Mich. Comp. Laws § 41.333
Not more than 75% of the net cost, exclusive of money, materials, and labor that are supplied by a federal agency, of purchasing and laying the mains and fittings of a water supply system shall be paid out of the contingent fund of the township. On resolving to make and install the improvement, the township board shall determine by resolution the net cost and the share of the net cost not exceeding 75% that the contingent fund of the township shall bear. However, no part of the cost of a water supply system acquired or created under sections 1 to 20a shall be levied or collected as a tax or assessment, whether general or special, upon property located in a village or school district or located in a water supply district in the township, including an area of the township served by a water system owned or operated by a city, if the village, school district, or water supply district has a water supply system that was originally acquired and is operated by or for the village, school district, or water supply district without any expense to the township at large. A water supply system, so separately financed and operated, shall not be taken, as to ownership or control, except by due process of law as provided by the general laws of this state. After determining the amount of money to be appropriated at any time from the township's contingent fund for purposes authorized in this section, the township board may set apart from that amount when appropriated a proportionate part of that amount for the benefit of the separately operated water supply system in the same ratio to the whole amount appropriated as the population of the separate district bears to the total population of the township, as determined by the board. This proportionate part shall be applied for the betterment of the separate water supply system as and when authorized by the board. The township board shall prepare and keep on file a map defining the boundaries of a water supply district served by the separately financed and operated water supply system separate from a township water system.
MCL 41.333