  July 2010 | Municipal Law News

  Municipal Law

  Foster Swift Administrative & Municipal Group

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  What’s Inside:

  Zoning Ordinance Must List

  Uses Eligible for Special Use

  Permit Specifically – Listing

  Merely Categories of Uses

  Such as “Commercial” Uses

  Is Not Sufficient

  (Page 2)

  Binding Arbitration

  Amendments May Actually

  Increase Costs to Local

  Municipalities

  (Page 2)

  Michigan’s New Texting

  Ban Effective July 1, 2010

  (Page 3)

  Bond CounSeL Corner

  Pending Legislative relief for

  delinquent Special Assessment Bonds

  by Frank G. Seyferth

  A pending bill in the Michigan Legislature
  may offer some relief to municipalities with
  outstanding bonds payable from special
  assessments that have not been paid. If
  enacted in its current form, HB 6181 would
  create a Delinquent Special Assessment
  Revolving Loan Fund within the Michigan
  Department of Treasury, purportedly to be
  funded initially by a $5 million appropriation
  from the State general fund. This money could
  be loaned to eligible units of local government
  to assist them to make payments on certain
  troubled special assessment bonds.

  The new Loan Fund would be limited to
  loans to a township, city, village, or county
  to pay bonds that were issued to construct
  infrastructure improvements and which
  were to be repaid from special assessment
  payments that have been delinquent
  more than 6 months. This aid is intended
  primarily for governmental units that were
  experiencing rapid growth that has since
  stalled.

  If HB 6181 is enacted in its current form, the
  appropriated $5 million would be loaned on
  a “first-come, first-served” basis. Thus, it is
  imperative that local finance officials who
  could be impacted pay close attention to the

  progress of this pending bill in the Michigan
  Legislature.

  The pending bill would require the
  Department of Treasury to provide an
  application form, and approve or reject each
  application within 30 days after receipt. Loan
  amounts would be limited to a maximum
  of one year’s bond debt service, and each
  loan would bear interest at a rate set by the
  Department and be due not later than five
  years after the final bond maturity date. A
  defaulting municipal borrower’s delinquent
  loan repayments would be withheld from its
  future State revenue sharing payments.

  The foregoing is a summary of some but not
  all aspects of the pending legislation, which
  should be closely tracked by municipal
  officials who serve potential borrowers
  from the new Loan Fund. There can be no
  assurance that HB 6181 will be enacted in its
  current form or at all.

  If you would like additional information
  from us regarding this topic, please contact a
  member of Foster Swift’s Municipal Team or
  our principal bond tax lawyer, Frank Seyferth
  at 248-538-6328 or fseyferth@fosterswift.com.

  Page 2

  July 2010

  continued on page 3 | Binding Arbitration

  Zoning ordinance Must List uses eligible

  for Special use Permit Specifically –

  Listing Merely Categories of uses Such as

  “Commercial” uses Is not Sufficient

  A zoning ordinance that merely lists uses eligible for a special
  use permit (SUP) generally does not comply with Michigan
  zoning laws. Rather, the ordinance must list those eligible
  uses very specifically. Whitman v Galien Twp, unpublished
  per curiam opinion of the Michigan Court of Appeals (2010).
  In Whitman, the township’s SUP provisions in its zoning
  ordinance provided that the following uses were eligible for
  a SUP: “establishments for the conducting of commercial or
  industrial activities.” Under this ordinance, the township
  granted a SUP that allowed some permit applicants to
  construct and operate a snowmobile, dirt bike, and racetrack.
  The plaintiffs, neighbors, appealed the township board’s
  decision. The trial court upheld the SUP, opining that the
  township may authorize SUP even if the proposed use is not
  specifically enumerated in the applicable zoning ordinance.

  The Court of Appeals reversed, and held that the ordinance
  violated zoning law by being too general. The ordinance did
  not specify the special land uses and activities as required.
  The Court first noted the controlling provision of the Michigan

  Zoning Enabling Act (MZEA): “zoning ordinance shall specify
  . . . the special land uses and activities eligible for approval . .
  . .” MCL 125.3502 (1). The Court stated that the ordinance’s
  general statement that “commercial or industrial activities”
  are eligible for a SUP was not specific enough to satisfy the
  MZEA. The township’s ordinance did not specify the special
  land uses and activities eligible for approval, but rather
  identified general categories of uses or activities. Since the
  zoning ordinance violated the MZEA, the Court found that the
  township board’s decision to grant the SUP was invalid. The
  Court therefore vacated the SUP.

  Municipalities should take special note of Whitman and
  review their SUP provisions to ensure that those provisions
  do not suffer from the flaws the Court identified in Whitman.

  Foster Swift’s municipal department has extensive experience
  in SUP matters and zoning ordinance drafting. If you have
  questions about Whitman, SUP matters, or zoning ordinance
  drafting, please feel free to contact us.

  Binding Arbitration Amendments

  May Actually Increase Costs to

  Local Municipalities

  Public employee unions have existed in Michigan since the
  1930s, but beginning in 1947, were prohibited from striking
  upon passage of the Hutchinson Act, which imposed serious
  penalties on strikers. In 1965, Michigan passed the Public
  Employment Relations Act (PERA), which encouraged
  unionization and established a state agency to administer
  and enforce new rules that were implemented for collective
  bargaining. Although the PERA preserved the prohibition
  against strikes, it removed all penalties for engaging in illegal
  strikes.

  By keeping strikes illegal yet removing the penalties, there
  existed a “de facto right to strike.” Among the rash of strikes
  that followed were strikes by police and fire employees.
  This led to Public Act 312 of 1969, 312 MCL 423.231 et seq.,
  which provides for compulsory arbitration of labor disputes
  involving municipal police, fire and emergency service
  personnel. If negotiations are not successful, Act 312 provides
  for state-appointed arbitrators to decide the terms of a labor
  contract. Act 312 has been successful in eliminating police
  and fire strikes, but it has made negotiations with police and
  fire unions very difficult.

  by Ronald D. Richards Jr.

  by Michael R. Blum &

  Cole M. Young

  Page 3

  Municipal Law News

  fosterswift.com

  Binding Arbitration | continued from page 2

  continued on page 4 | Texting

  Since passage of Act 312, the experience of most municipalities
  is that binding arbitration results in unfair and unaffordable
  settlements against municipalities. Some claim the process
  is too long, the arbitrators are insufficiently trained, and
  costs of arbitration are unfairly incurred by the government.
  However, the most critical problem with Act 312 arbitration is
  that arbitrators have generally given too much weight to one
  of the factors Act 312 requires they consider: the comparison
  of benefits with those provided by other employers. While
  this is only one of nine factors in the law, it appears to be the
  one relied upon most by arbitrators.

  Early this year, the Michigan Senate introduced SB 1072 in
  an effort to address some of these concerns. As written, SB
  1072 would amend Act 312 to, among other things, limit
  the arbitration hearing to a list of issues prepared by the
  mediator, limit the duration of the arbitration process,
  and establish training requirements for arbitrators. These
  provisions seemingly would make the process more efficient.
  However, SB 1072 would also shift the State’s share of the cost
  of the arbitration proceeding to local units of government
  and the labor union, so it would likely actually increase local
  expenditures.

  SB 1070 also fails to address the primary issue espoused by
  local governments: the ability to pay. A key amendment to
  Senate Bill 1072, the “Patterson amendment,” would have
  required arbitrators to look closer at city finances before
  awarding police and fire union raises. If it had become law,
  the Patterson amendment would have directed arbitrators

  to look at the financial impact of any awards for five years,
  consider the financial climate of the region and make sure
  the city is not deficit spending. However, the Patterson
  amendment was rejected on a voice vote.

  Critics claim that without the Patterson amendment, SB 1072
  will not result in the savings local government need in police
  and fire salaries and benefits. Worse, SB 1072 would expand
  the entities covered by Act 312 to include police, fire, EMS, and
  dispatch employees of any authority, district, board, or other
  entity created wholly or partially by resolution, delegation, or
  any other mechanism. This means that any covered entity,
  such as a park or airport authority, that employs fire or police
  personnel, may now be forced into compulsory arbitration.

  SB 1072 was passed by the Senate on February 10, 2010,
  and by the House on June 24, 2010. As of the writing of this
  article, the Bill has been sent to the Senate for enrollment
  and then ultimately to the Governor for signature, which may
  occur soon. Once signed, local entities that have never been
  through the mandatory binding arbitration process may find
  themselves scrambling to comply with the new amendments.
  Attorneys in the Administrative and Municipal Practice Group
  are monitoring these develops and will be available to provide
  assistance if this Bill becomes law.

  If you have questions regarding Senate Bill 1072, please
  contact Michael Blum or Cole Young in the firm’s Farmington
  Hills office (248.539.9900).

  Michigan’s new Texting Ban

  effective July 1, 2010

  As you may know, Michigan’s new texting ban went into effect
  July 1, 2010.1 The new law prohibits reading, manually
  typing, or sending a text message or email on a “wireless
  2-way communication device” located in a person’s hand
  or lap while operating a motor vehicle that is moving on a
  Michigan highway or street.

  A “wireless 2-way communication device” does not include
  navigation or global positioning systems affixed to the motor
  vehicle, but does include a cell phone.

  Because the text ban is incorporated into the motor vehicle
  code, it is automatically adopted by most municipalities,

  by Patricia Scott &

  Nichole Jongsma Derks

  LAnSInG | FArMInGTon HILLS | GrAnd rAPIdS | deTroIT | MArqueTTe | HoLLAnd

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  Page 4

  Administrative &
  Municipal Attorneys

  Foster, Swift, Collins & Smith, P.C. Municipal Law news is intended for our clients and friends. This newsletter highlights specific areas of law. This communication

  is not legal advice. The reader should consult an attorney to determine how the information applies to any specific situation.

  IrS Circular 230 notice: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. tax advice contained in this communication is not

  intended to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code, or (ii) promoting, marketing, or recommending

  to another party any transaction or matter addressed in this communication.

  Copyright © 2010 Foster, Swift, Collins & Smith, P.C.

  Texting | continued from page 3

  Michael r. Blum
  248.785.4722

  mblum@fosterswift.com

  Lindsey e. Bosch
  616.726.2209

  lbosch@fosterswift.com

  nichole J. derks
  517.371.8245

  nderks@fosterswift.com

  James B. doezema
  616.726.2205

  jdoezema@fosterswift.com

  Brian G. Goodenough
  517.371.8147

  bgoodenough@fosterswift.com

  richard L. Hillman
  517.371.8129

  rhillman@fosterswift.com

  Michael d. Homier
  616.726.2230

  mhomier@fosterswift.com

  John M. Kamins
  248.785.4727

  jkamins@fosterswift.com

  Steven H. Lasher
  517.371.8118

  slasher@fosterswift.com

  Janene McIntyre
  517.371.8123

  jmcintyre@fosterswift.com

  Thomas r. Meagher
  517.371.8161

  tmeagher@fosterswift.com

  Brian J. renaud
  248.539.9913

  brenaud@fosterswift,com

  ronald d. richards Jr.*
  517.371.8154

  rrichards@fosterswift.com

  Anne M. Seurynck
  616.726.2240

  aseurynck@fosterswift.com

  Francis G. Seyferth
  248.538.6328

  fseyferth@fosterswift.com

  Cole Young
  248.539.9916

  cyoung@fosterswift.com

  *Practice Group Leader

  so although it is possible there is likely no
  need to create a new ordinance. Importantly,
  the law states “[t]his section supersedes
  all local ordinances regulating the use of a
  communications device while operating a
  motor vehicle in motion on a highway or
  street, except that a unit of local government
  may adopt an ordinance or enforce an existing
  ordinance substantially corresponding to this
  section.”2

  Additionally, there are several exceptions to
  the ban. The following activities are allowed
  according to the new law:

  1. reporting a traffic accident, medical

  emergency, or serious road hazard;

  2. reporting a situation in which the

  individual believes his or her personal
  safety is at risk;

  3. reporting or averting the commission of a

  crime; and

  4. carrying out official duties as a police

  officer, law enforcement official, member
  of the fire department, or operator of an
  emergency vehicle.

  A violation is a civil infraction. The penalty for
  a first offense carries a $100 fine, and a $200
  fine is assessed for any subsequent offenses.

  Currently, it is unknown how the ban will
  be enforced. As a practical matter, given
  the economic climate, it may be difficult to
  collect the steep fines. Police officers may
  have difficulty proving that a driver was in
  fact reading or sending a text message given
  how many functions and features a cell phone
  offers. This raises legal questions about the
  police’s ability to search one’s cell phone.

  If you have questions about the texting ban,
  feel free to contact Patricia Scott or Nichole
  Derks in the Lansing office (517-371-8100).

  1MCL 257.620b.

  2Id.

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