HANDBOOK FOR MUNICIPAL OFFICIALS

Published by the Municipal League

Printed July, 2004, 2006, 2015 © Copyright Michigan Municipal League, July 2004. No portion of this book may be reproduced by any means without permission of the Michigan Municipal League. ISBN 1-929923-03-1

Upon publication, one copy was distributed as a Michi- gan Municipal League member service to each member city and home rule village. Copies are available online at mml.org, and hard copies are mailed upon request.

For additional copies, please contact: Michigan Municipal League 1675 Green Rd Ann Arbor, MI 48106-1487 Phone: 734-662-3246 or 800-653-2483 Fax: 734-662-8083

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Preface

Better Communities. Better Michigan. The Michigan Municipal League is the one clear voice for Michigan communities. Through advocacy at the state and federal level, we proactively represent to help them sustain highly livable, desirable, and unique places within the state. We create and offer our members services and events that range from traditional to cutting edge, in order to help educate and inspire them to remain focused on their passion for the area they represent. We are a nonprofit, but we act with the fervor of entrepreneurs; our people are dynamic, energetic and highly approachable, passionately and aggressively pushing change for better communities. We salute the officials across the state that give freely of their time and show great dedication to their communities. Acutely aware that knowledge is the key to effective decision-making, the League and the MML Foundation present this Handbook for Municipal Officials with the hope that it will provide you with excellent information and act as an important aid as you carry out your responsibilities. Every four years, over 5,000 officials are elected across the state to local government. Of these, approximately 3,600 are first-time officials, and often have little or no government experience. The League’s objective is to educate these new officials on municipal issues by offering educational training and information. The Handbook for Municipal Officials is one of the many tools the League has developed to offer basic local government information for local officials and to familiarize them with the responsibilities they face as policymakers. The Handbook for Municipal Officials is a collaborative effort of the Michigan Municipal League and the Michigan Municipal League Foundation.

Daniel P Gilmartin CEO & Director

Table of Contents

Section 1: Local Government Chapter 1: Welcome to Public Service ...... 1 Chapter 2: Structure of Local Government ...... 6 Chapter 3: Charter Revision and Amendment ...... 12 Chapter 4: Boundaries and Annexation ...... 17

Section 2: Roles & Responsibilities Chapter 5: Duties of City and Village Officials ...... 21 Chapter 6: Successful Meetings ...... 27 Chapter 7: Local Ordinances ...... 32 Chapter 8: Ethics ...... 36 Chapter 9: Influencing State and Federal ...... 41 Chapter 10: Training of Municipal Officials ...... 45

Section 3: Operations Chapter 11: Written Policies and Procedures ...... 47 Chapter 12: Municipal Service Options ...... 51 Chapter 13: Employment and Personnel ...... 56 Chapter 14: Labor Relations ...... 61 Chapter 15: Municipal Liability ...... 64 Chapter 16: Planning and Zoning ...... 66 Chapter 17: Selecting and Working with Consultants ...... 73

Section 4: Basic Chapter 18: Authority and Internal Controls ...... 77 Chapter 19: Budgeting ...... 82 Chapter 20: Purchasing ...... 86 Chapter 21: Financing Capital Improvements ...... 90 Chapter 22: Special Assessments and User Charges ...... 95 Chapter 23: Limits of Municipal Expenditures ...... 99

Appendices Appendix 1: Glossary ...... 102 Appendix 2: Michigan of Interest to Cities and Villages...... 106 Appendix 3: Overview of the Michigan Open Meetings Act ...... 115 Appendix 4: Overview of the Michigan Freedom of Information Act ...... 118 Appendix 5: Sample Council Rules of Procedure ...... 122 Appendix 6:Sample Budget Ordinance ...... 129 Appendix 7: Questions and Answers ...... 134 Appendix 8: For More Information ...... 143

Index ...... 148

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Section 1: Local Government

Chapter 1: Welcome to Public Service

The flush of victory has faded a interpreting them—as well as your city little and you’ve taken the oath of office. or village charter. Now you’re probably asking yourself,  Know your city or village. Know its “What do I do next?” history, its operations and its finances. Serving as an effective official requires Review all reports from the dedication, knowledge and a substantial (and/or manager if your commitment of time and effort. No matter has one), department heads and citizen your motivation or background, as a boards and commissions. member of the council/commission you  Become familiar with your have the opportunity to make important municipality’s plans. Review the contributions to shape the future of your master plan, the parks and recreation community. For this reason, becoming a plan, the infrastructure and economic local elected official can be one of the most development plans. There may also be a rewarding experiences of your life. number of other documents outlining the goals, objectives and plans for your city On Being an Elected Official or village. Being well informed, listening carefully and  Be aware of current state and federal knowing how to make decisions will legislation, pending court cases and enhance those qualifications you need to other factors that affect local issues. succeed as a public official: integrity, The Michigan Municipal League and the intelligence and a genuine concern for National League of Cities frequently people. send materials to help you stay up-to- date. Being Well-Informed  Talk to people with differing points of There is no substitute for thoroughly view and relevant information. Your understanding the issues as well as the constituents, officials in neighboring federal, state and local laws affecting these villages, cities, and townships, and issues. As a public official you will receive and state officials will all have an enormous amount of information. It is important and different perspectives on important to be able to handle this material each issue. efficiently and effectively. Listening For starters: Although seventy percent of our waking day  Become familiar with your city or is spent in some form of communication, village charter. Ask your clerk for a and at least six hours a day is spent listening copy of the charter. It is the governing to some form of oral communication. We document of your municipality. Think don’t always do this well. Yet, it is of it as the constitution of your city or imperative to listen actively and accurately village. to be an effective council/commission  Know the duties and limitations of member. your office and of the municipality. This requires familiarity with the state and federal constitutions, local ordinances and the court cases

Handbook for Municipal Officials 1 Published by the Michigan Municipal League, July 2015 (Section 1/Chapter 1)

Making Decisions Talk with Citizens No government official can always make Direct interaction with your constituents is decisions that please everyone. Honest both politically and practically prudent. people have honest differences of opinion. Municipal officials need to be accessible, Making decisions is not always easy; it concerned and open minded—and you will takes hard work and practice. However, each be if you talk not just with friends, but also commission member must eventually “stand with people you do not know well or at all. up and be counted.” It is this process by Be sure to include people representing which your constituency judges you and for various economic levels, professions, which it will hold you accountable. occupations and cultural backgrounds. In talking with citizens, be concerned Responsibilities of an Elected primarily with listening. Avoid arguing or Official defending existing positions. Your attitude The specific duties of village and city should reflect a genuine desire to secure officials are spelled out in the charter of information. each municipality. However, all elected In addition to seeking information in a officials share certain responsibilities. person-to-person setting of your choice, you First and foremost, council members should also be prepared to receive must remember they are elected to make unsolicited information and criticism from decisions as a collective body, not to act as citizens who seek you out. individuals or apart from the council. Read Together, as well as individually, it is their Elected officials receive a large amount of responsibility to: printed material: minutes, reports, articles, Identify Community Needs and letters, proposed state and federal legislation Determine Priorities and more. Much of this relates to problems Each city and village is unique, with its own and possible solutions, and some of it may set of problems, and each person has a help you discover the needs and wishes of different view of the relative importance of your constituents. A letter or a newspaper those problems. You must discover the article may reveal a problem that had not specific needs of your municipality and the surfaced previously. Problems in other relative importance of each. communities that are spelled out in journals and other printed sources may raise the Observe question, “Do we have that same problem in Take a tour of the community with the rest this community?” of the council, the manager (if your municipality has one), and department Establish Priorities heads. Such a tour is especially valuable for Having defined the problems and needs of newly elected officials. They often discover the community, it is important to establish areas never seen before, learn where the the priority of each. How is this done— boundaries are and see where major remembering that the resources, both human trouble spots are now and where they might and financial, of any municipality are develop. limited? Even if resources were unlimited, Keep your eyes open as you go back and there are a number of activities that would forth to work or to city hall, taking the not—and should not—be engaged in by the opportunity to look for problems. Use a local government. different route to see more than just one Each request should be examined in area. There is really no substitute for first- terms of citizen demand, financial cost, hand observation. benefit to the entire community, availability from other sources and even political expediency. A balance should be maintained between the flexibility required to reorder

2 Handbook for Municipal Officials Published by the Michigan Municipal League, July 2015 Welcome to Public Service priorities when conditions require and the  Eliminate personal remarks intended firmness required to resist changing the to ridicule another person. Regardless of programs to meet the momentary whims of the actual relationships between the special interest groups in the community. members of the council or commission, the general atmosphere of any meeting Participate in Formal Council Meetings should be relaxed, friendly, efficient and The council meeting is the final step in dignified. Sarcasm, innuendoes and determining the projects and programs name calling should be avoided in required to meet community needs. Here, interactions with the other council under public scrutiny (sometimes face to members, staff and the public. This does face with suspicious and distrustful citizens), not mean falsehoods, misinterpretations, the municipal lawmaker must transact the distortions and challenges to your business of the community based on integrity or honesty should be left established priorities and data that have been unanswered. They should be gathered and analyzed. answered—and sometimes vigorously— In council meetings, it is important to: but these rejoinders should address the  Look attentive, sound knowledgeable facts rather than the qualities, or lack of and be straightforward and meticulously them, of the person being addressed. honest.  Be familiar with a systematic and Engage with Citizens efficient way to handle business One of the greatest assets to elected officials brought before the council. The mayor is the public. Having causal and frequent or president, manager or clerk will have interactions with community members a prepared a concise and easily great way to build relationships and learn understood agenda outlining for you— about community concerns and ideas. It's and the general public—the order in also important to establish more formal which items will be considered during engagement strategies for important policy the meeting. This agenda may allow the initiatives and planning projects. Effective general public and the members of the engagement strengthens the community, council themselves to bring up improves government-citizen relationships, additional items of business for builds capacity, and eases program/policy discussion. Your copy of the agenda implementation. may come with a packet of background Because project and policy-based material. These should be read before engagement can sometimes be a long and the meeting, to assist you in decision- challenging process, the League makes the making. following recommendations for smoother  Bring all appropriate documents, civic participation: notes and memoranda to the meeting.  Develop a vision and goals for what Arrange the material in the same order engagement should look like. as the agenda so pertinent information  Start engagement in the project/policy can be found easily. ideation phase, and continue through  Have a reasonable knowledge of plan formation and implementation. parliamentary procedure and the  Build a diverse team of residents and rules of procedure the council has community stakeholders representative adopted. of the community to guide public This will keep the meeting moving engagement activities. smoothly and efficiently, with a clear  Build capacity by developing local indication of each item’s disposition. leaders and partnering with However, too much attention to organizations and community groups. procedure can slow down the meetings  In partnership with the stakeholder with complicated rules. group, build a campaign around the

Handbook for Municipal Officials 3 Published by the Michigan Municipal League, July 2015 (Section 1/Chapter 1)

work, develop a project timeline, and solved either at a higher level or celebrate accomplishments to keep the cooperatively by several different units. momentum going. Working with other units and agencies  Document activities in traditional and may be easier if you initiate meetings rather social media, evaluate engagement than wait for them to occur. strategies, and make changes accordingly. Communicate with the Media  Have fun! Stay open minded, positive, If you have had little or no experience with and energized throughout the process. members of the press, whether newspaper, For more information and examples of radio or television, you may suddenly great civic engagement across the state, visit realize that public figures live in a different placemaking.mml.org. world than the rest of us. Anything you say in public—whether seriously or jokingly— Placemaking can appear in the paper or on the TV screen Investing in communities is critical to the same day. An unguarded comment about long-term economic development, and a person or about someone’s idea may be Michigan’s future depends on its ability to indelibly printed, much to your attract and retain active, diverse, and en- embarrassment. A poor choice of words, gaged residents. Local governments must made on the spur of the moment, may be foster the dynamics of place to become used to distort your opinion on a public thriving communities in the 21st century. issue. It is important to learn to work with Placemaking capitalizes on the distinctive the press effectively and comfortably. assets of a community to integrate a mix- ture of uses that connect people and Tips for Working with the Media: places on a human scale. It is scalable  Be honest. Covering up, lying and strategy to create adaptable, economi- distorting statements and actions are cally-competitive communities worth car- guaranteed to establish poor relations

ing about. with the press. Through forums, research, and edu-  Never say “No comment.” It is always cation, the League identified eight assets better to say that you don’t have all the Michigan’s communities need to grow facts yet and are not prepared to publicly and strengthen for our state to sustain and discuss the issue at this time. prosper in coming years: physical design  If you don’t know the answer to a & walkability, green initiatives, cultural question, say so. Offer to refer the economic development, entrepreneurship, reporter to a staff person with more messaging & technology, transit, educa- information, or offer to call back later tion, and being welcoming to all. Helping with more details. If you are going to Michigan’s leaders grow these assets in call later, be sure to ask when the their own communities is the focus of the reporter’s deadline is, and call promptly. League’s placemaking efforts. Visit place-  Be consistent. Do your best to maintain making.mml.org for comprehensive re- the same position on public matters sources and solutions. from one meeting to the next. If the facts Cooperate with Other Governmental have changed or you have thought Units through an issue and come to a rational More and more of the problems a council change in opinion, be sure to carefully must face extend beyond the legal explain that to the media. boundaries of the municipality. Many—  Be cautious. Even though you may trust water and wastewater treatment, solid waste a reporter, remember that reporters have disposal, healthcare and drug abuse, for a story to get and that what you as a example—cross municipal, , public official say or think or do, is county or state boundaries and must be news.

4 Handbook for Municipal Officials Published by the Michigan Municipal League, July 2015 Welcome to Public Service

 Do not make statements “off the record.” They will only come back to haunt you later.  Be positive in your attitude toward the press. The media can help the village president or city mayor, manager and council communicate the work of the municipality to the citizens of your community. A good working relationship can be established if the council is open in its dealings with the press. Under the Open Meetings Act the press is entitled to attend all public meetings. Provide members of the press with copies of reports, recommendations and other documents related to the business of the city or village and initiate contact with reporters rather than waiting for them to come to you.

Chapter based on materials provided by Gordon L. Thomas (deceased), former mayor of East Lansing, past president and honorary life member of the League.

Handbook for Municipal Officials 5 Published by the Michigan Municipal League, July 2015

Section 1: Local Government

Chapter 2: Structure of Local Government

The present status of cities and villages in Most of the villages (212 of 260) are Michigan is the result of historical tradition, still governed under the General of the home rule provisions of the Village Act, 1895 PA 3 as amended. Constitutions of 1908 and 1963, of the home Charters for villages are the exception, rule acts of 1907, and the initiative of although any village may adopt a home rule individual communities. document under 1909 PA 278, the Home During the nineteenth century, the state Rule Village Act. recognized the need to incorporate the densely settled communities Cities within the basic pattern of and A city, being withdrawn from the township, townships. The system of local government must perform the basic, state-required duties written into Michigan’s 1908 and 1963 as well as its own services. In addition to constitutions recognized the continuing being responsible for assessing property and existence of counties and townships, with collecting taxes for county and school the voluntary incorporation of the more purposes, the city also becomes solely densely settled areas as cities and villages. responsible for registration of voters and An innovation in the 1908 constitution was a conduct of all within its provision for city and village home rule boundaries. charters—a change which was to have many The greater independence of the city, in repercussions. maintaining local and functions and state-imposed duties in one integrated Villages unit, accounts for the creation of many small The basic difference between a city and a cities in Michigan during recent decades. village is that whenever and wherever an The trend has also developed in villages to area is incorporated as a village, it stays seek incorporation as cities whereby they within the township. The villagers achieve a separation of jurisdiction from the participate in township affairs and pay township. township taxes in addition to having their As of January 2015, Michigan had 279 own village government. Incorporation as a incorporated cities and 254 incorporated city, however, removes an area from villages—a total of 533 municipalities. Of township government. City dwellers this total number, 320 had adopted home participate in county elections and pay rule charters. county taxes as do villagers but are removed In 1895, adoption of the Fourth Class from township units. City Act created two types of cities: those of Villages in Michigan are organized 3,000 to 10,000 population, which came primarily to establish local regulatory under the Act, and all others which remained ordinances and to provide local services “special charter” cities. As of October 2014, such as fire and police protection, public all but one of the “special charter” cities works, and utilities. Certain of the local have reincorporated as home rule cities. As duties required by the state are not of January 1, 1980 all fourth class cities demanded of the village but are performed became home rule cities by virtue of 1976 by the embracing township including PA 334 (see also OAG 5525, 7/13/1979), assessing property; collecting taxes for which continued the Fourth Class City Act counties and school districts; and as the charter for each former fourth class administering elections. city until it elects to revise its charter. As of

Handbook for Municipal Officials 6 Published by the Michigan Municipal League, July 2015 Structure of Local Government

January 2015, four cities continue to be State Boundary Commission governed by the Fourth Class City Act. Under 1968 PA 191, the State Boundary Commission must approve all petitions for Standards of incorporation city and village incorporation. The For incorporation of a home rule village, a Boundary Commission is composed of three minimum population of 150 is required, but members appointed by the governor. When there must also be a minimum density of the commission sits in any county, the three 100 persons per square mile. There is no members are joined by two county statutory requirement that a village must representatives (one from a township and become a city when it experiences a rapid one from a city), appointed by the probate growth in population. Once incorporated, judge. villages may seek reincorporation as fifth In reviewing petitions for incorporation, class home rule cities, providing their the Boundary Commission is guided by population is between 750 and 2,000. certain statutory criteria: population; Alternatively, they may seek reincorporation density; land area and uses; valuation; as home rule cities if their population topography and drainage basins; urban exceeds 2,000 with a density of 500 per growth factors; and business, , square mile. For many years the Home Rule and development. Additional City Act required 2,000 population and factors are the need for governmental density of 500 per square mile for city services; present status of services in the incorporation. A 1931 amendment permitted area to be incorporated; future needs; fifth class city incorporation at 750 to 2,000 practicability of supplying such services by population with the same 500 per square incorporation; probable effect on the local mile density requirement, but authorized governmental units remaining; relation of villages within this range to reincorporate as tax increases to benefits; and the financial cities regardless of density. capability of the proposed municipality (city There is no basic difference between a or village). In other words, the Boundary fifth class home rule city and a home rule Commission review centers on the city, except the population differential and feasibility of the proposed city or village. the statutory requirements that fifth class After review on the basis of criteria, the home rule cities hold their elections on an Boundary Commission may deny or affirm at-large basis (wards are not permitted). If the petition. (Affirmative action may include all the territory of an organized township is some revision of the proposed boundaries on included within the boundaries of a village the commission’s initiative.) Once the or villages, the village or villages, without Boundary Commission has issued an order boundary changes, may incorporate as a city approving incorporation, a petition may be or cities as provided in 1982 PA 457. filed for a referendum on the proposal. The Unincorporated territory may be referendum permits the voters to accept or incorporated as a fifth class home rule city reject the incorporation. If incorporation is provided the population ranges from 750 to approved by the voters, the incorporation 2,000 and there is a density of 500 persons may be finally accomplished only through per square mile. The same density rule the existing process of drafting and adopting applies to the incorporation of territory as a a city or village charter. home rule city if the area has a population of more than 2,000. There are no other Home Rule methods of city incorporation today. A new Home rule generally refers to the authority city must be incorporated under the Home of a city or village under a state’s Rule City Act. constitution and laws to draft and adopt a charter for its own government. This contrasts with legislative establishment of local charters by special act, which results in

Handbook for Municipal Officials 7 Published by the Michigan Municipal League, July 2015 (Section 1/Chapter 2) mandated charters from state capitols. Home Charters rule frees cities and villages to devise forms The Michigan Municipal League, versed in of government and exercise powers of local the needs of cities and villages, renders self-government under locally prepared informational assistance through its charter charters adopted by local referendum. inquiry service. A few Michigan attorneys Constitutional home rule is self- have become specialists in drafting charters. executing in some states and not so in The quality of city and village charters has others. Non-self-executing home rule, which improved steadily. No longer is it necessary Michigan wrote into its 1908 Constitution, for elected home rule charter commissioners leaves it up to the Legislature to implement to search for model charters elsewhere, since the home rule powers. Michigan’s many good charters exist in Michigan. Legislature did this by enacting the Home With some exceptions, Michigan Rule City Act and the Home Rule Village charters have been influenced by nationwide Act, both of 1909. trends in municipal practices such as the In implementing home rule when it did, short ballot, the small council, election of Michigan became the seventh state to join in councilmembers at-large, and nonpartisan a movement which now includes 37 states. It nominations and election of was more than a national trend which councilmembers. Chief executives of either motivated the Michigan Constitutional the appointed kind (a manager) or the Convention early in the 1900s. Under the elected type (a mayor) are favored. special act system of the nineteenth century, Municipal officials have shown their Michigan cities were, according to one ingenuity in searching for what is most observer writing closer to the time, appropriate to their needs. No longer is the “afflicted by their charters with an Legislature burdened with enacting assortment of governmental antiquities.” individual charters. The responsibility lies Robert T. Crane, Municipal Home Rule in with locally elected charter commissioners, Michigan, Proceedings of the Fourth Annual subject to legal review by the governor Convention of the Municipal League under statutory requirements. Since charters (Urbana, 1917), pp.62-65. must be adopted only by local referendum, The Legislature, under Article VII the voters themselves make the final (Sections 21-22) of the 1963 Michigan determination about the design of their Constitution, must provide for the government. incorporation of cities and villages by general law. Such general laws of Form of Government: Cities incorporation must limit their rate of Council-manager form taxation and restrict their borrowing of Among Michigan home rule cities, more money and contracting of debt. The voters than 175 use the council-manager form, in of each city and village have power to which the elected council appoints a frame, adopt, and amend charters in professionally trained and experienced accordance with these general laws. manager to administer the day-to-day Through regularly constituted authority, operations of the city, and to make namely their established representative recommendations to the . The government, they may pass laws and council makes all policy decisions, including ordinances pertaining to municipal concerns review, revision, and final approval of the subject to the constitution and general laws. proposed annual budget. The council may By January 2015, 274 cities and 46 dismiss the manager (sometimes called city villages had adopted home rule charters. The administrator or superintendent) if duties are total of 320 charters so adopted makes not being performed satisfactorily. Michigan one of the leading home rule states in the nation.

8 Handbook for Municipal Officials Published by the Michigan Municipal League, July 2015 Structure of Local Government

Council-manager form rather than through any specific authority extending beyond that of the councilmembers. The mayor also serves as chief administrative official, although department heads often operate more or less independently with only general coordination. Under the weak mayor form there is no central administrator by formal title such as . Some smaller cities are fortunate to have key long-serving staff who sense the overall cooperation needed to accomplish the city’s programs, and informally proceed for the city’s betterment.

Mayor-council plan Weak mayor form Two forms of the mayor-council plan are used by a number of Michigan home rule cities: The “strong” mayor form is most often found in larger cities where the directly elected mayor, who is not a member of the governing body, appoints and removes the key administrative officials (those who, by charter, report directly to and assist the mayor); often has variations of veto power over council decisions; is usually salaried; and is expected to devote full-time Election/selection of mayor to mayoral duties. in about two-thirds of Michigan’s home rule cities are chosen directly by the Strong mayor form people, in at-large, city-wide elections (including all strong mayor communities). In the remaining cities the councilmembers typically choose the mayor from among their ranks to serve a one- or two-year term. A trend to call the members of a city’s governing body councilmembers rather than commissioners is at least partially to avoid citizen confusion with county commissioners. City councilmembers and village

trustees typically are elected for two-year or four-year terms, about half at each election, The “weak” mayor form is found to preserve some continuity of personnel, generally in smaller cities and villages. The experience, and perhaps policy. Often a mayor (city) or president (village) is a charter calls for election of half of the member of the governing body, chairs council at each election, plus the mayor for a council meetings, and normally is the term half as long as the councilmembers, municipality’s chief policy and ceremonial preserving continuity but making possible a official by virtue of the position of mayor shift of majority at any election.

Handbook for Municipal Officials 9 Published by the Michigan Municipal League, July 2015 (Section 1/Chapter 2)

Most Michigan cities have at-large boards as may be essential. However, the elections for councilmembers, rather than president need not be directly elected by the ward elections where voters in each ward people but may be “elected” by the village (geographic section of the city) elect a council. Of the 46 home rule villages, only councilmember or members. Only a few 22 have a village manager position. Michigan cities have partisan elections The home rule village form of where major political party labels on the government offers flexibility that is not ballot identify candidates. found in the 1895 statewide General Law Village Act provisions. Home rule village Selection of administrative officials charters in Michigan are as diverse as the The trend in Michigan home rule charters is communities that adopt them. to appoint, rather than elect, administrative officials who must have technical Interesting municipal facts competence. In council-manager cities and Who’s the oldest? Who’s the newest? villages, the manager appoints and removes  Sault Ste. Marie is the oldest department heads, sometimes with—but community, founded in 1641. However, more often without—council approval, was the first incorporated depending on charter requirements. In the “” in 1802 and then as a city in weak mayor form, council approval 1815; followed by Monroe in 1837 and of appointments is generally required. Grand Rapids in 1850.  Farms is the only Form of government: Villages municipality incorporated from a Of the 254 villages in Michigan, 46 have detached territory (from Grosse Pointe home rule charters, and 208 are governed Village in 1893). under the General Law Village Act (1895  Village of Lake Isabella is the most PA 3). Under that Act all of the then existing recent incorporation from an villages in Michigan were reincorporated , in 1998. and standards were set for future  The most recent incorporations as cities incorporations. The general law village, still from general law villages are Jonesville the most common by far, has the typical and Dexter, in 2014. weak mayor-council form of government.  Mackinac Island is the only special Village presidents in general law charter city. villages are elected at-large, village-wide.  Remaining Fourth class cities The Act was amended in 1973 to provide for (population) two-year terms for the president and made  Harrisville (493) the village president a full voting member of  Omer (313) the village council. In 1974, the Act was amended to provide for four-year terms for  Sandusky (2,679 the six trustees—three of whom are elected  Yale (1,955) biennially, unless a village exempted itself  The only city/city/village consolidation prior to January 1, 1974. The most recent in Michigan occurred in 2000 when Iron amendments to the GLV Act passed in 1998. River, Stambaugh, and Mineral Hills These included the ability to reduce council merged. from seven to five members, allowed for the appointment of a clerk and treasurer, and The following cities incorporated allowed for nonpartisan elections. from townships The Home Rule Village Act requires  Auburn Hills, 1983 that every village so incorporated provide  Burton, 1971 for the election of a president, clerk, and  Farmington Hills, 1972 (also included legislative body, and for the election or the villages of Quakertown and appointment of such other officers and Woodcreek Farms)

10 Handbook for Municipal Officials Published by the Michigan Municipal League, July 2015 Structure of Local Government

 Livonia, 1950  Wayne County has the most cities  Norton Shores, 1967 with 33  Portage, 1963  Oakland County has the most cities  Rochester Hills, 1984 and villages with 39  Romulus, 1968  Keweenaw, Luce, Montmorency,  Southgate, 1958 Ontonagon, and Roscommon Counties  Sterling Heights, 1966 each have one incorporated area, a  Taylor, 1966 village  Warren, 1955 (was a village plus  Crawford, Schoolcraft, and Alpena incorporated Warren Township when it counties each have one incorporated became a city) area, a city.  Westland, 1964

Michigan Population Smallest and Biggest 1820: 8,767 (in the Michigan Territory, 2010 which included much of Ohio and Villages Population County Indiana) Forestville 136 Sanilac 1837: Michigan admitted to the Union as 26th state Eagle 123 Clinton 1840: 212,267 Melvin 180 Sanilac 2000: 9,938,444 Holly 6,086 Oakland 2010: 9,883,640 Milford 6,175 Oakland Michigan has: Beverly Hills 10,267 Oakland 83 Counties 2010 1,115 General law townships Cities Population County 127 Charter townships Lake Angelus 290 Oakland 274 Home rule cities 4 Fourth class cities Gaastra 347 Iron 1 Special charter city Whittemore 384 Iosco 208 General law villages Warren 134,056 Macomb 46 Home rule villages Grand Rapids 188,040 Kent Most & Least Detroit 713,777 Wayne  Tuscola County has the most villages with 10

Handbook for Municipal Officials 11 Published by the Michigan Municipal League, July 2015 (Section 1/Chapter 3)

Section 1: Local Government Chapter 3: Charter Revision and Amendment

Background for Change contravene the provisions of any general law Michigan cities and villages exist within a of the state (MCL 117.36; 78.27). Other framework that is part of a greater system of instances of illegality result when a court state and federal law. The system is declares them so. described in governing documents which fit into a hierarchy of importance and must be Obsolete Charter Provisions kept current. Constitutions, statutes, and The mere passage of time contributes to charters are primary examples of these charter obsolescence. Provisions that once documents. made sense in the history of a community Most Michigan cities are incorporated may later be irrelevant or too restrictive. under the Home Rule City Act, 1909 PA Certain dollar limitations for expenditures, 279 (HRCA) (MCL 117.1 et seq.). Home titles of municipal officers and departments, rule villages are created through the Home and descriptions of functions are some of Rule Village Act, 1909 PA 278 (HRVA) them. Archaic charter language, or charters (MCL 78.1 et seq.) The HRCA and HRVA dominated by male pronouns, also are statutes that were authorized by the contribute to examples of obsolescence. One Michigan Constitution of 1908, and charter provision may be in conflict with currently by Article VII, Section 22, of the another, leading to confusion of Michigan Constitution of 1963. interpretation. Locally, the city or village charter is the principal governing document. This chapter Omitted Charter Provisions addresses existing charters of home rule Does the charter claim all powers allowed cities and villages. As each community by law or does it unduly limit their exercise? changes in various ways over time, its The HRCA and HRVA provide in charter has to change with it. The same is similar language that each city or village true at the state and federal levels. The U.S. charter may provide “for the exercise of all Constitution has been amended 27 times to municipal powers in the management and date. Michigan has had four constitutions control of municipal property and in the and numerous amendments. Statutes are administration of the municipal government, being enacted and amended constantly. whether such powers are expressly When a charter becomes outdated it enumerated or not; for any act to advance hinders the ability of local government to the interests of the city or village, the good serve properly. A charter that is no longer government and prosperity of the current is one with provisions that are municipality and its inhabitants and to pass illegal, obsolete, or missing. Changes are all laws and ordinances relating to its needed to correct misleading, unreliable, or municipal concerns, subject to the unresponsive charters. constitution and general laws of this state” (MCL 117.4j(3); 78.24(m)). Illegal Charter Provisions The HRVA permits a village to adopt as Charter provisions may be preempted by part of its charter any chapter, act, or section other law. No provision of any city or of state statutes not inconsistent with the village charter shall conflict with or Act, which relates to the powers or

12 Handbook for Municipal Officials Published by the Michigan Municipal League, July 2015 Charter Revision and Amendment government of villages generally (MCL document, and that it may be recreated 78.25). without obligation to maintain the form, The HRCA and HRVA prescribe certain scheme, or structure of the former charter. charter content. Essential provisions are Amendment implies that the general plan mandated. Others are permissive. Still other and scope of the former will be maintained, provisions are prohibited, or are further with corrections to better accomplish its restricted. purpose. Revision suggests fundamental change, while amendment is a correction of Room for Improvement detail, according to the Michigan Supreme With decades of experience under municipal Court. home rule, generations of citizens have A change in the form of government come to view home rule as deserving of the will require charter revision and not merely public trust, as reflected increasingly in amendment. What constitutes such a change modern charter language. may require in-depth study. Legal advice Does the community want or need more should be sought if that question arises. innovative charter provisions than presently exist? It is possible to guide local officials, Charter Revision officers, and employees in their various Cities functions by specific creative charter Revision of city charters may be initiated by authorizations declared to be in the public a resolution adopted by 3/5 of the legislative interest. Examples are continual planning for body or by petition signed by at least five change; providing continuing at percent of the registered voters, unless the all levels of civic participation; improving present charter provides otherwise. In any intergovernmental relationships; employing case, the decision to revise is for the electors alternative dispute resolution methods; to approve or reject. They must also select a conserving resources (both human and nine member charter commission to revise environmental); keeping the public informed the charter, none of whom may be an elected of vital concerns; enhancing cultural or appointed city officer or employee. Both qualities; and promoting ethical standards matters may be voted upon at the same or and behavior. separate elections. An advisory vote may Examination of the local charter for also be taken on the question of a change in practical use should also raise the following the form of government. questions: The city council determines the place of  Is it organized in logical sequence? meeting, the compensation of charter  Does it define key terms? commission members, and provides funds  Is the language clear and for expenses and ballots. understandable? The city charter commission convenes  Are provisions easy to locate when on the second Tuesday after the election. needed? The city clerk presides at the first meeting.  Does it have an index? The clerk administers oaths of office and  Is it preceded by a meaningful preamble acts as the clerk of the commission. and historic statement? The city charter commission assesses the qualifications of its members, chooses To Revise or Amend officers, determines rules of procedure, keeps a journal, and fills vacancies. City The two forms of legally authorized charter charter commission members are changes are by revision or amendment. compensated for attending a maximum of 90 The home rule acts allow communities meetings (one per day). A majority of city to make substantial or nominal changes in charter commission members constitute a their charters by different routes. Charter quorum. Commission sessions are public. revision implies re-examination of the entire

Handbook for Municipal Officials 13 Published by the Michigan Municipal League, July 2015 (Section 1/Chapter 3)

It is generally advisable for a city and frames a charter within 60 days charter commission to engage a legal thereafter. consultant experienced in these matters as The village charter commissions there are numerous legal issues at stake. assesses the qualifications of its members, A proposed revised charter is submitted chooses officers, determines rules of to the governor for approval. The attorney procedure, keeps a journal, and fills general reviews it and advises the governor vacancies. Three or more village charter regarding its legality. The governor signs the commission members constitutes a quorum. charter if approved; otherwise the charter is Commission sessions are public. The county returned to the charter commission with a prosecutor is required by statute to advise commentary of recommended corrections. village charter commissions. An approved proposed city charter is to A proposed revised charter is submitted be published in full as prescribed by the to the governor for approval. The attorney charter commission. The adoption of the general reviews it and advises the governor revised charter is for the electorate to decide regarding its legality. The governor signs the by a simple majority of those voting on the charter if approved; otherwise the charter is question. Specific provisions for a city returned to the charter commission with a charter may also be decided as separate commentary of recommended corrections. ballot propositions. The ballot questions are The attorney general’s position is that to be approved for clarity and impartiality publication is to be in a newspaper in by the attorney general. The ballot contains general circulation within the community, voting instructions and explains the effect of which is the statutorily required method of each proposal. publication of village charters. If a proposed city charter revision is The adoption of the revised charter is for rejected, the charter commission reconvenes the electorate to decide by a simple majority and determines whether to take no further of those voting on the question. A proposed action or to proceed with a further revision. revised village charter must be filed with the If no action is taken, the city charter village clerk not less than 90 days before the commission ceases to exist. Proposed election. A revision may be submitted to the revised city charters may be submitted to electors only once in two years. electors by a charter commission three times within a three-year period. A new proposal Charter Amendment to revise a charter may be voted upon at any Amendment of a city charter may be time after termination of the charter proposed by 3/5 of the members of the commission. legislative body, or by an initiatory petition of electors containing the signature of at Home Rule Villages least 5 percent of the qualified registered The initiation of a home rule village charter electors of the city. If proposed by the revision requires a 2/3 approval vote by the legislative body, the proposal is submitted to legislative body, or by electors’ petition of at the electors at the next municipal or general least 20 percent of the total vote cast for state election, or special election held in the president (village) at the last preceding city not less than 60 days after it is election, unless otherwise provided by proposed. In the case of petitions, the charter. The village charter commission election is to occur not less than 90 days consists of five elected members. following their filing. The village council determines the place A village charter amendment may be of meeting, the compensation of charter submitted to the electors by a 2/3 vote of the commission members, and provides funds legislative body or petitioned for by not less for expenses and ballots. than 20 percent of the number of electors The village charter commission voting for president at the last election. convenes within ten days after its election,

14 Handbook for Municipal Officials Published by the Michigan Municipal League, July 2015 Charter Revision and Amendment

The governor is presented with the Legal References proposed amendment of a city or village The sections of the Home Rule City Act that charter for approval, and signs it if directly relate to charter revision are 18, 19, approved. If not approved, it is returned to 20, 22, 23, 24, 26, and 28. Those that govern the legislative body with stated objections amendment are 21, 22, 23, 24, 25, 26, and for reconsideration. If 2/3 of the members 28. The corresponding sections of the Home agree to pass it, it is submitted to the Rule Village Act are 14, 15, 18, 19, 20, 21, electors. If the amendment was initiated by and 26 for revision and 17, 18, 19, 20, and petition, it is submitted to electors 21 for amendment. notwithstanding the objections. The remaining provisions of each of the An amendment to a village charter is acts, respectively, must be referred to in submitted to electors at the next general or considering changes to a city or village special election. An amendment originated charter. Certain features of each municipal by the legislative body is published and charter are mandatory and are not subject to remains on the table for 30 days before exclusion. Others, as noted above, are action on it is taken. The form of a proposed permissive or restrictive and deliberate amendment to appear on the ballot is consideration is to be given to them. determined by resolution of the legislative Constitutional provisions and a host of body, unless provided for in the initiatory statutory laws also bear upon what may petition. Publication is made in a newspaper appear in charters, and to what extent and published or circulating in the village at content. least once, not less than two weeks, nor Courts have interpreted the validity of more than four weeks before the election. various charter provisions and the statutes Proposed amendments are to be that dictate their use. The Michigan attorney published in full with existing charter general has also rendered opinions, when provisions to be altered or abrogated by requested, for guidance in areas of specific them. The purpose of a city charter legal concern. amendment is designated on the ballot in not All sources of law that bear upon charter more than 100 words, including the short issues need to be consulted in any effort to title or caption. The statement of purpose reform charters, to achieve the desired must be true and impartial so as to create no benefit to the communities served by them. prejudice for or against the amendment. The attorney general examines it for compliance Charter Revision Strategies before its printing. The form of the proposed To do justice to the charter revision process, amendment is determined by resolution of it is well to project an 18-month time frame the legislative body unless provided for in after the election of the charter commission the initiatory petition. In the latter case the in order to complete the task. Each legislative body may add an explanatory commission will set its own pace. It should caption. meet regularly and assign a chapter of the A proposed amendment is confined to charter at a time to be considered at a one subject. If a subject embraces more than subsequent meeting or meetings. The review one related proposition, each of them must of each provision should be by all members be separately stated to allow an elector to so that each participant has a grasp of the vote for or against each proposition. issues involved. The entire charter document A majority vote of electors voting on the is subject to revision and improvement. question is required to pass an amendment. Officeholders are to be consulted for views A failed proposed amendment to a city regarding the effect of current charter charter may not be resubmitted for two provisions upon their duties and years. performances. It is well for the commission members to wrestle with and to dispose of the most

Handbook for Municipal Officials 15 Published by the Michigan Municipal League, July 2015 (Section 1/Chapter 3) volatile issues first, and to resolve them Revised charters and amended charter expeditiously—and to then close ranks. The provisions approved by the electorate with charter commission must present to the the vote for and against are filed in duplicate public a unified approach and avoid with the county clerk and the secretary of divisions caused by single or limited issue state, within 30 days after the vote is taken. positions, which tend to discourage voters They become effective upon filing, unless a and lead to defeat of the product of countless different effective date is specified in the hours of study, debate, and drafting. It is document, in the case of a city charter. also well to have one person draft all segments of the document, to preserve Conclusion continuity of and form. Until the The service performed for the community by commission approves a final version, each the members of a charter commission is draft should be regarded as tentative to immeasurable and has its own reward. It is a allow the entire work product to evolve into significant honor to participate in the a cohesive whole. creation of the document that most directly The election cycle is a foremost affects the quality of local government and consideration in the timing of charter the well-being of its citizens. submission to the electorate. To achieve The League’s Resource Center and its timely completion of the charter is to also city charter database are excellent resources allow sufficient opportunity for review by for research as to what other city and village the attorney general on behalf of the charters contain. In addition, the League has governor. It is prudent, and a courtesy to an online Charter Revision Handbook to aid those offices, to request their optimum charter commissions in this effort. timing in advance. The review of total charter language is given expert, in-depth Chapter based on materials provided by analysis by the highly experienced assistant Dan Matson, city attorney for the City of attorney general in charge of that service. DeWitt and village attorney for the Village The reviewer may need to refer various of Fowler. He chair of the Michigan articles of the charter to other state agencies Association of Municipal Attorneys’ Charter for inspection. Further consideration must be Focus Group and Ethics Roundtable given to the prospect that added time will be Committee. needed for adjustment if objections are raised.

16 Handbook for Municipal Officials Published by the Michigan Municipal League, July 2015

Section 1: Local Government

Chapter 4: Boundaries and Annexation

Introduction petition is filed, or if a referendum is held The first and only principle of law and the incorporation passes, the SBC then governing boundaries of municipalities is orders an election to be held to elect a that no one—no governmental authority, or charter commission. Upon election, the individual, person or entity—has any legally charter commission drafts a charter and protected right to the placement of a sends it to the governor’s office for municipal boundary in a particular location. approval. If so approved, an election is then Municipal boundaries are drawn by held (1) to approve the charter, and (2) to politicians in the legislature. They can be elect the first slate of municipal officials. If redrawn at any time by those same the charter does not secure approval of the politicians or by a vote of the people. electorate, the charter commission has three Political boundaries are created by years within which to submit a new incorporation. They are changed by proposed charter to the governor’s office. disincorporation, consolidation, annexation, (See Chapter 3, Charter Revision and or detachment. Amendment for more on charter commissions) Incorporation Disincorporation Villages and cities have separate statutes addressing incorporation. Both statutes have Disincorporation in a home rule city begins one thing in common. The process begins by with the filing of a petition of at least 25 securing a petition for incorporation from percent of the city electors. A city sends the the State Boundary Commission (SBC). The petition to the county commission, which is SBC has an informational guideline on how required to review it. If the county approves to fill out a petition to incorporate. the petition, it will pass a resolution calling In general, the petition must be signed for an election. A 2/3 vote of the city by a sufficient number of qualified electors. electorate is required to win. It must legally describe the area to be Home rule villages have no statutory incorporated and have a survey attached mechanism to disincorporate. They would showing the boundaries in juxtaposition have to insert a provision in their charter with its surrounding communities. Before permitting them to do so before they could submitting the petition, it is recommended disincorporate. that the municipality meet with the staff of the SBC. They will review the petition and Consolidation tell you to correct any deficiencies. This is Consolidation begins with the filing of a important because a petition, once petition with the SBC signed by five percent submitted, cannot be amended. It will be of the total population of the two or more rejected if there is any doubt whether it cities or villages. If the petition is approved, meets all of the statutory requirements. the SBC orders an election on the question The SBC determines the legal to be held along with the election of nine sufficiency of the petition; holds a public charter commissioners. If the question hearing to determine the reasonableness of passes the election, the charter commission the incorporation; and, if so found, approves drafts the proposed charter. If the governor’s the petition. A period of 45 days is then office approves the charter, the election is triggered allowing five percent of the held on the charter and candidates for office population to petition for a referendum. If no to the newly consolidated entity.

Handbook for Municipal Officials – Roles & Responsibilites 17 Published by the Michigan Municipal League, July 2015 (Section 1/Chapter 4)

Annexation referendum period is required before the There are three rules to consider. First, in annexation becomes final. If five percent of order to be annexed, the territory has to be the registered voters in the area to be contiguous to the municipal border. Second, affected, file a petition to hold an election on the amount of land touching along the the question of annexation, the election is boundary line must be somewhat held. If both the majority of the electors in proportional to the size of the territory to be the annexed area and the majority of the city annexed. And, third, no islands of township or township electors voting separately property can be created between the approve the annexation, the decision of the municipality’s old boundary and the newly SBC stands. If either group fails to register a drawn boundary line. majority vote, the SBC decision is Home rule villages secure permission overturned. from the county commission to hold an election to annex property. If the county Exemption and Exclusions from approves the petition, it passes a resolution Annexation ordering an election. Two Year Rule Home rule cities annex property in No petition will be accepted by the SBC if several ways. If the property is owned by the filed within two years of a previous city and vacant, the city council adopts a determination by the SBC on any portion of simple resolution stating their intent to the territory included in a current petition. annex the property. If the township agrees, annexation takes place by the adoption of a Charter Township joint resolution of the legislative bodies of If a charter township substantially meets all the city and the township. If the property is of the following requirements, property can in a charter township, the county is only be annexed under the provisions set petitioned to hold an election in the city and forth in Section 34 of the Charter Township in the area to be annexed. Act. The township has: Most other annexations are through  a state equalization value greater than petition to the SBC. Petitions can be filed by $25 million; the city, by 75 percent of the land owners,  a minimum density of 150 persons per by 25 percent of the registered voters in the square mile; area to be annexed or by one percent of the  fire protection services provided directly entire population of the city and township. or by contract; The petition process consists of:  a zoning ordinance or master plan; 1. a pre-application review of the petition  solid waste disposal services; provided by the SBC containing: legal  water or sewer services; description of the territory, a survey, a  police protection by contract or map of the general area in juxtaposition otherwise. with the rest of the city. 2. a determination of the legal sufficiency All of these services must be provided to the of the petition by the SBC. entire township. 3. a public hearing by the SBC. Annexation of territory from a charter 4. an adjudicative hearing at which time township is still permitted but it is only the SBC reviews their staff reports and allowed by: responses to questionnaires sent out to  election called for by petition of the city and township, and registered voters within the territory to 5. approval by the SBC. be annexed and the city;  joint resolution of the city and the If the SBC approves the petition and the township, and head of the Consumers and Industry Services Department signs off, a 45-day

18 Handbook for Municipal Officials Published by the Michigan Municipal League, July 2015 Boundaries and Annexation

 petition to the SBC to straighten the agreeing to annexation of property into the boundary between the two city. municipalities or to remove enclaves. PA 425 Agreements -- Conditional The Charter Township Act does not provide Transfer of Property for Economic a means for a property owner to petition for Development annexation with the SBC. 1984 PA 425, as amended, permits units of government to conditionally transfer PA 425 Agreements municipal jurisdiction over property from Property within the jurisdiction of an one municipality to another for the purposes agreement entered into pursuant to 1984 PA of economic development. For example, if a 425 cannot be annexed during the term of developer of an economic development the agreement. The 425 Agreement must project in the township requires water and have been entered into for an actual sewer, the property is conditionally economic development project as defined by transferred into the city in order to secure the act. It cannot be entered into merely to those services. The city shares the taxes it exchange utility services between the receives from the transferred property with municipalities. There also has to be an actual the township for the length of the agreement, conditional transfer of property. To at the end of which the property either effectively block annexation, the 425 returns to the township or stays with the agreement cannot have been entered into as city. Each municipality has to hold a public a sham or “shark-repellant” to block hearing. Finalization of a 425 agreement annexation. Twps of Casco, Columbus and does not occur until the expiration of a 30- Lenox v SBC. day referendum period, when it is filed with the county clerk and the secretary of state. Boundary Changes by Agreement Two statutes, the “Urban Cooperation Act” Detachment and “Act 425,” are often used to approve a Villages boundary change between a city and Detachment of property from a home rule township. village is initiated by the filing of a petition with the county clerk of one percent of the Urban Cooperation Act population of the qualified electors in the The Urban Cooperation Act (1967 PA 7) village and township. If the petition is and the Intergovernmental Transfers of legally sufficient, the county approves the Functions and Responsibilities Act (1967 petition and orders the election. The votes of PA 8) are preferred by cities. The acts the village and township electors are permit two or more local governments to counted collectively. A majority wins. enter into an interlocal agreement to do Assets owned by the home rule village in the anything either one of them could do on its detached area are sold pursuant to the statute own. If the agreement is to provide water and the proceeds divided proportionately and sewer to an area of the township, the with the township. Debts are likewise consideration would be the sharing of the divided and shared proportionately with the millage on the property with the township. township. Each municipality would hold a public hearing on the agreement. Final agreement Home Rule Cities would not occur until after the expiration of The detachment process is started by the a 45 day referendum period. circulation and filing of a petition signed by To effect a boundary change under an one percent of the registered electors of the Act 7 or 8 agreement, each municipality city or township with the county clerk. If would have to adopt mutual resolutions legally sufficient, the county board approves under Section 9 of the home rule cities act and orders an election to be held on the

Handbook for Municipal Officials 19 Published by the Michigan Municipal League, July 2015 (Section 1/Chapter 4) question of detachment, with the combined township. Debts and obligations are also total of all the votes cast in both the city and divided proportionately with the township township being counted together. A simple majority determines the outcome. Any assets Material for the chapter was provided by that the city may own in the detached William B. Beach, retired senior attorney territory are then sold under special formula with Miller, Canfield, Paddock and Stone, in the home rule city act and divided P.L.C.). proportionately between the city and the

20 Handbook for Municipal Officials Published by the Michigan Municipal League, July 2015 Duties of City and Village Officials

Section 2: Roles and Responsibilities Chapter 5: Duties of City and Village Officials

Sources of Authority  Legislative journal; and The duties of local elected officials are  System of accounts. specified in each city or village charter. The Home Rule City Act (1909 PA 279) and Permissive Charter Provisions Home Rule Village Act (1909 PA 278) both (HRCA, MCL 117.4; HRVA, MCL 78.24) require the adoption of a “home rule” Both Acts list many provisions which may charter. Essentially, home rule is the right of be included in the charter to require council citizens to determine their own government action. Some of these include: provisions for structure. This is done through a written streets; utilities; planning; establishment of charter drafted by an elected charter special assessment districts; and penalties commission and adopted by the electors by for ordinance violations. referendum. The home rule acts establish the procedures for framing charters. (See Prohibited Powers Chapter 3: Charter Revision and (HRCA, MCL 117.5; HRVA, MCL 74.25) Amendment). In addition, both Acts prohibit cities and Both Acts outline the mandatory, as well villages from taking certain actions in their as permissible, provisions for local charters. charter. For example, no city may exceed Mandatory requirements of the charter the tax limits established by law or the provide for the election of certain local charter; call more than two special elections officials and define the powers and duties of a year; or sell certain land or issue certain those officials—and to some extent the bonds except by the vote of the people. appointed officials for home rule municipalities. Power and Duties of the Council The home rule acts each place the legislative Mandatory Charter Provisions authority of the municipality in the council. (HRCA, MCL 117.3; HRVA, MCL 78.23) It is important to remember that this  Election of mayor and legislative body; authority is granted to the council as a election/appointment of officers; whole, rather than to individual members,  Nominations of officers; and that many of the powers granted to the  Elections; council are permissive in nature rather than  Officers-qualifications, duties, obligatory. compensation, contracts; Does this mean that as a council you  Establishment of wards; may take any action you deem appropriate  Taxation; as long as it is “for the benefit” of your  Appropriation of money; community? Probably not. Cities and villages operate as governments of law  Public peace, health, and safety services; within a system of constitutional federalism  Ordinances; and a complex network of federal and state  Adoption of laws, codes and rules; laws and regulations. Foremost are the  Adoption by reference; guarantees and restraints found in the U.S.  Open meetings; Constitution, and federal legislation and  Public access to records regulations. Next are Michigan’s

Handbook for Municipal Officials 21 Published by the Michigan Municipal League, July 2015 (Section 2/Chapter 5) constitution, statutes, and regulations. The constitutional law, as well as consistency next level of is local, and includes with previous ordinances. your charter, municipal ordinances, and Some actions, such as a zoning policies. ordinance, require that a public hearing be held prior to enactment. In other instances, it Ordinances, Resolutions, and Motions may be politically wise to hold a public For the newly elected official, the distinction hearing, even though it may not be between motions, resolutions, and mandatory. ordinances can be confusing. A 2/3 majority of the council is required  Ordinances are formal actions by the to pass certain types of ordinances. The council and constitute local legislation. village or city attorney should be consulted If the council wants to change a duly about which ordinances require this type of adopted ordinance, it must amend, super-majority. repeal or rescind the ordinance. (See Some villages and cities require an Chapter 7: Local Ordinances). ordinance to be “read” several times before Ordinances carry the force of law and it is adopted. This may be a full reading of may impose penalties on violators. The the entire ordinance—which can be quite clerk is required by state law to maintain lengthy—or only a synopsis. The an ordinance book, and from time to introduction of the ordinance is usually time a municipality may compile or considered the first reading, and a second codify all of its current ordinances and reading occurs at a subsequent meeting publish that compilation or code. when the ordinance is actively considered.  Resolutions are less formal than an These readings are not required by state ordinance, and are often used for short- statute, but they do provide an opportunity term matters, such as adopting the for public awareness and input. Your charter annual budget. A resolution may be used or council rules of procedure may provide to state the council’s position, such as to for such readings and may authorize the support or oppose a piece of state or suspension of one or more readings to avoid federal legislation. When the council verbatim readings of lengthy measures or wishes to commend a citizen or emergency actions. commemorate an occasion, it acts by resolution. Resolutions are a part of the Operating in the Sunshine permanent record of the municipality. A basic premise of is that the  Motions are used to introduce a subject public’s business is conducted in public. or propose an action to the council. For This requirement is particularly necessary example, a trustee might say, “I move in a representative democracy. the ordinance (or resolution) be The State of Michigan has established adopted.” Once a motion is made and that the public is entitled to full and seconded, the matter can be discussed complete information regarding the affairs and acted upon. (See Chapter 6: of government and the actions of those who Successful Meetings). represent them. In 1976, the Legislature The League’s Resource Center enacted the “Sunshine Laws.” The Open maintains a collection of sample ordinances. Meetings Act (OMA), and the Freedom of You may request them by emailing Information Act (FOIA) provided for the [email protected]. Your municipal attorney people’s right to know and set limits and should review all ordinances, including parameters on a council’s actions. (See samples you receive from the League, to Appendix 5: Overview of the Open provide you with guidance on the language, Meetings Act and Appendix 4: Overview of the relevance of state statutory requirements, the Freedom of Information Act). and the application of case and

22 Handbook for Municipal Officials Published by the Michigan Municipal League, July 2015 Duties of City and Village Officials

In a nutshell, the OMA requires that all Citizen Participation in Council Meetings deliberations and decisions of a public body An important part of serving your shall be made in public—with only a few, community as an elected representative is very specific exceptions. providing citizens with an opportunity to The Freedom of Information Act communicate with the council—not only on regulates and sets requirements for the a one-to-one basis with you as they meet disclosure of public records by all public you on the street, but also in a more formal bodies in the state. FOIA states that all public forum. Townships may hold an persons, except those in prison, upon written annual where citizens may request have a reasonable opportunity to participate and vote—however, this is not an inspect, copy, or receive copies of the option for cities and villages. Only the requested public record of the public body. mayor or president, member of the council, This sounds easy—however, the or a staff member (depending on your local problem arises in the definition of terms. For charter and rules) may introduce an agenda example: item. Only members of the council  What is a public record? (including the president or mayor under  Are personnel records of public most charters) may vote on matters brought employees subject to FOIA? What about for action. records?  Can someone FOIA an expensive Meet with Citizen Groups software program from the municipality, From time to time, councilmembers are thereby saving themselves several asked to meet with organized groups of thousand dollars? citizens such as a parent/teacher  What is a reasonable opportunity? organization, a subdivision association,  Does an employee/official have to stay service clubs, or the chamber of commerce. at village/city hall all night to Sometimes you may simply be asked to accommodate a FOIA request? listen. At other times, you may be asked to The answer to these questions is: “It speak or discuss a problem. The time spent depends.” Documents may be kept with these groups can provide valuable confidential only when there is an actual insight and build support in the community. detriment to the municipality, not when the One of the most pervasive criticisms of matter would simply be embarrassing. government is that it is too far removed from General guidelines and reference the people. Any effort you make to meet materials are available from many sources, with citizen groups will help reduce this including the League’s Resource Center. complaint. However, when specific circumstances arise that make you question the appropriateness Tips for Meeting with Citizen Groups of a closed session or the necessity to post a  Find out as much as possible about the meeting or whether or not to release a group before meeting with them; document, the safest course of action is to  Prepare thoroughly; follow the guidance of your municipal  If you are asked to give a speech, be attorney. Based on a professional brief. Ten to 15 minutes is plenty. Allow understanding of the law, and the enough time for questions from the interrelationships of various levels of the audience; law, your municipal attorney will be able to  Be forthright and willing to meet issues assist you in determining which laws are head-on without dodging or flinching; applicable and how they apply to your and village or city.  If you don’t know the answer to a question, say so. Faking it may bring about embarrassing repercussions later.

Handbook for Municipal Officials 23 Published by the Michigan Municipal League, July 2015 (Section 2/Chapter 5)

Relationships with Municipal Staff Respect the Relationship with Work with the manager Municipal Employees If your city or village has a manager, the Perhaps one of the most important jobs of functions of the council and manager are the council is to hire, evaluate, and retain clearly differentiated—at least in theory. competent staff—and to compensate them The council is the legislative body that must, fairly. This four-part chore may require the within the confines of the charter and assistance of other professionals. A process appropriate state and federal laws and court by which the council can evaluate the decisions, formulate policy by which the manager and/or department heads is the tool municipality is to be run. The manager and to keep everyone working on the same page. staff execute this policy—they do not Fair compensation avoids the revolving determine the policy. The council, on the door. other hand, should not wander through city The council should also trust the staff’s hall making sure that tasks are performed or professional judgment. They have training, that directives are carried out. experience, and information the council does In actual practice, a clear-cut separation not--and need not—have. Remember to is more difficult. Councils do direct the show your appreciation for a staff member’s manager from time-to-time to follow certain time and effort. A smile, a nod, a “thank administrative practices, and the manager you,” or a compliment will go a long way in does, at times, influence policy. The council establishing a good working relationship and manager should discuss this interaction with staff. and, wherever possible, establish clear guidelines to help keep these functions Powers and Duties of Elected separate. Each must recognize that and Appointed Officials occasionally these functions will overlap. Mayor/President The council is responsible for policy Both the Home Rule City Act and Home decision making. This is not always easy or Rule Village Act provide for the election of pleasant, but it is necessary. As much as an “executive head.” The role and duties of possible (except in routine matters), the this individual, known as a president in a council should make decisions with as much village and as a mayor in a city, vary greatly help from citizens, the manager, and the and are established by local charter. It staff as they can secure. should be noted the term “executive head” is It is the manager’s responsibility to not defined in either Act. implement policies and programs and, if directed by the city or village charter, to Mayor/President Pro Tempore supervise, hire, and fire municipal Although most, if not all home rule cities employees. This doesn’t mean the council is and villages have a mayor or president pro powerless in these areas. It can direct the tempore, the position is not required by manager to execute its wishes. either act. The method of selection as well Noncompliance can result in dismissal of the as the role and duties of these officials are manager. The manager acts as the liaison defined by local charters. between employees and the council. She or he must see that both are well informed City/Village Manager about what the other is thinking and doing. In the same manner, the duties and role of Misunderstandings are far less likely to the chief administrative officer for the occur if both employees and council are well municipality, variously known as a manager, informed. administrator, or superintendent, are defined by local charter or, in some instances, by local ordinances—or a combination of the two.

24 Handbook for Municipal Officials Published by the Michigan Municipal League, July 2015 Duties of City and Village Officials

Municipal Attorney outlined in the charter. Additional duties An important, though not always visible, may be assigned by the council and/or the member of the team is the attorney. manager. Although the duties of the attorney are not Michigan election law (MCL 168.1 et always spelled out in the charter, at the seq.) dictates that the city clerk will manage request of council they might include: city elections, and in addition, state and  drafting ordinances; federal elections under the direction of the  preparing legal opinions; Bureau of Elections in the secretary of  reviewing policies and procedures for state’s office. Village clerks no longer run compliance with local, state and federal village elections. law; In a small city or village, the office of  defending the village or city in a court clerk can be the most controversial, and of law; and perhaps most misunderstood position.  prosecuting violators of municipal Several steps can be taken to help resolve or ordinances. avoid some of these issues: Often a small city or village cannot  The clerk and council should discuss afford to have its attorney present at all mutual expectations of the roles and meetings. However, copies of agendas and responsibilities of each position. This minutes should be submitted for review to can lead to cooperation and mutual assure that they conform to the law and to respect. keep the council from unintentionally  The clerk and council should network placing the municipality in a questionable with other municipal officials. The legal position. Michigan Association of Municipal The League’s Resource Center and Clerks offers support for clerks. Help is Legal Affairs Division do not give legal often just a phone call or click (online at advice or render legal opinions (and in fact, michiganclerks.org) away. are not allowed to by law). However, the  The clerk and council should attend legal staff will confer with your attorney on educational programs about the roles legal issues in your community. and responsibilities of officials, The Resource Center can assist by teamwork, and local government. providing sample ordinances and policies as a starting point for drafting ordinances or City/Village Treasurer policies for your city or village. Many of Appointment of the treasurer by the council these are available on the League’s website allows for the requirement of specific job at mml.org. skills and experience for the position, makes the treasurer accountable to the council, and City/Village Clerk provides greater job security and continuity. The office of clerk is a pivotal one, dealing In 37 cities the treasurer is an elected with vital areas of city or village operation: position. As a general rule, the treasurer: records management, finance, and elections.  has custody of and receives all The importance of recording and preserving village/city money, bonds, mortgages, the official action of the legislative body notes, leases and evidence of value; cannot be overstated. Years from now, these  keeps an account of all receipts and records will provide the only documentation expenditures; of actions taken by the municipality.  collects and keeps an account of all Traditionally, the has taxes and money appropriations, been an elected official. As the requirements keeping a separate account of each fund; for this position became more technical, it is and more common for this to be an appointed  makes periodic reports to the manager office. Specific duties of the clerk will be or clerk and council as required by law.

Handbook for Municipal Officials 25 Published by the Michigan Municipal League, July 2015 (Section 2/Chapter 5)

Changing your Charter  Get involved. Know what is going on. The charter for your city or village can be Communicate with other council changed following the procedures outlined members. Review your meeting material in the Home Rule Village Act, 1909 PA 278 prior to the night of the meeting. as amended (MCL 78.1- 78.28) or the Home Councilmember Rule City Act, 1909 PA 279 (MCL 117.21-  When first elected, listen and observe. 117.26). An amendment must be approved Don’t challenge existing staff or by the council, submitted to the governor’s practices in public until you have done office for review, and approved by the your homework and know what you are electors. Both the Acts provide for talking about. It boils down to good amendment to the charter to be instituted by manners. Often, “jumping the gun” on petition. an issue causes it to be magnified in the Municipalities interested in amending media. Clerk their charters should work with their  Show respect to other officials, municipal attorney to assure that the including those appointed rather than procedure required in the relevant state elected. Our clerk and treasurer are now statute is followed. appointed by the council. They are still A detailed account of charter officials. Don’t treat them like they are amendment and revision can be found in your private secretaries. Clerk Chapter 3: Charter Revision and  Be professional. Don’t turn municipal Amendment. issues into personal issues. Communication and cooperation are the Words of Wisdom key. The following suggestions have been Councilmember provided by experienced municipal officials:  Realize you cannot solve every problem quickly. Looking at problems from the inside lends a different perspective when you are forced to look at all aspects. Manager  You have information citizens do not and you are charged with educating as well as listening to citizens. Manager

26 Handbook for Municipal Officials Published by the Michigan Municipal League, July 2015

Section 2: Roles and Responsibilities Chapter 6: Successful Meetings

Rules of Procedure anything having to do with how you Adopting rules of procedure to govern its procedurally conduct your meetings. meetings may very well be one of the most important actions a council takes. These Agendas rules assist in ensuring that meetings are An agenda is a guide for conducting an efficient and genial and provide guidelines official business meeting of a duly for dealing lawfully and effectively with the constituted body. Generally, the person who public and the media sets the agenda is the presiding officer The council should review its rules of (hereafter called the chair). The chair should procedure at its first meeting after members set a deadline before each meeting to receive elected at the municipality’s regular election agenda items. The deadline should allow have taken office and when a quorum is enough time before the meeting for an present. Following discussion and any agenda to be produced and supporting amendments, the council should adopt the information and documents to be mailed or rules of procedure by majority vote. delivered to the members. Board or council Typically, council rules contain members should have enough time before provisions for: the meeting to read and digest the  notification of meetings; information. Allowing time for the members  regular and special meetings; to prepare will help the meeting proceed at a  attendance at meetings; more efficient pace.  meeting information packets; The chair should mail a message or  agenda preparation and distribution verbally remind each person on the board or (including the use of a consent agenda); council of the deadline each time an agenda  voting; is being prepared. Most people can be verbally reminded before the preceding  public hearings; meeting is adjourned. Other interested and  parliamentary procedure; appropriate individuals should also be  conduct of meetings (decorum of notified of the date and time when agenda council members; disorderly conduct); items are due.  public participation; The person responsible for each agenda  minute preparation; item should be listed on the printed agenda  committees (establishing; appointments; next to that item. duties and responsibilities);  resolutions; and Sample Agenda Outline  ordinances (introduction; public hearing; 1. Call to Order (Pledge of Allegiance, if publication; amendments). there is to be one) The rules should indicate the sequence 2. Roll Call of the council agenda as well as the 3. Approval of (regular/special) minutes procedure for holding public meetings. They of the last meeting might also include whether or not the mayor 4. Approval of Agenda or president is entitled to speak in debate, 5. Public Comments – Reserved Time any restrictions on abstentions, how items (for items listed on this agenda) are added to the agenda, how the agenda is 6. Petitions and Communications distributed, limits on speeches—basically 7. Consent Agenda

Handbook for Municipal Officials 27 Published by the Michigan Municipal League, July 2015 (Section 2/Chapter 6)

8. Introduction and Adoption of Closed meetings Ordinances and Resolutions; Public In order for a public body to hold a closed Hearings meeting, a roll call vote must be taken; 9. Reports of Officers, Boards and depending on the circumstances, either two- Committees; Routine Monthly Reports thirds of its members must vote from Departments affirmatively or it must be a majority vote. 10. Unfinished Business (unfinished or (See Appendix 2: Overview of the Open pending matters) Meetings Act). Also, the purpose for which 11. New Business the closed meeting is being called must be 12. Miscellaneous stated in the meeting when the roll call is 13. Public Comments – General taken. The law provides for closed meetings 14. Recess – Work Session in a few specified circumstances: 15. Closed Session (for situations that meet  to consider the purchase or lease of real the circumstances specified in the property (2/3 vote); Michigan Open Meetings Act.)  to consult with its attorney about trial or 16. Adjournment settlement strategy in pending litigation, but only when an open meeting would have a Open Meetings Act detrimental financial effect on the public The basic intent of the Open Meetings Act body’s position (2/3 vote); (OMA) is to strengthen the right of all  to review the contents of an application for Michigan citizens to know what goes on in employment or appointment to a public government. office when the candidate requests the Briefly, the OMA requires that nearly all application to remain confidential (2/3 vote). deliberations and decisions of a public body However, all interviews by a public body for be made in public. While it sounds simple, employment or appointment to a public problems arise in the definition of terms. office must be conducted in an open What is a “public body”? Is a subcommittee meeting; and of the council a “public body”? Is a  to consider material exempt from discussion discussion of the candidates for the or disclosure by state or federal statute (2/3 manager’s position a “deliberation”? Does vote); and the council have to discuss its final offer to  to consider dismissal, suspension or the fire union in public session? The answer disciplining of, or to hear complaints or to most of these questions is the same: “It charges brought against or to consider a depends.” periodic personnel evaluation of, a public Remember, the general rule of thumb is officer or employee if requested by the to conduct the public’s business in public. named person (majority vote). Deliberate so the constituents know why decisions are made. Deliberations and Recording Minutes documents may be kept confidential only Minutes are recorded to provide an accurate when disclosure would be detrimental to the written history of the proceedings of a municipality, not when the matter would be board, commission, or committee meeting. uncomfortable or embarrassing. The OMA contains the legal requirements When specific circumstances cause you for minutes of public body meetings. to question the appropriateness of a closed Minutes must be kept for all meetings and session or the appropriate posting are required to contain: requirements, the safest course of action is  a statement of the time, date, and place to follow the guidance of your municipal of the meeting; attorney. The specific details of the situation  the members present as well as absent; and recent legislation and court decisions will make each situation unique.

28 Handbook for Municipal Officials Published by the Michigan Municipal League, July 2015 Successful Meetings

 a record of any decisions made at the serious effort on the part of elected officials meeting and a record of all roll call to secure as much information as possible votes; and about a topic before a final decision is made.  an explanation of the purpose(s) if the Public hearings are legal requirement for meeting is a closed session. some matters, such as: Except for minutes taken during a  adoption of the budget, and closed session, all minutes are considered  changing the zoning ordinance. public records, open for public inspection, Local charters may also include and must be available for review as well as provisions on public hearings, such as copying at the address designated on the requiring a public hearing for the public notice for the meeting. consideration of a proposed ordinance. Even Proposed minutes must be available for if not required by law, a public hearing can public inspection within eight business days be useful in helping municipal officials after a meeting. Approved minutes must be understand how their constituents feel and available within five business days after the why they feel that way. meeting at which they were approved. Corrections in the minutes must be Parliamentary Procedure made no later than the next meeting after the A good working knowledge of meeting meeting to which the minutes refer. management and the basic elements of Corrected minutes must be available no later parliamentary procedure will engender a than the next meeting after the correction sense of confidence at your first public and must show both the original entry and meeting. You should feel comfortable with the correction. how to make a motion, what is expected of you in debate, and how a vote is taken. In Closed Meeting Minutes other words, know your rights and how to Minutes of closed meetings must also be enforce and protect them. recorded, although they are not available for Parliamentary procedure is not meant to public inspection and would only be be restrictive or prevent free expression of disclosed if required by a civil action. These opinion, but rather to serve as a protection of minutes may be destroyed one year and one the rights of all—the majority, the minority, day after approval of the minutes of the individual members, absent members, and regular meeting at which the closed session all of these together. For a governmental was approved. body, that also includes your constituency— the public. The purpose is to expedite Public Hearings business, maintain order, insure justice, and Council rules should include a procedure for make sure that the will of the organization is public hearings. A public hearing is that accomplished properly and fairly. In other portion of a meeting designed specifically to words, these procedures are designed to receive input from the public on a single help, not hinder, the process. issue. It may be required by ordinance, In a message to Congress in 1961, charter, or statute. The time, place, and President John F. Kennedy stated “The basis subject of the hearing must be posted as of effective government is public required by the ordinance, charter, or statute. confidence.” As a member of your city or The hearing may be before, during, or after a village council, you can help inspire that regular meeting or may be at a special confidence by being professional in your meeting called specifically for that purpose. duties, by having a good working Public hearings are formal meetings of the knowledge of parliamentary procedure, and council to obtain input from the public. by projecting your image as an efficient, Public hearings offer citizens an opportunity fair-minded, knowledgeable official. An to be heard, and should be viewed as a orderly, smoothly run meeting, one that

Handbook for Municipal Officials 29 Published by the Michigan Municipal League, July 2015 (Section 2/Chapter 6) accomplishes the tasks at hand, should be 2. Another member “seconds” the motion, your goal. And it shouldn’t last too long without waiting for recognition. This either. means that another person thinks the It all sounds so simple. A motion is subject is important enough for made, discussed, and voted on. How much discussion and vote. (To expedite easier can it get? Well, we have a tendency business and avoid confusion when no to make it much more difficult than it has to second is offered, you might want to be. adopt a rule that eliminates the Parliamentary law is composed of the requirement for a second). rules and customs governing deliberative 3. The chair states the question: “It is assemblies. The most widely used authority moved and seconded that . . .” The is Robert’s Rules of Order Newly Revised motion now belongs to the assembly for (Roberts Rules), used by more than 75 discussion. percent of all deliberative assemblies, 4. The chair asks: “Is there any including governmental bodies. Meetings of discussion?” or “Are you ready for the governmental bodies are regulated by question?” The motion is opened for federal and state laws (such as the Open debate, and the member who made the Meetings Act), which take priority, and local motion has first priority in speaking to charters (which may stipulate that the the question. According to Roberts president votes only to break a tie), and any Rules, each member has the right to rules that your municipality has adopted speak twice in debate, but may not regarding procedure. If you have adopted speak the second time until everyone the current version of Roberts Rules, it has had a chance to speak the first time. should be consulted as a last resort if 5. The chair states “The question is on the nothing else applies, not as the first and adoption of the motion to...” the vote is foremost authority. taken by whatever means is established As a member of the public body, you in your community. If by voice vote, have the responsibility to become familiar “All those in favor say ‘aye’. All those with requirements and restrictions under the opposed, say ‘no’.” OMA, your own governing documents— 6. The chair announces the results of the especially your charter—and your council vote. “The ayes have it and the motion is rules of procedure. Your agenda, how adopted.” Or “The nays have it, and the business is introduced, how debate is motion is lost.” conducted, how the vote is taken—all of The chair must be comfortable not only these things have their basis in with procedures in handling motions, but parliamentary procedure. also showing impartiality; keeping the There are some basic concepts that are discussion focused; soliciting opinions from common to all organizations: a quorum must members; not allowing blame-oriented be present to take legal action; only one statements; protecting staff and colleagues main proposition can be on the floor at a from verbal abuse or attack; encouraging time; only one member can speak at a time; alternate solutions; making sure everyone the issue, not the person, is always what is knows what is being voted on; and, even under discussion; and usually, a majority explaining what a “yes” or a “no” vote vote decides. means. A motion is handled in the following Individual members should respect their manner: colleagues and the chair; obtain the floor by 1. A member is recognized and makes a being recognized by the chair before motion by stating “I move...” (Never speaking; use correct terminology; limit use “I want to...” or “I think we remarks to the issue under consideration; should...” or “I motion...” or raise concerns and objections during debate; “So moved.”)

30 Handbook for Municipal Officials Published by the Michigan Municipal League, July 2015 Successful Meetings

and, actively listen to citizen input and hear, raise a question of discussion. privilege Also, remember silence gives consent.  To take a short break in the Some communities have a restriction on the meeting, move to recess ability of members to abstain from voting, or  To close a meeting, move to they may need approval of a majority, or adjourn even unanimous approval, of the other  To set a time to continue the members, in order to abstain from voting. If business to another day without you have no such rule, you may abstain, but adjourning the current meeting, the abstention is not counted as a “yes” or move to fix the time for which to “no” vote. In essence, you have given your adjourn permission to the will of the majority, 4. Incidental motions are incidental to the whatever that might be. business at hand Following are the five classes of  To endorse the rules, rise to a point motions and some examples of when to use of order them:  To reverse or question the decision 1. Main motion of the chair, appeal  To introduce a subject, make a  To question the correctness of a main motion voice vote as announced by the 2. Subsidiary motions assist the members chair, call for a division of the in treating or disposing of a main motion assembly (rising vote)  To kill or reject a main motion 5. Motions that bring a question again without a direct vote on it, move to before the assembly allow the assembly postpone indefinitely to reopen a completed question  To change a pending motion, move  To give members a chance to to amend change their minds, some motions  To send a pending question to a can be redebated and revoted. The small group for further study, move move must come from the to commit or refer prevailing side (yes if it was  To put off action or a decision until adopted; no if it failed), move to later in the same or next meeting, reconsider move to postpone definitely  To change what was adopted at a  To change the rules of debate, previous meeting, move to amend move to limit or extend limits of something previously adopted debate  To change the outcome of an  To close debate, move the previous affirmative vote, move to rescind question Each of these motions, of course, has its  To set aside the pending question own rules regarding when it is in order, if it temporarily in order to take up must be seconded, if it is debatable or more pressing business, move to lay amendable, and what vote is required for on the table adoption; and even if it can be reconsidered. 3. Privileged motions deal with rights and Make it your business to become as privileges of members and do not knowledgeable as you can, and then share directly affect the main motion. your knowledge with others.  To return to the printed agenda, call for the orders of the day This chapter is based on materials provided  To secure a privilege, such as by Connie M. Deford, retired city clerk of insuring your ability to see or Bay City.

Handbook for Municipal Officials 31 Published by the Michigan Municipal League, July 2015

Section 2: Roles and Responsibilities Chapter 7: Local ordinances

implied and not prohibited by this Prerequisites to Valid constitution.” Ordinance Enactment To be valid, an ordinance must, at a 2. State statutes also provide local minimum, serve a public purpose within the governments with authority to adopt scope of the local governing body’s ordinances. These statutes are specific to authority; it must be consistent with the type of local government involved applicable local, state, and federal charters, and set forth procedures for adoption laws, constitutions, and public policies; and and other matters such as permissible it must be precise and reasonable. penalties for ordinance violations. The basic authorization sections are as Local Government Authority follows: Local governments in Michigan have no  1909 PA 279, The Home Rule power of their own, except as granted to City Act them by the state constitution, statutes, and  1909 PA 278, The Home Rule local charters, as applicable. Some of the Village Act basic constitutional and statutory provisions which empower local governments to enact Requirements of a Local Ordinance ordinances are as follows: Serve a public purpose 1. The Michigan Constitution provides An ordinance must advance a public local governments with the legislative purpose, not the interests of a private person power and authority to adopt or an arbitrary class of persons. An ordinances. For example, cities and ordinance that grants special privileges to a villages get their authority from Article single person or entity exceeds the scope of 7, §22. the governing body’s powers. An ordinance must relate to local matters, not to matters of “Each such city and village shall statewide concern. In addition, an ordinance have the power to adopt resolutions must serve a lawful purpose, either as and ordinances relating to its expressly provided for by law or as municipal concerns, property and necessary for the general health, safety and government, subject to the welfare of the community. constitution and law.” The Michigan constitution requires that Consistency with State and constitutional provisions and state laws Federal Laws and Local Charters concerning local government powers must The provisions of an ordinance must be be liberally construed. Article 7, §34 consistent with state law; the ordinance may provides: not conflict with or be preempted by a state law. The same holds true for federal law. A “The provisions of this constitution direct conflict exists if an ordinance permits and law concerning counties, what a state statute prohibits or prohibits townships, cities and villages shall what a state statute permits. Some areas of be liberally construed in their favor. potential local regulation may be preempted Powers granted to counties and by a state (or federal) statute, either townships by this constitution and expressly or because the statutory scheme by law shall include those fairly occupies the field of regulation. In that case,

32 Handbook for Municipal Officials Published by the Michigan Municipal League, July 2015 Local Ordinances the local regulation cannot be upheld, even action requires adoption of an ordinance, a though there is no direct conflict. An resolution cannot operate as a de facto ordinance may not conflict with the ordinance, and the attempt to legislate by provisions of a local charter. resolution will be invalid. A state statute or local charter may specify whether an action Clear and Precise Language must be by ordinance or resolution. If an ordinance is vague, ambiguous, or Typically, any act imposing a sanction indefinite so that it is impossible to for the violation of the act must be by determine what the ordinance requires or to ordinance. If a statute or local charter does determine the legislative intent, the courts not specify whether an action must be taken will hold the ordinance void. The meaning by ordinance or resolution, the nature of the of an ordinance must be clear enough so that proposed action must be examined to persons who are subject to its provisions can determine whether an ordinance or determine what acts will violate it. A penal resolution is required. Generally, resolutions ordinance (one that imposes a penalty for implement ministerial functions of violation) will be strictly construed by a government for short-term purposes, while court in favor of the defendant. ordinances are intended to have a permanent and more general effect. Labeling a Reasonable in Nature resolution an ordinance does not make it so. An ordinance must be reasonable, both at first sight and as applied to a particular Basic Adoption Procedures situation, or it will be held invalid. In and Requirements general, whether or not an ordinance is Assuming that there is proper authority to reasonable will depend on the particular enact an ordinance, the ordinance must be language of the ordinance or the particular enacted according to the procedures set forth circumstances to which the ordinance is by statute or local charter. For example, applied. The inquiry will typically focus on notice and voting requirements must be whether the ordinance is intended to observed. Also, ordinances must be advance a legitimate police power objective, published, printed and authenticated by the whether the ordinance constitutes a rational local government as required by applicable means to accomplish that objective, and the laws. The statutes provide varying times impacts of the ordinance on rights or within which an ordinance may become privileges which have been granted or effective, depending upon the type of local guaranteed by applicable laws and government involved. constitutions. However, a presumption of reasonableness applies to local ordinances Notice and an ordinance will not be invalidated Generally, to be bound by an ordinance, a unless it is clearly arbitrary, confiscatory, person must have notice of an ordinance, or discriminatory, or otherwise unreasonable. the reasonable opportunity to have had notice of it. This requirement does not Choosing between typically pose any problems. State statutes Ordinances and Resolutions may require that specific notice For each proposed action of a local requirements be met in adopting or governing body, it must be determined amending an ordinance. For example, MCL whether the action requires an ordinance or 125.3103 of the Michigan Zoning Enabling a resolution. In most cases, the proper Act provides that prior to the adoption of a approach will be obvious. However, the zoning ordinance, not less than 15 days’ choice of approach is critically important notice of the time and the place of the public because the use of the wrong device may hearing must be published in a newspaper of result in invalidation of the action taken. If general circulation. Local charters may also the substance of a local governing body’s

Handbook for Municipal Officials 33 Published by the Michigan Municipal League, July 2015 (Section 2/Chapter 7) contain notice requirements which must be Home Rule City Act, and for the publication observed. of an ordinance or a synopsis of an ordinance according to the Home Rule Voting Requirements Village Act. Unless otherwise provided by statute, an ordinance must be adopted by a majority Effective Date vote of the elected members of the Ordinances usually do not take immediate governing body. Voting requirements and effect unless stated in the ordinance, procedures can become complicated, particularly if they provide for penalties. however, particularly in situations involving Always check applicable charter provisions. abstentions, absences, conflicts of interest, the use of alternates, protest petitions and Reading Requirements ordinances dealing with special topics. It is Reading requirements govern the number of important to be familiar with the exceptions times that an ordinance must be read aloud to majority vote requirements. Check or considered by the local governing body, applicable statutes and local charters. either in full or by title, and on how many different occasions. Applicable state and Publication local laws, including local charters, should After an ordinance is adopted, it must be be consulted to determine the reading published in a local newspaper of general requirements in a particular jurisdiction. circulation before it becomes effective. As applied to ordinances, “publication” means Adoption of Technical Codes by printing or otherwise reproducing copies of Reference them in a manner so as to make their Various statutes authorize the adoption of contents easily accessible to the public. specified technical codes by reference. See, Some types of local governments are for example, the statutory authority for expressly authorized to publish an ordinance home rule villages (MCL 78.23(i) and home by publishing a summary of the ordinance rule cities (MCL 117.3(k)). Charters may along with a designation of where a true also contain requirements for adopting and copy of the ordinance can be inspected or publishing technical codes by reference. obtained. (Home Rule City Act – whether or The statutes authorizing adoption of not provided in the charter, MCL 117.3(k); technical codes by reference may also Home Rule Village Act, MCL 78.23(i)). The provide specific means of publishing the ordinance must be published within the time codes. Further, all requirements for period specified by statute. The time period publication contained in a local charter must varies depending upon the type of local be met. Failure to meet the publication government involved. There must also be requirements as provided by statute and compliance with publication requirements or charter will make the code unenforceable. procedures contained in local charters. If a Although a statute authorized the city to city or village passes an ordinance that adopt the Uniform Traffic Code by reference incorporates by reference a state statute, the and without publication in full, both the code does not need to be published in full if statute and the city charter required that the the code is available for distribution in the city ordinance adopting the code by clerk’s office and there is compliance with reference be published in full as a other applicable requirements under the prerequisite to the legal effectiveness of the statute and charter. code being adopted; failure to publish the adopting ordinance in full made that Printing and Adopting ordinance invalid and precluded prosecution Local charters will set forth ordinance for a violation of the traffic code. requirements. These are to include the Efforts should be made to stay current. method for adopting, continuing, amending, State codes adopted by reference should be and repealing city ordinances under the

34 Handbook for Municipal Officials Published by the Michigan Municipal League, July 2015 Local Ordinances readopted to reflect changes made in the convenient, to set forth only the codes as they occur. amended subsection.  The amending ordinance should state Drafting exactly where the new material is to be To be valid, an ordinance must be drafted in placed, by section or subsection number. the proper form. Although state law does not The first, and perhaps one of the most appear to require any particular form for important steps in the preparation of an ordinances (except for ordinance enacting ordinance, is to determine exactly what it is clauses), local charters may contain form the local governing body wants the requirements which must be followed. ordinance to accomplish. Often, local Otherwise, there are no absolute rules for legislation is proposed on the vague idea drafting ordinances. that there “ought to be a law” and with no clear understanding or articulation of what Ordinance Amendments the ordinance should prohibit or require. If The specific procedures and requirements the person drafting an ordinance does not that govern amendments as provided by know the precise objectives of a proposed state statute, charter provisions, and other new ordinance or the purpose for a proposed applicable laws should always be examined change in an existing ordinance, he or she and followed: will be defeated from the outset.  Amendments change, add, or delete After gaining a clear understanding of material in an ordinance. the local governing body’s purpose and  Local charters frequently contain intent, the drafter must express that purpose publication requirements in connection in appropriate language arranged in a with ordinance amendments. readable and useable manner. Although the  Amendments should be drafted to drafting of plain, accurate, and effective conform to the titles and numbering ordinances may be as much of an art as it is system of the ordinance being amended. a science, it is an endeavor that one can get The definitions contained in the better at with practice. ordinance should be referred to and followed.  It is not necessary to repeal an ordinance This chapter is based on materials provided section or provision in order to change by George B. Davis, a partner at Davis & it. The particular section or provision Davis PLC in Grand Rapids, Michigan. only needs to be amended to read as desired.  If an ordinance section or provision has already been amended, it is not necessary to repeal the prior amending ordinance. It is only necessary to amend the provision as it currently exists.  In adding new material, such as a new subsection, the entire section being amended generally should be set forth in full, including the new material, to show how the amended section will read in full. If this is not done, confusion may arise as to where the new material fits in the section being amended and whether old material is superseded. If a long section is being amended, it is appropriate, and may be more

Handbook for Municipal Officials 35 Published by the Michigan Municipal League, July 2015

Section 2: Roles and Responsibilities Chapter 8: Ethics

So there you were, as a councilmember, trying to do the best job you could juggling competing demands—answering calls from residents; asking questions of your city manager, finance director, and DPW director—trying to keep up with what’s going on. And all of a sudden, an angry resident jumps up at a council meeting, charges you with having “a conflict of interest” on a zoning matter, and says you are violating the state ethics law. Your friendly local newspaper reporter corners you after the meeting and asks, “Well, what about it? Are you in violation of the law?”

Who said serving on the city or village confidence in government. We all should council would be easy? care about that. Like it or not, we live in a time of A conflict of interest is any interest unparalleled cynicism toward government at competing with or adverse to our primary all levels. Fair or not, critics are quick to duty of loyalty to the public interest. A point to alleged ethical improprieties as competing interest may be a personal further proof of the untrustworthiness of interest, or it may be a duty or loyalty we government officials. In this environment, owe to a third party. In either case, there is a even the suggestion of improper action can “conflict” if the competing interest impairs trigger unhappy consequences. Local our ability to decide a public question officials thus need to be aware of the state objectively and independently. laws under which they can be held That is a broad definition, and not accountable. everything which might fall within it is This chapter summarizes the two necessarily a problem. Each of the statutes statutes comprising the principal ethics discussed below is based upon this general regulation of Michigan local government concept: An influence which could impair officials: The State Ethics Act, 1973 PA 196 our impartiality is a potential problem. The (Act 196); and 1968 PA 317, dealing with laws distinguish between conflicts which are public contracts. Every local public official permissible and those which are not. in Michigan is subject to them and should be familiar with them. State Laws The two state laws each address different What Is a Conflict of Interest, and aspects of conflict and ethics issues. Act 196 Why Should We Care? is concerned with individual behavior, and To understand the Michigan laws on the Act 317 regulates approval of public subject, let’s begin with what they are trying contracts in which local officials may have to address: What is a “conflict of interest,” an interest. Each statute has its own and why should we care about it? peculiarities. The second question is easy to answer: Public office is a public trust. Elected State Ethics Act (Act 196) officials are merely hired hands, delegated Act 196 prescribes general standards of power from the public, obliged to exercise conduct for public officers and employees that power as the public’s trustees. We owe by establishing seven areas of prohibited a duty of loyalty to the public interest. conduct. A local government official shall Actions or influences tending to undermine not: that loyalty are destructive to the public’s 1. divulge confidential information

Handbook for Municipal Officials – Roles & Responsibilites 36 Published by the Michigan Municipal League, July 2015 Ethics

2. represent his or her opinion as that lesser of $250 or five percent of the contract of the local government. cost; and the officer must file a sworn 3. use governmental personnel, affidavit as to the amount of direct benefit, property, or funds for personal gain which is made part of the public record. or benefit The exceptions are of limited use since 4. solicit or accept they are available only if there otherwise gifts/loans/goods/services, etc. would be a failure to obtain a quorum. which tend to influence his or her performance of official duties. Prohibitions on Public Contracts (Act 5. engage in a business transaction in 317) which he or she may profit from Unlike Act 196, which seeks to regulate the confidential information behavior of the individual official directly, 6. engage in or accept Act 317 addresses conflict concerns by employment/render services for a prohibiting local public officials from public or private interest which is pursuing certain public contracts. Section 2 incompatible/in conflict with the of the act provides that a local official shall discharge of official duties or which not: may tend to impair his or her 1. be a party, directly or indirectly, to a independence of judgment. contract between himself or herself 7. participate in the negotiation or and the official’s governmental execution of contracts/making entity. loans/granting subsidies/fixing 2. directly or indirectly solicit a rates/issuing permits, certificates, or contract between the official’s other regulation/supervision relating governmental entity and any of the to a business entity in which the following: public officer has a financial or a. himself or herself; personal interest. b. any co-partnership of In practice, subparts (6) and (7) created unincorporated association of which a serious hardship for part-time local he or she is a partner, member, or officials—such as elected trustees—who are employee; usually employed full-time at other jobs. c. any private corporation in which The Legislature thus amended Act 196 to he or she is a stockholder (over provide narrow exceptions to subparts (6) certain thresholds) or of which he or and (7), enabling the official to participate in she is a director, officer, or and vote on the governmental decision, but employee; or only if all of the following occur: d. any trust of which he or she is a a. a quorum is not available because beneficiary or trustee. the public officer’s participation Act 317 further prohibits the official would otherwise violate (6) or (7); from either taking part in the negotiation or b. the official is not paid for working renegotiation of any such contract or more than 25 hours per week for the representing either party in the transaction. governmental unit; and As with Act 196, there are exceptions. The c. the officer promptly discloses any principal exception is that the prohibitions interest he or she may have in the do not apply to officials paid for working an matter and the disclosure is made average of 25 hours per week or less for the part of the public record of the governmental entity. The prohibitions also governmental decision to which it do not apply to community college, junior pertains. college or state college or university In addition, if the governmental decision employees. This is a more useful exception is the award of a contract, the officer’s direct for trustees than that found in Act 196, since benefit from the contract cannot exceed the the quorum issue is not a precondition.

Handbook for Municipal Officials 37 Published by the Michigan Municipal League, July 2015 (Section 2/Chapter 8)

Even if the exception is available, Act 317 imposes strict disclosure and approval Other Considerations requirements: In addition to the two principal ethics a. Prompt disclosure of any pecuniary statutes, local elected officials should be interest, which is made part of the aware of other potential sources of ethical public record. Disclosure must be rules. One example is local charter made at least seven days prior to the requirements or local ethics ordinances or meeting at which a vote will be policies. Prior to 1997, Act 317 contained a taken. provision which said that the act superseded b. Approval requires a vote of at least all local charter provisions pertaining to 2/3 of the full membership of the conflicts of interest, and that Act 317 approving body (not 2/3 of those constituted the “sole law in this state” with present) without the vote of the respect to conflicts of interest in public official making the disclosure. contracts. This created an argument that all c. The minutes must include summary local ethics regulation was preempted by the information regarding the name of act. In 1997, however, the legislature

Ethics questions: What would you do in these situations?

Situation #1 You work for a large manufacturing company which also happens to be your village’s largest taxpayer and employer. The company applies for a tax abatement for the plant in your village. You work at an- other facility and the tax abatement does not impact your job. Should you vote on the abatement?

Situation #2 Before you were elected to the village council, you served on the zoning board of appeals (ZBA), so you know the ZBA procedures very well. A few months after your election, your neighbor files a petition with the ZBA seeking a variance. Since you know how the ZBA works, he asks you to accompany him to the ZBA and to speak on his behalf. Should you do it?

Situation #3 You are a member of the board of directors of your local chamber of commerce and have been for many years. You then run for and are elected to your village council. The chamber later proposes that the chamber and the village enter into a contract in which the village pays the chamber for economic devel- opment services. Should you vote on the contract?

each party to the contract, the amended Act 317 to reduce the scope of the principal terms, and the nature of potential preemption and expressly approve the official’s pecuniary interest. of local ethics regulation in subjects other than public contracts (1997 PA 145). The Finally, Act 317’s prohibitions do not legislative analysis accompanying the bill apply to contracts between public entities, makes it clear the state regulated public utility contracts, and contracts awarded to the lowest qualified preemption is narrow, and therefore, that bidder (other than the public official) upon local regulation—regarding disclosure, receipt of sealed bids pursuant to published conflicts of interest in other situations and notice. nepotism, for example—is permitted. Local officials should consult with their city or

38 Handbook for Municipal Officials Published by the Michigan Municipal League, July 2015 Ethics village attorney to become familiar with enter into contractual. Local public officials such local regulations. seeking to hold two public offices should Local officials should also be aware of first ask whether Act 566 will preclude the 1978 PA 566 (Act 566), which generally dual service as a way to avoid potential prohibits a public officer from holding two embarrassment. For more information, the or more “incompatible offices” at the same League has sample ethics ordinances and time. Act 566 is based upon general policies, an ethics handbook, and the principles of conflict of interest by following One Pager Plus Fact Sheets prohibiting a public official from serving in available at mml.org: two public offices whose duties are directly adverse to one another. “Incompatible  Ethics: Contracts of Public Servants offices” is defined to mean public offices with Public Entities held by a public official which, when the  Ethics: Incompatible Public Offices official is performing the duties of either - 2010 Updates public office, results in:  Ethics: Misconduct in Office by 1. subordination of one office to another, Public Officers 2. supervision of one office by another, or  Ethics: Standards of Conduct for 3. a breach of duty. Public Officers/Employees The has said that a breach of duty occurs if the two Conclusion governmental entities in which the official Local elected officials should be mindful of holds offices are parties to a contract or the relevant laws governing ethical issues.

Ethics answers

Situation #1: No. Act 196 states that a local public official shall not participate in the granting of subsidies, issuance of permits or certificates, or any other regulation relating to a business entity in which the official has an interest. An exception may be available, but only if the official’s participation is necessary to achieve a quorum. The Attorney General has said that if the council person does participate, the council action may be void or voidable where the person’s vote was determina- tive. See OAG No. 5864 (1981); OAG No. 6005 (1981).

Situation #2: No. The Michigan Court of Appeals has labeled this situation as “patently improper” and an abuse of public trust for the reason that the person making the argument to the ZBA is also one of the people charged with appointing the ZBA. This creates duress on the ZBA, raising doubt about the impartiality of the ZBA’s decision. Any decision made by the ZBA under these cir- cumstances is void. See Barkey v. Nick, 11 Mich App 361 (1968).

Situation #3: No. Although Act 317 grants to part-time officials an exception from the general rule that offi- cials shall not take any part in the approval or negotiation of a contract between the village and any private corporation of which the official is a director, the Act goes on to require that the contract may only be approved by a 2/3 vote of the full membership “without the vote of the [of- ficial].” In other words, Act 317 might permit you to vote, but your approving vote doesn’t count. See OAG No. 6563 (1989). The strict disclosure provisions will apply in any case.

Handbook for Municipal Officials 39 Published by the Michigan Municipal League, July 2015 (Section 2/Chapter 8)

Act 196 and Act 317 provide a good starting point for local elected officials to assure themselves that they are acting appropriately. Adhering to the provisions of these statutes will give you the comfort of knowing, if and when your friendly reporter pulls you aside, that you will be giving the right answers.

Materials for this chapter provided by Michael McGee, principal in the law office of Miller, Canfield, Paddock and Stone, P.L.C.

40 Handbook for Municipal Officials Published by the Michigan Municipal League, July 2015

Section 2: Roles and Responsibilities Chapter 9: Influencing State and Federal Legislation

The Michigan Municipal League villages throughout the state, meet several provides wide-ranging public policy times per year (generally quarterly) to advocacy services—both at the state and review and recommend League positions on federal levels—for member cities, villages, specific bills before the Legislature. The and urban townships. committees also conduct an annual review Since the late 1960s, the League has of, and recommend amendments to, the maintained a full-time advocacy and League’s policy statements, which guide lobbying presence at the State Capitol in League staff in discussions and negotiations Lansing through the League’s State and on legislative issues. Federal Affairs Division (SFAD). The Recommendations on legislation and SFAD staff monitors, analyzes, and League policies are then forwarded to the articulates the municipal viewpoint on many League’s 18-member Board of Trustees for of the 3,000 or more bills that are introduced further review and concurrence. In turn, in the Michigan Senate and Michigan House recommended amendments to the League’s of Representatives during each two-year policy statements are then forwarded to the legislative session. SFAD staff interacts League’s member cities and villages for directly with legislative leadership, review, debate, and a final vote at the legislative committee and sub-committee League’s annual business meeting. chairs, individual legislators, and key staff Additionally, at the start of each two- from both legislative chambers. They year legislative session, the League’s communicate the municipal point of view on standing committees recommend a list of a host of policy issues ranging from taxation specific legislative priorities which are and appropriations priorities to public safety, discussed and given final approval by the public works, and environmental concerns. Board of Trustees. SFAD staff also interacts regularly with executive branch staff and top-level officials Municipal Officials’ Role in Lobbying in the various state departments and The strength of the League’s advocacy agencies whose decisions can have an program comes from its base of elected impact on municipal operations. officials from the state’s 533 cities and villages. Our success as a lobbying unit is How League’s Policies and Positions on directly and unmistakably related to their Legislation Are Set level of active participation in an issue. The genesis of the League’s legislative The ultimate success of the League’s policies and positions on specific bills rests aggressive lobbying effort in Lansing with the League’s five standing committees: depends directly on the willingness of Economic Development municipal officials to take the time and Energy, Technology & Environment make the effort to get actively involved in Municipal Finance the process. Time and again, the League’s Municipal Services, and ability to influence the outcome of Transportation and Infrastructure legislation affecting municipalities has These committees, each consisting of hinged on the efforts of Michigan’s mayors, approximately 20 mayors, councilmembers, councilmembers, managers, and key staff to managers, and senior staff from cities and

Handbook for Municipal Officials – Roles & Responsibilites 41 Published by the Michigan Municipal League, July 2015 (Section 2/Chapter 9) contact their legislators and urge support for contact between local officials and their the League’s viewpoint on legislation. legislators will be of great benefit to To ensure that legislative information is championing the municipal viewpoint on a received by municipal officials and acted on bill. in a timely manner, please review our Most often, these meetings with lobbyist blog, Inside 208. legislators and municipal officials are pre- In some instances—upon receiving a arranged, with legislators given background call-to-action communication from the materials explaining the municipal League—a local official will personally call viewpoint. Frequently, however, the League his or her state senator or state will ask local officials to travel to Lansing representative and urge that official to vote a and request a non-scheduled visit with their certain way. In other instances, the legislator during critical committee legislative director will share pertinent discussion or floor debate on an important information on legislative activities with the bill. mayor, village president, council and Almost without exception, these face-to- manager, and coordinate a community or face meetings— if conducted in an region-wide response to their area’s senators atmosphere of cordiality and respect—yield and representatives. positive results and help galvanize strong This communications network—from future relationships. the League to local officials to legislators— is remarkably effective. With few How the League and its Staff Works to exceptions, state senators and state Impact the Outcome of Legislation representatives respond quickly and The League’s State and Federal Affairs positively to phone calls, letters, and emails Division staff in Lansing closely monitors from municipal officials in the home district. the development and introduction of bills Where once councils would simply pass a that are introduced each two-year legislative resolution and hope that the legislator read it session in the Michigan House and Senate. before voting on an issue of importance to This work requires daily, one-on-one cities and villages, now municipal officials interaction with legislative leaders, the have established a direct pipeline into their chairpersons of Senate and House legislator’s office. And it works! committees, and individual legislators who The technique is especially effective are working on issues of interest to cities when legislators are urged by their and villages. municipal officials to contact League League staff also nurtures professional lobbyists for additional technical relationships with key staff in both the information and background on a particular governor’s office and the Legislature who bill or legislative issue. When legislators call play a pivotal role in the conceptualization, the League’s Lansing office at the urging of development, drafting, amending, and final local municipal officials, League lobbyists passage of the bills that the League is respond with timely and insightful following. In addition, League staff information and a clear message that echoes maintains extensive contact with what municipal local officials in their representatives of other interest groups such district have told them. as the Michigan Townships Association, the On occasion—depending on the issue— Michigan Chamber of Commerce, the the League encourages municipal officials to Michigan Manufacturers Association, travel to Lansing and meet directly with organized labor groups, and other local their senator and representative. Once again, government associations such as the this is a situation in which League staff Michigan Association of Counties and the monitors developments, interacts with County Road Association of Michigan. legislators and staff, and then makes a Success in the legislative arena often determination that a direct, face-to-face means building and maintaining coalitions

42 Handbook for Municipal Officials Published by the Michigan Municipal League, July 2015 Influencing State and Federal Legislation

comprised of a wide range of individuals In the last few years, the League has and interest groups who share a desire to see also undertaken an ambitious public a particular bill passed and signed into law relations program designed to bring or delayed for further consideration. additional public attention to the legislative Whenever a bill that will have a issues of its members. significant impact on cities and villages is A typical legislative day will find introduced in the House or Senate, League League lobbyists at the Capitol building by staff analyze the legislation, ascertain its early morning to testify before Senate and effect on municipal operations, and develop House committees and talk with individual a list of influential individuals and legislators. Depending on the legislative organizations with whom the League can schedule, League lobbyists may be scattered partner to advance the municipal viewpoint at several House committee meetings or and secure the desired outcome. stationed outside the senate chamber to talk Michigan is one of a handful of states one-on-one with senators prior to, and with a full-time Legislature. For Michigan’s during, the senate session. By early 38 state senators and 110 state afternoon, the venue changes slightly as representatives, lawmaking is a very League lobbyists attend one of several demanding full-time job. Generally, the senate committee meetings while Legislature is in session at least three days simultaneously monitoring floor action in per week (usually Tuesday, Wednesday, and the house chamber. Breakfasts with coalition Thursday) most weeks of the year. While the partners, lunches with legislative staffers, Legislature does recess for an average of a and an occasional dinner meeting are all part few weeks each spring, two months in the of a routine day for League lobbyists at the summer, and a few weeks at the end of each Capitol. calendar year, the business of discussing, evaluating the impact of, amending, and Michigan Municipal League Publications building support for thousands of legislative The League’s State and Federal Affairs bills continues without pause throughout the Division produces a number of publications year. That means that the work of the to keep member cities and villages up-to- League’s State and Federal Affairs Division date on current legislative and regulatory also continues, without pause, throughout developments in Lansing. the year. Legislative Link – Produced by the League League staff are frequently at the table staff in Lansing, the Legislative Link is a when bills are discussed and amendments brief one-page weekly update on the are drafted. During each legislative session, “happenings” in Lansing and the League participates in dozens of work Washington. This communication is sent groups, task forces, subcommittees, and via email and/or fax. other activities where legislation is analyzed Email Alerts/Advisories – Produced by and final agreements are made. League staff and distributed via the League staff members also consult League’s email network, email alerts are regularly with municipal constituent groups direct calls to action urging municipal such as the Michigan Association of Mayors officials throughout the state to (MAM), the Michigan Local Government immediately contact their state senators Management Association (MLGMA), the and state representatives and urge them Michigan Association of Municipal to vote a certain way on pending Attorneys (MAMA), and the Michigan legislation that is moving through a Chapter of the American Public Works legislative committee or on the floor of Association (APWA), among others. These the Michigan Senate or Michigan organizations help SFAD staff to gauge the House. impact of legislation (and regulatory Targeted email alerts and advisories – decisions) on cities and villages. Occasionally, League staff prepares and

Handbook for Municipal Officials 43 Published by the Michigan Municipal League, July 2015 (Section 2/Chapter 9)

distributes via email, special advisories, often, these communications are sent to alerts and calls to action tailored to municipal officials whose legislators can individual municipal officials. Most provide critical votes on key legislation.

44 Handbook for Municipal Officials Published by the Michigan Municipal League, July 2015

Section 2: Roles and Responsibilities Chapter 10: Training of Municipal Officials

Elected officials of training for the police force in this case In this era of unprecedented change, citizens was reckless and negligent and Harris’ civil expect more of their elected officials. The rights were violated. public expects responsiveness and In a 1995 case, Hilliard v. Walker’s accountability at all levels of government. Party Store, Inc., decided in Federal District What better place to start than at the local Court in Michigan, it was held that a level, where citizens can experience directly municipality may be liable in a federal civil the difference that good decision-making rights action when policy makers are on and ethical standards can make in a actual or constructive notice of the need to community? Local government is more train employees, but fail to adequately do so. important than ever before. People who are The focus must be on the adequacy of elected today must demonstrate their training in relation to tasks that particular professionalism and integrity. employees must perform. As a leader in your municipality, you The common denominator in both cases should place importance on continual is the fact that the government officials in training and updating your knowledge base, charge were not correctly trained to handle as well as emphasizing the development of the situations and to treat the persons the knowledge and skills of employees. concerned with proper care and concern. As an elected official, mindful of the The importance of comprehensive and liability exposures to your municipality, you timely training for municipal employees is should be aware of established and not limited to police officers with respect to its relevance to your municipality. potential liability for the municipality. Although most case law addresses police Case Law officer liability, the concept of failure to The case of Geraldine Harris v City of train may be applied in other areas. Canton, Ohio, decided February 28, 1989, Municipalities must be continually by the U. S. Supreme Court, impacts all aware of the need for training. In terms of local governments in the area of personnel practical application, each person in and training. municipal employment should keep a log Harris, detained by the Canton police, documenting all aspects of individual brought a civil rights action against the city, training. The person in charge of training for alleging violation of her right to receive the municipality should have an identical log necessary medical attention while in police and periodic inspection should be made to custody. The U.S. District Court for the ensure that individual logs are up to date. northern District of Ohio decided in Harris’ New employees should receive written favor and the city appealed. Harris won her policy and procedure manuals and sign a log case against Canton by proving that the that they have received this manual, which Canton police clearly needed better training affirms the municipality’s desire to provide and correct training and orientation. Employees that city officials were “deliberately should be routinely scheduled for training to indifferent” to that need. comply with municipal policies and to keep The U.S. Court of Appeals, Sixth Circuit current with changes in the law as it affects subsequently held that inadequacy of police job duties and responsibilities. A positive training may serve as a basis for municipal aspect of the Canton v Harris decision is liability. The court concluded that the lack that it stimulated the demand for current

Handbook for Municipal Officials 45 Published by the Michigan Municipal League, July 2015 (Section 2/Chapter 10) training and updates on changes in the law and provides the added benefit of having better trained employees. Of top priority today is sharpening techniques and skills to implement higher productivity among public employees while maintaining high quality services and controlling costs. Training for elected officials to assist them in becoming better leaders is a prime focus for the League’s education programming. An intensive Elected Officials Weekender training is held yearly, along with numerous specialty trainings throughout the year. The League also offers the Elected Officials Academy, which as a four level, voluntary recognition program for elected officials. A number of other programs are geared specifically for the elected official. These programs help elected officials hone their skills and gain the knowledge they need to govern and lead citizens in cities and villages throughout the state. Many of these sessions are held in the evening and on weekends for the convenience of elected officials. For more information on education seminars and on-site trainings, call the League at 1-800-653-2483 or visit mml.org.

46 Handbook for Municipal Officials Published by the Michigan Municipal League, July 2015

Section 3: Operations Chapter 11: Written Policies and Procedures

Why you should Put Policies relations between supervisors and and Procedures in Writing employees. In addition, neither supervisor If your municipality is small or if it operates has done anything that will consistently under a relatively close-knit management improve employee compliance with the group, policies may be “understood.” This requirement to wear PPE. means that while you may not have written Managers and supervisors who have policies, managers and supervisors have a worked for the same municipality for a good idea of the municipality’s expectations number of years may think they understand regarding certain basic issues pertaining to its policies. Usually all they really have is a employees. sense of how their peers and predecessors Relying on “understood” policies, have handled similar situations in the past. however, may lead to misunderstandings. Other managers go on instinct, dealing with For example, the department of public each situation as it arises and relying on works (DPW) manager calls a meeting and their own “good” judgment to make the launches into a tirade about the number of right decisions. Either approach will almost employees he sees not wearing appropriate certainly result in inconsistencies. personal protective equipment (PPE). One These inconsistencies can, in turn, result in supervisor may interpret it as a decided shift misunderstandings, grievances, and even in the organization’s policy toward this lawsuits. There have been many instances requirement. She responds with a sudden where managers and supervisors have taken crackdown on lapses in following PPE a single manager’s decision—with no requirements in her area, disciplining every written policy to back it—as “policy employee who fails to wear PPE when setting.” The decision has then influenced appropriate. Another supervisor, present at many similar decisions by other managers the same meeting, does not take the and supervisors throughout the organization. manager’s tirade as seriously. He knows that If the original decision was sound, this may some lapses will occur. Besides, he is not result in any immediate disastrous certain that the manager was not directing consequences. What happens, however, if his comments at his area. He knows there that manager acted illogically, irrationally or are other areas within the DPW and other even illegally? Managers and supervisors departments that are far less strict about PPE who think they are in accordance with than he is. So he decides to sit tight for a municipal policy may repeat the original while and wait for this “storm” to blow over error in judgment many times. before he does anything drastic. These kinds of situations illustrate why Just imagine the kind of resentment and a policy manual is absolutely essential in frustration a situation like this might create. today’s complex, competitive, and What if two employees from the department regulation-ridden work environment. share rides to work and begin to compare Employers cannot expect their managers or notes on how their supervisors reacted to the supervisors to keep up with the many forces manager’s tirade? The individual whose that continually shape a municipality’s supervisor disciplined him will have every policy. Among these forces are the latest reason to feel angry and put upon. On an changes in the law, changes in the character organization-wide basis, this can mean of the work force and its expectations, and lower morale and productivity, more changes in operations. There should be a grievances, and understandably poor single, current, authoritative source of

Handbook for Municipal Officials – Operations 47 Published by the Michigan Municipal League, July 2015 (Section 3/Chapter 11) guidance and information that they can use explaining an unpopular decision to when making decisions or enforcing policy. employees, or when a supervisor must This will reduce the tendency to act on decide a course of action that runs contrary memory or instinct. With a policy manual, to his or her instincts. managers and supervisors will be able to act decisively, fairly, legally, and consistently. How are Policies Made? Employees will also know that their Most policies are a natural outgrowth of the managers or supervisors are acting in decision-making process. A manager who accordance with municipal policy as well as faces a situation or problem for the first time applicable federal and state regulations. evaluates it and makes a decision or issues Of course, a policy manual may not an order that he or she feels is appropriate. answer all your problems. Your supervisors While this decision may not present an must know what your policies regarding immediate problem, it could lead to employee safety and health are, and complications later. Let’s say that a similar understand the reasons behind them. situation arises later, but under slightly or Without this understanding, you cannot quite different circumstances. The manager expect them to carry the policies out with who must make the decision this time the commitment that is so vital to their around has to revise the original to fit these effectiveness. changed circumstances. After a period of Take your right-to-know program as an time, you have many supervisors and example. Let’s say a supervisor must hire a managers making totally different decisions large number of summer workers and get in the same area while believing that they them in the field quickly. The supervisor are adhering to “organization policy.” knows it is your policy to provide all new Most policies develop from past hires in that department with right-to-know practices—good or bad, fair or unfair. Even training as the Michigan Occupational in organizations where a policy manual Safety and Health Act (MIOSHA) requires. exists, these past practices can continue to However, the supervisor has projects that influence managerial decisions. In other need immediate attention and would like to words, managers cannot ignore them. ignore the requirement, especially since the The best policy is one that arises from employees are short-term. If supervisors do the best decisions of the past. It should not understand how failure to comply with incorporate the careful thought, the good MIOSHA might result in injury to judgment, and the valuable experience of all employees and/or fines to the municipality, managers who have faced problems or they may not cooperate with your efforts to decisions in a particular policy area. This provide employees with a safe and healthful process should eliminate the irrational, workplace. illogical, and unfair decisions that have Good written policies do more than help contributed to inconsistent application of the supervisors and managers make difficult organization’s policy. Most important of all, decisions and enforce rules. They provide a good policy is a natural outgrowth of the the framework and background for such organization’s management philosophy and decisions, so that supervisors can explain to overall objectives. It helps management their subordinates (and to themselves) why a direct the organization according to its certain action or decision is the right one established goals and mission. under the circumstances. Some policy More specifically, policy development manuals give a brief introduction to each occurs when a group of people—a policy policy, stating the reason a policy is committee—meets and reaches consensus necessary in this area, and what the on specific policy statements. Committee organization hopes to achieve through members review past practices and the implementation of the policy. Such traditional approaches to certain situations information is invaluable when it comes to as well as the latest legal requirements and

48 Handbook for Municipal Officials Published by the Michigan Municipal League, July 2015 Written Policies and Procedures management techniques. They try to pool the supervisor or manager in charge has an their ideas and experiences, iron out opportunity to improve communication and differences of opinion, and come up with understanding with the employee(s) policies that are both fair and workable. involved. Ideally, representatives come from the A policy manual is an excellent employee, supervisory, and management training resource. You can use the manual ranks. This helps to assure that the both in training newly hired or promoted committee considers the interests of all three supervisors and in conducting refresher groups during policy formulation. Policy courses for experienced supervisors. Some development should also include a organizations have actually structured their procedure for enforcing, reviewing, and supervisory training programs to correspond updating the policies. with the manual’s table of contents. You can develop and use case studies to illustrate What Purposes Does problems. Case studies can be particularly a Policy Manual Serve? useful when discussing employment-related A well written, up-to-date policy manual safety issues. The manual can serve as a guides managers and supervisors in making guide in deciding the right way to handle decisions, training, and handling these hypothetical situations. employment issues that relate to safety and A policy manual serves as written health. A policy manual also offers other documentation of the organization’s less obvious benefits. Consider the commitment to its employees’ safety and following: health. Simply having policies on personal A policy manual serves as a basic protective equipment or right-to-know does communications tool. The very process of not guarantee that you are in complete compiling a policy manual includes a survey compliance with the law. of managers’, supervisors’, and employees’ However, having policies can be helpful if views on each subject or policy area. This an employee files a complaint and someone process provides top management with an from MIOSHA comes to inspect your opportunity to find out where their staff operations. If you can show the MIOSHA stands and how they feel about certain inspector that you have clearly stated and issues. Top management can also learn what widely publicized policies in these areas, it steps the management staff would like to see will be viewed positively for you. It can also the organization take, what areas are giving help to reduce any fines you might receive if them problems, and where confusion and the MIOSHA inspector finds violations. misunderstandings lie. In other words, the A policy manual saves time. Your policy formulation process is perhaps the managers and supervisors will not waste best opportunity that an organization’s top hours coming up with decisions that others managers will have to communicate with its have made before. They will not have to management team on subjects of mutual struggle with how to handle a “delicate” interest. In return, supervisors and managers situation. They will not have to wonder if get a chance to find out exactly where top management would approve of their actions. management stands on these issues. If your policy committee researches and The important thing to remember about writes the policies well, supervisors and policy manuals, however, is that managers will have all the information and communication should not stop once the support they need to carry out top committee completes the manual. On the management’s objectives. contrary, this should be where the real These and other reasons make it communication—between supervisors and desirable to have a safety policy and employees as well as between supervisors procedures manual. In addition, there are and their superiors —begins. Every single other reasons that make such a manual all time a question concerning a policy arises, but mandatory if you are to fulfill your

Handbook for Municipal Officials – Operations 49 Published by the Michigan Municipal League, July 2015 (Section 3/Chapter 11) obligations to serve the public and to Reprinted with permission from the preserve all its resources—human, material, Michigan Municipal Worker’s and monetary. The regulatory requirements Compensation Fund’s, Safety, Health and that MIOSHA imposes frequently change. Resource Manual. Without current, documented policies and procedures, managers and supervisors are likely to make some mistakes in the area of safety and health that can lead to costly losses. Another reason for developing a policy manual is the increasing difficulty of managing and controlling complex operations. For example, in some organizations, managers of relatively small departments often make decisions that can affect the entire organization. It may not be possible or even desirable to control all management decisions under circumstances like these. It is, however, desirable to provide managers with a framework within which they can make their own decisions on important or sensitive issues in a fair and consistent manner. Another important reason for having a policy and procedure manual is requirement in some MIOSHA standards for organizations to provide information to their employees. Employees in particular are becoming more outspoken about their desire to know what regulatory agencies require of their employers. They are most likely to bring their concerns to their immediate supervisors or department heads. It is, therefore, essential that these managers have a resource to which they can turn to provide the requested information. A policy manual is more than an item you might want to have. It is something you must have to preserve your ability to serve your public, to attract and retain satisfied employees and to reach your objectives through logical and consistent management decision-making.

50 Handbook for Municipal Officials Published by the Michigan Municipal League, July 2015

Section 3: Operations Chapter 12: Municipal Service Options

Introduction seeking other service production and A principal responsibility of local provision partners due to economic government policy bodies is to determine constraints. the mix of community services to provide to This chapter is intended to provide local residents. While variation or mix of municipal officials with both a conceptual services is noted among municipal framework and practical guidelines for governments, each unit makes four basic exploring ways to provide municipal decisions about services: services other than through self-production 1. method of organization, production and and provision. provision; 2. quantity of services to be produced and Community Service Production provided; and Provision Options 3. quality of services to be delivered; and Communities, given a choice, would prefer 4. how to pay for services provided. to self-produce and provide municipal services. Any other option to service These decisions are somewhat provision increases transaction costs interdependent, but can be addressed (negotiating with someone else, public or separately. private) and local officials perceive a loss of The basket of services provided by control when joining with other units for municipalities to residents varies widely in service provision. Michigan. Citizen expectation as to what services are desired beyond the basic Why Seek Alternatives to constitutional duties of assessing property, Self-Production of Service? collecting property taxes and administering Communities explore alternatives to self- elections are articulated through the political production and provision when faced with process and imbedded in the city charter. excess service capacity, financial stress, The Home Rule City Act requires the capacity constraints (financial or human provision of police, fire, sewer, and water capital), spillover benefits or costs services to residents. Note, the key word is associated with the service, or as a means of “provision;” the Act does not require the sharing risk. city to be the “producer” but in most For example, fire protection and circumstances, cities both produce and emergency service production requires provide the varied sets of urban services. significant financial investment in As both a producer and provider of equipment and accessories, training of selected services such as police, fire, personnel, and management. Once the fire recreation, sewer, water, and other utilities, suppression or emergency response capacity excess capacity is often present, thus is generated, excess capacity is often created enabling the city to become a seller of since emergencies do not occur frequently or services to neighboring local units. As regularly. adjacent jurisdictions increase in population, Communities with excess capacity and migration from the central city to attempt to sell a portion of the capacity to surrounding areas occurs, cities and villages neighbors, thus a buyer-seller relationship is may find themselves in a situation of established.

Handbook for Municipal Officials – Operations 51 Published by the Michigan Municipal League, July 2015 (Section 3/Chapter 12)

City government, as a population center, of Michigan municipal governments have historically became the producer and privatized. provider of fire services, and in many cases, sold fire suppression activity to neighboring Consolidation of services townships. As a practical matter, a city A final option is the consolidation of would be unwilling to sell services to an municipal services. area outside of the incorporated territory if Three types of consolidation exist: they lacked the capacity or were unable to  functional, obtain compensation to cover the marginal  geographic, and costs of the additional service requirements.  political. Functional consolidation might include Intergovernmental contracting specific service functions such as fire, The buy-sell, or intergovernmental police, sewer/water, assessing, road contracting, method to obtain municipal maintenance, or solid waste collection. Such services is by far the most common method arrangements would involve two or more of service provision once self-production is local government units with each legislative not feasible. body appointing representatives to an Joint production arrangements and oversight board. intergovernmental contracting for services The consolidation of school districts is represent cost-effective means to obtain an example of geographical consolidation. services or provide services to units lacking The political boundaries of a the financial capacity. The key to consolidated are not developing viable and endurable consistent with the general-purpose intergovernmental arrangements is to governments, but cut across boundaries. So, develop a concise and detailed a separate governing body (school board) is intergovernmental agreement. established to provide oversight. Intergovernmental arrangements require The most difficult consolidation to patience, perseverance, compromise, and achieve is political; that is, merging two or most of all, an open mind. more separate units of government into a new government. Joint Service Production The most recent example is the through Authorities consolidation in the Upper Peninsula of the Joint production of service may take several cities of Iron River and Stambaugh and the forms. A municipality may join forces with village of Mineral Hills. This merger was an adjacent community to provide services approved by voters on November 2, 1999 such as fire, police, ambulance, sewer, and took effect July 1, 2000. The new city water, emergency dispatch, solid waste, land was called Iron River. use planning, building inspection, and Another example of political recreation, to name a few. consolidation is Battle Creek Township and The city may join with neighboring the city of Battle Creek, although technically local governments to establish a special the merger between the city and township assessment district with a defined service was accomplished through annexation. As district. Increasingly, local units are creating one would expect, political consolidation is authorities as a means of producing and difficult to achieve since a sense of providing a service and sharing both community and community identity is financial and associated risks. involved.

Privatization of Services Legal Authority for Contracting and When adequate private market options are Alternative Delivery Systems available to the community, service The State of Michigan has permissive provisions may be privatized. Solid waste legislation enabling local governments to collection is a service that a large percentage

52 Handbook for Municipal Officials Published by the Michigan Municipal League, July 2015 Municipal Service Options engage in contracting, consolidation and protection, “skeletons in the closet,” joint ventures for service provision. uncertainty of the sustainability of the joint Basically, if a local government unit has the agreement, and the perception that “hidden authority to engage in the provision of a agendas” are present may constrain viable service to residents, the entity may provide partnerships from materializing. Local the service through a contractual residents and public officials often shy away arrangement (public or private). from joint production arrangements due to The Legislature has enacted a number of the perception that service quality and intergovernmental statutes specific to quantity will change once the unit engages municipal services, such as fire, police, in a joint or contractual venture. sewer, water, and other utilities. In 1967, during a specifically called Methods of Cost Allocation under session of the Legislature, two broad Joint Production Arrangements intergovernmental statutes to facilitate The method of sharing and allocating cost intergovernmental contracting and shares under a joint production or cooperation were enacted. The Urban contractual arrangement is often critical to Cooperation Act (1967 PA 7) and the success and failure of joint ventures. A Intergovernmental Transfers of Functions necessary step in negotiating sustainable and Responsibilities Act (1967 PA 8) are joint ventures involves developing a clear frequently used for buy-sell contracts and rationale as to why a particular cost joint production arrangements for a variety allocation method has been selected. of community services. The popularity of Allocating cost shares is a separate the two statutes is in part due to the decision from selecting a method to finance flexibility of the laws permitting local the service. In joint production governments to tailor agreements to the arrangements, sharing costs and generating specific needs of the communities. The two monies needed to finance a service become statutes do not provide taxation authority, somewhat muddled. The strengths and thus necessitating contracting parties to weaknesses of a number of cost allocation negotiate the terms, conditions, financing, methods will be discussed to illustrate how and method of cost-sharing for the services the distributional consequences change exchanged or provided. under each method. The Emergency Services Authority Act (1988 PA 57) provides general-purpose Relating Benefits to Costs governments with the ability to create a A basic guiding principle in allocating cost special unit of government (an authority) to shares is: where possible, relate benefits provide police, fire or emergency service for (services received) to the costs of production a unit or in a multiple arrangement. The and provision. Identifying service demand advantage of creating an “authority” to gets complicated with services such as produce and provide the service is that the police, fire, emergency response services, or new entity is an independent body with its economic development. Other services such own appointed board, bylaws, and capacity as sewer and water, streets, sidewalks, to levy millage in support of the enterprise. curb/gutters, street lighting, inspection, tax Levying millage to support an authority assessing, etc., lend themselves to easier requires voter approval. identification of beneficiaries and demand.

Obstacles to Contracting Factors to Consider in and Joint Ventures Allocating Cost Shares Joint or contractual partnerships may be Buy-sell, contractual, or co-production/ impeded due to the transaction costs, (the provision arrangements for providing costs of reaching joint decisions). The fear community services present a challenge to over the perceived loss of control, turf both the producer (seller) and buyer. The

Handbook for Municipal Officials 53 Published by the Michigan Municipal League, July 2015 (Section 3/Chapter 12) seller is concerned about covering the total the costs). Local governments can use costs of producing and providing services, general fund revenues, extra-voted property maintaining service capacity and taxes, special assessment, user fees, third establishing the price to charge for the party payments, grants and donations/ services rendered. contributions to fund community services. Buyers, on the other hand, are Each financing strategy carries issues that concerned about not being overcharged for need to be resolved by the body politic. the service since many municipal services General fund revenues are used to are provided in a monopoly environment. finance services that are made available to A variety of options are available to all community residents. Units engaging in local governments when it comes to co-production arrangements for service allocating cost shares under joint ventures provision often use general fund monies (if and co-production arrangements. Units that available) to support such activities, but with are similar in size and demographic stressed budgets, local governments have composition and engage in joint ventures sought alternative sources of funding. will find that an equal division of cost shares Extra-voted property taxes have presents no problems. The more dissimilar become a common means of supporting communities are when entering into joint local services and are a way to expand production arrangements, the more creative service delivery. Local governments they need to be to insure equity in cost frequently go to the voters requesting sharing. Developing a weighted cost share additional millage levies for police and fire formula that includes factors that influence protection, library, buildings, recreation, demand is most fair. This type of new technology acquisition, emergency “weighted” formula works well with services and 911, all aimed at maintaining or services such as fire, police, ambulance, expanding the level of output of services. library and recreation. Population density, Extra-voted revenues become restricted congestion, household income or other revenues and are treated as special revenue demographics may influence demand. funds (meaning that their use is limited for a Population may be the appropriate factor specific activity). in determining cost shares for jointly Special assessment levies are the produced planning and development financing strategy most municipalities services. Or, a combination of population prefer. Special assessment districts are and tax base could be used since the output formed when the beneficiaries of a service from planning and development has or public improvement are clearly applicability to a wide variety of users identifiable, such as the case of streets, (governments, private firms and sidewalks, street lighting, drains and individuals). curb/gutters. Increasingly, local Jointly produced infrastructure services, governments use the special assessment such as sewer and water, present less of a districts to provide fire, police, ambulance, challenge. Variable costs are easily and recreation services. Technically, special identified and are related to consumption. assessment levies are not considered Units contracting for services are also property taxes, although property value is concerned with whether the supplier of used as the base upon which the levy is services will accommodate their specific assessed. needs. User fees and service charges, in large part, eliminate the problem of benefits not Financing Joint Ventures being related to costs of the service received. Financing joint ventures represents a critical Beginning in the mid-1980s, local decision point, for the selected finance governments began to rely more on user fees method has far-reaching distributional and service charges to support community consequences (who benefits and who pays services. This was especially true after the

54 Handbook for Municipal Officials Published by the Michigan Municipal League, July 2015 Municipal Service Options demise of the federal revenue sharing Past Relationships Impact program in 1986 as units scrambled to Joint Agreements replace federal monies. User fees increase Joint production arrangements and buy-sell administrative costs due to collection, agreements are influenced positively or monitoring and accounting, but help to negatively by intergovernmental regulate demand for the service. relationships. Municipalities often find that User fees are increasingly being used to border disputes (annexation), conflict over support fire run calls, selected police economic development location, and past services (such as obtaining an accident disagreements inhibit the capturing of report for an carrier) and benefits from joint relationships. The ambulance calls. Even if a governmental passage of the Conditional Land Transfer unit is producing and providing a service Act, 1984 PA 425, was adopted in part to through the general fund or special millage, create a cooperative spirit between adjacent local units may assess a user fee. communities and to minimize conflict Third party payments can partially related to annexation by the sharing of rents support services such as emergency services, from economic development projects. police, fire and ambulance. Homeowner and One of the key roles that elected auto insurance policies, in most cases, officials can assume is that of contain provisions for reimbursing “intergovernmental leader.” Political policyholders for costs incurred in boundaries often become walls even when ambulance and fire suppression the lowering of the barrier would result in calls. Though local governments incur mutual economic and service gains for both additional costs in billing customers who use jurisdictions. Building relationships with emergency services, third party payments neighboring jurisdictions is the first step in can assist in offsetting costs for service addressing intergovernmental production provision. If a unit decides to bill residents and provision options. or users of emergency services for emergency response, an informational campaign is needed to inform citizens of the Based on materials provided by Lynn R. new strategy. Residents may have to check Harvey (retired) professor and extension with their insurance carriers to see if such specialist for state and local government, coverage is provided or if a rider can be Department of Agricultural Economics at purchased. Charging users for emergency Michigan State University. services permits a service provider to charge non-community residents for services used. Obviously, local governments can combine financing options to provide community services. Utilizing extra-voted millage to support a service does not preclude the use of third party payments. Or a base level of service can be financed through general fund revenue and additional services through the collection of user fees and service charges. Local officials need to examine each revenue option and determine which method matches their community’s needs.

Handbook for Municipal Officials 55 Published by the Michigan Municipal League, July 2015

Section 3: Operations Chapter13: Employment and Personnel

A proactive approach to employment related An employer may charge a fee for copying issues can pay substantial dividends in the personnel records, which is limited to the reduced legal challenges and associated actual incremental cost of duplicating the costs. Municipalities should review the information. following ten potential problem areas: The Bullard-Plawecki Act defines 1. Pre-Employment Inquiries personnel record as a record kept by the 2. Personnel Records employer that identifies the employee and is 3. Disabilities Discrimination used, has been used, or may be used relative 4. Workplace Violence to an employee’s qualifications for 5. Harassment employment, promotion, transfer, additional 6. Fair Labor Standards Act compensation and/or disciplinary action. An 7. Independent Contractors employee is entitled to review his or her 8. Family Medial League Act (FMLA) personnel records whether the information is 9. Employment Posters kept in a single “personnel file” or in a 10. Employee Documentation number of files. Any medical-related information Pre-Employment Inquiries pertaining to an employee must be kept While most employment disputes involve confidential, in a separate locked cabinet, current or former employees, a municipality apart from the location of an employee’s must be aware of issues related to applicants personnel records. as well. Employers should familiarize Personnel records do not include: themselves with the guidelines and  Employee references supplied to an procedures of the issues listed below as they employer if the identity of the person apply to both pre-employment interviews making the reference would be and information requested on an application disclosed; form:  Materials related to the employer’s staff  Protected classification planning with respect to more than one  Disabilities and medical history employee, including salary increases,  Accommodating applicants management bonus plan, promotions,  Arrest and conviction records and job assignments;  Physical and medical examinations  Medical records;  Drug testing  Information of a personal nature about a  Background checks person other than the employee if disclosure of the information would Personnel Records constitute a clearly unwarranted invasion of the other person’s privacy; Under the Bullard-Plawecki Employee Right  Information that is kept separately from to Know Act, employers are required to other records and relates to a criminal allow former and active employees to investigation; review and obtain a copy of his or her  Records limited to grievance personnel records upon written request and investigations which are kept separate at reasonable intervals. Generally, an from other records and not used for employee’s review is limited to no more purposes of qualifications for than twice a year unless otherwise provided employment, promotion, transfer, by law or a collective bargaining agreement.

Handbook for Municipal Officials – Operations 56 Published by the Michigan Municipal League, July 2015 Employment and Personnel additional compensation, or disciplinary status, height, weight, disability, or other action; protected classes established through state or  Records maintained by an educational federal law or by local ordinance. institute which are directly related to a Prevention is the best tool employers student; and have to eliminate harassment in the  Records kept by an executive, workplace. They can do this by establishing administrative or professional employee an effective complaint or grievance process, that are kept in the sole possession of providing anti-harassment training to their the maker of the record and are not managers and employees, and taking accessible or shared with other persons. immediate and appropriate action when an employee complains. Additional information Disability Discrimination on harassment can be found at Both the federal Americans with Disabilities www.eeoc.gov. Act (ADA) and the Michigan Persons With Disabilities Civil Rights Act, 1976 PA 220 Fair Labor Standards Act (FLSA) (PWDCRA), prohibit an employer from The Fair Labor Standards Act establishes the discriminating against a qualified individual minimum wage, overtime pay, with a disability in regard to application recordkeeping, and child labor standards procedures, hiring, promotion, termination, affecting full-time and part-time workers in compensation, job training and other terms, the private sector and in federal, state, and conditions, and privileges of employment if local governments. Special rules may also the applicant or employee can perform the apply to state and local government essential functions of the position, with or employment involving fire protection and without an accommodation. Reasonable law enforcement activities, volunteer accommodation is a key requirement of the services, and compensatory time off in lieu ADA and the PWDCRA since many of overtime pay. More information on the individuals may be excluded from jobs that Fair Labor Standards Act can be found at they are qualified to perform because of www.dol.gov. unnecessary barriers in the workplace. Exempt or Non-Exempt Workplace Violence An employer must classify of each Workplace violence continues to be a employee as either exempt or non-exempt significant issue for employers. Violence in according to the FLSA. Non-exempt the workplace obviously affects employee positions are legally entitled, whereas safety, well-being, and productivity. An exempt position are not. To determine if a employer may be held responsible for the position is exempt, it must meet the duties actions of its employees. In addition, the and salary test of the FLSA. courts have recognized claims against employers based upon negligent hiring, Overtime Considerations supervision, and retention of employees. Both the federal Fair Labor Standards Act Also, the “general duty” clause in the federal and a similar Michigan statute require that Occupational Safety and Health Act of 1970 overtime be paid at 1.5 times a non-exempt (OSHA) has been extended to cover employee’s regular rate of pay for each hour incidents of workplace violence. over 40 worked in a workweek. Averaging of hours over two or more weeks is not Harassment allowed even if the employee is paid biweekly. The Act does not require that an Employees have a right to work in an employee be paid overtime for hours worked environment free from unlawful harassment in excess of eight per day, or for work on in the workplace including: sexual weekends or holidays, so long as the harassment and harassment of employee does not work more than 40 hours discrimination based on race color sex, age, in a week. religion, national origin, marital or veteran

Handbook for Municipal Officials 57 Published by the Michigan Municipal League, July 2015 (Section 3/Chapter 13)

The act does not consider paid times their regular rate of pay for all hours holidays, sick time, and vacation leave as worked in excess of 40 hours per week. hours worked. An employee’s meal period Under Section 207(k) of the act, however, can also be excluded from compensable police and fire employees who have an working time if it is at least 30 minutes long established and regularly recurring work and the employee is completely relieved of period that is not less than seven consecutive all duties and free to leave the workstation. days nor more than 28 consecutive days are Rest periods or coffee breaks 20 minutes or only entitled by the statute to receive shorter must be counted as hours worked. overtime pay if they Whether rest periods longer than 20 minutes work more than the maximum number of count as hours worked depends upon an hours established by law for their work employee’s freedom during the breaks. period. For employees having a 28-day work period, Compensatory Time or Overtime overtime must be paid for hours worked in The FLSA authorizes a public agency to excess of 171 (law enforcement) or 212 (fire provide compensatory time (comp time) off protection). These figures are prorated for in lieu of overtime compensation, at a rate of employees whose work periods are less than not less than 1.5 hours for each hour of 28 days. For example, police and fire overtime worked. In order for the use of employees with a seven-day work period comp time to be allowed, there must be an must be paid overtime after 53 and 43 hours agreement or understanding between the of work, respectively. An employer can employer and employees. agree by union contract, or otherwise, to pay An employee who has accrued comp overtime for fewer hours worked. time and wishes to use the time must be permitted to do so within a “reasonable Independent Contractors period” after making the request if it does There are a number of benefits to utilizing not “unduly disrupt” the operations of the the services of an independent contractor to agency. Undue disruption must be more than perform functions for your municipality. At mere inconvenience to the employer. the same time, there are considerable risks in Even where there is a comp time incorrectly designating a person as an agreement, an employer may freely independent contractor when he or she is substitute cash, in whole or in part, for comp really an employee. This exposure includes time. In addition, the U.S. Supreme Court liability for back taxes, overtime has ruled that nothing in the FLSA prohibits compensation, medical expenses, and costs a public employer from compelling the use related to completing the work assignment. of comp time. Upon termination of The existence of an employer-employee employment, an employee must be paid for relationship versus an independent all unused comp time figured at: contractor relationship depends, to a large (a) the average regular rate received by the extent, on the amount of control the employee during the last three years of municipality exerts over the worker. employment, or The Internal Revenue Service provides (b) the final regular rate received by the rules that help an employer employee, whichever is higher. determine the degree of control and independence of a possible independent Overtime Rules for Police and Fire contractor. These include: In addition to the difference in maximum 1. Behavioral: Does the employer control comp time accrual caps, the FLSA provides or have the right to control what the another very significant difference for public worker does and how the worker does employees engaged in law enforcement and his or her job? fire protection activities. As a general rule, 2. Financial: Are the business aspect of the employees must be paid overtime at 1.5 worker’s job controlled by the payer?

58 Handbook for Municipal Officials Published by the Michigan Municipal League, July 2015 Employment and Personnel These include things like how the worker is paid, whether expenses are Employers Subject to the FMLA Currently, a private sector employer must reimbursed, who provides the tools, employ 50 or more employees in 20 or more equipment, and supplies, etc. workweeks in the current or preceding 3. Relationship Type: Are there any written contracts or employee-type calendar year. Public employers, however, benefits? Will the relationship continue are covered without regard to the number of and is the work performed a key aspect employees employed. This is somewhat of the business? misleading because even if a small public employer is technically covered by the Family and Medical Leave Act (FMLA) FMLA, the employee will not be eligible under the Act unless he or she works within The Family Medical Leave Act of 1993, 29 75 miles of 50 employees of the employer. U.S.C. §2601 et seq., entitles eligible

employees of covered employers to take Eligible Employees unpaid, job-protected leave for specified Only eligible employees are entitled to family and medical reasons. Eligible FMLA leave. An eligible employee is one employees who work for a covered who: employer are entitled to:  Works for a covered employer (all  Twelve workweeks of leave in a 12- month period for: public employers are “covered employers”);  the birth of a child and to care for the newborn child within one year  Has worked for the employer for at least of birth; 12 months;  Has at least 1,250 hours of service for  the placement with the employee the employer during the 12-month of a child for adoption or foster period immediately preceding the leave; care and to care for the newly and placed child within one year of  Works at a location where the employer placement; has at least 50 employees within 75  to care for the employee’s spouse, miles. child, or parent who has a serious health condition; Employment Posters  a serious health condition that Both federal and state labor regulations makes the employee unable to require employers to clearly display labor perform the essential functions of and employment posters detailing applicable his or her job; labor laws. These posters should be posted  any qualifying exigency arising in a conspicuous area available to all out of the fact that the employee’s employees. Both federal agencies, such as spouse, son, daughter, or parent is the Department of Labor, and state agencies a covered military member on have these posters available at no cost and “covered active duty;” or several vendors also provide applicable  Twenty-six workweeks of leave during a posters as updates occur for a small annual single 12-month period to care for a fee. covered service member with a serious injury or illness if the eligible employee Employee Documentation is the service member’s spouse, son, Too often employers cannot establish the daughter, parent, or next of kin (military appropriateness of an adverse employment caregiver leave). action due to a lack of documentation. Having fair, accurate, and non-biased documentation of employee behavior and performance can establish that the adverse

Handbook for Municipal Officials 59 Published by the Michigan Municipal League, July 2015 (Section 3/Chapter 13) action wasn’t related to discrimination based established through state or federal law or on race, color, sex, age, religion, national by local ordinance. Without documentation, origin, marital or veteran status, height, it may become difficult for the employer to weight, disability, or other protected classes defend its actions against an employee.

60 Handbook for Municipal Officials Published by the Michigan Municipal League, July 2015

Section 3: Operations Chapter 14: Labor Relations

Many elected municipal officials find executives who can handle negotiations. themselves caught in a trap because they Councilmembers are sometimes tempted to allow themselves to be drawn into the local get directly involved. This is almost always labor relations process. The trap is such that, a mistake. the more you squirm, the tighter the For one thing, it is not wise for the bindings get. Elected officials are bound to ultimate decision-maker to face the union aggravate some constituents no matter what across the bargaining table. An argument they do. often used by union negotiators is “I don’t The solution, with labor relations, is to think I can convince my membership of avoid getting involved in the process as your position.” Management negotiators much as possible. Mayors in strong mayor need to be able to use the same argument, governments are an exception because, as either expressly or by implication. There chief executives, they must direct the labor needs to be some unseen person or persons relations in their cities. All other officials, who are hard to convince. If the council is especially councilmembers, would be well right there at the bargaining table, obviously advised to stay away from labor relations. the management negotiators cannot use the However, keeping out of the labor same argument when they are cornered. relations process is easier said than done. Another reason to exclude elected Inevitably, city or village councils must officials from the bargaining team is that approve all labor agreements. They must they may not be skilled negotiators. Most also adopt budgets which affect, and are people negotiate many aspects of their daily affected by, negotiated agreements. lives, but labor negotiations require specific Councilmembers have a responsibility technical knowledge. Experience in to vote intelligently and with the best negotiating the price of a house or used car interests of the entire community in mind. or the settlement of a lawsuit is, To do this, they must be well informed. unfortunately, of very little practical use in However, becoming informed leads to a labor negotiations. degree of unavoidable involvement. For Also, experience in private sector labor instance, it would be a council’s duty to not negotiations is very often of limited use in approve a labor agreement that would public sector labor negotiations. The issues, bankrupt the municipality. But such a choice though similar in appearance, are usually should never have to be made. There are quite different in substance. The life specific steps to take to avoid it. experiences of most elected officials will The goal as elected officials is to stay as help them judge a labor agreement they are far removed from the labor relations process asked to approve, but do not qualify them to as possible. At the same time, elected actually negotiate it. officials should be able to fulfill their The last reason for an elected official responsibilities. not to be on the bargaining team is political. Issues in labor negotiations stir the Stay Off the Negotiating Team emotions. Members of management First, elected officials should not be on the negotiating teams routinely must say “no” to management negotiating team. In most union representatives who passionately municipalities, elected officials rarely believe in the justice of their proposals. consider this role. However, in smaller Management negotiators are often perceived communities, there are not always enough as stingy and mean. Frequently union

Handbook for Municipal Officials 61 Published by the Michigan Municipal League, July 2015 (Section 3/Chapter 14) negotiators do not realize that they are told involvement is minimal. In a town with an “no” simply because management cannot elected chief executive, the council can quite say “yes.” The elected official who is one of properly exercise no involvement until it is the people at the table saying “no” is called upon to approve the negotiated labor alienating constituents. agreement. If the council feels it needs to discuss the negotiations prior to their Avoid Discussing Negotiations completion, it should do so only under Elected officials also should avoid carefully controlled circumstances. discussing labor negotiations. Do not voice a Whatever the degree, the method of such position. No matter what your position is on involvement is important. the labor issue, someone will disagree with Michigan’s Open Meetings Act permits it. When the council is presented with a a public body to meet in closed session to negotiated labor agreement for approval, the discuss labor negotiations. Using a closed or differences have been worked out and the executive session can be an effective way parties have agreed to it. Both parties are, in for a city council to exercise some control effect, asking for the same thing. If any over the city’s negotiators without opinion is expressed prior to that, an official disrupting the collective bargaining process. will be perceived as taking sides and will However, this will only work if strict alienate someone. confidentiality is subsequently maintained. The worst possible situation is the councilmember whose next-door neighbors Suggest Broad, General Guidelines are the union president on one side and the It is important that the council avoid tying leader of the citizens’ committee for tax the hands of its negotiators by mandating reduction on the other. A councilmember in specific bargaining outcomes. Broad, such a position can only say to both, “I don’t general policy guidelines can be helpful to a believe it would be appropriate to discuss negotiator, but absolute, specific instructions the negotiations,” or “I believe in a fair can be crippling. day’s work for a fair day’s pay and I hope For example, if a city council insists a the negotiators reach an agreement to that particular fringe benefit be abolished or a effect.” particular work rule be established, it may This is particularly good advice for the find later that the result was achieved, but official who was elected with specific union only at an unacceptable cost. This would be support. The best way such an elected especially true if the union negotiators official can help his union friends is to stay somehow learned of, or guessed at, the out of the negotiations. Any discussion of council mandate. bargaining table issues away from the bargaining table by people such as Delegate Negotiating Responsibility councilmembers, who must be ultimately It is a much better policy for a city council involved, can only disrupt the process. It can to delegate all negotiating responsibility to a never help. negotiator with only the broadest of guidelines, if any. This can be a lot to ask; Stay Uninvolved, but Informed however, the city council is not abdicating On the other hand, if the council is to be its responsibilities. After all, in the final more than just a rubber stamp approving all analysis, the council can vote to not approve labor agreements, it may have to have some a labor agreement. involvement in determining policies and guiding the management negotiators. The Never Disapprove degree to which this is necessary varies. the Labor Agreement If the city or village has an experienced Even though the option is always available, management negotiator with whom the a city council should never veto a labor council is comfortable, the need for such agreement. Disapproval by a city council of

62 Handbook for Municipal Officials Published by the Michigan Municipal League, July 2015 Labor Relations a labor relations agreement is roughly In most communities, elected officials equivalent to using atomic weapons in have a serious responsibility regarding the international relations. Disapproval is a operation of the municipal government. No power whose very existence keeps both elected official, particularly a member of a management and union negotiators in line, city or village council, should be advised to but which should not be exercised unless all abdicate or ignore such responsibility. else fails. It is much better to fire the Ironically, the collective bargaining negotiator than to disapprove the agreement. process works best when there is no direct Obviously, care in selecting the involvement by elected officials. The issues negotiator would be appropriate. Choosing at the bargaining table are complex enough an experienced negotiator with a proven without adding a political dimension. track record is the safest course. When an Involvement by elected officials, by elected body, be it a city council or a school definition, adds a political dimension. board, vetoes a negotiated labor agreement, The precise degree of involvement in it destroys the credibility of its negotiator labor relations, if any, is a decision each and either seriously damages or destroys the elected official must make based on the credibility of the entire organization. In such circumstances of his or her own situation. a case, the Michigan Employment Relations Perhaps the best advice on this point comes Commission (MERC) may order the council from a small town councilman who advised itself to the bargaining table if an unfair his colleagues, “When in doubt, stay out.” labor practice is charged. The general advice to elected officials, then, is to place labor negotiations in the This chapter is based on materials provided hands of the best people available and stay by Joseph W. Fremont, the labor relations out of the negotiations as much as possible. consultant for the League from 1984 until his retirement in 2005. Another Pitfall Another labor relations pitfall that councils should avoid is employee discipline cases. An employee who has been disciplined might turn to a friendly councilmember for help. If the councilmember takes any action, he or she is in a no-win situation. If the employee is represented by a union, the councilmember cannot possibly be of any real assistance, and could add to the problem. The employee’s union is always in the best position to see to it that each employee is treated fairly and justly. The union has the know-how, the means, the legal duty and the exclusive right to stand up for its members.

What Role to Play Labor relations professionals are fond of saying that the correct role for the elected official to play in municipal labor relations is none at all. Unfortunately, this is too simple.

Handbook for Municipal Officials 63 Published by the Michigan Municipal League, July 2015

Section 3: Operations Chapter 15: Municipal Liability

Knowledge Can Beat the Fear of Generally, city and village councils and Liability their individual elected officials have Municipalities operations always seem to be personal immunity from liability for their at the cutting edge of trends in litigation. decisions. Local government would truly Whether it’s huge verdicts—such as the $14 come to a standstill if elected officials could million jail death verdict against an MML be successfully sued by the “losers” of every Liability Pool member a few years ago—or motion on which they vote. new areas of exposure, such as prisoner Listing all the possible sources of exoneration claims or class action basement municipal claims and how to reduce your flooding lawsuits—local government always claims exposure is beyond the scope of this seems to get hit early, and often. limited space. Certainly, you did not make a We hear so often that our society has commitment to service in local government become more litigious that it almost has with the intent of becoming an expert on become a cliché. Municipalities often seem municipal liability. to be a primary target for litigation because But as an elected official, there are three of the so-called “deep pockets” of their tax things you should know. base. First, know who your municipal To add some perspective, there are more attorney is, and utilize this person’s than 500 cities and villages that are expertise. We recommend that your attorney members of the Michigan Municipal be present at all council meetings, and he or League. Many of them, especially our she should be given time to review the villages, go years without an insurance agenda in advance of the meeting. Your own claim. If you add the number of villages that good judgment will often tell you which rarely encounter an insurance claim beyond action items on the agenda require diligent a minor traffic collision or the payment of deliberation and possible legal advice. medical bills for a slip and fall claim, the Question your attorney on the legal number of members who have had “big hits” ramifications of your decisions. If one or is truly small indeed. more legal issues require further study, it is Most claims for bodily injury, property preferable to table a motion than to act with damage or “wrongful acts” that are made incomplete information. against a municipality never result in a Second, your municipality should have lawsuit. The Liability and Property Pool an acceptable insurance program. Know handles about 1,500 claims filed against our who is responsible for placing the insurance. municipal members each year. Only about You should have a coverage proposal you 150 of those develop into lawsuits. can review, and other sources of information Two points should be clear. First, you readily available. It is very important that should be generally aware of liability issues your municipality’s liability insurance has that affect municipalities and elected adequate limits, and that coverage is officials. But, secondly, elected officials available for activities that may result in should avoid becoming inflicted with claims against the municipality. “litigation paralysis”—the belief that For example, if you are a growing making no decision and avoiding possible community with new development, you lawsuits is preferable to acting in the best probably have one or more zoning variance interest of your community. requests each year. Make sure you are aware of how your insurance program responds to

Handbook for Municipal Officials 64 Published by the Michigan Municipal League, January 2003 Understanding Municipal Liability zoning and land use litigation before you website of the Michigan Municipal make a decision on a zoning issue. Liability and Property Pool, the League- Last, use the services of your Michigan sponsored and administered insurance Municipal League. Through a variety of program; and media, we offer numerous opportunities to  the League’s Annual Convention has a educate and familiarize municipal officials variety of concurrent sessions and and staff on liability issues. networking opportunities at which  educational workshops are held annually information can be obtained throughout our state dealing with If your municipality is already a various liability issues; member of the Liability and Property Pool,  an email ([email protected]) or phone call you are taking advantage of comprehensive to the League’s inquiry service can liability insurance designed for Michigan direct you to sources of information or municipalities, and enjoying immediate individuals that can provide assistance; access to the information resources  the League’s Risk Management Services mentioned above. Division has a staff of professionals who can assist you with most liability issues;  a wealth of insurance information is available online at mml.org—this is the

Handbook for Municipal Officials 65 Published by the Michigan Municipal League, November 2002

Section 3: Operations Chapter 16: Planning and Zoning

A Balancing of Interests  Requirements for adopting a master Perhaps one of the most difficult aspects of plan and zoning ordinance; and planning and zoning is the need to balance  Minimum standards for public the various, often competing, interests of notices and processes around property owners and residents. These planning and zoning decisions competing interests are represented through If your community has not yet reviewed its the concept of property rights. Local ordinances against these new statutes, it is decision makers are required to balance the critical to undertake that review, to ensure interests of private property rights against that you are on solid legal footing. the need to protect the public interest. In other words, how much regulation is enough The Planning Team to protect the public and at what point does The laws that originally set up the land use that regulation begin to infringe on property planning and zoning system for Michigan rights? anticipated the need for the three bodies In the midst of these sometimes most involved to work closely together to competing interests and views are the local coordinate their efforts. authorities for zoning; the zoning The planning commission, an administrator, the planning commission, the appointed body, was originally given the zoning board of appeals, and the city or responsibility of writing and adopting the village council. Dealing with each of these master plan. This was done to ensure some conflicting perspectives is simply not degree of independence from the political possible, and the intent of zoning is to avoid arena, which had plagued the planning conflicts that arise. Instead, zoning follows process in earlier years. In 2002, this some basic principles and procedures requirement was changed to include more designed to treat each person, property, and involvement by the legislative body in the point of view fairly and consistently. planning and adoption process. The planning commission was also given the duty of Legal Framework writing the first draft of the zoning Local planning and zoning authority is based ordinance. This was done to ensure a direct in two statutes, the Michigan Zoning connection between the master plan and Enabling Act (MZEA) (PA 110 of 2006) zoning ordinance. and the Michigan Planning Enabling Act The city/village council may choose to (MPEA) (PA 33 of 2008). These laws be the adopting authority of the master plan, consolidated and updated various older but is required to adopt the zoning ordinance enabling statutes, and should be referenced because it is the law. when adopting or updating local planning The zoning board of appeals was and zoning documents, as they address granted the authority to waive certain zoning topics like: ordinance requirements where conditions of  The creation and membership of the the ordinance deprived property owners of planning commission and zoning the right to develop their property. board of appeals (ZBA); There are, however, situations where  The division of responsibilities this delicate balance fails. For example: between these appointed bodies and  The planning commission adopts a the local legislative body; master plan with which the legislative body has fundamental differences. The

Handbook for Municipal Officials 66 Published by the Michigan Municipal League, July 2015 Planning and Zoning

legislative body may refuse to allow the While the planning commission is plan to be adopted by the planning responsible for drafting the master plan, the commission, or the legislative body may legislative body must “approve the plan for itself refuse to adopt the plan. distribution,” and may elect to become the Accordingly, any attempt to implement adopting authority for the plan. After the plan through the zoning ordinance preparing a proposed plan, the planning may then fail when the legislative body commission must submit the proposed plan refused to adopt either the plan or the to the legislative body for review and ordinance. To reduce the chance of comment. Before the adoption process can conflict, the legislative body and proceed, the legislative body must approve planning commission should work the distribution of the proposed plan. If it together on strategic goal setting early in does not, it must return the plan to the a master planning process; and commission with its objections. The  The ZBA grants variances without commission must then revise the plan until it sufficient justification, which detracts is accepted by the legislative body. from the ordinance’s effectiveness. In The long-term effect of this change to extreme cases, such actions might allow the adoption process will have to be the ZBA to, in effect, take over the determined. But even if the planning zoning policy-making function that is commission is delegated the responsibility normally reserved for the planning of completing and adopting the master plan, commission and legislative body. If the the legislative body should be involved in all ZBA believes the zoning ordinance is of the critical steps of the process in order generally flawed, rather than a unique for the plan to be effectively implemented. situation with a particular property, it Developing a master plan is a should communicate with the planning reasonably logical process. It consists of: commission to address the issue.  identifying community issues; The legislative body, planning  collecting information regarding those commission, and ZBA may find periodic issues; joint meetings or other formal  determining the direction in which the communications helpful: all have an interest community wants to develop; in keeping the master plan, as a policy  deciding how to proceed in that document, the zoning ordinance, as a law, direction; and the administrative and quasi-judicial  adopting the plan; decisions made on individual applications in  fashioning a method of implementation; alignment. and  reviewing the plan periodically. The Master Plan Of these, perhaps the most important is Policies regarding land use are expressed determining the direction of the community through the master plan. A master plan will through the development of a community include a description of the community, vision and setting goals that will achieve outline goals and objectives and map areas that vision. To begin this process, the of different land uses, ranging from planning commission and legislative body residential to industrial. The master plan should discuss philosophical, broad-ranging must constantly be reviewed to make sure questions related to growth and community that the new growth conforms to what was character. These might include such planned. But as events unfold, these plans questions as, “Do we want to grow?” or may change to take unanticipated events into “What does ‘small town character’ mean to account. While a master plan typically us?” considers a timeframe of decades, the Once the master plan is in place the MPEA requires a community to formally normal reaction is a let-down; the planning review its plan at least every five years. commission’s hard work has paid off and

Handbook for Municipal Officials 67 Published by the Michigan Municipal League, July 2015 (Section 3/Chapter 16) the plan is completed and ready to be filed. development than a focus on traditional But, in reality, the work has just begun. All divisions of residential, commercial, too often, the plan sits on a shelf and collects etc., activity. Note that the MZEA does dust. not explicitly discuss or authorize FBCs A plan which is not actively followed separately from more traditional zoning; and implemented may lead to problems for  Two or more communities may form a the community in the future. Failure to joint planning commission, to facilitate follow the plan may discredit any attempt to coordination of development across use the plan as a defense for actions which jurisdictions; and may be challenged by property owners or  The MZEA introduced the option for an developers. applicant to offer conditions to a rezoning request, such as limiting The Zoning Ordinance permitted uses under the rezoning to Local control of the use of land (with some only some of the uses permitted in the exceptions, such as state and federal land target district. Note that municipalities uses) is an accepted legal principle. Land are clearly forbidden from requesting use is traditionally controlled through the conditions or amending the conditions separation of land into various use areas, proposed—this option should be used called zoning districts. The rules governing carefully, if at all. these districts are contained in a zoning ordinance which includes provisions The Zoning Board of Appeals controlling the type and intensity of A community that has established a zoning development allowed. ordinance must have a zoning board of Communities often have to wrestle with appeals (ZBA). A city council may act as complex zoning and growth policy issues the ZBA, or a separate board of not less than brought on by new development. The need five members may be appointed. The to provide flexibility, coupled with the Zoning Board of Appeals has a quasi- desire to maintain some degree of control, judicial function and must act objectively has created the need to find innovative when evaluating an appeal. If the elected zoning and land use policy solutions. Some body also serves as the ZBA, it may become of these include: difficult to remain an objective evaluator  A planned unit development (PUD) when an individual is also an elected process offers the opportunity to review official. large or complex developments for their The number of members is based on ability to better meet the intent of the population; less than 5,000 must have at zoning ordinance than the strict least three members. More than 5,000 must application of the ordinance provisions. have at least five members. The only The MZEA introduced the ability for a appointment guidelines are residency, PUD to take place on noncontiguous population distribution, and representation properties. In all cases, the zoning for the various interests in the community ordinance must enable and define the (residential, commercial, industrial, process for a PUD before one may be education, etc.). All members serve three- considered; year terms. Two alternate members may be  A form-based code (FBC) places focus appointed and serve in the case of an on the shape, size, and arrangement of absence or in the case of a conflict of buildings or other improvements on a interest with one of the regular members. property, with the activity happening on The alternate, if called, serves on a case until the property a secondary a decision is reached, even if called on the consideration—some communities find basis of an absence of the regular member, this approach is better able to manage and even if that member returns. community character and impact of

68 Handbook for Municipal Officials Published by the Michigan Municipal League, July 2015 Planning and Zoning

The board has the responsibility for go to the ZBA to obtain relief from the ensuring that the zoning ordinance is ordinance. properly and fairly applied. The need for the Eventually, the offhand granting of ZBA is based on the realization that a single variances harms the community’s ability to set of regulations cannot anticipate every enforce the ordinance. Moreover, poorly potential condition related to individual supported decisions can, over time, have the properties and uses. The most common effect of destroying the credibility of the action by the board is the consideration of zoning ordinance as well as the ZBA. It is variances. up to the members to prevent this by strictly A variance is permission to waive or applying the review standards of the alter a requirement or limitation of the ordinance necessary to obtain a variance: zoning ordinance. There are two types of variances create an exception from the variances. ordinance, and should be exceptional, rather A use variance permits a use of land than routine. that is otherwise not allowed in that district. A use variance is a modification of the Procedures and Processes literal provisions of the zoning ordinance Foremost among today’s planning and that may be authorized by the board when zoning issues is the need to have specific, strict enforcement of the ordinance would written procedures for handling planning cause unnecessary hardship for the property and zoning matters. The entire zoning owner due to circumstances unique to the process, from the time that a person first property. To obtain a use variance, the approaches the municipality to the issuance applicant must demonstrate through review of the occupancy permit or possible sanction standards that the unnecessary hardship of violations, should be clearly understood related to the use of the property exists. The by all parties involved. Some basic rules: community may choose to exclude the  Proper forms should be in place to consideration of use variance in its zoning document applications and permits; ordinance.  Meetings should be governed by A nonuse variance, also known as a consistent rules; dimensional variance, is a modification of  All actions should be clearly and the literal provisions of the zoning ordinance thoroughly documented; that may be authorized by the board when  Applications should not be accepted if strict enforcement of the ordinance would incomplete (inadequate site plan, fee cause practical difficulties for the property unpaid, etc.); owner due to circumstances unique to the  If required public notices were not sent property. Nonuse variance requests are or were published improperly, stop the typically associated with modifications of process and start over; and required yard setbacks, building heights,  Action on any application should be parking requirements, landscaping or delayed until the applicant or a buffering restrictions, and related building or representative is present (unless legal facility placement matters and sizes. time limits dictate otherwise). Every person has the right to seek relief Another important aspect is keeping from a zoning ordinance requirement. If the good records. One test of record-keeping is standards used by the board are carefully the ability to pick any application that has considered and followed, the integrity of the been approved and constructed and be able ordinance will be maintained. But too often to follow each step, from the first contact of variances are granted because no one sees the application to the last permit, by the any harm in doing so, rather than carefully records kept for that application. Project considering the ordinance standards. The files should include, at a minimum: board soon gains a reputation for not following its ordinance; one merely has to

Handbook for Municipal Officials 69 Published by the Michigan Municipal League, July 2015 (Section 3/Chapter 16)

 relevant pages of minutes at which the  Questions of doubt should be resolved proposal was discussed, before taking action; do not act hastily.  staff notes, meeting notes, Zoning decisions are permanent; take correspondence, telephone conversation care that the decision is the best that can notes, etc., be made given the information  copy of the application and supporting available. material, and  approved/signed copy of the site plan. The Role of the Public Having noted the need for objectivity, the Making Effective Decisions question arises as to what role the public Following an effective decision-making should play. Various zoning approvals process is one of the most important require participation by the public in the methods of avoiding, or at least surviving, decision-making process, usually in the form challenges to decisions. Careful of public hearings. The dilemma in which consideration and support of decisions most decision makers find themselves is through the use of the standards of the trying to determine what weight to give the zoning ordinance is important. These comments (and complaints) of the public. standards must be written into the ordinance People do not generally come to a and if all standards are met, the application meeting in support of a particular project; must be approved. most have concerns that they wish If the decision is challenged, the addressed, many are simply opposed to what importance of using the ordinance’s is proposed. The foremost concern that any standards becomes self-evident. A well- decision maker should have is to ensure supported decision provides the background fairness for all concerned; the applicant as needed to build a solid legal foundation for well as the public. To ensure fairness, keep the decision. The use of standards will help some simple things in mind. avoid the “arbitrary and capricious” label  Everyone must have the opportunity to often given to zoning decisions that are not speak and present evidence at public well supported. hearings. While some limitations may The record must show sufficient facts to be placed on this right, no action should back up the findings made according to the be taken that would deprive a person of ordinance standards. Some simple their right to be heard. considerations:  Most people are uncomfortable speaking  It is not enough to deny an application in public. While the chair cannot make because of a vague notion that the use is everyone effective speakers, he/she can not a “good idea,” or that it will “harm make sure that meeting rules are the neighborhood;” followed and order maintained. Keeping  The presence of a roomful of people a subtle balance between the degree of opposing the project is not sufficient formality required, and the degree of reason to deny an application; informality that is sometimes needed is  The past performance of the applicant a learned art. should not be used as a basis for a  Recognize emotional responses and treat denial. If there are doubts about them with concern and understanding. performance, make proper use of Land use issues can elicit strong conditional approvals, performance emotions. Strong responses, within bonds, and proper documentation; limits, should be expected and  Approvals and denials should each be understood. Decision makers must learn thoroughly documented on the record, to control their emotions, even when the clearly stating how the ordinance comments get personal. standards were, or were not met; and  The chair can help maintain order by following meeting rules and requiring

70 Handbook for Municipal Officials Published by the Michigan Municipal League, July 2015 Planning and Zoning

that comments are made only on the How to Avoid Litigation subject at hand. It is often helpful to The short answer to avoiding litigation is point out what request is being made simple. You can’t! Governments are always and to ensure that the public understands open to lawsuits, regardless of the methods the limitations of the board or used to reach a decision. Disappointed commission. applicants and neighbors far too often look to the courts to make a decision favorable to Enforcement their position. However, there are some No matter how well written the zoning actions that you may take to strengthen your ordinance may be, it is essentially made legal position. meaningless unless the community has an The first way to avoid a legal challenge effective enforcement process. Creating and to your decisions is to follow the procedures maintaining an effective enforcement and principles outlined in this chapter. As program requires a good COP many members have already experienced, (Commitment, Ordinances, Process): the zoning process involves a wide variety Commitment: The community, of technical, administrative, and including its enforcement officials, discretionary factors. The technical factors administration and legislative body, needs to may include compliance with the specific have a firm commitment to the enforcement requirements of the zoning ordinance, such of its ordinances. This means providing the as setbacks, height, parking, etc. The necessary resources to monitor and penalize. administrative requirements may include It also means ensuring that enforcement ensuring that notices are mailed and officials are not subject to interference from published, meeting procedures followed, and the administration and legislative body other similar actions. members. Finally, and probably most important, Ordinances: Ordinances must be are the judgmental factors that are required clearly written and be able to be reasonably in making effective zoning decisions. The monitored and enforced. Each time a new standards provided in the zoning ordinance regulation is drafted, it would be useful to for various types of decisions are the ask the enforcement officials how they may clearest guide given to decision makers. All go about monitoring and implementing the decisions should be based on these standards various ordinance provisions. Ordinances and the facts that are used to apply them. that require unreasonable actions on the part Other factors that should be of enforcement officers are less likely to be remembered: properly administered.  Keep the master plan and zoning Process: Finally, it is important that ordinance up-to-date. A current plan and there be a consistent, well documented ordinance can bolster an effective enforcement process. For example, a follow defense. An outdated plan or ordinance up to a violation might be similar to this: is subject to attack as not relevant to 1. Verbal notification is sent to the today’s conditions. property owner, followed up by a  Recognize the landowner’s right to a written notice. reasonable rate of return, although that 2. If not corrected, a second notice (usually may not be the use that provides the worded somewhat more forcefully) may highest profit or “highest and best use,” be sent. not a term applicable to zoning. 3. If not corrected after the second notice,  Do not exclude lawful land uses if there a citation is issued. is a demand and an appropriate location (Note: The procedures for each in the community. community will be different, and may  Base decisions on the ordinances and depend on whether the ordinance violation facts rather than emotions or opinions of requires a civil or criminal action.) the applicant.

Handbook for Municipal Officials 71 Published by the Michigan Municipal League, July 2015 (Section 3/Chapter 16)

 Make decisions using the written  Correct immediately any situations that standards of the zoning ordinance. could be/are found liable.  Know the rules of procedure and follow If sued, hire competent legal counsel them consistently. familiar with the type of litigation  Resolve questions of doubt before involved. taking action; do not act hastily. Zoning decisions are permanent; try to get it Chapter based on materials provided by right the first time. Steve Langworthy, retired partner with  Know the limits of the community’s LSL Planning. authority and act in good faith.

72 Handbook for Municipal Officials Published by the Michigan Municipal League, July 2015 Selecting and Working with Consultants

Section 3: Operations Chapter 17: Selecting and Working with Consultants

Why Use a Consultant  grant application preparation and Today, cities need to consider delivery oversight; options for information and services not  subdivision plan reviews; even contemplated decades ago. Both small  short and long term strategic planning; and large municipalities will find themselves and in situations where, due to a lack of  recreation master planning. available personnel or to a lack of expertise in a specific area, they need to seek outside Common Types of Consultants professional assistance. Often a consultant and Professional Services can provide the required staffing and The most common types of consultants are: knowledge.  engineers; Consultants are defined as those with  planning consultants (land use and training and experience in a specific field zoning; who offer others their expertise. Why, when  strategic planning consultants; and how a community retains a consultant is  attorneys—general counsel, labor/ an important policy issue. employee relations, environmental, insurance claims, bond counsel, When to Use a Consultant litigation/special counsel (example: tax No one can be an expert in every aspect of tribunal cases) and real estate local government. Consultants are typically transactions; retained for one of three reasons:  human resources/training/safety 1. to provide specialized service not avail- consultants; able through existing staff resources;  property assessors; 2. to supplement existing staff in  information technology experts; completing projects and/or doing  privatization of services consultants; planned projects when the existing staff does not have time or the expertise to  auditors and financial advisors; complete the project; and  pension plan administrators; and 3. to get a second opinion from an outside  retired city/village management source on a possible project or to professionals. review, provide input, analyze data and Retired city and village managers are conclusions reached by the cities though valuable resources for communities of all other studies. sizes. A municipality might call one for Consultants are retained for many types interim management services during of projects and services. For example: recruitment of a new manager or to assist the  street construction; staff in managing specific projects or  water, wastewater and storm sewer functions. projects; How to Retain a Consultant  information technology support;  labor relations; The first step in retaining a consultant is to  master land use planning; establish criteria and guidelines. Items to consider in formulating your guidelines are:

Handbook for Municipal Officials 73 Published by the Michigan Municipal League, July 2015 (Section 3/Chapter 17)

 whether to designate an individual or and requests that the firms submit a proposal committee to be responsible for addressing the manner in which the project retaining the consultant; would be completed and the cost of the  who will be planning, monitoring, and project. From the responses, the local scheduling the project or service; government selects the consultant based on  what the scope of the project or service two criteria: cost and responsiveness to the will be; and RFP.  what base qualifications will be required The method for selecting a consultant for firms or individuals to be considered. using an RFP should follow many of the These should include: steps outlined below in the RFQ process.  professional and ethical reputation,  professional standing of the firm’s Request for Qualifications (RFQ) employees (registered, licensed, Unlike a RFP, the RFQ provides the certified), opportunity to select a consultant based on the needs of the community and  ability to assign qualified personnel qualifications of the consultant, not low bid. to the project and to complete it In July 2002, the State of Michigan enacted within the allotted time, and legislation (2002 PA 504) requiring state  experience in providing the services agencies to use Qualification Based or project development. Selection (QBS) methods to select consultants. While this legislation does not Selection Process apply to local governments, it emphasizes Michigan, unlike many other states, does not the advantages to using QBS in selecting have a state law requiring local governments consultants. to establish procedures for purchasing of For more information on the QBS goods and services or the selection of process, visit www.qbs-mi.org or call 517- consultants. Local charters and/or 332-2066. ordinances usually establish the consultant In preparing the RFQ, the following selection procedures. If the project will be elements should be included: funded in part or in full with state or federal  a type of consultant being sought; monies, check the requirements for  a brief outline of services desired; consultant selection procedures. Those  date and time the sealed qualifications responsible for the selection process need a are to be submitted to the local working knowledge and familiarity with the government; and optional, but purpose and general nature of the project to recommended, elements: be performed.  expected date of completion or length of contract, and Sole Source If the city has experience with one or more  anticipated end product such as consultants, preference may be given to reports or designs. continuing the professional relationship with These elements will help the consultant these firms. If you are not required by and local government determine the jurisdictional policy or ordinance to send out availability of resources. requests for proposal or bids, you can hire There are three options for establishing the consultant directly. An agreement as to the cost of services: the scope and cost of the project is 1. negotiating the cost with the consultant negotiated with this firm and the project selected, proceeds. 2. listing the anticipated range of fees in the QBS, and Request for Proposals (RFP) 3. having the consultant place the Under an RFP the city provides firms with a estimated fees in a separate envelope. specific detailed description of the project This envelope would only be opened if

74 Handbook for Municipal Officials Published by the Michigan Municipal League, July 2015 Selecting and Working with Consultants

the consultant were selected and would  establish a work schedule (including be used in contract negotiations. When milestones) for the project, the contract is signed with the successful  cross-check the consultant’s work, and firm the remaining fee envelopes should  determine and evaluate the final work be returned unopened to the product. unsuccessful consultant firms. While these elements are components of The QBS process allows the local good project management, the extent to community to select one or a small number which each element is used will depend on of consultants to interview. This selection the magnitude and scope of the work. For should be based on the number of responses example, a small project may only require a to the RFQ. project manager and an evaluation of the During the interview, ask who will be final product, without a work schedule. the key personnel assigned to your project. The project manager is essential to any The proposed project manager should be in consultant contract regardless of its size. attendance at the interview. The scope of This municipal representative administers services should also be discussed in the the contract, including but not limited to interview, but fees should not. monitoring the work, approving payments After the interviews, check with recent for the work and accepting the final work clients of each firm and determine the product. The project manager should be quality of performance that each client has given enough authority to ensure that the experienced. Try to include clients in city receives maximum benefit from the addition to those specified by the firm. consultant’s work. After the interviews, rank the firms Establishing milestones will tell the using criteria such as location, reputation, municipality when each stage of the project compatibility, experience, financial should be completed. Failure to meet these standing, size, personnel availability, quality milestones could be an early indicator of of references, workload and other factors possible delays and/or trouble with the specific to the project. Decide which firm consultant’s work product. This gives the you consider to be best qualified, and initiate project manager an opportunity to correct contract negotiations. the problem or it could serve as a reason to If an agreement cannot be reached with terminate the consultant’s contract. the first firm selected, notify them in writing Identifying deliverables in conjunction to that effect. Meet with your second with the milestones will provide the city selection, going through the same process. with another tool to evaluate the consultant. When you and the consulting firm agree on Deliverables, for example, might include a all matters and charges for services, the draft chapter of a master plan, a grant selected firm should submit a written application or securing certain permits. The contract for both parties to sign. Make sure type and extent of the deliverables depend your attorney reviews the contract before the on the size and scope of the project. city signs the agreement. In addition to milestones and A courtesy letter should be sent to each deliverables, monitoring the work can firm that expresses interest in the proposed involve regular meetings with the project, informing them of the outcome of consultant, visits to the consultant’s office, your decision. telephone calls, emails, and faxes. The larger the contract, the more likely Project management there will be a need to amend the contract. Once you select a consultant, you need In large projects, unforeseen delays can to design a process to manage the contract. make it necessary to amend the contract. These elements will help ensure the The contract amendment should be included successful completion of the project: in the original contract.  appoint a project manager,

Handbook for Municipal Officials 75 Published by the Michigan Municipal League, July 2015 (Section 3/Chapter 17)

The success of any project is determined committee of the Michigan Local by the process and resources allocated to the Government Management Association. effort. Using consultants can be a valuable tool in the management and delivery of -and- services for our communities. Reid S. Charles, who has served in various management and planning positions in local Chapter provided by Lou LaPonsie, city government, and lectured and taught courses manager and past trustee of the League, and on planning and municipal finance. charter member of the village management

76 Handbook for Municipal Officials Published by the Michigan Municipal League, July 2015

Section 4: Finance Chapter 18: Authority and Internal Controls

Introduction statutes, state and federal administrative Oversight and governance of financial codes, and city and village charters. These affairs is among the most important of the instruments, along with case law, grant responsibilities of municipal elected certain authority on one hand and limit it on officials. Inadequate oversight can lead to the other. abuses such as embezzlement, misuse of and/or misappropriation of funds, and State Limitations general loss of esteem for the municipality Municipal elected officials in Michigan have and its officials. Excessive control or become acutely aware of the limits imposed oversight can render your city or village by the Michigan electorate through ineffective and incapable of delivering constitutional provisions which limit the important services. authority of local officials to levy property Local elected officials are given the taxes. responsibility and authority to establish Constitutional revisions adopted in the financial policies for their municipality. For late 1970s (known as the Headlee example, only the elected governing body of Amendments) limited local authority by: a municipality can levy property taxes,  requiring local voter approval for establish fees and charges for utility increasing tax rates above the rates then services, levy special assessments, incur authorized by law or charter, and debt, establish spending levels, and  rolling back or decreasing millage rates determine independent audit requirements. so the total amount of taxes paid on Appointed officials may recommend existing property increases by no more policies in these matters but the final than the rate of inflation during periods authority to enact financial policy is when property values increase by more reserved for the governing body of elected than the rate of inflation. officials. They fulfill these responsibilities If one class of property has declining or through their budgets, ordinances, and stagnant market values and another class has resolutions, all of which must be enacted by spiraling increases, the total roll for the at least a majority vote of the body. (Check taxing unit may not increase more than the your charter for the vote requirement for rate of inflation. And, the taxing authorities your city or village.) are not required to reduce the millage rate. This chapter provides a brief overview In many local units, residential property of the very complex and pervasive subject of values have spiraled upward while other municipal finance in Michigan. It is classes stagnated. As a result, residential essential that elected officials turn to the taxpayers found little or no relief from the resources which are at their disposal (their Headlee roll back requirements. manager, finance officer, assessor, treasurer, Again in 1994 the Michigan electorate accountant, attorney, and independent amended the Constitution with Proposal A. auditor) in fulfilling their duties and This amendment defined a special class of responsibilities. property, Homestead, which is treated differently than the other classes of property Limitations on Local Authority (i.e., commercial, industrial, non-homestead Authority and responsibility for municipal residential, agricultural, etc.). Homesteads financial policies are established by the are exempt from the local school tax of 18 Michigan Constitution, state statutes, federal mills. No other class has this exemption.

Handbook for Municipal Officials 77 Published by the Michigan Municipal League, July 2015 (Section 4/Chapter 18)

Schools were provided with state funds, authorities. A listing of all controlling state generated by the state sales tax, to offset this statutes is not possible in this limited space. loss of revenue. (See Appendix 2: Michigan Laws of Interest In addition, Proposal A requires each to Cities and Villages.) parcel to be taxed on the basis of its taxable State statutes control almost every value which is to be limited to an annual aspect of municipal finance. Local elected increase of “...the rate of inflation or five officials should seek advice and counsel percent, whichever is less.” This limitation from their own local resources when is imposed for each parcel. embarking upon changes of policy and Prior to Proposal A, properties were practices in the conduct of the financial taxed on the basis of their state equalized affairs of their local government. value which was set at 50 percent of market value and adjusted upward or downward as Case Law the market value changed. Case law issuing from the judicial system The local assessor now maintains two also imposes controls and limitations on columns on the tax roll: the state equalized local elected officials. For example, a state value and the taxable value. Taxes are levied court adjudicated a disputed special on the taxable value. As long as the property assessment which was levied upon owners continues under the same ownership, the of homes in a platted subdivision with taxable value of the parcel may only streets emptying out into a major increase at the rate of inflation or five thoroughfare which was to be improved with percent, whichever is less. However, upon special assessment financing. The court set sale or transfer of the property to another aside the special assessment on the owner, the state equalized value (SEV) subdivision homeowners because in the becomes the new taxable value. opinion of the court: By shifting school financing from the a. the benefit derived from the property tax to the sales tax, the reduced improvement was a general benefit to potential captured revenue through tax the community and not a special benefit increment financing has had a negative side to homes in the subdivision, and effect on certain financing authorities for b. special assessments may only be levied future programs. The full effect of Proposal for direct benefits (i.e., the street upon A is still unknown. Some believe it has had which their homes fronted) and such an inflationary effect on home values. may not be levied for indirect benefits Others believe that the reverse will be true in (for the major thoroughfare to which the future when new owners find the their frontage street connected). See accumulated state equalized value (SEV) Jonson vs. Inkster, 401-MICH-263, entered into the roll of taxable value for their Michigan Supreme Court, 1977. payment of taxes. It also remains to be seen A second example has had perhaps an what its full impact will be on local units of even greater impact on municipal finance. government On December 28, 1998, the Michigan Supreme Court ruled unconstitutional the State Statutes city of Lansing’s stormwater service “fee,” State statutes also limit the authority of local declaring that the fee was actually a “tax” officials in administering their financial under the Headlee Amendment to the affairs in matters ranging from procedures to Michigan Constitution that required a vote be followed by local governing bodies in of the city’s electorate. advertising the annual budget hearing to the The ruling, in Bolt v City of Lansing, use of motor fuel taxes on local street 459 Mich 152, 587 NW2d 264 (1998) could systems; from debt limits to fidelity bonding have significant implications for requirements for local treasurers; from the municipalities statewide. Bond counsel for annual audit to creating special financing cities and villages have expressed concern

78 Handbook for Municipal Officials Published by the Michigan Municipal League, July 2015 Authority and Internal Controls that the ruling could impact the security of opportunity for public review and (c) revenue bonds backed by user fees. (See CH public hearing; and 22 Special Assessments and User Fees for  procedure for amendment and more information on Bolt.) reallocation after adoption. Case law in municipal liability has been Purchasing and contracting requirements a source of concern for the financial stability of charters usually include provisions that of municipal units of government. Indeed, (a) limit authority to acquire without creation of liability risk pools, including that approval of the governing body, (b) require of the Michigan Municipal League, is a advertisement in approved publications, and response to case law. (c) require receipt of sealed bids which are Again, as municipal elected officials to be opened in public. seek to establish policies affecting financial These are but two examples of charter affairs of their local unit of government, limits and grants of authority. Ordinances they must heed advice of financial experts and/or resolutions are often necessary to and their legal counsel. implement state statutory requirements and those of local charters. Local Limitations City/village ordinances and/or City and village charters, ordinances, and resolutions limit and regulate financial resolutions of policy are instructive to management in more detail than is permitted uninitiated elected officials. These local or desirable by local charters. These are instruments often reflect provisions of the more easily amended than the local charter State Constitution, state statutes and other and greater detail can be accomplished. regulatory requirements of the higher levels Ordinances and resolutions may deal of government. Indeed they must be in with such areas as administering blanket compliance with them. Careful review and purchase orders, counter-signatures on drafting by legal counsel and financial checks, depositories for funds, and credit administrators should assure compliance. card control. Again, local ordinances can be Local charters establish millage limits, instructive for the uninitiated. Although they debt limits, and the fiscal year. They often have little of the appeal found in best seller spell out purchasing and contracting novels, they should be regarded as required authorities, budget requirements, audit reading for the novice elected official. And, requirements and reporting of financial a refresher reading by seasoned officials is condition on a regular basis. Duties and suggested. Although attention has been responsibilities for financial management of given to limitations on the authority of local the unit of government are usually assigned governments and their elected officials in by the all-important local charter. the foregoing, much still remains as Charters often spell out the minimum discretionary authority to be exercised by requirements for the annual budget them. document including:  presentation of proposed revenues and Financial Controls – expenses in detail sufficient to Internal Management effectively control the financial After the city or village council has management of the municipality; approved the annual budget and allocated  presentation of actual audited revenues funds for specific purposes, financial and expenses for the last fiscal year; controls should be in place to assure  revenues and allocations for the current compliance with the council’s wishes, as fiscal year and actual expenses to date; well as compliance with laws, charters, and  separate presentation of operating and ordinances. These controls include an capital budget accounts; accounting system from which regular  procedure and deadline for adoption financial reports are extracted and including (a) advertisement, (b) transmitted to managers, administrative

Handbook for Municipal Officials 79 Published by the Michigan Municipal League, July 2015 (Section 4/Chapter 18) officers, department heads, and the state money, etc.) may also require an governing body for review and examination. annual audit. Charters and ordinances of some units The audit report provides opinions of require monthly financial reports, others the auditor as to whether: quarterly.  financial management practices are In reviewing these periodic reports, being conducted according to generally elected officials should first determine if the accepted accounting principles; reports permit them to carry out their  financial reports are presented fairly and responsibilities. Does the report provide accurately; and budget allocations as approved and expenses  financial management has complied as they are incurred to date? Are any budget with applicable laws and regulations. allocations over spent? Are there allocations The auditor may provide a management not being used? Is it necessary to reallocate letter which provides opinions on potential funds to provide services as planned? Is the problems with financial systems and rate of expenditures in some budgetary controls. The letter may also provide accounts such that they will be over suggested improvements. Comments on the expended by the end of the fiscal year? opinions and suggested improvements by Financial reports can also be used as the chief administrative official or manager strategic planning tools. They provide should be provided to the elected governing opportunities for mid-year budget reviews body. As part of the normal services of the and planning sessions. As a starting point for independent auditor, tests of financial the preparation of the next budget, councils controls should be conducted to assure can review progress of current projects and adherence to laws and regulations. Such programs. They can also provide input for tests should also be designed to uncover the planning and funding of projects in the weak systems which may provide next year of the capital improvement plan. opportunity for fraudulent behavior Finally, internal financial controls including embezzlement. should reduce opportunities and temptations It is impractical to pay for tests of all for fraud or embezzlement. Separating such control systems annually. It is duties of employees and mid-level suggested, however, that the auditor administrators is sometimes necessary. It is independently and without prior knowledge wise to have checks signed and counter- of municipal officials, select one or two signed by persons from two separate lines of aspects of the system to test. For example, authority such as the treasurer and the clerk. the auditor may select to examine a random Internal controls should be examined sample of all checks issued for purchases of periodically by the independent auditor to items having a price range of $1,000 to keep systems updated with current $5,000 for compliance with purchasing technologies, especially in automated regulations and ordinances. By annually environments. selecting a limited number of test subjects in addition to those for which potential The Independent Audit problems are apparent, continued The annual report of the independent auditor improvements in these systems can be is provided especially for the governing expected. body of the local unit of government. It is By now you have probably concluded intended to provide an independent review that financial aspects of the tasks of local of financial management practices of the elected officials aren’t getting any easier and local unit by professional public they are growing in importance. Good accountants. The state requires an audit financial planning and management is a way either annually or biannually, depending on of life. Good, sound systems and practices the size of your municipality. Certain are the product of a series of decisions over funding sources (e.g. federal funds, grants, a period of years. They are not the product

80 Handbook for Municipal Officials Published by the Michigan Municipal League, July 2015 Authority and Internal Controls of a short-term budget crunch or a financial And – crisis with quick-fix solutions. The task is to make thoughtful policy decisions with a Reid S. Charles, who has served in various view toward continual improvements over a management and planning positions in local period of time. government, and lectured and taught courses Local elected officials should always on planning and municipal finance. seek advice and counsel from their chief financial officer, assessor, manager and municipal attorney when embarking upon changes of policy and practices in the conduct of the financial affairs of their local government.

Chapter provided by A. Frank Gerstenecker, retired city manager and former consultant for the League’s Executive Search Service.

Handbook for Municipal Officials 81 Published by the Michigan Municipal League, July 2015

Section 4: Finance Chapter 19: Budgeting

The annual budget is the most performance budgeting (PPBS); significant of all policy-making management by objectives (MBO); and zero opportunities available to local officials. based budgeting (ZBB). It is also possible to Used wisely, the budget process can achieve combine one or more of these formats. the goals and objectives of the city or village  The line item budget divides and assure the delivery of the services expenditures into administrative expected by the citizens. categories such as salaries, contractual Focusing on the budget as a policy services, office supplies, postage, etc. document allows elected officials to avoid This type of budget is easy to prepare, the temptation to deal only with those items but makes it difficult to determine if with which they may feel most goals are achieved or if programs are comfortable—line item details of office adequately funded. supplies, for example—and concentrate  The program budget presents instead on basic policy issues. expenditures by program along with a Budgeting often takes two forms. The narrative description of the services to first is the operating budget dealing with be provided. Each program budget is short-term, year-after-year matters. The composed of line item amounts. For second is the capital budget for long-term, example, a municipality may decide to non-recurring expenses. initiate a street sweeping program. The entire program is presented including The Operating Budget – line item allocation of the costs required A Plan for Day-to-Day Operations to support the program. While a Section 15 of the Uniform Accounting and program budget is more complex to Budgeting Act requires cities and villages to prepare, it allows the council to view adopt a balanced budget (expenditures and evaluate the merits and costs of each cannot exceed revenues) prior to the program. beginning of each fiscal year. The Act,  The program performance budget however, does not specify the format of the (PPBS) shows the relationship between budget for either the general fund (operating the dollars spent and units of service budget) or any special or enterprises funds performed to determine a cost per unit your community may use. Local (e.g., cost per mile of street swept). This governments are also required to set the is the most complex of all types of millage rate required to cover the anticipated budgets to prepare and unit costs for expenditures for the year, as well as to some services are difficult to measure establish the necessary fees and charges for (e.g. cost per crime prevented by a crime various services. prevention bureau). However, it is useful in assessing the relative success Common Budget Formats of each program. Once again, line item There are several budget formats available allocations of the costs must be made. for use by local governments. The most  The management by objectives basic is the line item budget. Other budget budget (MBO) allows the identification formats have been developed to assist of specific programs or objectives to be legislative bodies in establishing policies accomplished during the budget year. rather than counting paper clips, the most This approach will allow the common being the program budget, program management to establish target dates

Handbook for Municipal Officials 82 Published by the Michigan Municipal League, July 2015 Budgeting

and costs for specific objectives and Of those revenue sources on the list, provide a means for the legislative body local elected officials have much to measure the performance of the discretionary authority in all except property various departments and the taxes, city income taxes, and management structure. intergovernmental revenue sources.  Zero based budgets (ZBB) require A city income tax is currently imposed each department to examine its in 22 Michigan cities, ranging in population programs by requiring justification for from 1,884 (Grayling) to 713,777 (Detroit). every dollar requested. Because of its Again, as is the case with property tax, state somewhat complicated nature, ZBB statutes closely control the creation of should only be used on a limited basis. revenues from this source through the Of the foregoing types of budgets, the Uniform City Income Tax Act (1964 PA program budget is often the most useful and 284). As amended, the Act now provides: practical for local officials. It clearly  Newly imposed city income taxes must outlines the purposes for which funds are receive voter approval. being proposed and it encourages a policy-  The tax may be imposed on residents, making approach to budgeting. Many local non-residents earning income in the city governments will use parts of all the and the income of corporations earned budgeting types, adapting each to the needs in the taxing city. of the community. Regardless of the overall  Limits on the rate of taxation (percent of budget format used, it is necessary to income) permitted based upon the size prepare line item detail for each section. of the city and other criteria.  Exclusion of certain types of income Revenue Sources from the tax. An important step in the budget process is to Intergovernmental revenues are a determine, as accurately as possible, the constant concern for local officials as the amount of revenue available for the formula for the statutory portion of revenue upcoming fiscal year. Revenue sources for sharing is subject to change by the state the operating budget are closely regulated by legislature and to reduction by executive state law and local charter. Special items of order of the governor. The same is true for income vary among local units of grants from both the state and federal government. Revenue sources for general government, as well as Act 51 monies. operating budget purposes include:  property taxes (controlled by law and Expenditures charter); Public expenditures are the amounts paid by  City income taxes; the municipality for the services required by  licenses and permits (building, the residents and businesses of the city or plumbing, heating, electrical, air village. Under state law, all public conditioning, occupancy, amusements, expenditures are to be only for public etc., controlled by ordinance); purposes. Generally, allowable expenditures  intergovernmental (state shared fall into the following categories: revenues, Act 51 monies, grants such as  general government (council, manager, CBDG, Clean Michigan, etc.); finance, clerk, etc.);  charges for sales and services  public safety (police, fire, code (engineering review fees, plan review enforcement and inspections, etc.); fees, etc.);  public works (streets, drains, sidewalks,  fines and forfeitures (drug forfeiture engineering, water and sewer, etc.); and proceeds, library book fines, and penal  leisure services (parks and recreation, fines); library, museum, etc.).  interest income; and  miscellaneous.

Handbook for Municipal Officials 83 Published by the Michigan Municipal League, July 2015 (Section 4/Chapter 19)

The Capital Budget—A Longer View When considering capital expenditures The capital budget provides funding for non- for new facilities, budget makers must keep recurring expenditures such as construction in mind the need for operating funds to place and acquisition of buildings, infrastructure, the new building or facility into operation. facilities, and equipment. These The need for additional employees, costs for expenditures are “lumpy,” non-repetitive, heat, lighting, water, telephones and so on and may span several years for project are appropriate concerns of those with completion or acquisition. budget making authority. The capital budget is another annual The capital improvement program plan of revenues and appropriations. It is a (CIP) is among the most important policy document adopted by the local legislative planning tool available to local budget body and having the force of law as a legally makers. binding allocation of funds. It often The CIP provides a longer-range represents the first year of a multi-year schedule for the community’s major capital capital improvement program. projects year-by-year. The Michigan Revenue sources for the capital may Planning Enabling Act of 2008 (MPEA) include any of those for the operating budget requires that the CIP must project at least six plus other sources for long-term capital years into the future: the first year of the CIP improvements: should be the upcoming budget year for  special assessments; capital budget allocations. Each operating  fees charged for construction; department is expected to be represented in  major road funds, Act 51—gas and the CIP, and the task of the budget makers is weight taxes, to make sure the year-to-year estimated costs are within the financial capacity of the  local road funds, Act 51—gas and local unit. weight taxes; Used properly, the CIP provides a  enterprise fund allocations from water, systematic approach to financial planning so sewer, and other utilities; and that budget makers can weigh the relative  bond proceeds from issues by the local priority of these projects, build up funds for governing body and any of the plan ahead for major investments, or authorities created by it (e.g., building undertake multi-year projects. This planning authorities, downtown development may include: authorities, housing authorities).  increases in operating costs for new Capital budget expenditures for facilities; property acquisition, construction and  acquisition of rights-of-way; equipment usually include allocations to provide facilities for the operating  contributions to other authorities; departments of the local unit. Most of these  special assessment projects; and are easily recognizable:  bond issuance planning.  general public works (streets, drains, The CIP can also provide opportunity water, sewer, sidewalks, lighting, motor for a systematic approach to preventive equipment pool); maintenance and the rebuilding of facilities  police (equipment, vehicles, facilities), and infrastructure. Scheduling of heavy preventive maintenance and rebuilding will  fire (equipment, apparatus, station often extend beyond the required 6-year CIP houses); time span, making a longer planning horizon  parks (land acquisition, recreation appropriate for some projects. For example: centers, play fields, athletic equipment,  concrete streets—joint grouting and nature trails, etc.); and resealing plus selective slab  library and museum (buildings, replacement—seven-year cycle, furnishings, and equipment).  concrete sidewalks—leveling and flag replacement—five-year cycle,

84 Handbook for Municipal Officials Published by the Michigan Municipal League, July 2015 Budgeting

 water distribution system—system replacement—20 to 30 year cycle or Michigan Planning Enabling Act  public buildings—plumbing, (ACT 33 of 2008) CIP requirements: heating, electrical system updates— The capital improvements program 20 to 30 year cycle. shall show those public structures and Under the MPEA, the planning improvements, in the general order of commission is responsible for preparing the priority, that in the planning commis- CIP annually and submitting it to the sion's judgment will be needed or desira- legislative body for final approval, unless ble and can be undertaken within the en- exempted by charter or otherwise. The suing 6-year period. The capital planning commission should coordinate with improvements program shall be based the chief executive official (e.g. village upon the requirements of the local unit president or manager) to compile projects of government for all types of public from each department or operating unit structures and improvements. Conse- within the village into the CIP. Each year, quently, each agency or department of the CIP should be updated to maintain the the local unit of government with au- minimum 6-year planning horizon, and to thority for public structures or improve- review and adjust the planned projects for ments shall upon request furnish the each year based on changing budgetary planning commission with lists, plans, conditions. This process provides an and estimates of time and cost of those opportunity for the planning commission to public structures and improvements. The consider projects against the adopted master planning commission, after adoption of a plan for the village, ensuring that major master plan, shall annually prepare a investments best support the community’s capital improvements program of public long-range goals. structures and improvements, (unless the Capital improvement programming is planning commission is exempted from essential for the long-term wellbeing of the this requirement by charter or other- community. The importance of this part of wise). If the planning commission is ex- municipal finance cannot be overstated. empted, the legislative body shall either prepare and adopt a capital improve- For More Information ments program, separate from or as a Sample budgets, budget policies and part of the annual budget, or delegate it ordinances are available through the to the chief elected official or a none- League’s Resource Center, by emailing lected administrative official, subject to [email protected]. final approval by the legislative body. (MCL 125.3865) Chapter based on materials provided by A. Frank Gerstenecker, retired city manager and former consultant for the League’s Executive Search Service.

Handbook for Municipal Officials 85 Published by the Michigan Municipal League, July 2015

Section 4: Finance Chapter 20: Purchasing

Introduction mechanisms for the allocation of municipal Purchasing departments exist to help funds are through ordinances and policies. governments manage their finances by In recent years, in order to set more realistic making the best expenditure decisions spending limits, some municipalities have possible. Elected officials have an important amended their charters (which requires responsibility to monitor the finances of review by the governor and a vote of the their organizations, part of which includes electors) to allow the purchasing function to approving purchase transactions. There are be legislated by local ordinance. several ways that the legislative body can support purchasing activity. First, the Local Ordinances council establishes the vision for the Legislation has a major impact on the organization, setting the tone for the day-to- services that can be provided to residents. day activities, as well as the ethical The activities conducted in public standards for the organization. Elected procurement are restricted to those officials can set meaningful rules regarding authorized by law. Therefore, many public fairness and open competition and work to entities have an ordinance that defines keep these rules current. Finally, councils important parameters of the purchasing can support professional development and process. Well-written legislation will allow technological improvements. the purchasing department flexibility in This chapter will provide an using criteria in addition to price as understanding of the public purchase evaluation tools. This ordinance may discuss process through a review of enabling how responsibility for the purchasing legislation and a discussion of the day-to- function flows. For example, the ordinance day aspects of the operation. may state that the organization’s executive branch (manager, mayor, State Statute administrator, etc.) may enter into contracts There are no longer any state statutes based on the recommendation of the requiring public bids on municipal contracts. purchasing director with approval of the 1993 PAs 167 & 168 which required legislative body for certain dollar limits. municipalities to seek competitive bids for Ordinances will vary in the level of purchases over $20,000 in order to receive detail included. Some will establish a dollar state shared revenue money, were repealed amount for obtaining both written bids and in 1996. The state has relegated the task of legislative approval for purchase developing public purchasing guidelines to transactions; advertising requirements; and local governments. outlining the circumstances in which competitive bidding is not required. Charter Provisions Ordinances may further detail specific Local government officials must look to responsibilities of the purchasing function their charter for purchasing guidelines and such as encouraging competition; promoting restrictions. A charter may establish who is standardization in the use of like products responsible for purchasing (such as the throughout the organization; barring vendors manager or administrator) and also include from bidding opportunities; and disposal of the maximum dollar amount that can be obsolete property. Some organizations have appropriated before advertising for socially motivated buying policies, such as competitive bids. Other local control local preferences or disadvantaged business

86 Handbook for Municipal Officials Published by the Michigan Municipal League, July 2015 Purchasing programs. not restrictive in nature. Competitive In these cases, authorization for such bidding has long been recognized as one of programs will often be addressed within this the best avenues to insure a healthy and enabling legislation. equitable public purchasing process (Public Procurement Management, First Edition, Cradle to Grave Philosophy NIGP, Herndon, VA 2000). Professionally staffed purchasing The specifications are combined with departments follow the “cradle to grave” the appropriate terms and conditions into a philosophy. In other words, a purchasing bid document and are advertised in the local department is responsible for obtaining all of press and distributed to suppliers that are the products and services needed by the able to respond. Advertising is an expense, organization at the right time, for the right which in lean economic environments, may price and in the right quantity (cradle). be considered expendable. It is important to Purchasing should redistribute property, note that posting public notices of purchase equipment and other resources among transactions is an essential component of departments when necessary (mid-life). maintaining an exemplary and inclusive Finally, purchasing is responsible for process. disposing of the organizations’ assets once Bidders are informed of the date, the they have become obsolete and of no further exact location, and the time of day responses use (grave). must be submitted (often referred to as the The purchasing process begins with the bid due date or bid opening date). This is adoption of the budget, which is the critical information in that if this deadline is organization’s fiscal plan for the year. The missed, bidders run the risk of their bids not budget document provides purchasing with being accepted. In general, bids are information about upcoming capital submitted to the clerk’s office or some other projects, equipment and service needs, as area independent of the purchasing or well as daily operating supply item needs. requesting department. They are time- Purchasing uses this financial perspective to stamped and held in a secure location until plan the timing of purchase transactions and the time of the scheduled bid opening. Such to combine the needs of several departments precautions help protect the integrity of the with the overall goal of taking advantage of bid process by reducing the possibility of quantity discounts. bid tampering. Bid openings are conducted The budget document can be used by in public and vendors are encouraged to purchasing to prepare a procurement attend and take advantage of the opportunity calendar. This calendar is a plan for bidding to review the responses submitted by their all capital and recurring operating supply competitors. needs. The calendar helps purchasing meet Companies and their respective the entity’s needs using an organized responses are evaluated to determine the approach. The purchasing calendar, in lowest responsive and responsible bidder. conjunction with the budget, permits the This allows for a review of the product, its organization to spread its expenditures pricing and compliance with the throughout the fiscal year. specifications (responsive), as well as the The next step involves developing offering firm’s financial standing, references specifications or an exact description of the and experience (responsible). Although product or service needed. This may be done price is always of primary concern, a vendor by the end user, the purchasing department, that delivers a quality product on time may an outside consultant if the item is complex prove to offer a lower overall product cost. in nature, or it may be a group effort. After the evaluation process, the Purchasing reviews the specifications for purchasing transaction will be submitted to completeness and clarity, and makes sure the legislative body for approval in this description is open to competition and accordance with the dollar limits set within

Handbook for Municipal Officials 87 Published by the Michigan Municipal League, July 2015 (Section 4/Chapter 20) the charter, ordinance, or policy. Another example is the use of the Transactions below the specified limit will internet. Purchasing professionals can be approved administratively. research products, locate distributors, and Purchasing departments are typically receive timely information online. Many responsible for disposing of the public organizations have a website which organization’s obsolete assets. Property can be used as a mechanism to reach a wider disposal can be handled as a trade-in pool of vendors. Information can be posted allowance toward the purchase of a new to the internet on doing business with the piece of equipment, using a sealed bid organization as well as a list of currently process or by conducting a live auction often available bid opportunities. Websites can be with a professional auctioneer. The used as an alternative bid document evaluation standards work in reverse of the distribution method. Rather than incurring purchase process, i.e., the highest bidder is duplicating, envelope insertion, and postage selected. costs, bids can be generated electronically and posted to the website. Interested vendors Purchasing as a Corporate Citizen can print these documents as needed. Purchasing has a responsibility to and Some advanced technology applications relationship with both internal and external allow vendors to submit bid responses to the customers. It often functions as an organization electronically while still ambassador to the business community following the established bid security while at the same time working to protect procedures. Some departments are moving the organization’s interests. The purchasing away from the practice of maintaining department has a responsibility to its vendor databases and are placing the suppliers to be fair, accessible and to responsibility of researching opportunities conduct its business with integrity. on the business community. Its internal customers are the employees Cooperative purchasing arrangements that rely on purchasing to acquire the are another emerging trend. The concept products and services needed to carry out behind cooperative buying is to seek and their work. Purchasing works closely with obtain the best deal possible by buying in the corporation counsel to make sure that volume. These arrangements cover the policies, procedures, contracts, etc. properly spectrum from being formal, dues paying protect the organization while being fair to groups to having informal alliances that vendors. The department has an impact on meet on an as-needed basis. In order to be the municipality’s financial health by successful, members must agree on the types fostering competition and making sure it of products that can be of use to the group pays a fair price for products and services. and incorporate the flexibility for each These efforts serve to instill behaviors that organization to fine tune its needs into the project the organization as business-friendly specifications. and well managed. Conclusion Trends The public purchasing process is conducted As with other areas, the impact of in accordance with the organization’s technology on the public purchasing arena enabling legislation, in an open, accessible, has been substantial. Purchasing has and competitive manner. Technology should incorporated technology into its processes in be used to expedite the process, enhance the several ways. First, it is common for routine aspects of the operation and to purchase orders to be generated using a conduct research. software package specifically designed for A well run, professional purchasing this purpose, automatically routed through operation reflects positively on the entire the approval process, and sent to the vendor organization. As an elected official, you can electronically. encourage suppliers to contact the

88 Handbook for Municipal Officials Published by the Michigan Municipal League, July 2015 Purchasing purchasing department knowing they will be treated fairly. Taxpayers can be informed that their money is being handled responsibly.

Chapter provided by Rae Townsel, purchasing agent for the city of Southfield..

Handbook for Municipal Officials 89 Published by the Michigan Municipal League, July 2015

Section 4: Finance Chapter 21: Financing Capital Improvements

Few municipalities have cash resources to there are limitations on the amount of short-term finance facilities with large price tags and long debt that can be issued in relationship to the life, such as a new municipal office, a new water amount of the grant, revenue sharing, or bond treatment facility, a new civic center, or other issue. Prior to the issuance of these notes, the long term capital improvements. Most must municipality is encouraged to contact its incur debt in the form of a bond issue to finance financial advisor and/or bond counsel to insure such improvements and facilities, similar to the compliance with state law. home buyer who must incur debt in the form of Energy conservation notes may be a mortgage. approved for issuance for periods not to exceed The incurring of debt by a municipality ten years. Use of proceeds from such notes is should be considered among the most serious of limited to financing improvements resulting in all courses of action available to a village energy conservation. council. Indeed, state statutes and administrative Installment sales contracts are permitted regulations require local authorities to follow by 1933 PA 99 (Purchase of Lands and Property certain procedures and processes prior to for Public Purpose) for installment periods not issuance of most debt. exceeding 15 years or the useful life of the property being acquired, whichever is shorter. Bond Issuance and Notes—Incurring Installment contracts may be used for Debt acquisition of land, equipment or property. Notes Approval by the Michigan Department of Notes are instruments of debt having shorter Treasury and vote of the electorate are not duration than the term of bonds. Notes may be required. issued for bridging short lapses of time between the date of need for an expenditure and the date Bond Issuance when budgeted revenues are available. Long term municipal debt is most often incurred The most common of these are tax in the form of bond issues. Most are issued as anticipation notes (TANs) which may be issued tax exempt bonds but municipalities may be, for operating or capital improvement purposes. under certain circumstances, required to issue These notes are essentially a promise to pay the taxable bonds. Interest income received by the lender, usually a local bank, from tax revenues buyer or holder of the tax-exempt bond is not anticipated during the current or next succeeding subject to federal, state, or local income taxes. fiscal year. This creates a higher demand for tax-exempt Amendments to the Municipal Finance Act bonds and issuing municipalities realize great (2001 PA 34) have provided cities and villages savings in interest costs. This also reduces with additional tools and allow the issuance of income tax revenues returned to the various short-term debt for the planning and engineering units of government. costs for capital improvements. As a result of Financial experts and statutes have given these amendments, cities, villages, counties, and titles to various types of bond issues which townships are able to issue bond anticipation reflect the quality of the issue. notes (BANs), grant anticipation notes (GRANs) General obligation (GO) bonds are the and revenue anticipation notes (RANs) in highest quality because they pledge the taxing anticipation of funds from these bonds, grants, capacity of the municipality to retire the bonds and revenue sharing, respectively. However, and pay the interest on them. There are two

Handbook for Municipal Officials 90 Published by the Michigan Municipal League, July 2015 Financing Capital Improvements types of GO bonds, discussed below. Revenue discussed later in this chapter, provide an bonds on the other hand, have a lower quality example of such an authority. because only the revenues from service fees and The county drain commission may issue charges for use of the system (e.g. water, sewer, county drain bonds—bonds for drain and electric, parking, etc.) are available to pay sanitary sewer system improvements and principal and interest on the issued bonds. apportion the cost for debt service among the Unlimited tax general obligation (UTGO) cities, villages, and townships which benefit. bonds, or voted GO bonds are bonds for which Tax increment bonds—Tax increment the electorate has pledged to tax themselves an financing (TIF) through the creation of TIFAs, amount which is sufficient to retire the bonds LDFAs, and DDAs which may issue TIF bonds, and pay interest on all that are outstanding. That are discussed in depth later in the chapter. is, the local taxing authority is not limited in the Amendments to the Municipal Finance Act amount of taxes that can be levied to retire the also created capital improvement bonds, which bonds and pay interest in any year. The may be issued for any “depreciable asset” as electorate must vote to approve the issue prior to Limited Tax General Obligations (LTGOs) of the issuance of the debt. the issuing municipality. This type of bond issue Limited tax general obligation (LTGO) is subject to the right of referendum, as are bonds or non-voted GO bonds are bonds for several of the other types of bond issues which the authority to raise taxes to pay discussed above, and is payable from the general principal and interest with bonds is limited to the taxing powers, subject to statutory and charter maximum amount of taxes that the municipality limitations, of the issuing municipality and/or is permitted to levy by state law and the local other revenue sources. charter. The electorate has not approved the There are pitfalls in incurring bonded issue nor given specific authority to be taxed indebtedness. Scarce resources are consumed by above the level authorized by law or charter to interest and principal costs and the cost of pay principal and interest on the issue. issuance. For example, debt service costs over a With special assessment district (SAD) 15-year bond issue could be more than double bonds, payment of principal and interest is the cost of the facility. Costs over a 30-year assured by pledging revenues from collection of issue could be more than triple the initial cost of special assessments and interest thereon. the facility or project. And, as infrastructure and Revenue bonds are used to finance facilities age, costs of repair and maintenance municipal operations which are characterized as accelerate. Continuing debt service costs being self-supporting and having their own mitigate against the allocation of sufficient funds revenue source such as service fees (e.g., sewer for current maintenance requirements. and water systems, golf courses and recreation facilities, parking garages, and auditoriums). Special Financing Tools for Revenue bonds are retired with revenue Development/Redevelopment produced from the facility or other service fees. Cities and villages are the crucible for fostering Villages may issue Michigan development and redevelopment. Realizing this, Transportation Fund bonds and pledge a the state legislature has enacted permissive portion of their statutory share of transportation legislation to assist cities and villages with this funds to pay principal and interest on the bonds. purpose. A city or village may issue  Housing authorities and building intergovernmental contracts and authority authorities are possibly the oldest of these bonds if they enter contracts with counties and special development entities, having been authorities to have a facility (water system, created by legislation in 1933 and 1948, sewer system) built and leased to the operating respectively. Housing authorities were city or village, which pays rent on the facility in permitted for the purpose of eliminating sufficient amount to pay debt service costs on detrimental housing conditions through the bonds issued by the county or authority. acquisition, construction, and ownership of Local building authorities, which will be

Handbook for Municipal Officials 91 Published by the Michigan Municipal League, July 2015 (Section 4/Chapter 21)

housing. Municipalities may create housing  A local development financing authority authorities and incur debt for housing (LDFA) may be created to encourage local purposes. development, to prevent conditions of  Building authorities may, among other unemployment, and to promote growth. In things, acquire, own, construct, operate, and 2011, transit-oriented development and maintain buildings, recreational facilities, transit-oriented facilities became allowable parking garages, and so on for any activities by LDFA’s. legitimate public purpose of the  A brownfield redevelopment authority municipality. They can incur debt through (BRA) may be created to clean up bond issues and lease the resultant facility contaminated sites, thus allowing the back to the municipality with rental income property to revert to productive economic to pay the principal and interest on the use. In 2011, transit-oriented development bonds. Upon final retirement of the bonds, and transit-oriented facilities became the authority would convey the property to eligible to be used by BRA’s. the municipality. Michigan cities and  A corridor improvement authority (CIA) villages have made widespread use of this may be created to redevelop a commercial financing technique. However, it should be corridor and to promote economic growth. noted that the capital improvement bonds In 2011, transit-oriented development and discussed above could eliminate the transit-oriented facilities became eligible to issuance of building authority bonds. be part of CIA’s. In addition, municipalities can now set up transit TIF districts that do Special Financing for Economic not require a community to wait for opt-outs Development of tax capture from other governmental units Cities and villages often need special financing (counties, libraries, community colleges, tools to complete projects designed to preserve etc.). their economic health. Several Michigan statutes Three other types of organizations your allow municipalities to create specialized community may find useful, although they organizations for use as economic development cannot use tax increment financing revenues, tools. The chart the end of this chapter compares are: these organizations.  An economic development corporation Four of these organizations are able to use (EDC) may be created to alleviate and tax increment financing revenues (TIF). In the prevent conditions of unemployment and to simplest terms, TIF is the capture of the increase assist industrial and commercial enterprises. in property tax revenue in a defined district to In 2011, transit-oriented development and fund capital improvements in that area. transit-oriented facilities are now part of the  A downtown development authority list of enterprises for which a project may be (DDA) may be created to halt property value undertaken in the Act. deterioration, to increase property tax  A principal shopping district (PSD) may valuation in the business district, to be created to develop or redevelop a eliminate the causes of deterioration, and to principal shopping area and to collect promote economic growth. revenues, levy special assessments, and  A tax increment finance authority issue bonds to pay for its activities. (TIFA), available prior to 1989, has been  A business improvement district (BID) replaced by the LDFA; no new TIFA may may be created to develop a more successful be created, and the boundaries for an and profitable business climate in a defined existing TIFA cannot be expanded. As of area, and to collect revenues, levy special 2011, transit-oriented development and assessments and issue bonds to pay for its transit-oriented facilities are allowable activities. activities by TIFA’s. Tax Abatement Programs

92 Handbook for Municipal Officials Published by the Michigan Municipal League, July 2015 Financing Capital Improvements

In 1974, the Legislature decided to encourage developed. The Legislature adopted 1974 PA economic development by providing for reduced 198 (Plant Rehabilitation and Industrial property tax assessments for specifically Development Districts Act), which selected business projects which were yet to be

Summary of Economic Development Tools

DDAs TIFAs LDFAs BRAs EDCs CIA PSDs BIDs

Authorized Cities, Cities Cities, Cities, Cities, One or more Cities with One or more municipaliti villages and villages and villages and villages cities, designated cities with an es townships urban townships and villages, and principal urban townships townships townships shopping design district(s) plan

Limitations One per No new One per Industrial or Industrial Established Commercial Commercial municipality areas municipality commercial area commercial area with at or industrial established property district least 10 retail area with after 1989 adjacent to businesses boundaries arterial or established collector road by city with size and resolution use restrictions

Requireme Deteriorating Deterioratin Industrial Environmen Industrial 10 Designated Designated nts property g property area tal or contiguous as a as a BID by values values contaminati 501(c)(3) parcels or 5 principal one or more on nonprofit acres; mixed- shopping cities by use; water area in resolution and sewer master plan available

Eligible Located in Within Public Environmen Issue Improvement Improve Improvement projects DDA defined facility to tal cleanup bonds of land and to highways of highways district with TIFA benefit for private construct, and and approved area industrial industrial rehabilitate, walkways; walkways; DDA/TIF park developme preserve, promotion; promotion; plans nt equip or parking, parking, maintain maintenance maintenance buildings or , security or , security or facilitate operation operation transit in the area

Funding TIF from TIF from TIF on TIF; Tax TIF, special Bonds, Bonds, sources District; plan area eligible Revenue exempt assessments, special special millage property Bonds bonds bonds, fees, assessments assessments donations , gifts, grants, city funds, other

was the first of three acts enabling to 12 years at the discretion of local abatement of part of the tax burden for governing bodies. impending business investments in facilities The cost of renovations or rehabilitation and equipment. may be entirely exempt from increases in PA 198 provides for a reduction of the assessed value for property tax purposes. assessed value of qualifying projects for up Thus, taxes on costs of renovation or

Handbook for Municipal Officials 93 Published by the Michigan Municipal League, July 2015 (Section 4/Chapter 21) rehabilitation could receive abatement of 100 percent. Taxes on new building and equipment could be abated no more than 50 percent. Personal property and real property, excluding land, are eligible for abatement if the intended use is for manufacturing, research and development, parts distribution and warehousing. Abatements for commercial property, granted by 1978 PA 288, became very controversial, and by act of the Legislature no new commercial abatements were permitted after December 31, 1985. Stimuli for development of high technology enterprises attracted legislative interests and in 1984 PA 385 (Technology Park Development Act) enabled municipalities to create one “technology park district” having a minimum of 100 acres of vacant land near a public university. Like the preceding Acts, abatement could not exceed 50 percent for a maximum of 12 years. PA 266 of 2003 allows for creation of Tool and Die Renaissance recovery zones, where eligible businesses can be granted virtually tax free status for up to 15 years. The state is responsible for designating the zones, but local governments must approve them. Briefly, the abatement process involves creation of a district, receipt of applications in a form acceptable to the State Tax Commission, local approval of the exemption certificate and state approval of the exemption certificate. Some of the foregoing development/redevelopment initiatives provide financing through the issuance of tax-exempt bonds discussed earlier.

Chapter provided by Robert C. Bendzinski, president of Bendzinski & Co., Municipal Finance Advisors, established to provide financial advisory services to municipalities since 1977.

Portions of this chapter are adapted from materials prepared by A. Frank Gerstenecker.

94 Handbook for Municipal Officials Published by the Michigan Municipal League, July 2015

Section 4: Finance Chapter 22: Special Assessments and User Charges

Municipalities often raise funds for special tax, a user charge must “serve a regulatory purposes by imposing special assessments or purpose rather than a revenue-raising user charges as an alternative to imposing a purpose.” tax. All three financing mechanisms have Rates and charges must also bear a elements in common, and distinguishing one direct relation to the cost of providing the from the other is not always a simple matter. service to the ratepayer. A fee designed to Any assessment or user charge not properly raise revenue for general public services in imposed, however, will be construed as a addition to covering the cost of providing tax, which must satisfy different the service which is the subject of the fee is requirements for validity. actually a tax. A fee designed to raise While a special assessment bears some revenue from a broad range of users of a of the characteristics of a tax, it differs in system to pay the cost of an improvement to that a special assessment may be levied only a discrete part of the system which will on land and may be imposed only to pay the benefit only a smaller group of users may cost of an improvement or service by which also be considered a tax. the assessed land is specially (as opposed to Revenues derived from user charges (or generally) benefited. assessments) must be segregated from other In contrast, a broadly imposed tax municipal funds and applied solely to the yields a general benefit to the community expenses of providing the service or the with no particular benefit to any person or improvement. The expenses of providing the parcel. service may include some indirect costs of Generally, a user charge is the price providing the service. paid for a service provided based directly on the value of the individual use of the service Special Assessments or benefit. Although a municipality may Authority impose a tax whether or not the taxpayer To impose a special assessment, a particularly benefits from the purposes municipality must first have the statutory served by the tax, and may specially assess authority to make the improvement or parcels which do particularly benefit from provide the service for which the assessment an improvement, it may impose a user will be imposed. Second, the municipality charge only on individuals actually served. must have the statutory authority to assess While the improvements made with a for that type of improvement or service. special assessment generally must increase Special assessments may be imposed for or maintain the value of the lands specially many types of improvements and even benefited, the services which are the services for which specific statutory and subjects of rates and charges do not other local implementing authority is found. necessarily have that effect. The value to Typical subjects of special assessments are one user may be greater than another street improvements, including paving, curb, depending on individual needs and gutter and sidewalk improvements, and consumption. water and sewer improvements. In addition In Bolt v City of Lansing, the Michigan to statutory authorities, city and village Supreme Court developed a test for user charters and special assessment ordinances, charges. In order to avoid classification as a

Handbook for Municipal Officials 95 Published by the Michigan Municipal League, July 2015 (Section 4/Chapter 22) if any, should be reviewed as sources of  apportionment of cost authority.  opportunity to object and appeal Where statutory authority exists,  dissemination municipalities will often finance an  publication and mailing improvement through the issuance of bonds  timing. in anticipation of special assessments, secured primarily by the assessments and Enforcement secondarily by the general fund of the Once confirmed, assessments may become a municipality. lien on the assessed property.

Basic Requirements User Charges The lands proposed to be specifically Subjects and statutory authority assessed comprise a special assessment The Revenue Bond Act of 1933, provides district. The assessments are apportioned the principal statutory authority for the among the landowners in the district. imposition of rates and charges for the Assessments may be required to be paid in a “service, facilities and commodities single payment or in multiple installments. furnished by... public improvements.” It Interest may be charged on unpaid authorizes any public corporation to installments. purchase and acquire one or more public An improvement which reduces improvements; to own, operate and maintain property value may not be specially the same; to furnish the services of such assessed. Further, the benefit conferred by public improvement to users within or the improvement may not be without its corporate limits; to establish by disproportionate to the cost of the ordinance such rates for services furnished improvement, i.e. the cost of the by the public improvement as are necessary improvements may not exceed the to provide for the payment of anticipated increase in the value of the administration, operation and maintenance property resulting from the improvement. of the public improvement so as to preserve Although this proportionality may “not it in good repair and working order; and to require a rigid dollar-for-dollar balance,” the provide for the debt service, if any, on bonds cost of the improvement must reasonably issued to finance the improvement providing relate to the increase in value in order to the service. avoid an unconstitutional taking of property. Other statutes and local charters provide No specific method of apportioning the additional authority. Municipalities regularly cost of an improvement is required, impose rates and charges for a variety of provided that the method selected is fair, services. just, equal and proportionate to the benefits conferred. Rate Ordinances Municipalities impose user charges by Key Procedures adopting a rate ordinance governing a Procedural requirements vary widely particular service or range of services. The depending on the particular statute, charter ordinance should set forth the purpose of the or ordinance involved. The following are ordinance, the service provided, the rates to key elements to any assessment process: be imposed and the various classifications of 1. petitions, users, the timing and method of billing and 2. hearings on necessity and the payment, penalties for nonpayment and apportionment of the assessment, and other enforcement provisions. To meet the 3. notice Bolt standard described below, the ordinance

 content should make a serious attempt, to relate the  nature, location, cost of user charge to a regulatory scheme. improvements Ordinances may also address a broader and

96 Handbook for Municipal Officials Published by the Michigan Municipal League, July 2015 Special Assessments and User Charges more detailed range of subjects, including the value of the services rendered and the regulations governing the use or provision of cost of providing the service. Alexander v the service and licensing issues. Various Detroit 392 Mich 30 (1974). grant making and regulatory authorities may require the use of a particular form of rate Enforcement and Collection ordinance as a condition for approval. In general, statutes authorizing user charges for services provide that the charges become Standards in Ratemaking: The Bolt Test a lien on premises served. Statutes also The Michigan Supreme Court’s decision in commonly allow the municipality to Bolt turned ratemaking on its head. In Bolt, discontinue service for non-payment of the the court articulated a new three-part test for charges. determining whether a charge is validly characterized as a fee: Chapter provided by Amanda Van Dusen, 1. it must serve a regulatory purpose, a principal in the law firm of Miller, 2. it must be proportionate to the necessary Canfield, Paddock and Stone, P.L.C. costs of the service, and 3. the user must be able to refuse or limit use of the commodity or the service for

which the charge is imposed. These three criteria are not to be considered in isolation “but rather in their totality, such that a weakness in one area would not necessarily mandate a finding that the charge at issue is not a fee.” Graham v Township of Kochville, supra, 236 Mich App 141 (1999). As indicated in Graham, voluntariness may be less significant where the elements of regulation and proportionality are strong. Conversely, where the regulatory aspect of the fee is less obvious, the voluntary use of the system may assume more importance. The method selected for calculating rates and charges must be reasonable and may not be arbitrary and capricious. Substantial evidence preferably set forth in the rate ordinance itself should justify the charges made and the method used. The Bolt court held that user charges must reflect “the actual costs of use, metered with relative precision in accordance with available technology....” The rates and charges for municipal services must be applied to similarly situated users in a similar way. It is appropriate to distinguish among different classes of users and to apply different rate schedules to each class. The requirement that rates be uniformly applied is an extension of the overall requirement that charges be proportional to

Handbook for Municipal Officials 97 Published by the Michigan Municipal League, July 2015

Section 4: Finance Chapter 23: Limits of Municipal Expenditures

Municipalities are frequently requested What Is a Public Purpose? to make donations to various worthy private The Michigan Supreme Court has defined organizations. Such organizations include the objective of a public purpose: chambers of commerce; hospitals; museums; Generally a public purpose has for veterans’ organizations; community funds; its objective the promotion of the public Boy Scouts, Red Cross; and other health, safety, morals, general welfare, educational, promotional, or benevolent security, prosperity, and contentment of associations. Frequently, it is difficult for the all the inhabitants or residents within the legislative body of a municipality to refuse municipal corporation, the sovereign such requests. However, it appears clear powers of which are used to promote from Michigan law that such donations are such public purpose....The right of the questionable expenditures of public funds. public to receive and enjoy the benefit Generally, a municipality’s power to of the use determines whether the use is spend money is derived from the state public or private. (Hays v City of through the Michigan Constitution and state Kalamazoo, 316 Mich 443, 453-454 laws. In addition to specific grants of power, (1947)) cities and villages with home rule authority are also able to rely on the applicable The following questions may be helpful provisions in the Constitution and statutes in determining whether an expenditure is for the power to spend on municipal appropriate: concerns. Regardless of the authority, it is 1. Is the purpose specifically granted by generally held, however, that municipalities the Michigan Constitution, by statute, have the power to expend funds only for a or by court decision? public purpose. 2. Is the expenditure for a public purpose? One test for determining a public 3. Is the municipality contracting for purpose is whether the expenditure confers a services that the municipality is legally direct benefit of reasonably general authorized to provide? character to a significant part of the public. 4. Is the operation or service under the It should be noted that the public purpose direct control of the municipality? test has also been limited to the provision of If you can answer “yes” to these services for which municipalities exist and questions, the expenditure is most likely the powers they have authority to exercise. appropriate. With respect to the question raised, neither the Michigan Constitution nor state law Michigan Constitution of 1963 grants to municipalities the power to spend The following provisions of the Michigan public money on employee parties, gifts, etc. Constitution are the basis for municipal Nor can a good argument be made that the expenditures: expenditures are for a public purpose. Article 7, Sec. 26. Absent a grant of spending authority, and no Except as otherwise provided in this clear public purpose defined, the constitution, no city or village shall have expenditure is most likely illegal. Simply the power to loan its credit for any put, a municipality cannot give public funds private purpose or, except as provided away. by law, for any public purpose.

Handbook for Municipal Officials 98 Published by the Michigan Municipal League, July 2015 Limits of Municipal Expenditures

public in nature, but the operation is not Article 9, Sec. 18. under the control of the city or village which The credit of the state shall not be is making the contribution, it may granted to, nor in aid of any person, nonetheless still be an illegal expenditure. association or corporation, public or In Detroit Museum of Art v Engel, 187 private, except as authorized in this Mich 432 (1915) the Supreme Court ruled constitution. (Note: This applies to all that Detroit could not pay the salary of the political subdivisions of the state. Black museum director, even though the city had Marsh Drainage District v Rowe, 350 title to the real estate on which the museum Mich 470 (1958)). was located and had minority representation on its board of directors. One sentence of the Private Purpose Decisions opinion which has been much quoted is: Expending public funds for a private purpose under Michigan law is illegal. For The object and purpose of relator is over a century, the Michigan Supreme Court a public purpose in the sense that it is has considered the limitations on expending being conducted for the public benefit, public funds and has been consistent in its but it is not a public purpose within the rulings. Most involve the relationship of a meaning of our taxing laws, unless it is municipality with private businesses. managed and controlled by the public. 1. A contract in which the village of In more recent cases the Art Museum Fenton proposed to expend $1200 to doctrine has been applied on a limited basis. drain a marsh, improve a highway, and Hays v City of Kalamazoo, 316 Mich 443 construct a dock in order to induce a (1947) involved the validity of the payment certain firm to establish a stavemill in of membership fees by Kalamazoo to the the village, was held invalid. Clee v Michigan Municipal League. The court Sanders, 74 Mich 692 (1889). distinguished the Art Museum case by 2. Money from a bond issue could not be saying that, contrary to the payment of dues spent if it appeared that the purpose of to the League, the transaction with the the bond issue was actually to provide a Museum did not “involve the right of a fund for paying bonuses to industry for municipality to avail itself of, and to pay for, locating in the city. Bates v Hastings, information and services of benefit to the 145 Mich 574 (1906). city in its governmental capacity.” 3. A city-owned building, which was In 1957, the Michigan Supreme Court occupied by a manufacturing company, held that Detroit could properly transfer to burned down. The city agreed to pay the Wayne County certain city park land to insurance proceeds to the manufacturer facilitate the construction of a home for if it would rebuild the building and neglected and abandoned children. In occupy it for a term of years. The sustaining the right of the city to assist the rebuilding, however, was not done on project in the manner indicated, the court the city-owned property. It was held that noted that two-thirds of the population of the payment of the $5,000, even though not county resided in the city of Detroit, and that raised by tax money, was unlawful. the proposed institution would provide care McManus v Petoskey, 164 Mich 390 for children from within the city. The court (1911). held that the city was aiding in the accomplishment of a purpose that it might Public Purpose—but Outside Municipal itself have accomplished directly under its Control charter. Brozowski v City of Detroit, 351 Most of the above cases involve a Mich 10 (1957). purpose which is worthy, but private in nature. There is another line of cases that involves an additional concern. If the purpose for which the funds are expended is

Handbook for Municipal Officials 99 Published by the Michigan Municipal League, July 2015 Section 4/Chapter 23

Opinions of the Attorney General private organization, the federal or state There are numerous opinions by the government, a county, village, township, Attorney General regarding municipal or another city for services considered expenditures. The following are offered as necessary by the municipal body vested examples. with legislative power. Public peace,  Money raised under the special tax for health, and safety services may include, advertising can be used to advertise the but shall not be limited to, the operation city’s advantage for factory location, but of child guidance and community not to buy land to be given for a factory, mental health clinics, the prevention, to build a factory for sale or rent, or to counseling, and treatment of give a bonus for locating a factory in the developmental disabilities, the city (1927-28 AGO p. 672). prevention of drug abuse, and the  In a park owned by the American counseling and treatment of drug Legion which had installed a lighting abusers. 1978 PA 241. system and held ball games open to the In addition, there have been other public, it would be unlawful for a expansions of a municipality’s spending village to assume the cost of the power with respect to a downtown electricity used by the park up to $100 development authority, MCL 125.1651 et per year, even though the majority of the seq. (1975 PA 195); public economic village taxpayers had signed a petition development corporation, MCL 125.1601 et requesting such payment (1935-36 AGO seq. (1974 PA 338); empowerment zone p. 5). development corporation, MCL 125.2561 et seq. (1995 PA 75); enterprise community Expansion of Public Purpose development corporation, MCL 125.2601 et The Attorney General has said that a county seq. (1995 PA 123); and brownfield may not use federal revenue sharing funds to redevelopment financing, MCL 125.2651 et make a grant to a private nonprofit hospital seq. (1996 PA 381). Each law allows money (1973 AGO No. 4851). The Attorney and resources to be used for economic General concluded that since it could not growth under the control or oversight of the expend its own funds as contemplated, it municipality’s governing body. could not disburse federal funds for that purpose. The Attorney General suggested Specific Authorizations Granted by Law that the county might obtain social service As a public decision maker, you have a legal and medical service needs by contract. In a duty to make sound financial decisions. later opinion the Attorney General Whenever a question arises that does not concluded a county could not expend federal easily match statutory law, or meet the revenue sharing funds for loans to private public purpose analysis, the expenditure is businesses unless the federal statute likely improper. Remember, if the question expressly authorized such expenditure (1987 cannot be resolved, your village attorney is AGO No. 6427). the best resource for legal advice. You may Considerable use has been made of the also wish to consult the state of Michigan authority to contract with private nonprofit Department of Treasury website agencies to perform services on behalf of a (treas.state.mi.us/localgov/Audit/ city or village. 1977 AGO No. 5212 lawfulex.htm) for guidelines. specifically recognized the validity of this procedure. The state legislature Statutory Authorizations for Expenditure subsequently amended section 3 (j) of the Listed below are several specific statutory Home Rule City Act as follows: authorizations for public expenditures: In providing for the public peace,  Cultural activities (Home Rule City health, and safety, a city may expend Act). MCL 117.4k. funds or enter into contracts with a  Water supply authority. MCL 121.2.

100 Handbook for Municipal Officials Published by the Michigan Municipal League, July 2015 Limits of Municipal Expenditures

 Public utility. MCL 123.391.  Band. MCL 123.861.  Exhibition area. MCL 123.651.  Publicity/Advertising. MCL 123.881.  Memorial Day/Independence  Principal shopping district. Day/Centennial celebrations. MCL MCL125.981. 123.851.

Handbook for Municipal Officials 101 Published by the Michigan Municipal League, July 2015

Appendix 1: Glossary

Annexation – The incorporation of a land conditions including the manner and extent area into an existing city or village with a to which taxes and revenues are shared, the resulting change in the boundaries of that duration of the agreement, methods by unit of local government. which a participating unit may enforce the contract and designation of which local unit Bond – A certificate or instrument certifying has jurisdiction upon the expiration or the existence of a debt. Local units of termination of the contract. government only have those powers to borrow monies expressly granted by law. Consolidation – The formation of a new Municipal obligations are generally city boundary through consolidation of any classified as either general obligation or of the following: special obligation bonds. A special a. two or more cities or villages; obligation bond is payable from a specially b. a city and one or more villages; or identified source; a general obligation bond c. one or more cities or villages is payable without reference to a specific together with additional territory not source. included in any incorporated city or village. Charter – The basic laws of a municipal A new village boundary may be created corporation describing the powers, rights, by the consolidation of two or more villages. and privileges which may be exercised within a political or geographic area by that Council – A legislative, executive, advisory, municipal corporation and its officers. A or administrative governmental body whose charter is similar to a constitution on the elected or appointed members are assigned state and federal levels of government. certain duties and responsibilities by law such as a city/village council or a citizens Budget – Under the Michigan Uniform advisory council. Budgeting and Accounting Act (MCL 141.421 et. seq.), budget means a plan of Enterprise Fund – A fund established to financial operation for a given period of finance and account for the acquisition, time, including an estimate of all proposed operation and maintenance of governmental expenditures from the funds of a local unit facilities and services which are entirely or and the proposed means of financing the predominantly self-supporting by user expenditures. It does not include a fund for charges. Examples of enterprise funds are which the local unit acts as a trustee or those for water, gas and electric utilities, agent, an intragovernmental service fund, an sports facilities, airports, parking garages enterprise fund, a public improvement or and transit systems. building fund or a special assessment fund. Franchise Agreement – As used in local Conditional Transfers of Land – A government, it is a negotiated contractual potential alternative to annexation. Public agreement between a utility provider and a Act 425 of 1984 (MCL 124.21 et seq.) government agency authorizing the provider allows the conditional transfers of land from to build and operate a utility system or one local unit of government to another for a conduct business within a given period of not more than 50 years for the geographical area. purpose of economic development. The conditional transfer must be evidenced by a written contract which must include certain

102 Handbook for Municipal Officials Published by the Michigan Municipal League, July 2015 Appendix 1 - Glossary

Franchise Ordinance – Unilateral action c. an incorporated village without taken by the legislative body of a local unit change of boundaries of government to establish the non- negotiable terms of obtaining the permission Mayor – An elected official who serves as to transmit and distribute a public utility chief executive, chair or nominal head of a system or to conduct business of a public city council or commission. Under the utility within a given geographical area. “weak mayor” form of government, the mayor’s administrative powers are limited General Fund – A fund used to account for and the mayor is chief executive in name all transactions of a governmental unit only. Under the “strong mayor” form of which are not accounted for in another fund. government, the mayor does not hold The general fund is used to account for the membership on council, but exercises veto ordinary operations of a governmental unit power. The “strong mayor” holds executive which are financed from taxes and other power while council holds legislative power. general revenues. Municipal Bond – A security issued by, or General Law Village – Villages on behalf of, a political subdivision, the incorporated under the General Law Village interest on which is generally exempt from Act, MCL 61.1 et seq. General law villages federal income tax. are subject to legislative amendments to the General Law Village Act, including the Municipal Corporation – A voluntary major re-write of the Act in 1998. Under public corporation which is established by provisions of the Home Rule Village Act state law as a result of the incorporation of (MCL 78.1 et seq.), all villages incorporated an aggregate of citizens residing within a after 1909 must be incorporated as home certain area, place or district. Historically, a rule villages. municipal corporation in Michigan has been limited, in definition, to cities and villages. Governmental Immunity – Doctrine, the The 1963 Michigan Constitution eliminated basis of which may be statute or court the phrase municipal corporation as it decision, that protects or insulates a appeared in article X of the 1908 governmental agency from tort liability Constitution and replaced it in article IX when engaged in a governmental function, with city, village, charter county, charter subject to certain exceptions. Governmental township, charter authority or other agency employees also enjoy broad authority, the tax limitations of which are immunity protection when the agency is provided by general law. Generally, a engaged in a governmental function. municipal corporation operates for the express purpose of promoting public health, Home Rule – The authority of local safety, and welfare. governments to frame, adopt or change their own charter and to manage their own affairs Ordinance – A law or an order enacted by with minimal state interference. the legislative body of a local unit of government, usually pertaining to a specific Incorporation – The formation of a new subject. An ordinance code is a systematic village or city governed by the State integration of all municipal ordinances into a Boundary Commission Act, the Home Rule single book, organized by subject matter, Village Act and the Home Rule City Act, tied together by a common numbering from: system and indexed. a. unincorporated territory; or b. one village or city and contiguous President – The chief executive officer of a unincorporated territory; or village. The president is elected and is a voting member of the council.

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Property Tax – A tax based on the assessed 141.101 et seq.) The bonds may be used for value of a property, either real or personal. a variety of public improvements including Tax liability falls on the owner of record as airports, bridges, electric and gas utilities, of tax day. Real property includes all lands, garbage facilities, hospitals, housing, buildings, and fixtures on the land. Personal parking facilities, pollution control, property is generally movable and not recreation facilities, sewer and water affixed to land. It includes equipment, facilities, etc. furniture, electric and gas transmission, and distribution equipment, etc. Revenue Sharing – A state program to share tax revenues with all eligible units of Public Act (PA) – Legislation passed by government, but particularly local both the state House and Senate and signed government in accordance with a method of by the Governor. When legislation is signed distribution, as by formula or per capita. The into law, it becomes a public act, assigned a term refers to revenues collected by the state number and is denoted by PA and the year it and shared with municipalities. These became law. include revenues from the sales tax.

Resolution – Official action of a legislative Site Plan – A plan, prepared to scale, body, primarily administrative or ministerial showing accurately and with complete in nature. dimensions, the boundaries of a site and the location of all buildings, structures, uses and Request for Proposal (RFP) – Document principal site development features proposed issued outlining the format of bids, for a specific parcel of land. deadlines, minimum requirements, and general guidelines for potential purchase of Special Assessment – A method of raising products or services. funds for special purposes available to municipalities as an alternative to imposing Revenue – For revenues recorded on the a tax. A special assessment may only be accrual basis, the term designates additions levied on land and may only be imposed to to assets which: pay the cost of an improvement or service 1. do not increase any liability; by which the assessed land is specially (as 2. do not represent the recovery of an opposed to generally) benefited. To impose expenditure; a special assessment, a municipality must 3. do not represent the cancellation of first have the statutory authority to make the certain liabilities without a corresponding improvement or provide the service for increase in other liabilities or a decrease which the assessment will be imposed and, in assets; and second, the statutory authority to assess for 4. do not represent contributions of fund that type of improvement or service. capital in enterprise and intragovernmental service funds. Special Permit or Use – Authorization The same definition applies to those allowing a use of property if specific cases where revenues are recorded on the conditions are met as permitted by a zoning modified accrual or cash basis, except that ordinance or regulation. additions would be limited partially or entirely to cash. Tax Exemption – The exclusion from the tax base of certain types of transactions or Revenue Bond – A bond payable from objects. Property which is exempt or free revenues secured from a project which is from taxation is usually the property of a financed by charging use or service charges. charitable, public service, educational or The primary authority for revenue bonds is other governmental institution. the Revenue Bond Act of 1933 (MCL

104 Handbook for Municipal Officials Published by the Michigan Municipal League, July 2015 Appendix 1 - Glossary

Tax Rate – The amount of tax applied to the powers granted by state law to levy property tax base. The rate may be a percentage of and other taxes. the tax base, as in the case of the sales and income taxes. In the case of the property tax, Variance – Authorization for the rates are expressed in cents (such as $.45 per construction of a structure or for the $100 of taxable value) or as a millage rate establishment of a use which is prohibited (such as 30 mills) where one mill equals by a zoning ordinance. Generally, a variance one-tenth of a cent. may not be granted unless the literal enforcement of the zoning ordinance would Tax Roll – The end product of the cause a property owner “practical assessment phase that lists the owners of difficulties or unnecessary hardship.” each property, each property’s legal description as well as its taxable value and Zoning – Division of a municipality into the liability of each owner. districts, the regulation of structures according to their construction, nature, and Taxing Powers – The basis for levying extent of use, and the regulation of land taxes. Local governments rely on taxing according to use.

Handbook for Municipal Officials 105 Published by the Michigan Municipal League, July 2015

Appendix 2: Michigan Laws of Interest to Cities and Villages Public Acts are available for free on the Michigan Legislature website (legislature.mi.gov).

increment revenue and levy a tax on Conflict of Interest and property within the district. Incompatible Public Offices Local Development Financing Act, 1986 Conflict of Interest of Legislators and PA 281, as amended, MCL 125.2151 et seq. State Officers Act, 1968 PA 318, MCL Provides for creation of an authority to 15.301 et seq. Prohibits legislators and state prevent conditions of unemployment and officers from having an interest in any promote economic growth in the authority contract with the state or any political district. The authority can capture tax subdivision which would cause a substantial increment revenue. conflict of interest. Plant Rehabilitation and Industrial Contract of Public Servants with Public Development Districts Act, 1974 PA 198, Entities Act, 1968 PA 317, as amended, as amended, MCL 207.551 et seq. Provides MCL 15.321 et seq. Regulates contractual for the establishment of plant rehabilitation conflicts of interest. districts and industrial development districts in local governmental units; provides for the Incompatible Public Offices Act, 1978 PA exemption from certain taxes. 566, MCL 15.181 et seq., as amended. Encourages the faithful performance of Principal Shopping Districts and Business official duties by prescribing standards of Improvement Districts, 1961 PA 120, as conduct for public officers and employees amended, MCL 125.981 et seq. Authorizes and prohibiting the same person from the creation of certain boards and the holding incompatible offices collection of revenue and bonding for the simultaneously. redevelopment of principal shopping areas and business improvement districts of Political Activities by Public Employees certain cities. Act, 1976 PA 169, MCL 15.401 et seq. Regulates political activity by public Tax Increment Finance Authority, 1980 employees. PA 450, as amended, MCL 125.1801 et seq. Provides for the creation of Tax Increment Standards of Conduct and Ethics Act, Finance Authorities (TIFAs) to capture tax 1973 PA 196, MCL 15.341 et seq. increments which may be spent or pledged Prescribes standards of conduct for public to make improvements within the TIFA officers and employees. district. Tax increment revenue is produced by applying existing tax levies to the Economic Development difference between the taxable value of Downtown Development Authority, 1975 property after improvements have been PA 197, as amended, MCL 125.1651 et seq. made in the TIFA district where the property Provides for creation of an authority to is located over the taxable value of that correct and prevent deterioration in business property fixed on the date a tax increment districts. The authority can capture tax financing plan is adopted.

106 Handbook for Municipal Officials Published by the Michigan Municipal League, July 2015 Appendix 2: Michigan Laws of Interest to Cities and Villages

Technology Park Development Act, 1984 PA 385, as amended, MCL 207.701 et seq. Tax Increment Finance Authority, 1980 Provides for the establishment of technology PA 450, as amended, MCL 125.1801 et seq. park districts in local government units; Provides for the creation of Tax Increment provides for exemption from certain taxes Finance Authorities (TIFAs) to capture tax and levying of specific tax on owners of increments which may be spent or pledged certain facilities. to make improvements within the TIFA district. Tax increment revenue is produced Finance by applying existing tax levies to the Budget Hearings of Local Governments, difference between the taxable value of 1963 PA 42, (2nd Ex. Sess), MCL 141.411 et property after improvements have been seq. Requires public notice and hearing on made in the TIFA district where the property annual proposed budget. is located over the taxable value of that property fixed on the date a tax increment General Property Tax Act, 1893 PA 206, financing plan is adopted. (After 1989, a as amended, MCL 211.1 et seq. Provides the new district could not be created or the primary but not exclusive source of statutory boundaries expanded.) law concerning property taxation. All property, except that which is expressly Tax Tribunal Act, 1973 PA 186, as exempt, is taxable. The Act also provides for amended, MCL 205.701 et seq. Creates the collection of delinquent property taxes by Michigan Tax Tribunal to hear appeals providing for the sale and redemption to related to the assessment and collection of collect tax liens on such property. taxes.

Local Development Financing Act, 1986 Truth in Budgeting Acts, 1995 PA 40, as PA 281, as amended, MCL 125.2151 et seq. amended, MCL 141.412; 1995 PA 41, as Provides for the creation of Local amended, MCL 141.436 & 141.437; 1995 Development Finance Authorities (LDFAs) PA 42, as amended, MCL 211.24e. Permits to capture tax increments which may be a local unit of government to combine the spent or pledged to make improvements “notice of public hearing” on the unit’s within the district. budget with a notice stating that the property tax millage to be levied will be a subject of Local Improvement Revolving Fund, the hearing. This eliminates the need to 1957 PA 57, as amended, MCL 141.371 et publish a notice of increasing property taxes seq. Authorizes cities and villages to raise and hold a public hearing pursuant to the money by taxes or bond issue within certain Truth in Taxation Act. limits for the purpose of establishing a local improvement revolving fund. Truth in Taxation Act, 1982 PA 5, as amended, MCL 211.24e et seq. Provides Revenue Bond Act of 1933, 1933 PA 94, as that no local unit of government may levy an amended, MCL 141.101 et seq. Provides for ad valorem property tax for operating the issuance of revenue bonds to finance purposes in excess of the base tax rate, as public improvement which are self- defined in the act, without first holding a supporting through use or service charges. public hearing pursuant to notice which contains the proposed additional millage rate Surplus Funds Investment Pool Act, 1982 and percentage increase in operating PA 367, as amended, MCL 129. 111 et seq. revenue which would be generated from the Provides authority for the investment of levy. A truth in taxation hearing is not surplus funds of a local unit in an investment necessary if the local unit complies with pool by a financial institution. section 16 of the Uniform Budgeting and Accounting Act.

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providing for the sale and redemption to Uniform Budgeting and Accounting Act, collect tax liens on such property. 1968 PA 2, MCL 141.421 et seq. Requires local governments to comply with the Housing Cooperation Law, 1937 PA 293, uniform charts of accounts prescribed by as amended, MCL 125.601 et seq. state treasurer, to file an annual financial Authorizes cities, villages, and other public report, to be audited periodically and to bodies to aid housing projects of housing formulate and adopt an annual budget. authorities and the like by furnishing parks, playgrounds, streets, and other Historic Preservation improvements and facilities. Local Historic Districts Act, 1970 PA 169, as amended, MCL 399.201 et seq. Provides Housing Facilities, 1933 PA 18 (Ex. Sess.), for the establishment of historic districts and as amended. MCL 125.651 et seq. acquisition of resources for historic Authorizes a city, village, or other unit of preservation purposes. government to purchase, acquire, maintain, and operate housing facilities, to eliminate Municipal Historical Commissions, 1957 detrimental housing conditions and to create PA 213, as amended, MCL 399. 171 et seq. a commission with power to effectuate such Authorizes cities, villages, townships, and purposes. counties to create historical commissions and prescribes their functions, to issue Housing , 1917 PA 167, revenue bonds, and to appropriate money for as amended, MCL 125.401 et seq. Promotes activities and projects. health, safety, and welfare by regulating the maintenance, safety, and improvement of Housing dwellings, establishes administrative Allowances for Moving Personal Property requirements, prescribes procedures for from Acquired Real Property, 1965 PA maintenance, improvement, or demolition of 40, as amended, MCL 213.351 et seq. certain commercial buildings. Authorizes and requires public agencies to pay allowances for the expense of moving Neighborhood Area Improvements, 1949 personal property from real property PA 208, as amended, MCL 125.941 et seq. acquired for public purposes. Authorizes cities, villages, and townships to designate neighborhood areas for the Blighted Area Rehabilitation, 1945 PA purpose of planning and carrying out local 344, as amended, MCL 125.71 et seq. public improvements for the prevention of Authorizes counties, cities, villages, and blight, to carry out such plans by acquiring townships to adopt plans to prevent blight and disposing of real property and providing and to adopt plans for the rehabilitation of for the establishment of local assessment blighted areas and authorizes assistance to districts. acquire, improve, and dispose of real property in blighted areas. State Housing Development Authority Act, 1966 PA 346, as amended, MCL General Property Tax Act, 1893 PA 206, 125.1401 et seq. Creates a state housing as amended, MCL 211.1 et seq. Provides the development authority, defines the powers primary but not exclusive source of statutory and duties of the authority, establishes a law concerning property taxation. All housing development revolving fund and property, except that which is expressly land acquisition and development fund and exempt, is taxable. The act also provides for provides tax exemption. collection of delinquent property taxes by

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The Uniform Condemnation Procedures transportation corporations to form group Act, 1980 PA 87, as amended, MCL 213.51 self-insurance pools. et seq. Provides procedures for condemnation of real or personal property Intergovernmental Transfers of by public agencies or private agencies. Functions and Responsibilities, 1967 PA 8 (ex sess), as amended, MCL 124.531 et seq. Utilization of Public Facilities by Provides for intergovernmental transfers of Physically Limited, 1966 PA 1, as functions and responsibilities. amended, MCL 125.1351 et seq. Provides for the accessibility and utilization by Interlocal Tax Agreements, 1995 PA 108, physically limited persons of public as amended, MCL 124.502 and 124.505a. facilities, prescribes for the creation of a Provides for interlocal agreements for barrier free design board with duties and sharing revenue derived by and for the powers, and prescribes powers and duties of benefit of local government units. other state and local authorities. Joint Public Building, 1923 PA 150, as Intergovernmental Relations amended, MCL 123.921. Authorizes cities, Contracts for Assessing Services, 1961 PA villages, and other units of local government 37, as amended, MCL 123.621. Permits to acquire, singly or jointly, public buildings cities, villages, and townships to contract for for the purpose of housing governmental assessing services. offices or any other public uses and purposes. Emergency Services to Municipalities, 1988 PA 57, as amended, MCL 124.601 et Metropolitan Councils Act, 1989 PA 292, seq. Provides for the incorporation of an as amended, MCL 124.651 et seq. authority by 2 or more municipalities (cities, Authorizes local governmental units to villages & townships) for the purpose of create metropolitan councils under certain providing emergency services, provides for circumstances, prescribes the powers and powers and duties of authorities, and duties, and authorizes councils to levy a provides for the levy of property taxes for property tax. certain purposes. Mutual Police Assistance Agreements, Intergovernmental Conditional Transfer 1967 PA 236, as amended, MCL 123.811 et of Property by Contract (Act 425), 1984 seq. Authorizes cities, villages, and other PA 425, as amended, MCL 124.21 et seq. units to enter into mutual police assistance Permits the conditional transfer of property agreements and provides for the by contract between certain local units of compensation of units of local government government, provides for permissive and entering into such agreements. mandatory provisions in the contract and conditions upon termination. Police and Fire Protection, 1951 PA 33, as amended, MCL 41.801 et seq. Provides Intergovernmental Contracts Between police and fire protection for certain cities, Municipal Corporations Act, 1951 PA 35, villages, and other units, authorizes as amended, MCL 124.1 et seq. Authorizes contracts for protection and purchase of intergovernmental contracts between equipment, authorizes creation of special municipal corporations, contracts with a assessment districts and creation of third party to furnish municipal services to administrative boards and authorizes property outside the corporate limits, collection of fees for such services. contracts between municipal corporations and with certain non-profit public Recreation and Playgrounds, 1917 PA 156, as amended, MCL 123.51 et seq.

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Authorizes cities and villages and other units Regulates and requires disclosure of public to operate systems of public recreation and records to the public by all public bodies in playgrounds. the state.

Urban Cooperation Act of 1967, 1967 PA General Law Village Act, 1895 PA 3, as 7 (Ex. Sess.), as amended, MCL 124.501 et amended, MCL 61.1 et seq. Provides for the seq. Provides for interlocal public agency government of certain villages (statutory agreements and permits allocation of certain charter for general law villages). Provides taxes received from tax increment financing for powers and duties of village council and plans as revenues, permits tax sharing, and officers; the authority to levy tax, borrow provides for additional approval for money, issue bonds; alter boundaries by agreements. annexation; adopt ordinances; and disincorporation. Local Government Powers, Duties, and Responsibilities General Property Tax Act, 1893 PA 206, Allowances for Moving Personal Property as amended, MCL 211.1 et seq. Provides the from Acquired Real Property Act, 1965 primary but not exclusive source of statutory PA 40, as amended, MCL 213.351 et seq. law concerning property taxation. All Authorizes and requires public agencies to property, except that which is expressly pay allowances for the expense of moving exempt, is taxable. The Act also provides for personal property from real property collection of delinquent property taxes by acquired for public purposes. providing for the sale and redemption to collect tax liens on such property. Building Authorities, 1948 PA 31 (1st Ex. Sess.), as amended, MCL 123.951 et seq. Home Rule City Act, 1909 PA 279, as Provides for the incorporation of authorities amended, MCL 117.1 et seq. Provides for to acquire and maintain buildings, parking the incorporation of cities and for revising lots, transit-oriented developments, transit- and amending their charters; provides for oriented facilities, recreational facilities, and certain powers and duties; and provides for stadiums for the use of local units of the levy and collection of taxes, borrowing government and the issuance of bonds for of money, and issuance of bonds. such authorities. Home Rule Village Act, 1909 PA 278, as Compulsory Arbitration of Labor amended, MCL 78.1 et seq. Provides for the Disputes in Police and Fire Departments incorporation of villages and for revising (Act 312), 1969 PA 312, as amended, MCL and amending their charters; provides for the 423.231 et seq. Provides for compulsory levy and collection of taxes, borrowing of arbitration of labor disputes in municipal money, and issuance of bonds. police and fire departments and prescribes procedures and authority. Incompatible Public Offices Act, 1978 PA 566, MCL 15.181 et seq., as amended. County Departments and Board of Public Encourages the faithful performance of Works, 1957 PA 185, as amended, MCL official duties by prescribing standards of 123.731. Establishes the department and conduct for public officers and employees board of public works in counties and and prohibiting the same person from outlines the duties of municipalities subject holding incompatible offices to the Act. simultaneously.

Freedom of Information Act, 1976 PA Michigan Campaign Finance Act, 1976 442, as amended, MCL 15.231 et seq. PA 388, as amended, MCL 169.201 et seq.

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Regulates political activity, campaign Uniform Condemnation Procedures Act, financing, campaign contributions and 1980 PA 87, as amended, MCL 213.51 et expenditures, campaign advertising and seq. Provides procedures for condemnation creates state campaign fund. of real or personal property by public agencies or private agencies. Michigan Liquor Control Act, 1933 PA 8, as amended, MCL 436.1 et seq. Creates Miscellaneous liquor control commission and prescribes its Armistice, Independence and Memorial powers, duties and limitations. Day Expenditures, 1905 PA 170, as amended, MCL 123.851 et seq. Authorizes Open Meetings Act, 1976 PA 267, as townships, cities and villages to appropriate amended, MCL 15.2621 et seq. Requires money to defray the expenses of observance public bodies (legislative or governing body of Armistice, Independence and Memorial including boards, commissions, committees, Day or for the observance of a diamond subcommittees, authorities or councils jubilee or centennial. which are empowered to perform governmental or proprietary functions or a Bands, 1923 PA 230, as amended, MCL lessee thereof performing an essential public 123.861 et seq. Authorizes villages and purpose pursuant to a lease) to conduct townships and cities with a population not nearly all business at open meetings. exceeding 50,000 to levy a tax for the maintenance and employment of a band for Political Activities by Public Employees musical purposes for the benefit of the Act, 1976 PA 169, MCL 15.401 et seq. public provided that a special question is Regulates political activity by public subjected to the voters and agreed to by a employees. majority vote.

Public Employment Relations Act, 1947 Bidders on Public Works, 1933 PA 170, as PA 336, as amended, MCL 423.201 et seq. amended, MCL 123.501 et seq. Regulates Prohibits strikes by certain public the practice of taking bids and awarding employees, provides review from contracts on public work construction and disciplinary action, mediation of grievances maintenance (except public buildings). and protects rights and privileges of public employees. Garbage Disposal Plants, 1917 PA 298, as amended, MCL 123.261. Authorizes three Purchase of Lands and Property for mill garbage tax for cities and villages. Public Purpose, 1933 PA 99, as amended, MCL 123.721 et seq. See also Municipal Gifts from Municipal Utilities, 1969 PA Finance Act, 1943 PA 202, as amended, 301, as amended, MCL 123.391. Authorizes MCL 133.1. Authorizes incorporated the giving of gifts or contributions from the villages, townships and cities to enter into operating revenues of any municipality contracts for the purchase of lands, owning or operating any public utility as equipment for public purposes. determined by its governing board.

State Boundary Commission Act, 1968 Gifts of Property to Local Government, PA 191, as amended, MCL 123.1001 et seq. 1913 PA 380, as amended, MCL 123.871 et Creates the State Boundary Commission and seq. Regulates gifts of real and personal prescribes its powers and duties with respect property to cities, villages, townships, and to municipal incorporation, consolidation counties. and annexation.

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Municipal Water and Sewage System contract with individuals, firms or Liens, 1939 PA 178, as amended, MCL corporations regarding the construction of 123.161 et seq. See also Revenue Bond Act, water mains, sale of water, to construct 1933 PA 94, as amended, MCL 141.121. water mains through the highways outside Provides for the collection of water or territorial limits with the consent of sewage system rates and assessment appropriate authorities. charges, and provides for a lien for Youth Center, 1967 PA 179, as amended, nonpayment for services furnished by MCL 123.461. Authorizes tax levy of 1.5 municipalities. mills for 20 years for operation of a youth center. Prohibited Taxes by Cities and Villages, 1964 PA 243, as amended, MCL 141.91. Organization, Governmental Forms Prohibits the imposition, levy or collection and Dissolution of taxes other than ad valorem property Disconnection of Land from Cities and taxes by cities and villages except as Villages, 1949 PA 123, as amended, MCL otherwise provided by law. 123.31 et seq. Provides a mechanism by which an owner of farmland may have it Resignations, Vacancies and Removals, disconnected from a city or village if the R.S. 1846, ch. 15, as amended, MCL 201.1 land is: (1) 10 or more acres; (2) is not et seq. Provides for procedures regarding subdivided; (3) is located on a border or resignations, vacancies and removals from boundary and the disconnection will not public office and for filling vacancies. isolate any part of the city or village from the remainder of the city or village; and shall Special Tax for Advertising, 1925 PA 359, have been used for only agricultural as amended, MCL 123.881. Empowers the purposes for the three years preceding the council or corporate authorities of any city filing of the petition to disconnect. or village to levy a special tax to be used for advertising the industrial, commercial, General Law Village Act, 1895 PA 3, educational, or recreational advantages of MCL 61.1 et seq. Provides for the the city or village and to establish government of certain villages (statutory recreational and educational projects for the charter for General Law Villages). Provides purpose of encouraging growth or trade of for powers and duties of village council and the city or village. officers, the authority to levy tax, borrow money, issue bonds, alter boundaries by Utilization of Public Facilities by annexation or disconnection, adopt Physically Limited Persons, 1966 PA 1, as ordinances and disincorporate. amended, MCL 125.1351 et seq. Provides for the accessibility and utilization by Home Rule City Act, 1909 PA 279, as physically limited persons of public amended, MCL 117.1 et seq. Provides for facilities, creates the barrier for the design the incorporation of cities and for revising board with duties and powers, prescribes and amending their charters; provides for powers and duties of other state and local certain powers and duties; and provides for authorities. the levy and collection of taxes, borrowing of money, and issuance of bonds. Water Furnished Outside Territorial Limits, 1917 PA 34, as amended, MCL Home Rule Village Act, 1909 PA 278, 123.141 et seq. Authorizes municipal MCL 78.1 et seq. or section 17 (MCL 78.17) corporations having authority by law to with reference to the authority of general furnish water outside their territorial limits, law villages to amend the statutory charter to sell water to other municipal corporations, (1895 PA 3) locally.

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Personnel & Employment projects; prescribes powers and duties of Bullard-Plawecki Employee Right to Department of Consumer and Industry Know Act, 1978 PA 397, MCL 423.501 et Services; and provides protection for certain seq. Permits employees to review personnel tenants, senior citizens, etc. records; provides criteria for review; and Land Division Act (formerly Subdivision prescribes what information may be Control Act of 1967), 1967 PA 288, as contained in personnel records. amended, MCL 560.101 et seq. Regulates the division of land, provides for proper Elliott-Larsen Civil Rights Act, 1976 PA ingress to and egress from lots and parcels, 453, as amended, MCL 37.2101 et seq. establishes procedures for vacating, Defines civil rights, prohibits discriminatory correcting and revising plats, and related practices and prescribes the powers and issues. duties of the civil rights commission. Michigan Planning Enabling Act, 2008 Fire Department Hours of Labor, 1925 PA 33, MCL 125.3801 et seq. Codifies the PA 125, as amended, MCL 123.841 et seq. previously separate planning acts for Regulates the hours of labor of employees in counties, townships, cities, and villages into municipal fire departments. one act to provide for the creation, organization, powers, and duties of local Persons With Disabilities Civil Rights planning commissions; to provide for the Act, 1976 PA 220, MCL 37.1101 et seq. powers and duties of certain state and local Prohibits an employer from discriminating governmental officers and agencies; to against a qualified individual with a provide for the regulation and subdivision of disability in regard to application land. procedures, hiring, promotion, termination, compensation, job training and other terms, Michigan Zoning Enabling Act, 2006 PA conditions, and privileges of employment if 110, MCL 125.3101 et seq. Codifies the the applicant or employee can perform the previously separate County Zoning Act, essential functions of the position, with or Township Zoning Act and City and Village without an accommodation. Zoning Act into one act regulating the development and use of land; provides for Preference in Employment (Veterans), the adoption of zoning ordinances; provides 1897 PA 205, as amended, MCL 35.401 et for the establishment in counties, townships, seq. Provides for preference of honorably cities, and villages of zoning districts. discharged members of the armed forces of the U.S. for public employment. Applicable Mobile Home Commission Act, 1987 PA to discipline public employees who are 96, as amended, MCL 125.2301 et seq. veterans. Creates a mobile home commission and prescribes its powers and duties in those of Whistle Blowers Protection Act, 1980 PA local governments; provides for mobile 469, as amended, MCL 15.361 et seq. home code, licensure and regulation. Provides protection to employees who report a violation or suspected violation of state, Natural Beauty Roads, 1970 PA 150, as local or federal law and also protection for amended, MCL 247.381 et seq. Designates employees who participate in hearings, certain roads as Michigan Natural Beauty investigations, etc. Roads, provides certain powers and duties and also provides for the development of Planning & Zoning guidelines and procedures. Condominium Act, 1978 PA 59, MCL 559.101 et seq. Provides for condominium

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Neighborhood Area Improvements Act, prescribes what information may be 1949 PA 208, as amended, MCL 125.941 et contained in personnel records. seq. Authorizes cities, villages and Freedom of Information Act, 1976 PA townships to designate neighborhood areas 442, MCL 15.231 et seq. Regulates and for the purpose of planning and carrying out requires disclosure of public records to the local public improvements for the public by all public bodies in the state. prevention of blight, to carry out such plans by acquiring and disposing of real property Open Meetings Act, 1976 PA 267, MCL and providing for the establishment of local 15.261 et seq. Requires public bodies assessment districts. (legislative or governing body including boards, commissions, committees, Sunshine Laws (Right to Know/Open subcommittees, authorities or councils Government) which are empowered to perform Bullard-Plawecki Employee Right to governmental or proprietary functions or a Know Act, 1978 PA 397, MCL 423.501 et lessee performing an essential public seq. Permits employees to review personnel purpose pursuant to a lease) to conduct records; provides criteria for review; and nearly all business at open meeting.

114 Handbook for Municipal Officials Published by the Michigan Municipal League, July 2015 Appendix 3 - OMA

Appendix 3: Overview of the Michigan Open Meetings Act 1976 PA 267

Basic Intent  governing boards of community The basic intent of the Michigan Open colleges, state colleges and universities; Meetings Act is to strengthen the right of all and Michigan citizens to know what goes on in  special boards and commissions created government by requiring public bodies to by law (i.e., public hospital authorities, conduct nearly all business at open road commissions, health boards, meetings. district library boards, and zoning boards, etc.). Key Definitions The Act does not apply to a meeting of a “Public body” means any state or local public body which is a social or chance legislative or governing body, including a gathering not designed to avoid the law. board, commission, committee, subcommittee, authority or council, which is Notification of Meetings empowered by state constitution, statute, The law states that within 10 days of the charter, ordinance, resolution or rule to first meeting of a public body in each exercise governmental or proprietary calendar or fiscal year, the body must authority or perform a governmental or publicly post a list stating the dates, times, proprietary function, or a lessee thereof and places of all its regular meetings at its performing an essential public purpose and principal office. function pursuant to the lease agreement. If a public body does not have a “Meeting” means the convening of a principal office, the notice would be posted public body at which a quorum is present for in the office of the county clerk for a local the purpose of deliberating toward or public body such as a village council or the rendering a decision on a public policy. office of the Secretary of State for a state “Closed session” means a meeting or public body. part of a meeting of a public body which is If there is a change in schedule, within closed to the public. three days of the meeting in which the “Decision” means a determination, change is made, the public body must post a action, vote or disposition upon a motion, notice stating the new dates, times and proposal, recommendation, resolution, places of regular meetings. order, ordinance, bill or measure on which a vote by members of a public body is Special and Irregular Meetings required and by which a public body For special and irregular meetings, public effectuates or formulates public policy. bodies must post a notice indicating the date, time, and place at least 18 hours before the Coverage meeting in a prominent and conspicuous The coverage of the law is very broad, place at both the public body’s principal including the State Legislature as well as the office and, if the public body directly or legislative or governing bodies of all cities, indirectly maintains an official internet villages, townships, charter townships, and presence that includes monthly or more all county units of government. frequent updates of the public meeting The law also applies to: agendas or minutes, on a portion of the  local and intermediate school districts; website that is fully accessible to the public.

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Note: A regular meeting of a public  to consult with its attorney about body, which is recessed for more than 36 trial or settlement strategy in hours, can only be reconvened if a notice is pending litigation, but only when an posted 18 hours in advance. open meeting would have detrimental financial effect on the Emergency Meetings public body’s position; Public bodies may hold emergency sessions  to review the contents of an without a written notice or time constraints application for employment or if the public health, safety, or welfare is appointment to a public office if the imminently and severely threatened and if candidate requests the application to two-thirds of the body’s members vote to remain confidential. However, all hold the emergency meeting. interviews by a public body for employment or appointment to a Individual Notification of Meetings by public office have to be conducted Mail in an open meeting pursuant to this Citizens can request that public bodies put act; and them on a mailing list so that they are  to consider material exempt from notified in advance of all meetings. Section discussion or disclosure by state or 6 of the law states that: federal statute. “Upon the written request of an In addition, a closed meeting may be individual, organization, firm or corporation, called by a majority vote of members and upon the requesting party’s payment of elected or appointed and serving for these a yearly fee of not more than the reasonable purposes: estimated cost for printing and postage of  to consider the dismissal, such notices, a public body shall send to the suspension or disciplining of, or to requesting party by first class mail, a copy of hear complaints or charges brought any notice required to be posted….” against a public officer, employee, In addition, upon written request, public staff member or individual if the bodies are required to send free notices of person requests a closed hearing; meetings to newspapers, radio, and  for strategy and negotiation sessions television stations at the same time that they necessary in reaching a collective are required to post those notices. bargaining agreement if either party requests a closed hearing. The Closed Meetings purpose for which a closed meeting The basic intent of the OMA is to ensure is being called must be entered into that public business is conducted in public. the minutes at the meeting at which The act states “all meetings of a public body the vote was taken. shall be open to the public and shall be held in a place available to the general public” Minutes of a Meeting (MCL 15.263). However, the act does Minutes must be kept for all meetings and provides for closed meetings in a few are required to contain: specified circumstances. 1. a statement of the time, date, and place For instance, a closed meeting may be of the meeting; called by a 2/3 roll call vote of members 2. the members present as well as absent; elected or appointed and serving for the 3. a record of any decisions made at the following purposes: meeting and a record of all roll call  to consider the purchase or lease of votes; and real property up to the time an 4. an explanation of the purpose(s) if the option to purchase or lease that real meeting is a closed session. property is obtained; Except for minutes taken during a closed session, all minutes are considered public

116 Handbook for Municipal Officials Published by the Michigan Municipal League, July 2015 Appendix 3 - OMA records, open for public inspection, and circuit court the validity of a decision of a must be available for review as well as public body to meet in closed session made copying at the address designated on the in violation of its provisions. If the body is public notice for the meeting. determined to be in violation of the law and Proposed minutes must be available for makes a decision, that decision can be public inspection within eight business days invalidated by the court. after a meeting. Approved minutes must be In any case where an action has been available within five business days after the initiated to invalidate a decision of a public meeting at which they were approved. body, the public body may reenact the Corrections in the minutes must be disputed decision in conformity with the made no later than the next meeting after the Act. A decision reenacted in this manner meeting to which the minutes refer. shall be effective from the date of Corrected minutes must be available no later reenactment and will not be declared invalid than the next meeting after the correction by reason of a deficiency in the procedure and must show both the original entry and used for its initial enactment. the correction. Penalties under the Act Explanation of Minutes of Closed The first time a public official intentionally Meeting breaks this law, he or she can be punished Minutes of closed meetings must also be by a maximum fine of $1,000. For a second recorded although they are not available for offense within the same term of office, the public inspection and would only be official can be fined up to $2,000, jailed for disclosed if required by a civil action. These a maximum of one year or both. A public minutes may be destroyed one year and one official who intentionally violates the Act is day after approval of the minutes of the also personally liable for actual and regular meeting at which the closed session exemplary damages up to $500, plus court was approved. costs and attorney fees.

Enforcement of the Act Under the law, the attorney general, prosecutor, or any citizen can challenge in

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Appendix 4: Overview of the Michigan Freedom of Information Act 1976 PA 442

Public Act 563 of 2014 made significant changes to FOIA concerning fees; the receipt, processing, and denial of requests; and civil actions and appeals brought under the Act. The new law goes into effect on July 1, 2015. Please visit mml.org for our FOIA Resource Packet detailing these numerous changes.

Basic Intent “Public record” means a writing prepared, owned, used, in the possession of, or The Freedom of Information Act regulates retained by a public body in the performance and sets requirements for the disclosure of of an official function, from the time it is public records by all “public bodies” in the created. state. Coverage Key Definitions The Freedom of Information Act regulates “Freedom of Information Act Coordinator” and sets requirements for the disclosure of means an individual who is a public body or public records by all “public bodies” in the an individual designated to accept and state. All state agencies, county and other process requests for public records. local governments, school boards, other “Public body” means: boards, departments, commissions, councils,  a state officer, employee, agency, and public colleges and universities are department, division, bureau, board, covered. Any program primarily funded by commission, council, authority or the state or local authority is also covered. other body in the executive branch of the state government, but does Public Records Open to Disclosure not include the governor or lieutenant governor, the executive In general, all records except those office of the governor or lieutenant specifically cited as exemptions are covered governor or employees thereof; by the Freedom of Information Act. The  an agency, board, commission, or records covered include working papers and council in the legislative branch of research material, minutes of meetings, the state government; officials’ voting records, staff manuals, final orders or decisions in contested cases and  a county, city, township, village, the records on which they were made, and intercounty, intercity or regional promulgated rules and other written governing body, council, school statements which implement or interpret district, special district, or municipal laws, rules, or policy, including but not corporation, or a board, department, limited to, guidelines, manuals and forms commission, council, or agency with instructions, adopted or used by the thereof; or agency in the discharge of its functions.  any other body which is created by It does not matter what form the record state or local authority or which is is in. The Act applies to any handwriting, primarily funded by or through state typewriting, printing, photostating, or local authority. photographing, photocopying, and every

118

Handbook for Municipal Officials Published by the Michigan Municipal League, July 2015 Appendix 4 - FOIA other means of recording. It includes letters, institutions occupied by persons words, pictures, sounds or symbols, or arrested or convicted of a crime or combinations thereof, as well as papers, admitted because of a mental maps, magnetic or punched cards, discs, disability, unless the public interest drums, or other means of recording or in disclosure under this Act retaining meaningful content. outweighs the public interest in non- disclosure; Public Records Exempt from  a public record or information which Disclosure is furnished by the public body A public body may (but is not required to) originally compiling, preparing, or withhold from public disclosure certain receiving the record or information to categories of public records under the a public officer or public body in Freedom of Information Act. The following connection with the performance of categories of information may be withheld: the duties of that public officer or  specific information about an public body, if the consideration individual’s private affairs, if the originally giving rise to the exempt release of the information would nature of the public record remains constitute a clearly unwarranted applicable; invasion of the person’s privacy;  trade secrets or commercial or  investigating records compiled for financial information voluntarily law enforcement purposes, but only provided to an agency for use in to the extent that disclosure as a developing governmental policy; public record would do any of the  information or records subject to following: attorney-client privilege; o interfere with law  information or records subject to enforcement proceedings, other enunciated privileges such as o deprive a person of the right physician-patient and those to a fair trial or impartial recognized by statute or court rule; administrative adjudication,  A bid or proposal by a person to o constitute an unwarranted enter into a contract or agreement, invasion of personal until the time for the public opening privacy, of bids or proposals, or if a public o disclose law enforcement opening is not to be conducted, until investigative techniques or the deadline for submission of bids procedures, or proposals has expired.; o disclose the identity of a  appraisals of real property to be confidential source or, if the acquired by a public body until record is compiled by a either of the following occurs: criminal law enforcement o An agreement is entered agency in the court of a into. criminal investigation, o Three years have elapsed disclose confidential since the making of the information furnished only appraisal, unless litigation by a confidential source or relative to the acquisition o endanger the life or physical has not yet terminated. safety of law enforcement  test questions and answers, scoring personnel; keys and other examination  public records which if disclosed instruments or data used to would prejudice a public body’s administer a license, public ability to maintain the physical security of custodial or penal

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employment, or academic o reveal the contents of law examination; enforcement officers or  medical counseling or psychological agents’ staff manuals, facts which would reveal an o endanger the life or safety individual’s identity; of law enforcement officers  internal communications and notes or agents and their families between the public bodies of an or those who furnish advisory nature to the extent that information to law they cover other than purely factual enforcement agencies or materials and are preliminary to a departments, final agency determination of policy o identify a person as a law or action. This exemption shall not enforcement officer, agent apply unless the public body shows or informer, that in the particular instance the o disclose personnel records, public interest in encouraging frank o identify residences that law communications between officials enforcement agencies are and employees of public bodies requested to check in the clearly outweighs the public interest absence of their owners or in disclosure. (Factual materials in tenants; such memoranda are open records  information pertaining to an and must be separated out and made investigation or a compliance available upon request even if the conference conducted by the other material is not.); department of consumer and industry  law enforcement communication services under article 15 of the public codes and deployment plans unless health code, Act No. 368 of the the public interest in disclosure Public Acts of 1978. Except records outweighs the public interest in non- pertaining to the fact that an disclosure; allegation has been received and is  public records of a law enforcement being investigated or the fact that an agency, the release of which would allegation was received and a do any of the following (unless the complaint was not issued and the public interest in disclosure allegation was dismissed, outweighs the public interest in  records of a public body’s security nondisclosure in the particular measures; instance):  records or information relating to a o identify an informer, civil action to which the requesting o identify a law enforcement party and the public body are both undercover officer or agent parties; and or a plain clothes officer,  information that would disclose the o disclose the name, address, social security number of any or telephone numbers of individual. family members of law enforcement officers or Availability of Public Records agents, This section of the Act has changed o disclose operational significantly. Please refer to the League’s instructions for law FOIA Resource Packet enforcement officers or agents,

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Fees for Public Records Denial of a Record This section of the Act has changed This section of the Act has changed significantly. Please refer to the League’s significantly. Please refer to the League’s FOIA Resource Packet FOIA Resource Packet.

Handbook for Municipal Officials 121 Published by the Michigan Municipal League, July 2015 Appendix 5 – Sample Council Rules of Procedure

Appendix 5: Sample Council Rules of Procedure

D. Discussion and voting Council rules of procedure for home rule 1. Rules of parliamentary procedure cities and villages are generally authorized 2. Conduct of discussion by city/village charter. Rules of procedure 3. Ordinances and resolutions help a council to run an efficient meeting 4. Roll call and to deal with the public and the media in 5. Duty to vote a positive manner. 6. Results of voting The council should review its rules of procedure at its first meeting after E. Citizen participation councilmembers have been elected, have 1. General taken office and when a quorum is present. 2. Length of presentation Following discussion and any amendments, 3. Addressing the council the council should adopt the rules of procedure. This sample provides suggestions F. Miscellaneous on what can be included in the rules of 1. Adoption and amendment of rules procedure. It may be modified locally as of procedure appropriate. 2. Suspension of rules Author’s notes are contained within 3. Bid awards brackets. 4. Committees a. Standing and special council Table of contents committees A. Regular and special meetings b. Citizen task forces 1. Regular meetings 5. Authorization for contacting village 2. Special meetings attorney 3. Posting requirements for regular and special meetings Council rules of procedure 4. Minutes of regular and special A. Regular and special meetings meetings All meetings of the city/village council will 5. Study sessions be held in compliance with state statutes, including the Open Meetings Act, 1976 PA B. Conduct of meetings 267 as amended, and with these rules. 1. Meetings to be public

2. Agenda preparation 1. Regular meetings 3. Consent agenda Regular meetings of the city/village 4. Agenda distribution council will be held on 5. Quorum ______of each month 6. Attendance at council meetings beginning at ___ p.m. at the city/village 7. Presiding officer office unless otherwise rescheduled by 8. Disorderly conduct resolution of the council. Council C. Closed meetings meetings shall conclude no later than __ 1. Purpose p.m., subject to extension by the 2. Calling closed meetings council. 3. Minutes of closed meetings

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proceedings and resolutions of the 2. Special meetings council in accordance with the Open A special meeting shall be called by the Meetings Act. In the absence of the clerk upon the written request of the clerk, the council may appoint one mayor/president or any three members of its own members or another of the council on at least 24 hours’ person to temporarily perform the written notice to each member of the clerk’s duties. council served personally or left at the b. Within 15 days of a council councilmember’s usual place of meeting, a synopsis showing the residence. Special meeting notices shall substance of each separate decision state the purpose of the meeting. No of the council or the entirety of the official action shall be transacted at any council proceedings shall be special meeting of the council unless the prepared by the clerk and shall item has been stated in the notice of indicate the vote of the such meeting. councilmembers. c. A copy of the minutes of each 3. Posting requirements for regular and regular or special council meeting special meetings shall be available for public a. Within 10 days after the first inspection at the city/village offices meeting of the council following the during regular business hours. election, a public notice stating the dates, times and places of the 5. Study sessions regular monthly council meetings Upon the call of the mayor/president or will be posted at the city/village the council and with appropriate notice offices. [Villages without a principal to the councilmembers and to the public, office must post in the county the council may convene a work session clerk’s office.] devoted exclusively to the exchange of b. For a rescheduled regular or a information relating to municipal affairs. special meeting of the council, a No votes shall be taken on any matters public notice stating the date, time under discussion nor shall any and place of the meeting shall be councilmember enter into a formal posted at least 18 hours before the commitment with another member meeting at the city/village office. regarding a vote to be taken [Villages without a principal office subsequently. must post in the county clerk’s office.] B. Conduct of meetings c. The notice described above is not 1. Meetings to be public required for a meeting of the council All regular and special meetings of the in emergency session in the event of council shall be open to the public, and a severe and imminent threat to the citizens shall have a reasonable health, safety or welfare of the opportunity to be heard in accordance public when two-thirds of the with such rules and regulations as the members of the council determine council may determine, except that the that delay would be detrimental to meetings may be closed to the public the city/village’s efforts in and the media in accordance with the responding to the threat. Open Meetings Act. All official meetings of the council 4. Minutes of regular and special and its committees shall be open to the meetings media, freely subject to recording by a. The clerk shall attend the council radio, television, and photographic meetings and record all the services at any time, provided that such

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arrangements do not interfere with the [Add the language from your charter on orderly conduct of the meetings. what constitutes a quorum in your city or village]. 2. Agenda preparation An agenda for each regular council 6. Attendance at council meetings meeting shall be prepared by the Election to a city/village council is a mayor/president with the following privilege freely sought by the nominee. order of business: It carries with it the responsibility to a. Call to order and roll call of council participate in council activities and b. Public hearings on ordinances under represent the residents of the consideration city/village. Attendance at council c. Brief public comment on agenda meetings is critical to fulfilling this items responsibility. d. Approval of consent agenda The council may excuse absences e. Approval of regular agenda for cause. If a councilmember has more f. Approval of council minutes than three unexcused successive g. Submission of bills absences for regular or special council h. Communications to the council meetings, the council may enact a i. Reports from council committees resolution of reprimand. In the event j. Reports from officers as scheduled, that the member’s absences continue for e.g. manager, attorney, etc. more than three additional successive k. Unfinished business regular or special meetings of the l. New business council, the council may enact a m. Announcements resolution of censure or request the n. Adjournment councilmember’s resignation or both. Any councilmember shall have the [Add the provision from your charter on right to add items to the regular agenda absences, if you have such a provision]. before it is approved. 7. Presiding officer 3. Consent agenda The presiding officer or chair shall be A consent agenda may be used to allow responsible for enforcing these rules of the council to act on numerous procedure and for enforcing orderly administrative or non-controversial conduct at meetings. The items at one time. Included on this mayor/president is ordinarily the agenda can be non-controversial matters presiding officer. The council shall such as approval of minutes, payment of appoint one of its members mayor pro bills, approval of recognition tempore or president pro tempore, who resolutions, etc. Upon request by any shall preside in the absence of the member of the council, an item shall be mayor/president. In the absence of both removed from the consent agenda and the mayor and the mayor pro tempore or placed on the regular agenda for the president and the president pro discussion. tempore, the member present who has the longest consecutive service on the 4. Agenda distribution council shall preside. [This section should explain when and how councilmembers will receive their 8. Disorderly conduct agendas.] The presiding officer may call to order any person who is being disruptive by 5. Quorum speaking out of order, failing to speak

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on matters germane to city/village negotiating party requests a closed business, speaking longer than the hearing. (majority vote) allotted time, or otherwise disrupting the c. To consider the purchase or lease of proceedings. Such person shall be seated real property up to the time an until the chair determines whether the option to purchase or lease that real person is in order. property is obtained. (2/3 roll call If the person so engaged in vote) presentation is called out of order, he or d. To consult with the municipal she shall not be permitted to continue to attorney or another attorney speak at the same meeting except by regarding trial or settlement strategy special leave of the council. If the in connection with specific pending person shall continue to be disorderly litigation, but only when an open and disrupt the meeting, the chair may meeting would have a detrimental order the sergeant at arms to remove the financial effect on the litigating or person from the meeting. No person settlement position of the council. shall be removed from a public meeting (2/3 roll call vote) except for an actual breach of the peace e. To review the specific contents of committed at the meeting. an application for employment or [It is suggested that there be an appointment to a public office when ordinance governing disruption of a candidate requests that the public meetings, prepared with advice of application remain confidential. (2/3 the municipal attorney and the roll call vote). However, all municipal liability insurance carrier on interviews by a public body for the risks, limits and force allowed to employment or appointment to a eject members. This ordinance should public office shall be held in an stipulate the procedure to be followed open meeting. and the resource to be used for the f. To consider material exempt from sergeant-at-arms function, e.g. local discussion or disclosure by state or police, county sheriff, etc. By planning federal statute. (2/3 roll call vote) in advance how to handle attempted disruptions, you can keep the meeting in 2. Calling closed meetings order.] At a regular or special meeting, the council may call a closed session under C. Closed meetings the conditions outlined in Section 1 1. Purpose above. The vote and purpose(s) for Closed meetings may be held only for calling the closed meeting shall be the reasons authorized in the Open entered into the minutes of the public Meetings Act, which include the part of the meeting at which the vote is following: taken. a. To consider the dismissal, suspension, or discipline of, or to 3. Minutes of closed meetings hear complaints or charges brought A separate set of minutes shall be taken against a public officer, employee, by the clerk or the designated secretary staff member or individual agent of the council at the closed session. when the named person requests a These minutes will be retained by the closed meeting. (majority vote) clerk, shall not be available to the b. For strategy and negotiation public, and shall only be disclosed if sessions connected with the required by a civil action, as authorized negotiation of a collective by the Open Meetings Act. These bargaining agreement when either minutes may be destroyed one year and one day after approval of the minutes of

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the regular meeting at which the closed presiding officer, maintain a courteous session was approved. tone and avoid interjecting a personal note into debate. D. Discussion and voting No member shall speak more than 1. Rules of parliamentary procedure. once on the same question unless every The rules of parliamentary practice as member desiring to speak to that contained in the latest edition of question shall have had the opportunity [Robert’s Rules of Order or an to do so. alternative source of procedural rules] The presiding officer, at his or her shall govern the council in all cases to discretion and subject to the appeal which they are applicable, provided that process mentioned in Section D.1., may they are not in conflict with these rules, permit any person to address the council city/village ordinances or applicable during its deliberations. state statutes. The mayor/president may 3. Ordinances and resolutions appoint a parliamentarian. No ordinance, except an appropriation The presiding officer shall preserve ordinance, an ordinance adopting or order and decorum and may speak to embodying an administrative or points of order in preference to other governmental code or an ordinance councilmembers. The presiding officer adopting a code of ordinances, shall shall decide all questions arising under relate to more than one subject, and that this parliamentary authority, subject to subject shall be clearly stated in its title. appeal and reversal by a majority of the A vote on all ordinances and councilmembers present. resolutions shall be taken by a roll call Any member may appeal a ruling of vote and entered in the minutes unless it the presiding officer to the council. If is a unanimous vote. If the vote is the appeal is seconded, the member unanimous, it shall be necessary only to making the appeal may briefly state the so state in the minutes, unless a roll call reason for the appeal and the presiding vote is required by law or by council officer may briefly state the ruling. rules. There shall be no debate on the appeal and no other member shall participate in 4. Roll call the discussion. The question shall be, In all roll call votes, the names of the “Shall the decision of the presiding members of the council shall be called officer be sustained?” If the majority of in alphabetical order. [Names may be the members present vote “aye,” the called with all names in alphabetical ruling of the presiding officer is order or alphabetical order with the sustained; otherwise it is overruled. mayor/president voting last or the council may select another system.] 2. Conduct of discussion During the council discussion and 5. Duty to vote debate, no member shall speak until Election to a deliberative body carries recognized for that purpose by the with it the obligation to vote. presiding officer. After such Councilmembers present at a council recognition, the member shall confine meeting shall vote on every matter discussion to the question at hand and to before the body, unless otherwise its merits and shall not be interrupted excused or prohibited from voting by except by a point of order or privilege law. A councilmember who is present raised by another member. Speakers and abstains or does not respond to a should address their remarks to the roll call vote shall be counted as voting

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with the prevailing side and shall be so 3. Addressing the council recorded, unless otherwise excused or When a person addresses the council, he prohibited by law from voting. or she shall state his or her name and Conflict of interest, as defined by home address. Remarks should be law, shall be the sole reason for a addressed to the presiding officer. No member to abstain from voting. The person shall have the right to speak opinion of the city/village attorney shall more than once on any particular subject be binding on the council with respect to until all other persons wishing to be the existence of a conflict of interest. A heard on that subject have had the vote may be tabled, if necessary, to opportunity to speak. obtain the opinion of the city/village attorney. F. Miscellaneous The right to vote is limited to the 1. Adoption and amendment of rules of members of council present at the time procedure the vote is taken. Voting by proxy or by These rules of procedure of the council telephone is not permitted. will be placed on the agenda of the first All votes must be held and meeting of the council following the determined in public; no secret ballots seating of the newly elected are permitted. councilmembers for review and adoption. A copy of the rules adopted 6. Results of voting shall be distributed to each In all cases where a vote is taken, the councilmember. presiding officer shall declare the result. The council may alter or amend its It shall be in order for any rules at any time by a vote of a majority councilmember voting in the majority to of its members after notice has been move for a reconsideration of the vote given of the proposed alteration or on any question at that meeting or at the amendment. next succeeding meeting of the council. When a motion to reconsider fails, it 2. Suspension of rules cannot be renewed. The rules of the council may be suspended for a specified portion of a E. Citizen participation meeting by an affirmative vote of two- 1. General thirds of the members present except Each regular council meeting agenda that council actions shall conform to shall provide for reserved time for state statutes and to the Michigan and audience participation. If requested by a the Constitutions. member of the council, the presiding officer shall have discretion to allow a 3. Bid awards member of the audience to speak at Bids will be awarded by the council times other than reserved time for during regular or special meetings. A audience participation. bid award may be made at a special meeting of council if that action is 2. Length of presentation announced in the notice of the special Any person who addresses the council meeting. during a council meeting or public hearing shall be limited to ___ minutes 4. Committees in length per individual presentation. a. The city/village shall have the The clerk will maintain the official time following standing committees of and notify the speakers when their time council: is up.

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[Committees should be listed by by majority vote of the council in name and with a definition of their the same way appointments are purposes and scopes.] made. b. Special committees may be established for a specific period of 5. Authorization for contacting the time by the mayor/president or by a city/village attorney resolution of the council which The following officials (by title) are specifies the task of the special authorized to contact the city/village committee and the date of its attorney regarding municipal matters: dissolution. c. Citizen task forces may be established by a resolution of the council which specifies the task to be accomplished and the date of its dissolution. Members of such committees will be appointed by the mayor/president, subject to approval We highly recommend that you consult your by a majority vote of the council municipal attorney for assistance in and must be residents of the modifying these rules to suit your city/village. Vacancies will be filled municipality’s individual needs.

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Handbook for Municipal Officials Published by the Michigan Municipal League, July 2015 Appendix 6 – Sample Budget Ordinance

Sample Budget Ordinance

We strongly recommend that you consult with your municipal attorney to appropriately modify this sample ordinance to meet your municipality’s needs.

AN ORDINANCE to establish a budget administrative officer for the performance of system for the City/Village of (Name of budgetary duties. City/Village) to define the powers and duties [If the city/village does not have a of the city/village officers in relation to that manager, the following language can be system; to provide that the chief used.] administrative officer shall be furnished The mayor/president shall be the chief with information by the departments, administrative officer referred to in this boards, commissions, and offices relating to ordinance and shall be responsible for the their financial needs, receipts and performance of the duties of that officer expenditures, and general affairs; to provide enumerated in this ordinance. The for an annual budget resolution; to prescribe mayor/president may appoint a fiscal officer a disbursement procedure; and to provide and delegate to that officer any or all of the penalties for refusal or neglect to comply budgeting duties specified in sections 5 with the requirements of this ordinance. through 8. The fiscal officer shall be responsible to the chief administrative The Council of the City/Village of (Name of officer for the performance of budgetary City/Village) ordains: duties.

Section 1. Title Section 4. Budget policy statement This ordinance shall be known as the No later than (date) of each year, the chief City/Village of (Name of City/Village) administrative officer shall send to each Budget Ordinance. officer, department, commission and board of the city/village a budget policy statement Section 2. Fiscal year for the use of those agencies in preparing The fiscal year of the City/Village of (Name their estimates of budgetary requirements of City/Village) shall begin on (date) in each for the ensuing fiscal year. year and close on the following (date). Section 5. Budget estimates required Section 3. Chief administrative officer Any officers, elected or appointed, and fiscal officer departments, commissions, and boards of [If the city/village has a manager, the the city/village financed in whole or in part following language can be used.] by the city/village shall, on or before (date) The manager shall be the chief of each year, transmit to the chief administrative officer referred to in this administrative officer their estimates of the ordinance and shall be responsible for the amounts of money required for each activity performance of the duties of that officer in their agencies for the ensuring fiscal year. enumerated in this ordinance. The manager They shall also submit any other information may appoint a fiscal officer and delegate to deemed relevant by the chief administrative that officer any or all of the budgeting duties officer. specified in Sections 5 through 8. The fiscal officer shall be responsible to the chief

Handbook for Municipal Officials 129 Published by the Michigan Municipal League, July 2015 Appendix 6 – Sample Budget Ordinance

d. An estimate of all anticipated revenues Section 6. Budget forms of the city/village which will be The chief administrative officer shall necessary to meet the proposed prescribe forms to be used in submitting expenditures and commitments during budget estimates and shall prescribe the the ensuing fiscal year. This should procedures deemed necessary for the include: guidance of officials in preparing such 1. sources other than taxes, budget estimates. The chief administrative 2. income from borrowing, officer may also require a statement of the 3. current and delinquent taxes, and purposes of any proposed expenditure and a 4. bond issues. justification of the services financed by any Included in this estimate shall be expenditure. corresponding figures for the current and preceding fiscal year. Section 7. Department budget review e. Such other supporting schedules as the The chief administrative officer shall review council may deem necessary. the department estimates with a f. An informative summary of projected representative from each department. The revenues and expenditures of any purpose of the review shall be to clarify the special assessment funds, public estimates, ensure their accuracy, and improvement or building and site funds, determine their adherence to the policies intragovernmental service funds or enumerated by the chief administrative enterprise funds, including the estimated officer pursuant to Section 4. total cost and proposed method of financing each capital construction Section 8. The budget document project, and the projected additional The chief administrative officer shall annual operating cost and the method of prepare a budget, which shall present a financing the operating costs of each complete financial plan for the ensuing year, capital construction project for three utilizing those estimates received from the years beyond the fiscal year covered by various agencies. The budget will be the budget. prepared in such a manner that shall assure that the total of estimated expenditures Section 9. Transmittal of budget to including an accrued deficit in any fund city/village council does not exceed the total of expected No later than (date) of each year, the chief revenues including an unappropriated administrative officer shall transmit the surplus. budget to the council. The budget shall be The budget shall consist of the accompanied by: following parts: a. A draft resolution for adoption by the a. Detailed estimates of all proposed council, consistent with the budget, expenditures for the ensuing fiscal year which shall set forth the anticipated for each department and office of the revenue and requested expenditure city/village showing the expenditures authority for the ensuing fiscal year in for corresponding items for the current such form and in such detail deemed and last preceding fiscal year. appropriate by the chief administrative b. Statements of the bonded and other officer, provided that it is consistent indebtedness of the city/village, showing with the uniform chart of accounts the debt redemption and interest prescribed by the State of Michigan. No requirements, the debt authorized and budget resolution shall be submitted to unissued, and the condition of sinking the council in which estimated total funds, if any. expenditures, including an accrued c. An estimate of the amount of surplus deficit, exceed estimated total revenues, expected in the current fiscal year. including an available surplus.

130 Handbook for Municipal Published by the Michigan Municipal League, July 2015 Appendix 6 – Sample Budget Ordinance b. A budget message which shall explain administrative officer within limits stated in the reason for increases or decreases in the resolution. In no case, however, may budgeted items compared with the such limits stated in the resolution or motion current fiscal year, the policy of the exceed those provided for in section 16 of chief administrative officer as it relates this ordinance. to important budgetary items, and any The city/village budget may include other information that the chief information concerning the amount of tax administrative officer determines to be levy expected to be required to raise those useful to the council in its consideration sums of money included in the budget of the proposed budget. resolution. In conformance with state law, and at such times as the council shall Section 10. Consideration of budget by determine to be appropriate, the council council shall order to be raised by taxation those The council shall fix the time and place of a sums of money necessary to defray the public hearing to be held on the budget and expenditures and meet the liabilities of the proposed budget resolution. The clerk shall city/village for the fiscal year. The council then have published in a newspaper of may take such action after the value of the general circulation with the city/village, property in the village as finally equalized notice of the hearing and an indication of the has been determined. place at which the budget and proposed budget resolution may be inspected by the Section 12. Procedure for disbursements public. This notice must be published at No money shall be drawn from the village least seven days before the date of the treasury unless the council has approved the hearing. annual budget. The council may direct the chief Each warrant, draft, or contract of the administrative officer to submit any village shall specify the fund and additional information it deems relevant in appropriation, designated by number its consideration of the budget and proposed assigned in the accounting system budget resolution. The council may conduct classification established pursuant to law, budgetary reviews with the chief from which it is payable and shall be paid administrative officer for the purpose of from no other fund or appropriation. clarification or justification of proposed Expenditures shall not be charged budgetary items. directly to any contingent or general The council may revise, alter or account. Instead, the necessary amount of substitute for the proposed general budget the appropriation from such account shall be resolution in any way, except that it may not transferred pursuant to the provisions of this change it in a way that would cause total ordinance to the appropriate general appropriations, including an accrued deficit, appropriation account and the expenditure to exceed total estimated revenues, including then charged to the account. an unappropriated surplus. An accrued deficit shall be the first item of expenditure Section 13. Limit on obligations and in the general appropriations measure. payments No obligation shall be incurred against, and Section 11. Passage of the budget no payment shall be made from, any resolution appropriation account adopted by the budget No later than (date) the council shall pass a resolution unless there is a sufficient resolution providing the authority to make unencumbered balance in the account and expenditures and incur obligations on behalf sufficient funds are or will be available to of the city/village. meet the obligation. The council may authorize transfers between appropriation items by the chief

Handbook for Municipal Officials 131 Published by the Michigan Municipal League, July 2015 Appendix 6 – Sample Budget Ordinance

of those anticipated in the original resolution Section 14. Periodic finance reports become available due to: The chief administrative officer may require a. an unobligated surplus from prior years the appropriate agencies to prepare and becoming available. transmit to him or her monthly a report of b. current fiscal year revenue exceeding city/village financial obligations, including, original estimates in amounts great but not limited to: enough to finance the increased a. a summary statement of the actual appropriations. financial condition of the general fund at The council may make a supplemental the end of the previous month. appropriation by increasing the dollar b. a summary statement showing the amount of an appropriation item in the receipts and expenditures and original budget resolution or by adding encumbrances for the previous month additional items. At the same time, the and for the then current fiscal year to the estimated amount from the source of end of the previous month. revenue to which the increase in revenue c. a detailed listing of the expected may be attributed shall be increased or a revenues by major sources as estimated new source and amount added in a sum in the budget, actual receipts to date for sufficient to equal the supplemented the current fiscal year, the balance of expenditure amount. In no case may such estimated revenues to be collected in the appropriations cause total estimated current fiscal year and any revisions in expenditures, including an accrued deficit, revenue estimates occasioned by to exceed total estimated revenues, including collection experience to date. an unappropriated surplus. d. a detailed listing for each organizational unit and activity of the amount Section 17. Appropriation adjustment appropriated, the amount charged to required each appropriation in the previous Whenever it appears to the chief month and for the current fiscal year to administrative officer or the council that date, and the unencumbered balance of actual and probable revenues in any fund appropriations, and any revisions in the will be less than the estimated revenues estimate of expenditures. upon which appropriations from such fund The chief administrative officer shall were based, the chief administrative officer transmit the above information to the shall present to the council council on a monthly basis. recommendations which, if adopted, will prevent expenditures from exceeding Section 15. Transfers available revenues for the current fiscal Transfers of any unencumbered balance, or year. Such recommendations shall include any portion, in any appropriation amount to proposals for reducing appropriations, any other appropriation account may not be increasing revenues, or both. made without amendment of the budget Within 15 days of receiving this resolution as provided in this ordinance, information the council shall amend the except that transfers within a fund and budget resolution by reducing appropriations department may be made by the chief or approving such measures as are necessary administrative officer within limits set by to provide revenues sufficient to equal the budget resolution. appropriations or both. The amendment shall recognize the requirements of state law and Section 16. Supplemental appropriations collective bargaining agreements. If the The council may make supplemental council does not make effective such appropriations by amending the original measures within this time, the chief budget resolution as provided in this administrative officer shall, within the next ordinance, provided that revenues in excess five days, make adjustments in

132 Handbook for Municipal Published by the Michigan Municipal League, July 2015 Appendix 6 – Sample Budget Ordinance appropriations in order to equalize appropriations and estimated revenues and Ordinance Declared Adopted______report such action to the council. City/Village Clerk Yeas: Nays: Effective Date______

Handbook for Municipal Officials 133 Published by the Michigan Municipal League, July 2015

Questions and Answers

Budgets and Budgeting Q3 Is a public hearing necessary to Q1 What budget procedures should amend the budget? we have in place? No. However, the budget should be The budget process is a complicated and amended before you overspend, not after. involved procedure. A chapter of this handbook is devoted exclusively to financial Q4 If our city has not adopted a management and budgeting details. The budget and the new fiscal year has Uniform Budgeting and Accounting Act begun, is it legal to pass a monthly (1968 PA 2) as amended, spells out the appropriation bill to pay the bills? procedures and requirements of the Your city charter may address this issue. budgeting process and the accounting Some charters provide for an “interim function for municipalities. authority” stating that if the council fails to A public hearing is required prior to adopt a budget ordinance before each new adopting the budget. (1963 PA 43). fiscal year, the council, on written request of Remember that someone must be the mayor, may make an appropriation for a responsible for budget preparation and department’s current expenses in an amount execution. The legislative body must sufficient to cover the minimum necessary annually adopt a budget (spending and expenses of the affected department(s) until revenue plan) for the city or village and the appropriation ordinance is in force. must make amendments when necessary. Proper procedures must be followed in Q5 Is there a “rule of thumb” for a setting the millages. (See CH 19: Budgeting, fund balance amount? for further information.) Operating fund balances should be maintained at levels sufficient to absorb Q2 Do we need to have a public unpredictable revenue shortfalls and to hearing before adopting the insure desired cash flow levels. Local budget? officials must balance financial stability Yes, according to the Budget Hearings of against an excessive fund balance. You Local Governments Act (1963 PA 43), should adopt a policy regardless of the which requires all local units to hold a amount that you decide is necessary. A public hearing on a proposed budget. Notice typical policy is one to three months must be published at least six days prior to operating expenditures or five to twenty the hearing in a “newspaper of general percent of annual budgeted expenditures. circulation” and must include a statement, printed in 11-point boldfaced type, stating Q6 We would like to start a capital “The property tax millage rate proposed project in five years and add a to be levied to support the proposed little to our reserves every year budget will be a subject of this hearing.” until we have enough to fund the Budget hearings held in accordance with the project. How do we budget for provisions of the local charter and/or this? ordinance will meet this requirement. This For five years, you should have excess hearing will also fulfill the requirement for a revenues over expenditures. The excess “truth in taxation” hearing. revenue should end up in your fund balance. You may want to place the excess revenue in a restricted “capital improvement fund” to avoid the temptation to use the funds to

134 Handbook for Municipal Officials Published by the Michigan Municipal League, July 2015 Appendix 7 – Questions and Answers cover budget shortfalls while you are saving other cities and villages have ordinances or for your capital project. The year that you policies establishing a threshold amount incur expenses on the capital project, you over which contracts must be bid. Even if will need to use your fund balance to offset your municipality does not have such a your capital project expenditures in order to requirement, it is often prudent to solicit balance the budget. bids on large projects.

Consultants Council/Staff Relationships Q7 How do we find a consultant Q9 What constitutes appropriate and/or other services and contact between individual products for municipalities? councilmembers and city staff? The Municipal Yellow Pages, in which Some of our councilmembers ask consultants can advertise, are currently staff (other than the city manager) online at mml.org. directly for information they The Directory of Michigan Municipal desire. This causes problems Officials, published annually by the League because information may be given also contains the Municipal Yellow Pages. to one council member and not to In addition, consultants also advertise in the others, thus putting the manager League’s magazine, The Review. Through in an awkward position. its Municipal Consulting Services, the Direction on appropriate council action with league offers a wide range of management respect to city staff can be incorporated into consulting projects with a primary focus on council rules or ethics policies. Manistee human resources. Specifically, we offer covers the issue in their council rules and classification and compensation systems, encourages council members to work benefits analysis, personnel policies review through their city managers for information and development, HR systems audits, from city staff. performance evaluation systems, and executive search services. Downtown Development Authorities You can also ask other municipalities of Q10 Does the DDA budget have to go a similar size in your region if they are using to the city council for approval? a consultant in the field in which you are Yes. MCL 125.1678 (1975 PA 197) states looking. Or, post a question to the village “Before the budget may be adopted by the listserv. Find out what others’ experience board it shall be approved by the governing has been with consultants. body of the municipality.” In addition, there is an online directory of more than 120 companies enrolled in the Email League’s Business Alliance Program (BAP). Q 11 Is email a public record? Go to mml.org and on the home page, left Email messages are public records if they bottom column—click Business Alliance. are created or received as part of performing Companies are listed alphabetically or by a public employee’s official duties. service category (See also Chapter 17: The Michigan Freedom of Information Selecting and Working with Consultants). Act (FOIA) (1976 PA 442, as amended) defines a public record as “a writing Q8 What is the maximum amount for prepared, owned, used in the possession of, which we can write a contract or retained by a public body in the without going out for public bids performance of an official function, from the under state law? time it is created.” There is no state law requiring public bids on municipal contracts. However, many cities and home rule villages have such a requirement written into their charter and

Handbook for Municipal Officials 135 Published by the Michigan Municipal League, July 2015 Appendix 7 – Questions and Answers

Q 12 I sometimes use my home increase proposed and...an estimate of the computer and personal email revenue increase the taxing unit will account to conduct government collect...during the first calendar year.”1999 business. Am I creating public PA 248 amends section 24f of the General records? Property Tax Act (MCL 211.24f) to require Yes. Records created in the performance of that the following information be provided an official function must be managed the on the ballot: same way as those created and received 1. the millage rate to be authorized, using government computer recourses. 2. the estimated amount of revenue that will be collected in the first year that the millage is authorized and levied, Q13 Does all email have the same 3. the duration of the millage in years, retention period? 4. a clear statement of the purpose for the No. Just like paper records, email records millage, and are used to support a variety of business 5. a clear statement indicating whether the processes. Email messages must be proposed millage is a renewal of a evaluated for their content and purpose to previously authorized millage or the determine the length of time the message authorization of a new additional must be retained in accordance with the millage. appropriate Retention and Disposal Schedule. Fortunately, this is not quite as complicated as it sounds and could be Elections something as simple as: Q14 How many home rule cities and Shall the [municipality] continue to levy home rule villages have non- a total of [one] mill ($[1.00] per $1,000.00) partisan elections? on taxable value of property located in the A check of the MML charter database shows [municipality] for [five] years beginning an overwhelming majority (over 90 percent) with the[2000] tax levy year and running of home rule cities conduct elections on a through [2004] tax levy year (inclusive), non-partisan basis. The Election which will raise in the first year of such levy Consolidation Act of 2005 required all an estimated revenue of [twenty thousand village elections to be non-partisan. two hundred fifty six dollars ($20,256.00)] to be used for the specific purpose of Q12 Our clerk administers the oath of [operation, maintenance and/or office to the mayor, commission improvements of the Community Center members and appointed officials. building and grounds]? If approved this Who swears in a new city or would be a renewal of a previously village clerk? authorized millage. The county clerk or any notary public can administer the oath of office to a newly Q16 Are there any new requirements elected or appointed clerk. for ballot language authorizing the issuance of bonds? Q15 Our council has voted to place a Yes. MCL 211.24f of the General Property millage increase on the ballot at Tax Act also requires a ballot to state: the next election. We understand 1. the principal amount to be borrowed, there has been a change in the 2. the maximum number of years the required ballot wording. What bonds may be outstanding, exclusive of additional information do we need any refunding, and to include? 3. a clear statement of the purpose for Previously, state law required only that the which the bonds proceeds will be used. “ballot state the amount of the millage

136 Handbook for Municipal Officials Published by the Michigan Municipal League, July 2015 Appendix 7 – Questions and Answers

If the bonds are to be paid from a Finance- Expenditures separate revenue source or from taxes levied Q20 Can the village/city make in less than the whole city or village, you donations to local service must indicate the estimated millage to be organizations? levied for the bonds in the first year and an Under Michigan law, municipalities have estimated annual millage required to retire the power to expend public funds only for the debt, as well as the source of revenue to public purposes. Authorized by the be used to pay off the indebtedness. Michigan constitutions or by statute, Michigan courts have ruled that gifts or Q17 Is a councilmember who was donation of money or property is a violation appointed to fill a vacancy subject of state law. (Chapter 26 of this book covers to a recall? the topic of municipal expenditures). Yes. This is still an elected position even though the trustee was appointed. According Q21 Can a city or village use public to the State Elections Bureau, MCL 168.951 funds for employee picnics, of the state elections statute applies to all retirement dinners, flowers for officials in elected positions. It states that a sick employees, etc.? person cannot be recalled in the first six It is quite difficult to meet the standard of months of office (from the time he or she is “public purpose” for these expenditures. The sworn-in) nor in the last six months of Michigan Supreme Court has held that an office, but can be recalled at any time in improper “lending of credit” occurs when a between. In fact, except under truly municipality gives something of value extraordinary circumstances, this is the only without getting something of specific value way to remove an elected official from in return. For more information, see CH 23: office. Limits on Municipal Expenditures.

Fees and Permits Q22 Our library asked for a donation Q18 One of the churches in our in order to match outside funding community is preparing to add a but we told them that we couldn’t new wing to its building. This will contribute to a private nonprofit require not only a building organization. permit, but also a special use A public library is not a private nonprofit permit. I know churches are tax organization. Chapter 397 of the Michigan exempt, but are they exempt from compiled laws, sets out the forms of fees also? libraries, including city and village libraries. Churches are exempt only from ad valorem If a library is established, the budget should and sales tax. They are still required to pay not show a disbursement as a donation but for permits and fees. as a line item like any other department. A municipality can hire a private nonprofit Finance - Bonds agency to perform a service that it might Q19 Can sewer revenues be used to otherwise have performed. retire sewer bonds? Yes, however, the municipality should call Finance - Payment in lieu of taxes its bond counsel to find out if there are any Q23 Can a municpality require penalties or other requirements. payments in lieu of taxes from state and county government agencies? No. You cannot require payment in lieu of taxes, but you can try to negotiate an agreement with them.

Handbook for Municipal Officials 137 Published by the Michigan Municipal League, July 2015 Appendix 7 – Questions and Answers

Finance - Purchasing organizations) is not exempt from special Q24 Can municipalities use credit assessments. cards? There are two public acts that allow Q28 Can we levy a special assessment municipalities to use credit cards for based on the value of a property? procurement (1995 PA 266, MCL 129.241 Special assessments are levied only on real et seq.) and for accepting payments (1995 property, based on some measure of how PA 280, MCL 129.221 et seq.). Both require that real property benefits from the special some type of action by the local legislative assessment, such as front footage for body. To use credit cards for procurement, a sidewalks. There are a few special written policy is required. The Act lists what assessments that statutorily authorize ad must be included in the policy. An valorem special assessments such as the authorizing resolution is required to accept Police and Fire Protection Act, 1951 PA 33 payments by credit cards. There are other (MCL 41.801 and 41.851). requirements and restrictions as well. Sample policies are available on our Q29 Are special assessments subject to website, mml.org. the Headlee amendment? Special assessments are not subject to Finance - Revenues constitutional and statutory general ad valorem property tax restrictions such as the Q25 Can a municipality use Act 51 Headlee Amendment and Proposal A of local street dollars for sidewalk 1994. construction? According to the Michigan Department of Q30 Must we hold a hearing on a Transportation (MDOT), municipalities special assessment? cannot use local street dollars for sidewalk You will need to check your charter. Many construction but can use them for sidewalk charter provisions require public hearings for repair and replacement if necessitated by special assessments. The procedure can also street work. be set by ordinance.

Q26 Are we supposed to match Act 51 Legislation local street dollars for local street construction? Q31 I am interested in receiving copies Yes. Local road construction must have of new bills introduced in the matching dollars from the general fund in legislature. Is there any way to get order to use Act 51 dollars. However, on the legislature’s mailing list? matching funds are not required for the use The Michigan legislature maintains an of Act 51 funds for routine maintenance. interactive, user friendly website: michiganlegislature.org. You can search for Finance - Special Assessments a bill by number, by sponsor or by text. The website is updated frequently and gives the Q27 In a special assessment district, current language of the bill, as well as its are tax-exempt properties subject current status. If you don’t have Internet to special assessment? access at home, your local library may have Federal and state governmental entities are computers available. exempt from special assessment districts. School districts can agree to pay assessments (MCL 380.1141). According to the Citizens Research Council, the courts have consistently ruled that property normally exempt from property taxes (such as that owned by religious and charitable

138 Handbook for Municipal Officials Published by the Michigan Municipal League, July 2015 Appendix 7 – Questions and Answers

Meetings, Minutes, etc. Q35 Can the council discuss an item Q32 Can a councilmember abstain not on the agenda? from voting without disclosing the There is no law prohibiting discussion of an reason? Is the abstention counted item not on the agenda. The Open Meetings as a yea or nay? Act outlines the time required for proper It depends. State law does not require village notice of regular and special meetings. or city councilmembers to declare the reason Although it specifies that the name, address for an abstention. However, many charters and telephone number of the public body be require the councilmember to do so. An included in the notice, it does not require a abstention is neither a yea or nay vote, and listing of specific items to be discussed. therefore, not counted. It upholds the will of However, a number of cities and villages, the majority. If the member does not leave either through their charter or their council the council chamber, they are included in the rules, have agreed that items not on the quorum count. agenda may not be considered by the council. Some permit the agenda to be Q33 How does one go about making amended during the meeting. Your city clerk changes to minutes? and/or your city attorney will be able to The Michigan Open Meetings Act (1976 PA guide you as to your requirements. 267, MCL 15.261 et seq.) requires that corrections in the minutes must be made no Q36 How long can the public speak later than the next meeting to which the during the public comment minutes refer. Corrected minutes must be portion of a council meeting? available no later than the next meeting after It is up to the council to determine the the correction and must show both the policy. Some communities limit each person original entry and the correction. to two minutes; in other communities the limit is five minutes. Some municipalities Q34 What is the difference between a set aside a total of 15 minutes for public hearing and a special proponents, and 15 minutes for opponents meeting? on a specific issue. One community even A public hearing is that portion of a meeting sets a timer, and when it goes off, the citizen designed specifically to receive input from must quit speaking. The length of time for the public on a single issue. It may be public commentary should be established in required by ordinance or statute. The time, your council rules. place, and subject of the hearing must be posted as required by the ordinance or Q37 Do council meeting minutes have statute and only the posted subject can be to be published? discussed. The hearing may be before, Check your charter for your municipality’s during or after a regular meeting or may be requirements. Some examples of the at a special meeting called specifically for differing charter requirements are: within 15 that purpose. days of the meetings, within 20 days of the A special meeting is any meeting of the meeting, and another requires within 45 governing body other than those called for days after the meeting. by the charter. It may be a meeting of the full body or just a subcommittee. Your charter will outline the process for calling a special meeting and the Open Meetings Act requires the date, time, and place of the meeting be posted at least 18 hours before the meeting.

Handbook for Municipal Officials 139 Published by the Michigan Municipal League, July 2015 Appendix 7 – Questions and Answers

Q38 Is there a requirement regarding from office. Variations include three the length of time a public hearing consecutive absences or 25 percent; 30 has to be kept open? We often percent in a year; or seven consecutive hold a public hearing during the meetings in a year. The League’s charter regular council meeting. If no one database has a listing of all the city charters appears to speak at the scheduled and what method they use. It is available at time, how long must we wait mml.org. before proceeding with the remainder of our agenda? Q 40 Is it possible for a councilmember Unless you have something established in to participate in a council meeting your council rules or charter, we know of by phone or Skype? nothing in state law that sets a specific The Open Meetings Act (OMA) regulates amount of time. Normally the mayor gavels meetings of public bodies in Michigan. Most the public hearing open and asks if there is Michigan cities and villages do not allow anyone who wishes to speak. If no one does, councilmembers to vote unless they are the hearing is declared closed. Public physically present at council meetings. The hearings are often held during council Legislature proposed adding an amendment meetings. You do need to make sure the to the OMA to specifically prohibit hearing is open at the time advertised. participation in a council meeting by Skype Again, you need to check your charter and or teleconferencing. However, this any rules the council may have adopted. legislation while passing the House, is still in committee as of this writing. Please seek Q39 What can be done about a the advice of your municipal attorney on councilmember not attending using Skype or teleconferencing to meetings? participate in meetings. [In Goode v. If you want to deal with council absences, Michigan Department of Social Services, you can enact a provision in your council 143 Mich App 756 (1985), teleconferencing rules to address it or amend your city (or of social services hearings were found to home rule village) charter to address it. The comply with the OMA; and Michigan policy can say something like this: Attorney General Opinion #6835 of 1995 concluded that an intermediate school A. Council Rules district representative could participate in a No city councilmember shall miss three (3) meeting through interactive television and consecutive, unexcused regular meetings in comply with the Open Meetings Act.] a twelve (12) month period. Any violation of this provision shall result in the matter being Q41 I think the council as a body is reviewed by the Board of Ethics for operating under questionable appropriate action, including but not limited legal and ethical practices. Is to removal from the city council. This there an organization or agency provision recognizes the duty of city that has oversight over the councilmembers to be in attendance to council? represent the citizens in matters concerning No, there is no oversight agency. The the city. An absence shall be excused only municipal attorney should be alerted to upon a quorum vote by the present city questionable legal or ethical practices. As a council. councilmember, you might suggest the council attend training seminars on the Open B. Charters Meetings Act, the Freedom of Information Most city charters contain a provision Act or other seminars that the League offers. dealing with council absences. The most common is: four unexcused absences or missing 25 percent of meetings in a year results in a councilmember getting removed

140 Handbook for Municipal Officials Published by the Michigan Municipal League, July 2015 Appendix 7 – Questions and Answers

Open Meetings Act Q45 Our village would like to have a Q42 Is it a requirement to post a joint meeting with the adjacent schedule of the regular meetings township. Is there anything to of the council? prevent us from holding this Yes, according to Michigan’s Open meeting outside the village limits? Meetings Act, (1976 PA 267, MCL 15.261 There is nothing in the Open Meetings Act et seq.). MCL 15.265 (2) provides, “For that prevents your council from meeting regular meetings of a public body, there outside the corporate limits. However, don’t shall be posted within 10 days after the first forget the posting requirements. This type of meeting of the public body in each calendar meeting, close to the village boundaries, or fiscal year a public notice stating the should pose no political problems because dates, time, and places of its regular the citizens can easily attend if they so meetings.” If there is a change in the desire. But, if your council ever considers a schedule, the changes must be posted within meeting at a remote location from the three days after the meeting at which the village, you’ll need to factor in the reactions change is made. of the village constituents. There are benefits and drawbacks to meetings like this Q43 Can we go into a closed meeting in and all aspects need to be considered, not order to discuss selling a piece of just the legal aspects. property? No. This is not permitted under the Training and conferences Michigan Open Meetings Act. However, Q46 Can appointed clerks and you can go into closed session to consider treasurers participate in the purchase or lease of real property up to the Elected Officials Academy? time an option to purchase or lease that They are welcome to attend the classes, but property is obtained. they are not eligible to graduate from the different levels. However, elected clerks and Q44 What can we discuss in a closed treasurers may earn credits and graduate meeting? from the Academy levels. If a person is Every councilmember should be familiar appointed to fill an elected position, then with the Michigan Open Meetings Act. The he/she is eligible to participate in the Elected intent of the Act is for a public body to Officials Academy. See the Education conduct its business in the open. There are Calendar section of our website for a list of only a few circumstances where a closed upcoming classes and check the program meeting is allowed. These include descriptions for details of Elected Officials discussion of employee or officer discipline, Academy credits. etc. when the employee or officer requests a closed meeting; consideration of purchase of Uniform Traffic Code property; consultation with the municipal Q47 We note a new Uniform Traffic attorney on pending litigation and review of Code has been promulgated. Do an employment application upon request of we need to adopt a new traffic the applicant. The statute states how to go ordinance? into closed session and how to record the Probably. As a matter of fact, unless you proceedings. You cannot conduct interviews have adopted the Michigan Vehicle Code in closed session. You cannot go into closed (MVC) as your primary code, you will need session to avoid discussing issues in front of to adopt that first. The League has a One citizens. Pager Plus Fact Sheet with a sample ordinance adopting the MVC by reference and a sample ordinance adopting the Uniform Traffic Code (UTC) by reference. You can obtain copies from either the MML

Handbook for Municipal Officials 141 Published by the Michigan Municipal League, July 2015 Appendix 7 – Questions and Answers website at mml.org or by emailing Q50 Can unpaid utility bills be added [email protected]. to tax bills as a lien against the property? Utilities 1939 PA 178 (MCL 123.161 et seq.) as Q48 Our city is in the process of security for collection of water or sewage setting water and sewer rates. Can system rates, assessments, charges, or we use rates from neighboring rentals and states, provides for a lien for communities as the basis for our water or sewage system charges which rates? accrues to the property at the time the The setting of utility rates is a complicated service is furnished by municipalities. matter that needs to include substantial input from your city attorney, engineer and your Weddings water and sewer department. In the past, Q51 Our mayor has been asked to many municipalities set their water and perform several wedding sewer rates based on the rates charged by ceremonies this summer. Who their neighbors and/or other comparable decides how much the mayor communities. However, in Bolt v. City of should charge? Lansing 459 Mich. 152 (1998), the Michigan The law giving a mayor the authority to Supreme Court ruled that there are legal perform marriage ceremonies (MCL differences between a tax and a fee. The 551.7(3)) states the mayor shall charge and Court said that a fee must serve a regulatory collect a fee. The amount is to be purpose, be proportionate to the necessary determined by the city council and paid to cost of the service and be voluntary. the city treasurer to be deposited in the As a result, the methods used by many general fund of the city at the end of the municipalities prior to the Bolt decision (i.e. month. In general, a fee of $25-50 has been determining rates based on comparable rates approved in many cities. in other cities and villages) may no longer be valid. Because of the potential impact on any municipality’s utility revenues, most rate ordinances should be reviewed by your municipal attorney for legal compliance with Bolt. (See Chapter 22: Special Assessment and User Charges for further discussion on Bolt).

Q49 Do any municipalities have an ordinance providing for multiple water meters – for instance, to measure water used for lawn sprinkling separately from water used indoors? Hancock provides separate water meters for a supply of water that will not be discharged into the sanitary sewer system. This includes lawn and garden sprinkling, commercial bottling of beverages and flooding of ice rinks. Tecumseh permits separate water metering systems for residential lawn sprinkling only under certain conditions, including the residential property owner being responsible for installation costs.

142 Handbook for Municipal Officials Published by the Michigan Municipal League, July 2015

For More Information

General (available at mml.org) o Policy and Definitions Inquiry Service. As one of the oldest o Responding to Requests League benefits, the Inquiry Service o Statutory Exemption provides member officials with answers to  Open Meetings Act– questions on a vast array of municipal o Calling Closed Meetings topics. Member officials may request o Closed Meeting Minutes information and/or material on any o Definitions and Requirements municipal issue. The League has many o Posting Requirements sample documents available:  Public Hearings  Ordinances  Work Sessions: Use By Legislative  Policies Bodies  Programs  Articles Meetings: Agendas and Minutes. A guide  Charters to recording minutes and organizing  Referrals meetings. Michigan Municipal League  Regulations electronic book (e-book), 2005.  Feasibility Studies Send your municipal inquiries to MML Legal Defense Fund. The League’s [email protected]. Legal Defense Fund and its resources are available incases which would have a Structure of Local Government in considerable impact on Michigan municipal Michigan (available at mml.org) law or positively affect the organization, Nature and Purpose of a Home Rule operation, powers, duties, or financing of Charter. Published jointly by Citizens Michigan’s cities and villages. Legal Research Council of Michigan, Michigan Defense Fund resources and services are Municipal League, Michigan Association of available to League members which are also Municipal Attorneys, 1993. members of the Fund. Dues are based on member population and range from $100 to Organization of City and Village $1,000. Government in Michigan. (Municipal The typical form of assistance is the Report). Michigan Municipal League; 1994, filing of an amicus brief to support the legal 2005, 2011. position of the city or village involved in the case. Most often this is in the Michigan One Pager Plus Fact Sheets: Court of Appeals or Michigan Supreme  Elected/Appointed Official–in Default Court. The Legal Defense Fund is financed  Email and Retention of Records by voluntary dues of member cities and villages. Forms to make a request for  Ethics– assistance are available at mml.org. o Contracts of Public Servants with Public Entities Legislative Issues (available at Incompatible Public Offices o mml.org) Misconduct in Office o The League's advocacy team researches Standards of Conduct for Public o legislative issues of importance to Officers/Employees municipalities; through their research, they

 Freedom of Information Act– develop issue papers and legislative briefs

o General Questions that provide the framework for the League's

Handbook for Municipal Officials 143 Published by the Michigan Municipal League, July 2015 Appendix 8 – For More Information efforts to represent municipalities' best Midtown, a nonprofit organized a live- interests at the state and federal level. where-you-work incentive program.  Issue Papers  Main Street Community Partnership— o Revenue Sharing Fact Sheet A group of Adrian residents and leaders, o Home Rule in Michigan—Then inspired to invest in their own community, and Now chipped in to buy and rehab a historic  Legislative Briefs structure on Main Street.  Prosperity Agenda  Inside 208 blog Green Initiatives  League Position on Current  Dequindre Cut—A 1.35-mile Legislative Bills recreational path that offers a pedestrian link between the Detroit Riverfront, Eastern Placemaking (available at Market, and many residential placemaking.mml.org) neighborhoods. The League identified eight essential assets  Recycle Here—A creative approach that make communities vibrant places in the turned a traditional drop-off center into a 21st century: physical design & walkability; community gather-ing place and a showcase green initiatives; cultural economic for artists and musicians. development; entrepreneurship; welcoming; messaging & technology; transit; and Cultural Economic Development education. Helping Michigan’s leaders grow  The Alley Project—Professional artists, these assets in their own communities serves teens, and neighbors built infrastructure for as the focus of the League. Research creative expression and community continues to show that “placemaking” responsibility. matters more than ever, as an increasingly  Artist Village Detroit—A once- mobile workforce seeks out neighborhoods abandoned commercial strip serves as a before finding jobs and opening up creative hub for artists, students, business businesses. owners, and neighbors in the heart of Old Redford. League Case Studies:  Growing the Economy through Arts Physical Design & Walkability and Culture—Ludington was poised to  Boyne City Main Street—A group of celebrate its past and future, bringing art, volunteers organized to improve, promote, nature and history together, and provide an and create greater vitality around the Boyne impetus for future development. City downtown.  St. Joseph Public Art—Fills downtown  Downtown: The Heart & Soul of a with unique sculptures from the area’s artists Community—Business owners in West and has helped turn the community into a Branch brought together local officials and tourist destination. residents to start “Fabulous Fridays” to create a more fun, viable downtown in the Entrepreneurship summer.  Hatch Detroit—Promotes a vibrant  Heart of Downtown: Sundquist urban community by awarding money and Pavilion in Riley Park—Farmington empowering local entrepreneurs with capital transformed a parking lot into an attractive and support to succeed and grow. landscaped park with a pavilion that now  Mark’s Carts - Ann Arbor— serves as the focal point for numerous Capitalizing on a national food cart trend, community events. Mark’s Carts offers local food and  Live Midtown—To boost the number communal seating, in a once empty of homeowners and renters in Detroit’s downtown lot.

144 Handbook for Municipal Officials Published by the Michigan Municipal League, July 2015 Appendix 8 - For More Information

 Ponyride - Detroit—Subsidizing shared  Adopting the Budget workspace, Ponyride provides cheap space  Economic Development– for artists and entrepreneurs to work and o Corridor Improvement share know-ledge, resources, and networks. Authority  Rust Belt Market—Features artists, o Downtown Development collectors, local food products, musicians, Authority and community events in a re-purposed big o Financing Tools box commercial building in Ferndale. o Local Development Financing Authority Welcoming to All o Neighborhood  Detroit City Futbol League—A Improvement Authority recreational, adult, co-ed neighborhood o Waterfront Tax Increment soccer league that brings people together Financing while marketing different areas of the city.  Investment Policies for Surplus  Detroit Soup—A grassroots initiative to Funds bring neighbors together to build  Municipal Expenditures relationships, share ideas, and raise money for community projects. Reference Packets. Compiled by the Michigan Municipal League. Messaging & Technology  DDAs (Downtown Development  Hubbard Farms Emergency Alert Authorities) System - Detroit—Frustrated by slow police response times, residents used a free cell Michigan Department of Treasury phone texting system to alert neighbors of Manuals: (available at crimes. michigan.gov/treasury)  Love Muskegon—A group of young  Bulletin for Audits of Local Units professionals in Muskegon started an online of Government. 2012. branding and marketing campaign to  Uniform Accounting Procedures promote their city. Manual. Michigan Department of Treasury, Local Audit & Finance Education Division, Bureau of Local  Clark Park Coalition - Detroit—This Government Services, 2007. grassroots, nonprofit coalition has grown to  Uniform Budget Manual for Local offer positive activities for nearly a thousand Units of Government in Michigan. neighborhood youth each year. Michigan Department of Treasury,  Frankfort Historic Landmarks Arts Local Audit & Finance Division, Center—A re-purposed Coast Guard Bureau of Local Government Station that serves as a popular Services, 2001. community hub for residents and  Uniform Chart of Accounts for visitors. Counties and Local Units of Government, Michigan Department Transit of Treasury, Local Audit & Finance  Tour de Troit—A small group of people Division, Bureau of Local exploring Detroit by bike has grown into Government Services, 2002. Michigan’s largest bike ride, promoting safer streets for non-motorized users. Outline of the Michigan Tax System. The Citizens Research Council of Michigan, Operation of Village Government Detroit, MI. 2014. Updated biennially. Finance (available at: crcmich.org.) One Pager Plus Fact Sheets:

Handbook for Municipal Officials 145 Published by the Michigan Municipal League, July 2015 Appendix 8 – For More Information

Risk Management times a year. It serves as a medium of The League’s Risk Management Services exchange of ideas and information for the Division administers two statewide official of Michigan cities and villages. municipal insurance programs: the The Directory of Michigan Municipal Michigan Municipal League Workers' Officials. Published yearly and distributed to Compensation Fund and the Michigan your village office. Municipal League Liability and Property Pool. One-Pagers Plus Fact Sheets. One-page The mission of Risk Management summaries on a variety of municipal topics, Services is to provide a long-term, stable, many with a “plus” attached—a sample cost-effective insurance alternative for ordinance, resolution, policy, form, etc. members and associate members of the These may be downloaded from mml.org. Michigan Municipal League. Here is a complete list of our current titles: Act 312 Compulsory Arbitration of Member Services Labor Disputes in Police & Fire  Expert Governmental Claims Departments Handling Act 425 Conditional Land Transfers  Personalized Loss Control Services Adopting the Budget & Resources Charter Amendment: HRC Initiatory  Law Enforcement Specialists Petition  Reduced Rates at Related League Charter Amendment: HRC Legislative Training Events, Body Resolution Conventions & Conferences Charter Amendment: HRV Initiatory Petition Websites: Charter Amendment: HRV Legislative michigan.gov/wca Body Resolution Workers’ Compensation Agency. Commercial Redevelopment Act michigan.gov/difs/ Commercial Rehabilitation Act Department of Insurance and Financial Complete Streets Services. Default: Elected/Appointed Officials primacentral.org Economic Development: Corridor Public Risk Management Association Improvement Authority (PRIMA). Economic Development: Downtown Development Authority Additional information Economic Development: Financing Tools Websites Economic Development: Local mml.org. Development Financing Authority Michigan Municipal League. Economic Development: Neighborhood nlc.org Improvement Authority National League of Cities. Economic Development: Waterfront michigan.gov Tax Increment Financing State of Michigan. Election Law Amendments - City legislature.mi.gov Election Law Amendments - Village Michigan Legislature. Ethics: Contracts of Public Servants with census.gov Public Entities U.S. Census Bureau. Ethics: Incompatible Public Offices Michigan Municipal League publications: Ethics: Misconduct in Office by Public The Review. The official magazine of the Officers Michigan Municipal League. Published six Ethics: Standards of Conduct for Public Officers/Employees

146 Handbook for Municipal Officials Published by the Michigan Municipal League, July 2015 Appendix 8 - For More Information

E-mail and Retention of Records Freedom of Information Act: General Questions Freedom of Information Act: Policy and Definitions Freedom of Information Act: Responding to Requests Freedom of Information Act: Statutory Exemptions Fuel Excise Tax Refunds Headlee Rollback and Headlee Override Investment Policies for Surplus Funds Land Division Act Liquor Licenses for Redevelopment: Background and How to Apply Master Plan: 5 Year Review Master Plan: Mastering the Updating Process MISS DIG Underground Facility Damage & Prevention Safety Act Mobile Home Rental Housing Inspections Municipal Civil Infractions Municipal Expenditures Municipal Liens Open Meetings Act: Calling Closed Meetings Open Meetings Act: Closed Meeting Minutes Open Meetings Act: Definitions and Requirements Open Meetings Act: Posting Requirements Public Hearings Rental Housing Inspection Law Residency Act Residency Requirements and the Planning Commission Revenue Sharing Fact Sheet Right to Work Social Security Number Privacy Act State Single Construction Code Act Supportive Housing Properties Urban Cooperation Act/Service Sharing and Labor Agreements Vehicle Code and Uniform Traffic Code (Michigan) Water and Sewer Liens Work Sessions – Use by Legislative Bodies Zoning: Basic Questions Zoning: Nonconforming Buildings and Uses

Handbook for Municipal Officials 147 Published by the Michigan Municipal League, July 2015

Index

Act 312 BANs ...... See Bond anticipation notes defined ...... 110 Bidders on Public Works Act Act 425 defined ...... 111 defined ...... 19, 109 Bidding process ...... 87 Act 425 Conditional Land Transfer Blighted Area Rehabilitation Act One-Pager Plus ...... 146 defined ...... 108 Act 51 ...... 138 Bolt v City of Lansing ...... 79 as revenue source for operating budget . 83 Bolt v City of Lansing ...... 95, 142 ADA ...... See Americans with Disabilities Act related to standards in ratemaking ...... 97 Administrative officials Bond appointment of ...... 10 defined ...... 102 Adopting the Budget Bond anticipation notes ...... 90 One-Pager Plus ...... 146 Bond issuance and notes Agenda incurring debt ...... 90 at council meeting ...... 139 Bonds ...... See also Revenue Bond Act sample outline ...... 27 ballot language authorizing issusance . 136 Agendas types of ...... 90 as a guide for conducting meetings ...... 27 Boundaries ...... 17 Allowances for Moving Personal Property Brownfield redevelopment authority from Acquired Real Property Act as special financing option for economic defined ...... 108, 110 development ...... 92 Americans with Disabilities Act ...... 57 Budget Annexation ...... 17 as a financial plan ...... 82 defined ...... 102 defined ...... 102 home rule cities ...... 18 public hearing ...... 134 home rule villages ...... 18 sample ordinance ...... 129 procedures ...... 18 Budget document contents public hearing ...... 18 as addressed in sample budget ...... 130 Appropriation, adjustment, Budget estimates as addressed in sample budget ordinance as addressed in sample budget ordinance ...... 132 ...... 129 Appropriations, supplemental, Budget forms as addressed in sample budget ordinance as addressed in sample budget ordinance ...... 132 ...... 130 Armistice, Independence and Memorial Day Budget Hearings Of Local Governments Act Expenditures Act defined ...... 107 defined ...... 111 Budget policy statement Attorney as addressed in sample budget ordinance duties of ...... 25 ...... 129 Audit report ...... 80 Budget procedures ...... 134 Background checks Budget resolution, passage, as it relates to the hiring process ...... 56 as addressed in sample budget ...... 131 ballot wording Budget review as it relates to millage increases ...... 136 as addressed in sample budget ...... 130 Bands Act Budget, consideration by councilas defined ...... 111 addressed in sample budget ordinance 131

Handbook for Municipal Officials 148 Published by the Michigan Municipal League, July 2015 Index

Budget, transmittal to council annexation ...... 18 as addressed in sample budget ...... 130 Charter Township Act Budgets ...... See also Truth in Budgeting Acts annexation ...... 19 Building authorities Churches as special financing tools for economic tax exemptions ...... 137 development ...... 92 Cities Building Authorities as form of government ...... 8 defined ...... 110 defined ...... 6 Bullard-Plawecki Employee Right to Know incorporated from townships ...... 10 Act Citizen groups defined ...... 113, 114 tips for meetings ...... 23 Bulletin for Audits of Local Units of working with ...... 23 Government in Michigan ...... 145 Citizens Bureau of Workers' Disability as participants in council meetings...... 23 Compensation ...... 146 Clerk Business improvement districts duties of ...... 25 as special financing option for economic Closed meetings development ...... 92 defined ...... 28 Business partnership program minutes ...... 29 Michigan Municipal League ...... 135 Compensation Calling Closed Meetings employees ...... 56 One-Pager Plus ...... 147 Compensation time Capital budget as it relates the Fair Labor Standards Act defined ...... 84 ...... 58 revenue sources ...... 84 Compulsory Arbitration of Police and Fire Capital improvement bonds ...... 91 Labor Disputes (Act 312) Capital improvement program ...... 84 defined ...... 110 Capital improvements ...... 90 Conditional Land Transfer Act See also: Act Case law 425 related to limitation on local financial Conditional transfers of land authority ...... 78 defined ...... 102 Charter Condominium Act adoption ...... 14 defined ...... 113 amendment ...... 13, 14, 15 Conflict of interest attorney general ...... 14, 15 laws relating to ...... 36, 106 Attorney General ...... 16 related to elected officials ...... 36 ballot ...... 15 Conflict of Interest of Legislators and State changing ...... 26 Officers Act commission ...... 15 defined ...... 106 Commission ...... 13 Consolidation consultant ...... 14 defined ...... 102 defined ...... 102 functional ...... 52 election ...... 16 geographic ...... 52 Provisions ...... 12 political ...... 52 publication of ...... 14 procedures ...... 17 revision ...... 16 Consolidation of services ...... 52 Revision ...... See Constitution Village ...... 14 of Michigan ...... 6 Charter provisions Consultants related to offials' duties ...... 21 finding ...... 135 Charter Township how to retain ...... 73

Handbook for Municipal Officials 149 Published by the Michigan Municipal League, July 2015 Index

selection process ...... 74 Disincorporation types ...... 73 procedures ...... 17 when to use ...... 73 Dissolution why to use ...... 73 laws related to ...... 112 Contract of Public Servants with Public Donations ...... 137 Entities Act Downtown development authorities ...... 135 defined ...... 106 as special financing option for economic Contractors development ...... 92 independent ...... 56, 58 Drug testing Contracts for Assessing Services Act as it relates to the hiring process ...... 56 defined ...... 109 Economic Development See also Technology Corporation Park Development Act, See also Tax defined ...... 103 Increment Finance Authority Act, See also Cost allocation Plant Rehabilitation and Industrial factors to consider ...... 53 Development Districts Act, See also Local for service delivery ...... 53 Development Financing Act Council laws related to ...... 106 defined ...... 102 Options for special financing ...... 92 Council duties ...... 21 Reference Packets ...... 145 Council manager form of government ...... 8 Economic development corporations ...... See Council meetings EDCs official's role as participant ...... 3 as special financing option for economic Council staff relationships ...... 135 development ...... 92 Councilmembers Economic Development Projects Act not attending meetings ...... 140 defined ...... 109 County Departments and Board of Public Economic Development Tools Works Act One-Pager Plus ...... 145 defined ...... 110 EDCs ...... See Economic development County drain bonds ...... 91 corporations Credit cards ...... 138 Eelctions Default ...... 143 ward ...... 10 Detachment ...... 19 Elected official home rule cities ...... 19 responsibilities ...... 2 villages ...... 19 Elected Officials Academy Development or redevelopment Michigan Municipal League program . 141 financing tools ...... 91 Elections Development or Redevelopment of Principal at-large ...... 10 Shopping Districts Act non-partisan ...... 136 defined ...... 106 Elliott-Larsen Civil Rights Act Directory of Michigan Municipal Officials defined ...... 113 ...... 146 E-mail and Retention of Records Disability One-Pager Plus ...... 147 employee ...... 56 Emergency Services Authority Act ...... 53 Disbursements` Employee as addressed in sample budget ordinance disability ...... 56 ...... 131 Employment issues ...... 56 Disconnection of Land from Cities and Energy conservation notes ...... 90 Villages Enterprise fund defined ...... 112 defined ...... 102 Discrimination Ethics ...... 36, See also Standards of Conduct as it relates to disability ...... 57 and Ethics Act

150 Handbook for Municipal Officials Published by the Michigan Municipal League, July 2015 Index

of council ...... 140 One-Pager Plus ...... 147 state laws relating to ...... 36 Fuel Excise Tax Expenditures One-Pager Plus ...... 147 for public purpose defined ...... 98 Fund balance of capital budget ...... 83, 84 amount ...... 134 statutory expenditures ...... 100 Garbage Disposal Plants Fair Labor Standards Act defined ...... 111 defined ...... 57 General fund Family and Medical Leave Act defined ...... 103 types of leaves ...... 59, 113 General fund revenues Fax Alerts/Advisories ...... 43 related to financing joint ventures ...... 54 Finance General law village adopting the budget ...... 145 defined ...... 103 for more information ...... 145 General Law Village Act laws related to ...... 107 defined ...... 110, 112 Financial controls General obligation bonds ...... 90 internal management ...... 79 General Property Tax Act ...... 136 Financing joint ventures ...... 54 defined ...... 107, 108, 110 Fire Department Hours of Labor Gifts from Municipal Utilities Act defined ...... 113 defined ...... 111 Fiscal year Gifts of Property to Local Government Act as defined in sample budget ordinance 129 defined ...... 112 FLSA ...... See Fair Labor Standards Act Governmental immunity FMLA ...... See Family Medical Leave Act defined ...... 103 Form of government GRANs ...... See Grant anticipation notes villages ...... 10 Grant anticipation notes ...... 90 Form of Government Headlee amendment cities ...... 8 limitation on financial authority ...... 77 Forms of government Headlee Rollback and Headlee Override laws related to ...... 112 One-Pager Plus ...... 147 number in Michigan ...... 11 Historic Districts, Sites and Structures Act Fourth Class City Act...... 6 defined ...... 108 Franchise agreement Historic preservation defined ...... 102 laws related to ...... 108 Franchise ordinance Home rule ...... 8 defined ...... 103 defined ...... 103 Freedom of Information Home Rule availability of records ...... 120 defined ...... 7 records exempt ...... 119 Home Rule Cities Freedom of Information Act annexation ...... 18 defined ...... 22, 23, 110, 114, 118 Home Rule City Act ...... 7, 51 denial of a record ...... 121 as authorized for public funds ...... 100 fees for records ...... 121 as it relates to adopting ordinances ...... 32 Freedom of Information Act - General charter revision ...... 12, 13, 15 Questions defined ...... 110, 112 One-Pager Plus ...... 147 Home Rule Village Act ...... 6 Freedom of Information Act - Responding to as it relates to adopting ordinances ...... 32 Requests charter revision ...... 12, 15 One-Pager Plus ...... 147 defined ...... 110, 113 Freedom of Information–Statutory Home Rule Villages Exemptions annexation ...... 18

Handbook for Municipal Officials 151 Published by the Michigan Municipal League, July 2015 Index

detachment ...... 19 Labor relations ...... See also Compulsory Housing Arbitration of Police and Fire Labor Laws related to ...... 108 Disputes (Act 312) Housing authorities Labor Relations as special financing option for economic collective bargaining ...... 63 development ...... 91 negotiations ...... 61 Housing Cooperation Law The role of elected official ...... 61 defined ...... 108 the role of elected officials ...... 62 Housing Facilities Act unions ...... 63 defined ...... 108 Unions ...... 61 Housing Law of Michigan Land Division Act defined ...... 108 One-Pager Plus ...... 147 Incompatible offices Legal Defense Fund law relating to ...... 39 Michigan Municipal League ...... 143 laws related to ...... 106 Legislation Incompatible Public Offices influencing...... 42 One-Pager Plus ...... 146 Legislative committees Incompatible Public Offices Act MML ...... 41 defined ...... 106, 110 Legislative Link ...... 43 Incorporation Legislative policies ...... 41 charter commission ...... 17 Liability ...... 64 Public Hearing ...... 17 related to training ...... 45 standards of ...... 7 Limited tax general obligation bonds ...... 91 Installment sales contracts ...... 90 Line item budget ...... 82 Insurance Lobbying need for program ...... 64 official's role ...... 41 Intergovernmenal Transfers of Functions Local Development Financing Act and Responsibilities Act defined ...... 106, 107 defined ...... 109 Local development financing authority Intergovernmental contracting ...... 52 as special financing option for economic Intergovernmental contracts and authority development ...... 92 bonds ...... 91 Local government Intergovernmental Contracts Between structure of ...... 6 Municipal Corporations Act Local government powers, duties and defined ...... 109 responsibilities Intergovernmental relations laws related to ...... 110 laws related to ...... 109 Local Improvement Revolving Fund Intergovernmental Transfers of Functions defined ...... 107 and Responsibilities Act ...... 53 Management by objectives budget ...... 82 Interlocal Tax Agreements Manager's role vs council's role ...... 24 defined ...... 109 Marriage ceremonies Internal financial controls ...... 77 performed by mayor ...... 142 Investment Policies for Surplus Funds Master plan One-Pager Plus ...... 147 definition and process ...... 67 Joint Public Building Act Mayor defined ...... 109 as defined by charter ...... 24 Joint services defined ...... 103 authorities ...... 52 election or selection of ...... 9 Labor agreements ...... 61 strong form of government ...... 9 weak form of government ...... 9 Mayor council plan ...... 9

152 Handbook for Municipal Officials Published by the Michigan Municipal League, July 2015 Index

Media Municipal bond tips for working with ...... 4 defined ...... 103 Meeting Municipal corporation posting of ...... See defined ...... 103 Meetings ...... See also Council meetings Municipal Emergency Services abstain from voting ...... 139 defined ...... 109 Agendas and Minutes ...... 143 Municipal Expenditures closed ...... 141 One-Pager Plus ...... 145, 147 location ...... 140 Municipal Finance Act ...... 90 Metropolitan Council Act Municipal Historical Commissions Act defined ...... 109 defined ...... 108 Michigan Campaign Act Municipal Liens defined ...... 111 One-Pager Plus ...... 147 Michigan Constitution ...... 12 Municipal Water and Sewage System Liens related to ordinances ...... 32 Act Michigan Employment Relations defined ...... 112 Commission (MERC) ...... 63 Mutual Police Assistance Agreements Michigan Legislature ...... 138 defined ...... 109 Michigan Liability and Property Pool ...... 65 Natural Beauty Roads Michigan Liquor Control Act defined ...... 114 defined ...... 111 Nature and Purpose of a Home Rule Michigan Municipal League Charter ...... 143 related to liability ...... 65 Neighborhood Area Improvements Act Michigan Municipal Review ...... 146 defined ...... 108, 114 Michigan Open Meetings Act ...... 139 Non voted GO bonds ...... 91 Michigan Persons With Disabilities Civil Nonconforming Buildings and Uses Rights Act ...... 57 One-Pager Plus ...... 147 Michigan Planning Enabling Act ...... 66 Oath of office Michigan transportation fund bonds ...... 91 without a clerk ...... 136 Michigan Vehicle Code ...... 141 Obligations and payments, limit on, Michigan Zoning Enabling Act ... 66, 68, 113 as addressed in sample budget ordinance Millage increases ...... 131 as it relates to ballot language ...... 136 Occupational Safety and Health Act ...... 57 Millage limits ...... 77 OMA ...... See Michigan Open Meetings Act Minutes One-Pagers Plus ...... 146 publication ...... 139 Open Meetings Act recording of ...... 28 closed meetings ...... 116 MIOSHA See Michigan Occupational Health defined ...... 23, 28, 111, 114, 115, 141 and Safety Act, See Michigan emergency meetings ...... 116 Occupational Safety and Health Act enforcement ...... 117 Misconduct in Office by Public Officers Minutes ...... 116 One-Pager Plus ...... 147 minutes of closed meetings ...... 117 Mobile Home Commission Act notification of meetings ...... 115 defined ...... 113 notifying individuals by mail ...... 116 Motion penalities for violation ...... 117 incidental ...... 31 special and irregular meetings ...... 115 main ...... 31 Open Meetings Act–Definitions and privileged ...... 31 Requirements for Meetings subsidiary ...... 31 One-Pager Plus ...... 147 Motions Operating budget defined ...... 22, 30 types of ...... 82

Handbook for Municipal Officials 153 Published by the Michigan Municipal League, July 2015 Index

Ordinances defined ...... 106, 111 adoption of technical codes by reference Population ...... 34 Michigan ...... 11 adoption procedures and requirements . 33 smalles and biggest in Michigan ...... 11 amendments ...... 35 Posters defined ...... 22, 103 as it relates to federal and state labor drafting of...... 35 regulations ...... 56 effective date ...... 34 Pre-employment inquiries local government authority ...... 32 as it relates to the application form ...... 56 notice of ...... 33 Preference in Employment (Veterans) Act printing and adopting of ...... 34 defined ...... 113 publication of ...... 34 President reading requirements ...... 34 as defined by charter ...... 24 related to purchasing ...... 86 defined ...... 103 related to Special Assessments ...... 95 President pro tempore related to user charges ...... 96 as defined by charter ...... 24 voting requirements ...... 34 Principal shopping districts writing of ...... 33 as special financing option for economic Organization of City and Village development ...... 92 Government in Michigan ...... 143 Privatization of services ...... 52 Overtime pay Program budget ...... 82 as it relates to the Fair Labor Standards Prohibited Taxes by Cities and Villages Act ...... 58 defined ...... 112 Parliamentary procedures ...... 29 Project Management Payment in lieu of taxes ...... 137 related to consulting and professional Performance budget ...... 82 services ...... 75 Personnel Property taxes ..... See also General Property harassment policies ...... 56 Tax Act medical records ...... 56 as source of operating budget funds ...... 83 personnel files ...... 56 Proposal A personnel records ...... 56 limitation on financial authority ...... 78 pre-employment inquiries ...... 56 Public act Personnel issues ...... 56 defined ...... 104 Planning Public address to the council Law related to ...... 113 length of time ...... 139 Planning and zoning Public contracts procedures and process ...... 69 Act 317 ...... 37 Planning commission Public Employment Relations Act role of ...... 66 defined ...... 111 Plant Rehabilitation and Industrial Public hearing Development Districts Act defined ...... 139 defined ...... 106 Public hearings Police and Fire Protection Act ...... 138 length of time ...... 140 defined ...... 109 procedures ...... 29 Policies and Procedures Public Hearings need for written ...... 47 One-Pager Plus ...... 147 Policy manual Public Risk Managment Association ...... 146 purposes ...... 47 Purchase of Lands and Property for Public Policy Manual Purpose purposes ...... 49 defined ...... 111 Political Activities by Public Employees Act Purchasing

154 Handbook for Municipal Officials Published by the Michigan Municipal League, July 2015 Index

function of ...... 86 Rules of procedure future trends ...... 88 adopting ...... 27 state statutes ...... 86 citizen participation ...... 127 use of credit cards ...... 138 closed meetings ...... 125 Purchasing departments conduct of meetings ...... 123 role of ...... 88 discussion ...... 126 Purchasing process ...... 87 meetings ...... 122 Questions sample for council ...... 122 frequently asked ...... 134 voting ...... 126 RANs ...... See Revenue anticipation notes SAD ... See Special assessment district bonds Recall ...... 137 SAD Bonds ...... 91 Recreation and Playgrounds Act Service options ...... 51 defined ...... 110 Sewer bonds Referendum sewer revenue ...... 137 related to incorporation ...... 17 sewer rates ...... See Utility rates Request for proposals Sexual harassment ...... 57 defined ...... 104 Site plan Request for Proposals defined ...... 104 related to consulting and professional Social Security Number Privacy Act services ...... 74 One-Pager Plus ...... 147 Request for Qualifications Special Assessment bonds ...... 91 related to consulting and professional Special assessment hearing ...... 138 services ...... 74, 75 Special assessments ...... 138 Residency Act as revenue source for capital budget ..... 84 One-Pager Plus ...... 147 authority ...... 95 Residency Requirements and the Planning based on property value ...... 138 Commission defined ...... 104 One-Pager Plus ...... 147 Headlee amendment ...... 138 Resignations, Vacancies and Removals related to financing joint ventures ...... 54 defined ...... 112 Special Assessments ...... 95 Resolution procedures ...... 96 defined ...... 104 Special meeting Resolutions defined ...... 139 defined ...... 22, 33 Special permit or use Freedom of Information Act - General defined ...... 104 Questions; Policy and Definitions ...... 143 Special Tax for Advertising Revenue defined ...... 112 defined ...... 104 Standards of Conduct and Ethics Act Revenue anticipation notes ...... 90 defined ...... 106 Revenue bond State and Federal Affairs Division of defined ...... 104 Michigan Municipal League ...... 41 Revenue Bond Act State Boundary Commission ...... 17, 18 defined ...... 107 defined ...... 7 Revenue Bond Act of 1933 ...... 96 State Boundary Commission Act Revenue bonds ...... 91 defined ...... 111 Revenue sharing State Construction Code defined ...... 104 One-Pager Plus ...... 147 Robert's Rules of Order Newly Revised .... 30 State equalized value ...... 78 Roles and responsibilities of general law State Ethics Act ...... 36 village officials State Housing Development Authority for more information ...... 143 defined ...... 108

Handbook for Municipal Officials 155 Published by the Michigan Municipal League, July 2015 Index

State statutes Unlimited tax general obligation bonds .... 91 related to limitation on local financial Updating the Master Plan–5 Year Review authority ...... 78 One-Pager Plus ...... 147 relating to purchasing ...... 86 Updating the Master Plan–Mastering the Structure of local in Michigan Process for more information ...... 143 One-Pager Plus ...... 147 Sunshine laws Urban Cooperation Act ...... 53 defined ...... 22 defined ...... 19 Surplus Funds Investment Pool Act Urban Cooperation Act of 1967 defined ...... 107 defined ...... 110 TANs ...... See Tax anticipation notes User charges Tax abatement programs ...... 92 statutory authority ...... 96 Tax anticipation notes ...... 90 User Charges ...... 95 Tax increment bonds ...... 91 enforcement and collection ...... 97 Tax Increment Finance Authority Act User fees defined ...... 106, 107 related to financing joint ventures ...... 54 Tax rate Utility bills defined ...... 105 as a lien against property ...... 142 Tax roll Utility rates defined ...... 105 setting of ...... 142 Tax Tribunal Act Utilization of Public Facilities by Physically defined ...... 107 Limited Persons Taxable value ...... 78 defined ...... 109, 112 Taxing powers Variance defined ...... 105 defined ...... 105 Technology Park Development Act types of ...... 69 defined ...... 107 Villages The Use of Work Sessions by Legislative as form of government ...... 10 Bodies defined ...... 6 One-Pager Plus ...... 147 Voted GO bonds ...... 91 Training Water Furnished Outside Territorial Limits municipal officials ...... 45 defined ...... 112 Treasurer Water meters ...... 142 duties of ...... 25 Water rates ...... See Utility rates Truth in Budgeting Acts Wedding ceremonies defined ...... 107 performed by mayor ...... 142 Truth in Taxation Act Whistle Blowers Protection Act defined ...... 107 defined ...... 113 Uniform Accounting Procedures Manual 145 Workplace violence Uniform Budgeting and Accounting Act .. 82, how to minimize the risk of ...... 57 134 Zero based budget ...... 83 defined ...... 108 Zoning Uniform Budgeting Manual for Local Units defined ...... 105 of Government in Michigan ...... 145 Laws related to ...... 113 Uniform Chart of Accounts ...... 145 Zoning board of appeals Uniform City Income Tax Act ...... 83 role of ...... 66, 68 Uniform Condemnation Procedures Act Zoning ordinance defined ...... 109, 111 purpose of ...... 68 Uniform Traffice Code ...... 141 Zoning–Basic Questions United States Constitution ...... 12 One-Pager Plus ...... 147

156 Handbook for Municipal Officials Published by the Michigan Municipal League, July 2015