Warnock Drain, At Large Assessment

City Council Agenda Item Report FROM:

Ryan Cummins, City Manager

MEETING DATE:

September 3, 2025

SUBJECT:

Warnock Drain – At Large Assessment

DESCRIPTION: The City of the Village of Douglas coordinated with the Allegan County Drain Office (Drain Office) to replace the culvert under Ferry Street which is part of the Warnock Drain. Work was completed in the spring. Last week, I received the attached e-mail from the Drain Office asking whether the City would like to prepay its at-large assessment of $61,875.00 (15% of the project cost). This was the first time I had been made aware of any at-large assessment or percentage allocation for this project. Upon inquiry with Drain Office staff and the Drain Commissioner, it was discovered that the City did not receive proper statutory notice of its at-large assessment. Although only 4.09 acres of City land lie within the drainage district, the Drain Office has provided the attached reasoning for our 15% assessment. The Drain Commissioner has offered an in-person meeting. It is unclear whether that meeting will be purely informational or whether the Drain Office would be willing to reconsider the notice or assessment. If proper notice had been given, the City would have had the opportunity to formally dispute its at-large assessment during the statutory review process. Because that did not occur, our options are limited to voluntary reconsideration by the Drain Office or potential legal challenge in Circuit Court. Finally, as our current legal counsel also represents the Drain Office, there is a conflict of interest. If the City desires legal review of this matter, separate outside counsel should be obtained. Staff seeks Council direction on the following options:

Pay the assessment in full in the amount of $61,875.00. Pay the assessment in installments over a three-year period, subject to bond or note interest as applied by the Drain Office. Engage separate legal counsel (due to a conflict with the City Attorney) to evaluate the lack of statutory notice, potential to contest the assessment, and other legal remedies.

BUDGET ACTION: This item was not budgeted for and a budget amendment may be necessary. LEGAL REVIEW: The City’s legal counsel has a conflict as they also represent the Drain Commission. If legal review is desired, separate counsel should be obtained. SAMPLE MOTION: N/A. Workshop item at this time.

Ryan Cummins From: Sent: To: Cc: Subject:

Brent Scholten <BScholten@ALLEGANCOUNTY.ORG> Tuesday, August 26, 2025 12:13 PM Ryan Cummins Carolynn Parnell; Chris Machiela; Lucas Timmer RE: Warnock Drain - prepayment

This email originated from outside of the organization. DO NOT click on links or Caution: open attachments unless you recognize the sender and know the content is safe.

Ryan, Per Section 151 of the Michigan Drain Code of 1956 (Act 40 of 1956) Section 280.151, the Drain Commissioner can apportion the percent of the cost of construction/maintenance of a drain to a City, Township, or Village based on benefits to public health, convenience, or welfare (not based on land size within the district; land size is only applicable to property owners within the district). City of Douglas and Saugatuck Township paid 30% and 10% respectively, consistent with what they paid in 2016 for the Warnock Improvements Project. Saugatuck City did not pay during the last project as the work occurred near Center Street which did not benefit the City of Saugatuck directly as their residents minimally utilize that road compared to Ferry Street. Saugatuck City residents in the district did pay in 2016 as they are part of the district (watershed). In 2025, Saugatuck City was apportioned by the Drain Commissioner 15% due to benefits for the public health, convenience, and welfare of their citizens by replacing the Ferry Street culvert. The replacement of this culvert provides access to this road for the residents who use it to reach their homes and residents/tourists who utilize this road for Oval Beach. The City of Saugatuck, fire department, and police have all indicated how critical this road/culvert are to the City of Saugatuck for public safety to reach their citizens due to the long detour route on Lakeshore Drive delaying response times and thus the improvement project provides benefit to the City based on public health, convenience, and welfare. The below photo indicates the parcels from Saugatuck City (purple), Saugatuck Township (orange) and City of Douglas (green) that would utilize Ferry Street to access their parcel. Although the City of Saugatuck has 4.09 acres within the district, 557.9 acres (or 282 parcels) utilize Ferry Street (and thus drive over the culvert) to access their homes compared to 149.12 acres by Saugatuck Township (7 parcels) and 103.75 acres (121 parcels) for the City of Douglas. The remaining costs were apportioned to Allegan County and the Allegan County Road Commission based on benefits to public roads per Drain Code (within the township; accounted for 1.25%) and the remaining 43.75% then was allocated out to the property owners within the watershed boundary.

Municipality

Parcel Area % of that uses Ferry Total

Parcels that use Ferry 1

% of Tot

Saugatuck Township City of Saugatuck City of Douglas

149.12 557.9 103.75

18% 69% 13%

7 282 121

2% 69% 30%

Brent Scholten Allegan County Drain Office Development Coordinator/Deputy Office – (269) 673-0311 FAX – (269) 673-0396 Cell – (616) 836-3360

From: Ryan Cummins <rcummins@saugatuckcity.com> Sent: Tuesday, August 26, 2025 10:10 AM To: Brent Scholten <BScholten@ALLEGANCOUNTY.ORG> Cc: Carolynn Parnell <CParnell@ALLEGANCOUNTY.ORG>; Chris Machiela <CMachiela@ALLEGANCOUNTY.ORG>; Lucas Timmer <ltimmer@preinnewhof.com> Subject: RE: Warnock Drain - prepayment CAUTION: This email originated from outside of the organization. Do not click links or open attachments unless you recognize the sender and know the content is safe.

Hi Brent, I don’t see the City of Saugatuck on the affidavit of mailing. I checked with our staff team to see if anyone received the notice. Our Treasurer advised she did and the envelope shows a postmark date of August 7, for a meeting date on the notice of August 5. See attached. The copy of the notice you sent me shows a meeting date of August 12, which differs from what was actually received. I don’t believe we received proper notice with the 10-day mailing requirements. And I don’t understand how 15% was determined to be our benefit apportionment. Campbell Road is in both Douglas and Saugatuck City, and we have very few parcels in the boundaries.

Ryan Cummins City Manager

City of Saugatuck 102 Butler St PO Box 86 Saugatuck, MI 49453 Ph: (269) 857-2603

From: Brent Scholten <BScholten@ALLEGANCOUNTY.ORG> Sent: Tuesday, August 26, 2025 9:24 AM To: Ryan Cummins <rcummins@saugatuckcity.com> Cc: Carolynn Parnell <CParnell@ALLEGANCOUNTY.ORG>; Chris Machiela <CMachiela@ALLEGANCOUNTY.ORG>; Lucas Timmer <ltimmer@preinnewhof.com> Subject: RE: Warnock Drain - prepayment

Caution: This email originated from outside of the organization. DO NOT click on links or open attachments unless you recognize the sender and know the content is safe.

Ryan, 3

Attached is the affidavit of mailing and the add in the newspaper regarding the Warnock Drain and the August 12, 2025 Day of Review.

Brent Scholten Allegan County Drain Office Development Coordinator/Deputy Office – (269) 673-0311 FAX – (269) 673-0396 Cell – (616) 836-3360 From: Brent Scholten Sent: Tuesday, August 26, 2025 8:28 AM To: Ryan Cummins <rcummins@saugatuckcity.com> Cc: Carolynn Parnell <CParnell@ALLEGANCOUNTY.ORG>; Chris Machiela <CMachiela@ALLEGANCOUNTY.ORG>; Lucas Timmer <ltimmer@preinnewhof.com> Subject: RE: Warnock Drain - prepayment Good morning, Ryan. Attached is the day of review letter and drainage district/watershed map the City was mailed. Let me know if you have any questions.

Brent Scholten Allegan County Drain Office Development Coordinator/Deputy Office – (269) 673-0311 FAX – (269) 673-0396 Cell – (616) 836-3360 From: Ryan Cummins <rcummins@saugatuckcity.com> Sent: Monday, August 25, 2025 4:57 PM To: Brent Scholten <BScholten@ALLEGANCOUNTY.ORG> Cc: Carolynn Parnell <CParnell@ALLEGANCOUNTY.ORG>; Chris Machiela <CMachiela@ALLEGANCOUNTY.ORG> Subject: RE: Warnock Drain - prepayment CAUTION: This email originated from outside of the organization. Do not click links or open attachments unless you recognize the sender and know the content is safe.

Hi Brent, I haven’t received any mail on this and wasn’t aware of the Day of Review. Can you send me a copy of what was mailed and a map of the drainage district boundaries? Were the boundaries changed? I know there was some discussion about that, but again didn’t receive any formal notice. Thank you,

Ryan Cummins City Manager

City of Saugatuck 102 Butler St PO Box 86 Saugatuck, MI 49453 Ph: (269) 857-2603

From: Brent Scholten <BScholten@ALLEGANCOUNTY.ORG> Sent: Monday, August 25, 2025 1:09 PM To: Ryan Cummins <rcummins@saugatuckcity.com> Cc: Carolynn Parnell <CParnell@ALLEGANCOUNTY.ORG>; Chris Machiela <CMachiela@ALLEGANCOUNTY.ORG> Subject: Warnock Drain - prepayment

Caution: This email originated from outside of the organization. DO NOT click on links or open attachments unless you recognize the sender and know the content is safe.

Good Afternoon, Ryan. The Allegan County Drain Commissioner held the Day of Review for the Warnock Drain on Tuesday, August 12, 2025. We have received confirmation that there were no appeals filed with the Probate Court. Under Section 280.278 of the Drain Code of 1956, as amended, [i]f bonds or notes are issued and sold by the commissioner, installments of the drain taxes shall bear interest at a rate that is not greater than 1% per annum more than the average rate of interest on the bonds or notes from the date of the preparation of the assessment roll until due. As a reference, our last Note on June 5, 2025, which was a qualified tax-exempt obligation, was 4.85%, plus 1.00%, for a total of 5.85%. The Allegan County Drain Commissioner is accepting prepayments for the apportionments mailed to municipalities and property owners. We have not obtained bids for the Note of $412,500.00 and therefore do not have an interest rate to provide. If you are interested in prepaying your apportionment ($61,875.00), please let us know as soon as possible. Thanks,

Brent Scholten Allegan County Drain Office Development Coordinator/Deputy Office – (269) 673-0311 FAX – (269) 673-0396 Cell – (616) 836-3360

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Warnock Drain Drainage District

SAUGATUCK TOWNSHIP, CITY OF SAUGATUCK, CITY OF DOUGLAS

Open Drains

WARNOCK DRAIN DRAINAGE DISTRICT

Storm Sewer

2240815

Warnock Drain Route and Course 380

ALLEGAN COUNTY DRAIN COMMISSIONER

ALLEGAN COUNTY DRAIN COMMISSIONER Chris Machiela 3283 122nd Avenue Allegan, MI 49010

WARNOCK DRAIN

CITY OF SAUGATUCK 102 Butler Street PO Box 86 Saugatuck, MI 49453

Parcel Number

Year(s) of Assessment

AT-LARGE

Estimated Apportionment %

Estimated Annual Assessment

15%

$20,625.00

Estimated Total Assessment $61,875.00 THIS IS NOT A BILL *Drain assessments will appear on winter tax statement. Estimated assessments do not include any potential interest charges associated with multi-year assessments

NOTICE OF DAY OF REVIEW OF APPORTIONMENTS

DATE: TIME: LOCATION:

QUESTIONS:

Tuesday, August 12, 2025 9:00 a.m. to 5:00 p.m. County Services Building Allegan County Drain Commissioner’s Office nd 3283 122 Avenue Allegan, MI 49010 (269) 673-0440

The Allegan County Drain Commissioner will hold a Day of Review of Apportionments on the above date, time, and location for maintenance/culvert replacement on the Warnock Drain. The Day of Review is an opportunity to review the tentative apportionment of benefits for each parcel and municipality within the Drainage District with the Drain Commissioner or staff member. The following is a list of any county, township, city, or village to be assessed: Allegan County, City of the Village of Douglas, City of Saugatuck, and Saugatuck Township. At the Day of Review:  No appointment is necessary.  The Drain Commissioner, engineers and/or other staff members will be available to assist individuals and make revisions where necessary.  The computation of costs for the Drain will be available. Persons with disabilities needing accommodations for effective participation in the Day of Review should contact the Drain Commissioner’s Office Office at the number noted above (voice) or through

the Michigan Relay Center at 7-1-1 (TDD) at least 24 hours in advance of the Day of Review to request mobility, visual, hearing, or other assistance. Comments Comments on the apportionment of benefits may be submitted in writing or verbally at the Day of Review. Comments may also be submitted in writing before the date of the Day of Review to:

MAIL: EMAIL:

Allegan County Drain Commissioner nd 3283 122 Avenue Allegan, MI 49010 cmachiela@allegancounty.org

Comments submitted in advance must be received by the Drain Commissioner prior to the Day of Review to ensure consideration. Assessments & Appeals Drain assessments are collected in the same manner as property taxes and will appear on your winter tax bill. The total drain assessment is being spread over three (3) years. You may pay the assessment in full with any interest to date at any time and avoid further interest charges. If you would like to prepay in order to avoid interest, please contact the Drain Office on or after Friday, August 22, to coordinate prepayment. You may appeal the Drain Commissioner’s decision to revise the district boundary to the Allegan County Circuit Court within ten (10) days. You may appeal the Drain Commissioner’s determination of apportionments to the Allegan County Probate Court within ten (10) days. Chris Machiela Allegan County Drain Commissioner