The fine print

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County commissioners originally tabled the DNR’s non-motorized trail fund agreement while their civil counsel perused the document—and the results are in.

By: Benjamin J. Gohs, News Editor

County commissioners originally tabled the DNR’s non-motorized trail fund agreement while their civil counsel perused the document—and the results are in.

According to board civil counsel Bryan Graham, by signing the contract the county would be promising to numerous stipulations including maintenance, insurance and it would also put an end to the discussion of whether property owners will have a say in the proposed trail route.

“By signing this agreement the county is making a commitment to take all action required to complete the project, which must be done no later than Aug. 1,2014,” Graham stated in his Oct. 25 letter to commissioners. “If the agreement is signed, there will no longer be any benefit to hearing comments from the public that the project should not go forward.”
He added, “In other words, this agreement is the final decision concerning whether the trail project should be completed.”

This latest development in saga of the non-motorized trail planned to stretch from Boyne City to U.S. 31 just north of Charlevoix has some property owners along the tentative route concerned.

“That land was given by my people for a dollar to be used for highway purposes only,” said proposed trail route resident Roger Conaway of an easement his relatives signed over to the county back when Boyne City-Charlevoix Road was originally built. “This road should not even be thought of for a path. It’s a road of commerce.”
Conaway said it was his understanding that the trail could not extend past the 47-and-a-half-foot right-of-way on either side of the highway center-line. But that, even if the trail fell within that area, it was not necessarily a granted use under state law.

According to Graham, Section 13 of the agreement requires that the trail be constructed on property owned in fee simple (the way land is most commonly owned) by the county, unless an exemption has been authorized by the DNR It is my understanding that the proposed trail will be located within the highway right-at-way, and in limited locations where it goes beyond the right-of-­way, will be located on easements provided by the property owners,” Graham wrote. “Under Michigan law most public highways are not created by conveyance of fee simple title to public authorities. Rather, most public highways are created under a legal doctrine known as ‘highway by user.’ Under this doctrine the public authority obtains an easement over the land for highway purposes—generally 66 feet in width.”
He added, “A trail located within the highway right-at-way would be authorized as a part of the highway purposes of the easement.”

Bay Township resident Bob Taylor said he owns no land along the proposed trail route, but he still has concerns about the use of taxpayer dollars and the issue of property rights in the trail matter.

“We have that building on Beaver Island (proposed utility and vehicle garage) and roads that need to be repaired—and before they put that bicycle trail in they have to have agreements with the property owners that’s adjoining that property,” Taylor said. “This has been going on for three or four years now and they have that requirement to have people sign the document first before they build on their property and they haven’t done it.”

Taylor added that he does not believe the county is even certain about where the center-line on the road is supposed to be in relation to its original construction.

“All along we’ve said they need to survey that road,” he said. “But, they decided it costs too much.”

Taylor added, “It’s going to cost them a lot more if they don’t survey it and it’s not done legally.”

In his letter, Graham stated that he assumed the DNR was aware at the time of grant approval that the trail would be located within the highway right-of-way or on easements granted by property owners.

“It is … important to document the DNR’s exemption from the fee simple title requirement in Section 13 of the agreement,” he stated. “If this exemption has not already been documented, then this documentation must be obtained prior to the agreement being signed.”

The deadline to have the agreement signed and returned to the state is Wednesday Nov. 21.

Other items of interest Graham highlighted in his findings include the actual amount of monies which could be reimbursed should the county be found to have complied with all of the DNR’s requirements upon completion of the trail.

“The grant will be paid as reimbursements to the county for eligible costs and expenses incurred in the project. The amount of the grant is 31 percent of $954,500—or $295,895—although the agreement makes reference to a figure not to exceed $300,000, the contractual language in Section 6.a limits the grant reimbursement to $295,895,” Graham stated. “I therefore suggest that the language in Section 6.a be modified to reflect the maximum grant reimbursement amount of $300,000. This would require the reimbursement percentage be increased to 31.43 percent.”

As currently written, only up to 90 percent of the grant can be reimbursed, meaning the county’s actual reimbursement in DNR Trust Fund monies would be $266,305.50.

The county is also responsible for submitting plans, specifications and bid documents to the DNR for approval, and is required to complete construction of the project to the satisfaction of the DNR.

“I therefore am assuming that the costs and expenses eligible for reimbursement would be the costs and expenses incurred to construct the project in compliance with the approved plans and specifications,” Graham stated. “However, nowhere in the agreement is there a provision specifying what constitutes the costs and expenses eligible for reimbursement.”

He added, “Therefore, it is my preference that the agreement define in some way the costs and expenses eligible for reimbursement.”

Graham cautioned that accurate record keeping be employed to ensure reimbursement by the DNR on all costs associated with the trail construction.

“If expenditures are made that cannot be properly documented, then the county may not receive reimbursement that would otherwise be allowable under the grant agreement,” he stated. “Upon completion of the project, the DNR will conduct an audit of the project’s financial records. As a result of this audit, there may be deductions made from previously reimbursed expenses.”

According to Graham, if the agreement is signed, the county must allocate $954,500—which includes a local match of $654,500—to a trail construction fund where-from it will fund construction costs and later seek the aforementioned reimbursement.

“Assuming the maximum grant reimbursement of $295,895 (as the agreement is currently written), the county would be responsible for the remaining costs—from other grants, donations or the general fund,” Graham stated. “Any cost overruns to complete the project facilities is the sole responsibility of the county.”

Funds have been pledged by the following entities in the following amounts to help fund the non-motorized trail:

  • Evangeline Township – $33,216
  • Boyne City – $11,072
  • Charlevoix County Community Foundation – $26,000
  • North Country Bike Club/Top of Michigan Trails Council – $18,312

The $565,900 figure is a grant the county hopes to get from the MDOT enhancement act program—the funds have been applied for and conditionally approved.

The $300,000 figure is a Michigan Natural Resources Trust Fund Grant that has also been applied for.

Additionally, the county would be required to operate the trail for a minimum of its useful life, as determined by the DNR, to regulate the trail to the satisfaction of the DNR, and to appropriate money and/or provide services needed to provide adequate maintenance of the trail.

“In other words, this subsection places future obligations on the county concerning the trail,” Graham stated. “If the DNR determines that the trail is not being regulated properly, it may require the county to develop regulations to meet the DNR’s satisfaction. These regulations may be required to be in a county ordinance. In addition, the county will need to budget money for trail maintenance or allocate county services to maintain the trail.”

The agreement also stipulates the county cannot make any changes to the trail without first consulting the state; nor can it charge fees for its usage without DNR approval.

Graham also instructed board members to carefully review Section 28 of the agreement, which details actions the DNR may take should the county breach the proposed contract.

These remedies include:

Withholding and/or canceling future payments to the county on any or all current recreation grant projects until the violation is resolved to the satisfaction of the DNR;

Withholding action on all pending and future grant applications submitted by the county to the Trust Fund and the Land and Water Conservation Fund;

Requiring repayment of grant funds paid to the county; and/or

Requiring specific performance of the grant agreement.

“Section 30 of the agreement requires the county to return all grant money paid if the trail is not constructed, operated or used in accordance with the grant agreement,” Graham added.

The Charlevoix County Board of Commissioners will likely discuss the matter during their regular 9:30 a.m. Wednesday Nov. 14 meeting.

Charlevoix County Board Chairman Joel Evans could not be reached for a comment by press time.


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