Residents of the Tollgate District will receive a letter within the next week explaining why they owe an average of $700 each.
Lansing Township Supervisor Kathy Rodgers passed around a copy of the letter at the township board meeting on Jan. 28, which will likely cause an uproar amongst the community.
“As a result of early principal payoffs by many of the property owners in the Tollgate District, coupled with historically low bank interest rates on these funds over recent years, the Debt Service Account for the Tollgate Drain is short of funds to cover the final three years of Ingham County’s bond payments,” said Rodgers.
Lansing Township Trustee Diontrae Hayes expressed surprise about the debt left for the township.
“I would be really mad if I opened up my mailbox to find an extra bill I have to pay for something that was done years ago,” said Hayes.
On an even more personal note, the person who has to be the bearer of the bad news to the Tollgate District is, in fact, a resident there as well.
Rodgers lives in the Tollgate District and is being affected just as much as any other citizen, so she feels it is her duty to answer any and all questions and arguments brought up by the other residents.
William Donald, a Lansing Township Trustee, is concerned about what feedback Rodgers will receive after they send out the letters.
“I can’t imagine the uproar this letter will cause in the community,” said Donald. “Not only does Kathy (Rodgers) have to pay extra just like any other resident, she also has to feel the wrath of fellow angry residents.”
The Tollgate Drainage District Sewer Separation Project covers a watershed of 234 acres, more than 550 residential homes, 10 commercial properties, 1,000 plus apartment units, and 4 governmental agencies.
The project separated a combined sewer system and created a wetland detention basin for storm water in the community.
The Tollgate Drainage system was inserted into the Lansing Township community in 1997.
From then until 2005, many properties in the Tollgate District were sold and at the closing, the amount of drain assessments for the properties was paid off in full.
In Rodgers’ letter, she explains why the Tollgate District in in debt from the drainage system.
The properties that were paid off in full were deposited into the Debt Service Account for the Tollgate Drain Bonds and due to bank interest rates being high, there was enough to make up the interest lost due to early pay off.
“During the recent ‘Great Recession’ properties continued to be sold in the Tollgate District resulting in more early payoffs of drain assessments. However, because interest rates nationwide tumbled (near zero), the Debt Service Account was no longer able to which made the Debt Service Account no longer able to earn enough interest to cover the last few years of Tollgate Drain Bond payments,” said Rodgers.
A three-year debt will have to be collected throughout the community from August 2014 to August 2016.
Current citizens of the district are responsible to pay off the debt and can do so in partial payments or in full as long as it is paid by August for the next three years
The letter, which will be sent Feb. 10, is enclosed with the citizen’s first bill and an Amortization Table showing the amounts of their next two bills.
Although no one is sure how residents of the Tollgate District will react, Rodgers knows there is no way to escape it.
“There are only a few things in life that are for sure,” said Rodgers, “and one of them is taxes.”