2010 : 11:18 a.m.
I wonder how this (tax deductable) "donation" from the builder was presented to the township fire dept. One can only imagine how much sugar coating was used to 'show how much this company cared about, & wanted to be a good citizen of the township'. Classic Palm greasing 101. Totally disgusting.
a2huron
Sun, Jan 3, 2010 : 10:41 a.m.
Finally some decent investigative reporting. Now the reporter just needs to track the campaign finance reports to see who the developer gave money to. Always follow the money trail.
HPD
Sun, Jan 3, 2010 : 10:14 a.m.
I wonder if there is a way to get the lost funds from the pockets of the perpetrators. It seems the state has an interest in local government integrity.A criminal investigation seems in order.
bruno_uno
Sun, Jan 3, 2010 : 9:37 a.m.
the township officials, attorneys, and head of the fire department should all be fired. this is unacceptable but probably will be swept under the rug very quickly i imagine.
jondhall
Sun, Jan 3, 2010 : 9:27 a.m.
Well it appears that Augusta Township now has Attorney Winters on the case, sure all will be fine. I would not let this bother anyone too much it will be a very long time, before these subdivision is completed. Why have house we have no JOBS!
in the know
Sun, Jan 3, 2010 : 9:27 a.m.
K J has been putting it to the residents of this township for her benefit for a long time. Why would he appoint her to the board? I think its time for a recall election and get P H and K J out for good
Eliz
Sun, Jan 3, 2010 : 9:21 a.m.
This is Augusta Twp. Politics as usual, what an embarrassment and disappointment too continually see our local Township Office let down its community. No one is stepping up to take responsibility for this and as usual, everyone is passing the buck and pointing fingers. Giszczak and Tobler were in office when this deal took place since they both claim to know whats going on in their community; I find it impossible they knew nothing about this, is this not their job to know? Government is by the people for the people and I can assure you that Augusta Township officers are for neither. The people of Augusta Township deserve better, want better and need better. Recall every single one of these idiots and lets have a community we can all be proud of and count on. If you have ever been to one of the public meetings you wouldnt put the care of your dog in their hands let alone your community. Others on the board when the deal was arranged - including trustees Linda Dew, Tobler, and JoAnn Kidder and Clerk Kathy Giszczak - told AnnArbor.com they were unaware of the deal.
Craig Lounsbury
Sun, Jan 3, 2010 : 9:05 a.m.
To steal a line from Claude Rains in Casablanca, "I'm shocked, shocked to find that corruption is going on here" This story would be laughable in its blatant bungling corruption and theft it wasn't at tax payers expense. There are at least a half dozen things I could focus in on, but I'll settle for one thats almost a side bar to the story. How did the hook up rates go from $1500 to $7000 in one vote?
Mike D.
Sun, Jan 3, 2010 : 8:40 a.m.
Reporter Perkins hasn't asked a few obvious questions that would give this story some needed depth: 1. What was the motivation to make this deal? It's commonplace for a large developer to work out special deals with a municipality for a break on fees. The expectation is that a large development will increase the property tax base in perpetuity, so some fees lost up front is an acceptable calculated cost. How much has this sub increased the township's property tax revenue every year since it was built? How much did the developer's work on water mains offset what should have been the township's burden? Did this deal, in fact, cost the township overall, or make it money? 2. Other than (apparent) improper approval without a board vote, was there impropriety on the part of the officials who made this deal? Did they stand to gain personally, or was their motivation simply to make a deal they thought would benefit their community? Depending on the answers to the questions above, this story could be a real scandal or simply a matter of a procedural gaffe.
zollar
Sun, Jan 3, 2010 : 7:39 a.m.
You need to do something nice for us. So he donated $33,000 for the fire department, she told the committee. WoW, This leaves me speechless....anybody else?