A year and a half ago, I wrote a rather lengthy piece titled “Majority white communities avoid Emergency Financial managers with help from Republicans Denby and Rogers”. In it, I told the rather convoluted story of how now-State Representatives Cindy Denby and Bill Rogers had, during their time as local government officials, gotten their municipalities and county into severe debt when the housing market crashed. Bad decisions by them resulted in Handy Township where Denby was the Supervisor and Livingston County where Rogers was a Commissioner facing severe financial crises over special assessment districts that were created, paid for, and which then fell apart as developers abandoned the projects.
Their financial crises were so severe, in fact, that some feared that these lily white communities may have to be taken over by an Emergency Manager. This was after Denby was overheard saying that the Emergency Manager law was “not intended for places like Livingston County”.
Rogers and Denby tried several times to put a law on the books that would have the state help bail out the municipalities that were put into debt by their mistakes. After three attempts, they were successful. Unfortunately for Handy Township, although they were first in line with their hand out for a state bail-out, they were denied.
Well, Denby and Rogers are back again, trying clean up their mess. This time, it’s by allowing the County to assume the debt and then giving the local municipality a virtually (or in some cases and actual) interest-free loan:
Several Livingston County governments saddled with special-assessment debt could see interest payments slashed under a bill progressing in Lansing. […]Under state law, governments that approve special-assessment districts become responsible for delinquent taxes when developments go bust in the districts.
Several county townships — including Brighton, Howell Oceola, Tyrone, Handy, Hartland and Marion — have incurred mostly sewer-bond debt from residential projects that failed to come to fruition.
Local governments can tap the county’s revolving delinquent-tax fund — at 1 percent monthly interest — to make the late payments.
This may seem like a righteous thing to do and, at the end of the day, it will certainly help these communities. But make no mistake: this isn’t something that Livingston County would do out of the goodness of its heart. While Bill Rogers was the County Commission Chair, the County backed the loans that are causing all of this debt for places like Handy Township in the first place. If these municipalities go bankrupt, the entire obligation falls on the County. It’s much more to their advantage for them to allow the local governments to pay the debts off at low interest.
I’ll give Denby and Rogers credit. At least they are trying to do something to fix the problems they created. It’s just a shame they don’t spend as much time solving the problems of other municipalities that are dealing with crushing debt.
