The Suttons Bay Village Council last week adopted two resolutions that village officials said will address some "technicalities and formalities" regarding an audit of village finances as well as possible construction of a water system for Phase 2 of the BayView project.

At its regular monthly meeting on July 16, the Village Council voted 6-0, with trustee Ewa Einhorn absent, to adopt a resolution formalizing a “deficit elimination plan” related to a “streets fund” in the village budget.

An auditing firm working for the village, Rehman-Robson of Traverse City, had recommended that the resolution be adopted because of the way village officials paid for a street improvement project last year.

A $300,000 project to resurface streets and improve drainage on St. Mary’s and Madison streets resulted in the expenditure of $60,000 more than originally budgeted when the need to upgrade sewer and water connections was uncovered during construction. Village officials took money for the additional repairs out of water and sewer accounts in the village budget rather than the streets account.

“We’ve had a difference of opinion with our auditing firm over whether that was the correct way to account for the expenditure,” explained village president Larry Mawby. “But we’re accepting the auditor’s recommendation and doing what they advise.”

The action has resulted in a temporary deficit in the village budget’s “streets” account, requiring that the village adopt and file a “deficit elimination plan” for that account with the state Department of Treasury. Members of the village council’s Legislative Committee were slated to meet with auditors on Tuesday evening, July 24, to formally review and accept the biannual audit for the fiscal year ending Dec. 31, 2006.

“For the most part all is well and we ended with a good clean audit,” said village manager Chuck Stewart. Because the village has received State Revolving Fund money to help pay for its new sewer system, the village government will be required to be audited annually for the next several years, he added.

The Village Council last week also adopted a resolution denying acceptance of a well system and temporary wellhouse that may provide water to Phase 2 of the BayView project. Located off Scott Hill Road north of M-204 and west of M-22, the second phase of the BayView project is known as “The Hills” at BayView. It is being developed by Leelanau Hills Development, L.L.C. headed by Marcus Yono of Brighton – the same developer who built the waterfront BayView condos on the former site of the Frigid Foods property along M-22 north of M-204.

Mawby explained that the village was required to “deny acceptance” of the well system for Leelanau Hills to meet Michigan Department of Environmental Quality requirements that will allow the developer to construct a temporary system for the development.

The village already owns the underground water and sewer pipes in the development. In order for the village to accept the well system, however, the village will require that it be a permanent gravity-fed system rather than a temporary pressure-tank system as proposed by the developer.

The pressure-tank system will accommodate up to 150 homes and will be much cheaper to construct, Mawby explained. However, at least 200 additional homes are envisioned for phases three through five of the BayView project.

“I think he (the developer) thought that things would be selling so fast that he’d put in the gravity system the village wanted from the start,” said Mawby. “If he can serve up to 150 homes up there with a temporary system, that’s fine too – but the village doesn’t want to own it. We’ve known all along that this arrangement was a possibility, so there’s no surprise here,” Mawby said.

Mawby added that he was surprised, however, to see “open house” signs appear at the BayView “Leelanau Hills” addition where the shells of three homes have remained uncompleted for months, streets remain unpaved, and utilities are not yet available.

“You know, at the Port Sutton condos (north of the BayView condos on M-22) we went through four or five different developers over a period of about 25 years,” Mawby said. “The final phase of the Port Sutton project hasn’t even begun yet – so who knows how BayView is going to turn out, and when it will be completed.”