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156737 - Michigan Association of Home Builders v City of Troy

Michigan Association of Home Builders, Associated Builders and Contractors of Michigan, and Michigan Plumbing and Mechanical Contractor Association,

 

Melissa Hagen

 

Plaintiffs-Appellants,

 

v

(Appeal from Ct of Appeals)

 

 

(Oakland – Kumar, S.)

 

City of Troy,

 

Lori Grigg Bluhm

 

Defendant-Appellee.

 

​​

Summary

In 2010, defendant city privatized its building department by contracting with SAFEbuilt of Michigan, Inc., which agreed to assume the duties and perform the services of the building department. Thereafter, the fees collected by the building department generated surpluses, which defendant transferred to its general fund to make up for prior years of deficits when the general fund was used to maintain building department operations. Plaintiffs are associations representing builders, contractors, and plumbers who filed this lawsuit, alleging that defendant violated the Construction Code Act (CCA), MCL 125.1501 et seq., and the Headlee Amendment, Const 1963, art 9, § 31, with respect to its practice of using fee surpluses from the building department to augment its general fund. The circuit court granted summary disposition in favor of defendant. The Court of Appeals affirmed in a split unpublished opinion. The Supreme Court has directed oral argument on plaintiffs’ application for leave to appeal to address: (1) whether the creation of a fee surplus generated by an enforcing agency under the CCA, and the use of that surplus to pay for shortfalls in previous years by transfer of the surplus into the city’s general fund, violates the constraints of § 22 of the CCA that fees be reasonable, be intended to bear a reasonable relation to the cost of acts and services provided by the enforcing agency, and be used only for the operation of the enforcing agency or the construction board of appeals, or both; (2) if so, whether plaintiffs have a private cause of action against a governmental subdivision for enforcement of the CCA, MCL 125.1508b(1); (3) whether plaintiffs are “taxpayers” that have standing to file suit pursuant to the Headlee Amendment, Const 1963, art 9, § 32; and (4) if so, whether the challenged fees violate the Headlee Amendment, Const 1963, art 9, § 31. ​