Sylvan Township residents question board about possible large tax levy
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About 30 Sylvan Township residents filled township hall to ask questions about a series of developers' lawsuits against the township and about future bond payments for sewer and water systems, which combined could lead to a possible 60-mill tax levy.
Oral arguments in the appeal could come as soon as February, Flintoff said, “but that doesn’t mean that a decision will be made anytime soon.”
Norfolk Development Corporation and Magellan Properties sued the township for breach of contract and were awarded $2.4 million. The township is appealing the judgment and has filed a motion for a stay of payment until the appeal is heard.
This judgment and an order to reimburse the county for $1.2 million could mean a one-time, 18-mill tax levy for township residents.
But the township also owes $9.775 million for water and sewer debt service bond payments.
Washtenaw County sold $12.5 million in bonds to finance the township's water and sewer systems and the township has a contract with the county obligating it to pay the county for the interest and principal on the bonds.
Washtenaw County Circuit Judge Donald Shelton, who ruled in favor of the developers, also voided a special assessment the township had levied on the developers. And the Washtenaw County Treasurer’s Office has billed the township for $1.2 million the county paid to cover the assessment when the developers didn't pay.
Flintoft said previously that if the township can’t find additional revenue to pay off the bonds and the judgments are upheld, residents could see a potential 60-mill tax levy.
In addition, the township has filed a malpractice suit in Washtenaw County Circuit Court against Foster, Swift, Collins and Smith, P.C., the attorneys who represented the township in its agreements with the developers.
The lawsuits resulted from an agreement between a previous township administration and the developers in 2000. The agreement established special assessment districts that were scheduled to collect $8 million to pay for new sewer and water systems for a planned development that was never started on 162 acres on Sibley Road. Westchester Farms was to include 262 homes and 64 townhouse condominiums.
The township is in talks with Chelsea in the hopes that the city might buy the water plant but Chelsea City Manager John Hanifan said previously if the city were to assume the $4 million in debt for the water plant, “to keep our residents held harmless, the city would need between $30-$35 million in taxable value from the township.”
That means a good portion of the township would end up annexed into the city of Chelsea. The township has about $200 million in total taxable value and currently levies 0.9474 mills. Property owners annexed into the city would face a steep rise in their tax bills. The city currently charges 11 mills for operations.
If the township is forced to levy 18 mills to pay the $2.4 million judgment and the $1.2 million to reimburse the county, the cost to the owner of a home with a taxable value of $100,000 would be $1,800.
Bob Pierce, a township resident, asked officials to do a better job of informing residents about developments in the suit.
“It’s imperative that this board share information and updates," he said.
In addition, he asked the board to discuss the township’s current audit with residents.
Lisa Allmendinger is a reporter for AnnArbor.com. She can be reached at lisaallmendinger@annarbor.com. For more stories about the Chelsea area, see our Chelsea page.
Comments
Genboy
Mon, Mar 14, 2011 : 4:53 p.m.
Just a reminder that Michael Williams of Sylvan, who was on the board in the mid 2000's, tried his darnedest to expose the ineptitude of the other board members, and to try to solve this problem before it got to this point. No one in the township cared back then, and the rest of the board successfully drowned him out, thwarted this attempts to work with Chelsea on a solution, and eventually, wore him down and spit him out. When a new slate ran for board office in 2008, they made the existing board members promise that there would be no tax increase because of this issue. You'll find that in the Chelsea Standard in late summer of '08.
tim smith
Mon, Jan 10, 2011 : 7:33 p.m.
This is a beatiful city I like living here. It is a shame that greed has to ruin it. just like Val said. With out the vote of the people. We the people, NOT. I talk to a landlord about the tax lein ordinace she had to pay the electric, and water bill that a previous tennant left her. She thought that was Ok, what piss her off, is the city let then move right around the corner and open another account. Do they read the water meter or is just guess? I know my meter is on the inside of my house, and they never asked to see it.
Ed1961
Thu, Jan 6, 2011 : 7 p.m.
Let the Village of Chelsea buy the water plant and annex Crysler Proving grounds and the property of Gerry Dresslehouse, Louann Koch, Arlene Grau and Rueben Lessor. They are the board members who created this mess back in 2000. They really need to be held responsbile but it won't happen. The majority of township residents were opposed to the high density development this was all built for. If the taxpayers end up paying for this, the fancy township hall should be sold to pay for some of this and the water tower should be taken down and sold for scrap metal too to offset more cost. That will keep future developers from ruining the rest of the township.
Ed1961
Thu, Jan 6, 2011 : 6:55 p.m.
Let the Village of Chelsea buy the water plant and annex Crysler Proving grounds and the property of Gerry Dresslehouse, Louann Koch, Arlene Grau and Rueben Lessor. They are the board members who created this mess back in 2000. They really need to be held responsbile but it won't happen. The majority of township residents were opposed to the high density development this was all built for. If the taxpayers end up paying for this, the fancy township hall should be sold to pay for some of this and the water tower should be taken down and sold for scrap metal too to offset more cost. That will keep future developers from ruining the rest of the township.
resnonverba
Thu, Jan 6, 2011 : 2:22 a.m.
Perhaps there's a clever one out there that can figure a way to instead of taxing the property owners, suing the property owners of Sylvan Twp for recovery of the damages. This would then allow the property owners to file claims with their insurance companies. The developers probably don't care what vehicle is used for payment of the judgement. Just a thought.
jcj
Wed, Jan 5, 2011 : 8:32 p.m.
BTW I also know families that have a hard time paying their taxes even though they have scrimped and saved. Only to lose their job through no fault of their own.
jcj
Wed, Jan 5, 2011 : 8:30 p.m.
Josef I agree. To say taxes should be based on "ability to pay" would never be fair. I know families who don't have the ability to pay because they bought a home well above their means, they have a boat, 2 snowmobiles and a new car in the drive. Not to mention the diamond rings, and tattoos. Having said all that. Is it fair that someone that has lived in their home for 30 years pays less than half of what their neighbor pays in property taxes just because the neighbor bought their house within the last couple years?
Josef
Wed, Jan 5, 2011 : 8:20 p.m.
Val, You said: "Taxes should be based on ability to pay not on the value of the property." Someone's ability to pay is subjective. What you consider an ability to pay is likely different from what the next person thinks. Does ability to pay equal household income? Hopefully not. I would definitely agree that taxes have seem to get out of control in many municipalities and that in Sylvan's case this possible extreme financial burden placed on its residence is devastating but that doesn't mean that a select few within the township should be left with the largest burden simply because they have the ability to pay.
Val
Wed, Jan 5, 2011 : 7:13 p.m.
This is a good example of a government agency placing a tax on property without a vote of the people. There is a threat that some people may loose their home because the tax outstrips their income. Property taxes are evil in that somebody else can set the tax on the house without consideration if the people living in the home can pay the bill. Who set the value of the house? It is the township that does that not the people. Why in the world did the people of Michigan give their homes to the government? Think about it. If you don't pay your property tax you loose your home by the government confiscating it for the taxes. A home could be sold for just a few thousand dollars as the government agency only is interested in having the taxes paid. Taxes should be based on ability to pay not on the value of the property. Isn't it time to return ownership of everyone's home back to the owner? By the way you pay property tax on everything you buy in Michigan because all property is taxed.
ME2
Wed, Jan 5, 2011 : 5:56 p.m.
As a resident & homeowner in Sylvan township, I have to say that I was very disappointed in the communication at the meeting last night. The township attorney was not very articulate. He rambled and didn't present a very cohesive, easy to understand case for the citizens to understand. Sitting through the meeting was just as disappointing. To say "lack of transparency" would be an understatement. All of the issues passes and voted on were "included in the packets" distributed to the board members - but not available to the residents. There was no discussion and everything was cryptic. This meeting did nothing but shake my confidence even further in a board that is going to ask its residents to pay 60 mills to cover their $12.5M mistake. Looks & feels like a lot of back room deals going on here to protect jobs or positions. That may or may not be the case, but the lack of transparency in the communication and decision making process certainly leaves a lot of room for these type of problems. If this is how they have run the township for the last decade, it's easy to see how the residents got blindsided and are now in an uproar over an the extra 60 mils of tax going to be required to cover the poor decisions of the past.