Worth settles $1 million bill
WORTH TWP. — The township board of trustees has approved an out-of-court settlement over an outstanding bill owed to the engineering firm that designed its state mandated wastewater treatment system.
The settlement was explained in detail to citizens at a Nov. 29 special meeting. It was thrashed out following 10 hours of intense mediation that took place Nov. 21 in Grand Rapids.
But there still are a lot of “ifs.”
The direction the deal will go depends on the outcome of another lawsuit, one between the township and the Department of Environmental Quality, now before the Michigan Supreme Court.
“It is a very complicated case,” township attorney Greg Stremers told citizens at the meeting. “We only got the agreement after very hard negotiations. I think it was the best we can do.”
In 2007 the DEQ sued Worth Township to force construction of a wastewater treatment system, claiming that pollutants from failed septic systems were escaping into Lake Huron. In 2008 an Ingham County judge ruled in favor of the DEQ.
In February 2010, Worth hired the engineering firm Fleis and Vandenbrink Engineering Inc. to design the system. Work on the project was halted in August 2010 when the state appeals court ruled that the DEQ couldn’t force the township to install the system.
The DEQ appealed the lower court ruling to the Supreme Court, where it now awaits a decision. Meanwhile, the engineering firm sued the township and Sanilac County over a $1.1 million unpaid bill for designing the system, plus interest and court costs.
The mediated agreement reduces the amount the township owes the firm to $975,000, with no further interest and court costs.
The award is upon the condition the firm will not seek compensation until 60 days after the decision of the Michigan Supreme Court on the DEQ case or such date that will permit the township to place the judgment on the Dec. 1, 2012 tax levy.
Initially, township officials believed a high court decision might come as early as January. Now, they suspect it may be later than that, said Township Supervisor Phil Essenmacher.
If the Supreme Court rules in the township’s favor, the township may consider suing the DEQ to pay the costs of designing the unnecessary sewer system, Essenmacher said.
If the court rules against the township and decides that a sewer system must be built, the township could sell bonds to pay for the system and the engineering fees could be rolled into the sale of the bonds, he said.
Or the entire project could be financed through a loan from the United States Department of Agriculture and the engineering fees paid from the loan.
Either way, township officials said they must stem the hemorrhage of money flowing out of the cash-strapped township.
Treasurer Jennifer Woodruff told citizens that since 2008, the township has been paying $600 a day in attorney fees.
“That’s a lot of money. And it’s making us go bankrupt,” Woodruff said.
At its regular Nov. 16 meeting, the board approved pulling $50,000 of a $150,000 payment from the insurance company to shore up its dwindling general fund, and pay its December bills.
The township also owes thousands in unpaid fire and rescue fees to Lexington, Croswell and Burtchville Township. The bulk of those fees – about $38,000 – is owed to Lexington.
Woodruff said billings for the services were left in disorder and she has been wading through files and working with the municipalities to match all the billings.
Essenmacher told citizens the out-of-court deal with the engineering firm means the township now owns all the engineering plans, including the electronic versions.
If the township must build a sewer system, it will seek three bids and go with the plan that is most economically feasible, he said.
Worth resident Charlotte Bruce asked what the parameters of the sewer district would be.
Essenmacher said that tentative boundaries might be from Galbraith Line Road to Chippewa Trail and include subdivisions east of M-25, but that the western boundary has not been established.
Resident Len Corsetti thanked the council for explaining the settlement in open meeting.
“I applaud your openness,” he said.