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The share of cities in county government was a bitterly-contested question in framing the act. There are some small cities which have a slightly larger representation in the county board of supervisors than they are entitled to on the basis of population, but the great majority have nothing like their fair share of members. In Kent County, Grand Rapids has only twenty-four members out of forty-eight, though it has three-fourths of the population and pays five-sixths of the taxes, while in other counties the situation is worse. The act, however, gives all cities at least one representative; leaves the present representation as it is, until changed by law; makes no provision for a change; and provides that no city may increase its own representation. (Sec. 27.) This was done because of an ultimatum by the country members that no bill would be passed if it attempted to change existing conditions, and because they had the votes to make good.
Each city must provide by charter for an annual appropriation of money for municipal purposes (Sec. 3, f), for a system
of accounts, which shall corespond to any uniFinanco
form system required by law (Sec. 3, n); and that the subjects of taxation shall be the same for municipal as for state purposes. (Sec. 3, o.)
The constitution requires the legislature to limit the power of cities to tax and borrow. The act as passed limits the rate of taxation to two per cent of the assessed valuation, and provides that no existing rate fixed by law shall be increased except by vote of a majority of the electors voting, not on the question, but at the election when it is submitted. (Secs. 4, a, 5, a.)
The settlement of the power to borrow gave more trouble than any other one matter.
The interests of the advocates of municipal ownership of public utilities and of the private owners of such utilities, were here opposed. This conflict arose as follows: Under the Constitution, it is possible to issue bonds beyond the bonding limit, for the purchase of a public utility, but such bonds may not be made a charge upon the taxing power. It is obviously impossible to sell bonds secured only by mortgage on a public utility property with a 20-year security franchise, up to the full amount of such purchase price. Some real money must be raised either by tax or loan, to take the place of captial invested ahead of the loan, as a guaranty of good faith, and to furnish some margin of security. An attempt was made to block public ownership by providing that no bonds which should be a charge upon the city should be issued to aid in the purchase of a public utility. There is but one place in the state where public ownership is a possibility, or where the question is even discussed, and the discussion finally resolved itself into one between the City of Detroit, on the one hand, and the Detroit United Railroad on the other. The question involved was, not immediate public ownership, but the framing of the bill so as to make it a possibility, in case of the failure of the parties to come to agreement as to the terms of renewal franchises in Detroit.
Again, there are cities in the state with very high bond issues at the present time, and with high tax rates as well, whose assessed valuation is too low. These cities were anxious to have high tax and borrowing limits, while the great majority of the cities and all the rest of the state, were determined to keep both down, the argument being that if the opponents of the low rate wanted to raise more money by tax or loan, they could do so by raising their assessed valuation to a proper figure.
The section as agreed upon falls into two divisions, the first treating of bonded indebtedness generally, the second of the power to borrow money in connection with municipal acquisition of public utilities used in transportation.
1. Each city may provide for borrowing money up to eight per cent. of its assessed valuation; but when there is a limit now fixed by law, such limit shall continue till it is changed by two thirds vote of the electors voting on the question; no single increase may exceed two per cent., and increases may not take place oftener than once in two years.
Special assessment bonds and the resources of the sinking fund are deducted in the case of cities now having a legal limit, in computing the debt. (Sec. 4, b.) These provisions are the direct outcome of the reluctance of most cities in the state to have the possible bonded debt suddenly multiplied by from two to seven or eight.
2. The section next re-enacts the constitutional permission to issue mortgage bonds for the purchase of a public utility. This provision is next modified, so as to prohibit borrowing money or issuing bonds for the purchase, construction, or maintenance of a public utility for transportation purposes to an amount which, added to the existing indebtedness, shall increase the net general debt beyond four per cent of the assessed valuation. (Sec. 4, b.) This very effectively excludes about every city in the state but Detroit, from ownership of street railways, and if pending proposals for new bond issues for other purposes are carried, Detroit will find itself without power to raise sufficient funds.
3. The legislative body of any city may borrow, in case of public calamity, not more than one-fourth of one per cent. above the limit of indebtedness for not more than three years.
4. No city may issue bonds of any kind except emergency and public utility mortgage bonds, to more than 10 per cent. of its valuation. The limit of the net debt is therefore 8 per cent., and of its gross debt, 10 per cent.
No city is permitted to “engage in any business enterprise requiring an investment of money in excess of ten cents per capita or authorize any issue of bonds except special assessments bonds, refunding bonds and emergency bonds as defined by this act and bonds that it is annually authorized to issue, unless approved by three-fifths of the electors voting thereon at any general or special election; (f) To make any contract with, or give any official position to one who is in default to the city” (Sec. 5, e); nor to issue any except serial bonds falling due annually, without providing a sinking fund for their payment at maturity (Sec. 5, g); nor to repudiate any debt by change in its charter or by consolidation with another municipality. (Sec. 5, h.)
Cities may also provide by charter for laying and collecting rents, tolls, and excises (Sec. 5, c); and for assessing and reassessing the cost of public improvements to a special district. (Sec. 5, h.)
As previously stated, the state constitution provides for three grades of permissions for the use of the highways by persons engaged in the operation of public utilities—a consent, which is granted by the local authorities, and carries no right to carry on a local business; a revocable franchise granted by the local authorities; and a franchise ratified by three-fifths vote of the electors
voting on the question. These constitutional Franchises
provisions are new, with respect to the granting power authorized to bind the community, but the change introduced in the source of the franchise is, not from the state legislature to the local authorities, but from the latter to the electors of the locality. Franchises in the past have always been granted by the local authorities, under the statutes of the state, which have granted the right to those engaged in the several public services to use the highways, with the consent and subject to the regulations, of the authorities of the respective townships, villages and cities. The present constitution, therefore, in this respect, curtails the powers rather of the local authorities than of the legislature. It is very probable that an act of the legislature granting a local franchise would have been declared unconstitutional as a violation of the principle of local home rule.
There is no grant of power in the act to enter into franchise contracts. Such grant is to be found in the several statutes under which corporations operating the so-called public utilities are organized, and is modified in each case by the existing constitutional provisions already outlined. The municipal act empowers each city to provide by charter for the reasonable use, regulation, and control of the surface of its streets and the space above and below them (Sec. 4, g); for the use by others than the owner and upon reasonable compensation of property in the highways used in the operation of a public utility (Sec. 4, f); and forbids the submission of any franchise to popular vote unless the cost of the election is paid in advance by the grantee. (Sec. 5, i.)
The municipal ownership provisions are short, and were considerably mangled in their passage through the legislature. Each city may may provide for the purchase of the franchises if any, and of the property used in the operation of cemeteries, plankroads, hospitals or alms-houses, or in the electric light, gas, heat, water, and power business; and in cities of more than twenty-five thousand inhabitants, of the property of street-railway or trainrailway companies. (Sec. 4, i.)
Cities may regulate trade, occupations, and amusements within their boundaries, and the territory within which liquor may be
sold at retail may be limited. (Sec. 4, d.) But Miscellaneous
in local option counties, such sale may not be Provisions
permitted by city action. General authority is given for the purchase of property for any municipal purpose (Sec. 4, k); for the adoption of a plan in conformity with which streets and alleys shall be laid out upon lands platted within a territory extending three miles from the city limits (Sec. 4, n); and for the use, control, and regulation of streams, waters and water courses within the city boundaries, but such regulations must not conflict with general statutory provisions relative to damming and bridging navigable streams, nor interfere with riparian rights without the corporate limits. (Sec. 4, o.)
Cities shall not have power, unless the proposal is ratified by three-fifths of the electors voting thereon, to sell any property of a value in excess of ten cents per capita, or any park, cemetery, or real estate used in the operation of a public utility, or any property bordering on a water front, or vacate any street or public place leading to a water front. (Sec. 5, e.) Nor shall any contract be made with, nor official position be given to, one who is in default to the city. (Sec. 5, f.)
, Such, in brief, are the provisions of the recent municipal act. To summarize briefly it provides as follows:
1. Each city is a body politic. (Sec. 1.) 2. Organized cities continue with present powers till changed.
I. What the city charter must provide. (Sec. 3.)
poses. (Sec. 35.) 4. Incorporation of new cities; annexation or detachment of territory: I. Procedure and determination of question. (Secs.
6-14.) II. Adoption of charter by charter convention and electors. (Secs. 15-17, 25.)