SENATE BILL No. 976

December 13, 2001, Introduced by Senator JOHNSON and referred to the Committee on

Finance.

A bill to amend 1909 PA 279, entitled

"The home rule city act,"

by amending sections 3, 4a, 5, and 5f (MCL 117.3, 117.4a, 117.5,

and 117.5f), section 3 as amended by 1999 PA 260, section 4a as

amended by 1994 PA 324, section 5 as amended by 1988 PA 268, and

section 5f as amended by 1990 PA 231.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

1 Sec. 3. Each city charter shall provide for all of the

2 following:

3 (a) The election of a mayor, who shall be the chief execu-

4 tive officer of the city, and of a body vested with legislative

5 power, and for the election or appointment of a clerk, a treasur-

6 er, an assessor or board of assessors, a board of review, and

7 other officers considered necessary. The city charter may

8 provide for the selection of the mayor by the legislative body.

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1 Elections may be by a partisan, nonpartisan, or preferential

2 ballot, or by any other legal method of voting. Notwithstanding

3 any other law or charter provision to the contrary, a city having

4 a 1970 official population of more than 150,000, whose charter

5 provides for terms of office of less than 4 years, and in which

6 the term of office for the mayor and the governing body are of

7 the same length, may provide by ordinance for a term of office of

8 up to 4 years for mayor and other elected city officials. The

9 ordinance shall provide that the ordinance shall take effect 60

10 days after it is enacted unless within the 60 days a petition is

11 submitted to the city clerk signed by not less than 10% of the

12 registered electors of the city requesting that the question of

13 approval of the ordinance be submitted to the electors at the

14 next regular election or a special election called for the pur-

15 pose of approving or disapproving the ordinance.

16 (b) The nomination of elective officers by partisan or non-

17 partisan primary, by petition, or by convention.

18 (c) The time, manner, and means of holding elections and the

19 registration of electors.

20 (d) The qualifications, duties, and compensation of the

21 city's officers. If the city has an appointed chief administra-

22 tive officer, the legislative body of the city may enter into an

23 employment contract with the chief administrative officer extend-

24 ing beyond the terms of the members of the legislative body

25 unless such an THE employment contract is prohibited by the

26 city charter. An employment contract with a chief administrative

27 officer shall be in writing and shall specify the compensation to

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1 be paid to the chief administrative officer, any procedure for

2 changing the compensation, any fringe benefits, and any other

3 conditions of employment. The contract shall state if the chief

4 administrative officer serves at the pleasure of the legislative

5 body, and the contract may provide for severance pay or other

6 benefits in the event the chief administrative officer's employ-

7 ment is terminated at the pleasure of the legislative body.

8 (e) The establishment of 1 or more wards, and if the members

9 of the city's legislative body are chosen by wards, for equal

10 representation for each ward in the legislative body.

11 (f) That the subjects of taxation for municipal purposes are

12 the same as for state, county, and school purposes under the gen-

13 eral law.

14 (g) The annual laying and collecting taxes in a sum, except

15 as otherwise provided by law, not to exceed 2% of the taxable

16 value of the real and personal property in the city. Unless the

17 charter provides for a different tax rate limitation, the govern-

18 ing body of a city may levy and collect taxes for municipal pur-

19 poses in a sum not to exceed 1% of the taxable value of the real

20 and personal property in the city. , subject to section 1a of

21 chapter VII of the municipal finance act, 1943 PA 202,

22 MCL 137.1a. As used in this subdivision, "taxable value" is that

23 value determined under section 27a of the general property tax

24 act, 1893 PA 206, MCL 211.27a.

25 (h) An annual appropriation of money for municipal

26 purposes.

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1 (i) The levy, collection, and return of state, county, and

2 school taxes in conformance with the general laws of this state,

3 except that the preparation of the assessment roll, the meeting

4 of the board of review, and the confirmation of the assessment

5 roll may be at the times provided in the city charter.

6 (j) The public peace and health and for the safety of per-

7 sons and property. In providing for the public peace, health,

8 and safety, a city may expend funds or enter into contracts with

9 a private organization, the federal or state government, a

10 county, village, or township, or another city for services con-

11 sidered necessary by the legislative body. Public peace, health,

12 and safety services may include the operation of child guidance

13 and community mental health clinics, the prevention, counseling,

14 and treatment of developmental disabilities, the prevention of

15 drug abuse, and the counseling and treatment of drug abusers.

16 (k) Adopting, continuing, amending, and repealing the city

17 ordinances and for the publication of each ordinance before it

18 becomes operative. Whether or not provided in its charter,

19 instead of publishing a true copy of an ordinance before it

20 becomes operative, the city may publish a summary of the

21 ordinance. If the city publishes a summary of the ordinance, the

22 city shall include in the publication the designation of a loca-

23 tion in the city where a true copy of the ordinance can be

24 inspected or obtained. Any charter provision to the contrary

25 notwithstanding, a city may adopt an ordinance punishable by

26 imprisonment for not more than 93 days or a fine of not more than

27 $500.00, or both, if the violation substantially corresponds to a

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1 violation of state law that is a misdemeanor for which the

2 maximum period of imprisonment is 93 days. Whether or not pro-

3 vided in its charter, a city may adopt a provision of any state

4 statute for which the maximum period of imprisonment is 93 days,

5 the Michigan vehicle code, 1949 PA 300, MCL 257.1 to 257.923, or

6 a law, code, or rule that has been promulgated and adopted by an

7 authorized agency of this state pertaining to fire, fire hazards,

8 fire prevention, or fire waste, and a fire prevention code,

9 plumbing code, heating code, electrical code, building code,

10 refrigeration machinery code, piping code, boiler code, boiler

11 operation code, elevator machinery code, or a code pertaining to

12 flammable liquids and gases or hazardous chemicals, that has been

13 promulgated by this state, by a department, board, or other

14 agency of this state, or by an organization or association that

15 is organized and conducted for the purpose of developing the

16 code, by reference to the law, code, or rule in an adopting ordi-

17 nance and without publishing the law, code, or rule in full. The

18 law, code, or rule shall be clearly identified in the ordinance

19 and its purpose shall be published with the adopting ordinance.

20 Printed copies of the law, code, or rule shall be kept in the

21 office of the city clerk, available for inspection by, and dis-

22 tribution to, the public at all times. The publication shall

23 contain a notice stating that a complete copy of the law, code,

24 or rule is made available to the public at the office of the city

25 clerk in compliance with state law requiring that records of

26 public bodies be made available to the general public. A city

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1 shall not enforce any provision adopted by reference for which

2 the maximum period of imprisonment is greater than 93 days.

3 (l) That the business of the legislative body shall be con-

4 ducted at a public meeting held in compliance with the open meet-

5 ings act, 1976 PA 267, MCL 15.261 to 15.275. All records of the

6 municipality shall be made available to the general public in

7 compliance with the freedom of information act, 1976 PA 442,

8 MCL 15.231 to 15.246.

9 (m) Keeping in the English language a written or printed

10 journal of each session of the legislative body.

11 (n) A system of accounts that conforms to a uniform system

12 of accounts as required by law.

13 Sec. 4a. (1) Each city in its charter may provide for the

14 borrowing of money on the credit of the city and issuing bonds

15 for the borrowing of money, for any purpose within the scope of

16 the powers of the city.

17 (2) Notwithstanding a charter provision to the contrary, the

18 net indebtedness incurred for all public purposes shall not

19 exceed the greater of the following:

20 (a) Ten percent of the assessed value of all the real and

21 personal property in the city.

22 (b) Fifteen percent of the assessed value of all the real

23 and personal property in the city if that portion of the total

24 amount of indebtedness incurred which exceeds 10% is or has been

25 used solely for the construction or renovation of hospital

26 facilities.

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1 (3) In case of fire, flood, or other calamity, the

2 legislative body may borrow for the relief of the inhabitants of

3 the city and for the preservation of municipal property, a sum

4 not to exceed 3/8 of 1% of the assessed value of all the real and

5 personal property in the city, due in not more than 5 years, even

6 if the loan would cause the indebtedness of the city to exceed

7 the limit established by this section.

8 (4) In computing the net indebtedness, all of the following

9 shall be excluded:

10 (a) Bonds issued in anticipation of the payment of special

11 assessments, even though they are also a general obligation of

12 the city.

13 (b) Mortgage bonds that are secured only by a mortgage on

14 the property or franchise of a public utility.

15 (c) Bonds issued to refund money advanced or paid on special

16 assessments for water main extensions.

17 (d) Motor vehicle highway fund bonds, even though they are

18 also a general obligation of the city.

19 (e) Revenue bonds.

20 (f) Bonds issued or contract or assessment obligations

21 incurred to comply with an order of the water resources commis-

22 sion or a court of competent jurisdiction.

23 (g) Obligations incurred before January 9, 1973 for water

24 supply, sewage, drainage, or refuse disposal, or resource recov-

25 ery projects, or incurred after January 8, 1973 for projects nec-

26 essary to protect the public health by abating pollution. A

27 certification by the county, district, or state health department

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1 shall be sufficient proof that the project is necessary to

2 protect the public health by abating pollution.

3 (h) Bonds issued to acquire housing for which rent subsidies

4 will be received by the city or an agency of the city under a

5 contract with the United States government and used by the city

6 to operate and maintain the housing and pay principal and inter-

7 est on the bonds.

8 (i) Obligations entered into under an intergovernmental

9 self-insurance contract pursuant to section 5 of Act No. 35 of

10 the Public Acts of 1951, being section 124.5 of the Michigan

11 Compiled Laws SECTION 5 OF 1951 PA 35, MCL 124.5, or issued to

12 pay premiums or to establish funds to self-insure for losses

13 pursuant to the municipal finance act, Act No. 202 of the Public

14 Acts of 1943, being sections 131.1 to 139.3 of the Michigan

15 Compiled Laws UNDER THE REVISED MUNICIPAL FINANCE ACT, 2001

16 PA 34, MCL 141.2101 TO 141.2821.

17 (j) Bonds issued or assessments or contract obligations

18 incurred for the construction, improvement, or replacement of a

19 combined sewer overflow abatement facility. As used in this

20 subdivision:

21 (i) "Combined sewer overflow" means a discharge from a com-

22 bined sewer system that occurs when the flow capacity of the com-

23 bined sewer system is exceeded.

24 (ii) "Combined sewer overflow abatement facility" means any

25 works, instrumentalities, or equipment necessary or appropriate

26 to abate combined sewer overflows.

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1 (iii) "Combined sewer system" means a sewer designed and

2 used to convey both storm water runoff and sanitary sewage, and

3 which contains lawfully installed regulators and control devices

4 that allow for delivery of sanitary flow to treatment during dry

5 weather periods and divert storm water and sanitary sewage to

6 surface waters during storm flow periods.

7 (iv) "Construction" means any action taken in the designing

8 or building of a combined sewer overflow abatement facility.

9 This term includes, but is not limited to, all of the following:

10 (A) Engineering services.

11 (B) Legal services.

12 (C) Financial services.

13 (D) Design of plans and specifications.

14 (E) Acquisition of land or structural components, or both.

15 (F) Building, erection, alteration, remodeling, or extension

16 of a combined sewer overflow abatement facility.

17 (G) City supervision of the project activities described in

18 sub-subparagraphs (A) to (F).

19 (v) "Improvement" means any action taken to expand, rehabil-

20 itate, or restore a combined sewer overflow abatement facility.

21 (vi) "Replacement" means any action taken to obtain and

22 install equipment, accessories, or appurtenances during the

23 useful life of a combined sewer overflow abatement facility nec-

24 essary to maintain the capacity and performance for which the

25 equipment, accessories, or appurtenances are designed and

26 constructed.

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1 (5) The resources of the sinking fund pledged for the

2 retirement of any outstanding bonds shall also be deducted from

3 the amount of the indebtedness.

4 (6) An obligation for the construction, renovation, or mod-

5 ernization of a hospital pursuant to UNDER subsection (2)(b)

6 shall not be incurred after July 1, 1978 unless the construction,

7 renovation, or modernization has been approved in accordance with

8 any applicable act or unless the obligation is to refinance a

9 previous obligation.

10 (7) Each city may provide in its charter for the borrowing

11 of money and issuing bonds for the borrowing of money in antici-

12 pation of the payment of special assessments, which bonds may be

13 an obligation of the special assessment district or may be both

14 an obligation of the special assessment district and a general

15 obligation of the city.

16 (8) Bonds issued and obligations incurred before July 31,

17 1973 are validated.

18 (9) In computing the net indebtedness for the purposes of

19 subsection (2), there may be added to the assessed value of real

20 and personal property in a city for a fiscal year an amount equal

21 to the assessed value equivalent of certain city revenues as

22 determined under this subsection. The assessed value equivalent

23 shall be calculated by dividing the sum of the following amounts

24 by the city's millage rate for the fiscal year:

25 (a) The amount paid or the estimated amount required to be

26 paid by the state to the city during the city's fiscal year for

27 the city's use pursuant to sections 134 and 136(1), (2), and (3)

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1 of the single business tax act, Act No. 228 of the Public Acts of

2 1975, being sections 208.134 and 208.136 of the Michigan Compiled

3 Laws UNDER THE GLENN STEIL STATE REVENUE SHARING ACT OF 1971,

4 1971 PA 140, MCL 141.901 TO 141.921. The department of treasury

5 shall certify the amount upon request.

6 (b) The amount levied by the city for its own use during the

7 city's fiscal year from the specific tax levied under Act

8 No. 198 of the Public Acts of 1974, as amended, being sections

9 207.551 to 207.571 of the Michigan Compiled Laws 1974 PA 198,

10 MCL 207.551 TO 207.572.

11 (c) The amount levied by the city for its own use during the

12 city's fiscal year from the specific tax levied under the commer-

13 cial redevelopment act, Act No. 255 of the Public Acts of 1978,

14 being sections 207.651 to 207.668 of the Michigan Compiled Laws

15 1978 PA 255, MCL 207.651 TO 207.668.

16 Sec. 5. A city does not have power:

17 (a) To increase the rate of taxation now fixed by law,

18 unless the authority to do so is given by a majority of the elec-

19 tors of the city voting at the election at which the proposition

20 is submitted, but the increase in any case shall not be such IN

21 AN AMOUNT as to cause the rate to exceed 2%, except as provided

22 by law, of the assessed value of the real and personal property

23 in the city.

24 (b) To submit to the electors a charter more often than once

25 in every 2 years, nor unless the charter is filed with the city

26 clerk 60 days before the election, but this provision shall not

27 apply to the submission and resubmission of charters of cities

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1 which THAT may be incorporated under this act until they shall

2 have first adopted a charter. Where a city submits to the elec-

3 tors a charter and the charter is adopted by the electors, and

4 the city has operated under the charter, which charter has not,

5 at the time it is adopted, been on file with the city clerk 60

6 days, then the legislative body of the city, upon its giving the

7 notice of election as provided in the charter, may resubmit to

8 the electors, at a special or general election, the charter,

9 which, if adopted by the electors, shall be considered operative

10 and effective as of the date of the first submission and

11 adoption. The charter shall not be resubmitted unless 60 days

12 have elapsed between the date of the filing of the charter and

13 the date of the election at which the charter is resubmitted.

14 (c) To call more than 2 special elections within 1 year.

15 This prohibition does not apply to elections which THAT may be

16 held in the submission and resubmission of charters of cities

17 which THAT may be incorporated under this act until they have

18 first adopted a charter, and does not apply to elections which

19 THAT may be held in the resubmission of a charter once adopted as

20 provided in subdivision (b).

21 (d) To decrease the salary of a municipal judge after his or

22 her election or appointment, or during the judge's term of

23 office, notwithstanding any charter provision to the contrary. ;

24 nor shall the THE term of a public official SHALL NOT be short-

25 ened or extended beyond the period for which the official is

26 elected or appointed, unless he or she resigns or is removed for

27 cause, where IF the office is held for a fixed term.

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1 (e) To adopt a charter or an amendment to the charter unless

2 approved by a majority of the electors voting thereon ON THE

3 QUESTION; to sell a park, cemetery, or any part of a park or cem-

4 etery, except where the park is not required under an official

5 master plan of the city; to engage in a business enterprise

6 requiring an investment of money in excess of 10 cents per

7 capita; or to authorize an issue of bonds except bonds issued in

8 anticipation of the collection of taxes actually levied and

9 uncollected or for which an appropriation has been made; bonds

10 which THAT the city is authorized by its charter to issue as

11 part of its budget system, to an amount which THAT in any year,

12 together with the taxes levied for the same year, will not exceed

13 the limit of taxation authorized by law; special assessment

14 bonds; bonds for the city's portion of local improvements;

15 refunding bonds; emergency bonds as defined by this act; and

16 bonds which THAT the legislative body is authorized by specific

17 statute to issue without vote of the electors, unless approved by

18 a majority of the electors voting thereon ON THE QUESTION at a

19 general or special election. In addition, to the foregoing, a

20 city which THAT now has, or which may hereafter

21 SUBSEQUENTLY have, a population of 750,000 persons or more may

22 issue bonds, upon resolution of its governing body, without prior

23 approval of the electors, which the city is authorized by its

24 charter to issue as part of its budget system, to an amount

25 which THAT in any year, together with the ad valorem taxes

26 levied for the same year, exclusive of debt service taxes or

27 taxes levied pursuant to other laws, will not exceed 2-1/2% of

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1 the assessed value of the real and personal property in the city,

2 this limitation to supersede and take the place of any contrary

3 language in any existing city charter. For the purposes of this

4 subdivision only, the assessed value of real and personal prop-

5 erty in any such city shall include the assessed value equiva-

6 lent of money received during the city's fiscal year from the

7 department of treasury pursuant to sections 134, and 136(1), (2),

8 and (3) of Act No. 228 of the Public Acts of 1975, being sections

9 208.134 and 208.136 of the Michigan Compiled Laws UNDER THE

10 GLENN STEIL STATE REVENUE SHARING ACT OF 1971, 1971 PA 140,

11 MCL 141.901 TO 141.921. The assessed value equivalent shall be

12 calculated by dividing the money received by the city's millage

13 rate for the fiscal year. Notwithstanding the former provisions

14 of this subdivision requiring approval by 3/5 of the electors

15 voting thereon ON THE QUESTION as a prerequisite to the exer-

16 cise of certain powers, these powers may be exercised if approved

17 by a majority of the electors voting thereon ON THE QUESTION at

18 a general or special election held on or after April 1, 1966.

19 (f) To make a contract with, or give an official position

20 to, one who is in default to the city.

21 (g) To issue bonds without providing a sinking fund to pay

22 them at maturity, except as provided in section 4g(1), but sink-

23 ing funds shall not be required in the case of serial bonds

24 which THAT fall due annually. Bonds, whether authorized under

25 this act or any other act, except refunding bonds, revenue bonds,

26 motor vehicle highway fund bonds, rehabilitation bonds, judgment

27 bonds, bonds or other obligations issued to fund an operating

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1 deficit of a city, bonds or other obligations to pay premiums or

2 to establish funds to self-insure for losses as authorized by the

3 municipal finance act, Act No. 202 of the Public Acts of 1943,

4 being sections 131.1 to 139.3 of the Michigan Compiled Laws

5 REVISED MUNICIPAL FINANCE ACT, 2001 PA 34, MCL 141.2101 TO

6 141.2821, bonds the issuance of which has been approved by the

7 voters, and bonds issued to comply with an order of a court of

8 competent jurisdiction shall not be issued by a city unless

9 notice of the issuance of the bonds is published once in a news-

10 paper of general circulation in the city at least 45 days before

11 the issuance of the bonds, within which period a petition may be

12 filed with the legislative body signed by not less than 10% or

13 15,000 of the registered electors in the city, whichever is less,

14 in which event the legislative body shall submit the question of

15 the issuance of the bonds to the electors of the city, at a regu-

16 lar or special election in the city. The bonds shall not be

17 issued unless a majority vote of the electors voting on the issu-

18 ance vote in favor of issuing the bonds. The notice of intent to

19 issue bonds shall state the maximum amount of the bond issue, the

20 purpose of the bond issuance, source of payment, right of refer-

21 endum on the issuance of the bonds, and other information as the

22 legislative body determines to be necessary to adequately inform

23 the electors and all other interested persons of the nature of

24 the issue and of their rights with respect to the issue. If a

25 notice of intent has been published before July 31, 1973, in sub-

26 stantial compliance with this section, and the referendum period

27 formerly provided by this section has expired, but the bonds have

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1 not been issued, the notice and the publication of the notice are

2 hereby validated and, if no petition for a referendum on issuance

3 of the bonds has been or is signed and filed within the time

4 period formerly provided by this section, the bonds may be issued

5 without submitting the proposition for approval to the electors,

6 or if a petition has been or is so signed and filed, the bonds

7 may be issued if approved at an election as provided in this

8 subdivision.

9 (h) To repudiate a debt by a change in its charter or by

10 consolidation with any other municipality.

11 (i) To submit a franchise to the electors at a special elec-

12 tion, unless the expense of holding the election, as determined

13 by the legislative body, is paid in advance to the city treasurer

14 by the grantee in the franchise.

15 Sec. 5f. (1) The legislative body of a city may provide by

16 resolution for energy conservation improvements to be made to

17 city facilities and may pay for the improvements from the general

18 fund of the city or from the savings which THAT result from the

19 energy conservation improvements. Energy conservation improve-

20 ments may include, but are not limited to, heating system

21 improvements, fenestration improvements, roof improvements, the

22 installation of any insulation, the installation or repair of

23 heating or air conditioning controls, and entrance or exit way

24 closures.

25 (2) The legislative body of a city may acquire 1 or more of

26 the energy conservation improvements described in subsection (1)

27 by installment contract or may borrow money and issue notes for

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1 the purpose of securing funds for the improvements or may enter

2 into contracts in which the cost of the energy conservation

3 improvements is paid from a portion of the savings which THAT

4 result from the energy conservation improvements. These contrac-

5 tual agreements may provide that the cost of the energy conserva-

6 tion improvements are paid only if the energy savings are suffi-

7 cient to cover their cost. An installment contract or notes

8 issued pursuant to this subsection shall extend for a period of

9 time not to exceed 10 years. Notes issued pursuant to this sub-

10 section shall be full faith and credit, tax limited obligations

11 of the city, payable from tax levies and the general fund as

12 pledged by the legislative body of the city. The notes shall be

13 subject to the municipal finance act, Act No. 202 of the Public

14 Acts of 1943, being sections 131.1 to 139.3 of the Michigan

15 Compiled Laws. The notes shall bear interest at a rate deter-

16 mined by the legislative body of the city, not to exceed the rate

17 provided in section 1a of chapter III of the municipal finance

18 act, Act No. 202 of the Public Acts of 1943, being section 133.1a

19 of the Michigan Compiled Laws REVISED MUNICIPAL FINANCE ACT,

20 2001 PA 34, MCL 141.2101 TO 141.2821. This subsection does not

21 limit in any manner the borrowing or bonding authority of a city

22 as provided by law.

23 (3) If energy conservation improvements are made as provided

24 in this section, the legislative body of a city shall report the

25 following information to the Michigan public service commission

26 within 60 days of the completion of the improvements:

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1 (a) Name of each facility to which an improvement is made

2 and a description of the conservation improvement.

3 (b) Actual energy consumption during the 12-month period

4 before completion of the improvement.

5 (c) Project costs and expenditures.

6 (d) Estimated annual energy savings.

7 (4) If energy conservation improvements are made as provided

8 in this section, the legislative body of a city shall report to

9 the Michigan public service commission, by July 1 of each of the

10 5 years after the improvements are completed, only the actual

11 annual energy consumption of each facility to which improvements

12 are made. The forms for the reports required by this section

13 shall be furnished by the Michigan public service commission.

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