Greenwood Township settles with Garland
GREENWOOD TWP. — Greenwood Township has settled a lawsuit with Garland Lodge and Golf Resort that involves returning $240,776.71 to the resort for taxes assessed in 2015. The settlement will impact the township as well as Oscoda County and Johannesburg-Lewiston Area Schools.
The county will pay out $61,647.44, including county administrative costs.
Oscoda County Treasurer Bill Kendall said refunding this amount to Garland would reduce fund balances for county departments, leading to possible cuts in areas including staffing.“I think the county’s in good enough financial shape that it’s not going to come to that,” Kendall said. “But obviously funding two years’ worth of taxes and then reducing the tax revenue from this point forward on our budget is going to have an impact.”
The northern half of Greenwood Township, which includes Garland, is part of the Johannesburg-Lewiston school district. That district would shoulder $99,692.95 of the settlement, but Kendall said this would more than likely be covered by funding the school receives from the state.
“They should get compensated on their per-pupil compensation from the state to make up for that loss,” he said.
Financial Assistant Carol Havrilla, who worked on preparing for the Garland settlement, agreed that per-pupil funding would help make up for the funding gap.
“Because the taxable value went down at Garland, that means the state makes up the difference that the school has lost,” Havrilla said.
However, this will have a negative impact on local funding sources for the school such as bonds and sinking funds. This type of funding is something Havrilla said is separate from state aid.
“When you do a special tax levy on bond issues or sinking funds, we’ve collected that money,” Havrilla said. “Now we have to pay it back.”
Superintendent Kathleen Xenakis-Makowski said decreases in local funding could have an effect on the school.
“It’s really going to impact how much we can spend in improvements in the district for our facilities,” Makowski said.
Havrilla said the school expected to take a hit from the tax settlement and had an idea of what the negative financial impact would be.
“It’s not going to be a financial hardship on us because we knew it was coming,” Havrilla said. “We prepared for it and budgeted for it.”
The Cheboygan-Otsego-Presque Isle Educational Service District would pay out $9,158 in the settlement as well.
Revenue from the State Education Tax, which levies six mills from residents, will be affected by $33,231.66. Revenue from this tax goes toward funding elementary-secondary education in Michigan.
Greenwood Township would be out $11,036.59 from the settlement between its operating and administrative costs. Township Assessor Randy Booth said he was surprised about how low the appraisal of the resort came in.
“The township, county, everyone was pretty surprised that our appraisal and their appraisal came in as low as they did,” he said.
The county is paying out $13,159.52 to cover delinquent interest Garland had previously paid to the county prior to the settlement.
This could negatively impact tax revenue for 2016 and 2017. Kendall said 2016 would be similar to 2015, but not be as severe since it would not include the $11,788.54 tribunal interest that was factored into the 2015 settlement. He said starting in 2018, the taxable value of the resort should be less.
“It shifts some of the burden from the tax money that’s collected to more of your residential locals, because you have a resort that’s not paying as much,” Kendall said.
Going forward, Kendall said taxable value will be key in determining how much of a negative impact the lowered value on Garland would have for the county. He said he didn’t expect Garland and the assessor to appeal for at least a little while.
“I think this is going to be the worst of it,” Kendall said about the lowering value. “Over the years there have been appeals out there, a lot of them on the undeveloped lots that are not selling anymore. A lot of those have been reduced in value to probably more of a fair market value than they were.”
Kendall said the check will be paid out of the county’s general fund. The county will then bill all the other entities involved in the settlement so they can reimburse the county for their share of the payment.
Garland President David Sanderson said the resort was satisfied with the outcome of the settlement and predicts the resort will do better than it was.
“We reached a fair agreement with the township and the county,” Sanderson said. “We hope and think (the taxable value) going to be a lot more in the future and the assessment can go back up at some point.”
Sanderson said the resort is a major employer in the county and thought the settlement reflected this.
“We’re not trying to get out of paying what we think was the proper assessment,” he said. “The appeal was about what we thought was proper.”