Livingston County taxpayers deserve a full accounting of the millions of dollars in debt piled up by the all-Republican County Board of Commissioners for roads and sewers built in subdivisions that are sitting nearly empty, Judy Daubenmier, the Chair of the Livingston County Democratic Party, said Thursday.
Daubenmier said the county’s financial reports have failed to alert the public to the extent of the problem the last two years and called on the Livingston County Commission to hold a town hall meeting explaining the issue to the public. She said taxpayers need to know which townships are in danger of missing their payments for the $101 million in principal and interest backed by the county. And she said the all-Republican Board of Commission needs to explain why it backed the bonds for the townships even as the Michigan economy was shedding thousands of manufacturing jobs and the Detroit Three Automakers were bleeding red ink.
“The Republican incumbents on the county commission must have been totally oblivious not to see that the Michigan economy was in trouble and that the building boom was coming to an end, but they went right on backing the bonds and feeding the real estate bubble,” Daubenmier said. “Their reckless borrowing has subjected Livingston County to nationwide embarrassment and put the richest county in Michigan in the position of begging for a taxpayer bailout from the state of Michigan.”
Republican state Reps. Bill Rogers, R-Brighton Township, and Cindy Denby, R-Handy Township, have cosponsored a bill asking the state to set up a $5 million fund to help Livingston County, which is the hardest hit of all the counties in Michigan with debt for infrastructure for subdivisions where many lots are unsold. They also are asking for legislation allowing the Michigan Strategic Fund to set up special “renaissance zones” for these empty subdivisions, but there has been virtually no public explanation of what this would mean.
But Daubenmier said many questions are begging for answers from the county commission before lawmakers even consider such a bailout. She called on the county commission to reveal which townships are unable to pay the county for the bonds, how much money is involved, why the county and townships failed to demand greater security from the developers for the money being borrowed, what attempts are being made to get money from the developers, and whether $5 million is even enough. And of course, the biggest question is why the public financed the developments in the first place instead of expecting developers to rely on private financing.
“Republicans like to talk about free market principles, but in this case they acted like a bunch of socialists,” Daubenmier said.
She said Rogers and Denby in particular need to answer questions. Rogers was chair of the Livingston County Commission when much of the borrowing went on.
“What steps did Rogers take to determine the soundness of the borrowing,” Daubenmier said. “How many of the subdivisions that are now vacant were approved in Handy Township when Denby was supervisor for eight years.
“Rogers, Denby and all the Republican incumbents on the county commission have been bragging about their conservative fiscal values,” Daubenmier said. “Those fiscal conservatives turned out to be fiscal fools who fueled a housing bubble without noticing that the economy around them was imploding. Now they want the state of Michigan to bail them out, but I say, ‘Not so fast,’”
Daubenmier said the looming disaster has been buried in the county’s annual financial reports for the last two years. The financial reports for the years ended Dec. 31, 2008 and 2009 each contain only one paragraph on the debt and interest, even though it amounts to two and a half times the county’s annual general fund budget. The 2009 financial report noted that the county had paid $10.3 million in principal and interest on the bonds and received only $10.2 million from the townships. The 2008 financial report said the county paid $10.6 million on the bonds but the townships contributed only $9.9 million. Neither report explains how the difference was made up. Daubenmier said the report shows the problem existed well before the 2008 national financial meltdown.
Taxpayers are just beginning to see the impact. In some townships, voters on Tuesday were asked to approve millages to pay for basic services such as police protection because most of the township budget has to go to paying off the debt. But the county’s 2010 budget book warns that taxpayers county-wide may end up footing the bill.
”Livingston County may very well find itself in a position where it must fund the debt in order to preserve its credit rating,” said the report. But the county’s report doesn’t say how much the county’s exposure amounts to.
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