View Agenda for this meeting



MONDAY, AUGUST 23, 1999, AT 7:30 PM



Mayor McLallen called the meeting to order at 7:33 p.m.




Boy Scout Troop #54 led Council and audience with the pledge.


ROLL CALL: Mayor McLallen, Mayor ProTem Crawford, Council Members DeRoche, Kramer, Lorenzo (left at 11:47 p.m.), Mutch, Schmid




Mayor McLallen stated Public Information Director Lou Martin would be making a presentation concerning the City of Novi of website.


Mayor McLallen commented she would like to add under Mayor and Council Issues the appointment of hearing officers for the newly adopted Dangerous Buildings Ordinance.


Mayor ProTem Crawford commented under Mayor and Council he would like to add police school liaison.


CM-99-08-201: Moved by Crawford, Seconded by DeRoche, CARRIED

UNANIMOUSLY: To approve the agenda as amended


Vote on CM-99-08-201 : Yeas: McLallen, Crawford, DeRoche, Kramer, Lorenzo,

Mutch, Schmid

Nays: None




Mayor McLallen said the City of Novi Public Information Director would be explaining the City’s website. She asked the citizens to stop and view the kiosks located in the atrium. It is a touch screen computer that gives information about the City of Novi and helps minimize the time a citizen would need to direct them to the proper department.


Mr. Martin said before he got started on the web site, there is a laptop connection on the podium in the Council chambers that connects to the projector on the ceiling. There also is an audio/visual person who can assist any individual or group who may be interested in using the equipment. There are also lights that can be utilized for any presentation. The City is encouraging any individual or group to use the laptop and he extended an invitation to any interested party to contact him at 347-0494 for assistance


Mr. Martin said the City was very excited about the website. The website address is He explained the website consists of four categories, which are government, services, community and business. The City directory is located at the top of the site. The feature will take the user to the department directors, which includes all the phone numbers and some e-mail addresses for ease and convenience when the user gets to the homepage. There is also a useful site map that may not be found on other websites but the City thought this was important to include. The site map is the initial outline. The Communications Committee, which includes Mayor ProTem Crawford, Members Kramer and Mutch along with himself, has worked on outlining the entire website, which includes up to 200 pages in the site map.


Mr. Martin stated the government category includes information on the Mayor and Council, Boards, Commissions and Committees along with information on the City Clerk. He gave a demonstration on how to operate the equipment and what kinds of information can be found.


Mr. Martin stated the services feature represents the Administration. In services the user can get a look at all the departments and information that has been collected as of this date. The website is in the beginning stages so there is still material and information that will become available in the future. One of the most interesting things that the City has is the finance site located under services. The finance site shows a talking tax form, which is the idea of the City Treasurer, Steve Babinchak.


Mr. Martin commented on the front of the services site there is the development guidebook. This is a great resource for developers and business people. There is the Parks & Recreation program, a resource center and a forms and permits site, which was one of the first things included during the first phase. There is a section that contains five years worth of minutes from City Council, Planning and Zoning Board of Appeals along with the City Code of Ordinances through the Municipal Code Corporation. There is a section for frequently asked questions for each department and again this goes to the site map. The Communications Committee has worked very hard in defining what the website should be and picking who the provider should be and the directors have worked very hard to provide information..




  1. S.A.D. 152 - Shawood Walled Lake Heights Subdivision - Water Main
  2. Mayor McLallen stated this is a request by the citizens to bring water into their area. The site is located north of 12 ½ Mile on the west side of Novi Road.


    James Korte of Shawood Lake said he was close to the Austin end of the area. The water mains are in but he still does not have any water. He hopes as this water main continues, the other end of the subdivision gets better response than the residents on Austin.


    He said he has reviewed the engineering by JCK and was given a copy for the other end of the subdivision with the Austin main, and the Shawood Bridge Canal was wrong. He asked how much that impacted the price of what the residents are going to be paying? Before going any further JCK should get the engineering correct.


    Angie Bruder of 195 Pleasant Cove lives on the west end of the neighborhood and their water is fine, and she does not want to pay for this service. She understands there are problems in the area but is it possible to just service them and not extend into the west end of the neighborhood? Mayor McLallen said the series of the hearings will determine the exact boundaries of the district. With the progression of the seven hearings, some issues will stay and some will be eliminated. Ms. Bruder commented she received a letter about the hearing and it appeared to her that if the residents did not attend and voice their opinion, the residents would not be able to contest a tax assessment in the future.


    Laverne Reinke 165 Pleasant Cove stated his water has a lot of iron and sediments. It would be a benefit to everyone to have City water available because of the amount of problems associated with wells and pipes. He hopes the water main goes through.


    Dorothy Nail of 240 Pleasant Cove came before Council asking for clarification on how 51% is determined. Mr. Kriewall answered it is based on the state equalized evaluation of a given district. The district can be any shape or size. The petitioning party, if it is petitioned has to represent more than 50% of the SEV in a district. City Council can create a SAD, irrespective of how many people want it in a particular district If there are pollution problems or health and safety questions or a general perceived need in the area. Where it is by petition, the City looks for 51% to drive any City Council discussion. Ms. Nail asked if the City knows what the percentage is at this time? Mr. Kriewall commented the Water Superintendent has been working with the residents and can respond. Mr. Jerome said based on the petitions that have been returned, there is 55.9% in favor of the water main. Ms. Nail asked how was that number determined? Mr. Jerome explained it was the number of signatures representing the properties and the state equalized evaluation of the properties. Ms. Nail asked where did the signatures come from because she was not aware that she was even asked for a signature. Mr. Jerome said the petitions came from residents within the neighborhood. Ms. Nail questioned if this is not the signature given to Mr. Reinke? Mr. Reinke answered the first one was to explore the cost and supposedly the residents were contacted after that for the rough amount of value cost wise.


    Ms. Nail stated her problem is she has three buildable lots besides her home, which will be overwhelming if the water and sewer is successful. She does not know what her recourse is in the situation. Mayor McLallen commented each SAD is a series of seven hearings where people begin to find out the residents in favor or not and estimated costs. When a point is reached where the majority of the residents want it and it comes in, the three lots would not be hooked up until they are buildable but the cost of the estimate will ride on the lots. Mayor McLallen mentioned a hardship could be petitioned on the properties. Ms. Nail said she understood an individual would have to be destitute to apply for the service and have to be low in income. Mr. Watson explained there are standards within the ordinance. Oakland County hardship levels set by the county fall within an income he cannot quote. He will locate the ordinance and make them available. Ms. Nail commented if 55% of the residents have shown interest will it go through? Mayor McLallen answered probably. Ms. Nail commented she might have to move. Mayor McLallen stated this is the third hearing so no actual answers can be given but the staff could work with her to tell her some options. This is not done to force anyone out of property in any way. The neighbors are saying there appears to be a need in the neighborhood for this public utility, so obviously the City is trying to work with everyone because this was a neighborhood initiated request. Mayor McLallen asked Mr. Nowicki to have further discussion with Ms. Nail.


    Mayor McLallen closed the Public Hearing.


  3. S.A.D. 154 - Shawood Walled Lake Heights Subdivision Sanitary Sewer


Glen Schoening of 150 Pleasant Cove commented he is one of the individuals who started the process for the sewer. His septic field has failed and it is not certain if he can put a new one in because the lots are on a slant and his septic field might be on someone else’s property. Mayor McLallen commented for the record, the requested SAD for a sanitary sewer is a much smaller number of residents than for the water.


Debbie Bundoff of 12 Mile asked how is the sewer percentage determined? Is it done by the SEV or the land size? Mr. Kriewall said it is done by SEV like the water main.



Mayor McLallen said for the record, Council received a response form from Mr. & Mrs. Kotrych of 2245 Crown. They live in the proposed SAD 152 for the water main. The letter states because of the high iron content and the damage that it does to their interior plumbing, they are in approval of the request and are ready to pay their share.


Mayor McLallen closed the Public Hearing.




James Korte of Shawood Lake spoke on item #3 under Matters for Council Action regarding Chapman Drive. He commented this is the third time he has spoken on the subject and he cannot understand why there is a problem on making a decision on such a small area. He presumed the first people owned the 60 foot lot on the corner. Now he discovered the first 60 feet on East Lake is owned by the City but someone has taken it over as a private parking lot . He asked that Council not vacate Chapman Drive.

Sarah Gray of 133 Maudlin requested they not vacate Chapman Drive. She said it serves a good purpose in keeping some traffic off of East Lake Drive at a bad corner. If Chapman Drive is taken away it forces drivers back out on South Lake Drive.


Ms. Gray commented on some letters pulled by Member Lorenzo. The garbage situation has been a frustrating issue for residents of the north end of the City. She asked the City to do something with a mandatory, residentially zoned garbage pick up ordinance that required the north end residents to have trash service. There are neighbors that burn garbage, keep garbage in the home until they are taken to court or simply take it to a vacant lot for animals to eat. Please forward this issue through Ordinance Review as soon as possible along with portable basketball hoops and personal watercraft. There needs to be ordinances to protect the residents and to make the job easier for the City and make the area better.


Ms. Gray stated under Communications there is the South Lake Traffic Calming Study. She has a copy of the document and does not know where Mr. Arroyo got the counts. No where in the study does it say what the road right-of-way is? She commented Council cannot have any logical discussion on some of these proposals that would eliminate some of the traffic by putting in no left turns and etc, when half of the road right-of-way is 35 feet and the other half 50 feet. All of these are good ideas but they are not going to work on South Lake Drive. West Road is going to be repaved and she suggested that the detour signs be put up now so drivers can start learning the route. Regarding the Taft Road Extension, she does not think it is going to be a big help. The only relief is going to be with the eastbound Beck interchange and she knows that it is in the process.


Asa Smith of 1294 East Lake Drive addressed Council regarding item #10 under Matter for Council Action-Part II. He read a letter stating his knowledge and concerns regarding the Ice Arena and how no community organization should be allowed to have a voice in management. He has known Mr. Anastos since he was a youth hockey player in Detroit area and stated Mr. Anastos’ hockey accomplishments. Mr. Smith supports Suburban Ice Management and Mr. Anastos and believes he will do an outstanding job for the City of Novi’s Ice Arena.


Pat Schreer of 1805 East Lake came before Council stating she is responsible for trying to get Chapman Drive closed behind her yard. She has talked to a neighbor down the street by the name of Marge many times. Marge has assured Ms. Schreer and others that she likes the idea of grass growing in her backyard and she is neutral on the issue but commented it would be nice not to have the public going through her yard. Ms. Schreer does not understand how closing that small section could take off traffic from East Lake Drive. She hopes the issue can have some action and be closed.


Mayor McLallen closed audience participation.


CONSENT AGENDA (Approval/Removals)


Member Lorenzo removed items H, K and L. The reason she pulled item L is because she wants the opportunity to vote against the extension. She has not been in favor or supportive of the project and wants to remain consistent.


Member Schmid removed item I. He said he fully intended removing items E and F however, he is going to leave them on. This is the first time in the history of Novi that a Class C Liquor License was part of the consent agenda. Both of the restaurants seem to be fine restaurants and that is the reason he let them remain and Council has the complete package so he was able to read the documents. But in the future he hopes that Class C Liquor Licenses requests will not be under consent agenda but under main agenda.


Member Mutch agreed with Member Schmid. She said the public benefits from knowing what is going into the City. She feels she has enough information to make a decision even though it is on the consent agenda. The next time this type of issue comes up, she would like the item placed on the main agenda.


CM-99-08-202: Moved by Crawford, Seconded by Lorenzo, CARRIED

UNANIMOUSLY: To approve Consent Agenda as amended



  1. Approve Minutes of:
  1. July 19, 1999 Special Joint City Council and Board of Trustees-Community Clubs Meeting
  2. July 26, 1999 Regular Meeting
  3. August 9, 1999 Regular Meeting
  1. Schedule Executive Session to immediately following the Regular Meeting of August 23, 1999, for the purpose of property acquisition
  2. Approval to add topic for discussion on August 30, 1999 Council Agenda under the Consent Agenda: Novi Millennium Fountain
  3. Introduction of a Resolution designating of Meadowbrook Road (12 – 13 Mile) as a Natural Beauty Road and schedule a public hearing for September 13, 1999
  4. Request from J & CD, Inc., d/b/a/ BIBIMBAB, for approval to transfer 1998 Class C liquor license, located in escrow at 4641 Highland, Waterford, MI, to be located at 43155 Main, Suite 300, Novi, MI
  5. Request from Chevy’s Inc. to transfer 1998 12 Months Resort Class C Liquor License from Ray Street, Inc, Boyne City, MI, to be located in the proposed Ramco Gershenson Development at 12 Mile Road north of I-96
  6. Approval of Meadowbrook Corporate Park Water Main Payback Ordinance Authorizing Resolution and the City of Novi Department of Public Services Water Main Oversizing and Payback Ordinance Policy
  1. Approval of Budget Amendment #2000-3, Fiscal Year 1998-99 rollover
  1. Approval of Claims and Accounts
  1. Warrant No 552




H. Authorization to prepare an Agreement with the Novi Community School District for the construction of the Wixom Road Regional Detention Basin

  1. Approval to execute Quit Claim Deed conveying excess Taft Road Extension property to the Steelcrete Company pursuant to the Agreement between the City of Novi and Steelcrete dated March 16, 1998

K. Approval of Agreement with Southwest Oakland Cable Commission to furnish a Video Production Specialist

L. Request from NOVA, SP 98-16, for Preliminary Site Plan one (1) year Extension


Vote on CM-99-08-202: Yeas: McLallen, Crawford, DeRoche, Kramer, Lorenzo,

Mutch, Schmid

Nays: None


Mayor McLallen stated for the record what Members Schmid and Mutch were discussing on the consent agenda, were requests for transfers of liquor licenses. These licenses were not from the City of Novi’s quota but these were licenses that were purchased outside of the City that are going to brought into Novi for two restaurants. One of the restaurants is called Chevy’s. This is a California restaurant out of San Francisco and they are transferring the Class C Resort License and might be going into the proposed NOVA project. The other is a request for the transfer of a liquor license from Waterford to Novi for an Oriental restaurant that will be located on Main Street.



  1. Request for adoption of Resolution Number 3 for Shawood Walled Lake Heights Subdivision Water Main - S.A.D. 152.
  2. Mayor McLallen explained Council previously adopted Resolutions Number 1 and Number 2 for this project. Council earlier attempted to do this for economy and speed with Austin Drive and Eubank Street Subdivisions. That did not work so this is now being done as a single SAD. There are 55% of the residents in favor of the SAD and preliminary numbers on projected costs are completed.


    Bruce Jerome, Superintendent of the Water & Sewer Department, explained this project involves the construction of about 42,020 feet of 8" water main. Old Novi Road borders the project on the east, Pleasant Cove on the south and Shawood Canal on the north. The request was initiated about a year ago and two public informational meetings have been held for the residents within the proposed district. It started a little later than the Austin Drive water main. The department tried to move it along but ran into some obstacles and some questions had to be resolved for some of the residents in order to get the necessary support for the entire district. The residents that are in favor have asked that the City expedite the project


    The Council packets include Resolutions Number 3 and Number 4. Resolution Number 3 directs that final plans and estimates be prepared. The City was trying to carry the project along with Austin Drive and Eubank water main, the final plans were prepared, permits were applied for and the project was actually bid one time with the other two water main projects. In order to expedite the project the request is to adopt Resolution Number 3 that authorizes the Sewer & Water Department to begin the project. Resolution Number 4 would actually set the second Public Hearing.


    Mayor McLallen commented in the Public Hearing, the Council heard three of the speakers were in favor of the water main and one who was not in favor. There was also a speaker who indicated there was some concern with the design of the water main going over a bridge on Shawood Lake. The other issue dealt with a resident owning multiple lots and dealing with the economic burden.


    Mr. Jerome explained the water main is not going to be attached to or any way constructed on the bridge. It will be off to the side and buried underneath the channel. He is not familiar with the issues on the bridge and he is not sure of the implications on this project. The bridge and the water main are two separate issues in his opinion.


    Mr. Jerome said on the issue of multiple lots, the resident has been at both public informational meetings and is concerned because they are on a fixed income and the impact it would have on them personally and financially. There is a possibility that they can apply for some assistance through the community development block grant process. Unless the Council wants to exempt them from the district they become a part of the district.


    Member Schmid commented if 50% of the district wants an improvement and there are no blocks, they usually go through? Is that accurate? Mr. Jerome answered that is a true statement but the special assessment process allows for three Public Hearings and allows the residents to change their minds. Member Schmid said assuming this passes and goes on to the other Public Hearings, what is a resident required to do to hook up the water? They do not have to hook up to the water but they have to pay for the installation of the water main. Is that correct?


    Mr. Jerome answered that is a true statement. Member Schmid clarified they will have to pay for the cost pro-rated by the number of properties for the installation of the pipe. Mr. Jerome said yes. Member Schmid commented Council has made a ruling in the last years that a resident does not necessarily have to hook up. He asked Mr. Kriewall if that is correct. Mr. Kriewall said that is true. Member Schmid said when the resident connects it is another fee. It is a relatively small fee compared to the installation of the pipe. Is that accurate? Mr. Jerome said the current connection charge is $1,100. Member Schmid asked what is the projected cost of this project? Mr. Jerome said probably between $6,000 or $7,000. Member Schmid said it is a major cost and the owner will have to pay if the property is part of the district.


    Member Kramer asked if it has been made clear to Ms. Nail that the expense to her would most likely be annualized in a 20+ year tax bills as opposed to a pay up front? Mr. Jerome confirmed she has been at the public informational meetings and in addition to the two meetings, he has sent out two separate mailings with general information about the process. Member Kramer mentioned because of her concern he would request that someone direct her on financial alternatives and what the probable impact might be. He is in favor of proceeding with the issue.


    Mayor McLallen asked when is the next Public Hearing date? Mr. Kriewall stated it is September 13, 1999.


    CM-99-08-203: Moved by Kramer, Seconded by Lorenzo, CARRIED

    UNANIMOUSLY: To approve Resolutions 3 & 4 which

    sets the next public hearing for September 13, 1999




    Mayor McLallen requested a point of information from Mr. Watson since Resolution Number 4 was not on the agenda, can it be added without amending the agenda? Mr. Watson answered Number 4 can be added.


    Member Lorenzo asked if a JCK representative could respond to Mr. Korte’s concern regarding the Shawood Bridge. Mr. Potter explained on the exhibit there was a detail on the culvert, which is the Shawood Canal. It is shown as a rectangular structure and probably a little more arch is needed but it is not really going to have any bearing on the construction technique. JCK is going to bore under this structure whether it is concrete or corrugated pipe. Member Lorenzo asked that it be corrected on a future drawing.


    Vote on CM-99-08-203 : Yeas: McLallen, Crawford, DeRoche, Kramer, Lorenzo,

    Mutch, Schmid

    Nays: None

  3. Request for adoption of Resolution Number 1 for Shawood Walled Lake Heights Subdivision Sanitary Sewer - S.A.D. 154.
  4. Mayor McLallen stated this process was requested by five property owners in the proposed district who would like a sewer brought into their property. This is the first step in the process of seven resolutions.


    Mr. Jerome stated this is a property owner initiated request for special assessment improvement. There are currently five property owners in the proposed district. This particular area was not serviced by sanitary sewer in the early 70’s when the Walled Lake/Novi system was installed. The main reason behind that was the area was not developed at that time. Currently the City has signatures of all five property owners that have requested the proposed district. Mr. Jerome requested to move forward to get preliminary cost and plans developed to share that information with the owners in order to decide to proceed or not.


    CM-99-08-204: Moved by Crawford, Seconded by DeRoche, CARRIED

    UNANIMOUSLY: To approve and adopt Resolution

    Number 1 Shawood Walled Lake Heights Subdivision

    Sanitary sewer SAD 154


    Vote on CM-99-08-204: Yeas: McLallen, Crawford, DeRoche, Kramer, Lorenzo,

    Mutch, Schmid

    Nays: None


  5. Request for approval of a Resolution vacating Chapman Drive within the Chapman Walled Lake Subdivision from Endwell to East Lake Drive.

    Mayor McLallen stated a portion of Chapman Drive was vacated many years ago and the current discussion involves the easterly portion. Chapman Drive runs in a northerly direction and that portion of Chapman Drive is not under discussion. Mayor McLallen said the discussion is for a portion that runs from Endwell to the previously vacated Chapman Drive approximately 600 feet.


    Mayor McLallen stated for the record there has been a Public Hearing on the issue and 12 written comments have come before Council with 11 in favor of closing and one not in favor of closing. One speaker came before Council this night in favor of closing Chapman Drive and two speakers not in favor.


    Mr. Nowicki said at the last Council meeting, the Council was presented with a series of issues from several property owners in the area. The issues primarily concerned law enforcement issues. The Novi Police Department has reviewed those issues and enclosed in the Council packet is a letter from Police Chief Shaeffer. There does not appear to be a compelling law enforcement problem on that area of Chapman from Endwell to what is now East Lake Drive. The City staff and consultants have recommended not to vacate that portion of Chapman.


    Mayor McLallen commented that Chief Shaeffer’s letter was informative and it proposed a meeting with residents in the area to go over some of their concerns. Mr. Nowicki said a Department of Public Service staff member would attend the meeting along with the police. Mayor McLallen asked if there is a date set for the meeting? Mr. Nowicki said no.


    Member DeRoche commented he understands what the staff is recommending. It is important to consider the area and what the City is actually going to need to use in the future. Because Mr. Arroyo and staff members are opposed to the issue he thinks it is not something the City should go forward with at this time. The residents appear to be actively pursuing the issue and if the motion is successful, he hopes the issue is let go. He hopes the City keeps the road and takes steps to correct the problems.


    CM-99-08-205: Moved by DeRoche, Seconded by Crawford, CARRIED

    UNANIMOUSLY: Deny the request for the Resolution

    vacating Chapman Drive within the Chapman Walled

    Lake Subdivision from Endwell to East Lake Drive




    Member Lorenzo supports the motion but she hopes the citizens that were in favor of vacating will continue to monitor the situation. If there are any definite problems, she hopes the citizens would contact the police and make a police report so the City in the future would have the information. Also, keep in touch with the Council to let them know of any problems that occur on the road. This could be something that can be monitored.


    Member Mutch had a procedural question. When there is a resolution presented does it have to be approved or denied? Or in the absence of approval, just no action is taken? Mr. Watson answered in the absence of approval of the resolution, no action can be taken, but certainly the motion to deny the request is an appropriate one. Member Mutch wanted clarification to deny the request but not the resolution? Mr. Watson answered that is correct.


    Vote on CM-99-08-205: Yeas: McLallen, Crawford, DeRoche, Kramer, Lorenzo,

    Mutch, Schmid

    Nays: None


  7. Request for approval of the City of Novi/Novi Public Library Memorandum of Understanding.

    Mayor McLallen said the Novi Public Library needs to expand to serve the citizens more efficiently. The Library is researching options in the most economically responsible way possible. The request is for the ability to investigate the potential of the construction of a library on City owned property on the Civic Center complex. For the record, the City and Library Board are separate political operations. Before spending any public funds to do the investigation, the Library Board is coming before the Council to ask their cooperation in the investigation so serious answers can be brought forward on the piece of property. If and when it proves to be a feasible piece of land, the Library will be able to present solid facts and figures to the citizens.


    Patrick Burnett, President of the Library Board, said Council has received an updated draft of the Memorandum of Understanding, which the Library would like the Council to enter in with them.


    Mayor McLallen said the Memorandum of Understanding before Council includes a final date of the process of investigation, which would run for 180 days and bring the investigation to a close in February 2000. Mr. Burnett asked Mr. Watson to indicate if either side for whatever reason was not able to conclude their investigations, the parties might consider renewing the document. The February date is the date the Library would like to meet.


    Member Mutch is supportive of the Library and would like to see them move forward. However, there is a question whether the Library Board and the City are best served because they are represented by the same attorney? She asked Mr. Watson at some point would he view that the Library Board should have another attorney or keep the same situation and represent both? Mr. Watson said there certainly is potential for that happening and is up to Council and the Library Board. If either body wishes to retain someone else or have someone review the documents. Should it come to negotiations on a land deal, it is an appropriate issue to consider. Member Mutch commented obviously there are economies when there is the same law firm representing both. Mr. Watson said this should be reviewed with the Library Board to make sure they are aware of the issue. Member Mutch asked Mr. Watson if he thought this might need to happen in the future? Mr. Watson said it is possible. Member Mutch wanted to make sure the Library knows that might be an expense later in the process.


    Member Kramer said in regards to the Memorandum of Understanding, who is considered the City and what area would be looked at to select a representative and is the 180 days appropriate from administrative perspective in terms of being able to execute the Memorandum? Mr. Kriewall said 180 days is adequate for the purpose of the initial Memorandum of Understanding. This is an exploratory agreement at this time and is not binding on either party and the City is comfortable. Member Kramer asked who would be the City? Mr. Kriewall answered it would be Mr. Klaver or himself.


    Member Schmid said the last time the parties met, there was some concern with the surrounding area residents to determine if any great dispute existed If the library should be located at the proposed site. Mr. Burnett said the Library is in the process of conducting a number of forums with the public and the Library will make a special effort to reach out to the residents in the area. Member Schmid mentioned he supports the issue, but he has been an advocate of having a municipal buildings in the downtown area and fought to have the Civic Center in the downtown area, which he still feels would have been a good idea. He understands why the Library prefers this site but he is disappointed. He believes it would be a great benefit to have a municipal building in the Town Center. He again stated he supports the six month study.


    Mayor ProTem Crawford said he agrees with Member Schmid. He believes the Town Center area could be an excellent option. He is going to support the Memorandum because he thinks this will be a good option if it works. He wants the Library to make sure all potential sites are taken into consideration.


    Mayor McLallen said for the record the options will be mentioned. The Library is housed on 7 acres west of the Civic Center and the property the Library is considering, which is owned by the City, is south of the high school. The Library will be doing soil samples and access research on the site. The City will be looking at other uses for the existing Library building. If all the investigations point in a general direction that works, then there would be some type of a land exchange. Mr. Burnett said that is basically correct. The properties may not be equal in size so the library might require more acres than seven. What the library would do is try to find out the values of both properties and try to come to an agreement.


    Member Mutch commented on the statement about the Library holding various forums for citizen input. Is the Library doing any kind of a user survey so that the people who actually use the Library have the opportunity to express their preferences in terms of location? Has this been built in and if not, could that happen? Mr. Burnett said that is a distinct possibility and should be done. The Library is attempting to get a package together to present to the public that includes the basic facts.


    Member Mutch said she would encourage the citizens that use the Library to indicate whether or not they would prefer to have a Library in the general Civic Center area or some other location.


    CM-99-08-206: Moved by Mutch, Seconded by Lorenzo, CARRIED

    UNANIMOUSLY: For approval of the City of Novi/Novi Public

    Library Memorandum of Understanding




    Member Mutch said the alternative that has been suggested to the Civic Center area is the Main Street area. When a citizen indicates preferences, these are the two areas that are being discussed.


    Vote on CM-99-08-206: Yeas: McLallen, Crawford, DeRoche, Kramer, Lorenzo,

    Mutch, Schmid

    Nays: None


    Mr. Burnett said the Library would be back in 30 days with an update report.


  9. Request for consideration of the request by Mark Churella, representing the Summit Pointe Corporate Office Campus, for a $35,000 financial contribution from the City of Novi toward the installation of a traffic signal at Haggerty and High Pointe Boulevard.

    Mayor McLallen said the request is to accommodate traffic issues in a new corporate site that is being developed on the eastern boundary of the City.


    Mark Churella explained the Phase I, 120,000 square ft office building is completed. In the next few days the group will be requesting a Temporary Certificate of Occupancy. In addition to that building, there is the LifeTime Fitness facility with 96,000 square ft, which will be completed in mid-September with the Grand Opening at the end of September.


    Mr. Churella commented during the development there has been some surprises. One pertains to the safety issue in front of the project presented by the traffic flow currently on Haggerty Road. The road improvements to be made on Haggerty Road came to about $80,000 for costs but it soon became evident that more steps would have to be done.


    Mr. Churella stated there was a presentation to Council and the Planning Commission for an extended stay facility, a Ramada, that has not been constructed to the south of the project. In developing a plan with the County, it became evident that the County does not have nor will they have in this year’s budget or in the 2000 budget any money allocated for improvements to Haggerty Road. The burden has fallen to the developer of the project. They have improved Haggerty Road with $300,000 in order to accommodate a left turn lane, additional widening of Haggerty in front of the project and to accommodate the need for a traffic light. This was presented to Oakland County and it was deemed appropriate to have a traffic signal, which would be at High Pointe Boulevard. This traffic signal costs approximately $62,000. The life safety issue is very important. A similar project would be the Novi Ice Arena and Sports Club of Novi at Arena Drive, which it is understood the City spent about $800,000 according to Mr. Nowicki’s assessment with about $100,000 going toward the traffic signal at the intersection.


    Mr. Churella asked the City Assessor, Glenn Lemmon, for an estimate on the tax base that they would be representing with Summit Pointe Phase I of the office building and LifeTime Fitness comparing the Novi Ice Arena, which does not produce any tax dollars and the Sports Club of Novi, which generates $152,405. The estimate for LifeTime Fitness and Summit Pointe Phase I will be $389,067 a year for each. When looking at the entire site when fully developed, it will generate upwards of 4.5 million a year in tax revenue for the City of Novi. It is for this reason that the developers ask for Council consideration in participating in what they clearly believe is a life safety issue for the residents of Novi and others coming into the community. The developers would like to make a financial contribution of $35,000 for the traffic signal. It includes the cameras and computer modules, which will be connected to the Eight Mile Road intersection and will allow traffic flow to be moderated and moved appropriately and truly create a safe environment for those using the park.


    Member Schmid wanted clarification that Oakland County determined the entrance is a safety problem? Mr. Churella answered yes. Member Schmid commented the County said they did not have any money to put into a signal even though it is a safety problem? Mr. Churella answered yes. Member Schmid commented that is ludicrous. He asked Mr. Kriewall if this is the normal procedure to get a traffic signal if the case is presented and it is determined a signal is needed for safety reasons? Mr. Kriewall said this is normally the position with the Road Commission where new development in the City would cause the need for a traffic signal. Member Schmid said even if it is a safety problem? Mr. Kriewall said yes; it goes to the developer. Member Schmid asked when was the last time a developer put in a traffic signal? Mr. Kriewall gave the examples of Twelve Oaks Mall, Crescent Boulevard and Town Center Drive. Member Schmid commented the developer paid for the total cost? Mr. Kriewall said it was part of the SAD. Member Schmid again commented even though it is a safety problem? Mr. Kriewall also stated the developer funded Novi Road and Main Street. If a signal is needed, it can be considered a safety problem. Member Schmid said individually the developer has paid for most of signals? Mr. Kriewall said most of them. Member Schmid said he was going to request for the City to pay for the entire signal, but now knowing what has happened within the City previously, he is now in the position to grant the financial contribution.


    Member Lorenzo has concerns with the issue. One it is setting a precedent and the City is asking the community at large to approve a road bond issue for 28 million that includes intersection improvements and signals. She has a concern about the City having $35,000 to put towards a signal. Her point is the City cannot seem to take care of the problems it now has without going back to the taxpayers, yet the City is subsidizing a developer’s project by contributing a portion for a signal. She has a serious problem with that. If Novi was such a wealthy community that all the problems were taken care of she might be able to consider this. The City has problems with a lawsuit, parks that are not completed or improved and safety issues that are not addressed. She has a hard time in taking General Fund money or City money and putting it towards a developer’s project at this point at time. She is not able to support the request.


    Mr. Churella addressed Member Lorenzo’s comment that they are not asking for tax abatement. In the City budgeting for the road improvement, the City has allocated funds for this type of issue. Secondly, when the allocations are done and they bring development to the City, these developments pay significant tax dollars. On a fully assessed basis, these projects represent $389,000 to the City that was not budgeted. He cannot see the parallel not asking for a contribution on a life safety issue of $35,000 or a danger of setting a precedent on asking for a contribution on that amount. It is a simple business practice to take a look at the exchange of $35,000 in comparison to $780,000 on an annual basis for a one-time investment.


    Member DeRoche said he heard this issue a little differently. The developer has gotten out in front of the normal channel. The normal channel in this City, unfortunately, is if there is a problem, we need to figure out how to fix and pay for it. He sees this issue as the developer getting ahead by being proactive and referring the City would have to do it anyway and as a developer, is offering to offset some of the cost.


    Member DeRoche mentioned to Mr. Arroyo that there is not a traffic signal at the Orchard Place Drive that comes out on Haggerty or Eight Mile Road. There is not a signal at Haggerty and it is an effort to pull out in either direction. Even though Haggerty is a County road, is it ever monitored? Mr. Arroyo said there are counts taken on a periodic basis. Some years ago he recalls that the County did not want to entertain signalization there because they felt the road itself needed to be improved to correct site distance problems. A possibility that was discussed when this project came in, is potentially trying to connect this development into the Orchard Hill Place Drive development and getting the driveways interconnected so others could take advantage of signals because it was anticipated that there would be a need for a signal for this project in the future.


    Member DeRoche asked is there a need for this project or is there just a need somewhere on Haggerty? It seems the benefit from one entry and exit way for cars would benefit other business traffic because it would break up the traffic. Mr. Arroyo commented the warrants for traffic signals are found within the Michigan Manual of Uniformed Traffic Control Devices. Most of the warrants deal with volumes. There has to be a certain amount of volumes on the side street and a certain amount on the main road and there are sliding scales along with some safety considerations. When placing traffic signals along a roadway, typically they should be spaced for efficient progression of traffic and generally are spaced a 1/3rd of a mile in between. The Summit Pointe project appears to be 1/3rd of a mile south of Nine Mile and Orchard Hill Place Drive is a little more than a 1/3rd of a mile north of Eight Mile. Even if Orchard Hill Place did become signalized in the future and this location became signalized, he thinks potentially the City could still get some fairly good traffic progression.


    Member DeRoche wanted clarification that Orchard Hill Place is a City road? Mr. Arroyo answered it is a City road. Member DeRoche asked if Mr. Arroyo determined for the health, safety and welfare of the citizens that something needed to be done to Orchard Hill Place, that would be a City responsibility? Mr. Arroyo answered the City could request it but it is the County’s ultimate authority to improve it because Haggerty is a County road and they would have to approve any traffic signal. Member DeRoche said he was not referring to signalization. He was referring to Orchard Hill Place. Are the improvements on Haggerty? Mr. Arroyo said the improvements are mainly on Haggerty and the improvements would be dramatic because a lowering of the hill is needed for sight distance. The improvements would be the County’s responsibility.


    Member DeRoche asked what has the City’s experience been on installing signals on a County road when the City believes it is for the safety and welfare of citizens? Mr. Arroyo commented it has happened in one or two ways. First, the City has done a traffic signal warrant study and presented it to the County and the City believes it is warranted based on the criteria. Or there may have been an informal request made for the County to evaluate a particular location. Member DeRoche asked does the City ever contribute to an installation? Mr. Arroyo mentioned there are tri-party funds, which involve a partial contribution by the City and the County. There have been a wide variety of methods used in the past.


    Member DeRoche commented on the signal location at Arena Drive. Who paid for that signal? Mr. Arroyo said he believes it was the City but he is not sure. Mr. Kriewall said the City paid 100% but did receive some federal funding through the County with fast track. Member DeRoche commented Novi is a County Road. Mr. Arroyo confirmed Novi is a County road and Arena Drive is a City road. Member DeRoche asked who initiated the signal? Mr. Arroyo commented he believes it was the City. Member DeRoche wanted clarification that Mr. Arroyo believes there will be a need to have a signal on Haggerty Road at one of the entrances in the future? Mr. Arroyo said that was the indication from the traffic study that was reviewed at the time this particular project came in. He has not looked at the actual conditions but if the road commission has done an analysis and has determined it meets signal warrants today, then that would satisfy that condition.


    Member DeRoche mentioned the issue was confusing because the City Administration or Consultants did not bring it forward. He does not know if the developer would pay for the signal if the City turned it down and he would hate for that to be the case. He would also not like for Council or a future Council to have to pay $100,000 in the future.


    Member Mutch commented there is a city and county road intersecting with the County determining it would be appropriate to install a signal for safety reasons. If the signal is put in right now the County is saying they do not have the money to do it and the developer would have to pay the entire bill? Mr. Arroyo said he believes that is true. Member Mutch said the City is not required it do this just because the County finds it to be a problem. Is the County ever in a position to say to the City of Novi, we have a problem on a county road so Novi has to pay for the remediation? Mr. Arroyo asked on a county road? Member Mutch said yes. Mr. Arroyo said not that he is aware of. Member Mutch asked if the city is ever in a situation where the city has serious liability if the city does not provide a signal after the county has identified it as a safety factor and they are not going to install one? Mr. Watson said no, at least not under these circumstances where there is not jurisdiction over either Haggerty Road or the intersecting road because it is still owned by the developer. The City does not have jurisdiction or ownership of any of these roads at this point. Member Mutch said there is no way the County would require the City to pay for the signal? Mr. Arroyo said he is not aware of anything. Member Mutch asked if the County agreed to install a signal, they actually have no way to require the developer either? Mr. Arroyo said he believes what the County is saying is that it is not going to be installed unless someone else pays for it. Member Mutch commented at some time if it is determined it really has to be done, the County would be doing it at County expense or would they be able to extract money from the property owners? Mr. Arroyo believes they would end up doing it themselves. Member Mutch commented whether it is determined that a signal is needed or not, it is either the developer can be proactive and pay for it completely because the County is not going to help, or the County at some point can agree to do it, but at no point is the City in a position that it would have to pay for it. Mr. Arroyo commented to the best of his knowledge.


    Member Mutch mentioned the Ice Arena project was a municipal project and not the only properties that would benefit from having a signal at Arena Drive. The Ice Arena does not generate tax dollars in property tax dollars, however she does not think it is an accurate comparison to take a private development to this area to be developed. The Haggerty Road construction is valid and those property tax dollars are definitely entering the system. But the municipal Ice Arena is not the only property that benefits from Arena Drive and the signalization at Novi Road. There is the Sports Club and other properties that are going to be developed and the City does not know at this point what the SEV will be on these but is sure they will be paying their share towards City services. She does not believe this a fair comparison. The City of Novi in fact developed the Ice Arena project so the City is the developer. So what the City did in paying for that signalization, is no more or less than what is being presented by the petitioner to pay the cost of the signalization at Haggerty Road if they want a signal. The City of Novi wanted a signal at Arena Drive so the City installed one at the location.


    Member Mutch commented Mr. Kriewall named some locations where signalization was installed and paid for by the developer. Were these paid entirely by the developer or was the County willing to participate in some of that? Mr. Kriewall commented the developer paid for 100%. Member Mutch said the projects are much larger than the one being discussed at present so compared to this project, it may be too much to ask. It would be unreasonable for the City to take on the $35,000 contribution. Although, there is a situation where ultimately the City would decide that one needs to be installed and if the City was to make that decision in the future it would probably be that the City would have to take on the full cost. The reasons the developer wants the signal today will still be there later if the City decides to do it. Member Mutch said she does not think she will be able to support the issue.


    Member Schmid asked Mr. Kriewall about all the lights on Novi Road between Grand River and Twelve Mile Road, who paid for those? Mr. Kriewall believes the developers paid for all those except for the West Oaks Drive signal because it is a City street. Member Schmid wanted clarification that all the lights between Grand River and Twelve Mile Road were paid for by the developers. Mr. Kriewall said maybe all except for West Oaks Drive. The freeway signals were paid by M-DOT.


    Member Schmid said it makes sense to get ahead and put in a signal. Did Sports Club of Novi contribute to the signal at Arena Drive? Mr. Kriewall said no. Member Schmid commented common sense tells him to help pay for the signal because Novi is a progressive City where this type of development is going to pay literally millions of dollars in taxes.


    CM-99-08-207: Moved Schmid, Seconded by Kramer, CARRIED: For the City of

    Novi to contribute $35,000 as a partial contribution for a signal

    At Haggerty Road and High Pointe Boulevard as requested




    Member Kramer asked when the project was approved the traffic signal was not required but that Mr. Arroyo believes one may be required in the future? Mr. Arroyo explained there was a traffic study submitted that looked at the whole area and it was determined that it would likely be needed at some point in future based on the volume of traffic to be generated. Member Kramer said this is an unusual situation and he finds it refreshing that someone wants to solve the problem before it becomes one. If the warrants exists and the County agrees the warrants are there, he adopts the perspective that the developer is helping defray the cost of the intersection to a problem that will eventually come to Council according to the traffic consultant’s analysis. He supports the issue.


    Member DeRoche wanted clarification on who paid for the signal at Arena Drive. It was said the City paid for it because the City was the developer. The City wrote the check but the money did not come out of the ice arena bonds or the budget. The City wrote a separate check as they did for the $800,000 road improvements. Mr. Kriewall said that is correct. Member DeRoche commented so that does not appear in the bonds of the Ice Arena? Mr. Kriewall said no. Member DeRoche said it is for the benefit of the Ice Arena but the ice arena revenues are never going to pay for that signal or road. Mr. Kriewall answered no.


    Member DeRoche commented the Sports Club of Novi and the LifeTime Fitness are direct competitors. The Sports Club of Novi is paying half the taxes and got a free signal while the one that is going to pay twice the tax is going to off set some of the cost of the signal. He wanted the record to be clear that when the City of Novi paid for the signal the Ice Arena did not pay for the signal and never will. The City budgets for these types of situations and makes priorities from the Council bench when these issues come forward. Mr. Kriewall said historically the City did not have mid-decade census special revenue funds that went into the construction of the road. That is where a lot of the funds came from.


    Member Mutch said if the City’s traffic consultant had said there is a serious problem on Haggerty Road and the County is not helping and the City really tried to work with the road commission and this failed but it is decided it really needs to be installed. The City would be making a $35,000 investment and someone else is picking up the rest of the cost. The City is being helped out. This is jumping ahead without the City determining it is a problem now. This is a difficult issue to turn down but she is still not persuaded to vote in favor.


    Member Lorenzo is more convinced now not to do it than she was at the beginning of the discussion. Was any part of this project a special land use approval from the Planning Commission? Mr. Arroyo said no to both of the buildings. Member Lorenzo commented at the time the Planning Commission reviewed the project, they would have no requirement for the potential signal? Mr. Arroyo said no, not that he is aware of. Member Lorenzo said historically the developers have paid for the signals. The situation at the Arena Drive is a unique situation. The City was the developer and whether she agreed with what the City did with that situation is another discussion. The City was the developer at least for the Ice Arena part of the equation. The developer is before Council because he would like help in paying for the signal. Obviously, not only is he going to be contributing taxes as all residents of the City do along with the general tax payers at large. She guesses this development is contributing to the problem on Haggerty Road and the developer is seeing there is a potential problem with participants coming to the buildings if it is an undesirable location that people will have a hard time getting to. This is not the City’s responsibility. There is no reason for the City of Novi to contribute at this time.


    Member Schmid said this is a unique situation and he is not convinced that the City has not paid for some signals. The City has a law suit pending and probably will cost the City more than $30,000 because a developer who did some minor improvements to a road for a subdivision, just barely widening a road, has sued the City because he thinks he did not have to do it. Here we have a gentleman who is putting in $300,000 of improvements to a road, which is over $200,000 more than what he thought would be necessary, and Council is arguing about $35,000. He understands the argument that Member Lorenzo pointed out but he believes there are times to use common sense and look at the dollars and do the right thing. He believes the right thing is to move on the project tonight.


    Mayor McLallen commented on the traffic movement on Haggerty Road and where the signal will be placed. The traffic on Haggerty Road, no matter the time of day, is becoming horrendous. She believes this project will not be able to function without a way to get people in and out expeditiously. She asked Mr. Arroyo if he is confident that the situation will not cause a problem at Eight or Nine Mile Roads? Mr. Arroyo said this signal will be connected to the scat system and the system provides coordination between the signals located on the same roadway. Haggerty Road is already within the scat system, so if this is added to it, it should be able to function properly and be coordinated. She is in support of the issue particularly because of the safety issue. This is a development that the City had planned to take place. It is a visual gateway to the community and it obviously is going to be a very productive member of the business community. Because of the recreational component it is going to be a site that many of the citizens will be visiting and their safety is paramount. She agrees with Member Schmid that it is the right thing to do. It is not an enormous amount of money and it is within the means of the City to do it and if it saves one crash or one life it is an investment the City ought to make.


    Vote on CM-99-08-207: Yeas: McLallen, Crawford, DeRoche, Kramer, Schmid

    Nays: Lorenzo, Mutch



    Debbie Bundoff stated she appeared before Council previously when the Council signed off and gave back money to a developer who put in the road and boardwalk along Novi Road. She expressed the previous time that Council might be making a mistake. Currently the City has come out twice in the last month to make repairs to a job that may not have been correctly installed. The earth gave way under the bike path at the end of the boardwalk which left a huge hole that a bicyclist could have gone into and flipped over. The City repaired it but had to come back again and put in asphalt and gravel. It should be noted that it is not going to solve the problem of the boardwalk and bike path because it eventually will cave in since the ground was not compacted prior to the construction. She mentioned this fact to Council before signing off on the project and now the citizens are paying the cost again.


    Mayor McLallen requested the City Administration research the situation and let Council know where the current status is and what the projected maintenance and alternatives for repayment might be available.


    Mayor McLallen closed audience participation after seeing no other speakers.


    BREAK AT 9:41 p.m. until 9:56 p.m.



  11. Request from Bellagio, SP 98-49C, for a General Appeal Variance for a gated community, Section 32, west side of Beck Road between 8 Mile and 9 Mile Roads

    Mayor McLallen mentioned the proposal is a 55-unit subdivision developed under the Preservation Option.


    Mark Guidobono, the petitioner, commented he was asked to come back before Council to get approval for a requested gated entrance. It was thought to be in the motion but they were informed that it was not in the last one. The issue with the gate is always police, fire and safety. There are several ways this can be addressed and the way they are proposing is through a keypad that can be punched with the code at the entrance of the gate. They would provide the police and fire with the number and the gate would be equipped with a siren operated sensor so any police or fire truck could pull up to the entrance and activate the siren, which would open the gate. The departments could also be provided with openers.


    Mayor McLallen commented another part of the issue is the design of the secondary access. Mr. Guidobono thought this issue was addressed but he was incorrect. In regards to the emergency access they would prefer not to pave with asphalt but with a geo-block system which is strong enough to support a fire truck. The area will be marked with trees to make it obvious to police and fire where the lane is located. Another part is the code requires a gate at another location and they want to eliminate that gate.


    Mayor McLallen contacted staff members to learn how many gated communities are within the City. There are 3 gated communities currently in existence. One of them is Turnberry, which is similar to the development proposed. The staff stated that Turnberry did not go to Council for a variance on their gate. The gate was approved as part of the site plan in the landscaping. However, the Fire Marshall discovered that the gate was not part of the ordinance and there has been a separate agreement made. Turnberry uses something called a knox-key access system, which is directly connected to the fire department. The second gated community is the River Oaks apartment complex. It does have a secondary access gate, with the primary gate guarded by an individual 24 hours a day. The third gated community is the Enclave Condominiums. It is gated but there is an ungated bypass for emergency vehicles so they are not required to go through the security gates. Fire Marshall Evans has not had any problems accessing any of the gated communities given the current provisions but the police department has experienced some problems with Turnberry but that situation is being addressed. According to the City Attorney, the variance that is being requested is a variance to the fire code. It regards the gated aspect and the fire prevention code. The grass block pavers is a Design & Construction Standards requirement. Mr. Guidobono mentioned that somewhere the elimination of the gate over the grass pavers has to be stated. Does this fall under the Design & Construction Standards as well? Mayor McLallen wanted clarification on that point. Is the gate a requirement of a secondary access? Member Schmid commented he thinks it is. Mayor McLallen stated the variance is for pavers and no gate, which are Design & Construction Standards for the secondary access. The gate itself is a waiver from the fire code.


    CM-99-08-208: Moved by Schmid, Seconded by DeRoche, CARRIED

    UNANIMOUSLY: To grant the variance to the fire prevention code to permit a gated entrance to Bellagio and that this is a site condominium and the streets within are private and will

    remain private


    Mayor McLallen commented the issues apparently are going to be made separately.




    Member Lorenzo wanted some clarification that the homeowners in the community are going to get an opener? Mr. Guidobono said that is correct. Member Lorenzo commented they do not have to enter any numbers? Mr. Guidobono said they do not but they do have the option. Member Lorenzo asked are people expressing that they like gated communities? Mr. Guidobono said he believes it is a marketing edge and people have expressed they like the feature and it makes for less traffic flow. Member Lorenzo said she would be supporting the motion.


    Member Kramer wanted clarification on the gates movement. Mr. Guidobono said it is gated in and out. Member Kramer commented Mr. Guidobono mentioned he would work with the fire department and provide whatever they needed. Mr. Guidobono said that is correct. Member Kramer said the City Administration has been asked to look at an emergency signal system that the City of Troy has for their general traffic intersection. There is a sensor that is activated from an emergency vehicle that changes traffic signals. If the City of Novi decides to get this type of system would that be agreeable? Mr. Guidobono said he is offering that as part of the package and he will cooperate with the police and fire departments.


    Member Mutch said one of the consultants asked that there be a provision that the streets remain private. Mr. Guidobono explained the streets would remain private. The community will be responsible for maintenance of the subdivison association because they are site condos. Member Mutch would like the motion to contain ‘the streets would remain private’.


    Vote on CM-99-08-208: Yeas: McLallen, Crawford, DeRoche, Kramer, Lorenzo,

    Mutch, Schmid

    Nays: None


  13. Request from Bellagio, SP 98-49C, for a Design and Construction Standards Waiver for grass block pavers, Section 32, west side of Beck Road between 8 Mile and 9 Mile Roads

    Mayor McLallen said the second issue pertains to the secondary access that is required with this community. The request is for a waiver from the Design & Construction Standards regarding the issue of a paver system, which appears to be grass, versus asphalt or concrete street and not having a gate at this secondary access point.


    Member Schmid agrees with the grass and likes the ideas of having trees along the way to show the street. It is required to have a gate on the secondary access. It has been discussed that the future residents have been told they are going to have a gated community, yet a driveway is going be left wide open for anyone to drive in because they could follow the trees. Why not have a gate at that location? Mr. Guidobono asked Mr. Arroyo if a chain is required? Mr. Arroyo said it could be a decorative gate. Mr. Guidobono said they would prefer not to attract attention to the secondary area. It is going to look like a lawn and it is a distance from the cul-de-sac street interior of Beck Road and it is such a great distance that anybody going in there would not think they could get into the community.


    Member Schmid commented the City just passed an ordinance that requires a gate or a decorative gate but cannot remember the particulars as to why a gate has to be on a secondary access road. Mr. Arroyo said the newly adopted Design & Construction Standards includes revisions to the emergency access. Previously, it was not required to be paved but be a surface able to support 25 tons. This has been changed because the fire department requested it be paved. It is 18 feet wide and there is a requirement for a gate. It can be a decorative gate but it has to have a chain connecting it so the fire department can cut with bolt cutters. Member Schmid asked Mr. Arroyo if he knows why the gate was required at that location? Mr. Arroyo said to stop unauthorized use. He mentioned if grass pavers are used the gate makes sense just because it provides some additional identification for emergency access because he does not believe trees are sufficient to notify the fire department that it is an emergency access point. Member Schmid said the gate is located at Beck Road so it would not be visible to anyone in the subdivision. He supports the grass pavers but believes a gate should be retained because a chain does further identify the emergency access.


    CM-99-08-209: Moved by Schmid, Seconded by Lorenzo, CARRIED

    UNANIMOUSLY: To grant the request for the waiver

    from the Design & Construction Standards to eliminate

    the request for asphalt road service and substitute with

    Geo-block system with retention gate requested and winter

    maintenance over a winter event of 2"




    Mayor ProTem Crawford commented the fire department does not really like the grass pavers but he believes it has been demonstrated it does support the vehicles. Another concern of the fire department dealt with snow removal. No matter what the entrance is constructed with it needs to be made accessible. It needs to be understood that the access needs to be cleared at all times. This is all the more reason to put in a gate because when it is cleared out it would be identified as an access but the gate would prevent the unwanted access. He does not know if that needs to be in the motion but it needs to be addressed. Member Schmid agreed that it should be in the motion. Member Lorenzo commented she agrees as seconder to the motion.


    Member Kramer asked what width is being proposed for the geo-block system? Mr. Guidobono explained the width would be according to City standards, which he believes is 18 feet. Member Kramer commented he would be putting in the required width and identify the access and keep it clear of snow. Mr. Guidobono answered since they are private streets the community will have them plowed by the association over a 2" snowfall. Member Kramer asked what is the length of the access? Mr. Guidobono said he believes it is 150 feet. Member Kramer commented he was concerned about the length because he believes this is a viable approach, although he respects the fire departments’ concerns. If the concerns can be taken care of by the design he thinks there is the opportunity to have a road and have it not look like a road.


    Vote on CM-99-08-209: Yeas: McLallen, Crawford, DeRoche, Kramer, Lorenzo,

    Mutch, Schmid

    Nays: None


  15. Request for Approval of a Resolution, Re: Preliminary Denial of Time Warner Franchise Renewal

    Mayor McLallen explained this has been an on going issue with Council and City cable provider Time Warner. In February 1999 the City entered into a formalized negotiating process that has numerous legal constraints. The City sent out in April 1999 an RFP asking Time Warner to respond to a number of issues. Time Warner has responded and the next step is being presented to Council this evening. This is the resolution to deny the franchise renewal. It is also a legal step that permits Time Warner more time to respond to some of the issues that came forward. It allows both the City and Time Warner the opportunity to continue to try to resolve the issues involved in the renewal process.


    John Donohue, attorney for SWOCC, appeared before Council to answer any questions. He commented Mayor McLallen summarized the status of negotiations appropriately at this time. If Council adopts the resolution then the next step is to go forward in the formal process to request an administrative hearing. That step would be in 30 days. SWOCC is hopeful and cautiously optimistic that within the next month or two that SWOCC will be able to make recommendations to its member communities to adopt a settlement involving two ordinances that would grant a franchise and also provide for cable television regulations within the three community members.


    Mayor McLallen wanted clarification that one more step is being taken in this franchise renewal. By the City statement if this resolution is supported for denial tonight it is a statement that there are still unresolved issues with Time Warner but the negotiations will continue for a special amount of time in an administrative hearing. Mr. Donohue said that is correct. Mayor McLallen said at that point if the issues can be resolved the franchise with negotiated points potentially could be renewed or if the issues cannot be resolved at that time the franchise can be totally denied? Mr. Donohue said that is correct. The next step to come before Council will either be a request for authorization to precede with administrative hearings in which case, SWOCC would bring to Council a formal procedure authorization to establish an administrative hearing officer and a procedure to go forward with an administrative hearing. The results of the hearing would be brought back to Council for either formal approval or rejection, which could constitute a final denial to Time Warner’s request for renewal. Mayor McLallen asked what is the anticipated time frame for that process? Mr. Donohue said what SWOCC is anticipating is by the end of October the Council would either have a recommendation from SWOCC to approve a franchise renewal with the appropriate ordinances that would accomplish that or SWOCC would be coming back with a resolution to initiate a formal administrative process. Mayor McLallen asked how long could the administrative process go on? Mr. Donohue said that could go on for a lengthy time. Basically an evidentiary hearing that could go on for months. Mayor McLallen asked if the time frame is mutually defined? Mr. Donohue answered the time frame for the administrative hearing is dependant upon what each side wishes to present to the administrative hearing officer. He wants to indicate to Council that this process is through federal communication commission rules. There have only been two formal hearings that have gone through the administrative process in the entire nation.


    Mayor ProTem Crawford commented the parties have made substantial progress informally. He guesses that 90% or more of the issues have been resolved. However, the parties are at the point to go to the next step in the formal process. Hopefully, the attorneys and others involved will meet on an informal basis and resolve the remaining few issues.


    CM-99-08-210: Moved by Crawford, Seconded by Lorenzo, CARRIED:

    To preliminary denial of Time Warner Franchise Renewal




    Member Schmid commented Mayor ProTem Crawford pointed out the good news but it is bad news to him, because he was involved with the contract in 1985. The facts are that this contract was up in 1997. Mr. Donohue said that is correct. Member Schmid said at least a year before 1997, the parties were supposed to be entering into negotiations to renew the contract in 1997. Mr. Donohue said that is also correct. Member Schmid said he believes those things took place but it is almost the end of 1999 and still nothing. The City has been told time and time again that it is almost resolved and again tonight the same situation. SWOCC keeps asking for more time and he does not know a person who would not be upset with what is going on with the cable commission and cable franchise. Two years after the expiration of a contract, there still is not a contract and the committee is still saying they have almost resolved the issue. Could Council choose tonight to decline, with a vote, that the cable service is no longer wanted in the City? Mr. Donohue said that could not be done. The proceedings are under the federal communications commission, which dictates the procedure that we have gone through. The procedure calls for Time Warner to initiate a request for renewal with an informal process a year before the actual franchise expires. Member Schmid said that was 1997. Mr. Donohue said the formal and informal processes are done. The informal process was the one initiated, which took over the two-year period. It was the SWOCC board and the negotiating team that made the recommendation to the Council to initiate the formal process to bring Time Warner to the table in a very serious manner. Since that time they have adhered very strictly to the FCC time schedule. The requests for a proposal goes out, the responses come in and then there is 4 months to respond. The 4 months is over tomorrow and that is why Council must act this evening. One of two situations can be done. Council could grant the franchise based on the response to request to renewal or Council could do the preliminary denial.


    Member Schmid said this entire situation has gone on way too long and it has cost a great deal of money. He said the City has paid Mr. Donohue for at least two years for negotiations from 1997 on and the City is paying other people for expenses. Time Warner has been reaping the benefits for not living up to the original contract. It continues on and on. What could have been done in 1997? Mr. Donohue commented the City could have initiated the formal process at that time. Member Schmid asked if the City should have done that? Mr. Donohue answered yes. It is in the interest of a franchise to delay as much as possible. Member Schmid stated it looks like there is no choice but to temporarily decline the proposal and go to the next step. Mr. Donohue said that is the recommendation. Member Schmid questioned if the City could go out and get another company to come into the City and provide the City with a contract? Mr. Donohue answered any potential cable franchise operator can come to the City of Novi at any time and make a proposal to provide cable television service. Member Schmid said the City can invite and say start. Mr. Donohue said yes. Member Schmid commented they could take all of Time Warner’s customers if they could? That is the out from Time Warner without going through this process. Mr. Donohue said the City still has to deal with the incumbent franchise provider with the approval or denial because they are operating. It is not an exclusive franchise and if a competitor wishes to come in they are free to do so. Member Schmid said the service would be provided under their terms not the City’s terms.


    Mayor McLallen commented the cable franchise in the community was never exclusive at any time during the past 15 years and any other company could have come forward. Member Schmid commented several franchises have come forward and the City has ignored them and they have not been allowed in. Mayor McLallen said that is not quite true. Mayor ProTem Crawford commented the City has not disallowed other companies. Member Schmid said this City has disallowed companies by ignoring them.


    Member DeRoche commented he is glad to see the route the Council is taking. It is clear the 3 cities are being taken advantage of and SWOCC is using everything they can to accomplish what they want. If the City continued along the way they wanted us to continue the negotiated contract would be nothing but to their advantage. He has also been very frustrated and knows other cable providers have been interested in Novi. There have been some situations that have frustrated him like the fact that he thinks they have been reluctant because they do not want to take on three cities and one city would be in their best interest. If Ameritech wants to compete in the City of Novi then that is the benefit to the residents. He hopes there are competitors and it appears that might be happening. He thinks that competitive pressure is long over due. Is it to the City of Novi’s advantage to bring in a competitor? Would it be to our advantage to switch gears and delay this project or is it better to resolve this issue with Time Warner as quickly as possible? Mr. Donohue commented it is the City’s benefit to proceed to resolve matters with Time Warner as soon as possible. Member DeRoche said regardless of whether or not we have a competitor that comes in who is offering comparable or a better offer service at a better rate? Mr. Donohue said right now within the cable television industry there is only one competitor, throughout the country, that is approaching any community. That competitor is Ameritech’s New Media and he understands that they have sent correspondence to the City of Novi along with the other members of SWOCC. There is no other competition in the cable industry but there are satellites. Time Warner knows this competition is available and that it would be coming to this point but does not believe it has impact on their negotiation position. It is better to resolve the matter with Time Warner and get started with doing business with Ameritech when they are ready to talk to the City.


    Member Lorenzo mentioned she agrees with the previous two speakers and shares the frustration. This point should have been gotten to sooner like she previously has said over the last two years and communicated with Ameritech sooner. This situation has been a long time coming and she is glad that other members are in agreement.


    Bob McCann from Time Warner approached the Council and said he is frustrated with the situation. It has not been two years because a resolution was passed in March 1994 to begin the franchise renewal process. Time Warner hopes this item is resolved this evening, they do not want a denial, they recognize the constraints under the federal law that this is a process that is probably going to take place. Some very good and substantial negotiations have happened in recent months and hope they will continue. As a matter of law and practice, Time Warner will be filing for an administrative hearing. This is a step that Time Warner has to take at this point. Time Warner has been a provider for 17 years and will continue to be in compliance. He wants to make it clear to Council that one of the very important points in a franchise renewal process is a level playing field language. If something is going to be granted to someone else that is much more favorable than it will be to the cable franchise provider, Time Warner will have issues with that and that probably will end up in court. Time Warner wants a fair deal for themselves and for the City.


    Member Mutch commented there has been discussion on competitors which appears to be one potential. It is interesting that the competitor is visible when the City may be ready to terminate Time Warner. She wonders what that level of interest will be if the City comes to some agreement with Time Warner will Ameritech still be interested when they have to lay cable and have the disruption in the community that comes with putting in a utility network for a second company. She believes a company is going to think long and hard before they make this type of investment in a community where they would have to share the revenue. She would be surprised if Novi became one of the communities that actually have more than one cable provider. Mr. Donohue said perhaps there are 2 dozen communities in southeastern Michigan where Ameritech has initiated the cable television competition. He does not believe they have ever gone head-to-head with Time Warner but they have done it with TCI and some others. Member Mutch asked do they overtake the other company or have two providers? Mr. Donohue explained the two providers continue to operate. The experience that tends to happen is initially an impact on rates and some variety of offerings and in long term there does not seem to be a major impact on the rates. The potential new provider would take a portion of the market that already has cable. The City cannot anticipate any major increases in revenues. However, where some increases maybe seen in franchise fees is if the City could negotiate and include within the franchise the requirement for internet access and the internet access be part of the franchise fee. Member Mutch commented in addition there is not a reasonable expectation for increased revenues just because of a second provider. The rates would level off. Mr. Donohue commented Congress said that municipalities were not going to be in the business of rate regulations. It is going to be a matter of competition between the providers but the way the market has worked out the consumers will not see a tremendous break in rates. Member Mutch referred to Mr. McCann’s comment on having a level playing field if there is competition. What the City needs to keep in mind is that Council and others are not just talking about cable access as a single service. With the existing Time Warner franchise there is the whole SWOCC set up. There are the studios and community access. What has been discussed previously is that historically Ameritech comes into a community and offers cable service only. That Time Warner, as a franchisee, who has a commitment already, which the City is negotiating to improve upon in terms of community access and equipment, that they would not want to see themselves boxed in to provide that and another company only having to provide the programming cable service.


    Vote on CM-99-08-210: Yeas: McLallen, Crawford, DeRoche, Kramer, Lorenzo,


    Nays: Schmid


  17. Request for approval of a Resolution, Re: Direction to City Administration to commence preliminary negotiations with Ameritech for Citywide cable service.

    CM-99-08-211: Moved by Lorenzo, Seconded by DeRoche, CARRIED

    UNANIMOUSLY: To adopt the resolution directing the City Administration and Members Crawford, Lorenzo and Schmid to commence preliminary negotiations with Ameritech




    Member Kramer said he is neutral between Time Warner and Ameritech. He has never had a bargain from Ameritech and does not have any great expectations of great bargains, but he thinks competition is healthy. He is concerned that Ameritech wants to talk to the 3 cities independently because the cities have strength together. He is for this but he questions why Ameritech wants to talk individually to the cities.


    Mr. Kriewall said Ameritech has made it very clear that they will not negotiate with SWOCC and if Novi wants them to come in and service the community they will only negotiatate with individual cities.


    Member Schmid is upset with the cable company because they have not come to the table in two years after the expiration of the contract in 1997. Ameritech came to the City of Novi at least 1 ½ or 2 years ago and wanted to talk and this Council has repeatedly said no. It is time to communicate with Ameritech to see what they will offer. There is not a better way in business then to have competition. Is it sufficient just to have the City Manager communicate with Ameritech or should a committee be established? Mayor McLallen commented that Member Schmid brought up a good point about a committee. She asked if there were any members available or wish to attend those meetings? Members Lorenzo and Schmid said they would be interested.


    Member Mutch mentioned Mayor ProTem Crawford is the most knowledgeable with the services that the City has had under the current agreement and asked if he might be willing to attend the meeting. Mayor ProTem Crawford accepted and said he would be happy to share his knowledge.


    Vote on CM-99-08-211: Yeas: McLallen, Crawford, DeRoche, Kramer, Lorenzo,

    Mutch, Schmid

    Nays: None


  19. Request for approval of Ice Arena Contract to Suburban Arena Management L.L.C.

    McLallen commended Suburban Arena Management and staff for responding so comprehensively and quickly in a short amount of time. The documents were clear and readable.


    Dan Davis addressed Council and thanked Dennis Watson and Mr. Riley for their efforts on the contract. The packet contains the proposed management agreement and the Suburban Arena Management business plans, which contains the proposed ice arena budget for September 1, 1999 through June 30, 2000. This is ten months of operation plus a projection of operations for the year 2000-2001. By recommendation of Administration and Community Clubs, the recommendation of Suburban Arena Management was brought forward to take over the operations and management of the Novi Ice Arena. Three basic City objectives have been developed and included in the documents. The City would like to see Suburban take over the operation of the facility and operate the facility in a sufficient manner, which at the very minimum they would break even in the first fiscal year of operation. Secondly, it will be the obligation of the City of Novi to work and encourage and support the efforts of Suburban to establish a strong solid foundation of programming, ice utilization that will grow and enhance the arena’s profitability. Thirdly, to develop a long term financial performance schedule that will establish a Capital Reserve Account and a deficit repayment schedule to repay the deficit that took place in the first year of operation. This is going to be a very difficult and challenging objective on behalf of the City of Novi, Parks & Recreation Department staff and Suburban. It is felt that the group has selected and recommended to Council a very worthwhile programming company that can come in and take over operations and turn the situation at the arena into a positive situation. Mr. Davis commented Mr. Anastos is present at the meeting to give Council an opportunity to ask questions regarding the business plan or contract.


    Member Lorenzo said she is in favor of supporting a contract with Suburban. However, she does have proposed amendments to the contract. She would like to make a motion to approve the contract with the following amendments: On page 1, under Facility and Program Management Responsibilities, change the third line where to read " Suburban shall provide business administration and management services to operate the Novi Ice Arena in an economically sound manner." She is removing the word "expeditious" and adding "consistent with the best interest of the City, which is to reduce the existing deficit as expeditiously as feasible and for the facility to operate self sufficiently." so that the objectives are very clear as to what is the best interest of the City and by recognizing that the deficit may not be reduced over night and Council understands that fact. On page 2 under Letter "D" she would like it to read, "Suburban will organize and supervise programs to utilize ice time or the facilities." She said iIt is not only for the benefit of the community; she assumes the management will go outside the community to utilize ice time and facility in order to maximize the profits. Such programs may include summer day camp, instructional programs, adult hockey leagues, general instructional programs and on or off ice social recreational or educational programs. She would like to add "Community participants may be offered first preference to utilize ice time or the facilities to the extent that is practical without compromising the best interest of the City. The full competitive rate in effect, at the time, shall apply.


    On page 4, the last paragraph dealing with revenues, she would like to add and change, "if and when revenues exceed direct expenses and debt service payments such revenues shall be returned to the City’s General Fund until any deficit have been repaid. The City shall determine the extent to which future surpluses shall be accumulated for future expenses and debt service and the extent to which such surpluses shall be returned to the City’s General Fund. This determination shall be made as part of the annual budget approval process."


    On page 7, under the Management Fee, she would like to add the base monthly management fee for each subsequent year of this agreement shall increase by 5% over the base monthly management fee in effect during the immediate proceeding year, based upon satisfactory performance.


    Under Letter "B", third sentence where it starts: "To encourage .. , she would like it to read, To encourage the generation of "additional revenues that exceed the projected revenues, Suburban shall be paid a percentage of gross revenues of the arena based upon the following schedules." She said it appears to her that these schedules were much more generous than what Mr. Anastos originally suggested and agreed to. She said that basically was the first $30,000 after the revenues that are being projected, we would split 50/50 and any additional surplus over the amount of the forecasted surplus, we would share 75% City and 25% Suburban. She has no problem with this issue but she would like the schedule to reflect this issue.


    Member Lorenzo referenced page 9(b) Option to Terminate. One concern she has is the six month time that the City would have to let Suburban know that we had any intention to sell or lease the building. The concern she has is whether that really is a practical time frame for a company who is coming in offering to buy the facility or is someone coming in to buy the facility going to baulk at the six month period? Could the City lose the optional sell or leasing agreement because of this clause? She would hate for the City to lose an option if it presented itself. She can understand the need to disclose intent, but she has a reluctant feeling about putting the issue at a six month time frame and suggested different time frames if the participant is willing. In terms of the liquidation damages, what that was based upon? How were the figures determined? Mr. Davis said the $62,500 is liquidated damages based upon one year’s worth of management contract fee. It drops down at a 50% value and then a 25% value. Member Lorenzo commented Suburban does not lose any of their management fee if the City sells within the first year. Mr. Davis answered that is correct. Member Lorenzo commented that sounds very fair but she does not want to put the City in a position that we would lose out on that opportunity because of having a particular clause.


    Member Lorenzo commented on the fidelity bond and would like some information to see if the $200,000 is adequate. The only other condition she would place upon the contract would be to have the City Finance Director and Plante & Moran accountants go over the documents of the Suburban facility to see what financial condition it is in at present.


    CM-99-08-212: Moved by Lorenzo, Seconded by DeRoche, FAILED: To Approve the Ice Arena Contract with amendments made by Member Lorenzo as stated above.




    Member DeRoche said he appreciated the comments made within the documents. He has a question regarding the $200,000 fidelity bond. He commented it was rather light due to the amount of money that goes in and out of the ice arena facility. Mr. Davis said they looked at that number based on the annual projections of revenue for the facility. The first year has a projection of about $1.3 million. The calculation is based on a monthly basis. It was felt that $200,000 on a monthly basis, we would have the necessary reporting and documentation that is required within the contract, to be able to monitor and evaluate the cash flow. It was felt with the $200,000 based on the monthly review we would be in a good accounting format to ascertain if there was a problem or not. Member DeRoche said that is a good formula for getting started but there is always something that makes that amount grow. Mr. Davis said he would point out that item under the contract provision is a cost item for the City. It would be a cost within the operations of the facility. If it were so directed that in subsequent years of the contract that would be evaluated, that would be a cost to the City. Member DeRoche commented that is unfortunate that that is being negotiated in this contract as a cost because in the previous contract it was made certain that the City should not be paying for the fidelity bond. Mr. Davis commented in the previous contract it was not a cost of the City; it was a cost that was attributed to Center Ice Management. In these negotiations, it was a negotiated item and is being recommended that that be a cost item by the City. When he says the City, he is referring to a cost item to the arena. Member DeRoche said he understands the individual will have to be paid enough money to do business and buy items that the City wants him to purchase. He respects that, but he does have a little problem that the City is directly paying for someone else’s fidelity bond. He would rather see the City bump his contract $50 a month and direct him to get his own bond and go through that process.


    Member DeRoche commented on Member Lorenzo’s comments. He stated that the comments are based on a different incentive structure than what he has in front of him. Or was this the basis of the numbers that they came up with? Member Lorenzo commented it looked to be higher that what Mr. Anastos suggested. Member DeRoche commented he proposed the 50/50 split over the $30,000. Member Lorenzo said that is right and does not believe that this section reflects that issue. Member DeRoche commented it was a concern of his and he liked the way Mr. Anastos proposed it because it addressed strictly the money that is in excess of what the projections are. Mr. Davis said the only caution he would throw out is looking at net profits that are not allowed under the IRS codes. Mr. Watson said that is the reason that provision was changed. The arena was financed with tax free bonds and under the IRS code provisions relating to that. The incentives cannot be based upon net revenues or surplus. Member Lorenzo commented just reduce the gross revenue. Mr. Watson said the amount of the gross revenue was an attempt to hit a figure that would be where a profit could be made. Member DeRoche commented that they could be based on gross revenues and not net revenues. So they cannot contemplate expenses whatsoever? Mr. Davis answered there is a fee for the incentive portion and it has to be based strictly on the gross revenue number that is derived from the operations of the facility and cannot be based on the net. It also cannot equal more than the value of the base management fee. Using the calculations of the approved budget, which in the first year is at $1,363,000, the percentages are worked back from this amount. Member DeRoche commented he understands the complexity of the process but stated from a business standpoint what would be the incentive after a certain figure is met?


    Mr. Davis said he would be qualified for it and it is at the 1.25% or if he kicks into the next level at 1.50%. He said when the base numbers for the incentives were established they were done at a higher than projected gross revenues that are within the budget. Example, in the first year he is talking about earning, under his budget, $1,363,000. Of that we have approximately $20,000 of net profit projected. Right away there is $20,000 of net profit. Secondly, we have a gap between before the incentive kicks in at $1,375,000 so the City would have the first right to that $12,000 difference. We will get the first $12,000 so now we would be up to $32,000. Then it would get divided up on a percentage basis at 1.25% going to Mr. Anastos and we pick up the balance. Our level would continue to grow and we did that in accordance with the second year of the contract provision that it would be at a gap slightly higher so we would get the first return on those dollars.


    Member DeRoche said with what we are proposing if he meets his minimum goal of 1.375 million he will get a $16,500 bonus. If he goes to 1.675 million he will get a $33,000 bonus. There is only $16,000 at play for him to go after. He has already qualified for $16,000 just by getting to A. The way Mr. Anastos was proposing originally was he gets to A then he starts collecting. That is more incentive and better for the City because it is when he is his hungriest. There is roughly a $300,000 difference in our plan from the lower tier to the top tier and we are talking about $33,000 in bonus contemplated for that time. Member DeRoche would rather have him get 10% of all revenues over the 1.375 million. He said pay him this way and it would work out to the same amount of dollars but do not pay him until he is over that. If he is $100,000 over, he gets $10,000 not the starting at $16,500 and get another $1,000.


    Mr. Davis said he understood where Member DeRoche was coming from and asked Mr. Watson about it. Mr. Watson understood and thought revisions could be made.


    Member DeRoche agreed with Member Lorenzo that a three month period not a six month period would be better. He also felt that a six month period would scare people away who wanted to buy or lease the facility.


    Member DeRoche had a lot of concern over conflict of interest and did not want this to be taken out of context. He said that they are in a private business and will have a contract with us and have different interest for different places. He could not have it explained away and in talks with Mr. Davis, the Attorneys and other Council members it was not explained away to his satisfaction where he could believe a conflict of interest would not exist. He thought, from what he has learned about this individual, he seems like an upstanding businessman and exactly the type of guy that we want to have here in Novi. He said he would welcome him coming here. He stated he wanted to have in the contract a punitive paragraph that if there is a conflict of interest however remote it might seem or the potential for it to exist, if at some point in the future Dan Davis, some employee or some citizen came forward and said this guy took business from Novi and moved us over to Farmington Hills, what are we going to do about it? There needs to be some monetary punitive clause in the contract that might start out light and provides some recourse to negotiate with him if there is a problem. Start off with a fine, go with a larger fine and if there are three incidents it could disqualify his contract. He thought the City should have this at their discretion and it would be silly not to have it in there. He stated he did not expect to have to contemplate it.


    Member DeRoche was also concerned that there was no out clause for a manager who wanted out. If someone is in there that is reluctantly managing our business, especially someone that owns private businesses, he did not think it would be a good relationship to maintain. He asked if this idea was contemplated?


    Mr. Watson said the sole provisions for termination are in the event of breaches of the agreement other than the provisions dealing with sale of the arena and the provisions dealing with failing to meet revenue. Member DeRoche commented he would like to see something in the contract that allows the City and the manager at a reasonable time period, to decide to continue the association or not. He does not think it serves the best interest of the City in holding a company contractually being the manager of the arena if he does not find the situation a profitable venture for his business. Mr. Watson commented from the City’s standpoint he does not know if the City would have any problem with that but he suspects Mr. Anastos would have a problem with something that was terminable for example after one year. Mr. Watson commented he does not pretend to speak for him.


    Member DeRoche commented on the Punitive Clause. He asked if that Mr. Watson could get some sort of verbiage for that if Council agreed that something like this was good to include? Mr. Watson answered yes.


    Member Kramer stated he believes the proposal on page 4 is in conflict with the incentive and commented the language should be reviewed. The proposal was all revenues that were surplus would come to the City and applied to Debt Service and he does not believe that leaves any option to having funds for shared incentives. He is not dissatisfied with the paragraph as it is written and he thinks Council should take a look at the proposal because he does not think it plays with the total. Member Schmid commented he agrees that there has to be some flexibility. Member Kramer stated it reads ‘the City will determine what to do with the surplus’. Given all the other verbiage that is in the contract, he is not uncomfortable with that. Member DeRoche wanted some clarification. Member Kramer commented he is referring to the bottom of page 4 where Member Lorenzo tightened the language and he believes it is too tight because she stated all surplus go to Debt Service but surpluses have to go to shared incentives. He does not have any problem with the paragraph as written and agrees with many of the incentives as proposed but he does not feel particularly strong with this one. Member Lorenzo agrees that it does seem to exclude the shared revenue provisions. Her intent was any revenues that are actually surplus revenues are actually coming to the City of Novi as opposed of being shared with Mr. Anastos. That is her intent in that paragraph. Member Kramer suggested some additional wording may be needed like beyond surplus. Member Lorenzo commented it could be written as surplus beyond the incentive schedule. Mr. Watson commented the reason it was written the way it was is to leave the flexibility completely with the City of Novi. Member Lorenzo commented she does not want the flexibility. Member Schmid commented the ice arena will be going through the budget process and stated Council members might change when this comes back to Council. He commented to continually tie up Council with policy might cost funds needed to be used for something else.


    Mr. Watson stated the reason was to ve Council the option. He said some of the funds might want to be dedicated to Capital Improvements with the facility. Member Lorenzo questioned if that could be done out of the General Fund? In other words, current Council or a future Council wants to direct money towards Capital Improvements of the facility, it could be done through the General Fund? Mr. Watson said Council might need to do a budget amendment. Member Lorenzo commented the community wants this deficit repaid. Mayor McLallen commented the deficit is being repaid at this time every single month. It is already in the budget to be repaid and this needs to be made very clear. This deficit is not waiting to be paid. From the first day, debt service of the deficit has been paid as part of the current budget. Member Kramer proposed an amendment to the motion that deletes the change to the paragraph. Mayor McLallen asked how many members want the motion to stay and how many members want it changed? Member Lorenzo commented she would like a formal amendment.


    CM-99-08-213: Moved by Kramer, Seconded by Mutch, CARRIED: Amendment

    to not change the paragraph on page 4 but to accept it as it stands


    Vote on CM-99-08-213: Yeas: McLallen, Crawford, Kramer, Mutch, Schmid

    Nays: DeRoche, Lorenzo


    Member Kramer proposed to amend the original motion to delete that Plante & Moran audit the Farmington Hills ice arena owned by Suburban.

    CM-99-08-214: Moved by Kramer, Seconded by Mutch, CARRIED

    UNANIMOUSLY: An amendment to delete the request to have the Farmington Hills facility audited by Plante & Moran




    Member Schmid said does he understand that Plante & Moran would audit Suburban’s present business? Member Lorenzo commented was an audit done on the previous manager? Mr. Watson commented he does not remember an audit being done. Mr. Davis mentioned Plante & Moran provided a review of the feasibility study. Member Lorenzo wants something to look at to see Mr. Anastos’s facility is in proper financial situation. The City needs documentation from someone that the facility in effect is in a good financial situation. Mr. Davis has talked with the finance department and Ms. Smith-Roy. Ms. Smith-Roy could go into the facility and provide an in-house review process. Member Kramer said he would not be opposed to an in-house review if it could be done quickly. Member DeRoche commented Member Lorenzo brought up a good point but would it be appropriate to sign a contract with someone and accept that person’s representations as the basis for the contract without checking. A background check is important in the due diligence process, the financial is just as important. The City needs to gather the information and make a representation to Council that the facility is in order as they represented it to be. Member Kramer wanted to restate his motion. He will support a review of the Farmington Hills facility by the City finance staff but the motion should be subject to the results of this review.


    Vote on CM-99-08-214: Yeas: McLallen, Crawford, DeRoche, Kramer, Lorenzo,

    Mutch, Schmid

    Nays: None


    Member Kramer said he would like to add to approve the contract per the motion subject to successful review of the Farmington Hills facility by the Finance Department.


    Member Lorenzo left the Council chambers at 11:47p.m.


    Mayor McLallen asked what financial process has been followed. Mr. Davis said the City has not received any financial information from Mr. Anastos regarding his other operations. He has made the offer for City staff to review. The basic due diligence that has been done are the checking of professional references where Mr. Anastos does business and the success of those. He has been in business for 25 years and has been articulate in his business plan to Council. It would be prudent of the City to have the Finance Director look over the process. Member Kramer and Member Mutch would like for the in-house review to be done but do not want to delay the overall process any longer by amending the motion. It was suggested to withdraw the motion but leave it as an issue. Mayor McLallen said the financial situation would be left as an issue. The verbiage on page 1 has been changed, the verbiage of page 2 was clarified, on page 4 was left as it s0tands, and on page 6 regarding the fidelity bond was left as it stands. Mayor ProTem Crawford said he has a problem with the entire process that is going on.


    The motion started out to accept this contract and then someone making amendments to it. He disagrees with 99% of them and he did not follow half of them, which he knows sounds conflicting. He does not want to redo this contract and does not know the ramifications of these amendments made to this contract. He has faith in Dan Davis and Dennis Watson who sat down in the best interest of the City of Novi and negotiated this contract. If there are a couple of minor changes or amendments to make that is fine. But the motion should have been to accept this contract then amendments could have been added. Maybe another amendment is in order to delete all the amendments that have been made to this contract. That would solve his problem and get back to the original contract.


    Mayor McLallen said the original motion had six or seven amendments. Member DeRoche said the original motion was made to accept the management contract with the following changes. Mayor ProTem Crawford commented he does not know how all of these changes affect the total document. Member DeRoche commented if a motion was made to accept the contract and then begin the process of amending it, it would give the same result as if the motion was made and then make the amendments at the same time. Mayor ProTem Crawford commented the way the motion is it changes the context of the contract significantly. Mr. Watson commented procedurally it could be done either way. A motion could be made to approve it that includes a series of amendments or approve it and then make amendments to it. Mayor ProTem Crawford encourages the Council to vote the motion down and get on with the contract. He has asked to call it questioned.


    Mayor McLallen asked if the Council had to vote on calling the question? Mr. Watson answered when the question is called,the chair can then call for a vote on the question. If any member wishes to object and wants to continue to debate, then the group would vote on that and it would take a 2/3rds vote to cut off the debate. Mayor McLallen said the question has been called and the motion is to accept the contract with the specific items that were proposed by Member Lorenzo with the exception of the two that have been previously deleted, which are the Plante & Moran audit and the changes to page 4 dealing with the City’s ability to deal with surpluses. Member DeRoche stated he objects with calling the question and would like a vote for the purpose of going through the same process.


    CM-99-08-215: Moved by Crawford, Seconded by Mutch, CARRIED: To call

    the question


    Vote on CM-99-08-215: Yeas: McLallen, Crawford, Kramer, Mutch, Schmid

    Nays: DeRoche

    Abs: Lorenzo


    Vote on CM-99-08-212: Yeas: Kramer

    Nays: McLallen, Crawford, DeRoche, Mutch, Schmid

    Abs: Lorenzo


    CM-99-08-216: Moved by Crawford, Seconded by Mutch, CARRIED

    UNANIMOUSLY: To approve contract as submitted


    Vote on 99-08-216 : Yeas: McLallen, Crawford, DeRoche, Kramer, Mutch


    Nays: None

    Abs: Lorenzo




    CM-99-08-217: Moved by DeRoche, Seconded by Kramer,

    To amend page 1 to reword the first sentence in

    paragraph one to read, Suburban shall provide business

    Administration and management services to operate the Novi

    Ice Arena in an economical manner consistent with the

    best interests of the City to reduce the existing deficit

    as expeditiously as possible


    Vote on CM-99-08-217: Motion not voted on


    Member Mutch stated these amendments are being made to the contract that has been negotiated. She asked if Mr. Davis and Mr. Watson see a problem or impact with these changes. Mr. Watson said as to regard with this issue he does not see anything substantial. Mr. Davis said he would agree with Mayor ProTem Crawford’s comment that he would defer to Mr. Anastos as it applies to his ability to deliver what he states in his business plan. Member Mutch mentioned if Council is going to go through potential amendments point by point. Is it possible to get a response at each step? Mayor ProTem Crawford said only to this question not to anything else said this night or we might say later. Member Mutch clarified her question is only to Mr. Davis, Mr. Watson and Mr. Anastos if any of them have trouble with the wording change?


    Mr. Bob Riley stated the process of putting together this agreement and the framework is the product of a series of compromises that have occurred in fairly intense but quick negotiations to respond to the City circumstances. On behalf of his client, he suggests Council do the following. That as trade offs continue we will have additional things and will interject, ask for and see. That while there are certain things that he sense quick agreements might be reached on the package will have to viewed as a whole and the give and take that his office has had with City Council has been fairly thoughtful and deliberate. His office has done a lot of things rapidly to give exclusive attention to the situation, but at midnight he believes it is not appropriate for him to give advise to his client on flurry of amendments that will have ramifications for both parties. Having heard a number of the recommendations that are coming from the various members he has gotten a sense of the some of things that they are interested with. He would really like the opportunity to confer thoughtfully with Mr. Anastos, to talk to him about some of these issues. Particularly important to both sides was how the tax code would enter into the incentive agreement. He suggested more detailed communication with his client and where they are headed, and secondly to work with Council to try to achieve some of the objectives expressed this evening.


    Member Mutch suggested that Council raise whatever points we want to raise as opposed to making amendments or making motions to amend. The concerns could be itemized and perhaps have a motion to approve based on successful negotiations of those items? Mayor McLallen commented that Council needs to concentrate on those issues that are truly substantive and not be editorial. Member DeRoche said he could list his substantive changes that he believes needs to be addressed. The issues are as follows. The first is that it needs to be pointed out that the goal is to make a profit and paying off the debt and deficit are the number one priority of the City of Novi. Secondly, he believes that the paying of the fidelity bond needs to be the burden of Suburban not the City of Novi. Mr. Anastos’s pay should be increased to compensate because it is a business cost that is passed onto the City and that amount needs to be raised to a sufficient level once the City has done business with the individual for two or three years. Thirdly, he believes there needs to be a paragraph that addresses punitive damages for conflict of interest in his business practice between the City’s facility and other facilities he runs or owns. Fourthly, he believes that an out clause should be negotiated for both the City and for Suburban because he deserves the same rights as the City at some renewal point. Member Kramer commented more explanation is needed regarding an out. Member DeRoche stated an option out of the contract like a 60 day notice of termination. Member Kramer said in Member DeRoche’s previous discussion he had focused on the facility manager and now he is referring not to a person but an out clause. Member DeRoche said he originally commented the City has one out, which is failure to meet revenue projections and Mr. Anastos has no outs. Member DeRoche said he would like to see some sort of out that either party could have in a year or two years into the contract where both parties would be able to say it is not working. Lastly, Member DeRoche commented the incentive schedule needs to be reworked. Member Kramer said he supported these issues.


    Mayor ProTem Crawford asked what does a bond cost? Member DeRoche said it depends on what kind of record Mr. Anastos has and that is why it should be his responsibility. Mr. Davis stated the price quoted is $1,884.00 for the $200,000 bond. Mayor ProTem Crawford said no matter who pays, it would be nickels and dimes. He asked Member DeRoche if he thinks it should be higher? Member DeRoche said the amount should be higher. For example 30 months into the contract, if the City has a fidelity issue, Mr. Anastos is going to have a lot more than $200,000 that has passed through his hands. The potential downfall for the City in this type of situation is a lot higher than $200,000.


    Mayor McLallen asked Mr. Davis to explain the rational for why the bond process was presented the way it was. Mr. Davis explained it was presented as a negotiated item. The City got a price quote and it will be a cost to the arena. Mr. Anastos is going to have to go through the processing of the paperwork because of his employees and things of that nature. The cost is going to be paid by the arena from the revenues derived from the arena one way or another either by upping Mr. Anastos contract amount by equal amount of money or in a line item expense within the operational cost. Member DeRoche commented when Mr. Anastos comes back in three years and says now it is going to cost the City $8,000 month he would have factored in the bond as a requirement that the City has placed on him. It would be Mr. Anastos responsibility to maintain that bond and price it into his cost of doing business. At this time, Mr. Anastos did not contemplate so additional compensation is warranted. In the future, it will be his responsibility. Member DeRoche said he does not want to know what Mr. Anastos bond costs, just tell the City how much it costs to manage the contract. Mr. Davis stated again by getting the bond it would protect the assets of the City. It has been set at $200,000 based on the cash flow that will run through that account, which will be monitored on a monthly or more frequent basis like weekly or bi-weekly. The City will have the ability to account for the cash flow that is why it is believed the amount is appropriate. The way it is set up, it is a City cost but a City cost that will be paid for from the operations of the facility. The $1,884.00 that has been outlined would be something that would be a cost in the line item of the budget of the facility and operations. The net result would be if it is passed on into other services and charges, part of it will be in the management fee so the net result will have the same effect on the bottom net profitability of the facility. Member DeRoche commented what he is trying to say is that it belongs in the management fee. Mr. Davis said he is not disagreeing. It is coming out of the operations of the facility. Mr. Riley commented this issue is not going to be hard to manage and the cost is going to be factored one way or another and this is an issue that does not need to require so much attention.


    Mayor ProTem Crawford said he thinks the goal to pay off the debt and the deficit and believes this is the City’s goal. He does not want to be tied so the City cannot use any surplus funds for anything else. The bond issue is probably settled. The out clause is probably a good idea for both parties. The attorneys probably could work something out that is mutually agreeable to everyone. In regards to the incentive, he does not have a problem with what is in the contract. In response to the punitive damages, he disagrees with Member DeRoche. He does not see how it could be monitored or enforced. He thinks there is language in the contract that if the operator is not operating sufficiently and the deficiencies are not cured properly, then there is no longer a contract. It would be difficult to put language in a contract as suggested. Mayor ProTem Crawford commented he does not have any issues and it appears to him that the process is very close in getting resolved.


    Member Mutch commented she is fine with everything except the conflict of interest. She has no problem with the discussions that have taken place. The conflict of interest as she had it originally described was too broad. It said in effect if there was a disgruntled parent who did not like the team assignment or something of that nature, there could be accusations of conflict of interest. Then people would be tied up in investigating those claims. It would be very difficult to be able to identify even going to more substantive type potential conflicts. It would be very difficult to document whether business went one place than another. Again she stated the conflict of interest was too broad and the City would be spending a lot of time investigating those types of claims. She has a serious problem with the issue of conflict of interest and she would like to suggest that unless there are additional concerns, to see if there is a consensus on the five items.


    Member Schmid said he had some general questions. As he reads the contract, once there is enough money to pay the debt and the employees, then the incentives become active. He does not see anything where Capital is indicated. In other words, this facility is going to cost a lot of money each year just to maintain. It may be clear in the contract, but to him it is not clear when those incentives become effective. It appears to him that there should be at least a percentage of revenue going to Capital Improvements or maintenance before the incentive for profit becomes active. Is that included or not? Mr. Davis answered that would be addressed at the end of the fiscal year. The incentive clause will not become effective until Mr. Anastos reaches $1,375,000. At the end of the fiscal year, there will be an evaluation to determine the surplus amount. Next year’s budget will be handled through the budget process and will outline Capital expense needs. Suburban will come to the City and outline what they envision will be Capital and what the projects are, which will be part of the budget process. Member Schmid commented the City might say it needs one thing and Suburban may say something else. It seems that there can be some mechanism so that before the incentive become active there should be some percentage of Capital. Mr. Davis answered that basically this will be set by Council when the budget is approved.


    Member Schmid asked why is the City maintaining employees? Suburban appears to want to take over, and he agrees with that. He would think the City should allow them to have the employees not the City. Mr. Davis stated all the employees of the arena would be with Suburban Arena Management.


    Member Schmid commented on the out clause. For example, if the management of the facility has pending lawsuits against them, it seems to him there has to be some way to suggest that is inappropriate. Would that be coming back to the City’s insurance plan? Mr. Watson explained the contract reads that all employees hired by Suburban shall be employees of Suburban Arena Management and not employees of the City of Novi. Member Schmid asked if Suburban would be responsible for the law suits? Mr. Watson stated employment issues would be Suburban issues. Member DeRoche stated the document states they will deminfy us and have a hold harmless.


    Member Kramer said he was satisfied with the discussion at the table. When Council comes to a new motion, he thinks the approval should be subject to favorable review of the Farmington Hills facility finances by the City Finance Department.


    Mayor McLallen stated at this point the issues that are outstanding are whether the Council wishes to have the conflict of interest clause included or excluded in the contract. The statement of goal and debt deficit reduction payment, everyone agrees is a statement of belief by everyone at the table.


    Member Mutch commented there seems to be some difference of opinion on the issue raised by Member Lorenzo on the amendments, when she made the comment on goals and profitable and so forth, she tied this to the strict bottom line. Member Mutch stated the facility is paid for by the people of the City of Novi and it was built to serve the people of the community and that has to be kept in mind. Member Mutch clarified that when she says she has no problem with the City goal of profitability she has the original wording in mind that Council is here to serve the community and have a profit as well but not to sacrifice service to the community in the name of making money.


    Mayor McLallen said the next issue was the fidelity bond. She believes the members are in agreement with the issue.


    Mayor McLallen mentioned the out clause seems to be the one still to be defined so there is a mutual release stated more clearly than is currently available. Regarding the incentives schedules, there appears to be some consensus to accept them as presented. Member DeRoche is the only one that has a major problem with them as presented.


    Mayor McLallen moved forward to the conflict of interest issue. Is there support to continue that or to let this issue also drop? Should there be a conflict of interest punitive clause put into the document or not? Member Kramer asked is there a malfeasance statement? Could this include the substantive conflict of interest? Mr. Watson stated the paragraph runs from pages 9 to 10. Mayor McLallen stated would this cover the issue? Mr. Watson answered he does not think that necessarily covers the issue. He believes Member Kramer’s question was if the City was going to put in language, would this be the place to put it? It could very will be. Member Kramer said he thinks that Member DeRoche was trying to define it at the table but the thought is if there is substantive, conflict of interest that would be the element that would start in the contract termination process. Mayor McLallen stated the real issue is whether this is something that needs to be articulated or not? Member Kramer answered if a way exists without getting tangled. Mayor ProTem Crawford said he does not want in there. He thinks it is too broad and difficult to monitor. One of the things he did not say when he spoke against including it before was the reverse of that is, there is an incentive clause in there. There is incentive to do more business in Novi. Member Schmid said it could be covered with either party getting out. There could be a factor in the contract that if there was evidence, then the City would have the option of terminating the contract.


    Mayor McLallen commented it appears to be a consensus to not continue with the conflict of interest clause. The document as presented with the exception of the mutually to be determined out clause, appears to be acceptable to the majority of this Council. The discussion has been very protracted but it let the members express their feelings on the table. Her concerns are very different. She feels that the City is in a very challenging,a high profile situation. Suburban has stepped up to the table in a very public and tight time frame has presented on his word and reputation a plan for the arena. She thanked Mr. Anastos for his efforts and believes that the City has found the person that it should contract with. Time is very important with this particular contractual situation. She believes the contract as presented protects, with the one exception that still needs to be worked on, protects the City and enables the City to get where everyone wants to go.


    Mayor ProTem Crawford said he agrees with what the Mayor just stated in regards to Suburban and their team. He was very impressed and he thinks they are going to do nothing but good for the City of Novi and the ice arena. There were five issues and the incentive remains the same so that does not change in the contract. The punitive damage issue is not in the contract so that does not change. The only three issues that the Council has are the goal to pay off the debt and the deficit with some language of that nature as long as it does not tie the City so that the City may be able to use surplus funds for Capital Improvements or in some other area. He believes council has reached an agreement on the bond. He does not know if Suburban has agreed. He believes the amount can be worked out between the parties. There is consensus that the City should have a mutually agreeable out clause for the City and Suburban. His question to Suburban is the three issues dealing with goal, bond and out clause issue, is that a problem? Mr. Riley said he wants the opportunity to discuss these with Mr. Anastos and talk more thoughtfully about it. He knows behind the scenes, the items that they were concerned about. In all respect for the progress being made in the last fifteen minutes, he would like to do the same with his client and he cannot say everything is on the right track. While he senses that it is, he really wants some time with his client to work through these. He thinks the good faith given to the City is that Suburban has dropped everything to get to this point, and they will be back with Mr. Watson and continue to work through these issues. He senses the City’s willingness to work with Suburban and Suburban in return can be responsive to some of the issues. The out clause is going to require some discussion. The finance check of Suburban will have to be worked out on how this is going to be achieved.


    Mayor ProTem Crawford said the last issue is not part of the contract. Member Kramer would like it to be discussed as part of the motion. Mr. Riley commented it has circulated enough to be an issue and he would like to work with Mr. Anastos to give it the attention that is wanted. Another issue circulated and it is not on point list, is the City preference issue. That has been in and out tonight. He is not certain where it is now. Mayor ProTem Crawford stated that is out. Member Mutch commented she was not saying preference. The other issue of fidelity bond can be worked out. Mr. Riley commented goal language can be agreed upon. These sound like the parties are headed in the right direction. Mayor ProTem Crawford commented he is trying to come to some conclusion and get a contract in place with these issues yet to be resolved. If the motion can be made like that where the two attorneys’ can get together, he believes they are resolvable issues.


    Member Mutch commented when the City is responsible for paying for the bond, is there some indication just by what is charged whether it is a good risk or not?.


    Member DeRoche commented it sounds like something is going to be worked out and he is glad and hopes the ice arena gets back on the right foot. He is not going to be able to support this because he was unable to convince the other members of the two most important things of the incentive clause and the punitive damage clause for the conflict of interest. He said that his lack of support is not reflective on Surburban management.


    Member Schmid mentioned business interruption. If something happens to the facility like fire or something of that nature is the City protected? Mr. Davis said the City has business interruption insurance.


    Member Kramer commented that Mayor ProTem Crawford indicated there was a motion on the floor but he does not believe there is one. He continued Council was discussing consensus on the substantive items and he said he would like to make a motion.


    Mayor McLallen said there is a motion on the floor that has not been voted upon. Mayor ProTem Crawford said it was not voted upon because discussions were held. Member DeRoche said he started making motions to amend but was interrupted. City Clerk Bartholomew stated that there is a motion on the floor moved by Crawford and seconded by Mutch to approve the contract as amended, carried unanimously.


    Member Kramer said then a motion is needed to pick up the areas of discussion.


    Member DeRoche commented to the Mayor that he does not recall voting on the motion. Member DeRoche explained he started making amendments to the motion, said it was going to work, then it went from there.


    Mayor McLallen stated there is an open motion on the floor that has not been voted on. City Clerk Bartholomew stated there is a motion by Crawford, seconded by Mutch to approve the contract as presented and it passed unanimously.


    Member DeRoche commented if the City Clerk is convinced that it existed he would move that the Council reconsider the motion to accept the contract as presented.


    CM-99-08-218: Moved by DeRoche, Seconded Kramer, CARRIED

    UNANIMOUSLY: For the reconsideration on the motion


    Vote on 99-08-218: Yeas: McLallen, Crawford, DeRoche, Kramer, Mutch,


    Nays: None

    Abs: Lorenzo


    Mayor McLallen said the issue to be reconsidered is the motion.


    CM-99-08-219: Moved by Crawford, Seconded by Kramer, CARRIED: To

    accept the contract with Suburban Arena Management

    as presented subject to the resolution of the goal, debt

    and deficit, the fidelity bond and the out clause.


    Member Mutch commented there was a vote on the motion to accept the contract as presented so that the amendments could be added. There was a vote but she understands that has been redone. The discussion that followed, as she understands was on the issues that the City did not want to have part of the contract but just to have a consensus on. If it is to be part of the contract now, she would reluctantly agree but she thought this was already discussed and some of these issues were not to be part of the contract.


    Vote on CM-99-08-219: Yeas: McLallen, Crawford, Kramer, Mutch, Schmid

    Nays: DeRoche

    Abs: Lorenzo


    CM-99-08-220 : Moved Kramer, Seconded by DeRoche, CARRIED

    UNANIMOUSLY: For Novi Finance Department to

    Review the financial statements of the Suburban Management

    Ice Arena before the contract is signed




    Mayor ProTem Crawford questioned the part of the motion that stated before the contract is signed and he does not know how long that review is going to take and the City needs to get a contract signed fairly soon. He was hoping that the goal, bond and the out clause could be mutually agreed upon. A financial review and a report back to Council may take longer than what the City wants. Member Kramer commented only if there were issues, would he expect to have the contract come back. Mayor ProTem Crawford asked who is going to decide if there is an issue? Member Kramer said the Finance Department and this is good business before entering into a contract. Mayor ProTem Crawford said this process might take a week or more and how much longer is Suburban going put up with this?


    Member Mutch asked if the finance issues are for the entire business operations of Suburban? Member Kramer said the issue as discussed was they are operating a similar facility and it is making money. Member Mutch said this is only focusing on the Farmington Hills facility? Member Kramer said that is all. Member Mutch asked when does Center Ice Management leave? Mr. Davis answered their last day of operation is

    August 25, 1999. The Parks & Recreation Department will be staffing the facility as anticipated for 6 days until September 1, 1999 when Suburban takes over as it is outlined in the proposal. Member Mutch asked if the ice arena could be added to the agenda of Monday, August 30, 1999 if there is a problem. Mr. Kriewall commented if all this is worked out tomorrow we would have an approved agreement and the Finance Director would review by Wednesday and then it would be ready to go. Mr. Davis commented it is going to take some time for Suburban to get staff and that is why the City was trying to allow 10 days to get in the facility.


    Vote on CM-99-08-220: Yeas: McLallen, Crawford, DeRoche, Kramer, Mutch,


    Nays: None

    Abs: Lorenzo


  21. Novi 2020 Master Plan for Land Use Presentation – Rod Arroyo


Member Schmid asked if this item could be put on the next agenda. Mayor McLallen requested this item be put on the next agenda under Presentations and thanked Mr. Arroyo.


CONSENT AGENDA REMOVALS FOR COUNCIL ACTION: (Consent Agenda items, which have been removed for discussion and/or action)


  1. Authorization to prepare an Agreement with the Novi Community School District for the construction of the Wixom Road Regional Detention Basin

    CM-99-08-221: Moved by Crawford, Seconded by DeRoche, CARRIED

    UNANIMOUSLY: Authorize to prepare an agreement with the

    Novi Community School District for the construction of the

    Wixom Road Regional Detention Basin


    Vote on CM-99-08-221: Yeas: McLallen, Crawford, DeRoche, Kramer, Mutch,


    Nays: None

    Abs: Lorenzo


  3. Approval to execute Quit Claim Deed conveying excess Taft Road Extension

property to the Steelcrete Compnay pursuant to the Agreement between the

City of Novi and Steelcrete dated March 16, 1998


CM-99-08-222: Moved by Schmid, Seconded by Crawford, CARRIED

UNANIMOUSLY: To approve Quit Claim Deed conveying excess Taft Road Extension property to the Steelcrete Company per agreement dated March 16, 1998


Vote on CM-99-08-222: Yeas: McLallen, Crawford, DeRoche, Kramer, Mutch,


Nays: None

Abs: Lorenzo


  1. Approval of Agreement with Southwest Oakland Cable Commission to furnish a Video Production Specialist

    Member Schmid wanted clarification that the individual would be working for Novi. Mr. Kriewall said yes. Member Schmid asked if this issue would have any influence on what the Council does with the cable company? Mr. Kriewall said no.


    CM-99-08-223: Moved by Schmid, Seconded by Crawford, CARRIED

    UNANIMOUSLY: To approve the agreement with

    Southwest Oakland Cable Commission to furnish a

    Video Production Specialist for the City of Novi


    Vote on CM-99-08-223: Yeas: McLallen, Crawford, DeRoche, Kramer, Mutch,


    Nays: None

    Abs: Lorenzo


  3. Request from NOVA, SP-98-16, for Preliminary Site Plan one (1) year Extension


CM-99-08-224: Moved by Crawford, Seconded by Kramer, CARRIED

UNANIMOUSLY: To approve the request for the extension of

SP-98-16 for one (1) year


Vote on CM-99-08-224: Yeas: McLallen, Crawford, DeRoche, Kramer, Mutch,


Nays: None

Abs: Lorenzo




Member Kramer mentioned the Rules Committee needs to meet to consider the Communications Committee recommendations for video taping and replay of Council meetings. A date has not been determined.




  1. Sarah Gray communications dated February 7, 1999 – Lorenzo


Member DeRoche requested the issues of personal watercrafts, portable baseball hoops and mandatory garbage removal be forwarded to Ordinance Review.


2. Dangerous Buildings Ordinance


Mayor McLallen mentioned under the Dangerous Buildings Ordinance that Council recently passed there is a provision to have the Mayor appoint members to sit on the review board. The Building Department recommended three individuals who already sit on boards in the City of Novi. She concurs with the recommendations. City Clerk Bartholomew stated this appointment does not need Council confirmation.


3. Police School Liaison


Mayor ProTem Crawford mentioned at budget time he brought up the idea that the City could look into a police department and school liaison. Many communities have participated in this program and in some cases there is grant money available. He would like, with Council consent, a report back from the police department as to the feasibility of such a program and let the police discuss the feasibility with school administration within a 30 day time period. Member Kramer mentioned this was also a recommendation of the mayoral exchange with the City of Troy. Member Mutch wanted clarification that the report that Council would get back would be from the police assessment report on the feasibility but also the willingness of the school district. Mayor ProTem Crawford said it would include both groups. Member Mutch said it would be with the high school? Mayor ProTem Crawford said it would be primarily be Novi school district. He does not want that to be designed by Council, he wants a report back from the police department as feasibility. Member Mutch said if this refers to the high school she does not have a problem with it but if it includes anything other than the high school then she does think all three school districts need to be involved. Mayor ProTem Crawford mentioned his intention is not to involve the other school districts.








  1. Letter from Fried, Watson & Bugbee to Councilmembers Schmid, Mutch & DeRoche, Re: Ethics Opinion
  2. Letter from James Korte to JCK & Associates, Re: Shawood/Walled Lake Heights Watermain Installation: SAD #150
  3. Letter from James Korte to Novi Police Department, Re: 170 Erma
  4. South Lake Drive Traffic Calming Study – Phase I
  5. Memorandum from A.W. Nowicki to E.F. Kriewall, dated August 18, 1999, submitting the JCK Storm Water Sediment and Aquatic Plant Study for Walled Lake, Shawood Lake, Meadowbrook Lake
  6. Letter from James Alampi, dated August 16, 1999, commending the City of Novi Water & Sewer Department
  7. Memorandum from A.W. Nowicki to E.F. Kriewall, dated August 18, 1999, Re: the Garfield Road Mitigation Site issues
  8. Memorandum from A.W. Nowicki to E.F. Kriewall, dated August 18, 1999, with August 16, 1999 letter from the Department of Agriculture, giving notice of the proposed Quail Ridge Intercounty Drain





There being no further business before City Council, the meeting was adjourned at 1:00 a.m.




Kathleen S. McLallen Tonni L. Bartholomew



Transcribed by:




Melissa H. Place


Date Approved: