Tax dispute pauses restoration of four flooded dams in Midland and Gladwin counties
Work to restore four lakes and dams damaged in record floods in Midland and Gladwin counties in 2020 has been suspended while some property owners protest the costs of a pair of special assessments to fund construction and maintenance.
The Four Lakes Task Force, which is overseeing the work and is responsible for the financing, said the delays could add millions of dollars to the cost of restoring the four dams and lakes: the Edenville Dam and Wixom Lake; the Sanford Dam and lake; the Secord Dam and lake, and the Smallwood Dam and lake.
According to the Four Lakes Task Force, a volunteer group of property owners, the operations and maintenance assessment totaling $8.8 million would be for five years, from 2025 through 2029, while the capital improvement assessment totaling $217.7 million would be for 40 years.
Four Lakes Chairman Dave Kepler said the task force followed the legal path to paying for the work with the two proposed assessments. A public hearing was held in January, and then county commissioners in Midland and Gladwin signed off on the assessments in February.
All four dams were privately owned at the time of the disaster. The Four Lakes Task Force acquired all four dams through condemnation in late 2020 and took on responsibility for restoration and financing on behalf of Midland and Gladwin counties.
In a complaint filed in Midland County Circuit Court late last month, lawyers for the Heron Cove Association of property owners said the assessments are "grossly disproportionate" to any expected increase in the properties' market value and amount to an unconstitutional taking of property without due process or just compensation.
Michael Homier, a Grand Rapids lawyer for Heron Cove, said the assessments could cause some property owners to lose their homes or land.
For example, he said, a house with a market value of $144,000 would pay nearly $32,000 in assessments over 40 years, and at interest rates of about 5%. In another case, a residential vacant lot with a market value of $26,000 would pay nearly $32,000 in special assessments over 40 years, not counting interest.
Homier said there are people in his case "who simply cannot afford the assessments."
"This will crush their finances and they had no responsibility and no control over the dam failure," Homier said.
He said he understands that while "everyone wants the lakes back, my clients would rather have their homes."
After heavy rains, the Tittawabassee and Tobacco rivers flooded in May 2020, destroying or damaging hundreds of homes at a cost in the tens of millions of dollars.
Kepler said the construction project received $180 million from the state, and other grants helped offset total restoration costs of $398.8 million, resulting in the $217.7 million in the special capital assessment.
He said the area affected by the special assessments includes 7,300 parcels with approximately 6,600 owners, while the number of protesters is a fraction of that, 500-600 people.
According to a news release from the task force, while the appeal is pending, only state funds can be used, meaning that work on the lakes and dams is rationed, starting now.
Until the appeal is resolved, none of the four dams can be fully restored, according to the news release.
"We hope to have clarity before September on funding for the capital improvements and operations and maintenance of the dams," Kepler said in the release. "With that, we can move forward. Without it, we are on hold for the foreseeable future on if and when the lakes will be restored."
Contact Jennifer Dixon: jbdixon@freepress.com
This article originally appeared on Detroit Free Press: Repairs on hold for four flooded mid-Michigan dams amid tax dispute
