By Rosemary K. Otzman
The Van Buren Township Board of Trustees at its July 1 meeting voted 4-3 to postpone action on a proposed law suit against Wayne County regarding the Downriver Sewer System.
The item will be on the agenda of its next regular meeting on July 15 for a vote.
Voting against waiting were Treasurer Sharry Budd, Trustee Jeff Jahr, and Supervisor Combs. Voting to discuss it in two weeks, after more information was in hand, were Clerk Leon Wright and Trustees McClanahan, Miller, and Hart.
The proposed law suit reportedly was discussed in the board’s closed-door session on June 30.
The agenda item paperwork noted that the DPW director and the township attorney supported the lawsuit and it has also been supported by “Treasurer Budd, Trustee Jahr, and Supervisor Combs.”
The budget implications noted were: “The township is to pay its share of the attorney fees and expenses based upon a proportionate share of the township’s five-year average annual flow volumes adjusted as to the number of communities that join the litigation.”
If all 13 municipal members of the Downriver Sewer System’s Joint Management Committee join in the law suit, VBT’s share would be 1.8% (and the City of Belleville’s share would be 1.06%).
It also was noted on the agenda paperwork that the VBT legal fees will be funded from the Water and Sewer Fund’s attorney account.
The five-page resolution on the proposed law suit notes the Downriver Sewage Disposal System contract was effective March 1, 1962 and later amended for the treatment and disposal of sanitary sewage emanating from the 13 municipalities.
The contract, as amended, provided the establishment of the system with the cost allocated among all the municipalities as funding units as having an ownership in the system and contractually authorized the county to operate the system.
That contract expired March 1, 2012 and despite the municipalities’ best efforts, the county has refused to continue negotiations as to a new contract, resulting in the parties continuing their relationship under the expired contract.
The resolution further explained that the system has undergone a major expansion and renovation as a result of the U.S. EPA and MDEQ mandates which were set forth in a consent decree dated May 24, 1994 in the matter of United States of America, et al vs. Wayne County Michigan, et al. filed in federal court.
As a result of the consent decree the system has undergone a major renovation and expansion, bonds were issued in the aggregate amount of about $350 million for a Financing Plan and Final Judgment entered on March 14, 1994, and the municipalities pledged their full faith and credit as the primary obligor to secure debt payments on the bonds and have exclusively made the payments on the bond indebtedness.
The resolution points out that since 1962 the municipalities have exclusively paid for all capital improvements, bonded indebtedness and reserves for the system, but on May 15, 2014 Wayne County approved a Deficit Elimination Plan without notice and without the consent of the municipalities, that imposes $121 million dollars of additional debt unrelated to the sewer system on the municipalities.
In essence, the resolution states, this requires the municipalities to purchase the system for which they have already paid.
The municipalities already have filed objections with the county and the state treasurer.
The resolution goes on to state that on top of that, the municipalities discovered that on May 28, 2014 the county, again without notice or consent of the municipalities and in violation of 1957 PA 185 and the contract, caused the transfer of $4.594 million from the system’s reserves (all of which was funded by the municipalities for the exclusive use and benefit of the system) to the county’s general fund.
The county also transferred $4.4 million from the Rouge Valley system to its general fund.
The resolution states, “… the municipalities are justly concerned that the county’s tenuous financial condition and the uncertain ability to implement a workable Deficit Elimination Plan may very well result in the appointment of an Emergency Financial Manager and/or a bankruptcy filing thus imperiling the assets of the system in which the municipalities have a legal and/or equitable interest.”
The resolution said the municipalities “now recognize that given the county (i) had no interest in resuming negotiations of a contract; (ii) intends to further burden the municipalities with tens of millions of added debt through the Plan; and (iii) will, given the need to continue to fund general county operations in light of the financial deficit, continue to misappropriate money from the system’s reserves, the municipalities have no other option than to commence litigation…”
Among other things, the law suit would “seek a declaration of rights, obtain a full accounting of the county’s use of the municipalities’ system fund, obtain injunctive relief to prevent the implementation of the Deficit Elimination Plan that was approved by the County Commission on May 15, 2014, and request the appointment of a receiver to cause, among other things, the restoration of system funds with interest and other costs and such other relief as may be necessary.
In the public comment portion of the July 1 board agenda, Alan Helmkamp, Assistant Wayne County Executive, told the board it does not have all the facts.
He said the county proposes the sale of the wastewater treatment plant and seeks dialog with the communities. He said they are not looking to oppose the sale.
Helmkamp said the bottom line was, “If you proceed to sue, you will be wasting the township’s money.” He said Southgate and Romulus have already decided not to be in the litigation.
“I would be happy to sit down and listen to you,” said Supervisor Linda Combs, inviting Helmkamp to give the printed information he offered to Deputy Clerk Joanne Montgomery, which he did.
When the litigation resolution came up for action on the agenda, Clerk Wright said, “I would like to hear what he has to say before I cast a vote.” Trustee Reggie Miller agreed.
Wright made a motion to postpone the item.
“I’m not as optimistic as you,” said Trustee Hart.
“Plenty of time has already been given to this,” said Trustee Jahr. He said the township has been stonewalled by the county and when the township wants to sue, now the county will talk with the township.
“I’ve heard some alarming things, financial things,” Trustee Hart said.
Trustee McClanahan said there may be some information the township is not aware of and Trustee Miller said she would like to hear more information.
Besides VBT and Belleville, other municipalities that are members of the Downriver Sewage Disposal System are Allen Park, Brownstown, Dearborn Heights, Ecorse, Lincoln Park, River Rouge, Riverview, Romulus, Southgate, Taylor, and Wyandotte.
By Rosemary K. Otzman