Presto! Township Debt Problem Disappears!

Livingston County must be home to some real magicians. They can make millions of dollars of debt just disappear.

Last month, the all-Republican Livingston County Commission set aside $2 million to create a fund to help townships pay off bonds for water and sewer systems in subdivisions that were never finished. The county backed the bonds for the townships, who paid for the projects for developers who walked away from the projects and left the townships holding the bag.

The county is left with egg on its face as it scrambles to figure out how to salvage its credit rating if townships stop making the payments. And it may face having to pay out $200,000 to $400,000 a year in payments for Handy Township because it can't make its bond payments starting as early as next year.

But just last week, the Livingston Press and Argus reported that everything is fine with the townships' special assessment debt. In some cases, township voters have approved millages to make up the shortfall. In other words, they raised taxes to cover up county and township officials' mistakes.

So what was the point of the $2 million loan fund? None of the township officials interviewed seems to have been asked if they will make use of the county's loan fund. Did the problem magically disappear in the month between when the loan fund was set up and the time the township officials were interviewed? Or does Handy Township at least expect to borrow money from the fund? What are the terms of the loan from the fund and can Handy Township meet them?

The article's emphasis was on whether or not the state would send in emergency managers to take over any townships, not the value of the county loan fund. And it turns out the state treasurer's office has met with local officials to discuss assessment debt. What happened in those discussions? Does the treasurer's office have a plan the people don't know about?

The two stories don't add up. The county commission sets up a loan fund for townships that have debt, and townships that have the debt don't even mention whether they will use it.