How do dissolve a government entity when state law doesn’t say how? Ask a judge.
That’s exactly what the Oxford Township Board voted to do last week when it directed attorney Gary Rentrop to file for a declaratory judgement in Oakland Circuit Court to determine the proper way to dissolve or terminate the Oxford Public Fire and EMS Commission (OPFEC).
“We need some direction,” Rentrop said. “We want to do the right thing, the right way.
“The judge will either say you can’t (dissolve or terminate OPFEC) or you can and here’s how,” he said.
The township board voted in May to pull out of OPFEC on Sept. 30.
However, in light of its decision to seek guidance from the court, the board voted to suspend that withdrawal date.
“We want to wait to hear what the judge has to say,” said township Supervisor Bill Dunn. “We don’t want to pull out before the court’s had a chance to make a decision. That would be like jumping into a pool without checking the depth.”
Rentrop said the big problem is that the state law under which OPFEC was created, Public Act 57, says “nothing” about dissolution procedures for a safety authority. He called it an “oversight” on the legislature’s part.
The law simply states that a party can withdraw from the authority, but is still liable for past debts, Rentrop said.
He noted that the only mention of dissolution in OPFEC’s Articles of Incorporation concerns how the assets would be divided should the authority ever cease.
Seeking a judge’s opinion on the matter will “put order to the whole unwinding process,” Rentrop said.
“I’d rather have it be a controlled determination by the court as opposed to just pulling out,” he said. “We want to make sure our actions bring about the termination or dissolution of OPFEC and the distribution of assets.”
Rentrop said it’s possible the township may have to ask the state Legislature to amend Public Act 57 to set up and “define” a dissolution process for a safety authority.
The township attorney noted an 1897 Michigan Supreme Court case, Cain v. Brown, which involved the attempted dissolution of the Village of Attica. Rentrop said the court ruled that “unless the (state) legislature provides for the dissolution of a municipal corporation, it can only be dissolved with the consent of the (state) legislature.”
“It can lay dormant and suspend all functions, but it can’t dissolve,” Rentrop said.
Rentrop also cited a Michigan Attorney General Opinion concerning the dissolution of a transportation authority, which involved only one municipality, that was based on the above court decision. The opinion state that without a provision outlining dissolution from the state legislature, the authority could not dissolve, he said.
Rentrop said if you take the Attorney General Opinion “at face value” and believe it’s right, then “even if the village and township agreed to dissolve the authority, they couldn’t do it” without an amendment to the law from the state legislature.
But Rentrop believes the AGO is “wrong.”
“It defies logic that two entities can get together and can’t split up,” he said.
Rentrop said he doesn’t believe the supreme court case applies to the transportation authority in the AGO or OPFEC now.
It’s his opinion that OPFEC is “not a municipal corporation,” like the Village of Attica.
“It’s a different animal,” he said.
Rentrop said the AGO’s determination that the transportation authority was a municipal corporation was a “giant leap.”
The township’s desire to withdraw from OPFEC and dissolve the safety authority has triggered an on-going who-owns-what debate with the village.
The township claims it owns 82 percent of the department and the village owns 18 percent based on the total State Equalized Value of each community.
Stating their intention to be the sole owner, operator and overseer of the department, the township offered to purchase the village’s share.
The village has repeatedly stated it has no interest in selling or giving away its ownership share of the department. Council has stated it still wants to govern the fire department jointly.
Village officials also dispute the township’s percentages concerning the current ownership breakdown, insisting the split is 50-50, not 82-18.
Councilman George DelVigna is adamant about this point. According to him, the 82-18 percentage split is the formula for funding the fire department through OPFEC and dividing the assets between the two communities in the event of the authority’s dissolution.
However, as long as the fire department is jointly governed under OPFEC, DelVigna said the ownership split is 50-50 between the village and township.
DelVigna bases his assertion on the 1982 agreement that created the joint fire department with a 50-50 ownership split and OPFEC’s Articles of Incorporation, which contain the provision regarding the division of assets in the event of dissolution.