What are the different options that were considered in deciding to form Special Assessment Districts (SAD) and finance the project through Bloomfield Township, and why was the Township selected?

There are two options for forming SADs to fund road construction in the Village – through the Road Commission of Oakland County and through Bloomfield Township.  Each option is governed by a different statute.  The Village Board of Trustees, in consultation with the Road Committee leadership, evaluated the two different options through review of the relevant statutes and discussions with both entities regarding the process and policies that would be involved for each option.  The table below sets forth the key elements of each option:

**There is one nuance to how the liability is transferred with the property.  If a property is sold after an annual installment is billed, but before the annual installment is paid, the annual installment would have to be paid upon sale.  In the above example, if the property is sold in January of year 4, the year 4 annual installment of $1,000 would have been billed in December with the winter property taxes.  If the homeowner had not yet paid the winter taxes, the $1,000 annual installment that had been billed but not paid would have to be paid upon sale, and the remaining unbilled assessment of $11,000 would transfer to the new owner. 

Why did we pick the Township?

In deciding whether to form the SADs and finance through either the Road Commission or the Township, the Board and Road Committee leadership weighed the differences between the two options, including reviewing the feedback from residents from the prior SAD effort in 2013.  Key factors in the decision to go with formation of SADs with the Township:

·       Treatment of the special assessment liability when a property is sold:  This was the most important factor in choosing Township SADs and financing. 

A significant factor cited by many residents who did not support the prior effort was the fact that the liability for the special assessment attached to the homeowner and had to be paid when the property sold.  After that effort failed, the governing statute for township SADs – PA 188 – was amended to allow the unbilled assessment to be transferred with the property.  With the amended statute, forming the SADs with the Township has the advantage of the liability staying with the property, and thus eliminating a substantial negative factor. 

·       Repayment period and terms:  Township financing allows a longer repayment period, and most likely a lower interest rate than Road Commission financing. 

·       Required level of support:  Formation of the SADs with the Township allows us to gather support from 51% of the frontage and 51% of the properties in the SAD, whereas the Road Commission would require 51% of each street in the SAD.  With the Road Commission, a single street could cause the entire effort to fail if 51% of the frontage on that street did not support the SAD. 

How the costs would be allocated among the properties in the SAD was also considered.  There are arguments for the allocation methodologies used by both the Township and the Road Commission, and reasonable people could (and likely will) disagree in good faith about which one is better/more fair/more reasonable.  On balance, the Board and Road Committee leadership did not consider the allocation methodology to be significant factor arguing for either option, but rather a neutral factor.