No action shall be brought against the governmental agency for injury or property damage arising out of the operation of proprietary function, except for injury or loss suffered on or after July 1, 1965. In Coleman v Kootsillas, 456 Mich 615, 621; 575 NW2d 527 (1998), the Michigan Supreme Court stated that "the definition of a proprietary function is clear and unambiguous." Two tests must be satisfied for the exception to apply: "The activity (1) must be conducted primarily for the purpose of producing a pecuniary profit, and (2) it cannot be normally supported by taxes and fees."

Garbage collection and disposal is "a matter of public health and a governmental function," even if the garbage comes from other jurisdictions.Coleman v Kootsillas, 456 Mich 615, 619; 575 NW2d 527 (1998).Id. at 619-620, citing MCL 123.261 and MCL 324.4301.

For plaintiffs to avail themselves of the proprietary function exception, "[t]wo tests must be satisfied: "The activity (1) must be conducted primarily for the purpose of producing a pecuniary profit, and (2) it cannot be normally supported by taxes and fees." Coleman v Kootsillas, 456 Mich 615, 621; 575 NW2d 527 (1998). Several considerations are relevant to the above two tests, but none of them are dispositive.

First, defendant Lansing Board was engaged in a proprietary function and, thus, was not entitled to governmental immunity. See Coleman v Kootsillas, 456 Mich 615, 620-621; 575 NW2d 527 (1998). Defendant Lansing Board provided electrical and water utility services not just to the residents of the city of Lansing, but also to residents of East Lansing and other surrounding townships.

In other words, "[t]wo tests must be satisfied: The activity (1) must be conducted primarily for the purpose of producing a pecuniary profit, and (2) it cannot be normally supported by taxes and fees." Coleman v. Kootsillas, 575 N.W.2d 527, 530 (Mich. 1998). If Garner Properties fails to establish a fact question on either of these two tests, then Redford's ordinance enforcement operation is not a proprietary function, and it is entitled to governmental immunity from state-law tort liability. See, e.g., Totsky v. Henry Ford Hosp., 425 N.W.2d 531, 534 (Mich. Ct. App. 1988) (declining to reach second, "taxes and fees" test after concluding that "pecuniary profit" test not satisfied).

To establish a proprietary function, "[t]wo tests must be satisfied: The activity (1) must be conducted primarily for the purpose of producing a pecuniary profit, and (2) it cannot be normally supported by taxes and fees."Coleman v. Kootsillas , 456 Mich. 615, 621, 575 N.W.2d 527 (1998). Whether the activity generates a profit or a loss is relevant, but not conclusive, evidence.

Like the distant consumers in Coleman, there is no evidence that the non-resident users reaped the benefits from the City's use of the revenue deposited into the general fund or from the unrelated improvements to the City by defendant's million-dollar-gift in 2013. Coleman v Kootsillas, 456 Mich 615; 575 NW2d 527 (1998). Hyde v Univ of Michigan Bd of Regents, 426 Mich 223; 393 NW2d 847 (1986).

A proprietary function is defined as "any activity which is conducted primarily for the purpose of producing a pecuniary profit for the governmental agency, excluding, however, any activity normally supported by taxes or fees." MCL 691.1413; Coleman v Kootsillas, 456 Mich 615, 621; 575 NW2d 527 (1998). Two considerations have been identified to evaluate whether an agency's primary purpose is to produce a pecuniary profit: (1) whether a profit is actually generated, and (2) where the profit (if any) is deposited and how it is spent.

When determining whether a governmental agency's primary purpose is to produce pecuniary profit, a court should consider (1) whether profit is actually generated, and (2) where the profit is deposited and how it is spent. Coleman v Kootsillas, 456 Mich 615, 621; 575 NW2d 527 (1998). With regard to the second consideration, our Supreme Court has explained:

Unless the contested activity is proprietary, governmental agencies engaged in mandated or authorized activities are immune from tort liability. See Coleman v. Kootsillas, 456 Mich. 615, 620; 575 N.W.2d 527 (1998). Michigan's governmental immunity statute protects both the state and its political subdivisions.