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A Better Partnership
June 14, 2015

COA holds that City of Flint violated its own sewer and water ordinances, limits Emergency Manager powers

In William Scott Kincaid v. City of Flint, No. 318906, the Court of Appeals held that the City of Flint violated its own city ordinances 46-52.1 and 46.57.1 by not providing proper notice and publication of water and sewer rate increases, and that it was not within the Emergency Manager’s powers to ratify those violations later, and therefore reversed the trial court’s order granting summary disposition. The Court also affirmed a different order granting summary disposition, finding that there was no evidence of the city using an illegal accounting system for its funds. The Court also found that the trial court did not articulate sufficiently its denial of Plaintiffs’ request for leave to amend their complaint, and remanded for further consideration.
 
Plaintiffs William Scott Kincaid, Eraina Poole, George Poole, and Mary Bell filed a complaint against the City of Flint alleging that the city’s rate increases in both 2011 and 2012 violated city ordinances, that the Emergency Manager could not ratify the improper rate increases, and that the city illegally used water and sewer funds to pay general obligations. The trial court granted Defendant’s motions for summary disposition for the challenges to the rate increases as well as for the accounting of the city funds. The trial court also denied Plaintiffs’ request for leave to amend their complaint.
 
The Court of Appeals held that the rate increases by the city finance director in 2011 were invalid because they were issued without proper notice and publication 30 days prior to taking effect. The Court agreed with Defendant that the rate increases did not fail for exceeding an 8% limit in an ordinance, because the increases were sufficiently justified as required under the same ordinance. Although the Court held that the Emergency Manager’s further rate increases in 2012 were valid, as they were issued with proper notice and publication, the Court did hold that the Emergency Manager did not have the power to ratify the earlier, improper rate increases by the city’s finance director. The Court found no statutory support for an Emergency Manager’s ratification power. Therefore, the Court held that the 2011 rate increases violated the city’s ordinances and reversed the trial court’s grant of summary disposition.
 
The Court also affirmed the trial court’s grant of summary disposition in favor of Defendant regarding its use of water and sewer funds, finding that Plaintiffs failed to show any evidence of illegal commingling of funds or any disputed issue of fact. However, the Count held that the trial court erred by denying Plaintiffs’ request to amend their complaint, finding that the court did not sufficiently articulate a particularized reason for denial, and therefore remanded this issue for further consideration.

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