TUESDAY, JUNE 27, 1995 AT 6:00 PM EDT




The meeting was called to order at 6:00 PM with Mayor McLallen presiding.


ROLL CALL: Council Members Crawford (present), Mason (present), Mitzel (absent-excused), Pope (absent-excused), Schmid (absent), Toth (present), and Mayor McLallen (present).


Present (4) Absent (3-Mitzel, Pope, Schmid*)


*Councilman Schmid arrived at 6:20 PM





Edward F. Kriewall - City Manager

Craig Klaver - Assistant City Manager

Les Gibson - Finance Director

Geraldine Stipp - City Clerk






Mayor McLallen said the purpose of this special meeting was to adopt a year end budget amendment and determine the compensation package for the new city clerk.


Members agreed to take item #2 first since there weren't enough members present to adopt the budget resolution.




2. Compensation Package - New City Clerk


Mayor McLallen said they had a memo from Mr. Kriewall suggesting a floor of $41,000 and a discussion of whether a probation period was a pertinent item because this person was an at-will employee. She said there was a certain redundancy or inappropriateness of using a true probationary situation.


Councilman Toth suggested calling it an evaluation period; he felt anyone coming in should have a period of time in which their performance was evaluated, and if the evaluation met the criteria established by city council - fine and if it didn't, they could look elsewhere. Mr. Klaver agreed with calling it an evaluation period.


Councilman Toth said since this was a council appointment, he felt there should be a council directive going to that individual stating that they were being hired as at an-will employee with an evaluation of X months and the evaluation would be based on whatever they decided on but he thought all of this should be spelled out in a directive to the individual so it was all up front and above board and everything was documented.


Councilwoman Mason suggested a six month evaluation period, and Councilman Toth asked Gerry Stipp if that was sufficient. Ms. Stipp said she felt six months was a good time period.


Councilman Toth said he felt they should have 6 to 10 measurables to evaluate how a person performed; he suggested seeking technical input from Ms. Stipp on that. Ms. Stipp said she had worked on a list of functions and duties and from that, an evaluation could be worked up based on particular duties.


Mayor McLallen asked her to outline what she would expect a competent clerk to achieve in six months, and Ms. Stipp commented to keep up with the work. She said the list contained normal job duties but there were always other things that came up but not on a daily basis. The Mayor asked if the list was actually the job description or was there a written job description over and above this.


Gerry Stipp said she wrote a job description back when they first discussed hiring someone and this list was areas of responsibility. She said she wasn't sure exactly what council was looking for and assumed the person would be evaluated like the rest of the employees were evaluated.


Councilman Crawford asked Mr. Kriewall if he evaluated the city clerk and the assessor who were council appointed people, and Mr. Kriewall said he did. Councilman Crawford asked if there was a written form he used and Mr. Kriewall said there was. Councilman Crawford said the list of city clerk duties was all rather technical but at least half the job was getting along with people. He suggested incorporating administration's evaluation form along with the areas of responsibility listed.


Councilman Toth said what they wanted to do also was some brainstorming on what they wanted to see because this person was not Gerry Stipp and would have some of her own ideas and essentially council would want to look at some of these. He said for example, they may want to evaluate how well council packets were put together - were they readable, well organized, etc. That would be one of the first things they would see. Councilwoman Mason did not feel a new person would change that procedure, at least not right away.


Councilman Toth said there were a couple elections coming up they could evaluate and perhaps what kind of plans the new person might have for the department. He said that any one coming in would want to make some changes, whether they were minor or major, and there would be resolutions and minutes they could look at and gauge. He said they may want to see how that person interfaced with the engineering and legal people; if there was a disconnect there or a bad relationship, then they had a problem. He said these were some of the things he thought they should look at.


Mayor McLallen said Mr. Toth noted six areas of influence directly in control of the city clerk and his major concerns were that the clerk be evaluated on the timeliness in which these areas were handled, the accuracy with which these items were handled and that council establish some type of review of the new clerk's inter personal relationships with city staff and consultants.


Councilwoman Mason said tonight they were discussing the compensation package and the evaluation system didn't have to be done right this minute but could be done over the next several months.


Councilman Toth said before that person came on board, he felt they should identify what they were going to evaluate.


Councilwoman Mason said there was already a basic evaluation form used by administration for administrative people. Councilman Toth said this person was appointed and hired by city council and he felt council should decide the evaluation they were going to do and that it should be decided within the next ten days before that person came on board.


Councilwoman Mason said she felt the important thing tonight was wages and benefits and that there would be an evaluation at the end of six months. She said there was nothing wrong with using the evaluation form that administration used and taking off from that.


Councilman Toth said to him that was a totally different issue; the relationship council had with the city clerk was different from the relationship administration had with the city clerk or with the people who worked for the city.


Mr. Kriewall suggested that council members write some of their suggestions down and administration would work something out and bring it back to council.


Mayor McLallen said member Mason was correct; the issue on the table tonight was the actual compensation for the new clerk which included salary and benefits. She said Mr. Kriewall's memo pretty well outlined these and his starting point was to offer a salary of $41,000 that could be increased when the evaluation took place. The rationale for a $41,00 floor for this position was that this was one of the primary administrative positions, and he felt the position warranted being paid at this level since this position was at a top management level. She said the other issue was what benefits were to be given and the recommendation was that they be in line with what administration currently had.


Councilman Toth said he had some concern with the compensation package; he said he didn't feel they should follow the existing one. He said they have had some discussion with both union and non-union employees and they had done some things he liked and felt they should follow up with that. He suggested in lieu of sick and vacation day, he felt the new clerk should be started off with a number of days - say 20 - and the days could be used for sick time, vacation or however they wanted. He said they have done that with the Fire Department; he also was in favor of stipulating that the days be used up by the end of the year or pay the employee for them with no carryover. His further recommendation was that there be no back-to-back use from one year to the next which could amount to two months off and create some kind of problems. He said he also felt that any time off in excess of a week should have city council approval or at least notification. He said he felt this met the intent of what they have done in the past and would be a pretty good set up for the person; if all the days weren't used by the end of the year, the employee would be paid for them.


Councilman Toth said he also felt they should have a cafeteria health plan; they have talked about it and this was a good opportunity for an individual to tailor a health plan to fit personal needs and life style. He said he would also make an issue for a 401k program; a lot of places offer it as a savings program and he felt it was something that should be pursued. He noted there were probably other things they should look at in terms of benefits and this benefit package was something they should spend some time with and come up with a fairly decent plan and eliminate some of this other stuff that they have talked about eliminating and set the standard. He said he would then expect to direct administration to talk to the unions and try to get the same type of set up; the general intent was to be fair but not overly generous the way they were currently.


It was then,


Moved by Councilman Crawford,

Seconded by Councilman Schmid,


To accept the recommendation of administration to hire the new city clerk at no less than $41,000, that after six months there be an evaluation and with a passing evaluation, they offer no less than $45,000 and that the new person be offered the current administrative benefit package.





Councilman Schmid said he supported for discussion because he felt there was some area for discussion on wages.


Councilman Crawford said he could be a little flexible on wages. He said as a starting point, he was suggesting they go with what administration recommended. He said they did offer this position at a range of $45,000 to $54,000 and he felt starting at less than $41,000 might be somewhat of a slap in the face to the kind of a person they expect to assume the city clerk's position in this city. He said he would not at all be flexible in the benefit package that they offer; he thought it would cause much harm to all concerned - all administrative and the new city clerk - if they offered anything different than the present administrative package. He said he didn't know how in good faith they could even make that kind of an offer to treat one employee that much different than others.


Councilman Schmid said he didn't disagree with Mr. Crawford, however, he thought Mr. Toth did bring up some excellent points as it related to a look-see at the benefits package for the city. He said he did believe, however, it was too late to start with this particular opening. He said giving X number of days had some merit perhaps and he was not sure about the 401K because usually that was a contribution by both the employer and individual. He said Mr. Toth's ideas had merit and should be looked at and they could decide on that later but he probably would not support it going into this new clerk although if he was talking to the clerk he would probably suggest that they were looking at some of these things so she wouldn't be surprised after she got here if some of these things were looked at.


Councilman Schmid said he probably could support $41,000 although he didn't think it was necessary to pay that kind of money. The applicant made about $35,000 today and he would guess she would be walking into an equal or better benefit package; he said although this was a promotion and she should be rewarded for having gained that promotion, he felt they were being very generous. He said he definitely would not support going another $4,000 or $5,000 in six months. He said that was a substantial raise percentage-wise of anybody's salary; he felt they should start out around $40,000 and hold it there for at least one year and see how she functioned and if she merited the increase, then give her the increase. He said he felt an increase of $4,000 was far too much for a young administrative who looks like she can prove herself but really hasn't proven herself as far as the City of Novi and can't do that in six months. He felt six months was far too soon and his concern was that this was moving her along far too fast without having really given them an indication of her abilities.


Councilwoman Mason said she felt the benefit package in Oak Park was much less than what Novi offered. She said she was absolutely for the change to cafeteria benefits and she felt they should know what her benefits were now.


Mr. Klaver said Oak Park had longevity and Novi did not for new hires, employee and employer contributed to Oak Park's pension plan and Novi employees did not contribute, Oak Park had a higher retirement percentage plan, FAC-3, early retirement clause with paid medical, more vacation and personal days, and higher life insurance.


Councilwoman Mason said she was for the $41,000, the $4,000 to $5,000 and definitely for a change in benefits.


Councilman Crawford said he didn't care if she was getting half the benefit or ten times more than Novi had, he thought they should offer nothing more or less than what the present administrative employees are offered. He said that didn't mean Mr. Toth didn't have a lot of good points because he did and he agreed with Council members Toth and Mason that maybe they ought to be looking at more cafeteria-style benefits, but now was not the time to fight that battle. He felt that all administrators ought to be treated equally; they should not have an administrative policy for everybody except the city clerk or the city assessor - they should all be treated equal.


Councilwoman Mason said she would not be in favor of changing the current city clerk's benefits but with long time employees retiring, now was the time to start with this type of thing. She said if they were going to start cutting back and changing things, when they hire a new person was definitely the time.


Councilwoman Mason said she would go along with the salary and the increases but she would not go with the standard benefit package.


Councilman Toth commented that they had to start somewhere; he said they wouldn't start with all 184 city employees in one fell swoop and they weren't talking about getting rid of things that concerned someone hiring in. His recommendation was to take the sick leave bank completely out because it took 11 or 12 years to accumulate the maximum 130 days and a new hire was at least a decade away from that. He said get rid of the sick days and personal days and vacation days and each employee would have a bank of X amount of days each year to use however they wanted with no carryover or accumulation.


He said regarding insurance, they have had many reports on a cafeteria plan and he felt all new hires should have a cafeteria plan. He said that was a direction they wanted to go in because they felt it was better for the employee who could tailor the system any way they wanted. Councilman Toth said they were not beating them out of anything, and he felt there were a lot of advantages to letting the employees decide what they needed for their personal lives. He said they should start here and the additional people hired next year should fall in the same line unless there were some union requirements they had to meet.


Councilman Toth said the money issue was tough; they were talking about going $10,000 more over six months plus benefits and that was almost 30% higher than what she was making now.


Gerry Stipp commented that it was a different job.


Councilman Toth said if she got a 10% or 15% increase, she would probably be happy with that so he had some concerns about this. It was a significant job that brought someone up to near what Gerry Stipp was making after decades.


Councilman Schmid said he thought $41,000 was a bit high but he would go along with it; he said he would not support giving her an additional $4,000 in six months. He said to him that was substantial and with six months work, they really didn't know what they had. He said six months was not a very long period to evaluate for that kind of increase; his recommendation would be to evaluate in one year and then give what was reasonable in that year's time. He said he didn't see any need to jump it that fast particularly since they were giving her a $6,000 increase to come to Novi although it was a different job and more responsibility, but it wasn't a bad starting wage based on the comparables from other cities.


Mayor McLallen said she supported the salary floor based on the presented information and the fact that they knew what kind of hours would be required of this position. She said she would like to focus on the position - not who held it before or who would in the future. She said based on the number of hours that this council used the clerk, $41,000 was fair particularly with the amount of responsibility. She said the discussion this evening has been very positive and she was leaning towards lumping the days together which she didn't feel would drastically affect the unions. They would just be giving people discretion on how they used time away from the building so it seemed quite sensible. She said on the cafeteria plan, she agreed this presented an opportunity to council to review where they were but whether they could actually change the plan for a single individual she did not know. She said if it couldn't be done for this individual, she would ask for the support of this council to direct the administration to begin whatever it took to change the plan.


Mayor McLallen said on the evaluation, perhaps they didn't want to affix a specific number to what the raise would be at the time but she felt six months was a fair time to evaluate the individual and decide whether or not they were on the right track.


Mayor McLallen asked Craig Klaver to address the issues of what impact the conversation tonight may or may not have on the existing administrative situation.


Mr. Klaver said he was a real fan of cafeteria programs and the CTO-a single pool of days-however, there were some serious legal and practical restrictions to implement either of those. He said regarding the CTO, the real cornerstone is substituting traditional sick leave with a short term disability policy; he said there had to be some sort of umbrella in case of serious illness. He said if they just took away sick leave, a person had no protection whatsoever. He said there would be great difficulty in trying to obtain a quote or insurance policy for one individual; he noted they even had difficulty with the firefighters and that was a group of 15.


Mr. Klaver said another problem was an IRS federal regulation which dealt with not making distinctions among a single group, especially higher paid employees. He noted council had a memo from Anthony Hackmeyer of our labor attorneys office in which he talks about not making that kind of distinction between employees in a single group and he would suspect that in this instance, the answer would be the same.


He said regarding the cafeteria, there were some similar type problems. Mr. Klaver said they were actively pursuing the CTO for Teamsters and hopefully if that group came in, council might want to consider doing something but he felt they would have to do it for the entire group and not an individual.


Mayor McLallen said this group of administrative employees was only three, and Mr. Klaver said yes, however, they have been told that that was not a sufficient distinction and in the future they would have to have uniform benefits for all administrative employees. He said even the category of appointed officials that they previously used to separate these employees would not meet IRS standards in 1999.


Mayor McLallen asked Mr. Klaver to have Mr. Hackmeyer attend a meeting or present a response that outlined the goals of council. Mr. Klaver said he would strongly recommend the CTO program for all administrative employees. Mayor McLallen asked that he get a response from the attorney on how they could proceed to achieve that goal and how quickly they could proceed. She asked if they could proceed by initially bringing this person in or did they have to wait.


Craig Klaver said he wanted to point out that they did have a deferred compensation program available to all employees.


Mayor McLallen asked if council wanted to direct Mr. Klaver to return with a backup and a fully fleshed out response from the attorney on how to proceed with a CTO program and cafeteria benefits and a 401k or similar program addressed to this individual and if it can't be, how could they begin to address it to the universal group.


Councilman Toth said at-will employees did not fall into the same category as administrative employees and he would like to get a reading from an attorney. He said at-will employees were basically that and council could set whatever they wanted for at-will employees. He commented that Mr. Kriewall had a car but that didn't mean they had to buy everybody on city administration a car so he had an extra benefit. He said they could set whatever benefits they wanted and as an at-will employee, they could extend benefits out or do whatever they liked because that employee technically worked for the council and was not an administrative employee so he would like Mr. Klaver to get that legally defined for them so they understood.


Mr. Klaver said Mr. Hackmeyer addressed that point in some great detail in one of the three reports council received tonight.


Mayor McLallen said the motion on the table was to accept the city administration's recommendation for a salary and benefit package for the clerk.


Councilman Crawford said he was not going to flex on what he felt they ought to offer in a benefit package, but based on some of Councilman Schmid's comments on $41,000 to $45,000 in six months, he would be willing to modify his motion.


Councilman Schmid said he would recommend one year and not put any dollar figure on it although they could evaluate in six months but there didn't have to be a compensation for that.


Councilwoman Mason called the question, and Mayor McLallen asked for a vote on calling the question at this time.


Yes (3-Mason, Toth, McLallen) No (2) Absent (2-Mitzel, Pope)


Councilman Crawford asked if he was allowed to modify his motion or withdraw it, and Gerry Stipp said he couldn't withdraw it - the question now belonged to the assembly. She said the motion could be amended but it should have been amended before they voted on calling the question.


Mayor McLallen called for a vote on the motion to accept administration's recommendation to offer the new city clerk.


Yes (0) No (5) Absent (2-Mitzel, Pope) Motion failed


Councilman Schmid asked what the Mayor's position was on Mr.Toth's comments about benefits. Mayor McLallen said she agreed that now was the time to revisit where they were going with that; her concern was what constraints were they legally under. She said this was something she did not know and had not had time to review; she said if they could not at this window change anything, then she was in support of offering this new employee the existing package. She said if this was an opportunity where it was appropriate to change those.....she questioned whether this was the time where it could be done and they needed to put something together in a timely fashion to give this person a job.


Councilman Schmid asked if she was suggesting she would entertain a motion that would not include benefits at this meeting, and Mayor McLallen said no. She said if Mr. Hackmeyer came back to them in ten days and said they could tailor them to a single individual, then she would like to do that but if they were told they could only tailor them for everybody, she would like to direct administration to start working on that.


Councilman Schmid asked if the city still offered longevity, and Mr. Klaver said existing employees were grandfathered. He explained that this benefit was changed for an entire category of employees - all people hired after a certain date. Councilman Schmid said that might be the way to handle other benefits, and Mr. Klaver said they could do that by going self-insured; one individual wouldn't present such exposure that they couldn't do that. He said he was more concerned with the legal problems.


Mayor McLallen said perhaps she conveyed the wrong impression; they did not want to change the existing benefits for everyone. They wanted to begin to look to the future and this was the opportunity to go from this day forward.


Councilman Schmid asked if in general Mr. Klaver would agree that some changes were warranted with sick leave days, vacation days, etc. Mr. Klaver said he would recommend it. He said to him it seemed to parallel the longevity and they could start with this individual and grandfather existing employees. Mr. Schmid said this would not be an attempt to greatly reduce benefits - just a different approach and sometimes a very good approach for the employee.


Mr. Klaver said his recommendation when they discussed this six months ago for union negotiations was that they look at next year as the appropriate year to pass this change along to administration. He said with this particular benefit, he felt they could do the whole group at once because it has been suggested that it was more of a different approach than it was a major reduction in benefits.


Councilman Schmid asked if they didn't have a buy-out of sick time right now, and Mr. Klaver said they did with the Fire Department only because it was a very unique group where nobody had more than six years because that category of employee did not exist prior to that. He said his recommendation with the other groups was to just freeze that time and phase it out; administration's only other recommendation was that they wait until they do it with the Teamsters.


Councilman Schmid commented that it would seem more acceptable to him if they started with management and then moved it on down. He said he didn't think the present people in management would have a problem with it, and new employees might like the new concept. He said a sick time buy-out was really getting old and he supposed it started to encourage people to come to work but not many companies did that.


Councilman Schmid said he felt they were onto something and maybe they should look at it even for this position because in not too many years, they would probably have three or four people in the same position.


Mayor McLallen said the majority of council seemed to be heading that way - to have Mr. Klaver clarify this conversation and have it reviewed by the attorney and bring it back.


Mr. Klaver asked if there was a consensus for converting to a CTO program for administrative employees. He said if there was and they wanted to do the whole group, then the idea of whether they could isolate someone was academic.


Councilwoman Mason said she wanted to know anyway.


Mr. Kriewall asked if they would buy them out, and Mr. Klaver said no - just freeze it.


Mayor McLallen asked if everyone was comfortable with having Mr. Klaver take this discussion and run it by the attorney and bring it back to council.


Councilman Schmid said obviously he would come back with cost projections for both plans. Mr. Klaver said he would give them what they have done with the Fire Department.


Councilwoman Mason asked why they couldn't add a person to that disability they had in the Fire Department, and Mr. Klaver said because they do it by employee groups.


Councilman Toth said he felt if they started right now that would give them more definition for negotiations with the union.


It was then,


Moved by Councilman Toth,

Seconded by Councilwoman Mason,


That we accept administration's recommendation of a salary of $41,000, that the evaluation period be six months, that 26 days per year be offered to be used within the year with no carry-over or back-to-back uses, that any time off in excess of one week requires city council approval, that the new city clerk be offered the cafeteria plan, no sick leave bank, no longevity, retirement in accordance with city administration direction to exclude this position from early retirement and tuition reimbursement.





Councilman Crawford said tonight was not the meeting to reinvent the wheel; he said Mr. Toth listed five or six things that may have some merit and should be looked at but to lay them on council tonight when they talk about one individual was very inappropriate. He said they should have had a new city clerk on board three weeks ago; he said they have over complicated this issue immensely. He said tonight's issue should have been decide on a salary and to redesign a benefit package for one person, it has been pointed out in memos that it would probably not work. He said the longevity issue that they talked about was an entirely different issue; that would have been a major reduction in monetary benefits to people. He said all they did there was say no new employees get it - everybody else gets it, but now was not the time to start talking about grandfathering in insurance benefits and 401s and sick time.


Councilman Crawford urged that they move forward and get a new city clerk on board and give her a decent salary and give her the benefit package that everyone else currently had. If they wanted to change that benefit package at a future meeting, he suggested they talk with their labor attorney and Craig Klaver and have a study session and talk about cafeteria benefits and sick leave banks. He said also he did not want to get into micro-managing like when Mr. Toth put in his motion that the clerk needed council approval to get more than a week off; he said that was getting into administration duties. He said he didn't want the city manager or assessor or city clerk coming to them for permission to take time off; he said that was very appropriately handled administratively and they always knew when key people were off.


Councilman Toth said in rebuttal, that person would be working for the city council as directed by city charter and the intent was to make sure that the city moved smoothly and all he insisted upon was having some language in there to make sure they were notified and were aware of what was taking place.


Councilman Toth said Council had a January 26, 1995 letter from him discussing the city clerk's benefit package and nobody took any action so this was not new stuff being brought up at the eleventh hour.


Councilman Crawford said just because he wrote them a letter did not mean they had to take action on it. Mr. Toth said it was offered as a discussion item that he felt council should discuss at that time.


Councilman Schmid said if he wanted the memo to be further discussed, he should have brought it up as a motion and not expect someone else to grab hold of his memo and run with it. He commented that Mr. Toth was as remiss as the rest of council for not pursuing it.


Councilman Schmid said assuming they hire this lady tonight at the same benefits, she would then be entitled to the accumulation of sick leave up to 130 days and grandfathered in. He said he came into this meeting assuming he would give the same benefits but this was a new employee and they would be having several people leave in the next 5 to 7 years and there was something to be said for not locking her into the same benefit of 130 days of accumulated sick leave unless they did away with it all but probably they would grandfather those people in or pay them off.


Mr. Klaver explained that it was sick leave time that was accumulated currently and the new clerk would start with zero days; he said the idea would be to freeze whatever time was banked when they went to a CTO so it wouldn't make any difference at all. He also pointed out that in Mr. Hackmeyer's letter he states that in his opinion all the city benefits for all administrative employees need to be uniform by 1999 so based on that it was administration's recommendation that council not grant the new city clerk the early retirement option that was previously granted to the other appointed officials and that they make that part of the appointment letter and also go back and amend the personnel policy which would be on the agenda July 10th to make that change because otherwise they would have to drop those people off in the next four years anyway.


Councilman Schmid clarified that Mr. Klaver was proposing for all administrators benefits similar to what Mr. Toth was saying - grandfathered but frozen. Mr. Klaver said they would not be grandfathered because that would mean keeping the same provisions; whatever was accumulated at the time of the change would be frozen and no more time would be accumulated from that point.


Councilman Schmid said with that and realizing that the new clerk could not accumulate much and it would be frozen anyway if they went into a new plan, he agreed they should offer the present benefits. He said if they were serious about changing the whole administration, it wouldn't affect the new city clerk anyway and there was no need to single her out at this particular time since she would only have the benefits for a few months anyway. He said he could not support the motion.


Mayor McLallen said the discussion has been very positive based on the fact that the administration has been directed to give council firmer information by July 10th. She said she would not support the motion.


Yes (2-Toth, Mason) No (3) Absent (2-Pope, Mitzel)

Motion failed

It was then,


Moved by Councilman Schmid,

Seconded by Councilman Crawford,


That the new city clerk be offered a $41,000 starting salary with an evaluation in six months, that she be given the present administrative benefit package with the exception of the early retirement provision and recognizing that this benefit package will probably be changing within 90 days.





Councilman Toth said he would not support the motion; they have talked for years about changing things and he felt they should start in that direction now and follow through with everybody else. He said he didn't think there was any incentive to change things and unless council followed up on this, he didn't think it would move very fast. He said if council didn't take a stand right now, he didn't think it would ever come about.


Yes (3-Schmid, Crawford, McLallen) No (2-Toth, Mason) Absent (2-Pope, Mitzel) Motion carried



1. Resolution - Budget Amendment No. 12 - Year End


Councilman Toth said he would be leaving shortly and he didn't want to get into a long discussion on this. He said he went through the quarterly statement and found several things; it looked like the Police Department had $232,882 extra by the end of the fiscal year so he couldn't support giving them any additional funds at this point.


Councilman Toth said to talk briefly about his memo, he couldn't understand the figures on interest rates - they appeared to be all over the place. He said he had absolutely no way of determining how these interest figures have been arrived at. He said there were things that were way out of whack, none of it was explained to him, and he was used to a cost to complete calculation. Councilman Toth said he couldn't support anything he couldn't understand.


Les Gibson said he wanted to reassure council that they did monitor cash balances on a daily basis, they make investments as funds warrant, and they have their investments mature when the warrants come in so they basically didn't have any excess funds sitting around. He said once the warrant number was determined, they then reinvested everything available after that. Mr. Gibson said a PC was tied into the city's lead bank so they can check available balances for investment purposes and they even maintain a control disbursement account so when they released a check based on the warrant, that money was invested until the check physically cleared the bank.


Mr. Gibson said to address one of Mr. Toth's concerns - Major Street Fund - the primary funding source was the Gas & Weight Tax and in effect the State collected the money and gave the city a check three months after the fact in twelve monthly checks so there was seldom any balance in the account for investment purposes.


Mr. Kriewall said as they indicated in the budget study sessions, the addition of a budget analyst would take care of a lot of the information that council might want over and above what they were getting today. He said beyond that, he would recommend that council approve these budget amendments only because he felt it would affect the year end audit and any subsequent bond rating.


It was then,


Moved by Councilman Crawford,

Seconded by Councilman Schmid,


That Resolution - Budget Amendment No. 12 - Year End be approved.





Councilwoman Mason said she had called bond people and that was not true. She said this kind of stuff did not affect the bond rating; this is a good city and just because they didn't pass things they didn't understand did not give them a bad bond rating.


Councilman Toth said he had two examples on the quarterly statement on page two - it listed $459,266 and after four calculations, all he could come up with was $173,779. He said on page 9-Routine Maintenance was budgeted at $340,000 and the actuals were $461,343 - $121,000 over what was budgeted and he didn't understand why someone hadn't come to them sooner.


Councilman Schmid noted that Mr. Toth brought up substantial amounts of money, and Mr. Gibson said the formula on page two was messed up. As to the Routine Maintenance, the budget was put together about a year and a half ago and this was starting to show the impact of the additional people moving to the city.


Councilman Schmid said Plante & Moran are paid thousands of dollars to audit the city accounts for interest, etc. and they were paid to come back to council and tell them if there were discrepancies. He said he couldn't look at the accounts and tell if the interest was bad but the auditors certainly could and they had to rely on someone.


Councilwoman Mason said Plante & Moran worked with the figures they were given by the city and many companies that have gone bankrupt have been audited by big firms like Plante & Moran so that was not a guarantee that things were being done right in the city. She said she was not saying things were done wrong but that was nothing but a rubber stamp on what the city has given the auditors.


Councilman Schmid said he agreed with that but this was the best they had and he didn't know of anything better.


Yes (4) No (2-Mason, Toth) Absent (1-Pope) Motion failed


The meeting adjourned at 7:45 PM.










Date Approved: