FENTON CHARTER TOWNSHIP V BKG DEVELOPMENT LLC
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STATE OF MICHIGAN
COURT OF APPEALS
FENTON CHARTER TOWNSHIP,
UNPUBLISHED
June 22, 2006
Petitioner-Appellee/Cross-Appellee,
v
No. 259265
Genessee Circuit Court
LC No. 04-78490-AA
B/K/G DEVELOPMENT, L.L.C.,
Respondent-Cross-Appellant,
and
THE CITY OF FENTON,
Respondent,
and
MICHIGAN STATE BOUNDARY
COMMISSION,
Respondent-Appellant.
Before: Whitbeck, C.J., and Zahra and Donofrio, JJ.
PER CURIAM.
Respondent-appellant, Michigan State Boundary Commission (the commission), appeals
by leave granted the circuit court’s opinion and order invalidating the commission’s decision to
allow a portion of Fenton Township to be annexed to the City of Fenton. BKG Development,
L.L.C. (BKG), owner of the property in question, cross-appeals the same order. We affirm.
I. Basic Facts and Procedure
This appeal arises from BKG’s attempt to have property it owns in Fenton Township
annexed to the City of Fenton, which property borders both the township and the city. Starting
in 2002, BKG sought to develop the property, a little more than 15 acres, for residential use. The
Michigan Department of Environmental Quality informed BKG that well-water on the site
contained approximately two and a half times the acceptable level for arsenic under newly
imposed federal rules. As such, the state recommended BKG seek water service from the City of
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Fenton because the township did not supply water to the site, although it did provide
approximately 82 percent of its households with sewer service. Consequently, BKG petitioned
the commission for annexation.
The commission approved the annexation and held the township was not exempt from
annexation. Specifically, the commission determined that MCL 42.34(1)(f) does not exempt the
property within the township from annexation. In doing so, the commission determined that the
township’s sewer service was “illusory” because, although sewer service was available to the
property in question, no potable water service was available.
The circuit court reversed the commission. The court held that the language of MCL
42.34(1)(f) was clear. The statute allows townships chartered after June 15, 1978, to be exempt
from annexation if certain conditions apply. The court determined that, because Fenton
Township, chartered in 1980, met the conditions enumerated, including the fact that it supplied
sewer service, it was exempt from annexation. Specifically, the court determined that the
language relied on by the township required that a township seeking exemption provide “water
or sewer services, or both,” and found that the language “is not ambiguous and that it clearly
means that a township can be exempt if it provides either water or sewer services.”
II. Analysis
On appeal, the commission and BKG argue that the circuit court erred by ignoring both
the “competent, material and substantial evidence” relied on by the commission and settled law.
Specifically, BKG cites Shelby Charter Twp v State Boundary Comm, 425 Mich 50; 387 NW2d
792 (1986), for the proposition that the decision of a commission cannot be overturned if
competent, material, and substantial evidence supports its final judgment.
A. Standard of Review
In Bureau of Worker’s & Unemployment Compensation v Detroit Medical Ctr, 267 Mich
App 500, 504; 705 NW2d 524 (2005), this Court concluded that our review of a trial court’s
disposition of an appeal arising from an agency’s determination is limited to clear error. As
such, we will overturn a circuit court’s disposition of an administrative appeal “only if we are
left with the definite and firm conviction that a mistake has been made.” Id. However, questions
of statutory interpretation are still subject to de novo review. Id. Moreover, although this Court
affords deference to an agency’s long-standing interpretation of a statute, it will not give
deference where the determination is clearly wrong. Dana v American Youth Foundation, 257
Mich App 208, 215; 668 NW2d 174 (2003).
B. The Court Properly Interpreted and Applied the Statutory Exemption
Section 34 of the Charter Township Act, MCL 42.1 et seq., exempts a township from
annexation if the township satisfies various criteria. MCL 42.34(1) reads:
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A charter township existing on June 15, 1978, or a township incorporated
after June 15, 1978 as a charter township that complies with the following
standards, is exempt from annexation to any contiguous city or village except as
provided in subsections (2)[1] to (8):
(a) Has a state equalized valuation of not less than $25,000,000.00.
(b) Has a minimum population density of 150 persons per square mile
....
(c) Provides fire protection service by contract or otherwise.
(d) Is governed by a comprehensive zoning ordinance or master plan.
(e) Provides solid waste disposal services to township residents, within or
without the township, by contract, license, or municipal ownership.
(f) Provides water or sewer services, or both, by contract or otherwise.
(g) Provides police protection through contract with the sheriff in addition
to normal sheriff patrol, through an intergovernmental contract, or through its
own police department. [Emphasis added.]
At a February 6, 2003 public hearing before the commission, the township presented
proofs regarding the enumerated criteria. With the exception of subpart (1)(f), the commission
and BKG do not dispute that the township satisfies the criteria. The township admits that it
provided no water service. Thus, the issue in this case is whether the township’s sewer service to
82 percent of its residents satisfies the exemption criteria. We conclude that it does.
In Shelby, supra at 56-71, the Michigan Supreme Court supplied detailed analysis of the
statutory evolution of the boundary commission and annexation legislation that culminated in the
statute at issue here. The Supreme Court pointed to the substantive nature of the criteria
enumerated in the provision, e.g., the minimum population density, necessary fire and police
protection, $25,000,000 minimum equalization value, etc. Id. at 73. The Court read those
requirements to mean that the Legislature intended townships to provide more than de minimus
water and sewer services to avoid annexation. Id. at 74-76. It then analyzed the specific criteria
concerning water and sewer services:
1
Subsection (2) states: Notwithstanding subsection (1), the state boundary commission may,
under procedures initiated and conducted under section 9 of the home rule city act, 1909 PA 279,
MCL 117.9, order a portion or portions of a charter township to be annexed as necessary to
eliminate free standing islands of the township completely surrounded by an annexing city, or to
straighten or align the exterior boundaries of the city or village in a manner that the charter
township and city or village contain uniform straight boundaries wherever possible.
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Rather than supporting the construction of the statute Shelby urges, that the
provision of “any” water or sewer services is sufficient to satisfy the statute’s
requirements, this legislative history supports the opposite conclusion. There
would have been no real need to reduce the standard from “water and sewer
services” to “water and or sewer services” to “water or sewer services, or both,”
if the requirement of providing water and sewer services were purely a de
minimus, pro forma standard. Furthermore, that the Legislature reduced the
substantive requirement does not indicate that it also transformed what were
substantive requirements into purely pro forma standards. Instead, that the
Legislature expressly acted to reduce the services a charter township had to
provide in order to qualify for exemption, but did not in any way indicate an
intention to move from substantive service requirements to purely pro forma
service requirements, implies that it had no intention of doing so. Thus, this
legislative history also supports the conclusion that the standard contained in §
34(1)(f) imposes more than a pro forma, de minimus requirement. Id. at 76-77
(emphasis original).
In Shelby, the township supplied water to less than a third of the homes in the township
and sewer services to approximately 6 percent of the land area. Id. at 54-55. In holding that the
commission did not exceed its statutory authority when it concluded that the township failed to
meet the standard for exemption, the Supreme Court essentially determined that the township’s
coverage was de minimus and fell short of the threshold necessary to satisfy the statute. Id. at
52, 77.
Unfortunately, the Supreme Court does not provide a bright-line test to guide us in
determining what amount of water or sewer service is needed to be more than de minimus
service. Nor did the Court declare that the provision in question must be read to mean that every
household be served by a township water and sewer system in order to meet the requirement. As
such, we gauge our determination in this case on whether Fenton Township supplied something
more than did the petitioner in Shelby but less than complete coverage to all residents.
Because the township here supplied sewer coverage to approximately 82 percent of its
residents, we conclude that Fenton Township satisfied the criteria under Shelby, i.e., that 82
percent sewer coverage is far from de minimus service. Moreover, we conclude the
commission’s determination that such service was “illusory” to be without merit. The statutory
language, although declared ambiguous under Shelby when determining the amount of coverage
required, is not ambiguous when determining whether water “or” sewer service is required. The
statute reads: “water or sewer services, or both.” This clearly means that a township can be
exempt if it provides either water or sewer services. The commission erred as a matter of law by
interpreting the statute to mean something other than what the plain language expresses.2
2
See Ludington Service Corp v Acting Comm’r of Ins, 444 Mich 481, 503-504; 511 NW2d 661
(1994) (stating that deference to an agency’s interpretation will not overcome a statute’s plain
meaning).
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Because the township satisfied the requirements for exemption, the trial court did not err in
reversing the commission and in holding that the township was exempt from annexation.
Affirmed.
/s/ William C. Whitbeck
/s/ Brian K. Zahra
/s/ Pat M. Donofrio
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