January 25, 2007, Introduced by Reps. Moss, David Law, Stakoe, Amos, Garfield, Acciavatti, Pavlov and Meltzer and referred to the Committee on Regulatory Reform.
A bill to provide for the establishment of a regional water
and sewer district; to provide for a board of trustees; to provide
for transfer of certain rights in water supply and sewerage
facilities; to provide for payment for water supply and sewerage
services and facilities through rates, 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 officials and entities.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 1. This act shall be known and may be cited as the
"regional water and sewer district act".
Sec. 2. As used in this act:
(a) "Acquire" means acquisition by purchase, construction, or
any other method.
(b) "Board of trustees" or "board" means the governing and
administrative body of a district.
(c) "District" means a regional water and sewer district
created by this act.
(d) "Local unit of government" means a county, city, village,
township, charter township, drainage district, or authority
existing under the laws of this state.
(e) "Metropolitan area" means the service area of a regional
system.
(f) "Municipal sewage collection system" means a sewerage
system located within or outside the corporate limits of a local
unit of government that collects sewage or combined sewage directly
from the users of that system and transports that sewage to a
regional system or another wastewater treatment facility for
disposal.
(g) "Municipal water distribution system" means a water supply
system located within or outside the corporate limits of a local
unit of government that receives water from a regional system or
another water source and distributes water directly to the users or
ratepayers of that system.
(h) "Qualified city" means a city that owns a regional system.
(i) "Regional system" means interconnected water supply and
sewerage services and facilities that provide water supply service
or sewerage service, or both, for more than 25% of the population
of this state. A regional system may consist of water supply
facilities and services that serve 1 group of customers and users
and a system of sewerage facilities and services that serves a
different group of customers and users. Regional system does not
include a municipal sewage collection system or a municipal water
distribution system.
(j) "Resolution" means a resolution or an ordinance, if the
governing body of a municipality chooses to act by ordinance rather
than by resolution.
Sec. 3. Each regional system shall be incorporated as a
regional water and sewer district under this act. A district
created under this act has the power to do the following:
(a) To exercise jurisdiction, control, and supervision of a
regional system and other water supply or sewage disposal systems
placed under its jurisdiction.
(b) To maintain, operate, reconstruct, and improve the
regional system and other water distribution or sewage disposal
systems under its jurisdiction and make additions, betterments, and
extensions to those systems to protect the public health and
welfare by preventing or abating the pollution of water.
(c) To prepare, revise, and adopt plans, designs, and
estimates of costs of a system of outfalls, sewers, trunks, water
mains, submains, interceptors, lateral sewers, outlets for
sewerage, storm water drains, pump stations, ventilating stations,
water and wastewater treatment plants and works, and all other
structures, systems, and works which, in the judgment of the board,
provide an effective and advantageous means for insuring the area
within the district of safe drinking water and adequate sanitary
sewage treatment.
(d) To construct any additions, improvements, or extensions to
the facilities of the district, including across, through, over, or
under any public highway, railroad right-of-way, tract, grade, fill
or cut, and any other right-of-way or easement in the district and
remove any fence, building, or other improvement in the district
where necessary for the construction of the additions,
improvements, or extensions.
(e) To establish, own, acquire, construct, lease, operate, and
maintain, as a part of the systems of the district, water treatment
facilities, sewage treatment and disposal plants, and all
appurtenances and appliances belonging to them and sell any product
or by-product manufactured in the course of water or wastewater
treatment.
(f) To own, acquire, and hold personal property the board
considers necessary to carry out the corporate purposes of the
district and dispose of personal property when the district has no
further need of it.
(g) To own, hold, control, and acquire by donation, purchase,
contract, lease, or the exercise of the power of eminent domain all
rights of property, either public or private, necessary for the
purposes of the district. In exercising the power of eminent
domain, a district shall follow the procedures set forth in the
uniform condemnation procedures act, 1980 PA 87, MCL 213.51 to
213.75. A district may sell and convey property no longer necessary
or useful in its operations.
(h) To contract with state or federal governments or their
agencies, local units of government, drainage districts, other
public agencies, individuals, or private corporations for the
construction, use, or maintenance of common or joint sewers, common
or joint water lines, drains, outlets, or water treatment and
wastewater disposal plants or for any service required by the
district.
(i) To contract with and permit municipalities, districts,
other public agencies, individuals, or private corporations to
contract for the purpose of connecting with and using the
facilities of the district. The rates for the service and
connections shall be the amount agreed upon by the contracting
parties.
(j) To apply for and accept grants, loans, or contributions
from the federal government, its agencies, this state, or other
public or private agencies for the purposes of this act and do all
things within its powers necessary or desirable to secure the aid
or cooperation.
(k) To incur debts by borrowing money in anticipation of the
collection of revenues and to give appropriate evidence of those
loans. The board shall determine by ordinance the amount and terms
of the loans, and the executive director shall execute and issue
warrants of the district to the lenders as evidence of the loans
and of the terms of the district’s obligation to repay the loans.
(l) To meet the cost of acquiring, constructing, improving, or
extending all or any part of the water and sewage disposal systems
operated by the district by any of the following:
(i) The expenditure of funds available for that purpose.
(ii) The issuance of bonds for that purpose, payable from
taxes, fees, or special assessments collected by the district.
(iii) The proceeds of special assessments.
(iv) Any other funds which may be obtained under the law of
this state or of the United States for that purpose.
(v) The proceeds of revenue bonds, payable from the revenues
to be derived from the operation of water supply systems and sewage
disposal systems of the district.
(vi) Any combination of these methods of providing funds.
(m) To establish by ordinance a schedule of rates and other
charges to be collected from all of the real property served by the
water supply or sewage disposal systems of the district. A district
shall prescribe the manner and time at which the rates and charges
are to be paid, change the schedule as the board determines
necessary, proper, or advisable, and collect or enforce collection
of those charges. The schedule may be based on any classifications
or subclassifications the board determines are fair and reasonable,
including, but not limited to, the consumption of water on premises
connected with the facilities, taking into consideration
commercial, industrial, and agricultural use of water, the number
and kind of plumbing fixtures connected with the facilities, the
number of persons served by the facilities, or any combination of
these factors.
(n) To contract with a local unit of government, public
agency, or private water company for service contracts, joint use
contracts, or contracts for the construction or operation of any
part of the water supply systems or sewage disposal systems or for
the collection of rates or other charges levied by the district for
water supply and sewage disposal services. The local unit of
government, public agency, or private water company may contract to
collect the rates or other charges and to discontinue water
services or sewage collection services upon failure to pay the
rates or charges within the time prescribed by ordinance. A local
unit of government, public agency, or private water company
situated within a district shall furnish the district any
information which will assist the district in calculating rates or
other charges for sewer services.
(o) To enter lands, waters, and premises for the purposes of
making surveys, evaluations, and examinations.
(p) To approve, revise, or reject the plans and designs of all
outfalls, sewers, trunks, water mains, submains, interceptors,
lateral sewers, outlets for sewerage, storm water drains, pump
stations, ventilating stations, water and wastewater treatment
plants and works, and all other structures, systems, and works
proposed to be constructed, altered, or reconstructed by any other
person or corporation, private or public, in the district. Any work
shall be subject to inspection and supervision of the district.
(q) To fix, levy, and collect special assessments, in the form
of supplemental rates, for the construction, improvement, or
extension of water, sewer, or drainage facilities, levied ratably
by area upon lots or parcels of ground within the district, whether
public or private, benefited by the construction, improvement, or
extension and provide by ordinance for the classification and
reclassification of these properties into classes or subclasses
that the board determines are fair and reasonable.
(r) To provide a retirement system for employees of the
district if and when permissible under the constitution and laws of
this state.
(s) To bargain collectively and enter into agreements with
labor organizations. A district shall be bound by existing labor
union agreements with public or privately owned water supply
systems or sewage disposal systems that are acquired, purchased, or
condemned by the district.
(t) To require the owner of any real property capable of being
efficiently served by water supply or sewage disposal systems
operated by the district to connect with and use the facilities if
the board finds that the water supply or sewage collection from
that property constitutes a public nuisance or a danger to public
health or safety.
Sec. 4. (1) The powers of a district are vested in a board of
trustees which shall enact district ordinances, adopt budgets,
determine policies, and appoint the executive director, who shall
execute the ordinances and administer the affairs of the district.
The powers of a district shall be exercised in the manner
prescribed in this act or, if not prescribed in this act, in a
manner prescribed by the board.
(2) The membership of the board shall provide representation
across a metropolitan area in approximate proportion to the number
of customers served and shall be as follows:
(a) The mayor of a qualified city and the elected drain
commissioner, public works commissioner, or appointed environment
department director from each county served, or their designees,
shall be board members.
(b) A qualified city and each county by resolution may appoint
1 additional representative for every additional increment of
400,000 in population served. Each county or qualified city shall
have at least 1 member.
(3) In determining the representation for a county containing
a qualified city, the population shall exclude the population of
that city. The population served shall be individual residents of a
community who buy water from or discharge sewage to a district and
shall be determined by the appropriate regional planning agency,
using the most recent federal census data overlaid on the sewer
service area map or the water service area map. Membership of the
board shall be reconfigured once every decade after each federal
census to reflect changes and shifts in population or when service
is provided to an additional county.
(4) A majority of the members of the board constitute a quorum
for the transaction of business. Each member of the board shall
have 1 vote.
(5) The first meeting of the board shall be held not more than
180 days after the effective date of this act. After its first
meeting, the board shall meet not less than quarterly and at other
times as determined by the board.
Sec. 5. (1) A local unit of government, qualified city, sewer
district, or public agency situated within a metropolitan area
shall retain its municipal water distribution system and municipal
sewage collection system together with all contracts, rights,
privileges, interests, easements, books, maps, plans, papers,
records, and title to them. A local unit of government, qualified
city, sewer district, or public agency may, under a separate
contract or transfer of ownership, transfer administration,
control, and supervision of a municipal water distribution system
or a municipal sewage collection system to a district. A district
shall not assume, agree to pay, or be liable for any bonded
indebtedness of a local unit of government, sewer district, or
other public agency unless ownership of the system is transferred.
In order to assure continuity of operation and maintenance, a local
unit of government, sewer district, or other public agency shall
continue to maintain and operate the municipal water distribution
system and sewage collection system until the board shall by
resolution set a date when the district shall exclusively maintain,
operate, and control the systems and facilities.
(2) A district shall administer, control, and supervise the
regional system. A qualified city shall retain ownership of the
regional system and all rights, privileges, interests, easements,
books, maps, plans, papers, records, and title to them. A qualified
city shall assign all contracts for water supply and sewage
disposal and treatment to the district. A qualified city may
transfer ownership of the regional system to the district. In order
to assure continuity of operation and maintenance, a qualified city
shall continue to maintain and operate the regional system until
the board shall by resolution set a date when the district shall
administer, control, and supervise the system.
Sec. 6. A district may fix rates and other charges for
services and use of the water supply systems or sewage disposal
systems owned or operated within the jurisdiction of the district.
A district shall determine, after appropriate public hearing, the
water supply systems and sewage disposal systems to be operated by
it, the services to be available to the public, and the rates to be
charged.
Sec. 7. The board shall do all of the following:
(a) Employ an executive director, who shall be the chief
executive and operating officer of the authority and who shall
execute the ordinances and administer the affairs of the district.
(b) Establish broad policies covering all major operations of
the district.
(c) Prepare and publish a detailed public report and financial
statement of its operations at the end of each fiscal year.
Sec. 8. (1) The executive director shall do all of the
following:
(a) Manage the properties, employees, and businesses of a
district.
(b) Direct the enforcement of all resolutions, rules, and
regulations of the board and enter into contracts under the general
control of the board.
(c) Prepare a separate operating and capital budget for each
fiscal year. The board shall approve the budgets at least 30 days
prior to the beginning of each new fiscal year. Capital program
budgets shall be prepared to cover periods of 5 years. The first of
these annual capital program budgets shall be submitted no later
than 3 years after the initial formation of a district. The budgets
shall be revised and updated annually prior to submission to the
board.
(2) The executive director may appoint officers, employees,
and agents to carry out the purposes of the district under the
general policy direction of the board.
(3) The executive director and his or her appointees shall
serve at the pleasure of the board.
Sec. 9. A district may not levy taxes or pledge the credit or
taxing power of this state or a local unit of government, except
for the pledging of receipts of taxes collected by this state or a
local unit of government and returnable or payable by law or by
contract to the district and except for the pledge by a local unit
of government of its full faith and credit in support of its
contractual obligations to the district as authorized by law. A
regional system and any municipal water supply or municipal sewage
disposal system which the district has agreed to control,
supervise, administer, operate, and maintain shall be financed, in
addition to other methods of financing provided by law, by any of
the following:
(a) Rates.
(b) Income or revenues from whatever source available,
including appropriations or contributions of whatever nature or
other revenues of the participating local units of government.
(c) Grants, loans, or contributions from federal, state, or
local units of government and grants, contributions, gifts,
devises, or bequests from public or private sources.
(d) Proceeds of taxes, special assessments, or charges imposed
pursuant to law and collected by this state or a local unit of
government.
Sec. 10. (1) A district may borrow money and issue bonds to
finance and carry out its powers and duties. The bonds shall be
payable from and may be issued in anticipation of payment of the
proceeds of any of the methods of financing described in section 9
or elsewhere in this act or as provided by law.
(2) A local unit of government within the geographical
boundaries of the district may contract to make payments,
appropriations, or contributions to the district of the proceeds of
taxes, special assessments, or charges imposed and collected by the
local unit of government or out of other funds legally available
and may pledge its full faith and credit in support of its
contractual obligation to the district. The contractual obligation
shall not constitute an indebtedness of a local unit of government
within a statutory or charter debt limitation. If the district has
issued bonds in anticipation of payments, appropriations, or
contributions to be made to the district pursuant to contract by a
local unit of government having the power to levy and collect ad
valorem taxes, the local unit of government may obligate itself by
the contract and may levy a tax on all taxable property in the
local unit of government to provide sufficient money to fulfill its
contractual obligation to the district. The tax rate or amount
shall be as provided in section 6 of article IX of the state
constitution of 1963 for contract obligations in anticipation of
which bonds are issued.
(3) The bonds of the district shall be issued and sold in
compliance with the revised municipal finance act, 2001 PA 34, MCL
141.2101 to 141.2821, except that the bonds may be issued for a
period not exceeding 40 years.
(4) A local unit of government may advance money or deliver
property to a district to finance or carry out the district's
powers and duties. The district may agree to repay the advances or
pay for the property within a period not exceeding 10 years, from
the proceeds of its bonds or from other funds legally available for
that purpose, with or without interest as agreed at the time of
advance or of repayment. The obligation of the district to make the
repayment or payment may be evidenced by a contract or note, which
may pledge the full faith and credit of the district.
(5) A district may advance money or deliver property to a
local unit of government to finance or to carry out the local unit
of government's powers and duties. The local unit of government may
agree to repay the advances or pay for the property within a period
not exceeding 10 years from the proceeds of its bonds or from other
funds legally available for that purpose, with or without interest
as agreed at the time of advance or of repayment. The obligation of
the local unit of government to make the repayment or payment may
be evidenced by a contract or note, which may pledge the full faith
and credit of the local unit of government.
(6) A local unit of government desiring to enter into a
contract under this act shall authorize, by resolution, the
execution of the contract. The resolution shall be published in a
newspaper of general circulation within the local unit of
government, and the contract may be executed without a vote of the
electors 90 days after the date of the publication unless, within
the 90-day period, a petition signed by not fewer than 25% of the
registered electors residing within the limits of the local unit of
government is filed with the clerk of the local unit of government
requesting a referendum upon the execution of the contract. In that
event, the contract shall not be executed until approved by a
majority of the qualified electors of the local unit of government
voting on the contract at the next regular election.
(7) Notes issued and contracts entered into under this section
are not subject to the revised municipal finance act, 2001 PA 34,
MCL 141.2101 to 141.2821.
Sec. 11. A petition under section 10, including the
circulation and signing of the petition, is subject to section 488
of the Michigan election law, 1954 PA 116, MCL 168.488. A
person who violates a provision of the Michigan election law, 1954
PA 116, MCL 168.1 to 168.992, is subject to the penalties
prescribed for that violation in the Michigan election law, 1954 PA
116, MCL 168.1 to 168.992.
Sec. 12. This act, being necessary for the public peace,
health, safety, and welfare, shall be liberally construed to effect
the purposes hereof, which are declared to be public
purposes.
Sec. 13. The district and its property, real, personal, and
mixed, are exempt from fees and the assessment, levy, and
collection of all general and special taxes of this state or a
local unit of government.
Sec. 14. Records and any other writings prepared, owned, used,
in the possession of, or retained by the district in the
performance of an official function shall be available to the
public during normal business hours in compliance with the freedom
of information act, 1976 PA 442, MCL 15.231 to 15.246. The business
which the board may perform shall be conducted at a public meeting
of the board held in compliance with the open meetings act, 1976 PA
267, MCL 15.261 to 15.275. Public notice of the time, date, and
place of the meeting shall be given in the manner required by the
open meetings act, 1976 PA 267, MCL 15.261 to 15.275.
Sec. 15. Pursuant to section 27 of article VII of the state
constitution of 1963 and any other applicable law, an authority
created under this act is an agency and instrumentality of the
state that has all of the powers of a public corporation in the
exercising of its duties under this act. The enumeration of any
powers in this act shall not be construed as a limitation upon
those general powers.
Sec. 16. A challenge to the validity of any provision of this
act shall be filed with and decided by the court of appeals
pursuant to section 10 of article VI of the state constitution of
1963.