HOUSE BILL No. 5788 March 12, 2002, Introduced by Reps. Drolet, Faunce, Patterson, Rocca, Woronchak, Hummel, Kowall, Ruth Johnson, Palmer, Voorhees, Toy, Bishop, Pappageorge, Wojno, Switalski, Callahan, Gieleghem and Woodward and referred to the Committee on Local Government and Urban Policy. A bill to provide for the incorporation of a regional water supply and sewerage authority; to provide for a regional assembly and regional authority board; to transfer certain ownership rights in water supply and sewerage facilities; to provide for payment for water supply and sewerage services and facilities through fees, charges, taxes, special assessments, and other means; to provide for the issuance and payment of bonds; and to provide for the powers and duties of certain governmental offi- cials and entities. THE PEOPLE OF THE STATE OF MICHIGAN ENACT: 1 Sec. 1. This act shall be known and may be cited as the 2 "regional sewer and water authority act". 3 Sec. 2. As used in this act: 4 (a) "Capital contribution for capacity" means general fund 5 money or the proceeds of borrowing contributed by a participating 06827'02 KAO 2 1 municipality to defray the costs of acquisition or construction 2 of a portion of the regional system serving more than 1 partici- 3 pating municipality. 4 (b) "Mcf" means a thousand cubic feet. 5 (c) "Participating municipality" means a city, village, 6 township, or county appointing a member of the regional assembly 7 under section 4 or 29. 8 (d) "Regional assembly" means a regional water and sewer 9 assembly created in section 4. 10 (e) "Regional authority" means a regional water and sewer 11 authority incorporated under this act. 12 (f) "Regional authority board" means a regional water and 13 sewer authority board elected under section 6(6). 14 (g) "Regional system" means interconnected municipal water 15 supply and sewerage services and facilities that provide whole- 16 sale water supply service or wholesale sewerage service, or both, 17 for more than 25% of the population of this state. A regional 18 system may consist of a system of wholesale water supply facili- 19 ties and services that serves 1 group of customers and users and 20 a system of wholesale sewerage facilities and services that 21 serves a different group of customers and users. Regional system 22 does not include retail water supply or retail sewerage services 23 or facilities. 24 (h) "Retail" pertains to water supply service, sewerage 25 service, or both, provided by a county, city, village, township, 26 district, or authority directly to residents and businesses. 06827'02 3 1 (i) "Sewerage" means sewage collection or disposal, or 2 both. 3 (j) "Territory of the authority" means the combined terri- 4 tory of the voting participating municipalities. 5 (k) "Voting participating municipality" means a participat- 6 ing municipality that is a city, village, or township. 7 (l) "Wholesale" pertains to water supply service, sewerage 8 service, or both, provided to a county, city, village, township, 9 district, authority, or other public corporation that utilizes 10 the services to in turn provide retail services. 11 Sec. 3. Each regional system shall be incorporated as a 12 regional authority under this act and shall be administered, 13 operated, and controlled under this act for the benefit of and 14 continued service to each voting participating municipality. 15 Sec. 4. (1) There is created for each regional system a 16 regional assembly. 17 (2) The director of the department of environmental quality, 18 ex officio, or his or her designee, shall be a member of the 19 regional assembly, without a vote. 20 (3) Not more than 90 days after the effective date of this 21 act, the governing body of each city, village, and township that 22 provides retail water supply or sewerage services from the 23 regional system, whether directly or by contract with a county or 24 with a district authority or other public corporation established 25 in a county, shall appoint a member of the governing body or the 26 mayor, president, or supervisor of that city, village, or 27 township to the regional assembly and shall notify the director 06827'02 4 1 of the department of environmental quality of the name and 2 address of the individual appointed. If a city, village, or 3 township provides retail water supply or sewerage services from 4 the regional system by contract with a county or a district, 5 authority, or other public corporation established in a county, 6 not more than 90 days after the effective date of this act, the 7 county board of commissioners of that county shall appoint a 8 member of the county board of commissioners or other officer in 9 an elective county office, or a member of the governing body of 10 the district, authority, or public corporation as a member of the 11 regional assembly and shall notify the director of the department 12 of environmental quality of the name and address of the individ- 13 ual appointed. A member of the first regional assembly appointed 14 under this subsection shall serve for a term ending on the second 15 January 1 following the effective date of this act or when a suc- 16 cessor is appointed, whichever is later. If a member of the 17 regional assembly was appointed under this subsection, a succes- 18 sor to that member shall be appointed in the same manner as that 19 member was appointed. A member of the regional assembly, other 20 than the first regional assembly, appointed under this subsection 21 shall serve for a term of 1 year, or until a successor is 22 appointed, whichever is later. 23 (4) In addition to the circumstances set forth in section 3 24 of 1846 RS 15, MCL 201.3, the office of a member of the regional 25 assembly appointed under subsection (3) becomes vacant if he or 26 she vacates the office that entitled him or her to be appointed 27 to the regional assembly. Upon the occurrence of a vacancy, the 06827'02 5 1 governing body that appointed the member vacating office shall 2 promptly appoint a successor to serve for the remainder of the 3 term. 4 Sec. 5. (1) A majority of the members of the regional 5 assembly constitute a quorum for the transaction of business. 6 Five members of the regional assembly may adjourn a meeting of 7 the regional assembly to another day and date or without date. 8 (2) A member of the regional assembly appointed by a voting 9 participating municipality shall have 1 vote for each 45,000 mcf, 10 or major portion thereof, of sewage treatment capacity used annu- 11 ally in the regional system and 1 vote for each 45,000 mcf, or 12 major portion thereof, of water supply received annually from the 13 regional system by the voting participating municipality repre- 14 sented by the member. However, each member appointed by a voting 15 participating municipality that receives sewerage services from 16 the regional system shall have at least 1 vote on account of 17 sewage treatment capacity used annually. Each member appointed 18 by a voting participating municipality that receives water supply 19 from the regional system shall have not less than 1 vote on 20 account of water supply received annually. A member of the 21 regional assembly appointed by the county board of commissioners 22 shall not have a vote on the regional assembly. 23 (3) Adoption of a resolution or other action taken by the 24 regional assembly requires a majority of the votes that members 25 of the regional assembly are authorized to cast. However, if a 26 matter, including, but not limited to, a matter under 27 section 6(6) or 8, pertains strictly to sewerage or pertains 06827'02 6 1 strictly to water supply and transportation, a member is 2 authorized to cast only those votes to which he or she is enti- 3 tled under subsection (2) based on water supply received annually 4 or sewage treatment capacity used annually, respectively, by the 5 voting participating municipality represented by the member. 6 Sec. 6. (1) The first meeting of the regional assembly 7 shall be held not more than 180 days after the effective date of 8 this act. The director of the department of environmental qual- 9 ity shall call the first meeting. At the first meeting, or at 10 any adjournments or continuations of the first meeting, the 11 regional assembly shall satisfy the requirements of 12 subsections (2) to (6). 13 (2) The regional assembly shall elect a chairperson and a 14 vice-chairperson of the regional assembly. 15 (3) The regional assembly shall establish a procedure for 16 members of the regional assembly to agree on the beneficial 17 rights of ownership of the participating municipalities in the 18 regional system. The beneficial rights of ownership shall be 19 based historically upon payment of rates and charges for service 20 and use and on capital contributions for capacity, employing, to 21 the extent considered necessary, financial, accounting, engineer- 22 ing, or legal consultants. Capital contributions for capacity 23 shall be apportioned among participating municipalities on the 24 basis of ownership of capacity and facilities irrespective of and 25 whether or not the capacity or facilities are used. If neces- 26 sary, the agreement shall include a system of credits, charges, 27 and payments to and among participating municipalities, by the 06827'02 7 1 regional system and regional authority from the proceeds of money 2 borrowed as authorized in this act, so that no participating 3 municipality shall have made capital contributions for capacity, 4 as a percentage of aggregate historical cost of the facilities of 5 the regional system and regional authority, in an amount in 6 excess of the percentage of beneficial rights of ownership. The 7 agreement shall determine the rates and charges for use and capi- 8 tal contributions for capacity, if any, that shall be paid by the 9 city or other public corporation that originally organized the 10 regional system so as to recognize the beneficial ownership 11 rights of that city or other public corporation. Retail water 12 supply systems and retail sewerage systems shall continue to be 13 owned, controlled, operated, maintained, enlarged, extended, or 14 improved by the county, city, village, township, district, 15 authority, or other public corporation that has authority to do 16 so under law. If an agreement on the beneficial rights of owner- 17 ship of the participating municipalities in the regional system 18 is not reached by the expiration of 180 days after the first 19 meeting of the regional assembly, a member of the regional assem- 20 bly or the director of the department of environmental quality 21 may petition a court of competent jurisdiction to enter an order 22 constituting an agreement as described in this subsection. 23 (4) The regional assembly shall adopt articles of incorpora- 24 tion and a name for the regional system and regional authority. 25 The articles of incorporation shall incorporate this act and may 26 include any other provisions consistent with this act. If the 27 regional assembly fails to adopt and provide for publication of 06827'02 8 1 articles of incorporation not more than 180 days after its first 2 meeting, a member of the regional assembly or the director of the 3 department of environmental quality may petition a court of com- 4 petent jurisdiction to enter an order adopting articles of incor- 5 poration and directing the filing and publication of the articles 6 of incorporation as provided in this act. The petition may be 7 combined with a petition under subsection (3). The validity of 8 the incorporation shall be conclusively presumed unless ques- 9 tioned in a court of competent jurisdiction not more than 60 days 10 after the publication of the articles of incorporation. 11 (5) The regional assembly shall publish the articles of 12 incorporation in 1 or more newspapers whose circulation or com- 13 bined circulation covers the entire territory of the proposed 14 authority. The regional assembly shall file a copy of the arti- 15 cles of incorporation with the clerk of each participating munic- 16 ipality and with the secretary of state. The articles of incor- 17 poration take effect when the requirements of this subsection are 18 satisfied. 19 (6) There shall be a 16-member regional water and sewer 20 authority board consisting of a water supply division board and a 21 sewerage division board. The regional assembly shall elect 9 22 members to the water supply division board of the regional 23 authority board and 7 members to the sewerage division board of 24 the regional authority board. Not more than 2 members of a divi- 25 sion of the board shall be residents of the same voting partici- 26 pating municipality. If a county has appointed a member to the 27 regional assembly and receives an average annual supply of not 06827'02 9 1 less than 450,000 cubic feet of water from the regional system on 2 behalf of 1 or more municipalities, districts, authorities, or 3 other public corporations in the county, not less than 1 member 4 of the water supply division board shall be a resident of the 5 county. If a county has appointed a member to the regional 6 assembly and receives sewerage services on behalf of a municipal- 7 ity, district, authority, or other public corporation in the 8 county, not less than 1 member of the sewerage division board 9 shall be a resident of the county. A member of the regional 10 assembly is not eligible to serve on the regional authority 11 board. A member of the regional authority board shall be a resi- 12 dent of the territory of the authority. 13 Sec. 7. (1) Except as provided in this section, the term of 14 office of a member of the regional authority board shall be 4 15 years commencing on July 1. 16 (2) Of the members of the water supply division board 17 elected by the regional assembly at its first meeting, 2 shall 18 serve for a term of 1 year, 2 for terms of 2 years, 2 for terms 19 of 3 years, and 3 for terms of 4 years. Of the members of the 20 sewerage division board elected by the regional assembly at its 21 first meeting, 1 shall serve for a term of 1 year, 2 for terms of 22 2 years, 2 for terms of 3 years, and 2 for terms of 4 years. 23 (3) If under subsection (2) the term of a member of the 24 original authority board would expire on a date other than 25 July 1, that term shall be extended to the succeeding July 1. 26 Sec. 8. In addition to the circumstances set forth in 27 section 3 of 1846 RS 15, MCL 201.3, the office of a member of the 06827'02 10 1 regional authority board becomes vacant if the member violates 2 the residency requirements of section 6(6). A vacancy in office 3 of a member of the regional authority board shall be filled by 4 the regional assembly for the remainder of the unexpired term in 5 the same manner as the original election. A member of the 6 regional authority board may be removed for cause by a majority 7 vote of the members of the regional assembly. Each member of the 8 regional authority board shall be compensated by payment of a per 9 diem fee and mileage for not more than 1 meeting a day in amounts 10 to be set annually by the regional assembly and paid by the 11 regional authority. The regional authority board shall appoint a 12 director of the regional authority and a deputy director for each 13 division of the regional authority board. A director or deputy 14 director shall be professionally qualified to serve in that 15 capacity and shall not be a member of the regional assembly. The 16 director and deputy directors shall serve at the pleasure of the 17 regional authority board. 18 Sec. 9. After its first meeting, the regional assembly 19 shall meet annually on the first Tuesday in March, and on such 20 additional days and dates to which the meeting shall be 21 adjourned, for the purposes as follows: 22 (a) To elect a chairperson and a vice-chairperson of the 23 regional assembly for the succeeding year. 24 (b) To review rates, charges, and procedures for water 25 supply and sewerage services on the written request of a county, 26 city, village, township, district, authority, or other public 27 corporation served by the regional system and regional authority 06827'02 11 1 or as directed by a weighted majority vote of the regional 2 assembly. 3 (c) To establish or revise the rates and charges to each 4 county, city, village, township, district, authority, or other 5 public corporation served by the regional system. The rates and 6 charges within the limitations of an applicable contract for sew- 7 erage services or water supply and transportation services, or 8 both, shall not impair the obligations for debt retirement or 9 payment of bonds of the regional authority or of a county, city, 10 village, township, district, authority, or other public corpora- 11 tion served by the regional system. 12 (d) To receive, revise, and approve plans and projects to 13 extend, improve, enlarge, or refinance the facilities of the 14 regional system as initiated and requested by either division of 15 the regional authority board. 16 (e) To elect members of the regional authority board. 17 Sec. 10. The regional assembly shall meet at such other 18 times as a meeting is called by the chairperson of the regional 19 assembly or by 5 of its members for purposes specified in the 20 call of the meeting. The members of the regional assembly shall 21 serve without compensation. 22 Sec. 11. (1) The water supply division board shall control 23 the regional water supply system including, but not limited to, 24 the operation of the water intake, treatment, and wholesale dis- 25 tribution and transmission facilities of the regional water 26 supply system and the selection and appointment of water supply 27 system personnel subject to section 27. The water supply 06827'02 12 1 division board may privatize or oversee the privatization of 2 these functions. 3 (2) The sewerage division board shall control the regional 4 sewerage system, including, but not limited to, the operation of 5 the major trunk line sewers, interceptors, treatment plant, and 6 other similar sewerage facilities of the regional sewerage system 7 and the selection and appointment of sewerage system personnel 8 subject to section 27. The sewerage division board may privatize 9 or oversee the privatization of these functions. 10 (3) The regional authority board shall control those activi- 11 ties, facilities, and personnel that pertain to both the water 12 supply division and the sewerage division, as determined by the 13 director of the regional authority board, including, but not 14 limited to, the selection and appointment of regional system per- 15 sonnel and the billing and collection of charges for wholesale 16 water supply or sewerage services. The regional authority board 17 may privatize or oversee the privatization of those activities. 18 (4) The city or other public corporation that originally 19 established the regional system shall retain direct control of 20 retail water supply and retail sewerage services and facilities 21 within that city or other public corporation. 22 (5) Title to all assets of the regional system, whether 23 real, personal, mixed, tangible, or intangible, including, but 24 not limited to, easements, leaseholds, permits, licenses, and 25 contract rights, is vested free and clear in the regional author- 26 ity upon the filing of its articles of incorporation under 27 section 6(5), subject to the rights of record of third parties 06827'02 13 1 and subject to the provisions of the agreement described in 2 section 6(3). The regional authority shall prepare, the affected 3 parties shall execute, and the regional authority shall record 4 documents necessary to effectuate the transfer of title. The 5 regional authority board shall assume the operation of the 6 regional system upon the election and qualification of its mem- 7 bers, the election of its officers, and the appointment of a 8 director and deputy directors of the authority. 9 (6) In order to ensure the orderly transfer of the facili- 10 ties of the regional system, the regional authority may enter 11 into operating agreements with the city or other public corpora- 12 tion that originally established the regional system, for such 13 period of time as may be agreed, not exceeding 5 years from the 14 date on which the regional authority board assumes operation of 15 the regional system. The costs of the regional system shall at 16 all times be borne by all users of the regional system, except to 17 the extent such costs are defrayed by grants, contributions, 18 fees, or payments made by persons who are not users of the 19 regional system. 20 Sec. 12. The regional authority board shall hold its first 21 meeting within 1 month after selection of its members, on the 22 call of the chairperson of the regional assembly. At the first 23 meeting, the regional authority board shall elect a chairperson 24 and 2 vice-chairpersons from the members of the regional author- 25 ity board. One of the vice-chairpersons shall be a member of and 26 serve as chairperson for the water supply division board, and the 27 other vice-chairperson shall be member of and serve as 06827'02 14 1 chairperson for the sewerage division board. The regional 2 authority board shall also elect a secretary and a treasurer of 3 the regional authority. The secretary and treasurer need not be 4 members of the regional authority board and shall be compensated 5 as its employees. The regional authority board shall require of 6 the treasurer a bond by a responsible bonding company in an 7 amount to be determined by the authority board. The bond shall 8 be paid for by the authority. The regional authority board shall 9 select and employ other officers and employees and contract for 10 engineering, legal, accounting, and other professional services 11 as it considers necessary to effectuate its purposes and fix com- 12 pensation for the officers, employees, and services subject to 13 this act. The regional authority board may adopt rules of proce- 14 dure and bylaws as it considers advisable. The regional author- 15 ity board shall designate its principal place of business and 16 other offices or locations it considers necessary to perform its 17 functions and duties. 18 Sec. 13. The regional authority board shall keep a written 19 record of each session of the regional authority board. The 20 water supply division board and the sewerage division board shall 21 keep a written record of each of their separate sessions. The 22 regional authority board shall provide for a system of accounts 23 to conform to any uniform system required by law and for the 24 auditing at least annually of the accounts of the treasurer by a 25 qualified certified public accountant. Not more than 30 days 26 after the audit is received by the regional authority board, the 27 regional authority board shall publish the balance sheet and the 06827'02 15 1 statement of revenue and expense showing the financial condition 2 of the authority as of the date of the audit in 1 or more newspa- 3 pers whose circulation or combined circulation covers the terri- 4 tory of the authority. 5 Sec. 14. (1) On or before February 1 of each year, the 6 regional authority board shall prepare and submit to each member 7 of the regional assembly and to each member of the regional 8 authority board a proposed budget for the next succeeding fiscal 9 year covering its anticipated expenses of administration, opera- 10 tion, and maintenance, plus any reserve to be established for 11 administration, operation, and maintenance. The budget shall 12 include a statement showing the amounts necessary to retire the 13 principal and interest on any bonds of the authority maturing 14 during the next fiscal year, the anticipated revenues to be 15 derived from rates and charges during the next fiscal year, and 16 any proposed contractual obligation, charge, fee, assessment, or 17 tax levy necessary to provide funds for administration, opera- 18 tion, maintenance, and debt retirement. The proposed budget 19 shall be distributed to members of the regional assembly and mem- 20 bers of the regional authority board. If, not more than 30 days 21 after distribution of the proposed budget is completed, a partic- 22 ipating municipality requests a hearing on the proposed budget, 23 the regional authority board shall hold a hearing on the proposed 24 budget. The regional authority board shall adopt the budget not 25 later than June 1 of each year. 26 (2) The fiscal year of the regional authority shall commence 27 on July 1 of each year and end on June 30 of each year, except 06827'02 16 1 that the regional assembly may establish a shorter first fiscal 2 year. 3 Sec. 15. Each bond, note, or other evidence of indebtedness 4 that is issued by the city or other public corporation that orga- 5 nized the regional system or issued by a participating municipal- 6 ity and that is payable from the revenues of the regional system 7 shall be fully assumed and paid by the regional authority in 8 accordance with the terms of the bond, note, or other evidence of 9 indebtedness. The regional authority shall perform representa- 10 tions and covenants, establish and collect rates and charges, 11 maintain accounts and reserves, operate and maintain facilities, 12 and render services required by the terms of the bond, note, or 13 other evidence of indebtedness and documents issued or executed 14 by the issuer. In particular, each debt retirement account, 15 fund, and reserve shall be maintained in strict compliance with 16 terms agreed to by the issuer and using funds under section 17. 17 Sec. 16. (1) A contract, contract obligation, or assessment 18 obligation that involves the regional system and to which a 19 county, city, village, township, district, or authority is a 20 party shall not be impaired, amended, revised, or terminated by 21 the incorporation of the regional authority. The regional 22 authority shall assume and perform each duty and obligation per- 23 taining to the regional system of the city or other public corpo- 24 ration that organized the regional system. However, the regional 25 authority board may agree to extend, amend, or terminate any such 26 contract, contract obligation, or assessment obligation by 27 agreement with any other party to the extent permitted by law. 06827'02 17 1 (2) The city or other public corporation that organized the 2 regional system shall be considered a customer and user of the 3 regional system to be provided wholesale water supply services 4 and wholesale sewerage services on the same basis and terms as 5 all other wholesale customers and users. Upon request of that 6 city or other public corporation, the regional authority shall 7 enter into a contract with that city or other public corporation 8 that embodies the rights of the city or other public corporation 9 under this subsection. The term of the contract shall be as 10 requested by the city or other public corporation, but shall not 11 exceed 50 years. 12 Sec. 17. (1) Rates, charges, and procedures for water 13 supply and sewerage services from the regional system in effect 14 and in use on the effective date of the articles of incorporation 15 of the regional authority shall remain in effect until the annual 16 meeting of the regional assembly following the effective date of 17 the articles of incorporation and thereafter until a review of 18 the rates, charges, and procedures is requested as provided in 19 section 9(b). 20 (2) After the effective date of the articles of incorpora- 21 tion of the regional authority, the regional authority and the 22 participating municipalities may enter into new or additional 23 contracts for the sale and purchase of water supply and sewerage 24 services from the regional system for a period not exceeding 50 25 years. 06827'02 18 1 (3) Rates and charges collected by the regional authority 2 shall be applied and used by the regional authority in the 3 following manner, and in the following order of priority: 4 (a) To provide for the payment during each fiscal year of 5 all current expenses of administration, operation, and mainte- 6 nance as may be necessary to preserve the regional system in good 7 repair and working order. 8 (b) In the discretion of the regional authority board, or as 9 required by financing agreements or contracts, to provide a 10 reserve fund for replacements or major repairs and improvements 11 not anticipated or considered to be a part of current expenses of 12 administration, operation, or maintenance. 13 (c) With respect to a balance remaining at the end of a 14 fiscal year, to deposit into the debt retirement fund established 15 by the regional authority board for the retirement of debt issued 16 under section 22 or 23. 17 Sec. 18. The governing body of each voting participating 18 municipality may pay from its general fund or pay from its reve- 19 nues derived from operation of its water supply and sewerage 20 system not exclusively earmarked or pledged for other purposes 21 any money required to be paid for water supply or sewerage serv- 22 ices purchased from the regional authority by the terms of a con- 23 tract between it and the regional authority existing or entered 24 into under section 17. 25 Sec. 19. The regional authority may acquire for the 26 regional system property within or without the territory of the 27 authority by purchase, construction, lease, gift, or devise. The 06827'02 19 1 regional authority may hold, manage, generate income from, 2 control, sell, exchange, or lease the property. 3 Sec. 20. (1) After the effective date of the articles of 4 incorporation of the regional authority, exclusive control of and 5 jurisdiction over facilities and services in the territory of the 6 authority for wholesale water supply and wholesale sewerage shall 7 be in the regional assembly and regional authority board. By 8 resolution of the regional assembly and the appropriate division 9 of the regional authority board, the regional authority may 10 acquire and construct, improve, enlarge, and extend the wholesale 11 water supply or wholesale sewerage facilities. The resolution 12 shall describe the project and the plans for carrying it out 13 including, but not limited to, details of financing and sharing 14 of costs. Project descriptions, plans, and specifications shall 15 comply with applicable state and federal orders, permits, and 16 regulations. 17 (2) If the regional assembly or regional authority board 18 determines that a project will serve and benefit all participat- 19 ing municipalities, the project shall be carried out by the 20 regional authority. If the regional assembly or regional author- 21 ity board determines that a project will not serve and benefit 22 all participating municipalities, the project shall be carried 23 out by 1 of the following: 24 (a) The regional authority under contract with and on behalf 25 of the participating municipalities to be served and benefited. 26 (b) The participating municipalities to be served and 27 benefited on approval of the regional authority, but without 06827'02 20 1 participation of the regional authority beyond the terms and 2 conditions set forth in the approval resolution. 3 (3) The necessity for projects of the type described in this 4 section and the apportionment of the costs of such projects among 5 the participating municipalities shall be decided finally and 6 conclusively in writing by the regional assembly after such 7 investigation and hearing as the regional assembly determines to 8 be necessary unless the members of the regional assembly agree on 9 the necessity or apportionment of the costs of the project or 10 agree to accept the determination by the regional authority board 11 on the necessity or apportionment of the costs of the project. 12 Sec. 21. (1) For a project to be carried out by the 13 regional authority under section 20, the regional authority may 14 enter into a contract with a participating municipality for the 15 acquisition, construction, improvement, enlargement, extension, 16 operation, or financing of water supply or sewerage facilities or 17 services. The contract shall provide for the allocation and pay- 18 ment of the share of the total cost to be borne by the partici- 19 pating municipality in annual installments for a period not 20 exceeding 40 years. The participating municipality may pledge 21 its full faith and credit for the payment of the obligation in 22 the manner and times specified in the contract. Notwithstanding 23 any statutory or charter limitation, each participating munici- 24 pality that pledges its full faith and credit shall include in 25 its annual tax levy an amount sufficient to assure that the esti- 26 mated collections will be sufficient to promptly pay, when due, 06827'02 21 1 the portion of the obligation falling due before the following 2 year's tax collection. 3 (2) If, when the participating municipality makes its annual 4 tax levy, there are other funds on hand earmarked for the payment 5 of a contractual obligation under this section, credit for the 6 other funds may be taken upon the annual levy for the payment of 7 the obligation. The participating municipality may raise such 8 other funds by 1 or more of the following methods: 9 (a) The levy of special assessments on property benefited by 10 the project. The procedures relative to the levying and collec- 11 tion of the special assessments shall conform to applicable 12 charter or statutory provisions. 13 (b) The imposition and collection of rates or charges from 14 users and beneficiaries of the regional system. 15 (c) From revenue derived from the imposition of taxes by 16 this state. 17 (d) From any other source that may be validly used for the 18 purpose of meeting the contractual obligations under this 19 section. 20 (3) A contract under this section may authorize the regional 21 authority to issue bonds secured by the full faith and credit 22 pledges of the contracting participating municipalities. The 23 contract may provide for appropriate remedies in case of default 24 including, but not limited to, authorization for the county trea- 25 surer or other official charged with the disbursement of funds 26 derived from the state sales tax levy under the general sales tax 27 act, 1933 PA 167, MCL 205.51 to 205.78, and returnable to the 06827'02 22 1 participating municipality under section 10 of article IX of the 2 state constitution of 1963, to withhold sufficient funds to make 3 up a default or deficiency in funds. 4 (4) If a participating municipality desires to enter into a 5 contract with the regional authority under this section, the gov- 6 erning body shall adopt a resolution authorizing the execution of 7 the contract and publish the resolution in a newspaper of general 8 circulation within the participating municipality. The contract 9 may be executed without a vote of the electors not less than 31 10 days after the date of the publication. However, if, not more 11 than 24 days after publication, there is filed with the clerk of 12 the participating municipality a petition signed by the lesser of 13 1% or 15,000 of the registered electors residing within the ter- 14 ritory of the participating municipality and requesting a refer- 15 endum upon the execution of the contract, the contract shall not 16 be executed unless approved by the vote of a majority of the reg- 17 istered electors of the participating municipality at either the 18 next primary or general election held after the filing of the 19 petition. The form of the petition shall meet the requirements 20 of, and the clerk of the participating municipality shall have 21 the same power to reject signatures and petitions as city clerks 22 under, section 25 of the home rule city act, 1909 PA 279, 23 MCL 117.25. 24 Sec. 22. To obtain funds for payments to and among partici- 25 pating municipalities under the agreement described in 26 section 6(3) or for the acquisition, construction, improvement, 27 enlargement, or extension of the regional system, the regional 06827'02 23 1 authority, after the execution of a contract under section 21, 2 may issue its negotiable bonds secured by the full faith and 3 credit pledges made by contracting participating municipalities 4 under section 21. The ordinance or resolution authorizing the 5 issuance of the bonds shall include the terms of the contract. 6 The bonds shall be serial bonds with annual maturities, the first 7 of which shall fall due not more than 5 years after the date of 8 issuance and the last of which shall fall due not more than 40 9 years after the date of issuance. A maturity more than 5 years 10 after the date of issuance shall not be less than 1/5 the amount 11 of any subsequent maturity. Except as otherwise provided in this 12 act, the bonds shall be subject to applicable provisions of the 13 revised municipal finance act, 2001 PA 34, MCL 141.2101 to 14 141.2821. 15 Sec. 23. To finance the acquisition, improvement, enlarge- 16 ment, extension, or operation of the regional system, the 17 regional authority may issue self-liquidating revenue bonds in 18 the manner provided by the revenue bond act of 1933, 1933 PA 94, 19 MCL 141.101 to 141.140, or any other act providing for the issu- 20 ance of revenue bonds. The revenue bonds shall be payable solely 21 from the revenues of the regional authority. 22 Sec. 24. (1) The regional authority shall make a reasonable 23 charge for services that it renders in order to cover the retire- 24 ment of outstanding indebtedness; costs of operation, mainte- 25 nance, and replacement of its facilities; and reserves for capi- 26 tal improvements. The charges specified in a contract to which 27 the regional authority is a party are subject to increase by the 06827'02 24 1 regional authority at any time if necessary in order to provide 2 funds to meet its obligations. 3 (2) A contract authorized in this act shall be for a period 4 not exceeding 50 years. 5 Sec. 25. The governing body of a participating municipality 6 may advance or loan to the regional authority funds required for 7 administrative expenses or for obtaining maps, plans, designs, 8 specifications, or cost estimates of proposed improvements, addi- 9 tions, or extensions to the regional system. The advance or loan 10 may be included by the authority as a part of a bond issued under 11 this act and repaid to the participating municipality upon the 12 sale of the bonds. 13 Sec. 26. The regional authority may do 1 or more of the 14 following: 15 (a) Survey, study, and investigate water resources of the 16 area within the territory of the authority for the purpose of 17 determining the feasibility and practicability of developing new 18 sources of water supply. 19 (b) Ascertain requirements for sewerage systems and 20 services. 21 (c) Accept grants or loans from this state or the federal 22 government and execute or accept contracts, permits, documents, 23 or agreements as may be required by law as a prerequisite to the 24 securing of the funds. 25 Sec. 27. (1) If the regional authority and a participating 26 municipality enter into a contract under 1967 (Ex Sess) PA 8, 06827'02 25 1 MCL 124.531 to 124.536, the contract shall not transfer 2 legislative functions. 3 (2) If, under the contract, the duties of employees are 4 transferred to the regional authority and sufficient positions of 5 comparable employment are not available for all employees at the 6 time of transfer, a less senior employee who is not transferred 7 to a comparable position shall be placed on layoff status with 8 the regional authority and shall be recalled to any position for 9 which he or she may qualify or become qualified after a reason- 10 able training period. The layoff status, or any layoff list, 11 need not be honored after 3 years from the date of layoff. The 12 regional authority shall determine the number of positions neces- 13 sary to perform any service and is not required to create or 14 maintain unnecessary positions. 15 (3) A representative of employees of a participating munici- 16 pality under 1947 PA 336, MCL 423.201 to 423.217, shall continue 17 to represent the employees after the employees are transferred to 18 the regional authority. This subsection does not limit the 19 rights of employees, under applicable law, to assert that a bar- 20 gaining representative protected by this subsection is no longer 21 their representative. 22 Sec. 28. The business that the regional authority board, a 23 division of the regional authority board, or the regional assem- 24 bly may perform shall be conducted at a public meeting of the 25 regional authority board, a division of the regional authority 26 board, or the regional assembly held in compliance with the open 27 meetings act, 1976 PA 267, MCL 15.261 to 15.275. A writing 06827'02 26 1 prepared, owned, used, in the possession of, or retained by the 2 regional authority board, a division of the regional authority 3 board, or the regional assembly in the performance of an official 4 function is subject to the freedom of information act, 1976 5 PA 442, MCL 15.231 to 15.246. 6 Sec. 29. (1) If a city, village, township, county, authori- 7 ty, district, or other public corporation that was not a partici- 8 pating municipality when the regional authority was incorporated 9 desires to become a participating municipality, the governing 10 body shall adopt a resolution requesting admission as a partici- 11 pating municipality and offering to negotiate a contract for 12 water supply or sewerage services as provided in section 17. The 13 governing body shall deliver the resolution to the chairperson of 14 the regional authority board. The chairperson of the regional 15 authority board shall present the resolution to the regional 16 authority board or the appropriate division of the regional 17 authority board for a recommendation as to acceptance or rejec- 18 tion of the request and, if acceptance is recommended, the terms 19 and conditions of admittance as a participating municipality. 20 The recommendation of the regional authority board or the appro- 21 priate division of the regional authority board shall be for- 22 warded to the regional assembly for consideration at its next 23 regular or special meeting. The regional assembly may approve 24 admission by adopting by a 2/3 vote a resolution in which the 25 terms and conditions of admittance are specified. The regional 26 assembly shall file a certified copy of the adopted resolution 06827'02 27 1 with the clerk of the public corporation requesting admission and 2 with the secretary of state. 3 (2) Not more than 90 days after the resolution of the 4 regional assembly is filed with the clerk of the public corpora- 5 tion requesting admission as a participating municipality, the 6 public corporation shall appoint a member to the regional assem- 7 bly in the manner provided in section 4(3). The member's term 8 shall be concurrent with the remainder of the terms of the other 9 members of the regional assembly. 10 Sec. 30. (1) The regional authority is a municipal corpora- 11 tion and a public body corporate with power to sue and be sued in 12 a court of competent jurisdiction. The regional authority pos- 13 sesses all powers necessary or incidental to carrying out the 14 purposes of its incorporation. The enumeration of any powers in 15 this act shall not be construed as a limitation upon such general 16 powers. 17 (2) The powers granted in this act are in addition to those 18 granted by statute or charter. 06827'02 Final page. KAO