Michigan Supreme Court
Lansing, Michigan 48909
____________________________________________________________________________________________
C h i e f J u s ti c e J u s t ic e s
Maura D. Corrigan Michael F. Cavanagh
Opinion
Elizabeth A. Weaver
Marilyn Kelly
Clifford W. Taylor
Robert P. Young, Jr.
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
1
See also In re Brewster Street Housing Site, 291 Mich
313, 323; 289 NW 493 (1939).
2
Id.
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
3
Section 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
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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
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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
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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.
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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
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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.
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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.
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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
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