Mallard Point still an issue of contention for Geary

By on April 5, 2013

by Cheryl Borrowdale
SUGAR GROVE—Long-simmering tensions between Village President Sean Michels and his challenger, trustee Kevin Geary, spilled into public view just weeks prior to the April 9 election for Village President.

Geary has accused Michels of arranging “a backroom deal” that caused Mallard Point residents to experience another decade of groundwater problems.

Though Geary ultimately retracted his accusation that Michels and the village had acted illegally after the Village Board approved the public release of minutes from a 2003 executive session at Tuesday night’s Village Board meeting, he continues to maintain that residents have not yet received the truth.

The issue
Geary has long been critical of the village’s handling of drainage problems in the Mallard Point subdivision, which caused flooding in some residents’ basements for years and caused nearby farms to lose acreage to flooding. He originally charged that “a backroom deal” had taken place between Michels; Engineering Enterprises, Inc., a company owned by Michel’s father, Jim Michels; and Village Attorney Peter Wilson.

Geary released hundreds of pages of documents to the Elburn Herald, including a May 19, 2003, letter that released MB Financial, the development bank that completed the troubled subdivision after the original developer abandoned it, from responsibility for completing the bypass storm sewer line. Geary said the agreement led to Mallard Point residents experiencing another decade of flooding and groundwater problems.

“What the village did is a backroom deal without the consent or knowledge of the board members not to have that drainage point put in, (and) this is the result of all the flooding,” Geary said. “What makes it a backroom deal is that in order for this to be a legal maneuver by the village, it has to be brought before the entire Village Board, and the board has to vote on the transaction and it never was. I’ve been on the board for 14 years, and I never saw this until I started digging deeper and deeper.”

Michels dismissed Geary’s claims as “bogus” and a “wild turkey shoot.”

“He’s looking to sensationalize the election,” Michels said. “It’s an election ploy. He’s trailing significantly, so he’s trying to do a Hail Mary … it’s bogus. Why is Kevin coming out with this now? Why just before the election? It makes me upset because there’s nothing to it, but yet Kevin keeps trying to bring something out of it.”

When the board voted on Tuesday to release the minutes from an April 15, 2003, executive session, which discussed the village’s agreement not to continue pressing MB Financial to install the drainage, Geary backed off his accusation that the board’s actions had been illegal, but maintained that the village still refused to take responsibility for failing to ensure the subdivision had proper drainage.

“Maybe I was a bit harsh with that analysis (that the village’s actions were illegal), but I think the residents need to have the truth, the God’s honest truth, of what happened,” he said.

Michels said that Geary’s retraction didn’t surprise him.

“It’s typical of Kevin. He’s usually the first to accuse and the last to get the other side of the story,” Michels said. “Unfortunately, it’s a normal response from Kevin. There’s usually more to the story than what Kevin presents.”

The Mallard Point story
The story of Mallard Point is a complex one.

The subdivision’s original developer, Apex Development Corporation, went bankrupt in 1996 after encountering high groundwater levels in Mallard Point that quickly became an expensive problem. When Apex abandoned the subdivision without installing the necessary drainage or creating the homeowner’s association that was supposed to maintain it, it left behind half-completed houses, residents with flooded basements, farmers with flooded fields and a legal nightmare.

It took 16 years for the issue to get resolved, as a complicated legal standoff took place between the village, the Rob Roy Drainage District, the banks and developers involved, Kane County, the residents and the farmers who lived downstream. Though the 30-inch diameter drainage pipe installed in 2012 resolved the flooding problems for all but a handful of Mallard Point residents, Geary has continued to pursue the issue.

Geary said that there was “something stinky” about the way the village handled the release of MB Financial’s letter of credit in 2003.

The bank came in with the second developer, the James Corporation, and took over the completion of the subdivision in 1996. MB Financial had to submit a letter of credit, guaranteeing the village millions of dollars as security that a list of public improvements, such as roads and sidewalks, would be completed.

When the village released the bank’s letter of credit in 2003 without the bypass storm sewer line being completed, Geary said the village was “deliberately protecting engineering firms, law firms, everybody but the residents.”

Wilson said the charges that he, Michels and the board had acted improperly in releasing MB Financial from completing the bypass storm sewer line are false.

“The question of whether it was a secret thing is baloney,” Wilson said.
The newly released minutes from the April 15, 2003, executive session show that the board met in closed session to discuss threatened litigation from MB Financial—a meeting that was perfectly legal—and that no action was taken in that session.

Wilson explained in an interview that the terms of MB Financial’s letter of credit did not require the bank to complete the drainage line—that responsibility still belonged to Apex, the original developer—but that the village had tried to “strong arm” the bank into completing it anyway by refusing to release its letter of credit.

For a time this appeared to work and MB Financial completed about two-thirds of the drainage line, but when the bank ran into groundwater from an underground aquifer that escalated the cost, it refused to go further and threatened to sue the village unless its letter of credit was released. The village had no choice but to comply, Wilson said, and the May 19, 2003, letter—the one that Geary originally alleged was evidence of “a backroom deal”—documents that acknowledgement to MB Financial.

“They had an absolute right to have that letter released once they completed (everything required by the letter),” Wilson said. “(The board) couldn’t take action in the executive session, and they didn’t have to take action in the open session until the bank asked to have the letter of credit released. The drain tile was not covered by the letter of credit, and everybody knew that at the time. The village knew it, Kevin knew it and the bank knew it.”

The minutes from the 2003 executive session show that Michels asked whether the work had to be completed, and Village Engineer Dave Burroughs of EEI said no, that the drainage work was part of the Rob Roy Drainage District and that not fixing it would only affect the wetland area.

“This drainage area does not affect the current subdivision,” the notes record Burroughs as saying. “Fixing it will not alleviate the sump pumps that run continuously in the Mallard Point subdivision.”

Geary was absent from the meeting that night.

Discord on the board
Village trustee Mari Johnson, who is supporting Michels in the election, said that Geary’s allegations were false and upsetting.

She pointed out that the board had reviewed the release of the letter of credit in open session on Sept. 2 and Sept. 16, 2003, before releasing it, and that Geary had seconded the motion to release the letter of credit.

“When trustee Geary does these things, he’s impugning the integrity of our board, our engineer, our lawyer, every member on the board,” Johnson said. “He’s pointing the finger at himself—he is the village. He wants the people to think that he is on the outside. He keeps saying, ‘the village, the village, the village.’ You cannot serve on the board for 14 years, vote yes on everything, and then make yourself out to be an outsider.”

Johnson said she found Geary’s accusations personally offensive.

“I don’t understand why he’s making this an election issue, and he’s impugned my integrity, because I am the village, and I am not happy about it. If I was sitting on that board and thought that it was not right, I wouldn’t vote yes. I’m upset. Why would you try to make a board that you’ve been part of all this time look bad? What does he have to gain from this? I feel like I’m fed up. Enough is enough.”

Geary was not at the April 15, 2003, executive session and said that he had been misled into thinking that the drainage issues had been resolved at the board meeting on Sept. 16, 2003. The minutes from that meeting show that Geary inquired whether the retention pond at Mallard Point was operating as it was designed to; Burroughs answered that it was. Had he known the drainage issues had not been resolved, Geary said that he never would have voted to release the letter of credit.

“I specifically asked about the drainage, and I wanted to know if the drainage system was working properly so that people’s basements didn’t flood, and I was told yes. So I guess shame on me for not inquiring as to whether, prior to that meeting, there was an executive meeting, and shame on me for not knowing that there was. But that still doesn’t excuse the village for not providing full information at the meeting about the plan to not have the bank put that pipe in.”

He said that even though the board had released the minutes from the 2003 executive session, it still did not answer the question of responsibility.

“So the bank is released from liability for putting that pipe in, so who is responsible?” Geary asked. “If the village was asleep at the wheel and forgot to have the drainage pipe put in the letter of credit, then I believe that the village would be responsible, but then the village got a letter from EEI stating that the pipe didn’t need to go in.”

Michels said that the village had done all it could do to resolve the drainage problems.

“I think the board has done everything in its power to help the residents of Mallard Point and to represent all the residents that it serves,” he said.

The real problem, Michels said, was that Geary simply didn’t remember the details about what happened 10 years ago.

“Kevin is lying in the fact that he says he did not know anything about it. He just probably forgot, but it was approved in open session,” Michels said. “We’ve never done anything to jeopardize the public’s trust in the government. We did not do anything illegal, that’s why we have a council and a village clerk and we keep everything public. I think Kevin’s just not realizing or remembering what actually happened. It wouldn’t be the first time … Kevin has a pretty selective memory.”

Michels also pointed out that he has recused himself from voting on any contract involving EEI to prevent conflicts of interest, but that Geary had voted in favor of every proposal put before the board involving EEI.

Claims of secrecy
Geary also said that the village had withheld documents about Mallard Point from him and that, even as a trustee, he needed to submit Freedom of Information Act requests in order to get copies of emails, letters and other documents related to Mallard Point.

Trustee Rick Montalto said that Geary had been gathering documents about Mallard Point from the village for a long time and was unwilling to let the Mallard Point issue go.

“I know Kevin, I get along with him. I know Sean, I get along with him,” Montalto said. “Any (documents) we want, we can pretty much get. Kevin felt that something was being kept from him personally; he thinks that there’s some big conspiracy theory. He was given all of the emails (between Village officials about Mallard Point), and repeatedly I’ve heard the village attorney say that he’s gotten everything.”

Geary said that all he wanted was the truth.

“I’m all about the truth. If we can get down to what the truth of this matter is, then I’ll be happy,” he said. “I think the village owes it to every one of those residents down in Mallard Point. I still feel that even through this, with the release of the information, we haven’t gotten to the truth. There’s still not a complete picture of what went on down there.”

Geary also countered Johnson’s assertion that he was the village.

“While I have been elected to serve on the board, I am not the village. I am a representative of the people. If that makes me an outcast or someone who is not part of that group, so be it,” he said.

About Cheryl Borrowdale

Cheryl Borrowdale is a freelance reporter for the Elburn Herald. You can reach her at cborrowdale@elburnherald.com.

One Comment

  1. Jon A. Zahm

    April 7, 2013 at 7:38 PM

    If you go to http://www.michelsethicsissues.com you will learn a lot about the problems with the current Village President and why Sugar Grove voters need to vote for change on Tuesday.
    All posts are documented with links and/or pictures, including two audiotapes, that verify all the information there.

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