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The cost of disincorporation climbs

Marie Havenga • Jul 26, 2017 at 10:00 AM

SPRING LAKE — Next month, Spring Lake Village voters will decide whether or not they want to amend the Village Charter to add the right to someday petition to dissolve the village.

But even before the polls open Aug. 8, the cost of exploring disincorporation has been steadily chipping away at the village budget.

Village Clerk/Treasurer Marv Hinga said that through June 30, the village has spent $68,539 on legal fees, personnel costs, public education, publishing expenses, informational meetings and mailings related to the disincorporation issue. Between June 30 and Tuesday, personnel costs tallied an additional $1,865.

“Personnel costs — $19,775 to date — is the cost of staff time devoted to disincorporation,” Hinga said. “That includes time spent answering inquiries from the public and the press, conversations with attorneys and council, reviewing correspondence, gathering information for council, the public and the press, etc.”

Hinga said staff members track their time and enter it into payroll.

“The personnel cost number includes over 200 hours of (Village Manager Chris Burns’) time and over 60 hours of my time,” he said.

Hinga said the numbers include attorney fees for Burns’ revised employment agreement, which contains provisions for severance pay if the village should disincorporate. The numbers also include time Village President Joyce Hatton spent contacting village attorneys, he added.

“I have not tracked separately the hours taken up by Ms. Hatton's calls to the attorney or the time devoted to Ms. Burns' severance agreement,” Hinga said.

Several Village Council members have expressed disgust at how much has been spent on something they don't feel is a good idea to begin with.

Village Council and Disincorporation Work Group members have publicly stated that they are not in favor of disincorporating the village and making it part of the township. The work group, headed by Hatton's nephew, Tony Verplank, determined property tax savings to village residents would be minimal.

At a June public informational session, Verplank expressed shock at the disincorporation-related costs the village has encountered to date.

Burns said she isn't surprised.

“Last winter, we predicted $100,000 would be spent by the end of the year, so we are exactly where we expected to be with those expenditures,” she said.

Last spring, council approved spending about $20,000 on public education of the issue to get accurate information to residents.

“It's important to educate the electorate so they know what they're voting on,” Burns said. “Believe it or not, we still have people walking into Village Hall who are oblivious that there is even an election.”

Burns said she doesn't anticipate a millage increase to offset the disincorporation expenditures.

“Instead, we will likely cut back on things like parks maintenance and perhaps dip into our fund balance,” she said. “Council will be making those decisions as the fiscal year progresses.”

Burns said even though all council members, save Hatton, and the Disincorporation Work Group have recommended against disincorporation, council members “felt their hands were forced.”

“The majority of council has stated, very publicly, that they are devastated to have to do this, as is staff,” she said. “The Parks & Recreation Board, the Downtown Development Authority and the Chamber of Commerce are endorsing a 'no' vote on Aug. 8.”

Hatton gathered enough petition signatures in 2012 to put the disincorporation issue on the ballot, but an Ottawa County judge ruled that the Village Charter contains no provision that allows for disincorporation. Approval of next month’s ballot issue would provide that provision.

Last November, Hatton was elected village president on a platform of disincorporating the village and making it part of the township. Village residents pay property taxes to both the village and township, which Hatton believes is “double taxation.” She thinks the village is an unnecessary layer of government and overly costly to its taxpayers.

Last week, the Ottawa County Elections Commission approved recall petition language that local businesswoman Michelle Hanks filed against Hatton. One of the points in the recall petition is that Hatton continues to insist on pursuing the disincorporation process, at great cost to taxpayers, even though council and the work group recommend against it.

Hatton said she is not to blame for the expenses. She said she voted against council's spring decision to spend money on public education because she didn't think it was necessary. But she said council and staff insisted on “controlling the message” that went out to voters.

“The vocal minority seeking to preserve the Village of Spring Lake have accused me of 'spending' taxpayers' money on disincorporation,” Hatton said. “The truth is that the folks fighting to keep their village cash cow on all fours are the ones spending the taxpayers' money to fight disincorporation.”

Hatton said she thinks the village's disincorporation-related expenses should be independently audited.

“I have neither requested nor authorized as village president any of the following expenses,” Hatton said, referring to the line item list of $68,000 in expenditures that Hinga provided. “This lavish spending of taxpayers' money has had one apparent purpose — to convince the voters that they are actually benefiting from the double tax that keeps these folks on the public dole. The people authorizing this spending are also the same folks who keep telling the voters they could be personally liable for the village's debts if it stops doing business. This is another lie.”

Hatton said recent financial statements show the village's assets exceed its liabilities by $7 million.

Hinga noted that many of those assets are included in the village's net position, but are not items that could easily be converted to cash, such as underground piping and lift stations.

Hatton continues to say the village needs to go.

“When the taxpayers finally get this ravenous monkey off their back, it will easily pay its bills when it thankfully shuts its doors,” she said. “... The voters will decide on Aug. 8 if they want to continue to fund this charade.”

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