Case Title: AMERICAN FED OF STATE CO & MUNICIPAL EMPLOYEES V CITY OF DETROIT

Citation: 

Docket Number: 122091

State: michigan

Court: Michigan Supreme Court

Date: 2003-06-17T00:00:00Z

Document:
____________________________________________________________________________________________ 
____________________________________________________________________________________________________________________________ 
___________________________________ 
Michigan Supreme Court
Lansing, Michigan 48909 
Chief Justice 
Justices 
Maura D. Corrigan 
Michael F. Cavanagh 
Elizabeth A. Weaver 
Marilyn Kelly 
Clifford W. Taylor 
Robert P. Young, Jr. 
Opinion 
Stephen J. Markman 
FILED JUNE 17, 2003  
AMERICAN FEDERATION OF STATE, 
COUNTY AND MUNICIPAL EMPLOYEES  
also known as AFSCME, doing 
business as AFSCME LOCAL 23  
and AFSCME LOCAL 2394,  
Plaintiffs-Appellants,  
and  
DETROIT CITY COUNCIL,  
Intervening 
Plaintiff-Appellant,  
v
 Nos. 122053, 122091  
CITY OF DETROIT AND DETROIT  
HOUSING COMMISSION,  
Defendants-Appellees.  
BEFORE THE ENTIRE COURT  
CAVANAGH, J.  
We granted leave to appeal in this case to determine  
whether 
the 
1996 
amendments of the Michigan housing facilities  
  
act, MCL 125.651 et seq., sever the employment relationship  
between 
a 
municipality and its housing commission by operation  
of law.  We hold that the 1996 amendments, specifically MCL  
125.655(3), do sever a coemployment relationship by operation  
of law, thus we affirm the decision of the Court of Appeals.  
I. BACKGROUND AND PROCEDURAL HISTORY  
In 1933, the city of Detroit established the Detroit  
Housing Commission (DHC) under the authority of the housing  
facilities act, 1933 PA 18 (Ex Sess), MCL 125.651 et seq.  
Section 2 of the act provided that any city or incorporated  
village with a population of over 500,000 was authorized “to  
purchase, acquire, construct, maintain, operate, improve,  
extend, and/or repair housing facilities and to eliminate  
housing conditions which are detrimental to the public peace,  
health, safety, morals, and/or welfare.”1  Section 3 of the  
act authorized any city with a population of over 500,000 to  
create by ordinance a commission with the power to accomplish  
the purposes set forth in § 2.2  Under the 1933 version of the  
housing facilities act, the DHC was under the control of the  
city, and DHC employees were city employees.  
The United States Department of Housing and Urban  
1See also In re Brewster Street Housing Site, 291 Mich 
313, 323; 289 NW 493 (1939).  
2Id.  
2  
 
  
Development (HUD) funds, monitors, and regulates public­
housing authorities, including the DHC. 
From 1979 through  
1990, the HUD Public Housing Management Assessment Program  
rated the DHC a poor performer. The DHC was consistently on  
HUD’s list of severely troubled public-housing authorities  
because it was failing its essential purpose because of an  
unreasonable number of vacant and dilapidating properties,  
untimely rent collections, and a general failure to meet HUD  
standards.  In an attempt to cure these problems, the city  
entered a series of agreements with HUD that would permit the  
DHC to make substantial improvements in its performance,  
effectiveness, and efficiency.  In July 1995, HUD and the city  
entered into a memorandum of agreement, followed by a  
partnership agreement in December 1995.  One of the primary  
objectives of the partnership was a complete separation of the  
DHC from the city’s governmental systems.3  
HUD and the city entered into a revised memorandum of  
3Section C1(b) of the partnership agreement stated:  
The separation plan shall deal with all  
aspects of the housing commission, which will have 
the power of governance and by-laws (written draft 
by March 1, 1996), including: housing commission 
capacity to hire, fire, transfer, [and] assign 
employees 
as well 
as 
set 
job 
descriptions, 
compensation levels, and performance criteria.  The  
plan will include a timetable and date certain for 
complete separation from the City.  
3  
 
 
agreement (revised MOA) approved by the city council in  
September 1996 and executed in October 1996.  The revised MOA,  
by its terms, expired on June 30, 1997, and also focused on a  
complete separation from the city’s governmental systems.  
In June 1996, the Legislature passed 1996 PA 338,  
effective June 27, 1996, which substantially amended the  
housing facilities act.  The 1996 amendments designated  
housing commissions, such as the DHC, as distinct “public  
bodies corporate” with enumerated independent powers and  
authorities.
 See MCL 125.654(5). 
In addition, housing  
commissions such as the DHC were authorized to employ and fix  
the compensation of their directors, officers, and other  
employees and to prescribe the duties of those persons. MCL  
125.655(3).  
The DHC was removed from HUD’s troubled list in 1997.  In  
1998, the mayor prepared a memorandum of understanding and  
related ordinances, seeking to establish the DHC as a separate  
entity, which the city council rejected.  Thus, all DHC  
employees were treated as city employees from 1998 through  
2001 
under 
the 
city’s compensation and classification plan and  
the city housing ordinance, which expressly subjected DHC  
employees to the provision of the city charter related to  
civil service. See Detroit Code, subsection 14-5-3(7).  
On July 17, 2001, relying on the 1996 amendments of the  
4  
 
housing facilities act, the mayor notified the city council  
that the DHC would begin functioning as a “public body  
corporate” on September 21, 2001.  The mayor asked the city  
council to approve a proposed intergovernmental agreement  
between the city and the DHC to allow current city employees  
who elected to be employed by the DHC to continue to  
participate in the city’s health and retirement plans.  The  
mayor also submitted a proposed amendment of the executive  
organization plan recognizing DHC as a separate “statutory  
agency” and a proposed ordinance to implement the minimum  
statutory requirements of the housing act.  
The city council rejected the mayor’s proposals and  
adopted a series of ordinances and resolutions, which  
effectively avowed DHC employees as city employees and  
prevented the separation of 
the 
DHC from the city.  
Specifically, on September 17, 2001, the city council adopted  
a resolution opposing separation of the DHC from the city and  
retaining all DHC employees as city employees. On September  
26, 2001, the city council enacted the following ordinance:  
All housing commission employees shall be 
members of either the classified service or the  
unclassified service as is provided under Section 
6-517 of the Charter of the City of Detroit, and 
shall be entitled to all rights of all employees of 
the City of Detroit, including but not limited to 
pensions and benefits. [Detroit Code, subsection 
14-5-3(7).]  
Subsequently, the city council formally rejected the  
5  
 
 
 
 
 
mayor’s proposed amendments to the city housing ordinance and  
the executive organizational plan. The council also overrode  
the mayor’s vetoes of the city council’s resolutions and  
ordinances.  
The American Federation of State, County and Municipal  
Employees (AFSCME) filed suit on September 19, 2001, in the  
Wayne  Circuit Court against the city of Detroit and the DHC,  
seeking an injunction to maintain the status quo while it  
pursued an unfair-labor-practice charge against the city and  
the DHC with the Michigan Employment Relations Commission  
(MERC).  On September 20, 2001, the parties stipulated the  
court’s 
entry 
of 
a 
temporary restraining order indicating that  
all AFSCME DHC employees remained city employees. On September  
21, 2001, the city council intervened as a plaintiff and  
sought a declaratory judgment to clarify the validity of the  
ordinances pertaining to the operation, procedures, and  
employees of the DHC. AFSCME amended its complaint on October  
18, 2001, to add a request for declaratory relief concerning  
whether the housing facilities act gave the city the power to  
divest itself of the DHC and to sever its relationship with DHC  
employees.  On October 19, 2001, the city council amended its  
complaint, seeking to extend the temporary restraining order,  
relative only to AFSCME employees, to all DHC employees. The  
city council further sought a declaratory judgment to clarify  
6  
 
the validity of the ordinances and the resolution, which  
provide that all DHC employees are and will remain city  
employees.  The council also sought a permanent injunction  
restraining defendants from acting in a manner inconsistent  
with the declaratory judgment.  
The trial court issued a declaratory ruling on November  
19, 2001, holding that severance of the city’s employment  
relationship with DHC employees is permissive under the 1996  
amendment of the housing facilities act and that the housing  
facilities act did not sever the DHC from the city by  
operation of law. The court also found that, as recently as  
April 2001, the mayor had taken affirmative action to continue  
to treat DHC employees as city employees by proposing the  
budget for the fiscal year of July 2001 through June 30, 2002,  
which included funds for those employees.  On January 25,  
2002, the court entered an order declaring that the city had  
appropriately exercised its authority under the housing  
facilities act to establish employee compensation ranges and  
classifications to be used by the DHC, and that all DHC  
employees are city employees “at least until June 30, 2002.”  
With respect to AFSCME’s request for declaratory relief,  
defendants filed a motion for summary disposition on February  
15, 2002, on the basis that the 1996 amendments of the housing  
facilities act made housing commissions separate independent  
7  
 
 
employers by operation of law.  With respect to the city  
council’s 
request 
for 
declaratory 
relief, 
defendants 
moved 
for  
summary disposition on the basis that certain ordinances and  
resolutions adopted by the city council violate state law and  
are preempted. 
AFSCME filed a cross-motion for summary  
disposition, essentially arguing that the court had already  
determined that the 1996 amendments of the housing facilities  
act did not sever the city’s relationship by operation of law  
and that the city had continued to exercise the power to  
reserve employment through its continued inclusion of DHC  
employees in the city’s compensation plan, the inclusion of  
the DHC in the city budget through June 30, 2002, and the  
continuation of the housing ordinance until September 2001.  
AFSCME also argued that any changes in the status of DHC  
employees can only be effectuated in accordance with the city  
charter.  
On May 21, 2002, the trial court entered an order of  
declaratory 
judgment 
that 
certain 
ordinances 
pertaining 
to 
the  
employment status of DHC employees were valid and enforceable.  
The trial court also entered a preliminary injunction barring  
the city from severing its employment relationship with DHC  
employees until further “legislative action” by the city  
council.  The trial court, however, invalidated two of the  
ordinances related to the DHC because they were preempted by  
8  
 
 
 
the housing facilities act.  
Defendants appealed and plaintiffs cross-appealed to the  
Court of Appeals.  A unanimous panel affirmed in part,  
reversed in part, and vacated in part the trial court’s  
judgment. 
252 Mich App 293; 652 NW2d 240 (2002).  
Specifically, the Court of Appeals reversed the trial court’s  
ruling that the 1996 amendments of the housing facilities act  
did not, by operation of law, sever the city’s employment  
relationship with DHC employees, because the plain language of  
MCL 125.655(3) explicitly authorized housing commissions to  
act as independent employers.  The Court of Appeals further  
reversed the trial court’s ruling that such a severance could  
be attained only with the concurrence of the city council by  
means 
of 
direct 
“legislative action.”  Additionally, the Court  
reversed the trial court and held that subsections 14-5-3(2),  
14-5-3(5), 14-5-3(6), and 14-5-3(7) of the Detroit Code were  
invalid because they were preempted by the housing facilities  
act.  The Court affirmed the trial judge’s order declaring  
subsection 14-5-3(9) and § 14-5-10 invalid and subsection 14­
5-7(1) valid.  Finally, the Court of Appeals vacated the  
injunction enjoining the city from divesting itself of the DHC  
employees.  
We granted AFSCME’s and the city council’s applications  
for leave to appeal. 467 Mich 899 (2002).  
9  
  
 
 
II. JURISDICTION  
AFSCME asserted, as a preliminary matter, that the Court  
of Appeals lacked jurisdiction to accept this case because  
count I of 
AFSCME’s first amended complaint was still  
outstanding.  
This 
count requested a preliminary injunction to  
maintain the status quo while 
AFSCME litigated an unfair-labor­
practice change in MERC.  The Court of Appeals stated that it  
has 
the 
jurisdiction 
to entertain appeals by parties aggrieved  
by a final order of the circuit court.  MCR 7.203(A)(1).  
“Final order” is defined in MCR 7.202(7)(a)(i) as “the first  
judgment or order that disposes of all the claims and  
adjudicates the rights and liabilities of all the parties  
. . . .” 
“Claim” is defined in MCR 2.111(B)(1) as a  
“statement of facts, without repetition, on which the pleader  
relies in stating the cause of action, with specific  
allegations necessary to reasonably inform the adverse party  
of the nature of the claims the adverse party is called on to  
defend . . . .”  
Count I of AFSCME’s first amended complaint requested the  
issuance of a preliminary injunction to keep the status quo  
while 
AFSCME 
litigated 
an 
unfair-labor-practice 
charge 
in 
MERC.  
The circuit court issued a preliminary injunction in favor of  
AFSCME in both the January 2002 and May 2002 orders. The Court  
of Appeals concluded that these orders disposed of AFSCME’s  
10  
 
  
  
  
 
claim for a preliminary injunction and adjudicated the rights  
and liabilities of the parties concerning this cause of  
action.  The Court stated that if the injunction was not as  
broad as AFSCME desired, while the issue may be relevant in  
regard to the circuit court’s actions, it is not relevant to  
the jurisdiction of the Court of Appeals.  
We agree with the Court of Appeals analysis on the matter  
of jurisdiction.  The circuit court’s preliminary injunctions  
meet the criteria of a “final order” as set forth in MCR  
7.203(A)(1).  
Therefore, the Court of Appeals had jurisdiction  
to entertain the parties’ appeals. 
We also agree with  
defendants’ assertion that the jurisdiction issue is moot  
because MERC issued its final ruling, dismissing the majority  
of plaintiffs’ claims.  Therefore, the Court of Appeals had  
jurisdiction to entertain this appeal.  
III. STANDARD OF REVIEW  
“We review de novo decisions on summary disposition  
motions.” CAM Constr v Lake Edgewood Condo Ass’n, 465 Mich  
549, 553; 640 NW2d 256 (2002).  Likewise, we review questions  
of statutory interpretation de novo.  Cardinal Mooney High  
School v Michigan High School Athletic Ass’n, 437 Mich 75, 80;  
467 NW2d 21 (1991).  
IV. DHC AS AN INDEPENDENT EMPLOYER-MCL 125.655(3)  
The trial court held that the 1996 amendments of the  
11  
  
housing facilities act did not, by operation of law, sever the  
city’s employment relationship with DHC employees and that  
such severance could be accomplished only with the consent of  
the city council by means of the council taking “legislative  
action” under the Detroit City Charter.  The Court of Appeals  
reversed, holding that the plain meaning of MCL 125.655(3)  
evidences that the Legislature explicitly authorized housing  
commissions to act as independent employers, separate from  
their incorporating cities.  252 Mich App 307.  Additionally,  
the Court of Appeals stated that nothing in the housing  
facilities 
act 
implies, 
much 
less 
mandates, 
formal  
acquiescence by the city council before the DHC may act as a  
separate and autonomous employer.  Id. 
We agree with the  
Court of Appeals and hold that the 1996 amendments of the  
housing 
facilities 
act, 
specifically 
MCL 
125.655(3), 
sever 
the  
city’s employment relationship with the DHC as a matter of  
law, unless the mayor recommends, and the city council  
approves, a resolution declaring otherwise.  
Because the issue is one of statutory interpretation, we  
must apply familiar principles of statutory interpretation  
that were recently restated in Omelenchuk v City of Warren,  
466 Mich 524; 647 NW2d 493 (2002):  
The paramount rule of statutory interpretation  
is that we are to effect the intent of the  
Legislature. 
Tryc v Michigan Veterans’ Facility, 
451 Mich 129, 135; 545 NW2d 642 (1996). To do so,  
12  
we begin with the statute’s language. 
If the  
statute’s language is clear and unambiguous, we 
assume that the Legislature intended its plain 
meaning, and we enforce the statute as written. 
People v Stone, 463 Mich 558, 562; 621 NW2d 702 
(2001).  In reviewing the statute’s language, every 
word should be given meaning, and we should avoid a 
construction that would render any part of the 
statute surplusage or nugatory. Altman v Meridian  
Twp, 439 Mich 623, 635; 487 NW2d 155 (1992). 
[Omelenchuk at 528, quoting Wickens v Oakwood  
Healthcare System, 465 Mich 53, 60; 631 NW2d 686 
(2001).]  
Additionally, we may not read into the statute what is not  
within the Legislature’s intent as derived from the language  
of the statute. Omne Financial, Inc v Shacks, Inc, 460 Mich  
305, 311; 596 NW2d 591 (1999).  
At issue in this case is MCL 125.655(3).  Before its  
amendment by 1996 PA 338, MCL 125.655(3) provided:  
A president and vice-president shall be  
elected by the commission.  The commission may 
appoint a director who may also serve as secretary, 
and other employees or officers as are necessary. 
The commission shall prescribe the duties of its 
officers and employees and, with the approval of  
the 
appointing 
authority, 
may 
fix 
their  
compensation.  The commission may employ engineers, 
architects, and consultants, when necessary. [1978 
PA 205 (emphasis added).]  
Under the 1978 version of MCL 125.655(3), a housing  
commission could fix the compensation of its employees only  
with the approval of the appointing authority. Without this  
approval, a housing commission was a coemployer with the  
incorporating unit, not a separate employer.  See Grand Rapids  
Employees Independent Union v Grand Rapids, 235 Mich App 398,  
13  
 
 
403; 597 NW2d 284 (1999).  
As amended in 1996, MCL 125.655(3) provides:  
A president and vice-president and other  
officers designated by the commission shall be 
elected by the commission.  The commission may  
employ and fix the compensation of a director, who  
may also serve as secretary, and other employees as  
necessary. 
Upon 
the 
recommendation 
of 
the  
appointing authority, the governing body of an 
incorporating unit may adopt a resolution either 
conditioning the establishment of any compensation 
of an officer or employee of a commission upon the 
approval of the governing body or establishing 
compensation ranges and classifications to be used 
by a commission in fixing the compensation of its 
officers and employees. 
The commission shall  
prescribe the duties of its officers and employees  
and shall transfer to its officers and director  
those functions and that authority which the  
commission has prescribed. 
The commission may 
employ 
engineers, 
architects, 
attorneys, 
accountants, and other professional consultants 
when necessary. [Emphasis added.]  
The 
statute’s 
language is clear and unambiguous.  Housing  
commissions have the authority to employ and fix the  
compensation of their employees, as well as the express  
authority to determine the duties of their employees.  
We believe MCL 125.655(3) presents an alternative to  
severance.  As a matter of law, the statute provides that the  
housing commission may employ and fix the compensation of a  
director and its employees as necessary.  However, if the  
appointing authority makes a recommendation, the alternative  
becomes viable and the governing body may then adopt one of  
the two resolutions as set forth in the statute.  However, if  
14  
 
 
 
the appointing authority does not make a recommendation, or if  
the governing body does not adopt a resolution based on the  
recommendation in accord with the statute, then the housing  
commission retains the exclusive authority to fix the  
compensation of its director and employees.  Thus, we agree  
with the Court of Appeals that the Legislature explicitly  
authorized 
housing commissions 
to 
act 
as 
independent  
employers, separate from their incorporating cities.  
We reject AFSCME’s argument that the Court of Appeals  
holding renders MCL 125.655(3) a nullity.  AFSCME maintains  
that the Court of Appeals analysis does not take into account  
the current status of DHC employees, which is the product of  
seven years of “proposals,” both before and after the 1996  
amendments.  However, we note that the city’s actions as a  
coemployer with the DHC, in the absence of any valid  
resolution, do not negate the legal status of the DHC as an  
independent employer.  Merely because the city has been acting  
as a coemployer with the DHC does not mean that MCL 125.655(3)  
does not sever the employment relationship as a matter of law.  
Additionally, as has been noted by counsel for the city and  
the DHC, and as is apparent in several documents including the  
revised MOA, the DHC was not in a position to immediately  
separate from the city in June 1996, when the amendments of  
the housing facilities act became effective.  
15  
 
 
AFSCME argues that while MCL 125.654(5) provides that a  
housing commission shall be a “public body corporate,”  
subsections a through e recite public body corporate  
attributes and make no reference to employment capabilities.  
Therefore, AFSCME would have us conclude that the designation  
of a housing commission as a “public body corporate” divests  
it of employment authority.  We believe, however, that whether  
the attributes of a “public body corporate” specifically  
include employment is irrelevant because MCL 125.655(3)  
expressly 
designates 
employment 
authority 
to 
housing  
commissions.  
AFSCME makes the same argument in relation to MCL 125.657,  
which sets forth the enumerated powers and duties of housing  
commissions.  We reject this argument for the same reason.  
MCL 125.655(3) clearly designates employment authority to  
housing commissions, thus, it is irrelevant that MCL 125.657  
does not set forth employment authority as an enumerated power  
or duty.  
AFSCME also argues that MCL 125.655(3) “expressly”  
reserves employment classification and compensation powers to  
the city.  This is incorrect. Contrary to AFSCME’s argument,  
MCL 125.655(3) automatically gives housing commissions  
unfettered authority unless the appointing authority engages  
the alternative in the statute, as discussed above, by making  
16  
  
  
 
a recommendation to the governing body.  
We also agree with the Court of Appeals that the trial  
court erred in holding that concurrence or “legislative  
action” by the city council is required before the DHC may act  
as a separate and autonomous employer.  In fact, quite the  
opposite is true. Contrary to the trial court’s holding, it  
is apparent that MCL 125.655(3) declares a housing commission  
an independent employer as a matter of law.  Only upon the  
recommendation 
of 
the appointing authority and the adoption of  
a resolution by the governing body establishing compensation  
of DHC employees could the city be regarded as a coemployer.  
A. ACTIONS BY THE MAYOR  
The mayor submitted four different proposals to the city  
council 
that 
the 
various 
parties 
argue 
satisfy 
the  
“recommendation” 
requirement 
prescribed 
by 
MCL 
125.655(3): 
(1)  
the mayor’s proposed resolution dated February 27, 1996, (2)  
the revised MOA dated October 1996, (3) the mayor’s proposed  
amendment dated July 17, 2001, and (4) the budgets submitted  
by the mayor from 1997-2001.  For the reasons that follow, we  
do not believe that any of these actions by the mayor  
constitute 
the 
type 
of recommendation required by the statute.  
1. FEBRUARY 27, 1996, PROPOSED RESOLUTION  
AFSCME and the city council argue that the February 27,  
1996, resolution proposed by the mayor constituted the  
17  
 
  
 
 
“recommendation” required in MCL 125.655(3) before the city  
council could adopt a resolution. 
However, the 1996  
amendments of the housing facilities act did not become  
effective until June 27, 1996. See MCL 125.655. Therefore,  
a 
resolution 
proposed before the effective date cannot satisfy  
the requirement under the statute.  
2. THE OCTOBER 1996 REVISED MOA  
The revised MOA was entered into between HUD and the city  
of Detroit.  It was approved by the city council in September  
1996 and executed in October 1996.  Relevant to employment,  
the MOA at page five stated:  
The revised MOA also provides for steps to be 
taken to create a separation of systems for public 
housing. The City of Detroit has acknowledged its 
support for the transfer of certain operational 
functions to the DHC. . . . 
The reasons for the  
transition are due to the DHC not being able to  
manage all of the critical components of its public  
housing program while having to depend on city  
operated 
systems 
(e.g.[,] 
in 
the 
areas 
of  
personnel, financial management, automated data 
processing and procurement) . . . .  The DHC is  
troubled and needs to not only have the capacity to 
operate all public housing activities in-house but 
it can also not afford to pay other departments for 
services for public housing in the long term.  
It is important to note that the DHC can not  
immediately separate from the city with respect to  
all 
of 
the 
functions 
relating 
to 
financial  
management, procurement and personnel. The agency 
does not have its own systems in place but will 
take steps under this MOA to create its own  
administrative 
systems 
and 
then 
move 
toward  
operating these systems separate from the City of 
Detroit.  
18  
 
 
 
DHC will follow the model used by other Housing 
Commissions in the State of Michigan.  Transferring 
responsibilities to the Commission will meet HUD’s  
concerns that the public housing program operate 
with significant independence and authority.  The  
Commission 
will 
have 
control 
over 
necessary 
functions for public housing and be a part of the 
plans and programs for revitalization of the City 
of Detroit.  This MOA also requires the DHC to seek  
additional approvals from City Council in order to 
take full advantage of state legislation providing 
greater 
authority 
for 
housing 
commissions.  
[Emphasis added.]  
Assuming that this MOA meets the recommendation and  
adoption requirements under the statute, it does not contain  
the 
necessary 
information 
regarding 
compensation 
or  
classification of employees.  MCL 125.655(3) is precise: if  
the 
appointing 
authority 
makes 
a 
recommendation, 
the 
governing  
body may adopt a resolution “either conditioning the  
establishment of any compensation . . . upon the approval of  
the governing body or establishing compensation ranges and  
classifications . . . .”  Therefore, the 1996 MOA cannot serve  
as a recommendation sufficient to constitute a joint employer  
relationship between the city and the DHC.  
In fact, to the contrary, the MOA notes that one of the  
reasons for the transition is the DHC’s inability to manage  
all the critical components of its public-housing program  
while having to depend on city-operated systems.  One of these  
“critical components” was personnel.  Additionally, the MOA  
recognized that these transitions could not occur overnight,  
19  
  
 
 
  
because the DHC did not yet have the resources. This does not  
evidence a recommendation that the city retain control over  
the compensation and classification of DHC employees.  
3. JULY 17, 2001, PROPOSED AMENDMENTS  
The purpose of the mayor’s July 17, 2001, proposed  
amendments of the city code was to recognize the status  
conferred on the DHC by the housing facilities act as a  
separate “public body corporate.”  The proposed amendments  
tracked the language in MCL 125.655(3) that “the commission  
. . . may [employ] and fix the compensation of a director  
. . . and . . . other employees . . . .”  
While the mayor’s July 17, 2001, proposed amendment may  
constitute a “recommendation” to the city council, the  
recommendation 
was 
not 
to 
“establish[] 
compensation 
ranges 
and  
classifications to be used by a commission in fixing the  
compensation of its officers and employees” as required by the  
statute.  MCL 125.655(3). Instead, the recommendation merely  
attempted to comply with the housing facilities act by  
providing the DHC with authority to fix compensation for and  
describe duties of its employees.  Therefore, the July 17,  
2001, proposed amendments do not meet the statutory  
requirements.  
4. BUDGETS  
The trial court agreed with AFSCME and the city council  
20  
 
 
that the mayor’s actions in submitting budgets that included  
funding for employees assigned to the DHC constituted the  
mayor’s “recommendation” to the city council to fix the  
compensation and classification of DHC employees.  The Court  
of Appeals rejected this position, as do we.  The mayor  
proposed a lump sum budget for the entire city for July 2001  
through June 30, 2002.  This does not constitute the detailed  
“classification” or “compensation” recommendation required by  
MCL 125.655(3).  
We recognize that the budgets incorporated by reference  
the city of Detroit White Book, which contains specific  
compensation ranges and classifications for all employment  
positions in the city of Detroit.  The White Book includes  
positions that are unique to the DHC. The attorney for the  
city council informed us at oral argument that, where a  
separate public agency is established, such as the library,  
positions unique to that agency are no longer included in the  
White Book. The crux of AFSCME and the city council’s argument  
is that the budgets constitute the recommendation of the mayor  
required for engaging the MCL 125.655(3) alternatives because  
the budgets reference the White Book, which includes  
compensation ranges and classifications for employees of the  
DHC; thus, the mayor recommended that the city council adopt  
a resolution regarding DHC compensation and classification.  
21  
 
 
  
 
We disagree and hold that the budgets did not constitute  
the necessary recommendation to the city council.  The budgets  
for the city of Detroit include the recommended allocation for  
every imaginable service the city provides.  We decline to  
accept the inference that the mayor, by submitting a budget  
that encompassed all the operating costs for the entire city,  
was recommending that all DHC employees remain city employees.  
The budget submission is too broad in scope to allow the  
specific conclusion that the mayor was recommending that the  
city council adopt a resolution regarding DHC employees  
compensation and classification.  Further, the mayor did make  
specific recommendations that the DHC separate from the city  
with 
respect 
to 
personnel and employment functions, which were  
rejected by the city council.  
Therefore, 
the 
mayor’s submission of the general lump sum  
budget for the entire city could not have constituted a  
recommendation from the mayor on which the city council could  
have taken action.  
B. GRAND RAPIDS EMPLOYEES INDEPENDENT UNION V GRAND RAPIDS  
AFSCME and the city council argue that the Court of  
Appeals failed to follow a previous Court of Appeals decision,  
Grand Rapids, supra. 
In Grand Rapids, the city executive  
proposed that the city council amend existing ordinances to  
transfer all employment authority from the city to the housing  
22  
 
 
commission.  The Grand Rapids city council agreed. The Grand  
Rapids Court held “in the absence of a city resolution to the  
contrary, housing commissions are now permitted to fix the  
compensation of their employees.” Grand Rapids at 405.  
AFSCME and the city council maintain that the Court of  
Appeals holding in this case is contrary to the decision in  
Grand Rapids. AFSCME and the city council argue that if there  
is a city resolution to the contrary, which there is in this  
case, the housing commission is not permitted to fix the  
compensation of its employees.  AFSCME and the city council  
further maintain that the 1996 amendments permitted the city  
to continue to exercise employment oversight for the  
commission and that it did so between 1996 and 2002 when it  
included the DHC in its budgets.  
Defendants, however, counter that the Court of Appeals  
decision is not in conflict with the decision in Grand Rapids  
because it also held that housing commissions are independent  
bodies corporate and the sole employer of commission  
employees.  Defendants interpret Grand Rapids as providing  
that the city council may adopt an ordinance defining powers  
of the commission as the employer if it is consistent with the  
housing act, but the ordinance may not withhold or deny powers  
granted by the statute.  We agree with this interpretation;  
the ordinance in Grand Rapids did not conflict with the  
23  
 
  
housing facilities act; Detroit’s does.  
We decline to accept plaintiffs’ position that the Grand  
Rapids Court holding that “in the absence of a city resolution  
to the contrary, housing commissions are now permitted to fix  
the compensation of their employees,” is applicable in this  
case.  The Court of Appeals in this case is not bound by that  
language to conclude that because there was a resolution to  
the contrary in this case, the DHC could not be the sole  
employer.  The Grand Rapids panel and the instant panel are  
consistent in their reading of the housing facilities act, but  
differ on the facts under consideration.  The Grand Rapids  
Court was not faced with a resolution in conflict with the  
statute and, thus, did not have to address what happens when  
there is such a resolution. Therefore, the Court of Appeals  
did not err by declining to follow the fact-specific holding  
from Grand Rapids.  
V. DETROIT CITY ORDINANCES  
The 
Court 
of 
Appeals opined that subsections 14-5-3(5) to  
(7) of the Detroit City Code are in direct conflict with MCL  
125.655(3). The city council argues that this is incorrect.  
We reject the council’s arguments, however, and agree with the  
Court of Appeals.  
The city of Detroit is a “home rule city.”  Detroit Fire  
Fighters Ass’n v Detroit, 449 Mich 629, 637, 652, 669 n 8; 537  
24  
 
 
 
NW2d 436 (1995)(opinions by Weaver, Cavanagh, and Mallett,  
JJ.).  We have held that “home rule cities enjoy not only  
those powers specifically granted, but they may also exercise  
all powers not expressly denied.”  Detroit v Walker, 445 Mich  
682, 690; 520 NW2d 135 (1994).  As a home rule city, certain  
powers are left to the city under Michigan’s constitution:  
Under general laws the electors of each city 
and village shall have the power and authority to 
frame, adopt and amend its charter, and to amend an 
existing charter of the city or village heretofore 
granted or enacted by the legislature for the 
government of the city or village. Each such city  
and village shall have power to adopt resolutions  
and ordinances relating to its municipal concerns,  
property 
and 
government, 
subject 
to 
the  
constitution and law.
 No enumeration of powers 
granted to cities and villages in this constitution 
shall limit or restrict the general grant of 
authority conferred by this section. [Const 1963, 
art 7, § 22 (emphasis added).]  
While prescribing broad powers, this provision specifically  
provides that ordinances are subject to the laws of this  
state, i.e., statutes. See also the Home Rule City Act, MCL  
117.1, et seq., specifically MCL 117.4j(3), which provides:  
For the exercise of all municipal powers in 
the management and control of municipal property 
and 
in 
the 
administration 
of 
the 
municipal 
government, whether such powers be expressly 
enumerated or not; for any act to advance the 
interests of the city, the good government and 
prosperity of the municipality and its inhabitants 
and through its regularly constituted authority to 
pass all laws and ordinances relating to its 
municipal concerns subject to the constitution and 
general laws of this state.  
This Court has held that a municipality may not enact an  
25  
  
ordinance that directly conflicts with the state statutory  
scheme or if the state statutory scheme preempts the  
municipality’s 
ordinance 
by 
“occupying 
the 
field 
of 
regulation  
which the municipality seeks to enter, to the exclusion of the  
ordinance, even where there is no direct conflict between the  
two schemes of regulation.”  People v Llewellyn, 401 Mich 314,  
322; 257 NW2d 902 (1977).  As analyzed below, it is clear that  
the city ordinances at issue directly conflict with the  
housing facilities act.  
A. SUBSECTIONS 14-5-3(5) AND (6)  
The 
city 
council amended subsections 14-5-3(5) and (6) to  
provide:  
(5) The mayor shall recommend to the City 
Council 
either 
a 
compensation 
Schedule 
or  
compensation ranges and classifications for the 
[housing] Commission officers and employees.  
(6) The City Council shall adopt a resolution 
either conditioning the establishment of any 
compensation of an officer or employee of a  
commission upon the approval of the City Council or 
establishing 
compensation 
ranges 
and  
classifications by the commission in fixing the 
compensation 
of 
its 
officers 
and 
employees. 
[Emphasis added.]  
The city council’s position is that the plain meaning of  
MCL 125.655(3) suggests that the mayor (or “appointing  
authority”) 
has 
an 
affirmative duty to make recommendations to  
the city council (or “governing body”).  The city council  
maintains that the statute is discretionary because it  
26  
 
provides that “[u]pon the recommendation of the appointing  
authority, the governing body of an incorporating unit may  
adopt . . . .”  (Emphasis added). The city council would have  
us interpret this as giving the governing body discretion to  
adopt either a requirement that the compensation of each  
officer or employee be approved or establish compensation  
ranges and classifications.  The city council believes that  
while it may choose either of the two alternatives, it must in  
fact act.  If the city council has the affirmative duty to  
choose an alternative, the city council states that it is  
incumbent upon the appointing authority to make the  
appropriate recommendations. 
Under the city council’s  
interpretation, the appointing authority has discretion  
regarding what is recommended, not whether to make a  
recommendation.  If the city council’s interpretation is  
correct, it would follow that subsections 14-5-3(5) and (6) do  
not conflict with the statute and thus are not invalid.  
The city council’s position, however, is flawed.  
Subsections 14-5-3(5) and (6) do conflict with MCL 125.655(3)  
and are preempted.  We cannot read into the statute what is  
not there.  Omne Financial at 311. MCL 125.655(3) includes no  
duty to make a recommendation.  Likewise, we cannot read into  
the statute a duty mandating the adoption of a resolution  
regarding employee compensation and classification.  
27  
Rather, as discussed in part IV, we believe MCL  
125.655(3) presents two alternatives.  As a matter of law, the  
housing commission may employ and fix the compensation of a  
director and employees as necessary.  If the appointing  
authority makes a recommendation, the second option becomes  
viable and the governing body may adopt one of the two  
resolutions as set forth in the statute.  However, if the  
appointing authority does not make a recommendation or if the  
governing body does not adopt a resolution in accord with the  
statute, 
the 
housing 
commission has the exclusive authority to  
fix the compensation of its director and employees.  
Subsection 14-5-3(5) provides that the mayor shall make  
a recommendation to the city council regarding compensation  
and classification of DHC employees.  Likewise, subsection 14­
5-3(6) states that the city council shall adopt a resolution  
regarding compensation and classification of DHC employees.  
The city code makes the mayor’s recommendation and the city  
council’s adoption mandatory.  
However, MCL 125.655(3) clearly provides, in pertinent  
part:  
The commission may . . . fix the compensation  
of a director . . . and other employees as  
necessary.
 
Upon 
the 
recommendation 
of 
the  
appointing authority, the governing body of an 
incorporating unit may adopt a resolution either 
conditioning the establishment of any compensation 
of an officer or employee of a commission upon the 
approval of the governing body or establishing  
28  
compensation ranges and classifications to be used 
by a commission in fixing the compensation of its 
officers and employees. [Emphasis added.]  
Subsections 14-5-3(5) and (6) are clearly contrary to the  
plain language of the statute. First, the statute gives the  
housing commission the express authority to fix the  
compensation of its director and other employees.  Second, the  
statute provides that “[u]pon the recommendation of the  
appointing authority, the governing body . . . may adopt a  
resolution” regarding the compensation and classification of  
housing commission employees.  There is nothing in the  
language of the statute mandating that the appointing  
authority make a recommendation to the governing body.  
Therefore, subsection 14-5-3(5) is contrary to the plain  
language of the statute and is invalid.  Likewise, there is  
nothing in the language of the statute mandating that the  
governing body adopt a resolution.  Therefore, subsection 15­
5-3(6) is also contrary to the plain language of the statute  
and is also invalid.  
Because the mandates in subsections 14-5-3(5) and (6)  
directly contradict the express language of MCL 125.655(3),  
which gives the appointing authority the discretion to make a  
recommendation and the governing body the discretion to adopt  
a resolution, subsections 14-5-3(5) and (6) are invalid.  
29  
 
 
 
B.  SUBSECTION 14-5-3(7)  
The city council’s amendment of subsection 14-5-3(7)  
provides:  
All housing commission employees shall be 
members of either the classified service or the  
unclassified service as is provided under Section 
6-517 of the Charter of the City of Detroit, and 
shall be entitled to all rights of all employees of 
the City of Detroit, including but not limited to 
pensions and benefits.  
We hold today that the 1996 amendments of the housing  
facilities act, specifically MCL 125.655(3), sever the city’s  
employment relationship as a matter of law, unless the mayor  
recommends and the city council approves a resolution  
declaring otherwise.  As we have already established, the  
mayor did not make such a recommendation; therefore, there was  
nothing for the city council to approve.  As a result,  
subsection 14-5-3(7), declaring that all DHC employees are  
city employees, is contrary to MCL 125.655(3) and the mayor’s  
actions in this case; thus, subsection 14.5-3(7) is invalid.  
C.  OTHER ORDINANCES  
To the extent AFSCME argues that if the ordinances are  
declared invalid, the status quo will revert to the prior  
housing ordinance, which still maintains DHC employees as city  
employees, AFSCME is mistaken. 
Any prior ordinances that  
conflict with the housing act are invalid and have no effect.  
30  
  
 
VI. CONCLUSION  
We hold that the 1996 amendments, specifically MCL  
125.655(3), sever a coemployment relationship between a  
municipality and its housing commission by operation of law.  
The only way to establish a coemployment relationship is under  
the unambiguous language of MCL 125.655(3): upon the  
recommendation 
of 
the 
appointing 
authority, 
the 
governing 
body  
may adopt a resolution regarding the compensation and  
classification 
of 
housing commission employees.  In this case,  
the mayor of the city of Detroit did not make such a  
recommendation, therefore, the DHC is the sole and independent  
employer of DHC employees. As a result, ordinances enacted by  
the Detroit city council to the contrary are invalid.  The  
judgment of the Court of Appeals is affirmed.  
Michael F. Cavanagh 
Maura D. Corrigan 
Elizabeth A. Weaver  
Marilyn Kelly 
Clifford W. Taylor 
Robert P. Young, Jr. 
Stephen J. Markman  
31