Chapter 15. MUNICIPALLY OWNED UTILITIES  

Section 15.1. Subject to the provisions of the Constitution and statute, the city shall have the power to acquire, own, establish, construct, operate, improve, enlarge, extend, repair and maintain, either within or without its corporate limits, a public utility for supplying water to the municipality and its inhabitants for domestic, commercial and municipal purposes, and may sell and deliver water without its corporate limits in an amount not to exceed the limitations set by the Constitution and statute. Subject to statutory provisions, the city shall also have the power to acquire, own, establish, construct, operate, improve, enlarge, extend, repair, and maintain, either within or without its corporate limits including, but not by way of limitation, public utilities for supplying light, heat, power, gas, sewage treatment and garbage disposal facilities, and facilities for the storage and parking of vehicles within its corporate limits.

Section 15.2. All municipally owned and operated utilities shall be administered as a regular department of the city government under the management and supervision of the City Manager.

Section 15.3. The Commission shall have the power to fix from time to time such just and reasonable rates and other charges as may be deemed advisable for supplying the inhabitants of the city and others with such public utility services as the city may provide. There shall be no discrimination in such rates within any classification of users thereof, nor shall free service be permitted. Higher rates may be charged for service outside the corporate limits of the city.

Section 15.4. The Commission shall provide by ordinance for the collection of all public utility rates and charges of the city. Such ordinance shall provide at least:

(a) That the City shall have as security for the collection of such utility rates and charges, those liens as authorized by statute upon the real property supplied by such utility, which lien shall become effective immediately upon the supplying of such utility service and shall be enforced in the manner provided in such ordinance.

(b) The terms and conditions under which utility services may be discontinued in cases of delinquency in paying such rates or charges.

(c) That suit may be instituted by the city before a competent tribunal for the collection of such rates or charges.

With respect to the collection of rates charged for water, the city shall have all the powers granted to cities by Act 178 of the Public Acts of 1939, as amended.

Section 15.5. Unless approved by the affirmative vote of three-fifths of the electors voting thereon in a regular or special election, the city shall not sell, exchange, lease or in any way dispose of any property, easements, equipment, privilege or asset belonging to and appertaining to any municipally owned public utility which is needed to continue operating such utility. All contracts, negotiations, licenses, grants, leases or other forms of transfer in violation of this section shall be void and of no effect as against the city. The restrictions of this section shall not apply to the sale or exchange of any articles of machinery or equipment of any city owned public utility which are worn out or useless or which have been, or could with advantage to the service, be replaced by new and improved machinery or equipment, to the leasing of property not necessary for the operation of the utility, or to the exchange of property or easements for other needed property or easements. It is provided, however, that the provisions of this section shall not extend to vacating or abandonment of streets, as provided by statute.

Section 15.6. The rates and charges for any municipal public utility for the furnishing of water, light, heat, power or gas shall be so fixed as to at least meet all the costs for such utility, including depreciation.

Transactions pertaining to the ownership and operation by the city of each public utility shall be recorded as a separate group of accounts under an appropriate fund caption, which accounts shall be classified in accordance with generally accepted utility accounting practice. Charges for all service furnished to, or rendered by, other city departments or agencies shall be recorded. An annual report shall be prepared to show fairly the financial position of each utility and the results of its operation, which report shall be available for inspection at the office of the Clerk.