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White Lake to Pay Sewer Debt With General Fund Money

The White Lake Township board approved a loan of $740,000 from the general fund to the sewer debt fund in order to pay back bonds.

The White Lake Township Board of Trustees approved a loan of general fund dollars to the township's sewer debt fund in order to save the township from defaulting on bonds related to a decade old sewer project.

The township will loan $740,000 to the sewer debt fund to pay off, in full, an outstanding bond from Oakland County and to make a payment, due in March, on another bond owed by the sewer project.

Supervisor Greg Baroni said the money from the general fund was set aside last year for this purpose, and because it's budgeted, will not impact other township expenditures.

The township board now must figure out how the sewer debt will repay the loan to the township.

There are several options on the table, but trustee Rik Kowall said it will be "a cold day in hell" before he and others on the board vote to reassess sewer users that have already paid for their sewers in full.

Clerk Terry Lilley said the ongoing issue dates back to the 1990s, and that some of the decisions made in the 1990s by previous administrations have tied the hands of the current administration and put the township in the situation it’s in now.

“That is why it is so important for us to go back, look at the decisions that were made, and see where things went wrong,” Lilley said. “Those mistakes can help us now so we don’t make the same mistakes in the future.”

Part of the problem, Lilley said, is that the township was bringing in money in the late 1990s and early 2000s from the Phase 1 project, but the board at that time decided to use those funds to subsidize the sewer project along Pontiac Lake, instead of keeping it to pay for the first phase of the township’s sewer line.

“As a result, the debt grew because money was taken from one project to pay for the other instead of letting that project pay for itself through the collection of fees," Lilley said. "There were project overages as time went on, and those funds that were taken from phase one were never paid back, putting that project further in debt.”

Another issue, according to Lilley, is the projection that initial direct and indirect sewer hookup funds would have paid the debt through 2014, and earned interest at a steady 4 percent. Instead, the fund is earning only .4 percent interest.

Late last year, Lilley presented the township with four options for resolving the issue.

Those options include:

  • Unscrambling the current accounting issues. This would mean that Pontiac Lake property owners would have to be assessed for any and all deficiencies related to its project funding, Lilley said, and also means holding reassessment hearings for all 432 parcels within the sewer district at $1,900 per parcel.
  • Allowing the Pontiac Lake sewer fund to collect indirect fees to meet its requirements for bond repayment. If there are any remaining funds after debt is paid, those would be returned to Phase 1. This would mean that Phase 1 will never benefit from whatever indirect fees it was shorted, creating shortfall in customers and cash flow prior to bonds being fully paid in 2018.
  • Loaning improvement revolving funds to meet principal and interest demands on Phase 1 bonds each year through 2018.
  • Increasing the debt service charge and connection fees to make up some of the potential deficit.

Trustee Carol Burkard was the only trustee to vote against the resolution, saying she wanted the resolution to inlcude how the money would be paid back, and at what interest rate.

Lakeside February 26, 2013 at 11:54 PM
Rog, I do not want to blame the new board, but I do blame Mr. Lilley. Also, I do not believe Mr. Baroni was first made aware of the problem in November when he finally decided it was an important issue. The auditors, for the first time, in March 2013, said there is a problem. Mr. Baroni did not want to deal with the issue before the primary in fear of losing the election. Therefore, he lied in September in the Patch, and a half-baked decision was made last week. Lets start holding these local people accountable. Too many people are not paying attention to these two. Lets not forget the auditors also told them there is a $4,000,000 problem with unfunded retiree health care.
steve johnson February 27, 2013 at 01:27 PM
Lakeside: I don't understand why your Blaming Lilley and Baroni. The board members that were there in 2004 are the ones who should be blamed for not takeing care of the problem (Kowall, Spoor, Burkhard, Brendle, Voorhies,Powell, Lilley). Why are you not blaming Burkhard,and Voorheis there were on the board back then, there is no mention of them in this debate?
Lakeside February 27, 2013 at 02:07 PM
Lilley claims this problem has been around for years. I can't help but feel Lilley is in it up to his neck since he was involved in the planning of the first phase. I am not Blaming Baroni, but he should have delt with the problem when he was made aware of it last year. Baroni lied to the public about the state of the fund. Baroni has no clue how to solve the problem. The supervisor is responsible for the administration of the system so he better start showing some leadership on this instead of worrying how the public found out the item was going be discussed at the last meeting.
steve johnson February 27, 2013 at 10:16 PM
Dear Lakeside: Mike Kowall was supervisor was their for 8 years, sounds like you want to give him a FREE PASS at being responsible for administration fo the system as you call it. Mike was their when the problem started in 2004 and the next 8 years and did nothing. ( But then mike bailed and went to State Senate, before he left he was able to starte an employee union, because of his inaction on employee problems, also he left the building department in a mess because of his looking the other way, and not taking any action . You now want to blame this new board?)
Lakeside February 28, 2013 at 01:35 PM
For starters Kowall was there six years. I am not giving him a pass, But he did hire an attorney in an attempt to obtain information from Commerce Twp. at how they arrived at the rates they charge White Lake users. Lilley was constantly a road block to this effort and he got Baroni to put a hault to this. Part of the White Lake cash problem is the lack of connects to the system. One reason for the lack of connects is the connect fee Commerce charges White Lake residents for basically doing nothing. You should research this a bit. My issue is Baroni knew there was a problem and a couple of board members even told him there was. He chose to ignore the problem until November. This is purely a cash issue, do you borrow the money from a bank, bond to make the debt payments from the General Fund. The problem is calculating the amount needed, term of the loan and which residents are going to pay and how much. Lilley is simply not capable of doing this. HIRE AN EXPERT AND GET IT DONE, no more history lessons
steve johnson February 28, 2013 at 08:32 PM
Lakeside: Somehow you don't seem to understand the problem started between 1996-2004 when phase 1 and Pontiac Lake special assment district sewer project was being built. The Pontiac Lake area didn't want to pay for construtions and all the extras. What you need to find out who was on the twp board at that time.(transparency,transparency what happened) So you want to know Commerence connection fees are -- call them up and find out why. At the end of the day Pontiac Lake still needs to pay their BILLS not make everyone else pay. Better talk to Burkhard she knows all a long what the issues were and she did nothing and now sits back and keeps quiet.---Shame on her.
Laura Vogel February 28, 2013 at 08:55 PM
Rog, you've apparently lived here long enough to know "who was on the twp board at that time." Who? Because, honestly, I have no idea who was on the twp board back in e.g. 1997. It would be great if the records for doing that kind of research, plus the research that both you and Lakeside have been going back and forth on --- costs when initially projected, costs today, over-runs, under payments, etc. --- was able to be researched by the taxpayers without having to file FOIA subpoenas on the township.
steve johnson February 28, 2013 at 09:59 PM
Laura: You don't need to file FOIL, just call up the twp. and they will give you what you want BUT YOU NEED TO CALL YOURSELF and not a friend I am sure you can find the time, if you want an answer. For your info Mike Kowall in the 6 years that he superviser he could have changed the contract with Commerce at anytime but didn't, Mike must have thought white lake had a good deal, and gave Pontiac Lake a free ride and let someone else take care of the issue in the future.
Laura Vogel March 01, 2013 at 02:24 AM
Sorry, Rog, but obviously you've never audited records. You don't "call", you need to get details not merely someone's verbal off the top of their head. I'm sorry you want to always make everything personal to me, rather than focusing on the fact that our elected officials fail to inform the taxpayers ahead of time about huge diversions of funds that they are planning to make, fail to provide coherent and verifiable information to the taxpayers, and so on. If you are content, that is your prerogative. Some of us taxpayers, however, are not content with the same ol' same ol' of things being done without making the information generally freely available.
steve johnson March 01, 2013 at 01:57 PM
Laura: The information is generally freely available, you or anyone can call and get or make an appointment to meet anyone in the admin. and they will help you ( I am trying to attack you, just telling you what you could do instead compaining on the Patch, you took political science in college and you know how it works.)
Laura Vogel March 03, 2013 at 01:15 PM
The common definition of "generally freely available" does not ordinarily mean having to make an appointment for a special opportunity to view records that aren't made available to the general tax paying public unless they similarly make a special appointment to specially view records. It is unacceptable that our elected paid officials failed to provide any advanced notice (by way of putting on the agenda that there was going to be a diversion of general fund dollars to the sewer fund). It is unacceptable that, after nearly a year of discussions, our paid elected officials still have not made any coherent FACTS available in writing. And, no, having to listen to Terry Lilley give a lengthy oratory, complete with unreadably small overheads, is not a substitute for providing facts about the costs and shortfalls. It is very telling that you wish to keep trying to make this personal about people like me who dare to question this arrogance of power.
Lakeside March 03, 2013 at 04:59 PM
Laura, I understand your concerns, a couple members of this board are really pulling the wool over the residents of White Lake. I would suggest you focus your efforts into getting these meeting televised on Comcast or on the Net. The media coverage is terrible
Michael March 03, 2013 at 06:53 PM
What is in the past is in the past, this needs to be corrected NOW or sometime in the very near future so the Township and its citizens can move on. Pointing fingers at something that happened 15-20 years ago wont do a damn thing. The township has a financial responsibility for the SAD, they "cosigned" the deal and financially backed the deal. If this was not done no bond would have been issued. So I feel as if the entire township is on the hook. Now, how do we fix this and be fair to everyone involved? Here is my fix: *Raise sewer rates *Have the general fund EAT the cost of part of this, maybe like half and the rest to come from increased sewer rates for everybody utilizing sewer services over the next 7 or so years. Is this legal? Is it fair to everybody involved? I have no sewer service, but as a township residence I do feel I am obligated to pay over poor decisions my elected officials made years ago!
Mark March 04, 2013 at 05:26 AM
I agree for the most part of what you propose. This issue has been known for many years. The residents of Pontiac Lake as well as the rest of the system have fulfilled their contractual obligations. The problem is not with them. The problem is with the Township officials who have chosen to ignore it and kick the proverbial can down the road because it was the politically expedient thing to do. Therefore it IS a Township problem. I agree that it is time to stop finger pointing and deal with it. I also want to instill a sense of urgency in our Township Board to grow the sewer system. With only about 1000 or less connections, the system is not sustainable. The rates paid quarterly are already grossly excessive and approximately double those of surrounding communities. To raise them again would create even more financial hardship for many at risk residents. If a problem or failure occurs with the system with so few existing connections the costs can quickly grow to the point that the system financially collapses. The key to the systems financial stability is to promote more hookups with either incentives or mandate (God forbid). Only in this way can the system work for for the long term and all residents of our beautiful Township will reap the benefits of cleaner lakes and rivers.
steve johnson March 04, 2013 at 03:26 PM
The subject has been brought up before, Burkhard has make the comment in several meetings about putting meetings on Comcast---- but she didn't want some board members to start grandstanding just to look good for the camera.
steve johnson March 04, 2013 at 03:28 PM
Mark: you might want read the Oakland Press in Sunday's edition under White Lake Sewer.
Michael March 04, 2013 at 03:44 PM
How much are residents charged quarterly for sewer services? I saw the township ordinance from 2003 stating $70 for usage, $10 for disposal and a $6 charge. Is $86 for 3 months correct? Is there a sewer map posted on the internet on what is existing and what is proposed for the township?
Gerry S March 04, 2013 at 04:29 PM
I agree with those that argue finger pointing does us no good at this point in time. The question is how do we take care of the problem we are faced with today? Seems pretty clear the people in the Pontiac Lake area will not be asked to pay twice for their sewers so that leaves it up to the rest of the township to cover the costs. A 10 year tax was voted for in 2004 to purchase new fire equipment and hire new personnel. Trouble is, no new trucks have been purchased and they are just now getting around to hiring a new firefighter. That millage has generated almost 8 million dollars since 2004 and it is sitting in the bank. Now in 2014 that millage will expire and I am pretty sure the citizens will not renew it unless new equipment is purchased between now and then. So buy the new equipment already. At $500,000 - $1,000, 000 apiece that should get us between 8 and 16 new trucks that should last 20 years. Then when it comes time to renew instead of a 10 year tax make it 20 years and you can cut it by more than half. At the same time ask for a tax to cover this debacle and maybe even fund legacy costs which also seems to be a big issue these days. Bottom line, we solve both of these problems, end up with new fire equipment AND lower taxes by collecting taxes over the entire 20 year life of the new equipment. The $60,000 we save on the maintenance of our fire equipment should almost cover the cost of the new personnel...
Laura Vogel March 04, 2013 at 05:03 PM
If there is a map, Michael, I can't find one anywhere at either http://www.whitelaketwp.com/Stormwater.asp nor at http://www.whitelaketwp.com/maps.asp. Nor is there any information about the whole "hook up" issue in general. For example, when the sewers "went through", were the homeowners in the hook-up-able path mandated that they are not allowed to e.g. repair/rebuild their septic field, that any failure in their septic field would mandate having to hook-up to the sewer that is right there waiting for them? Is there any requirement for homeowners in the hook-up-able path/area to have septic field testing done on a regular basis, so that a failing field would even be detected prior to it literally becoming a cesspool for the neighbors to have to suffer? I know that some folks will resist letting go of their septic field simply because they don't want to spent the money to hook up to the sewers, and they really don't terribly care if their septic waste pollutes e.g. Pontiac Lake in the meantime. It would also be good to know whether any of our past or present elected and appointed officials live in homes in the hook-up-able area(s), and whether they have themselves opted to hook-up to the sewer regardless of whether their septic field remains otherwise functioning properly. Leading by example is always good. It's hard to make the case that other taxpayers should hook-up if the bureaucrats don't themselves do it.
Gerry S March 04, 2013 at 06:08 PM
Oh, and since we are going to have to rely on our own wells for the foreseeable future it might be wise to follow Waterford's lead and not allow any oil drilling or fracking: http://www.theoaklandpress.com/articles/2013/02/26/news/local_news/doc512d39a975ca8467216080.txt?viewmode=fullstory
steve johnson March 04, 2013 at 06:40 PM
Gerry: Don't worry about fracking, the water dept. will have mandatory hookup and take care of that problem and also the NEW iron filtration system---so get ready and open up your wallet.
steve johnson March 04, 2013 at 06:56 PM
Michael, The residents of Pontiac Lake asked the twp. to create a SAD to put a sewer line for them, They wanted it, why should they not have to pay for it. If the twp. taxpayers have to pay for this, then all the other SAD projects need to be paid back for any additional expenses they might have incured now, in the past and for any in the future. (BOARD MEMBERS YOU BETTER THINK WHAT YOU ARE DOING BEFORE YOU VOTE---- IT MIGHT COST YOU YOUR SEAT ON THE BOARD -- not a threat, I'm just saying think about what the true COSTS might be to all of the township.
Michael March 04, 2013 at 07:27 PM
Laura, There is a sewer ordinance posted on WLT's site. No mapping on what has been done, but it goes over the ground rules over what "the rules" are. http://www.whitelaketwp.com/downloads/ord108022113_1.pdf I still have my septic field that is original to my house. As of this date it still seems to be working perfectly fine, IE Water goes down the drain and does not back up. The only real work I have done to it is to have it pumped out at a cost of $200 every 3-4 years. As far as the fire department goes: If they are hiring 1 its due to a dismissal they had last year. There are a few of their engines/tankers and both ambulances that are long due for replacement . Take the money out of the bank and Buy them already!
Gerry S March 04, 2013 at 08:10 PM
There is a poll on the Townships website (http://www.whitelaketwp.com/) asking "Would you like to see the Township Board meetings televised?" Last I looked the votes were 9-1 in favor.
Laura Vogel March 04, 2013 at 08:18 PM
Thanks, Michael, you're right that the ordinance at least provides the ground rules even if it provides little else. I have to ask: do we have an idea if the ordinance is even being enforced? It sounds like everyone who was within the "Pontiac Lake District" was required to hook-up within the first few months. Did that happen? It sounds also like no new construction is allowed to have its own septic field if the sewers are "available". What is the definition of availability (proximity, I am presuming, but how proximate?) and has this been enforced? If the projections were that, by now, there should have been twice as many homes hooked-up, is this shortfall against forecast due to septic systems simply lasting longer than envisioned (because folks like you and me spend the $300 every few yrs to pump and maintain) or because of something else? Again, it's hard to piece things together simply by relying upon word of mouth. If the trustees, who hold 4 out of the 7 votes on the Board, believe they've been given all of the necessary gorey details, then the fact that the public at large is not privy to those same details is less of a concern. However, it has seemed for quite a while that the Trustees regularly walk into the Board meetings with the same pittance of details as do the rest of us random folks who just happen to make time to attend. I don't know if televising would solve that problem, but it would certainly make it harder to argue after the fact at least.
Mark March 05, 2013 at 03:41 AM
Rog, I did. I am rather disheartened that some on the board can make the errors they have well in the past and do all they can to remove themselves from all responsibility. The article stated one persons simplistic take of the problem. The truth, as described to me, is there was a blending of the money to be paid. Some went to phase one, some went to construction costs. The funding became so confusing that no one knows just what happened back then. Another fact that isn't stated is that the Pontiac Lake SAD is the ONLY SAD with 432 parcels and MANDATED to hookup. All others on the system were optional. It is the easy answer to simply say it is Pontiac Lakes problem and dump it on them. They know the answer to the long term survivability of the system is hookups. My question to our Sewer Director is; If your plan was to have 2500 hookups, why has there NEVER been a concerted effort to market the system? I have had discussions with Mr. Lilly who stated "to make residents hook up to the sewer is political suicide". I personally have talked to residents who have the desire to hookup and do not even know the sewer passes by their homes. When the question of why was presented, the answer was simply "its up to the residents to bring their request for an SAD to the Township Board". It seems to me that the initial effort to spread the knowledge of sewer availability falls in the hands of the Township officials. To me this is gross neglect and a disservice to all Township residents.
Mark March 05, 2013 at 03:45 AM
The most recent bill was $162.
Lakeside March 05, 2013 at 01:54 PM
I agree with Michael's statement about getting the issue resolved. However, according to Lilley, the General Fund already gave the Sewer Fund $400,000 in phase I. As to broadcasting the meetings, this needs to happen, make these people accountable. White Lake is the only local community I can think of that does not broadcast their meetings. I guess all the other communities like to grand stand. Rog- When I checked the annual financial report last year, the water system had over $4,000,000. I do not think it needs a General Fund gift.
Gerry S March 06, 2013 at 05:44 PM
Not only Board of Trustees Meetings but Planning Commission Meetings, Parks and Recreation Committee Meetings and Zoning Board of Appeals Meeting should be available and accessible to every citizen. Not everyone subscribes to Comcast and these meetings should be available on the township's website as well.
Laura Vogel March 06, 2013 at 06:03 PM
I couldn't agree more, Gerry. If I've missed a meeting or two, it would help me to be able to be a more-informed participant if I could watch the meeting(s) I missed so that I don't accidentally ask a question that might have already been answered (for example). Plus, the minutes take at least one (sometimes two or more) months before they're posted, and even once they're posted they hardly reflect all that was actually discussed.

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