THURSDAY, APRIL 9, 1998 AT 7:30 P.M.



Mayor McLallen called the meeting to order at 7:40 p.m.



ROLL CALL: Mayor McLallen, Mayor ProTem Crawford, Council Members DeRoche, Kramer, Lorenzo, Mutch, Schmid





PURPOSE OF MEETING - 1998-99 Budget Study Session




1. Revenues


Les Gibson advised Page 2 of Mr. Kriewallís letter is a historical presentation of the cityís 1989 to 1999 SEV. Mr. Gibson reported it shows two sets of numbers for value because the state equalized value has been maintained by the assessorís office. However, for taxing purposes after Proposal A, Mr. Gibson reported there is now a lower number taxed at 5% of the increase in the CPI. Mr. Gibson reported that the increase in the CPI for this year was 2.7%. Mr. Gibson noted the cityís growth in SEV, which is 50% of the true tangibility of the city, is just over 12%. Further, the growth in the taxable value is 9.84% and he added that the recommended millage is slightly less than what it was last year.


Mr. Gibson referred to Page 5 which is an analysis of the millage to portray the roll back required by the Headlee amendment and although the proposed is slightly higher than last year, it still leaves a remaining capacity of just over one mil. He added that the remaining capacity of 1.0814 equates to just under $2.0M. Mr. Gibson advised they currently have two other funds that are not at the maximum; they are the Municipal Street Fund and the Drain Revenue Fund. He continued by stating that the millage calculation for the Debt Service Funds is a straightforward process. He explained when they sell the bonds, they know exactly how much principal and interest is due every year. He further explained that it is just a matter of taking the total debt service requirement for the current year and evaluating it by the tax base.


Mayor McLallen understands that all of the debt (except the 1997 Street Debt Bond) is declining because they are almost paid off; Mr. Gibson agreed. Mr. Gibson added that the 1997 Street Debt Bond was sold in two series. He explained they sold $9.0M the first year and sold the remaining $8.1M this past year, and that is why the debt service is increasing.




Mr. Gibson noted that the report also indicates what percentage of each fund is funded by the property tax. He further noted that property tax revenues fund 40% of the General Fund.


Mayor ProTem Crawford understands the amount shown for the General Fund represents 40% and therefore, there would be a 60% addition to that fund; Mr. Gibson agreed.


Mr. Gibson summarized the revenues received from the other funds. He then advised that they recommend that the General Fund be increased by 0.0789 mils which would generate $142,000.00 and would be tied to the hiring of two police officers (one D.A.R.E. officer and one patrol officer).


Mr. Gibson advised the Building Department activity is estimated at $1,375,000.00 by the end of this year, which is the same amount estimated for the current year. He noted that the prior yearís actual is just under the estimated amount.


Mr. Gibson advised the C.O.P.S grant is the largest item under the Grants category.


Councilman Kramer asked whether the Community that Cares Coalition Grant is included. Mr. Gibson replied they have not yet included that item.


Mr. Gibson reported that State Shared Revenue continues to be a difficult item to estimate because the state continues to adjust the numbers. However, he further reported that although the state changed the payment schedule on a quarterly basis during this past year, it has helped Novi because it has generated $200,000.00 more in the current year than what they originally estimated. Mr. Gibson asked Council to notice that the number they are estimating for next year is the same number as the current year. He explained the state has identified that any growth in their revenues will be set aside and they have established a committee to determine how they should allocate these funds back to local governments. Mr. Gibson added they have included $600,000.00 in the State Shared Revenues that can be attributed to the special census and noted that there was a special appropriation at the state level to fund that in its entirety. However, he added they will not know until possibly May whether that funding is a reality.


Mr. Gibson reported that Business Registration revenue amounts to approximately $20,000.00. Mayor McLallen stated they discuss this item yearly and asked whether they should review this fee because she is not certain whether the current fee is covering the actual administrative paperwork. Mr. Kriewall advised that they will survey the business fee structure in other communities.


Mayor McLallen advised that the Chamber of Commerce has retained a college student to survey the fee structure of several local communities to compare with Noviís fee structure.


Mr. Gibson advised the transfer from the Police and Fire Fund amounts to approximately $3.0M and he noted they will be discussing that transfer later during the budget process. He further noted that they basically put all the funds for the police and fire operations in the General Fund so they can refer to one place to determine the police and fire costs.


Mr. Gibson noted that the tax bill has been redesigned so that it highlights the school taxes.


Mayor McLallen asked where is the interest earned for school taxes indicated? Mr. Gibson replied that it is included in the interest earnings, but added he can break that amount out for Council.


Councilwoman Lorenzo noticed that there are no longer any fees indicated for wetlands and woodlands. Mr. Gibson advised they are still receiving the fees, but they are not breaking them out in the budget process.


Mr. Gibson reported the final budget number is $15,745,166.00 and added Council previously established a target of 10% to be maintained as a General Fund Balance. Mr. Gibson advised they expect to have on $2, 829,083 on June 30, 1998 and that means they will expect to leave $1,574,517.00 in the General Fund.



2. City Council


Mayor McLallen noted Councilís proposed 1998-99 budget ($32, 840.00) has increased slightly from the prior year ($31,350.00).


Council requested that their Goals and Objectives be included on Page 82 of the budget document.



3. City Manager


Mayor McLallen noted that each department has almost a $10,000.00 pension increase.


Councilman Schmid noted the $14,000.00 change in the City Managerís pension plan benefit. Mr. Gibson explained the amount includes the entire Personal Services category, and includes insurance increases and several other authorized increases.


Councilman Schmid thought there was a change in the pension plan. However, he now understands that the language is a misstatement. Mr. Gibson agreed and Mr. Kriewall advised that they will change the wording from "benefits" to "base" on Page 84.

Council requested that Mr. Gibson provide a list of the total Capital Outlay to compare with a draft of the CIP recommendations.



4. Public Information


Lou Martin noted that the largest request in his budget is under CIP. He explained $50,000.00 of the request represents a video enhancement. Mr. Martin explained how the new video improvements will correct the problems they are currently experiencing because of the most recent audio equipment improvements. Further, Mr. Martin noted that the computer equipment will permit the city to keep more of their video work in house.


Councilman Schmid asked whether Time Warner will still provide equipment? Mr. Martin reported that Time Warner will maintain the modulators and the power to the modulator. He added that they also own the original suitcase studio and he believes that several enhancements were made to it. Further, Mr. Martin understands that there is a potential to have much of that equipment paid for by Time Warner under that the contract that they are currently negotiating. In addition, Mr. Martin believes all the equipment included in the original contract was fulfilled.


Mayor ProTem Crawford advised some of the equipment issues are currently being discussed during contract negotiations.


Councilman Kramer asked whether there is a potential for some additional capital equipment funding. Mayor ProTem Crawford replied there is some potential, but restated it is a part of negotiations and remains to be seen. He added if it is forthcoming, they must determine whether there is the potential for the cost to be added to cable billings.


Councilwoman Mutch asked Mr. Martin to comment on what he expects to accomplish under Item 2 (Research, define and propose formal government access policy) of his goals and objectives. Mr. Martin explained the original resolution for the cityís policy for cable casting was adopted in approximately 1992 and simply stated that specific meetings would be cable cast. Mr. Martin would like to survey other communities and determine what their formal policies are relating to everything they place on the air.


Mayor ProTem Crawford asked for further clarification about the request for the expansion of an audio/visual back up staff for the production of live meetings. Mr. Martin explained part of the request includes back up staff and someone to record the meetings on the audio cassette equipment. Mr. Martin noted that the new equipment produces a better quality audio tape for transcription purposes. In addition, Mr. Martin advised they would also like to incorporate the ability to view the agenda item during the live meeting similar to what is seen on CNN so that the meeting is easier to follow by the viewers at home.



Mayor ProTem Crawford asked whether Mr. Martin has researched video podium equipment? Mr. Martin advised that he has and it is a part of the $56,000.00 request. He explained $6,000.00 represents that computer equipment, a printer or a scanner. He added that because it will be connected to the ceiling projector, they will also be able to televise what is projected.


Councilman Schmid asked how many people are currently working in the audio/video room during the meetings? Mr. Martin advised two people currently are working during the Council meetings; one oversees the cable production and the second oversees the audio system that they now house in the audio/video room with the potential of eventually controlling the viewing of current agenda items live during the meetings.


Councilwoman Mutch asked whether Mr. Kriewall sees the Public Information Department as the area that should develop and maintain the cityís web page site? Mr. Kriewall believes it is appropriate.


Council requested that they add the "Development of the City Web Page" to Mr. Martinís goals and objectives, and to his responsibilities.



BREAK - 9:20 until 9:30 p.m.


5. Assessing


Glenn Lemmon advised they are cutting back on their temporary staff for the 1998-99 budget. He added they are also eliminating their co-op student position.


Mr. Lemmon reported the assessing information has now been input into one computer system and they are satisfied with the results. He explained that their Board of Review requests are down by approximately one hundred applications as compared with last year.



Mr. Lemmon further reported that the cityís current SEV is approximately $1.9M. In addition, he advised that Ken Cheyne and Jim Geiermann remeasured every industrial and commercial property, and are in the process of inputting that information into the computer system. Mr. Lemmon noted this work was previously done by hand.


Mayor McLallen asked what is the total count for businesses in Novi? Mr. Lemmon advised there are approximately one thousand commercial and professional properties, and of those, probably six hundred are approved.



Mayor McLallen asked whether the department is creating a data base that other departments can use? Mr. Lemmon advised other departments are currently using the data base for names and addresses (i.e., public hearing notices). He further noted that their system is compatible with the GIS system. Mr. Lemmon believes the general policy of all the cityís departments is to share information.


Councilwoman Mutch understands there are one thousand industrial or commercial properties of which 60% are improved in some way; Mr. Lemmon agreed. Mr. Lemmon added that the principal system that they put in place has the potential to store up to eight pictures for each parcel. He noted it is their initiative to start this process within this budget year once their training on the equipment is complete.


Councilman Schmid asked at what point does the Assessing Department change the value of a property when a rezoning has taken place? Mr. Lemmon replied that they establish the value of a property throughout the state on December 31 of any given year.


Mayor McLallen asked whether a tax bill will change for an owner whose property is rezoned from RA to OST if he plans to stay in his functional residence on the property? As the cityís assessor, Mr. Lemmon advised that he is bound by the constitution to try give 50% market value. However, he explained if the zoning change makes the property more valuable, he needs to consider that when formulating the SEV. Mr. Lemmon added that the ownerís taxable value is locked into increasing as if the CPI were 5% or the lower of the two. Mr. Lemmon advised the owner is protected because the taxable value does not change, even under a rezoning.


Councilman Schmid asked how many businesses are in litigation? Mr. Lemmon replied there are approximately twenty cases that are pending. Mr. Lemmon advised one goal of the department is to cut back on their legal costs and they believe the development of the commercial and industrial appraisal will provide a good basis for their appeal foundation in the legal process.


Mayor ProTem Crawford asked what kind of tax does a medical center pay when compared with a similar office or industrial complex? Mr. Lemmon replied Providence Hospitalís assessment is reduced as they expand the hospital facility into the space that is currently leased by doctors. Mr. Lemmon added that the tax will be reduced until it reaches zero.



6. Fire


Mayor McLallen reported that the Fire Department has twenty one full time staff members; six supervisory and administrative staff members and fifteen fire officers. She added there is no request for additional staff, but noted the biggest request for this year is the transfer and construction of two new fire stations. Further, the Mayor reported the greatest capital outlay is in the trucks.


Chief Lenaghan added they are replacing three ten year old vehicles and he noted they can probably trade them in for the new vehicles. Chief Lenaghan reported the proposed budget is a maintenance budget, but added he would recommend that Council consider two people for maintaining the eight vehicles. He would further propose that they consider reorganizing the fire department by having two assistant chiefs and incorporate the fire marshall, the training officer and a part time vehicle maintenance program into what would be called "Support Services." Chief Lenaghan then discussed the many factors that impact public fire protection.


Councilman Schmid noted the increase in social security and understands it is due to the increase in the paid, on call staff; Chief Lenaghan agreed.


Mayor McLallen noted the fire departmentís pension has decreased.


Councilman Schmid asked for further clarification about the infrared sensing device. Chief Lenaghan advised there is a request for one device at this time and then they will purchase one per station per year. He added there are different prices for the three or four that are currently available on the market.


Chief Lenaghan noted there is a change in the capital outlay. He explained they are trying to complete the parking lot paving project for Station 3 in conjunction with the DPW project and added different repairs are needed at the other stations (i.e., roof repair, generator repair, etc.).


Councilwoman Mutch understands that the Chief is recommending two staff members for each vehicle; Chief Lenaghan agreed.


Councilwoman Mutch understands that the recommendation for the two assistant chiefs as part of the reorganization would help eliminate the one man departments (i.e., fire marshall, training officer and maintenance) and asked whether the assistant chief could also serve as the fire marshall? Chief Lenaghan replied the assistant chief position is a non-union position whereas the fire marshall is a union position.


Councilman Kramer requested that the Chief list the proposed staffing needs and the staffing as it currently exists because he would like to see how some of the functional positions are combined.


Councilman Kramer would also like to see how the construction of a training facility will impact the other departments (i.e., administrative expenses, operating costs, added personnel etc.). He also asked whether there is the opportunity to receive revenue from other communities for training their firefighters. Chief Lenaghan believes that opportunity would exist after the first year.

Chief Lenaghan advised the maintenance of the facility will fall on the full time staff members.


Chief Lenaghan asked Council to consider the implementation of an intercom system in the four fire trucks and four rescue vehicles that will also hook into the radios. Chief Lenaghan also encouraged that the department acquires a tread mill so they can implement a respiratory evaluation of their employees.


Councilman Kramer suggested that those types of items be included in the CIP process.



7. Finance


Item to be carried over to budget meeting scheduled for Monday, April 13, 1998.


Councilman Schmid asked Mr. Gibson to provide him with the costs attributed to existing and the projected new employees. Mr. Gibson believes he can provide that information for the new employees, but he is uncertain about whether he can provide it for existing employees.





There being no further business before City Council, the meeting was adjourned at 11:15 p.m.








Mayor City Clerk


Transcribed by Barbara Holmes


Date Approved: April 20, 1998