REGULAR MEETING OF THE COUNCIL OF THE CITY OF NOVI
THURSDAY, APRIL 8, 1999, AT 7:30 PM
ACTIVITIES ROOM-NOVI CIVIC CENTER-45175 W. TEN MILE ROAD
Mayor ProTem Crawford called the meeting to order at 7:30 p.m.
ROLL CALL: Mayor McLallen (arrived at 7:35 pm), Mayor ProTem Crawford, Council Members DeRoche, Kramer, Lorenzo, Mutch (arrived at 7:40 pm), Schmid
AUDIENCE PARTICIPATION - None
PURPOSE OF SPECIAL MEETING Ė 1999-2000 Study Session
PROPOSED BUDGET REVIEW:
Mr. Les Gibson started by referring to the figures in the budget book on revenues dealing with property taxes and operating allowances. Mr. Gibson explained the millages that were levied last year and continued to explain that the maximum levy figures is the maximum that can be allowed under the Headlee amendment which is the maximum for all purposes.
Mr. Gibson continued with the operating and debt millages. He explained Headlee does not govern the debt millages, the city would have to levy whatever is necessary to make the principal and interest payments. He explained the next figures are what is being proposed for the 1999-2000 year and the following figures refer to the remaining capacity which shows the city as having over 1M in the General Fund and just over a tenth in Municipal Street Fund and Drain Revenue Fund. Mr. Gibson explained the remaining information reflects the dollars that are generated and reflected in the budget. Mr. Gibson said the budget reflects what portion of each of these funds is financed by property tax.
Mr. Gibson continued with base revenue by saying the city started with the taxable value of the city which was 1.8 billion dollars and new construction added nearly 90 million, market adjustments added 62 million and one industrial facility tax that was taxed at 50% for improvements over ten years has entered the last year. Mr. Gibson explained to compensate for the negative 20 million dollars, the compensation is for adjustments made throughout the year by Board of Review and the State Tax Tribunal. Mr. Gibson commented the taxable value being used as a base for the budget is $1,928,000,000. He said the tax dollars generating through the General Fund Revenue for the proposed millage as 7.4 million is being raised on last years tax base, new construction is contributing $370,000, market adjustment would generate $254,000, industrial facilities tax is $4,000 for the General Fund and then adjusting it down by $84,000 for potential adjustments so the property tax revenue for the budget and General Fund is $7,946.000.
Mayor McLallen asked if the new money over last yearís budget is roughly 1.2 million dollars? Mr. Gibson referred back to the figures previous discussed which is closer to 1.3 million. Member DeRoche said these figures only refer to the General Fund. Mayor McLallen said the General Fund is about .5 M.
Mayor ProTem Crawford commented a year or more ago it was decided to levy the maximum drain millage and apparently has some remaining capacity. Mayor ProTem Crawford asked is that correct? Mr. Gibson said it could not have the full amount last year. Mayor ProTem commented at one time it was decided, like a policy statement, if it was there and it was needed, the city would not bother with a levy. Mr. Gibson said he does not recall.
Mayor ProTem Crawford said there is also some remaining street capacity and wonders why these two are not being levied at the maximum when the city needs the street funds and possibly the drainage fund? Mr. Kriewall stated he believes Council wanted to keep it level the last couple of years. Mayor ProTem Crawford asked if some cuts were made so whole millages would not increase? Mr. Kriewall answered yes. Mayor ProTem Crawford commented again as it relates to the Drain Fund it was said the city needed money and Storm Water people asked if it could be levied because they needed more money. He commented the city had the money and the city does not need to increase the levy than what the city has already authorized. Mr. Kriewall commented the city would rather give in other areas not just in the General Fund.
Mr. Gibson referred to the General Fund figures, which breaks down the revenue into numerous categories. Mr. Gibson gave a brief explanation of each of the items under the various categories.
Member Kramer questioned the item of drug law forfeitures. Mr. Gibson explained there is money sitting aside in the Trust & Agency Fund which can be used for that purpose but until the police department requests the use, the city does not anticipate spending the money. He continued when the police department comes up with a need for use of the fund it could come into as a budget amendment to accommodate. Member DeRoche commended he understood the drug law forfeitures as being what the city has possession of and sold at auction. Mr. Gibson said it is the share of that profit that goes into a fund to be used for law enforcement. He continued to explain until the police department identifies specific needs as to how the funds are to use, the money is not put into the budget.
Member Schmid asked where these funds could be found? Mr. Gibson said they would be in the Trust & Agency Fund. Member Schmid asked what could the money be used for? Mr. Gibson said he was not sure of the restrictions. Ms. Kathy Smith-Roy commended the money could be used for training, equipment to enhance the drug enforcement. Mayor ProTem Crawford asked does the city have to wait for the police department to request the money? He asked if the city could ask for the use of the money? Mayor McLallen asked Mr. Gibson to continue. Mr. Gibson said the total budget revenue is $20,596,335.
Member Mutch asked if the trailer fees where mobile homes? Mr. Gibson said that is correct. Member Mutch asked how much property tax a mobile home park pays? She continued to ask is it possible to find out how much a mobile park generates in tax dollars per property owner and park owner? Mr. Gibson said he could provide those numbers.
Member Mutch commended on the grants by saying she understood in July a County Grant would be starting. She said it is the money that covers Beth Belter. Ms. Smith-Roy explained it is not separated on the list because that revenue is county money and it is on a year from September 1 to October 1 so the city has this yearís money for September to October in the budget but not next years.
Member Mutch said she understood that the grant expired last fall and the city the approved the application for renewal and it was granted but not yet begun. Ms. Smith-Roy commended the grant has begun but it has gone beyond what is authorized. Member Mutch said how can the city pay out money it does not have? Member DeRoche asked why is the city subsidizing for a grant? Mr. Kriewall commended why is the city continuing the position? Member Mutch asked why is the city continuing to pay when the city does not have the money? Member Lorenzo wants to know where it is coming out? Mr. Gibson said it is taken out of the General Fund. Member Lorenzo asked in which line of the budget? Mr. Gibson said it was taken out of temporary salaries in the police department.
Ms. Smith-Roy commented Mr. Klaver has all the information and this issue should be brought to his attention. She continued to say the projection for the funds were not as planned. Member Mutch commented the Council thought Ms. Belter was getting money out of the grant for procedures to establish the larger grant which the city has gotten and hired personnel so why is the city paying anything? There was not a definitive answer.
Member Mutch commended on the drug forfeiture laws are they cashed? Mr. Gibson answered what the city has is cashed is shared among the jurisdictions. Member Mutch asked if this amount could be showed within the budget within any particular time? Mr. Gibson said that could be done. Member Lorenzo said parameters for what this money could be used for would also be helpful for Council.
Member DeRoche had some comments on the administrative reimbursement of 15%. He asked it is 15% of what? Mr. Gibson said any consultants that get involved; the fees are based on 15% of what the consultantís charge. Mayor McLallen commented that this year there are a number of projects coming up why are we projecting flat revenue when prices are increasing? Mr. Gibson answered he would have to review the situation. Member DeRoche wanted some clarification of these fees. Mr. Gibson explained this reflects when a developer comes in with plans.
Member Schmid commented on current property taxes that in February 1999 was $7,406,458 but it is estimated for $7,372,000. Why? Mr. Gibson said there still is activity that the city is receiving changes coming out of the State Tax Tribunal and when this happens the city has to return the money. That is why the estimate is a lower.
Member Schmid mentioned the $20,000 from the weighmaster comes back to the city. Mr. Kriewall said some of the $260,000 includes fines in particular the weighmaster wrote $114,000 in tickets and the city gets one-third, which is included in the total amount. Mr. Kriewall also mentioned $33,500 has been collected for permits. Mr. Kriewall again said it is one-third of $114,000 plus the $20,000.00.
Mayor ProTem Crawford asked what the police department revenue includes? Mr. Gibson answered it is primarily for dispatching for the communities. Mayor ProTem Crawford commented this is what the city is receiving from the other communities? Mr. Gibson answered yes along with some other items.
Mayor ProTem Crawford went back to the drug law forfeiture and asked how much money is involved? Ms. Smith-Roy answered between $30-40,000. Mayor ProTem Crawford asked could this money be used by the police department instead of coming out of the General Fund? Mr. Gibson said that could be done. Ms. Smith-Roy said anything dealing with drug enforcement is where this money could be used. Mayor ProTem Crawford said he would like to see that money applied.
Mayor McLallen made a comment on the Non-Business Licenses flat income projection. Mr. Kriewall commented there is a down turn on single family exhibits. Mayor McLallen said for this year but next year there are two major projects. Mr. Kriewall said if RAMCO begins in the next facial year the city could be on the low side.
Mayor ProTem Crawford asked about Harvest Lake? Mr. Kriewall explained said the project is slowing down for two reasons. The reasons are the Kohl brothers purchased other property and are putting their interest there at this time and they are partners with other developers on other projects. Mr. Kriewall mentioned it would be something if the ground was broken to put in utilities this fall. He mentioned there probably would not be much activity until spring 2000. Mayor ProTem Crawford commended revenue will be on next yearís budget. Mr. Kriewall said probably not this budget but in the year 2000-2001.
Member Mutch asked if Harvest Lake would be kept at the same numbers because the estimated numbers are higher than what the actual payment for this year? Mr. Kriewall said the numbers appear to be close. Mr. Kriewall commented the figures should be fairly accurate.
2. CITY COUNCIL
Mayor McLallen commented on membership and dues for conferences which is about $1,000. She explained the Council belongs to MML , National League of Cities and has historically paid for Mayor memberships. Mayor McLallen said because the Council does not participate to cut $1,000 from the budget. She continued to say could the Council be apart of the three organizations for $1,500? Mr. Kriewall explained these are city memberships where these are specific Council or Mayor memberships.
Mayor McLallen explained the city is not set up to fund Mayor conferences. She continued to explain the small bit of information that is funneled to the city is not worth the money that would be required.
Member Schmid commented there are seven laptops at $22,400. Lauri Loechli said that is what is being budgeted for software and a network card so the Council members could connect to the network.
Member Schmid said that long distance is expensive. He asked how is this going to be handled? Ms. Loechli explained there would be an Internet Provider for on-line. RFP is coming out of the current budget. Member Schmid asked why this was not done at the beginning? Ms. Loechli said she was not sure.
Member DeRoche said this is enough money for the project. Member Kramer said this is enough for a capable but moderate laptop. Ms. Loechli agreed.
Mayor ProTem Crawford commented on conferences and workshops budget. Mr. Kriewall explained the money reflects the distance for some of the conferences.
3. CITY MANAGER
Mr. Kriewall said there are no changes or capital. He commented a new computer terminal should be installed for the Manager. Ms. Loechli commented the manager would probably get one when the city is Y2K compliant. Member Kramer asked if this shows on the Managerís budget? Member Mutch asked how many people would be involved in the new system? Mr. Kriewall answered it would be the city manager, the assistant city manager and the administrative secretary.
Member DeRoche asked about longevity? Mr. Kriewall said he is grandfathered. All new employees would not get the benefit.
Mayor ProTem Crawford asked about the membership and dues? Mr. Kriewall answered that is the ICMA professional dues and rotary. The dues are for himself and Mr. Klaver. Mayor ProTem Crawford mentioned the transportation dues? Mr. Kriewall said that is for gas. Member Mutch asked where does SEMCOC membership come in? Mr. Kriewall answered general administration. Mayor ProTem Crawford asked if conferences and workshops are for three people? Mr. Kriewall said that is correct. Member Mutch asked if these were all free? Mr. Kriewall said yes.
4. GENERAL ADMINISTRATION
Mr. Gibson answered the positions of purchasing director, human resource specialist, new position-grant administrator, one receptionist, one clerk typist and one additional clerk typist fall under this description. Mr. Gibson said two positions have been recommended. Member Kramer wanted clarification on the two positions. Mr. Gibson said they are grant coordinator and clerk typist for human resources. Mayor ProTem Crawford asked if the grant position is for the entire city? Mr. Kriewall answered yes. Mr. Gibson said one of issues is to have the position help Ms. Smith-Roy monitor the grants along with solisistating and writing new grants. Member Lorenzo commented the position should be filled with someone of good caliber. Mr. Kriewall said the total monies for the two salaries are $70,000. He commented the money for a grant coordinator would be around $45-47,000.
Member DeRoche questioned why there is so much insurance for retirees medical? Mr. Gibson answered for each of the retirees that pre-dated the offsetting side money in a separate fund those employees who are going to retire. Member DeRoche asked about coordinating of Medicaid or Medicare? Ms. Smith-Roy said the city does this. She explained the decreased rate from Blue Cross/Blue Shield by one-half based on the plan of Medicaid and re-implement to lower the cost. Ms. Smith-Roy said there are 38 people involved and their benefits can not be changed. Ms. Smith-Roy explained that money showing on the budget has gone on for some time. The money set aside is under the Post Retirement Health Care Fund.
Member Mutch asked if the lake property is as clean as it is going to get? Mr. Kriewall said the concrete and old roadway has been torn up and quite a bit of work has been done at the location.
Member Mutch asked about Michigan Week and does not see anything about Mayor exchange. Mr. Kriewall answered it comes out of community promotion. He continued to say about four years ago Council wanted to have it included in the budget.
Member Mutch asked about the 50ís Festival? Mr. Kriewall commented the budget item reflects police department, department of public works and water & sewer overtime.
Member Mutch commented on the other services item. Mr. Gibson said these numbers reflect the planning consultant and the engineering consultantís retainers.
Member Mutch asked about the suggestion program. Mr. Kriewall said this program did not work. She then asked about printing and publishing. She wanted to know if these are based on known projects? Mr. Gibson said this is an estimate of normal activity.
Carol Kalinovik explained the community calendar comes out of public information and the printing and publishing covers general administration, finance, treasurers and assessing not planning.
Mayor McLallen mentioned the $400 in medical service. Mr. Gibson answered that is used for physicals for new hires.
Member Schmid wanted clarification on the $30,000 for historical? Member Lorenzo said it is for the Town Hall restoration, cemetery and community events. Member Schmid asked again what it is for? Member Lorenzo said it was fixing the steps of the Town Hall, concerts and other promotional events. Ms. Kalinovik said $8,000 is for maintenance and utilities, $500 for printing, $1,000 for conferences, $3,000 for historical markers, $15, 000 for building renovation and $2,500 for special events.
Member Schmid said at one time it was talked about creating a Capital Fund. He said it has been talked about but never appears in the budget. Mr. Gibson said there is now a special fund set up in the capital area called Capital Improvement Fund. He continued to explain items that are identified in the CIP (Capital Improvement Program) for the current year are included in this budget. They are included in the General Fund and Parks and Recreation. He said this activity may want to be moved so that the fund CIP coming out of the Planning Commission area.
Member Schmid mentioned the Planning Commission has the responsibility to prioritize. Mr. Gibson this is the reporting and makes it easier to identify the capital but that does not set up any extra money. Mr. Gibson said if the city does nothing more than just move the activity that is reflected in the General Fund and Parks and Recreation over than there probably would be some fund accumulated.
Member Lorenzo said the city could levy the maximum out of the General Fund and have 2M extra dollars. She continued to explain this could be put into Capital Improvement Fund for an option.
Member Schmid asked about the equipment lease of $25,000. Ms. Kalinovik answered this is for the copy machine.
Member Kramer asked about mowing. Mr. Kriewall said that has been moved to the public works area.
Member Kramer asked do we need to budget for the 2000 census? Mr. Gibson said there is nothing that needs to be budgeted.
Member Kramer brought up the street lighting. Mr. Gibson said that is something he wants to be discussed in the individual departments. He said the city has been charging it to the Mutual Street Fund. He said the estimate has been dropped from $124,000 to $80,000 based on actual experience. Mr. Gibson said there is a certain special assessment fund that their districts are established where the city charges the districts like the Towne Center and other areas.
Member Kramer said the city has not done the 20/20 yet and it has not been proposed. What happens to the money that was not spent in 1998-1999 is rolled over? Mr. Gibson answered that is correct and it is lost. Member DeRoche commented that 20/20 needs to bring in an outside consultant because there has not been any community support for the past year. He believes there needs to some organization and recommendation to Council. Member DeRoche continued to say he believes it needs some administrative or professional direction.
Member Kramer wanted clarification on the bike trails. Mr. Gibson explained the monies is found under maintenance and the budget has been moved over to the DPW.
Member Mutch had a comment on 20/20. She believes the term should be dropped and come up with something new. This may regenerate the idea to the community.
Member Mutch wanted to know where the Fuerst property is located? Mr. Gibson said it is located under the Building and Grounds Fund.
Member Kramer commented about the 30th anniversary monies. He asked if the $5,000 would be spent? He said there are a few upcoming activities that may need some support.
Member Mutch said Mr. Martin has been working on interviews from residents for some time. She wondered if he has this in his budget and commented this may be a use for the money.
Mayor McLallen had a question on the $500 for transportation. Mr. Gibson said this is mileage for the purchasing director, human resource specials or any other employee who uses their personal car.
5. FINANCE DEPARTMENT
Mayor McLallen asked Mr. Gibson who is covered under the Personal Services? Mr. Gibson answered himself, Ms. Smith-Roy , Cheryl McNamara, 2 account clerks and 1 part-time account and co-op student. Mr. Gibson said the co-op monies come out of temporary salaries. Mayor McLallen said there are 2 supervisors and 4 middle level employees and 1 part-time? Mr. Gibson said that is correct.
Mayor McLallen said there are two categories under data processing. Mr. Gibson said on is general support which includes payroll service. He said the other is his recommendation for purchasing two printers. He commented Finance could use one along with the Budget department. Mr. Gibson said the $35, 000 is for record retention imaging. Mr. Gibson said the Clerk and Building Departments already have an imaging support. Mr. Kriewall said the building is running out of space and the DPW is at capacity and this would be an alternative. Mayor McLallen mentioned that some of the items from storage be moved to another location or cleaned out. Ms. Kalinovik mentioned it is known what needs to be done. She commented the environment has to be temperature controlled.
Mr. Gibson continued with the keeping of all the documents in the office. He said the original records have to be maintained but an imaging system would relieve the on-site storage. Member Schmid asked if the documents could be put into the computer? Mr. Gibson answered yes but he was not aware if a copy of the document meets the legal requirement. Mr. Gibson said the document could not be changed because the idea is not to be able to edit the document. Mr. Gibson said the police department has a support system and the Clerkís and Building departments share one server. Member Schmid commented one server seems more practical than having individual systems. Member Kramer commented this situation should be reviewed to consolidate.
Mayor McLallen asked who is involved in the technology. Mr. Gibson commented there are two full-time positions and a new position. Mayor McLallen said it is a two member department and the proposal is to make it a three member department? Mr. Gibson said that is correct. Mr. Gibson said there have been many challenges in the technology field within the city. Mr. Gibson said he believes the computer support has made it possible to support the increasing work requirements.
Mayor McLallen wanted clarification on the $20,000 under Conferences and Workshops. Mr. Gibson said that includes in-house training.
Mayor McLallen commented on the $500 on overtime. She asked if the city needs some temporary help occasionally maybe the city could budget more carefully.
Mr. Steve Babinchak explained the department has two full time account clerks who work with tax and accounts receivable, and one full time clerk who works with loan guarantees and bonds and one permanent part-time employee and one co-op.
Member Schmid asked if $3,000 is enough for Y2K? Mr. Babinchak commented he believes that will be enough. He said tests were run on the computers and three of the tests failed. He continued by saying many of the software systems are on the accounting system and the accounting is responsible for the Y2K compliance.
Member Kramer asked what background needs to be done for Y2K? Ms. Loechli said a list of hardware replacement has been made. Mr. Gibson said most of this has been done during the current year and anything that has been identified will be carried over to the next year and dropping into individual departments. He said if a major obstacle should present itself it will come out of the General Fund. Mayor ProTem Crawford asked if each department has a Y2K line item? Mr. Gibson said no because many have been taken care of this year and do not need a line item.
Member DeRoche commented there needs to be more open discussion on the consultant review committee for services.
Mayor McLallen clarified this only covers Fried, Bugbee & Watson not labor attorneys or appeal attorneys. Member Lorenzo commented on the other legal fees of $100,000. She asked if there was confirmation? Mr. Gibson said the city does not have anything and there needs to be a review of the whole area. He continued with the impact on the city attorney because of labor contracts this year. Mayor McLallen restated legal fee covers Fried, Bugbee & Watson retainers plus other expenses by the firm. Mr. Kriewall answered that is correct. Mayor McLallen continued to say other fees that would be the labor attorney; Mr. Kriewall said that is correct.
Mayor McLallen summarized some of the issues raised. Clarification needs to be made on the Oakland County revenue sharing for 14 Mile Road.
Under the City Council item it was mentioned the $1,000 be removed for the mayor conference.
Mayor McLallen said under City Manager there was nothing major but under General Administration it was mentioned there needs to be an audit of the grants. Another issue dealt with the Drug Law Forfeiture Fund and what are the limitations of the use.
Mayor McLallen mentioned there needs to be continued support for the creation of a Reserve Capital Fund. The 20/20 program needs retooling to receive more community feedback analysis. Mr. Gibson asked if $1,000 would be enough for the regeneration? Mr. Kriewall answered yes with other Council members.
Mayor McLallen said the biggest issue of the night was the issue of record management. She asked if the budget has adequately addressed the issue for the next 12 months? Mr. Kriewall commented the DPW might be able to appropriate amount of space on site. Mr. Kriewall said there is a factor with the DPW garage because it will overnight increase the value of the property to help build a new facility. Mr. Kriewall said in involves 11,033 acres for 6M.
Mayor McLallen said the other issue is to evaluate the support and funding for the IT Department given the workload.
Mayor McLallen said the attorney issue budget needs to be more refined to reflect what it is going to cost for the major appeal and the issues associated with the situation.
There being no further business before City Council, the meeting was adjourned at 9:30 p.m.
Kathleen S. McLallen Tonni L. Bartholomew
Transcribed by: Melissa H. Place
Date approved: April 19, 1999