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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 - www.ag.state.mi.us)



Opinion No. 6037

February 2, 1982


District library--control over expenditures of money


Transfer of funds from county system to district library plan

The board of trustees of a district library has exclusive control over the expenditure of moneys collected to the credit of the library fund.

There is no authority for funds credited to the account of a member of a county retirement system to be transferred from such system and paid into a district library retirement plan.

Honorable Michael J. Griffin

State Representative

The Capitol

Lansing, Michigan

You have requested my opinion on two questions concerning the operation of the Jackson district library.

You first ask:

'In light of the enclosed contractual agreement entered into by the City of Jackson, the County of Jackson and the Jackson District Library, especially paragraphs 6 and 12, is the County of Jackson obligated to transfer funds paid into the Jackson County retirement plan on behalf of those employees now employed by the Jackson District Library to the retirement system chosen by the Jackson District Library notwithstanding the silence of 1851 PA 156 sec. 12a?'

The Jackson district library was created by the City and County of Jackson pursuant to 1955 PA 164; MCLA 397.271 et seq; MSA 15.1780(1) et seq, to provide a single library system for their citizens. The Jackson district library came into being after the voters of the city and county approved, at a special August 2, 1977 election, the following ballot proposition:



Shall the limitation on the total amount of taxes which may be imposed upon all property in the County of Jackson be increased by 1.00 mill on each dollar ($1.00 per $1,000.00) of the assessed valuation, as equalized, for a period of twenty (20) years, 1977 to 1996, inclusive, said millage increase to be used exclusively for the purpose of establishing and operating a single public library system in Jackson County?

The city and county thereupon entered an agreement, effective January 1, 1978, to establish the district library.

Concerning your first question, you note that your request is on behalf of the director of the Jackson district library, who asks for a clarification of an August 19, 1980 letter opinion provided Norvel A. Hansen, Deputy Director of the State Bureau of Retirement Systems. Concerning the authority of the Jackson county retirement system to transfer pension contributions made for the benefit of former county library employees who are new employed by a separate entity, I stated:

'1851 PA 156, Sec. 12a, supra, does not contain any provisions authorizing such transfer. While the Legislature has expressly provided for the refund of employer contributions upon the withdrawal of a participating municipality from the Municipal Employees' Retirement System; 1945 PA 135, supra, Sec. 63; MCLA 38.663; MSA 5.4063, the Legislature has not similarly provided in 1851 PA 156, Sec. 12a, supra. Further, in the factual context being discussed, it appears that employer contributions made to the county retirement system were made with county funds during a period of time when involved employees were county employees. The county as the employer is not withdrawing from the system. Thus it would appear that if withdrawal of any portion of the employer contributions were authorized by the Legislature, refunded contributions would be the property of the county and would not belong to the new employing entity.

'It is, therefore, my opinion that when a county department or instrumentality ceases to exist and its functions and employees are transferred to a new employing entity, contributions paid by the county to the county retirement system with respect to such employees may not be transferred to any other retirement system. However, the right of public employees to receive retirement payments as such payments come due is firmly established. Kosa v State Treasurer, 408 Mich 356, 371; ---- NW2d ---- (1980).'

Since paragraph 6 of the agreement between the city and county simply involves the transfer of physical assets to the district library, i.e., buildings, books, equipment, intangible assets, etc., I find no impact on the question of county employee retirement benefit contributions. Chapter 12 of the said agreement of January 1, 1978, in pertinent part addresses retirement matters:

'Individuals employed at the City or the County library as of the effective date hereof who become employees of the Jackson District Library, shall, insofar as it is legally possible and economically feasible, be entitled to the same rights and benefits as they now enjoy or rights and benefits substantially comparable thereto. Present City and County library employees who are employed by the Jackson District Library, after the effective date hereof, shall not be deprived of their accrued pension benefits, benefits derived from length of service, and unused sick leave. Such employees shall remain members of the City and County pension plan, respectively, if such membership is necessary for them to retain accrued but unvested pension benefits. New employees of the Jackson District Library may participate in the County's pension plan, if legally possible.'

1851 PA 156, Sec. 12a; MCLA 46.12a; MSA 5.333(a), does not empower a county to transfer pension contributions in the county system to any other retirement system. It is my opinion, therefore, that a county retirement system may not transfer funds paid into it in behalf of certain members of the system into a district library retirement plan.

Your second question is:

'Pursuant to paragraph 2 of the enclosed contractual agreement, is the Jackson District Library bound by the budgetary proportions embodied in the contracts?'

Paragraph 2 of the January 1, 1978 agreement between the City and County of Jackson provides:

'The proceeds of the property tax levy (authorized by the voters at an election held on August 2, 1977, at a maximum of one mill for a period of 20 years, to finance a single library system in Jackson County) shall be made available to the Board of Trustees of the Jackson District Library to finance the activities of the Jackson District Library. In any calendar year in or for which more than two-thirds (2/3) of a mill is so levied, no more than an amount equal to two-thirds (2/3) of the tax revenues which would be raised by the levy of a full mill shall be used by the Board of Trustees of the Jackson District Library for operating purposes. In any calendar year in or for which two-thirds (2/3) or less of a mill is so levied, there shall be no limitation on the amount of the revenues therefrom which may be used by the Board of Trustees of the Jackson District Library for operating purposes.' [Emphasis added.]

The proposition approving the 1 mill for library purposes did not establish any limitation on the use of that mill by the district library's board of trustees. 1955 PA 164, supra, Sec. 4, provides in pertinent part:

'The board of trustees of each district library established shall have the following powers:

'(f) To have exclusive control of the expenditure of all money collected to the credit of the library fund.

'(g) To make by-laws and regulations not inconsistent with this act as may be expedient for the board's own government and that of the library.'

It is a cardinal rule of statutory construction that the Legislature must be held to intend the meaning which it has plainly expressed and in such cases there is no room for contstruction, or attempted interpretation to vary such meaning. Dussia v Monroe County Employees Retirement System, 386 Mich 244; 191 NW2d 307 (1971). As stated earlier, the express commands of the Legislature may not be altered by some later agreemet, no matter how willing (or unwilling) the parties.

It is my opinion, therefore, that the Jackson district library board of trustees has exclusive control over the expenditure of money collected to the credit of the library fund pursuant to 1955 PA 164, Sec. 4, supra.

Frank J. Kelley

Attorney General

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