Before you start reading, please know these things:
Full disclosure: I’m one of seven candidates challenging an incumbent County Commissioner.
Full disclosure, Part 2: I’m also a Livingston County taxpayer.
F.D. Part 3: This is a complicated story, but it’s worth reading.
OK, here we go.
[There’s a lot going on this time of year: Christmas decorations are already in the stores, nestled next to the half-price Halloween items; football (LOTS of football); and elections are just around the corner.]
You may have heard about the township Special Assessment District (SAD) debt problem… or maybe not. Either way, SAD debt is a serious problem for the county and if like me, you take the time to research what information you need for an iva – you’ll be well prepared for the worst circumstances, should they come.
Here’s the story in a nutshell.
Back during the housing boom (remember the housing boom?), developers were really enthusiastic about building all sorts of houses in all sorts of places. A number of developers asked townships to put in water, sewer and other infrastructure before the development even started.
A few townships said, “Heck, no! If you want that stuff, you pay for it.”
But other townships said, “Okay!” They went ahead and issued bonds to cover the cost of putting in water and sewer; the thought was that once the houses were built and sold, the people who bought them would pay the special assessment, the bonds would be paid off and everyone would live happily ever after.
Some of these townships asked the county to act as guarantor for the SAD bonds, so that they could get a lower interest rate. The county agreed to put its full faith and credit behind these bonds, on the assumption that there would be no problem making the payments.
Fast forward to today. The housing boom has gone bust. Nearly half of Livingston County’s townships hold serious levels of SAD debt, the highest rate in the state; we lead the region in home foreclosures. Of the $5.2 million worth of tax-foreclosed properties in the county up for auction, only $370,000 has been sold. And developers walked away from many of the SAD properties that they asked
News stories about Livingston’s township debt problem date back to November 2009. In the spring, our state representatives were concerned enough to introduce bills aimed at helping townships manage their debt. We even got some attention from a national news organization over the summer. Then suddenly, the stories stopped. The County Commissioners assured us there was nothing to see here, folks, just one little township that will need “only” $200,000 – $400,000 a year.
The candidates challenging the incumbent Commissioners wrote to ask for a town hall meeting on the issue. It’s big, it’s complicated, and it affects everyone in the county now – not just the folks who live in a township that issued SAD debt. What had changed, and why was it no longer a problem?
The Commissioners refused to hold a town hall meeting, saying that they weren’t interested in “political spectacle.” The Commission Chair pointed out that the Debt Management Committee had been holding public meetings for 18 months, with the implication being that if the challenger candidates really cared about the issue they would have shown up to learn about it.
Fair enough.
A visit to the county website calendar shows lots of scheduled committees (including meetings of the Drain Committee, the Foster Adoption and Kin Services Workgroup, Master Gardeners, the Local Advisory Coordinating Council and the Sheriff Explorers). No mention of a Debt Management Committee, though.
With no listing on the website calendar, a Livingston County taxpayer who wants to find out about the schedule for these supposedly public meetings has to physically go to the County Administration building in Howell, and look for a piece of paper tacked to a bulletin board.
Finding the minutes of these meetings was even more complicated. Again, nothing on the website. Requests to the County Clerk didn’t pan out… until a Freedom of Information Act request was submitted.
A few weeks and $25 later, a year’s worth of minutes showed some pretty concerning things.
• Handy isn’t the only township with SAD debt problems.
• The townships that need help with bond payments are racking up additional debt, because the county charges them a 1-percent-per-month interest rate, plus an administrative fee on top of the cost of the payment.
• The Commissioners could have changed county policy so that would be no more backing of bonds for “speculative development” or bonds based on “future development or utilization.” They decided not to make that change.
Last but not least, I managed to find out about one of these Debt Management Committee meetings, and went to it last week. The first agenda item: approving 10 sets of meeting minutes dating back to August 2009. That’s pretty unusual, but even more interesting was that nine of the 10 sets of minutes were the ones that we had to file a Freedom of Information Act request to get.
So what’s a taxpayer to think? The County Commissioners talk about being fiscally responsible, but they chose to spread the risk of speculative real estate bonds to everyone in the county. They chose to back speculative local real estate projects that only benefited private developers.
The Commissioners offer the excuse that Livingston isn’t the only county with SAD debt, and that some counties are in worse shape. Well, I don’t buy the “everybody’s doing it” line from my kids – I sure won’t buy it from my elected officials who like to brag about their prudent financial management.
The worst part, in my opinion, is that the Commissioners have tried to hide the issue from the public. They refused to hold a town meeting to explain what’s going on. They won’t include the public debt management meetings on the website. They held back public minutes for over a year.
Then they say, “Trust us.”
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