Letter to the Editor: Change Needed in Brighton Township Government
John Ewing discusses his reasons for running for Township Supervisor on Nov. 6.
I am running to replace Tom Murphy as Brighton Twp. Supervisor in hopes of transforming the township hall into a place actually managed for the residents of Brighton Twp. - a place of honor, transparency, and trust. Today, Brighton Township is, at best, dominated by a secretive confederacy of dunces (Murphy, Rogers, and lawyer Harris, predominantly) and at worst it is a den of thieves or favor grantors. I hold the latter view, but the most important thing is for the residents to make their own assessment – I encourage everyone to ask questions and demand answers at the township hall before voting in Nov. 6 th election. “Murph” – as he identifies himself (note to electorate: beware of people in public office who refer to themselves with “charming” nicknames) in the township newsletter - has been involved in a series of questionable activities, some of which I believe constitute serious crimes, including The Sewer Problem, The Tax Evasion Deal with Private Developer of State Police Post Problem, and Other Problems:
The Sewer Problem
- An apparently fraudulent real estate transaction, in which Brighton Twp. supposedly purchased 55 acres of wetland property for the Sewer Treatment plant for a whopping $1,012,000. The transaction includes the following certain irregularities:
- no check was written to the property owner, Pleasant Valley Partners, for that amount – a check for $960,000 appears to have been written.
- The purchase agreement claims, in an apparent fraud, that 46 acres of the 55 acre property was “donated”. The agreement claims, suspiciously, that the supposed “donated” parcel would be surveyed at a later date – something which did not happen. In fact, the supposedly “donated” parcel never existed as a legal piece of property, and its identification as having been “donated” appears to be part of one or more frauds (read more below).
- The 55 acres of land was predominantly wetland, and existed as a larger parcel owned by Pleasant Valley Partners. Prior to the supposed “donation” of 46 acres and supposed sale of the remaining 8 acres for $1,012,000, Pleasant Valley Partners carved off all of the commercially valuable land including three parcels – a parcel adjacent to I-96, a parcel with frontage on Pleasant Valley, and a parcel behind the 7-11 at Pleasant Valley and Grand River.
- Having carved off the valuable pieces, the predominantly wetland remainder of 55 acres was transferred to Brighton Twp. along with an easement through the kept property on Pleasant Valley. If you believe the purchase agreement, Brighton Twp. Paid $1,012,000 for an 8 acre parcel of dry land and received 46 acres in a “donation”. The problem is that the supposedly “donated” parcel never existed in legal form, and seems obviously contrived for other reasons, and probably not good ones. Whatever the reason, the purchase agreements identification of a 46 acre parcel which never existed in legal form as a “donation” was a fraud.
- Brighton Twp. Then proceeded, in an act which apparently defrauded the Brighton Twp. Sanitary Sewer District (effectively one-third of the residents of Brighton Twp.) to take $1,012,000 from the Sewer Bond proceeds, under the story (in a lease agreement with the Sanitary District) that it was “rent” for the 8 acre parcel of dry land which Brighton Twp. Claimed (in the purchase agreement with PVP) to have purchased for $1,012,000. There are many problems with this “deal”, including: the 8 acres was not worth a one-time up-front payment of $1,012,000 for “rent”, Brighton Township has indicated no appraisals exist for the purchase from Pleasant Valley Partners or for the rental of 8 acres to the Sanitary District, no brokers were involved in the deals, and although it has not been confirmed to have been cashed by PVP, the check which was written was only for $960,000.
As Supervisor, I will get answers about the sewer land transaction. In the meantime, I am asking the residents to consider the following possible explanations for the irregularities:
- Brighton Twp. Knowingly overpaid for the 8 (or 55) acres of wetlands as an unlawful favor to Pleasant Valley Partners. Clearly $113,000 per acre for 8 acres in the year 2000 is an overpayment, but even if you consider the 46 acres of wetland supposedly “donated”, the price per acre would still be about $25,000 – and again, for predominantly wetland with limited or no commercial value. We will find out who is behind Pleasant Valley Partners.
- The supposed “donation” of a 46 acre parcel which did not exist in legal form was part of some kind of unlawful tax dodge. It is possible that Pleasant Valley Partners used the complications of the transaction – carve off and keep three newly created parcels, sell 55 acres of wetland under the false pretense that 46 acres is donated, etc. - to whitewash the taxable gain which no doubt would have been created by the sale of wetland for over $1,000,000. We will find out how Pleasant Valley Partners handled the taxes on this transaction.
- The most charitable – and least likely, in my opinion – is that township lawyer John Harris simply had no idea that identifying a 46 acre parcel of land which did not exist legally, as having been “donated”, might not be illegal or fraudulent. I will continue to seek answers from Murphy, Rogers, and Harris – truth is patient and relentless, and likely something more powerful than denials or distortions.
- Having started the expenditures from the Sewer Bond funds with a questionable land transaction, Brighton Township proceeded to abuse legal processes for the next ten years, as follows:
- Brighton Township had great difficulty in gaining consent from enough sewer districts and users to fund the cost of the Sewer, which started at an estimated $8 million and later ballooned to a supposed $28 million cost. The problem is that it only had around $16 million in supposed actual assessments. That left a $12 million unfunded liability with no secure payback source.
- In fact, some of the supposed special assessments had not even been gain legally. The bond books which describe the payback sources claimed special assessments for Orchard Estates and Deerfield subdivisions which never existed and were never billed. Amazingly, the million dollars or so from these sources simply disappeared from the bond books when the sewer bonds were refinanced in 2005 – and without any notification to the public as to why they disappeared or who would be responsible for covering this additional unfunded liability. This is the type of thing which would have to be reported to the Securities Exchange Commission, bondholders, and the residents subject to the special assessments, but it appears that Murphy, Rogers, and Harris figured nobody would ever notice.
- Brighton Township, when it refinanced the bonds in 2005, began charging sewer users who financed the special assessment over 20 years (the vast majority) approximately 2% over the bond interest costs despite the fact that the law allows only 1% over the average interest rate on the bonds outstanding. It is not credible that this was the result of bad math, or an oversight – it appears to have been done simply because of the financial distress caused by the irresponsible unfunded liability, phony assessments which did not exist, and other mismanagement. Whatever the case, the law is clear and they continue to charge 2% above the average interest costs on the bonds which remained to be paid upon refinancing.
- Despite the fact that the statute under which the Sewer bond was financed – County Drain Code, Chapter 20 – only allows the following charges on sewer bills: special assessment, operations/service, readiness (for non-users) or availability (for non-users), Brighton Township proceeded to double-dip the special assessment by charging a “capital charge”. The monies from the “capital charge” were being used for exactly the same purpose as the “special assessment” - to pay back the bonds – but did not go through the lawful processes of the special assessment which exist for a reason. The Sewer Users which rightfully believed they had an approximately $12,500 cost for residential use (1 REU) were actually being subjected to an assessment which will ultimately total $22,000 – part through lawful special assessment and part through unlawful capital charges. In documents I have seen, it appears the township is busy crafting a story that the “capital charge” was really a “readiness” or “availability” charge, somehow misnamed. Such a story will fail because those charges are only for non-users (or vacant parcels) and the charge is being applied on top of the special assessment for users. It is simply the case that Brighton Township has abused those receiving the special assessment with unlawful charges. The motivation for the unlawful charges is also clear to see: they irresponsibly took on an unfunded liability of $12 million plus whatever non-existent assessments were claimed in the bond books and figured nobody would ever notice the unlawful capital charge. Of course, when the capital charge ultimately ballooned from $10 per quarter to $90 per quarter, people started noticing. Specifically, Mike Palmer (candidate for Trustee) and I started asking questions. Mike and I will continue to seek answers, and should we get elected by the residents of Brighton Township we will do so as Board members.
- Notably, around the time that Mike Palmer began putting serious pressure for answers about the capital charge – to which he was subjected to as owner of a residential parcel and a vacant parcel – the Brighton Township Manager, Dan Bishop resigned. Apparently he did not want to be associated with the activities of Tom Murphy, John Rogers, and John Harris any longer. The explanations for his departure were, tellingly in my opinion, vague and incredible. “Murph” indicated in a Board meeting that he was leaving for a place with actual cows (Albion City Manager), and Bishop himself explained to the local paper that Albion was a special place with a college-town vibe. If you've ever been to Albion, you would wonder why anyone would want to leave a Brighton Twp. Position, during a recession, for Albion, a smaller jurisdiction, and you would know that the “vibe” there has little to do with the tiny college located outside of town. It seems Dan Bishop was not chasing good “vibes” in Albion, but rather running from bad “vibes” created by Tom Murphy, John Rogers, and John Harris in Brighton Township.
- Dan Bishop's departure was later followed by Jim Kovitz decision to not run again as Trustee. Perhaps this was another sign that the Murphy, Rogers, Harris regime was in its death-throes. I have great respect for Jim Kovitz, who, as trustee attempted to get costs under control by proposing that part-time trustees give up their health-care benefits. It fell on apparently deaf ears even though his reasoning was sound – it's a part-time job that requires you show up at a meeting every two months...why should the people pay for their health care? Jim Kovitz seems like exactly the type of person needed on the Brighton Township Board and it is a shame that he sought to disassociate himself by not running again. Anyway, it seems to me that the departures of Bishop and Kovitz were a direct result of dissatisfaction with how things run at the Brighton Township Hall. It's too bad that bad people tend to push good people away, and I believe that's what Murphy, Rogers, and lawyer Harris have been doing. They are the one's that need to go, not good people like Jim Kovitz.
The Private Developer Tax Evasion on State Police Post Problem
- Around 2009, Tom Murphy participated in a calculated fraud assisting a property developer, Bruce Dietz, in evading property taxes on a private, for-profit, rental property built on public land. The fraudulent pretense was that running Mr. Dietz lease payments from the State Police through township money-laundering accounts “somehow” transforms Mr. Dietz private rental property into a public, tax-exempt property. In fact, the private building was financed by Mr. Dietz and he receives all the rents – for this reason he is the owner and subject to taxation on both the building itself, and the public land he gained for $1 per year. To-date, the people of Michigan have been deprived of property taxes on the public land for the years 2011, when Mr. Dietz gained control of the land, and 2012. The township also appears to be setting up evasion of taxes on the building, which was constructed this year, and will be subject to taxes based on percentage of completion on December 31, 2012. Estimated tax fraud to date: $30,000. Possible plan for future tax fraud: $40,000 per year.
- There are many other problems at the township hall which can broadly be described as abuses of the legal process and public trust. In spring of 2010 Brighton Township created a form called “land use permit” and began demanding $75 and information from property owners about how they intend to use their land. This process is little more than a shakedown because they failed to go through the process to lawfully pass an ordinance for their demands. These are apparently the types of people who think they are above the law, who think they can just start demanding monies from the people by creating a form, and who think that nobody will notice. These are not trustworthy people, and if I am elected Supervisor, you can be sure that those who have paid this fee will receive refunds, and the legal process of public notice and Board votes will be followed for any fees which are actually in the interests of the residents of the township (not the desire of Board members to generate revenues).
- The unlawful sewer dealings break-down as follows: $1,012,000 questionable land transaction, $2,180,000 in unlawful capital charge extractions, and $700,000 in unlawful excess interest rate charges since 2005 bond refinancing. This is a total of nearly $4,000,000 in questionable charges to-date, and as the billings continue unabated, the number continues to grow. Recently, the township treasurer, Lana Theis, took great pains in a board meeting to mislead an auditor into saying the Sewer problem (the unfunded liability) “is getting better”. It was an amazing moment – apparently in Ms. Theis's view, as long as the capital charge continues to increase “things are getting better”. Missing from her understanding is that the money comes from somewhere, namely the bank accounts of sewer users in Brighton Township. In this twisted view of the world, the definition of things getting better is equivalent to more money being billed to township sewer users. In the apparent view of the township treasurer things would be even better if the capital charge were raised even higher ! I don't believe Ms. Theis understands that the capital charge is an unlawful fee, nor do I believe she cares – however, if the Brighton Township Treasurer doesn't understand that higher capital charge revenues, while bolstering accounts under her control, actually have equivalent reductions in the bank accounts of township residents, we've all got a problem. That type of “thinking” will be less likely to thrive at the township hall if the people elect me as Twp. Supervisor, and Mike Palmer as Trustee.
The types of problems described in this letter do not happen in a vacuum. They are reflections of the characters of the people in charge at the township hall. I would encourage all residents to ask questions about these issues at the township hall – the best way to know whether you are dealing with trustworthy people is to challenge them directly and personally. I hope you have better luck getting credible answers than I have.
Please consider the issues and consider electing me, John Ewing, as Brighton Township Supervisor.