Opinion ID: 2006473
Heading Depth: 1
Heading Rank: 2

Heading: extent of municipal power

Text: ( a ) Dual Nature of Municipal Government. In 1895 in Davock v. Moore, 105 Mich 120, Justice LONG described the nature of local governments as follows (p 128): Municipal corporations are of a two-fold character,  the one public, as regards the State at large, in so far as they are its agents in government; the other private, in so far as they are to provide the local necessities and conveniences for the citizens. (Emphasis added.) This concept of local government was not materially altered under Home Rule. See, Pryzbylowski v. Board of Commissioners of the Poor of the City of Detroit (1915), 188 Mich 270; Attorney General, ex rel. Lennane, v. City of Detroit (1923), 225 Mich 631; and Curry v. Highland Park (1928), 242 Mich 614, for recognition by the Court of the dual role or function of cities. ( b ) Sources of Municipal Power. Turning next to the authority of municipal corporations, Justice CHRISTIANCY, writing in 1875 in the case of Attorney General v. Burrell, 31 Mich 25, said the powers to be exercised are (1) those granted by express words, (2) those implied in, or incident to, the powers expressly granted, or (3) such powers as are essential to the declared objects or purposes of the corporation. This pronouncement has been reiterated and applied as a restraint upon municipal action in the following cases: Attorney General v. Common Council of the City of Detroit (1907), 150 Mich 310; Barnhart v. Grand Rapids (1926), 237 Mich 90; Toebe v. City of Munising (1937), 282 Mich 1; City of Detroit v. Michigan Public Utilities Commission (1939), 288 Mich 267; and Home Owners' Loan Corp. v. City of Detroit (1940), 292 Mich 511. The nature and extent of territorial municipal power is analyzed in 37 Am Jur, Municipal Corporations, § 122, pp 736, 737, as follows: The primary purpose of a municipal corporation is to contribute toward the welfare, health, happiness, and public interest of the inhabitants of such corporation, and not to further the interests of those residing outside its limits; therefore, the general rule is that municipal corporations have no extra-territorial powers, but their jurisdiction ends at the municipal boundaries and cannot, without specific legislative authority, extend beyond their geographical limits. The legislature may, however, confer jurisdiction upon municipal corporations for sanitary and police purposes, and for license regulation under the police power, over territory contiguous to the corporation. As a governmental unit, the municipal corporation is the agent of the state, exercising its powers for and in behalf of the state, and the courts are inclined to be liberal in upholding legislation extending governmental powers in proper cases beyond the municipal limits. Furthermore, the practical necessities of municipal administration have compelled the courts to recognize that a municipality cannot be a self-contained unit, but must be permitted to go beyond its boundaries, so that the rule has been announced that when a power granted to a municipal corporation cannot be exercised without going outside the corporate limits, the requisite authority to do so will be implied. Thus, a municipal corporation may, when necessary or manifestly desirable, acquire land and make contracts to construct works beyond its corporate limits for the discharge of sewage and drainage, since drainage, whether of surface water or of impurities, can seldom be effectual unless removed beyond the inhabited limits. In some jurisdictions, statutory enactments specifically empower municipal corporations to extend public improvements, such as sewers, beyond the corporate limits, where necessary to carry out the scope and object of the improvement. Frequently, a municipality must go outside its limits for a water supply, and when that is the case, the right to do so will be implied; legislatures of some states have authorized municipal corporations in such cases to exercise police jurisdiction to prevent pollution or destruction of waterworks property. There is some authority for the proposition that while a municipal corporation cannot exercise governmental authority outside its territorial limits, in the exercise of its business functions it may purchase land wherever it is most convenient, and may exercise the ordinary rights of ownership over land so purchased. A municipal corporation, however, cannot be authorized by the legislature of a state other than that which created it to acquire property for governmental purposes situated in such other state. Nevertheless, there can be no doubt of the power of the legislature to authorize a municipal corporation to acquire the ownership of property outside its territorial limits. (Footnotes omitted and emphasis added.) The City of Dearborn purports to find the necessary power in the provisions of PA 1933, No 94, being the Revenue Bond Act of 1933, as amended. Under Justice CHRISTIANCY'S classification, this would be a power granted by express words. The act was given immediate effect to secure the public health, safety, convenience and welfare of various governmental instrumentalities of the State of Michigan. It was passed during the great depression and its primary purpose was to provide a means for the construction of public works which, in turn, would provide employment for the unemployed of this state. The act, as its name implies, is a revenue bond act as an aid to local improvements without the involvement of general fund debt limitations. The act is not a grant of power to a city to act in a private capacity but rather in a public one. Section 3 of the act  Definitions  defines as public improvements: housing facilities, garbage and rubbish disposal plants, incinerators, transportation systems, sewage disposal systems, water supply systems, electric and gas utility systems, automobile parking facilities, yacht basins, harbors, docks, wharves, terminal facilities, elevated highways, bridges, tunnels, ferries, community buildings, markets, stadiums, convention halls, auditoriums, dormitories, hospitals, parks, recreational and aeronautical facilities, marine railways, and buildings devoted to public use. Following the reasoning of Justice DETHMERS, any and all of these facilities could be built by a city anywhere in the State of Michigan or, for that matter, anywhere in the world. I do not construe the grant of power given to cities by the Revenue Bond Act that broadly. It should be noted that all of these facilities are designed or can be used to provide the local necessities and conveniences of which Justice LONG wrote in Davock, supra . Even if it should be contended that any of these facilities may be constructed by a city acting in its role of agent for the state, the facilities are still intended to serve the public health, safety, convenience and welfare of the people of the State of Michigan. The state cannot extend its sovereign jurisdiction beyond its territorial limits. 81 CJS, States, § 3. What is beyond the power of the state is also beyond the power of one of its municipalities. If the purpose of Dearborn, acting beyond its boundaries, is to provide public housing for the elderly, such action would be an exercise of the police power and the performance of a governmental function. The city's power, acting in its local capacity or as an agent for the state, could not extend beyond the boundaries of this state. Justice DETHMERS would uphold the city's action by concluding that in making the purchase, the city acted in a proprietary capacity and not in a sovereign or governmental one. What is the limit of its power to proceed in a proprietary capacity? Prior to the adoption of the Constitution of 1908, the question arose as to the validity of legislation authorizing municipal ownership and operation of plants and facilities which would permit municipalities to engage in business as a service to their citizens where such an undertaking might be in competition with private business. Common examples were water, light, heat, and transportation. In Mitchell v. City of Negaunee (1897), 113 Mich 359, the issue was the legality of statutes authorizing municipal light plants. The Court said (p 364): These provisions will stand if furnishing electric lights is a public service. In upholding the validity of the statutes, the Court concluded that the furnishing of electric light and water is a public service and that the performance of such service can be delegated by the legislature to cities and towns for their own benefit and the benefit of their inhabitants. In Wood v. City of Detroit (1915), 188 Mich 547, an award of compensation for the death of an employee of the Public Lighting Commission was upheld against the claim that it was beyond the power of the legislature to bring municipal corporations within the provisions of the workmen's compensation act. The Court said (p 559): [The new Constitution] has not abolished all distinctions between municipal and other corporations and individuals with respect to the exercise of the powers conferred nor denied the power of the legislature to enact general laws applicable to cities. The distinction between powers governmental in character and those private in character, as exercised by municipal corporations, does not involve the abrogation of the distinction between private municipal activity and private individual activity. To employ a seeming paradox, private municipal activities are all of them public. What has been called private in municipal activity is, nevertheless, public when contrasted with purely private enterprise and adventure. (Emphasis added.) Traverse City v. Blair Twp. (1916), 190 Mich 313, involved the liability of the city for taxes on its power plant located outside the boundaries of the city. In reviewing the issue, the Court pointed out (pp 317, 318): While in distinguishing the purely governmental powers of a municipality from its authorized business activities in supplying itself and its inhabitants with a certain class of utilities and conveniences for which in places of concentrated population there is a general need, and which it is recognized under present conditions of civilization public welfare demands, the latter are sometimes referred to as private business enterprises, perhaps because such wants may be and sometimes are supplied for profit by private parties; yet in the final analysis they are in no true sense private business or private property when operated and owned for public benefit by a municipality under constitutional or statutory authority. See also cases cited under II(b) for limitation of municipal power. Not every housing project, even for the elderly, is a public work. In the case of Hays v. Kalamazoo (1947), 316 Mich 443, 454, this Court quoted with approval a passage from 37 Am Jur, Municipal Corporations § 120, p 735, which has been much quoted as to the meaning of public purpose. The last two sentences of the passage read as follows: The test of public use is not based upon the function or capacity in which or by which the use is furnished. The right of the public to receive and enjoy the benefit of the use determines whether the use is public or private. (Emphasis added.) The broad grant of authority contained in the Revenue Bond Act does not permit a city to engage in private enterprise. Municipalities can acquire lands and property rights beyond their boundaries for legitimate municipal purposes only. When a city attempts to move outside its boundaries to provide housing for its inhabitants, such action can be upheld only under the most extraordinary circumstances. Housing is unique among the proprietary enterprises a city may engage in. In the case of light, water, sewer plants, or the other facilities authorized by the Revenue Bond Act, when the facility is built outside the municipality it is nevertheless constructed in whole, or at least in major part, for the benefit of the inhabitants of the city. Only when a city acquires housing outside its boundaries, by the very nature of such an action does it divest itself of the right to act for those who occupy the housing since they are then no longer inhabitants of the city. [4] In this case, the city states in its brief that many of our senior citizens have migrated to Florida and other warmer areas. The power of a city to serve local needs does not extend to serving those who have migrated to Florida, the South Seas, Shangrila or Timbuktu. [5] Dearborn citizens who have migrated should look to their new communities for housing, if there is a public need for such, rather than for Dearborn to undertake such a worldwide mission. The public policy of this state with regard to public housing can be determined from the various laws dealing with housing. All of these statutes clearly pertain to housing within the State of Michigan: PA 1917, No 167 (MCLA § 125.401 et seq.; Stat Ann 1969 Rev § 5.2771 et seq. ), is a general housing law. PA 1933, Ex Sess, No 18 (MCLA § 125.651 et seq.; Stat Ann 1969 Rev § 5.3011 et seq. ), pertains to municipal housing facilities and permits cities to acquire housing to eliminate housing conditions which are detrimental to the public peace, health, safety, morals or welfare. PA 1941, No 268 (MCLA § 125.711 et seq.; Stat Ann 1969 Rev § 5.3059[1] et seq. ), pertains to defense housing facilities, recognizes a housing shortage in the state, and allows cities to act to assure the availability when needed of safe and sanitary dwellings for persons engaged in national defense activities. PA 1937, No 293 (MCLA § 125.601 et seq.; Stat Ann 1969 Rev § 5.3057[1] et seq. ), the Housing Co-operation Law, finds there exist in the state unsafe and insanitary housing conditions and a shortage of safe and sanitary dwelling accommodations for persons of low income and declares that to remedy these conditions constitutes a public use and purpose and an essential governmental function. (Emphasis added.) PA 1966, No 346 (MCLA § 125.1401 et seq.; Stat Ann 1968 Rev § 16.114[1] et seq. ), the State Housing Development Authority Act of 1966, determines that there exists in the state of Michigan a seriously inadequate supply of safe and sanitary dwelling accommodations within the financial means of low income or moderate income families. (Emphasis added.) PA 1941, No 250 (MCLA § 125.901 et seq.; Stat Ann 1969 Rev § 5.3058[1] et seq. ), the Urban Redevelopment Corporations Law, finds that  in the cities of the state substandard and insanitary areas exist and provides for their redevelopment. (Emphasis added.) PA 1969, No 304 (MCLA § 125.1501 et seq.; Stat Ann 1970 Cum Supp § 5.3518[1] et seq. ), the Urban Redevelopment Financing Act, adopted after the purchase of the Florida property, determines that it is essential to the public health, safety, and welfare of the state and its residents to rectify blighted conditions in municipalities of the state. (Emphasis added.) General regulation of housing aside, the public policy of this state as to housing may be summed up as twofold: (1) to reduce or eliminate slums and blighted areas; (2) to provide housing for certain residents of the state, primarily persons of low or moderate income. It would seem evident that the purchase of an 88-unit apartment building in Florida to meet the needs of the elderly of a Michigan city of 112,007 is completely beyond the public policy of this state. Even if it were not, the attempt to place the management and operation of such a building in the hands of the Housing Director of the City of Dearborn is an impermissible exercise of governmental power. (See footnote 1.) The primary purpose of a city is to serve local needs. Constitutional and statutory provisions with regard to home rule are intended to allow cities to meet such local needs. The housing project here in question cannot be a public work of a municipality of this state because it is outside the State of Michigan. As a proprietary venture, since it does not serve local needs, it does not meet the test of public use which a city must meet when it ventures into such an activity. It is not authorized by legislative enactment or by the public policy of this state. I would reverse the Court of Appeals and the trial court and would remand for further proceedings by the trial court for the sale and liquidation of this property by the City of Dearborn. No costs, a public question being involved.