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) STATE OF MICHIGAN
JENNIFER M. GRANHOLM, ATTORNEY GENERAL
APPROPRIATIONS:
COUNTIES:
PUBLIC MONEY:
SENIOR CITIZENS:
Appropriation of county funds to private organization for senior citizen services
A county board of commissioners may appropriate public funds to a private, nonprofit corporation to renovate its building for use in providing services and activities for older persons in the county.
Funds derived from a senior citizen millage election passed by the voters for the sole purpose of providing services to senior citizens may be expended for purposes of renovating a privately owned building for use in providing services and activities to older persons in the county.
A county board of commissioners, in appropriating public funds to a private, nonprofit corporation under the Activities or Services for Older Persons Act, may approve and set the terms of the appropriation.
Opinion No. 7016
May 13, 1999
Mr. Elwood L. Brown
St. Clair County Prosecuting Attorney
201 McMorran Blvd.
Port Huron, MI 48060
You have asked three questions regarding the authority of a county board of commissioners to appropriate public funds to a private, nonprofit corporation that provides services and programs to older persons.
Your first question asks whether a county board of commissioners may appropriate public funds to a private, non profit corporation to renovate its building for use in providing services and activities for older persons in the county.
Information supplied with your request indicates that the county electorate approved a millage proposition submitted for the sole purpose of providing services to senior citizens. Thereafter, the county board of commissioners was approached by a council on aging, a private, nonprofit corporation, seeking financial assistance for purposes of restoring its building. This improvement project would facilitate the delivery of services to senior citizens by eliminating the fragmentation of programs and services in the county by combining council on aging operations under one roof. The county board of commissioners, by majority vote, authorized the appropriation to assist with the building restoration costs on the condition that the recipient council repay the appropriated amount to the county in the event its building is sold or the council ceases to exist.
The Legislature has authorized counties to fund services for older persons. The activities or services for older persons act, 1976 PA 39, MCL 400.571 et seq; MSA 5.3439(1) et seq (Act), is:
AN ACT to authorize local units of government to appropriate funds for purposes of providing activities or services to older persons, to authorize local units of government to levy taxes for services to older persons, and to repeal certain acts and parts of acts.
Section 1 of the Act declares that it is a valid public purpose to provide services to older persons, which are defined in section 2(d) as persons 60 years of age or older. To effectuate this valid public purpose, section 3 of the Act provides that:
A local unit of government may appropriate funds to public or private nonprofit corporations or organizations for the purposes of planning, coordinating, evaluating, and providing services to older persons.
(Emphasis added.)
The funds which a local unit may expend under section 3 of the Act are defined in section 2(e):
"Funds" means general tax revenues, federal revenue sharing funds, state revenue sharing funds, and other funds under the control of the governing body.
OAG, 1981-1982, No 5842, p 19 (January 19, 1981), which examined the authority of a township to appropriate public funds under the Act to a private, nonprofit council on aging, concluded at p 22 that:
[A] county or township may make an appropriation from general and revenue sharing funds to private, non-profit corporations or organizations, such as the Oscoda County Council on Aging, which undertake the provision of senior citizen activities or services . . . where a contract is entered providing for the terms of the appropriation as authorized by 1976 PA 39, supra.
The question, therefore, becomes whether restoring a privately owned building to be used to provide activities and to coordinate services to older persons is an authorized purpose for which a county may make an appropriation of public funds under the Act.
OAG, 1977-1978, No 5402, p 714 (December 13, 1978), considered whether a county's appropriation of public funds to preserve a privately owned historical landmark offended Const 1963, art 9, � 18.1 Quoting extensively from Alan v Wayne County, 388 Mich 210; 200 NW2d 628 (1974), OAG, No 5402 concluded, at 716, that where statutory authority exists for the appropriation of county funds to privately owned entities "it becomes a matter of judgment and the exercise of sound discretion that lies with the . . . County Board of Commissioners as to whether the restoration and preservation . . . will result in a degree of public benefit so as to constitute adequate consideration for the expenditure of county funds."
Section 3 of the Act authorizes local units of government to make appropriations to private, nonprofit corporations "for purposes of planning, coordinating, evaluating, and providing services to older persons." Section 2(c) defines the type of "[a]ctivities or services" expected of entities eligible for appropriation under the Act as "identifiable actions directed toward the improvement of the social, legal, health, housing, educational, emotional nutritional, recreational, or mobility status of older persons." Thus, a private, nonprofit corporation that provides section 2(c) services to older citizens is eligible for an appropriation under the Act. OAG, No 5842, supra. An appropriation to a private, nonprofit corporation which provides activities and services to older citizens, such as the county council on aging described in your questions, does not offend Const 1963, art 9, � 18, where the governing body, in the exercise of its sound discretion, determines the legislatively recognized valid public purpose of providing services to older persons. Alan, supra, and OAG, Nos 5402 and 5842, supra.
It is my opinion, therefore, in answer to your first question, that a county board of commissioners may appropriate public funds to a private, nonprofit corporation to renovate its building for use in providing services and activities for older persons in the county.
Your second question asks whether funds derived from a senior citizen millage election passed by the voters for the sole purpose of providing services to senior citizens may be expended for purposes of renovating a privately owned building for use in providing services and activities to older persons in the county.
Section 6 of the Act authorizes governing bodies of local units of government to submit a millage proposition to the electorate to levy up to 1 mill for services to older citizens.
The answer to your first question concludes that restoration of a privately owned building to be used for activities and services for older persons is a legislatively recognized valid public purpose for which public funds may be expended under the activities or services for older persons act. The expenditure of legislatively authorized senior citizen millage funds for such a valid public purpose is authorized under the Act. Indeed, section 3 of the Act authorizes the expenditure of any "funds under the control of the governing body," in furtherance of county programs for older persons. Restoration of a building can constitute an identifiable action directed toward the provision of services to older persons.
It is my opinion, therefore, in answer to your second question, that funds derived from a senior citizen millage election passed by the voters for the sole purpose of providing services to senior citizens may be expended for purposes of renovating a privately owned building for use in providing services and activities to older persons in the county.
Your third questions asks whether a county board of commissioners in appropriating public funds to a private, nonprofit corporation under the activities or services for older persons act may approve and set the terms of the appropriation.
As noted above, the referenced county board of commissioners authorized the appropriation of public funds to a local council on aging for purposes of building restoration on the express condition that the recipient council repay the appropriated funds in the event that the building is sold or that the council ceases to exist.
Once an appropriation is authorized under the Act, the terms of the appropriation must be published. Section 4. The terms of the appropriation shall include, inter alia, a description of the "functions and responsibilities to be performed by the recipient of the appropriation" and the length of the grant. Section 5. The Act contains no limitation on the authority of governing bodies to impose on the grant recipient additional terms and conditions that are deemed appropriate, in the exercise of their sound judgment and discretion. On the contrary, such additional terms and conditions may include provision for repayment of the appropriated public funds if the renovated building is subsequently sold or the local council ceases to exist. OAG, Nos. 5402 and 5842, supra. Contractual provisions of this nature do not convert the statutorily authorized appropriation into a loan; instead such provisions are designed to safeguard the appropriation in the event of a subsequent occurrence that frustrates the legislatively recognized valid public purpose for which the appropriation is made by the governing body of the local unit. Id.
It is my opinion, therefore, in answer to your third question, that a county board of commissioners, in appropriating public funds to a private, nonprofit corporation under the activities or services for older persons act, may approve and set the terms of the appropriation.
JENNIFER M. GRANHOLM
Attorney General
1 Const 1963, art 9, � 18, prohibits the granting of the state's credit, except as authorized in the constitution.