Hayes building project delayed – most likely residents will vote on new township hall

March 21, 2014

By Rosemary Horvath

Bond counsel has given Hayes Township more detail information that potentially could pave way for a voter decision on moving forward with a major building project. A vote hinges on whether volunteers will circulate petitions and collect 358 qualified signatures calling for a referendum. Consequently, the process to replace the existing township hall, repurpose the Civic Center building and transfer township services to a main location has been slowed. Instead of beginning construction this year, work may not begin until 2015.

This has influenced township Supervisor Terry Acton’s political future. His earlier announcement he would not seek re-election has been replaced with his hope to see this project through. He will seek another 2-year term. The township was thrown a curveball, Acton said upon learning through the Thurn Law Firm facts about a referendum vote. Thurn deals with municipal bonds. It’s true the township will not issue bonds in order to pay the construction costs, so voter approval is not required. However, the township does have to guarantee payment of a loan it is eligible to receive through the US Department of Agriculture Rural Development to finance the project.

Therein is the confusion.

“The township is not issuing bonds to pay for the project,” Acton explained. “This bond is more like insurance and assurance saying the township guarantees repayment of the loan.” Bond counsel informed the township that voters have the right to ask for a referendum. Details are being published in a legal notice in a Harrison weekly newspaper for seven weeks. This is more or less a promissory note that says the township is obligated to repay the loan. This means if the township ever fails to make a loan payment over a repayment period then the township would have to raise taxes to repay the loan.

The township doesn’t anticipate that happening. To pay annual bond payments, the township has eliminated annual bonuses elected officials received over the years paid in lieu of health insurance. This added up to $130,000 annually. Other adjustments to the budget were made such as closing the Grant Road building. A new complex would be built with efficient energy equipment thereby saving on utilities costs.   Acton said, “Intent of community is to repay the loan with current funds in the general fund. This is not a bond sale which would have required voter approval and ask for a millage to repay the loan. “We were told the township cannot have a mortgage on property so there has to be another way to guarantee repayment. This bond is a vehicle promising this mortgage will be repaid.”

Details are being worked out with bond counsel as to length of the loan repayment period. Acton has received different terms from 10 to 40 years.

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