Sep 24, 2010

Bipartisan brownfield package brings out financial trouble of county townships

LANSING – A package of bills making it easier to redevelop contaminated Brownfield sites illustrated what bipartisanship and moderate Republicans can accomplish, but it also brought out how much financial trouble Livingston County is in.

The House Committee on New Economy and Quality of Life took testimony Thursday on House Bill 6416 and Senate Bills 437 and 1345-1349. A workgroup has been working on the bipartisan package for at least a year, and all of the various advocacy groups are behind it.

“This has been more difficult than birthing my three sons and twice as long,” said Sen. Patty Birkholz, R- Saugatuck, the Chair of the Senate Natural Resource and Environmental Affairs Committee.

Many cities and even some townships have contaminated sites that would be ideal for new development if they were not contaminated. The City of Detroit alone has some 1,000 Brownfield sites.

The only opposition came from one environmental group, Clean Water Action, and they objected to how the clean-up will be funded. The plan is to use under-utilized funds from the Great Lakes Water Quality bonds. The fund was approved by voters in 2001 to pay for reducing sewer runoff into lakes and streams and improving water quality.

Clean Water Action said the money was only supposed to be used for protecting the waters, and they suggested closing tax loopholes to finance the cleanup up of brownfields. The Michigan Townships Association (MTA) testified that they support the package, but they also have some concerns with financing, including the State Revolving Fund (SRF).

The MTA’s lobbyist, Tom Frazier, testified that many townships are facing financial hardship because developers have simply walked away from developments after the townships established Special Assessment Districts (SAD) to pay off the bonds for installing sewer and water infrastructure, leaving townships holding the bag. Frazier even mentioned Rep. Cindy Denby, R-Handy Township, a member of the committee and the former Handy Township supervisor.

It turns out that the MTA wanted a special provision to the package, a bailout, that would allow the state to pay off the bonds, and the townships would only have to pay the interest on the bonds for the first 10 years.

Livingston County is one of the hardest hit, and county and now perhaps state taxpayers may be on the hook for $101 million in principal and interest backed by the good faith and credit of the county. Half of Livingston County’s 16 townships are in this boat, but Handy may be the worse off. It was estimated that it would cost about half of the township’s annual tax revenue to meet the bond obligations.

The local newspaper has been almost silent on this after a national business publication broke the story that the county’s townships are in such dire straights. The local Democratic Party issued a press release demanding the all-GOP Board of Commissioners hold a townhall meeting, but that has not yet happened.

The county has even refused to say what townships are in danger of defaulting, and no one but the local Democrats have demanded answers. The Bloomberg News that broke the story mentioned Howell and Hartland Townships. It says Hartland came up $951,000 short in collecting special assessments last year, according to an April 2009 report by Standard & Poor’s.

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