Alleged development scandal cause for hard feelings at Augusta Township board meeting

At the onset of the meeting, Township Supervisor Pete Hafler attempted to establish ground rules for what kind of behavior would be permitted. He called for civil discussions, but before the nearly five-hour meeting was over, not even Hafler stayed out of the bickering that ensued.

Township Trustee Bill Tobler, right, and Jackson, left, did not get along Tuesday night.

Ryan J. Stanton | AnnArbor.com

Most residents were in attendance because of Trustee Bill Tobler's recent accusations that township officials cut a break on water and sewer connection fees to the developer of the Lincoln Pines subdivision six years ago. After quietly conducting his own probe, Tobler says that by undercharging developer Dale LaClair, the township lost out on at least $407,000 - a price now being paid by utility customers.

Tobler says connection fees for a total of 74 lots were paid at an originally agreed-upon $1,500 rate after a new $7,000 rate should have kicked in because the developer failed to meet a deadline.

Tobler, with the support of Township Clerk Kathy Giszczak and Treasurer Angela Sherbine, brought forward three resolutions at Tuesday's meeting to take enforcement actions against those who made the deal with LaClair. But each of the the three resolutions was voted down 4-3.

"What a surprise, the coverup continues," Tobler said in response to the opposition Tuesday night.

Trustee Kathy Jackson fired back at Tobler, suggesting his suspicion of a conspiracy might be "a sign of mental illness coming on." Jackson and other township officials say political motives are behind the accusations.

The first resolution - as read by Tobler - would have condemned the actions taken six years ago by Jackson, who was Augusta Township's supervisor at the time, former Treasurer William Babut and former Township Attorney Ken Schwartz, who currently serves on the Washtenaw County Board of Commissioners. Tobler claimed all three acted together and accepted reduced payments from the developer.

The second resolution voted down would have authorized the township attorney to investigate a means for collecting the unpaid fees. And the third would have authorized the township attorney to meet with county and state authorities to begin a police investigation.

Jackson, one of the three implicated in the alleged deal, gave a 15-minute speech defending her actions Tuesday night. She explained the details of what led township officials to cut a deal with LaClair.

"For the record, Mr. LaClair was never given any preferential treatment by Augusta Township," Jackson said, noting that LaClair invested a significant amount of money into new infrastructure that cost the township nothing.

"Augusta Township got a premium housing development that added millions of dollars to our tax roll at no cost, we got a mile of paving ... for free, we got a new water main to provide critically needed water to the Lincoln schools and the residents for free, we got a completely new sewer system for 132 lots for free, Augusta Township gets the new revenues from the users of the water and the sewer service to help rebuild an old and aging system for free," she said. "So let's talk about what actually happened."

Jackson recalled the township board approved a Planned Unit Development in September 1999 for 132 single-family homes known as Lincoln Pines for Arbor Development LLC. The agreement called for a connection fee of $1,500 per lot for water and sewer, but that rate extended only 42 months from the date of the first building permit.

Jackson, left, and Township Supervisor Pete Hafler, right, engage Township Clerk Kathy Giszczak in a heated debate during one of many disagreements Tuesday night.

Ryan J. Stanton | AnnArbor.com

Jackson said when LaClair finally came to the township to pay his fees in 2004, he was informed he was over the 42-month deadline. The township's new connection charges of $7,000 had taken effect by that time.

"He was unhappy with the fact that the new fee would have been some $7,000 versus the $1,500," Jackson said. "He indicated that he couldn't afford this payment without potentially reducing quality of homes, and he was certain that the fees were unfair, wrong and improper."

Jackson said LaClair admitted he was late, but claimed the delays were due to governmental agencies and asked Jackson to look into the matter.

"So I did," Jackson said. "I called our attorney at the time, Ken Schwartz, I told him what was happening. He said that he would check a few things and get back with me. I talked with several of the other township officials to see where the temperament was on this particular issue and whether or not we thought we would be legally right in extorting him for the extra dollars. At some point, Ken called us back and let us know that there was a recent case ... that tested when a fee became an illegal tax."

Schwartz told AnnArbor.com in a separate interview last week that he advised the township to offer LaClair the lower connection fee rate to avoid a potentially costly lawsuit. He said he determined the township could not legally charge a connection fee that does anything more than cover costs, and the township had incurred no costs. By that argument, Schwartz said, perhaps the township shouldn't even have charged the $1,500 rate, but that was agreed upon in the PUD.

Jackson also explained Tuesday night what led to LaClair's large donation to the township's fire department shortly after the township gave him a break on the connection fees.

"I contacted Dale and instructed him that I had spoken with the attorney and we did not wish to go into a lawsuit with him," Jackson said, adding she then suggested the idea of a donation to the fire department. "They were in need. There was no extortion, there were no illegal meetings. This was done completely in the public."

At the end of her speech, Jackson called for the termination of Township Attorney Doug Winters, suggesting he knew about Tobler's probe into Lincoln Pines and even spoke with AnnArbor.com about it without informing her or the board.

"He doesn't communicate with me, he doesn't communicate with Pete most of the time," she said. "I think that his statements to the press were inaccurate and unethical and gave the impression of grave wrongdoing. I think that he is personally profiting from this story, this fairy tale, without any concern for how his actions will impact our township."

Only Trustee Mike King went along with Jackson when the board voted on a resolution to terminate Winters' contract. Other board members said they had issues with Winters, but preferred to talk to him first before taking any action against him. Winters recently was fired from his job as Salem Township's attorney.

Township Trustee Dan Lula defended his reputation at Tuesday's meeting against attacks by Tobler.

Ryan J. Stanton | AnnArbor.com

Township Trustee Dan Lula said he took offense that Tobler discussed the Lincoln Pines issue with AnnArbor.com before talking to the township board or - if he really suspects illegal activity - the police.

Lula said he believes Tobler's intent was to sully the reputation of township trustees who voted in 2008 to disband the township's Accounts Receivable Committee, which had been investigating the alleged Lincoln Pines scandal. Lula said Tobler made it sound as though there was a coverup by dissolving that committee, but neither he nor other board members were ever informed there was an investigation.

"It appears to me that Mr. Tobler's public allegations are a reckless political strategy, and I intend to pursue the necessary legal remedy to prevent them from damaging my reputation in the future," Lula said.

At one point during Tuesday's meeting, Hafler criticized Tobler for supplying what he considered false information to AnnArbor.com. Giszczak tried to speak up, but Hafler refused to hear her.

"I am not recognizing you," Hafler said, banging his gavel several times. "I control this meeting, not Kathy Giszczak."

At another point during the meeting, Hafler demanded to know whether any board members were carrying a voice recorder on them. Tobler pulled a running recorder from his jeans pockets and thumped it on the table. Hafler said any recordings made by public officials at public meetings are public record, and he wanted full disclosure for the sake of transparency.

Jackson vowed before the meeting was over that she'd bring back the resolution to terminate Winters every two weeks until it's approved.

"I think that he's worked very hard in succeeding to destroy the credibility of this township in the eyes of its residents - to a point that I fear it may be years of hard work to get a millage passed for police protection or fire protection," she said. "So when we have home invasions and thefts and crimes, we can thank him."

Though trustees voted not to have the township attorney pursue an investigation or enforcement of fee collections for Lincoln Pines, at least some board members - including Lula - said they wouldn't be opposed to turning the case over to the county prosecutor to decide how to proceed.

Ryan J. Stanton covers government for AnnArbor.com. Reach him at ryanstanton@annarbor.com or 734-623-2529.