The Brevort Township Board of Trustees unanimously voted to refuse an $8,000 settlement offer by Frontier Insurance Company of New York at its Wednesday, January 2, meeting. The company was hired to insure the township's sewer project in 1999, but was seized in 2001 by the New York State Insurance Department after suffering heavy losses. Frontier's offer is intended as maximum compensation for a claim package totaling more than $400,000, said Charles Brown, the township's attorney.

Parties involved in the claim include Brevort Township, Mackinac County, U.P. Engineers, and contractors who lost money when Midwest Contractors, the company hired to build the sewer, quit during the final phase of the project. Midwest left large amounts of work unfinished and later went bankrupt.

"In my view, the $8,000 offer was far too low," Mr. Brown wrote in a letter to the board. "However, I am not sure if we are going to be able to recover a significant amount of money from [Frontier] and/or the State of Michigan, if [Frontier] follows through with its threat to go through some type of bankruptcy procedure to wipe out the debt."

Frontier demanded a response to its offer by December 28, 2007. The company's letter, mailed December 20, was received by Mr. Brown on December 27, leaving Brevort Township no time to respond. Following a call from Mr. Brown, Frontier agreed to extend its deadline to January 15, 2008.

Now that the offer has been rejected by the township board, it will be taken up by the Mackinac County Board of Public Works, which makes recommendations to the Mackinac County Board of Commissioners. The commissioners will rule on the matter, Mr. Brown said.

If the Board of Commissioners settles for $8,000, it may forfeit its right to draw on a state fund designed to help pay some of the costs associated with such projects, Mr. Brown explained. There is potential for a sizable payment if Frontier comes out of rehabilitation, but since 2001, the company has been allowed to avoid paying claims, owing to rehabilitation status allowed by the State of New York.

Several attempts to find out how long a company can remain in rehabilitation have been unsuccessful, Mr. Brown noted.

Owing to heavy losses, the company was seized by the New York State Insurance Department, which has been managing its rehabilitation to save it from liquidation. If the company goes bankrupt, the Michigan fund may pay some of the project's costs, although there is no guarantee that the state will pay anything, Mr. Brown cautioned.

The fund could pay a portion of the project's labor costs, supplies, and materials. The state fund will not pay any part of the $180,000 in extra engineering costs incurred to finish the sewer. It will not cover the additional $15,000 to $20,000 in legal fees, nor a $25,000 claim by the Mackinac County Road Commission for extra work needed to finish the project, Mr. Brown said.

As the insurer, "Frontier is required to pay these fees. That is our argument," he said.

In other news, the township board voted to pay Mr. Brown up to $500 to deed East Lane to all homeowners on that road. Township ownership of the road grew out of the uncertainty involving the sewer project, he added; somehow, in the midst of the project, the road was deeded to the township, which has no ability to plow or resurface it.

The Mackinac County Road Commission declined to take over the road last year, in part because East Lane is too narrow to be accessed by the commission's vehicles, Mr. Serwach said.

Brevort Township is considering building its new fire hall on land it owns along M-123, between Moran's hardware store and the post office.

"It would be nice to have the fire hall on M-123 so the [firemen] can zip right out there," said Township Treasurer Dan Litzner.

This week, Mr. Serwach said he expects to receive information regarding whether the lots are buildable.

The municipality will need special building permits, said Mr. Litzner, and a potential problem regarding setbacks may prevent use of the lots.

Over time, as M-123 has been upgraded, the original course of the road has been altered. Technically, setbacks now reach into adjacent businesses, he said, and these setbacks may prohibit the building of a new structure along the highway.

If allowed, the board plans to begin preparing the land by spring. The municipality wants to show the Sault Ste. Marie Tribe of Chippewa Indians, which recently donated $19,000 toward the project, that the funding is being used for its intended purpose, Mr. Litzner said.

If Michigan Department of Transportation allows building on the parcels along the highway, the board will seek bids for site preparation. If not, the township will consider building on land it owns on Church Street, across from the community center, Mr. Litzner said.