The city's electric, water, and sewage utility facilities and services shall constitute a department of the city government. Such utilities of the city shall be under the control and direction of a board, to be known as the Board of Public Utilities. The Board shall be composed of five members who shall be appointed by the Mayor, subject to the approval of the Council, for terms of five years each, with the terms of one member expiring in each year. Board members may be removed by the Council for inefficiency, neglect of duty, or malfeasance in office. The term of office of each member of the Board shall commence on the day of the first regular meeting of the Board next following the date of his appointment, except that the term of office of any person who is appointed to fill a vacancy shall commence on the date of his appointment. The Board shall organize at its regular meeting held in the month of July, and shall elect one of its members President. The Board shall hold at least one regular meeting in each month at a meeting place designated by the Board with the approval of the Council. Special meetings may be called at the request of the President or of any two members in the manner provided in this charter for calling special meetings of the Council. All meetings of the Board shall be open to the public. The Board shall keep a journal of its meetings, and its proceedings shall be filed with the Clerk as a public record. Within 15 days the Board shall designate its Secretary. Members of the Board shall not receive any compensation, but shall be allowed reasonable expenses when actually incurred by them upon authority of the Board.
The Board shall appoint a Director who shall be responsible to the Board and serve at its pleasure. The Board shall set his compensation. The Director shall have control and direction of and be responsible for the supervision of all of the utility facilities and the properties of the city pertinent thereto which are entrusted to the Board, and shall be responsible for the economical and proper operation and maintenance thereof. As the administrative agent of the Board, he shall have the control and direction of the employees of the Board, subject to the provisions of this charter.
Subject to the general direction of the Council, the Board of Public Utilities shall have charge of the city's electric services, water supply services, and sanitary sewers and sewage disposal facilities, and shall organize and conduct the affairs of the city's systems for the construction, generation, maintenance, purchase, extension, and distribution of electric light and power and water, and of the construction, extension, maintenance, and operation of the city's sanitary sewer and sewage disposal system and facilities, in a manner consistent with the best practices therefor. The Board shall make contracts concerning the electric, water, and sewage facilities of the city, subject to the overall control of the Council relating to all departments of the city.
The Board of Public Utilities shall establish the procedures for the purchase and sale of personal property which may, in whole or in part, be through the officer charged with the functions of making purchases for the city. Subject to the approval of the Council, the Board shall provide the dollar limit within which purchases of personal property may be made without the necessity of securing competitive bids, and the dollar limit within which purchases may be made by the Director without the necessity of Board approval.
The Board shall have the power to acquire property, and interest in property, both real and personal, in the name of the city, for its purposes, and shall have the power to dispose of personal property by sale, exchange, or lease. The Board may dispose of real property or any interest therein by sale, exchange, lease, or otherwise, upon the approval thereof by the affirmative vote of not less than six members of the Council, and subject to the limitations on the sale of property by the city contained in Sections 13.3 and 14.5 of this charter.
(a) 
The Board shall have full power and authority to fix all rates for electricity, water, and sewage disposal services, which shall become effective 30 days after the same have been approved by the Council and filed with the Clerk as a public record. Such rates shall not be fixed any lower than will produce the revenue required to pay all operating, maintenance, depreciation, and obsolescence expenses of the city's electric, water, and sewer and sewage disposal utility systems, together with a sufficient amount to provide for necessary expansions and extensions.
(b) 
The Board and the Council shall agree upon rates and conditions upon which the Board will furnish electricity and services for street lighting and other city uses, and water and sewage disposal services used by the city.
(a) 
The Board of Public Utilities shall submit to the City Manager the itemized estimates required by Section 7.2. of this charter. The City Manager shall include such estimates in the budget proposal submitted to the Council, without change or recommendation on his part, except that he may make recommendations concerning such parts thereof as directly affect or relate to departments of the city for which he is responsible. The Council shall consider such estimates in the same manner as the estimates of other departments of the city when it adopts the budget of the city for the ensuing fiscal year of the city and the appropriation for such fiscal year shall include the operation, maintenance, extension, and improvement of the utilities of the city which are entrusted to the Board.
(b) 
No appropriations of money shall be made by the Council for the operating expenses of the city's utility facilities entrusted to the Board, other than to pay for utility services actually used by the city, if it is agreed between the Board and the Council that such payment shall be made. No free service of electricity, water, or sewage disposal shall be furnished by the city's utility services to any person, public or private, or to any public agency or instrumentality, other than the city.
(a) 
Subject to the provisions of this charter, and the general accounting procedures of the city which shall be consistent with and meet any requirements of law, the Board shall have and exercise control over all of its funds. Such funds and revenues shall be in a bank account separate from other city funds. Except as provided in Section 15.9 to 15.13 inclusive, such funds shall be used only to defray the cost of operating the city's electric plant or plants and distribution systems, water plant and system, and sewage plant and system, necessary overhead, plant and system extensions, debt service, and other incidental and pertinent expenses of operating, maintaining, improving, extending, and changing the electric, water, and sewage and sewage disposal plants and systems, including allowance for depreciation and obsolescence. All checks drawn for the payment of money, under authority of the Board, shall be signed by the City Treasurer in addition to the signature of any person authorized by the Board to sign such checks.
(a) 
The Board of Public Utilities shall, annually, pay to the Treasurer for the use and benefit of the city, 6 1/2% of the gross income of the department, which payment shall be in recognition of and compensation for all benefits received from the city in the use of city streets, services, and facilities and shall constitute a part of the expenses of the administration and operation of the utilities of the city required to be paid under the first priority of Section 15.12 (a).
(b) 
Notwithstanding other provisions of this chapter, except when otherwise provided by Section 15.12 (b) of this chapter, the Board shall have power to transfer to the city such sums of money as it may deem proper and under such terms and conditions as the Board and the Council may mutually agree upon.
The Council shall have power to loan money to the Board of Public Utilities from funds of the city which are not appropriated or budgeted for expenditure within the term of such loan. Each such loan shall be based upon the payment of reasonable interest by the Board, to be determined by the Council, and the repayment thereof to the city in substantially equal annual or other periodic installments.
(a) 
There is hereby created a public utility reserve fund in the amount of 15% of the undepreciated original cost of the utilities and facilities of the city entrusted to the Board, which reserve fund shall be maintained for the purpose of accumulating and holding available such money which, in addition to insurance carried by the city, may be deemed by the Board of Public Utilities to be prudently necessary for the protection, improvement, replacement, and extension of the city's public utilities and facilities entrusted to the Board. Such fund shall not be allowed to fall below the sum of 5% of the undepreciated original cost of the said utilities and facilities, as estimated by the Board and approved by the Council, including the value of any fire, wind, explosion, or other disaster type of insurance carried on the utilities and their facilities. The Council may, at any time, at the request or with the consent of the Board, and for so long as it deems desirable, increase the amount held and reserved in the city's public utility fund to a sum larger than the amount required to be maintained by this section.
(b) 
Moneys placed in the city public utility reserve fund shall not be used for any purpose other than the purpose of the fund, as stated in this section, unless the proposition to do so is approved by a majority of the electors of the city who are the owners of property which is assessed for taxes by the city, and the lawful husbands and wives of such persons, voting on such proposition at a regular or special election. This subsection shall not prohibit the investment and reinvestment of such moneys in any manner permitted by law.
(a) 
The revenues of each utility of the city shall be devoted to the following purposes in the order listed: First, to the expense of administration and operation of each utility, and the maintenance thereof as may be necessary to preserve it and its facilities in good repair and working order; second, such of the remaining amount of the revenues as may be required for the principal and interest on any indebtedness against the utility; third, of the remaining amount of the revenues, an amount shall each year, be placed in the city's public utility reserve fund or funds which shall be sufficient to maintain the said fund at the per cent level established by Section 15.11 of this chapter, or such higher level as may be established under Section 15.11 (a) or for any reserve fund established for any bond issue, so long as any of the bonds thereof remain unpaid: Provided, that, in case of the depletion of the city's public utility reserve fund below the level so established, or if there exists any debt from the city to such fund, no funds shall be devoted to the next (fourth) purpose, until such level has been restored or such debt repaid, or both; and fourth, unless otherwise required by law, the balance of such revenues shall be placed in the fund created by Section 15.13.
(b) 
In the event that the city shall issue bonds under the provisions of Act 94 of the Public Acts of 1933, as amended, or under the provisions of any other legislative authority authorizing the issuance of bonds based upon the revenue of a public utility, and to the extent that it has issued any such bonds, the provisions of this section, and of Section 15.13 shall be subject to the provisions of such act and any ordinance adopted in accordance therewith.
All revenues of the City's utility operations which are placed in the funds of the city in accordance with the fourth provision of Section 15.12 shall be placed in a fund which is hereby created to be known as the capital public improvement fund, to be used solely to defray the cost or a part of the cost of capital public improvements of the city. No moneys shall be expended from the capital public improvement fund, except to alleviate disaster, unless the proposition to do so is placed before the people of the city by a vote of not less than six members of the Council and is then approved by a vote of not less than a majority of the electors of the city voting on such proposition at a regular or special election, who are the owners of property assessed for taxes by the city, and the lawful husbands or wives of such persons.
The director shall have power to employ all personnel deemed by him to be necessary for carrying on the supervision, operation, maintenance, and general conduct of the utilities of the city entrusted to the Board. Such salaries and hourly rates of pay as are established within the department shall be consistent with the salaries and rates of pay established by the Council for city employees performing comparable work, but shall not be so limited for other employees of the Board.
An annual report shall be prepared by the Board within 60 days after the completion of the annual audit, made under the provisions of Section 7.14 of this charter, which report shall clearly show the financial position of the utility systems of the city entrusted to the Board by a profit and loss statement, balance sheet, and such other information as may be pertinent thereto. Such annual report shall be published in a manner determined by the Board, and one copy thereof shall be filed with the Clerk, one with the Public Library, and one with each newspaper published in the city.[1]
[1]
Editor's Note: The Schedule Chapter that immediately followed is included as an attachment to this Charter.