Sylvan Township voters will see 4.75 mill tax levy for sewer-and-water system debt on November ballot
Sylvan Township voters will be asked to approve a 4.75 mill tax for 20 years to pay for about $13.2 million in sewer and water system debt payments when they go to the polls on Nov. 8.
At a special meeting Monday morning, the Sylvan Township Board unanimously approved ballot language. The vote followed an explanation of the millage and the estimated revenues and payment schedule to the county by Rob Turner, county commissioner, and Pete Flintoft, the township’s attorney.
In the first year, the proposed tax levy is estimated to raise about $853,860 and, if approved, it would be collected on the winter tax bill.
“This is where we are; this is the eleventh hour,” Flintoft said about the ballot language.
Turner said four revisions were made to the final ballot language Sunday by township and county bond attorneys, and the board must submit the language before the 4 p.m. Tuesday deadline to be placed on the November ballot.
"This 4.75, it's a balancing act," Turner said, "keeping it (the millage) at the lowest possible rate with a comfort level on the part of the county."
The county, by putting its full faith and credit behind the bonds, doesn't want the township to default on them.
"The county is trying to make this less painful and set aside capital funds to help you," Turner said. "If the voters turn this down, the county will go for (court) judgments."
The 20-year millage of 4.75 mills would mean a home with an assessed value of $100,000 would be taxed $475 per year. Currently, residents pay less than 1 mill for township operations.
If voters turn down the millage in November, the county would ask for a court judgment and residents could face an 8.7 mill tax levy, “basically double what’s being asked for in this millage," Flintoft said.
During the proposed 20-year tax levy, residents will pay off a $5 million water system and a $7.5 million sewer system. In the first two years, it will pay a debt to the county of $1.213 million for money advanced by the treasurer to the township for “township sewer special assessment installments which were voided by court judgment and water special assessment installments which were declared uncollectible,” according to the ballot language.
Judy Slocum, a township resident, said the people that she's spoken to "are angry. Yes, we have no choice, we have to eat this, but people want to know 'why, why, why did this happen?'"
Norfolk Development Corp. sued the township alleging breach of contract, among other things, for a special assessment district that was calculated to collect $8 million to pay for new sewer and water systems. Subsequently, the courts voided the district.
In the meantime, the planned development has yet to break ground on 162 acres on Sibley Road. Called Westchester Farms, the development was supposed to include 262 homes and 64 townhouse condominiums.
The township only has enough money in its water and sewer fund to make the Nov. 11 interest-only payment of $175,000. In 2012, it will owe $350,000 for the bonds and in 2014 the payment will increase to $969,000 when the principal payments start to kick in.
The township’s current taxable value is $183,428,782, down by 6.21 percent from the previous year.
Beginning in 2013, the estimated revenue from the millage is based on a 5-percent drop in growth and subsequent property values followed by successive 2-percent reductions in growth and property values in 2014-2016. The estimated revenues assume a zero-percent growth in 2018 and 1-percent growth in 2019-2025. From 2026-2032, the estimated revenues are based on 0-percent growth.
Turner and Flintoft plan “two or three” town hall meetings to answer residents' questions and explain the millage before the general election.
"I really feel if people are informed, they will pass this millage," Turner said.
Lisa Allmendinger is a reporter for AnnArbor.com. She can be reached at lisaallmendinger@annarbor.com. For more Chelsea area stories, visit our Chelsea page.
Comments
maverik
Fri, Aug 19, 2011 : 2:22 a.m.
The residents were very informed about the lake sewers but not many knew about the other sewer project( with the developers) and many people were against the lake sewer, in fact it was stopped once but then got passed. it is very hard to go to a "special" meeting when they are held in the mornings when most are at work,etc. and the board knows this., so saying that the residents were napping is so very wrong.The insurance won't pay for any of this because there was fraud in the contract. Don't blame the residents, blame the ones that were involved making this deal and any board member, if they knew wrong was going on, could have and had the knowledge of who to go to, to maybe stop this in it's tracks, but they said nothing , so lets not put blame on the residents.
4PawPicker
Tue, Aug 16, 2011 : 3:23 p.m.
There is a misconception that "bankruptcy" will absolve the township of the all or some of the liability. The previous township board committed to the following provisions in the original bond contract with the County (note this is for the Water Tower & Sewer in the Urban District): "5) ...The Township has irrevocably pledged it's full faith and credit for the prompt and timely payment of its debt service obligations. Pursuant to such pledge, if other funds are not available, the Township shall be required to pay such amounts from any of its general funds as a first budget obligation and shall each year levy an ad valorem tax on all taxable property in the township in an amount sufficient to pay such obligations ...." "6) In the event that the Township shall fail for any reason to pay its respective contract obligations to the County at the times specified in the contract, the (County) Board shall notify the Township Treasurer, County Treasurer, The Treasurer of the State of Michigan and any other officials charged with disbursement of funds to the Township returned by the State, and said State Treasurer or other appropriate official shall withhold and pay to the County the amount necessary to meet the amount due from the Township, to the extent permitted by law. In addition to the forgoing, the (County) Board shall have all other rights and remedies provided by law to enforce the contractual obligations of the Township." The only choices are millage, and hope that it meets the debt obligation, or a court imposed taxation.
Vicki Motsinger
Tue, Aug 16, 2011 : 12:45 p.m.
Where was the townships attorney and the clause stating the township would not be held liable for the cost if the builders backed out? Where was the townships insurance policy covering such dumb decisions may by a few people but is going to cost most of the township homeowners for the next 20 years? Is there going to be a refund to the homeowners if the township does collect some or all of the money from the builders after the law suit is settled? It's you pay the 4.75 mills or else you face a 8.7 mills. It doesn't sound like a choice, it sounds like a threat.
clownfish
Tue, Aug 16, 2011 : 12:39 p.m.
This situation occurred because political forces wanted the govt entity to facilitate growth and help out a developer. It was done mostly behind closed doors, with smoke and mirrors. without making the developer be responsible for what they wanted. I still don't understand why the developer is not on the hook for getting what THEY asked for. If you voted for the board that caused this mess, you are partly to blame and should accept the punishment. If you were pro-development you should accept the outcome of poor planning. If you want the "government out of the way of business" you should accept this as the cost of doing that kind of business.
alan
Tue, Aug 16, 2011 : 2:23 a.m.
So I have two questions. a) What numbskull thought this was a good idea without the developer signing off before selling the bonds? b) Has the water and sewer project actually been done? If not, the money is sitting somewhere.
4PawPicker
Tue, Aug 16, 2011 : 3:33 p.m.
Yes, the Urban District Project - which are the bonds in question - Water Tower, treatment, distribution, as well as sewer service collection and transport for the area where Development was to occur has been completed since 2004. It serves about 60 condos in the Chelsea springs Condo's as well as the Sylvan Crossing Manufactured Home Development - Probably around 110 residences served for an original $12.5M. All the money is in the ground...
Edward R Murrow's Ghost
Tue, Aug 16, 2011 : 1:04 a.m.
Chase Ingersoll asked: "What happens if the voters don't pass the millage? Can the township file for bankruptcy and discharge the debt, or would that put all of the township pensions in jeopardy also?" Municipalities in Michigan may declare bankruptcy only after 1) being under the management of an Emergency Financial Manager for at least 6 months, and 2) with the approval of the governor after receiving a recommendation from the EFM. One would think that a would-be candidate for the state senate might know that, especially given all of the ruckus about the new EFM law that has been part of the buzz for the last six months. Good Night and Good Luck
maverik
Mon, Aug 15, 2011 : 11:27 p.m.
Alan, you are pretty much right and than there are other issues. I think if the towship were to go bankrupt, the county and maybe surronding areas would have to pay the tab, sylvan off the hook??? Maybe the life insurance and the pension that the taxpayers of sylvan township provide for the board should go away and also the wages of the board members that sat on the board when all of this was going on. Were any of the residents asked or told that this wonderful scheme was going on,NO!!!! But now they have to pay for it all, doesn't sound quit fair, let these board members pay like mentioned above. No matter how it's sugar coated, thats a lot of money for nothing that the residents did, and to be told that they have to pay it, that's salt in an open wound.
brooktrout
Tue, Aug 16, 2011 : 5:33 p.m.
well maverick, a bit fact challenged. "Were any of the residents asked or told that this wonderful scheme was going on, NO!!!!" In fact, there was plenty of discussion about this very project and its shortcomings in the Sylvan Sentinel, a newsletter than was printed periodically (appr every 4 months) during the years 2002-2004. It was mailed to every registered voter in the township. There were articles, at least two that I recall offhand, in the Community Observer. There was a great deal of public comment at the board meetings during the 2002-2004 period as well, including a comment by Sylvan resident David Brooks that we were all on the hook for this. This outcome should come as no surprise to anyone who was paying attention, but then that has been an age old problem with local politics in Sylvan and elsewhere--too few people paying attention. (Of course when you have "special meetings" to take embarrassing votes instead of doing so at a regularly scheduled meeting that members of the public would be more likely to attend, you're going to get exactly what the Sylvan Township Board wants--no interference from us rabble. Please check Sylvan history, specifically the special meeting of August 28, 2003, wherein the board performed an illegal act that is central to this situation.) I've been asked "What is to be done?" Open your checkbook folks, the time for doing anything about the situation has come and gone, and the great majority of you were snoozing. Time to pay for your nap. michael williams sylvan township supervisor nov 20,2004 to nov 20,2008
Daniel
Mon, Aug 15, 2011 : 10:03 p.m.
Wish I could sell my house for what they say it's worth. Please turn out the lights when you leave!!
alan
Mon, Aug 15, 2011 : 8:53 p.m.
This article is very vague. This is what I gather, please help if I'm wrong. Developer wanted to build subdivision. Subdivision needed water and sewer. Township sold bonds to finance said water and sewer and levied special assessment against subdivision (users) to pay bonds. Developer sued so entire township is now on the hook. Is this accurate?
Chase Ingersoll
Mon, Aug 15, 2011 : 8:31 p.m.
Well, if the creditor applied their judgement to a purchase of the entire township, it would be a greater down payment than most home owners have had to pay in the last decade. What happens if the voters don't pass the millage? Can the township file for bankruptcy and discharge the debt, or would that put all of the township pensions in jeopardy also?
free
Mon, Aug 15, 2011 : 8:07 p.m.
"The township's current taxable value is $183,428, down by 6.21 percent from the previous year. " Something must be missing here. The entire township is only worth $183,000? If it's right, can I buy the township?
Paula Gardner
Mon, Aug 15, 2011 : 8:17 p.m.
The correct number is $183,428,782. Thanks for the catch!
Chase Ingersoll
Mon, Aug 15, 2011 : 7:47 p.m.
Great article, allowing one to quantify the cost to voters when they elect representatives, who by dint of ideology or incompetence, make bad decisions. My rough calculation is that the $475 over 20 years will be reflected in a 10% depreciation in the value of the properties in the short run, that will rise as demand for properties in Sylvan township falls due to the higher carrying costs, resulting in the need for even higher rates to compensate for the falling property values. If anyone can tighten up my cost analyses theorem above, please do.
maverik
Mon, Aug 15, 2011 : 11:33 p.m.
Let's see, the board probably will raise township propery assement value and they are considering turning the township into a charter township, which would allow them to add a 5 mill increase to the property without putting it to a vote of the residents and knowing them, they will do it. So, residents beware, vote no if you see anything about a charter township on the nov. ballot, don't go for it!!!!!!