By Benjamin Gohs
The majority of Walloon Lake Water System customers want to buy the system from owner Dennis Hass.
While 51 percent of the customers needed to agree to the proposed purchase—a deal that has been estimated to be worth $1.3 million—at least 83 percent of the folks within the water system district had signed on as of the Tuesday Nov. 12 meeting of the Melrose Township Board.
“I don’t know if it’s good, bad—I don’t know if you can qualify it as good or bad. There’s always issues of some sort. There’s issues of ownership, what you have to do. There’s issues of being part of a group that has to pay a water bill that you don’t own,” Melrose Township Supervisor Vern Goodwin told the Boyne City Gazette prior to the meeting. “I think you’re trading one set of problems for another.”
He added, “The biggest thing is, if we own it, then we have more control of our problems.”
Melrose Township Clerk Robin Hissong Berry said neither she nor Goodwin live in the water district that is served by the Walloon Water System.
When asked about the petition process, Berry said, “Citizens are doing what they need to do to follow the law.”
How this community came to even consider buying such a costly utility service is a story in itself.
The issue came to light back in the summer of 2012 when multiple charges were filed against Hass for a string of allegations that included extortion, conducting a criminal enterprise and unlawfully using property liens against customers of his Walloon Lake Water System.
Following months of twists and turns in the case—that included charges being changed, charges being dropped at one point, charges being refiled and the case ultimately being dismissed—customers of the Walloon Lake Water System had had enough and a public meeting was held to discuss their options.
A citizens committee consisting of nearly 10 Walloon Water System Customers circulated petitions in order to guage support.
“Everybody in the district or the supposed area was contacted by knock on the door personally or we sent them a petition with a hand-written letter or if we had their e-mail they were contacted by e-mail—so everybody was contacted at least once or twice,” said citizens committee member Bunny Marquardt.
One petition signer said he thought it was a good idea to make the water system public but feared speaking out on the matter because the system was still under the control of Hass.
During the meeting, Marquardt told the board that petitioners urge the Melrose Township board purchase the water system from Hass as soon as possible for an amount not to exceed $1.3 million.
Marquardt said 147 people signed the petition. Twenty did not sign, eleven people said “no” and 20 people never responded.
Marquardt said there are a total of 204 water hook-ups because some customers had more than one; that means 85 percent of the hook-ups are owned by people in favor of buying the water system.
“So now we would like to schedule a public hearing so we could proceed with the negotiations,” Marquardt said…. “This just means that we’re going to pursue the purchase of the system.”
The actual value of the system was discussed and it was explained that it depended on your definition of value. A valuation that relied on the cost of the system when it was new, minus depreciation, put the system somewhere in the $286,000 range. However, to build a system from scratch could cost nearly $3 million. According to officials, at least $400,000 and $500,000 in new parts have been put into the system and could be deducted from the cost of building a new system if they were used.
Issues of concern generated during board discussion involved needing more data—which they said Hass was unwilling to release—the condition of existing infrastructure and the valuation of the system.
The Melrose Township Board merely accepted the petitions during the Nov. 12 meeting and communicated that there would be two public hearings on the matter, with the first one to be scheduled for 7 p.m. on Tuesday Dec. 3 at Melrose Township Hall.
The initial plan, if the system is purchased, is to pay for it on a fee-based system instead of using taxes. A special assessment district will be created because the township could, in the future, levy taxes to help fund the system.
Those people who oppose the purchase will have the opportunity to make their displeasure known at the Dec. 3 meeting and will then have the chance to go before the tax tribunal to plead their case.
Even though the township is not asking for taxes, it must still go through the same process by law.
A negotiator, who Marquardt said knows Hass well, has been chosen by the citizens group to work out the details of the potential sale with Hass.
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