What started out a simple date change, turned into a chaotic debate about a promissory note.
At the June 16 Independence Township Board meeting, Treasurer Curt Carson said after reviewing the resolution authorizing the transfer of funds from water and sewer to general fund that he noticed the first payment date needed to be changed from 2008 to 2009. Trustee Neil Wallace thought this would be an opportune time to discuss whether or not the money ‘borrowed? from water and sewer was a ‘loan? or not.
‘I think in addition to correcting the date we should have a motion to direct the township attorney to create for us two promissory notes,? he said. ‘One for water fund and one for the sewer, I think they should be ‘demand notes? meaning they could be called at anytime.?
Attorney Steve Joppich said it ‘technically was not a loan.?
‘I know that the terminology ‘loan? was used on occasions improperly by myself because we continually talk about paying it back,? he said. ‘If anything it’s a transfer from one fund to the other with a representation by resolution adopted by the board that can only be undone by the board to pay it back.?
Joppich said a promissory note can be done, but he has never seen one with an ‘inner fund transfer.?
‘It would be a document promising ourselves to pay ourselves and I can’t guarantee how that would be enforced,? Joppich said. ‘I guess there would be some issues in that. How do you force a promissory note against yourself??
However Wallace said the borrowers and the lenders were two different groups of people.
‘I guess I disagree with the notion that it’s a promise to pay ourselves because again the lenders are a different group of people than the borrowers. The borrowers are all tax payers,? he said. ‘The lenders are just the rate payers of water and sewer and a lot of them are not necessarily voting taxpayers.?
Trustee David Lohmeier agreed with Wallace that there should be a note.
‘I don’t see the down side for making a promissory note for something that we’ve always called a loan,? he said. ‘Every indication has always been that this is a loan from an enterprise fund and must be paid back and may have to be paid back earlier than the amortization schedule to prevent unfairly treating those folks that frankly from a town hall that we borrowed the money to build. I like the idea of doing a promissory note.?
Carson said it was made clear to him in private discussions with Joppich that a note was not needed because the township was borrowing from themselves.
‘What is it that we need to make everybody understand that this township has borrowed the funds from these two water and sewer funds and we’re paying it back,? he asked.
Joppich said he thought what was done in the resolution ‘satisfies the legal requirements.?
Clerk Shelagh VanderVeen said she was ’embarrassed? because she didn’t know what they were doing.
‘Mr. Carson put on the agenda the correction to the resolution we went off far field discussing loan documents which was not on the agenda,? she said. ‘Somehow we’ve gone into this convoluted discussion about what we should or shouldn’t do.?
Trustee Mark Petterson who was frustrated by the whole thing called ‘point of order.?
‘This discussion has absolutely nothing to do with changing the date on the resolution all we wanted to do was change the date and now we’re into the water and sewer department,? Petterson said. ‘Now we’re going on and on and on, this is way out of hand.?
The motion for the promissory note was defeated 4-2. Lohmeier and Wallace voted yes. Supervisor Dave Wagner was absent. The board voted unanimous to change the date.