STATE OF MICHIGAN

FRANK J. KELLEY, ATTORNEY GENERAL

Opinion No. 6782

January 19, 1994

TOWNSHIPS:

Custody of funds raised by a voted township millage for fire protection used to pay the expenses of a fire board created by an agreement between the township and the village

VILLAGES:

Custody of funds raised by a voted township millage for fire protection used to pay the expenses of a fire board created by an agreement between the township and the village

The township treasurer is the custodian of the fire millage tax revenues approved by a township's voters to support an agreement with a village for fire protection where the agreement provides that the township shall be the employer of the fire department personnel and the agreement is silent on the question of custody of the fire millage tax revenues.

The township treasurer is to make payment of these funds in accordance with the requirements of the annual budget for the fire board and fire department approved by the township board and the village council in accordance with the procedures ordered by the township board.

Honorable Dave Honigman

State Senator

The Capitol

Lansing, MI 48909-7536

You have asked who is the proper public official or entity to have custody of funds raised by a voted township millage for fire protection. Your letter states that the township and a village have entered into an agreement (the Agreement) to establish a fire protection board (the Fire Board). The stated purpose of the Agreement is to provide fire protection through a fire department administered by the Fire Board, subject to the ultimate authority of the township board and the village council. Section 4 of the Agreement provides that the funding "of the Fire Board and Fire Department activities shall be by way of the voted fire millage in the Township."

Municipalities are given authority to enter into intergovernmental contracts for the furnishing of services that they are each authorized to provide by a number of statutes, including MCL 124.2; MSA 5.4082, which provides:

The term "municipal corporation" includes both townships and villages, MCL 124.1(a); MSA 5.4081(a). See, also, the Urban Cooperation Act of 1967, MCL 124.501 et seq; MSA 5.4088(1) et seq, and 1951 PA 33, MCL 41.801 et seq; MSA 5.2640(1) et seq.

Townships and villages are authorized to provide fire protection services by sections 1 and 10, respectively, of 1951 PA 33. Villages are also authorized to provide fire protection services by MCL 70.1 et seq; MSA 5.1397 et seq (general law villages), and MCL 78.23(f); MSA 5.1533(f) (charter villages). OAG, 1985-1986, No 6350, pp 244, 246 (March 26, 1986), recognizes that townships and villages may organize their firefighting activities in concert by establishing a joint fire administrative board. A village is permitted, but not required, to enter into a contract for joint fire protection with the township in which the village is geographically located. OAG, 1983-1984, No 6197, pp 219, 221 (January 12, 1984).

Under the Agreement, the Fire Board consists of representatives appointed by the township board and the village council. The Agreement states that all personnel of the fire department are township employees. However, the Agreement provides that the township board's decisions regarding hiring and firing are to take into account the recommendations of the Fire Board and the village council.

Section 44(1) of the General Property Tax Act, MCL 211.44(1); MSA 7.87(1), provides that upon receipt of the tax roll, the township treasurer shall collect the taxes levied by the township.

The statutory duty of the township treasurer is to "receive and take charge of money belonging to the township, or that is by law required to be paid into the township treasury, and [to] pay over and account for the money, according to the order of the township board, or the authorized officers of the township." MCL 41.76; MSA 5.68.

The township treasurer is required to file a bond, "conditioned upon the faithful discharge of the duties of the office and that the treasurer will account for and pay over according to law, all money that comes into the treasurer's hands as treasurer." MCL 41.77; MSA 5.69.

The township treasurer may deposit the township funds "in a bank or any depository authorized by statute for the deposit of township funds [as] the township board may direct." Id. In discharging these duties, the township treasurer is to "keep an accurate account of the receipts and expenditures of township money in a book which meets the uniform accounting requirements of the state treasurer .... [and] [t]he book shall reflect the amount of money belonging to each of the several funds of the township." MCL 41.78; MSA 5.70.

Section 7 of the Agreement requires that the Fire Board submit its proposed budget to the township board and village council and that the budget "shall be reviewed by and may be amended and altered as deemed appropriate by the Village Council and Township Board in accordance with state statute." However, the Agreement makes no specific provision for custody of the public funds which have been appropriated annually by the township, pursuant to Agreement with the village, for the activities of the Fire Board and fire department.

In light of the statutory duty of the township treasurer to account for and pay over according to law all township funds for which the treasurer has filed a bond, the provisions of the Agreement already discussed above and the the dual role of the township as the source of the funding for the Fire Board and fire department and the employer of the fire department personnel, it must be concluded that the township treasurer is responsible for the custody of the funds generated by the voted township fire millage.

While the funds levied by the township for fire protection are to be held by the township treasurer, the decision as to the plan of expenditure of these funds rests with the township board and the village council as expressed in their approval of the annual budget for the Fire Board and fire department under the Agreement. The township board may establish procedures for authorizing and directing the township treasurer to issue checks drawn on the fire millage tax revenues for the payment of the expenses of the Fire Board and fire department which have been provided for in the jointly-approved annual budget.

The conclusion that the township treasurer retains custody of the voted township fire millage, subject to the direction of the township board which is acting in cooperation with the village board under this Agreement, is consistent with statutory provisions regarding the township treasurer's duties and the statutes authorizing cooperative fire protection arrangements by townships and villages.

It is my opinion, therefore, that the township treasurer is the custodian of the fire millage tax revenues approved by a township's voters to support an agreement with a village for fire protection where the agreement provides that the township shall be the employer of the fire department personnel and the agreement is silent on the question of custody of the fire millage tax revenues. It is my further opinion that the township treasurer is to make payment of these funds in accordance with the requirements of the annual budget for the Fire Board and fire department approved by the township board and the village council in accordance with the procedures ordered by the township board.

Frank J. Kelley

Attorney General