Court Opinion

ID: 9673482
Source: CourtListenerOpinion
Date Created: 2023-08-24 04:12:44.97044+00
Date Added: 2024-06-11T11:37:44.844129
License: Public Domain

Riley, J.
(dissenting). Because I disagree with the majority’s conclusion that Western Michigan University’s project to build a recreational facility is subject to the prevailing wage act, I respectfully dissent. I believe that the majority has given a strained interpretation of the meaning of “sponsored or financed in whole or in part by the state” in the act that is not supported by the plain meaning of the statute, is contradicted by the statute itself, and renders nugatory part of the provisions where the building agent is a state institution. I would adopt the long-held interpretation of the agency responsible for administering this act, the Department of Labor, and hold that a project is sponsored or financed by the state when it was either (1) financed by the state, i.e., where the state made money available for a capital outlay or debt service, or (2) sponsored by the state, i.e., where the state became a surety for the project. In the instant case, the State of Michigan did not finance or sponsor the university’s project to expand the student recreational facility because the university did not use state funds for the project and the state did not act as a surety to indemnify the debt the university incurred *548on the project. Consequently, I would conclude that the prevailing wage act does not apply. The trial court properly entered judgment on behalf of the university by ruling that the act did not apply. I would affirm the Court of Appeals decision upholding the trial court’s grant of summary disposition in favor of the university.
ANALYSIS
I. PREVAILING WAGE ACT
The prevailing wage act, MCL 408.551 et seq.; MSA 17.256(1) et seq., requires that certain contracts for state projects must contain a provision that requires the contractor to pay wages and fringe benefits to construction employees at the prevailing wage in the locality where the construction is to occur. Section 2 of the prevailing wage act contains the primary mandate:
Every contract executed between a contracting agent and a successful bidder as contractor and entered into pursuant to advertisement and invitation to bid for a state project which requires or involves the employment of construction mechanics, other than those subject to the jurisdiction of the state civil service commission, and which is sponsored or financed in whole or in part by the state shall contain an express term that the rates of wages and fringe benefits to be paid to each class of mechanics by the bidder and all of his subcontractors, shall be not less than the wage and fringe benefit rates prevailing in the locality in which the work is to be performed. [MCL 408.552; MSA 17.256(2) (emphasis added).]
I agree with the majority that this provision thereby requires a governmental employer to pay the prevailing wage if a project meets the following five condi*549tions: the project must (1) be with a “contracting agent” as defined by the act, (2) be entered into pursuant to an advertisement and invitation to bid, (3) be a “state project” as defined by the act, (4) involve the employment of construction mechanics, and (5) be “sponsored or financed in whole or part by the state.” See ante, p 536.
n. MAJORITY’S INTERPRETATION OF THE ACT AND THE PROPER INTERPRETATION
The only issue on appeal is whether the project to build a recreational facility initiated by Western Michigan University was “sponsored or financed in whole or in part by the state.” The majority asserts that the statute unambiguously provides that this project was sponsored and financed by the state because “Western Michigan University is ‘the state’ ” for purposes of the act. See ante, p 540.1 do not believe that this conclusion is required by the plain meaning of the act.
In fact, the majority’s interpretation of the word “state” in the phrase “sponsored or financed in whole or in part by the state” is contradicted by the statute’s usage of the word “state” in the very same statute in its third element. The majority concludes that the term “state” in this phrase unambiguously includes state universities like Western Michigan, but also unambiguously excludes local school boards. See id., pp 542-543.1 In contrast, in requiring that a project subject to the prevailing wage act be a “state project,” *550the statute clearly provides that an improvement by a local school board is a “state project.”
A “state project” is defined by the act as a “new construction, alteration, repair, installation, painting, decorating, completion, demolition, conditioning, reconditioning, or improvement of public buildings, schools, works, bridges, highways, or roads authorized by a contracting agent” MCL 408.551(b); MSA 17.256(l)(b) (emphasis added). The statute defines a “contracting agent” as “any officer, school board, board or commission of the state, or a state institution supported in whole or in part by state funds, authorized to enter into a contract for a state project or to perform a state project by the direct employment of labor.” MCL 408.551(c); MSA 17.256(l)(c) (emphasis added). Thus, there can be no dispute that, according to the statute, a local school board may begin a “state project.” The majority’s interpretation, however, creates an inconsistency in the statute: a project by a local school board may be a “state project” under the statute’s third element, but, at the same time, a local school board is not part of the “state” for the purposes of the fifth element. See ante, pp 541-543. This contradiction manifests the fallacy of the majority’s claim that it is expounding on the unambiguous, plain meaning of the word “state.”
The analysis is flawed for a second reason. The majority’s novel interpretation of the statute renders superfluous the first of the five elements, i.e., that the *551project be with a “contracting agent,” where the contracting agent is a state institution. The statute provides that a state institution that is supported by state funds like Western Michigan University is a “contracting agent” under the act.2 The university concedes on appeal the point that Western Michigan University is a contracting agent. Where an employer like Western Michigan University meets the statute’s first element of the test (involve a “contracting agent”) because it is a state institution, it will then, according to the majority’s interpretation, always meet the fifth element that the project be “sponsored or financed ... by the state” because Western Michigan University is the state.
The majority attempts to address this claim that its interpretation renders part of the statute to be mere “surplusage” as the Court of Appeals concluded, see 212 Mich App 22, 26; 536 NW2d 609 (1995), by noting that there are other entities defined by the act as “contracting agent[s]” that are not part of the state for whom the fifth element would be relevant. See ante, pp 542-543. Nevertheless, the statute’s fifth requirement would still be redundant for “state” contracting agents (as interpreted by the majority). The rules of statutory construction require that this Court read separate provisions of a statute consistently as a whole to ensure that each provision is given effect. Gebhardt v O’Rourke, 444 Mich 535, 542; 510 NW2d 900 (1994). By analogy, this Court should interpret a statute to ensure that an interpretation of one provision does not render another superfluous in a sub*552stantial number of cases. The Legislature likely did not intend to create such a cumbersome, awkward statute.
The majority’s error is rooted in its mistaken belief that the word “state” is unambiguous in the phrase “sponsored or financed in whole or in part by the state.” In my opinion, the word “state” may be construed narrowly to include only the three branches of state government (executive, legislative, and judiciary) and the agencies they operate. Or, the “state” may be construed broadly to include the three branches of state government and their agencies as well as all municipalities and institutions that are created by the state. Traditionally, cities, like state universities and colleges, are considered municipal corporations and creatures of the state. Sinas v City of Lansing, 382 Mich 407, 411; 170 NW2d 23 (1969). The word “state” in the fifth element may also plausibly be interpreted, as advanced by the majority, to include all state governmental agencies, and state institutions, like state universities and state mental health facilities, but not smaller units of government created by the state. This Court should examine the purpose of this fifth element and examine it in the context of the earlier provisions to discern its meaning here.
The focus of the fifth element is on whether the project is 11 sponsored or financed” by the state government, not on whether the agency or institution initiating the project is a governmental entity. The statute ensures the latter point in its first element, by guaranteeing that the project is with a “contracting agent.” Every entity listed in the definition of contracting agent could be loosely described as a state *553actor. In focusing on whether the project is financed or sponsored by the state, the statute’s fifth element appears to ensure that either the Legislature has authorized funds for the project or there has been a state action by one of the three branches of government to sponsor the project. The act, however, provides no definition of the terms “sponsor” or “finance.”
The Department of Labor has defined these terms for its administrative use in its policy and procedural manual from 1992 as follows:
Financed in whole or in part by the state — means providing or making state monies available for capital outlay or debt service.
Sponsored by the state — means that the state acts as a surety by assuming the financial responsibilities for an authorized contracting agent.
The Department of Labor apparently applied this interpretation to at least six state university or college projects from 1987 through 1991, where it concluded that the prevailing wage act did not apply to the school projects because the state universities and colleges used bond issues to fund the projects and did not use state funds.3 This Court generally grants *554deference to a longstanding agency interpretation of a statute that the agency administers. See Wayne Co Prosecutor v Dep’t of Corrections, 451 Mich 569, 580; 548 NW2d 900 (1996). Because the agency’s interpretation is a plausible one and fits the purposes of the statute and its fifth requirement examined in context, I would defer to this administrative agency and conclude that, in order for a project to come under the prevailing wage act, the state must either finance the project by providing state monies or sponsor the project by assuming financial responsibility for it.
HI. APPLICATION OF THE PROPER INTERPRETATION
Under this interpretation, the trial court properly concluded that the project was not financed or sponsored by the State of Michigan.
In April 1992, the university began construction on the project. In December 1992, the university issued $59,495,000 in tax-exempt bonds to pay for the project. Between the start of the project and the sale of the bonds, the university internally borrowed with interest from its general fund to cover the cost of the project’s progress. The university did not receive capital appropriations from the state for the project. During the time the university drew from its general fund, the cash reserves in the general fund ranged from approximately $22,000,000 to $38,000,000, and the amount the university drew from the general fund as a temporary cash flow on a monthly basis ranged from $95,000 to $7,100,000. After the bonds were sold, the general fund was reimbursed with interest from the bond proceeds. The university intends to repay the revenue bonds with money raised through student activity fees and from its nonstate general fund that *555includes tuition, other fees, grants, and gifts. The Legislature approved the project with the understanding that it would not involve state funds.4 The state was not a party to any of the contracts for the project, is not obligated to pay on the revenue bonds, and is not acting as surety on the bonds.
According to the undisputed facts, the State of Michigan did not specifically appropriate funds for the project. Where the university drew from its general fund for the project, it reimbursed the funds it obtained, and this fund, at all times, contained sufficient cash reserves from nonstate sources to cover the costs of the project. The trial court persuasively addressed the point regarding whether the university actually used state or nonstate funds for the project when it drew from its general fund:
[I]t would be unrealistic to require wmu to chase dollars through its general account to determine whether they were state or non-state funds, for this would be an impossible task. Thus, the court finds that so long as there were sufficient non-state funds in the general account to cover the dollars paid out for the Project, there was no state financing or sponsorship.
Moreover, the State of Michigan did not become a surety on the project and was not financially responsible for the debt the university incurred.
*556Because the Court of Appeals properly affirmed the trial court’s decision to grant summary disposition in favor of Western Michigan University, I would affirm.
Weaver, J., concurred with Riley, J.

 The majority reasons as follows:
[W]e hold that because Western Michigan University is a part of state government and its funds are state funds, the student recreational facility project is sponsored and financed by the state within the plain meaning of the prevailing wage act. [Ante, p 541.]
*550[F\or projects undertaken by contracting agents that are not part of state government, for example, a local school board, the “sponsored or financed ... by the state” criterion will require closer examination and must be determined case by case. [Id., p 543 (emphasis added).]

 The fact that Western Michigan University is a “state institution” is, in my opinion, a good example of a point that is unambiguous.

 For example, in July 1987, the Department of Labor sent the following letter with regard to a project by Ferris State College:
“This project for which you have claimed an underpayment of the prevailing wage act is not a state prevailing wage project. Ferris State College financed this building project with its own bond issue, which is not guaranteed by the State. This method of financing ... is outside the jurisdiction of the Department of Labor.”

 On March 5, 1992, the Director of the Department of Management and Budget, Patricia Woodworth, sent a letter to the Joint Capital Outlay Subcommittee indicating her support for the project because “it does not require state funding and with the understanding that there is no commitment of state funds for operation and maintenance.” The committee unanimously supported the project with the understanding that “there is no commitment of state funds for operation and maintenance.”