The following opinion is presented on-line for informational use only and does not replace the official version. (Mich Dept of Attorney General Web Site -



Opinion No. 5255

January 18, 1978


Payment of fringe benefits to members of city council.


Payment of fringe benefits to members of city council of a home rule city.


Payment of fringe benefits to members of city council of a home rule city.




Even though salaries of elected officials of a home rule city are determined by the Local Officers Compensation Commission, the members of the city council may establish and pay fringe benefits to city officials, including members of the council.

Representative Gilbert J. DiNello

State Representative

73rd District

The Capitol

Lansing, Michigan

You have requested my opinion on the question of whether a home rule city may pay members of the city council fringe benefits (such as Blue Cross/Blue Shield, pension plan, etc.) over and above their annual salary set by the local officers compensation commission established pursuant to 1909 PA 279, Sec. 5c as added by 1972 PA 8; MCLA 117.5c; MSA 5.2075c.

OAG, 1973-1974, No 4847, p 194 (October 30, 1974), after review of the relevant authorities, stated at page 195:

'It is readily apparent that, pursuant to Const 1963, art 7, Sec. 22 and enabling legislation, home rule cities have broad discretion to manage their own affairs. Thus, home rule cities fix the compensation of their employees. Kane v Flint 342 Mich 74; 69 NW2d 156 (1955). In doing so, a city is not restricted to fixing only cash salaries, but may also provide supplementary benefits, such as, insurance, pensions and uniforms, to its employees. Kane, supra; cf, OAG, 1971-1972, No 4732, p 66 (December 29, 1971) . . ..'

Home rule cities are required by statute to provide in their charters for the 'compensation' of their officers. 1909 PA 279, Sec. 3(d), MCLA 117.3(d); MSA 5.2073(d). 'Compensation' is a generic term incorporating within its meaning, not only salaries, but also fringe benefits including pension benefits, OAG, 1971-1972, No 4732, p 66 (December 29, 1971), sick leave benefits, OAG, 1973-1974, No 4847, supra, Blue Cross/Blue Shield premium payments, I OAG, 1959-1960, No 3413, p 206 (October 12, 1959), group health and life insurance premium payments, OAG, 1961-1962, No 3541, p 194 (October 21, 1961), and uniform allowances, Kane v City of Flint, 342 Mich 74; 69 NW2d 156 (1955). See also, Bowler v Nagel, 228 Mich 434; 200 NW 258 (1924) (retirement benefits), II OAG, 1959-1960, No 3583, p 160 (December 27, 1960) (group insurance), and Hite v Evart Products Co, 34 Mich App 247; 191 NW2d 136 (1971) (pension, group insurance, and vacation pay are 'wages' within the meaning of the workman's compensation act).

Mainfestly, therefore, a city does have the authority to pay 'fringe benefits' to members of the city council. Your question, however, addresses the situation in the context of authority of a local officers compensation commission.

1909 PA 279, Sec. 5c, supra, states in pertinent part:

'In lieu of a charter provision existing on the effective date of this act establishing the salaries or the procedure for determining salaries of elected officials, the governing body by ordinance may establish the procedure described in this section, in which case the restriction contained in a charter provision with respect to changing salaries during term shall be inapplicable. The ordinance shall provide:

'(a) A local officers compensation commission is created which shall determine the salaries of all local elected officials. . . .

'(b) The commission shall determine the salaries of such local elected officials which determination shall be the salaries unless the legislative body by resolution adopted by 2/3 of the members elected to and serving on the legislative body reject them. The determinations of the commission shall be effective 30 days following their filing with the city clerk unless rejected by the legislative body. In case of rejection, the existing salary shall prevail. Any expense allowance or reimbursement paid to elected officials in addition to salary shall be for expenses incurred in the course of city business and accounted for to the city.' [Emphasis added.]

While the Legislature has broadly designated a 'compensation commission,' it has limited the commission's powers to the determination of 'salaries,' one component of the larger term 'compensation.' Holmes v State Officers Compensation Commission, 57 Mich App 255; 226 NW2d 90 (1974). This new amendment carefully avoids vesting the full power over determining total compensation to the commission. The only change in statutory language from 'salary' to 'compensation' is in subsection (d) in reference to amending the charter to implement the broader change:

'(d) The governing body shall implement this provision by resolution. After 1 year following the date the ordinance goes into effect the procedure for establishing the compensation of elected officials may be changed by charter amendment or revision.' [Emphasis added.]

Assuming, therefore, that a city does not amend its charter to broaden the compensation commission's powers, and in absence of any charter limitation, the council may determine its own fringe benefits.

Frank J. Kelley

Attorney General