Oxford Township’s decision last month to pay 100 percent of the tab to fix all the problems in the Elk View Estates subdivision could get the municipality in some legal hot water.
‘If the board doesn’t change their decision, every time I get a bill for Elk View, I’m going to write on it in big, capital letters ‘MISAPPROPRIATION OF FUNDS,?? said Supervisor Bill Dunn.
At its July 15 meeting, the township board voted 4-2 to pay the entire cost of bringing the subdivision’s two roads, Elkview and Bull Run, up to public standards, plus fixing all the surface water drainage problems that plague the development located east of Baldwin Road and south of Hummer Lake Road.
Right now, the total estimated cost to do all this is $324,000.
Township attorney Gary Rentrop indicated an expenditure by the Township to correct the water damage problems at Elk View raises the issue of misappropriation of funds.
He warned the board of this in a June 17 e-mail to Dunn.
‘Once township monies are paid to do physical corrections of the problems at Elk View, this likely would be considered the expenditure of public monies for private purposes,? Rentrop wrote.
He told this reporter, ‘Unless you can find a statute that authorizes that kind of expenditure, the state constitution prohibits it. The state constitution says you’ve got to have statutory authorization to spend money for anything.?
The township could also legally expend monies on Elk View if the payment was part of a lawsuit filed by property owners against the municipality.
‘It needs more research, but I know enough to say there’s some flags there,? Rentrop said. ?(The board) ought not to make a move without having some good research done.?
But so far, Rentrop hasn’t been authorized by the board to issue a legal opinion on this matter. He can’t do any work on it unless directed to do so.
Treasurer Joe Ferrari, Clerk Curtis Wright and trustees Joe Bunting and Buck Cryderman voted in favor of paying for the entire fix in Elk View.
Trustees Sue Bellairs and Mike Spisz voted against it.
Dunn was not present at the July 15 meeting due to health issues and although he isn’t able to return to work yet, he wanted to make his feelings very clear.
‘I would definitely have voted against paying the whole thing,? he said. ‘I feel bad for those residents in Elk View, but the township isn’t responsible for everything that went wrong in that development. We’ve got no business making the taxpayers foot the whole bill, especially when it only benefits the few people that live there.?
Looking back, Ferrari, who voted in favor of paying 100 percent for the Elk View fix, admitted it was not the right move.
‘We’re not perfect and we should have looked at a different motion,? he said.
Unfortunately, the July 15 meeting was ‘contentious,? in Ferrari’s opinion, and people got ‘caught up in the whole debate.?
Ultimately, he said ‘the township board’s trying to solve (the problem) and put the thing to bed.?
That was the intent behind the approved motion, which was contingent on Elk View residents agreeing, prior to any work being done, to absolve the township of any liability and allow for any necessary easements.
That was the trade-off for the township to pay 100 percent.
‘Some of us want the whole problem just to be solved,? Ferrari said.
Despite the issue raised by Rentrop, Ferrari does not believe a legal opinion is needed in this situation.
‘I don’t think that’s the route we need to go,? he said.
Ferrari believes what needs to happen is for the board to revisit the issue of who’s going to pay for what.
‘We can always revisit things,? he explained. ‘Basically, right now, we have to look at the funding mechanism and determine who’s responsible and what that percentage is.?
‘It all depends what you think our responsibility, through the (township) building department, is in the situation,? Ferrari noted. ‘We have some responsibility. Everybody, I think, kind of admits that.?
Ferrari believes Elk View residents should at least put up the $55,385 that a majority of them had indicated they were in favor of paying through a Special Assessment District.
‘We should have continued with the portion that the residents were going to pay,? the treasurer said. ‘That’s what we should have kept in the equation. That’s something we should not have taken out.?
Bunting, who also voted in favor of the township taking full financial responsibility for Elk View, favors looking into the legality of the situation before any money’s spent.
‘We have to make sure that we’re doing everything the right way,? he said. ‘You want to do the right thing. Obviously, we want to help the people as best we can, which was the direction we were headed.?
Ferrari indicated the board is holding off on a discussion of the Elk View issue until Dunn returns. The supervisor’s expected to attend the 7:30 p.m. Wednesday, Sept. 9 regular meeting.
‘He was the one mostly involved in it,? the treasurer said. ‘That’s what kind of put us behind the eight ball. Nothing against the six of us that were there, but Bill had a lot of the information. We should have just sent a cancellation notice to our residents and waited for Bill to be in attendance and have a good discussion.?
However, Dunn indicated the board had all the same information he had.
‘It wasn’t about a lack of information or me not being there,? he said. ‘They made the wrong decision, period.?
Even though the township would be spending tax money to turn Elk View’s streets into public roads, Rentrop said it could still be viewed as spending public money for a private purpose.
Neither of Elk View’s roads legally exists because they were never dedicated as either private or public nor were they approved by the Road Commission for Oakland County.
Legally, both roads are still private property.
‘There are statutes that allow the townships to spend money on public roads, but I am not aware of authorization to spend money on private roads. Right now, at best it’s a private road,? he explained.
Without approved roads, residents technically can’t sell or refinance their homes because mortgage companies won’t loan money for properties that are not in compliance with the township zoning ordinance. No building permits can be issued in the subdivision for the same reason.
The subdivision also suffers from severe drainage problems, which again could be viewed as a private, not public, issue.
A natural drainage course runs through the subdivision into wetlands located to the south. When Constable went to the county for his lot splits, he indicated there were no wetlands on his property, according to Rentrop.
The attorney said Constable then proceeded to dump materials into the drainage course to fill it in and create four lots. But since you can’t stop nature, the water now flows on the surface, instead of in a drainage course.
Dunn is afraid of setting a precedent whereby every private property owner with drainage problems comes to the township to pay for their fix.
‘They’ll say, ‘You paid for Elk View, why not me??? he said. ‘How can we justify paying all of one bill and none of another??
Rentrop said it’s the developer who caused the Elk View situation to begin with, so ‘that says to me the township is not 100 percent responsible (to fix) the problem.?
Residents and officials agree it was the alleged improper action of Elk View developer Scott Constable, who supposedly didn’t play by the rules, that led to this whole situation.
Errors made by both Oakland County and the township’s building department added to the mess.
The county approved the land divisions, which allowed for the subdivision’s creation, with no input from the township. These divisions, of which too many were issued, should have been reviewed by the township per state law, but the developer circumvented the municipality by going through the county.
Because everything was done at the county level, no site plan ever went before the township planning commission for review or approval.
On the township end, the building official/zoning administrator at the time, Mike Darling, signed off on the county-approved land divisions without an independent review.
Contrary to the township zoning ordinance, Darling then issued Certificates of Occupancy for homes located on roads that do not exist.
Although the township may have been negligent in the situation, it was not grossly negligent, according to Rentrop, and would have the protection of government immunity in a lawsuit seeking damages.
Constable declared bankruptcy in 2005 and moved out of state, leaving the township and Elk View residents to clean up the mess with no financial assistance from the county.
Over the years, the township’s spent more than $200,000 in legal fees trying to resolve the issues at Elk View Estates by pursuing Constable in court.
‘We’ve already gone above and beyond trying to help these people,? Dunn said. ‘Township taxpayers can’t be expected to pay for everything. The homeowners have got to bear some responsibility, too. There’s such a thing as ‘buyer beware.??
In April, the township voted to pay $148,486 to bring Elk View’s roads up to private standards and fix some of the drainage problems.
The roads would be brought up to public standards if the majority of the property owners agreed to pay another $55,385 through a Special Assessment District to make it happen.
Most property owners agreed via a survey sent out by the township.
However, since the township’s offer, the overall estimate for the public roads and drainage fixes increased by $119,000, which did not set well with the property owners, who felt the municipality should cover the difference.
Dunn indicated he would have been willing to increase the township’s contribution to about $160,000, no more.
‘That’s more than fair,? he said. ‘We’d be paying for half and the homeowners would cover the rest.?
But Rentrop indicated the township’s original $148,000 offer and Dunn’s $160,000 proposal still raises the issue of expending public funds for a private purpose. ‘It is my recommendation before any money’s spent, the township needs to have the legality of this thoroughly researched,? he said.
Ferrari argued that if it’s wrong for the township to spend money to physically fix Elk View’s problems, then it was also wrong for it to spend more than $200,000 in legal fees pursuing Constable over the years.
‘If that’s the case, our counsel should never have had us go forward with the whole Constable lawsuit,? the treasurer said. ‘To me, it’s the same thing. You can’t continue throwing legal fees at it without solving the problem . . . To me, it’s all intertwined, you can’t separate it.?
However, in his June 17 e-mail to Dunn, Rentrop explained the attorney fees were for ‘public purposes? because ‘the township was, via this litigation, prosecuting its ordinance violations.?