DiFlorio: Bad Sewer Debts May Bite All Livingston Taxpayers

All Livingston County taxpayers may be asked to chip in to help Handy Township finish a sewer project for a subdivision that was backed by county bonds but never finished, one county official has suggested.

Jeanette DiFlorio, a candidate for Livingston County Commission, took exception to the suggestion that the county pay $500,000 to finish a sewer line in Handy Township. Livingston County Drain Commissioner Brian Jonckheere brought up the idea at the Oct. 10 meeting of the Debt Management Subcommittee.

"This idea needs far more public discussion before the Livingston County Commission goes ahead with it. Would the $500,000 payment be a loan that Handy Township would repay at some point? How long would it be before the money is repaid? Would interest be charged? Where would the $500,000 come from at a time when the county has so many other needs? What kind of a precedent would it set for bailing out other townships?" DiFlorio said.

Livingston County had backed bonds issued by Handy and other townships for water and sewer projects for private developments. The bonds were supposed to be repaid by special assessments on those who bought lots and built homes in the developments, but not enough lots sold and the developers later walked away from the projects. With not enough homeowners paying the special assessments, townships such as Handy are struggling to pay the county for the bonds. Handy refinanced its 2003 and 2005 sewer bonds earlier this year in order to cut its payments, but it is still likely to have trouble paying the $2.9 million its owes the county for chargebacks and interest in early 2014.

In one case, Handy Township is involved in litigation over a sewer line to one of the special assessment districts. The line is unfinished and Jonckheere told the Debt Management Subcommittee that litigation “would drag on for years.” If the line is never finished, there would never been any sewer hookups to pay special assessments to repay the bonds, he said. The township, he said "is in no position" to pay to finish the line and the question “is whether it is in the best interests of the county” to finish it so that development can continue at some point.

The county officials also discussed the possibility that Handy will not be able to cover its bond payments for the special assessment districts and could end up having an emergency manager appointed.

"Ever since the problem of toxic special assessment districts surfaced in 2010, county taxpayers have been told that these debts were being paid and they would never be asked to pay for them. Now we hear that is not the case and that is very disturbing. Perhaps the county commission is not as fiscally responsible as they have led taxpayers to believe," DiFlorio said.

DiFlorio is running as a Democrat in County Commission District 2, which includes Deerfield and Oceola Townships, as well as a portion of Hartland Township.

 (Paid for by Friends of Jeanette DiFlorio, 4296 Merriman Loop, Howell, MI 48843. (Printed on home-computer. Labor donated.)