View Agenda for this Meeting


SATURDAY, MARCH 18, 2000, AT 12:00 NOON


Mayor Clark called the meeting to order at 12:05 PM


ROLL CALL: Mayor Clark, Mayor ProTem Lorenzo –absent/excused, Council Members Bononi, Crawford, Csordas, DeRoche – absent/excused, Kramer

ALSO PRESENT: Richard Helwig, Dennis Watson, Craig Klaver, Bruce Bagdady of Keller Thoma, Tia Gronlund-Fox



Presentation of compensation package to Richard Helwig

Mr. Klaver introduced Bruce Bagdady of Keller Thoma, which is the firm that handles all of the City’s labor relation issues.

Mr. Watson said Council Members were provided packet material that included a proposed employment agreement with Mr. Helwig. Since the packets went out Mr. Bagdady had an opportunity to review the agreement and had a couple of comments and Mr. Watson had a couple of minor changes.

Mr. Watson pointed out the changes. Mr. Watson referred Council to Page 2 of the new draft in Paragraph 2 dealing with Employment at Will. The previous draft read "It is distinctly and expressly understood and agreed between the City and the City Manager that the employment is at will and that its duration is indefinite and solely rests in the discretion of the City Council." Mr. Bagdady suggested rather than saying "the employment is at will" say "that the employment compensation and benefits are at will."

The next change is in Paragraph 3, third line down that says "compensation to be paid bi-weekly"; in the previous draft there was a blank space there.

The last sentence in that Paragraph previously read "said compensation will be reviewed annually." Mr. Watson said added the words "commencing with the review effective July 1, 2001."

The last change was to correct a typo on page 5, which is a correction of the Mayor’s middle initial.

Mr. Klaver said deferred compensation is an issue that needed to be discussed and clarified. Mr. Klaver advised Council that Mr. Helwig said, if all works out to everyone’s satisfaction today, that he was looking at April 17th as his first day in the office. However, Mr. Helwig would like to attend the budget session on April 15th.

Mayor Clark asked Mr. Watson and Mr. Bagdady if they had any concerns about Mr. Helwig being at the April 15th meeting when his actual employment date is not until April 17th?

Mr. Bagdady believed that Mr. Helwig would be in attendance at the meeting for the purpose of performing his function as City Manager, which is working for Council as opposed to just being present as a member of the public.

Mayor Clark asked if he was suggesting Council make the Employment Agreement effective April 15th?

Mr. Bagdady said if Council thought it made sense for Mr. Helwig to be present and doing his job then the employment date should be the 15th.

Mayor Clark thought that could be worked out.

Mr. Watson said there is one other minor revision to the agreement. On page 3, Paragraph 5 in the first sentence, because of deferred compensation, said "the City would not be making contribution to the MERS system." A second sentence has been added to indicate that "the City Manager shall execute any and all forms necessary for withdrawal from the MERS system." Mr. Klaver said MERS requires a resolution.


Member Crawford thought the severance was on the light side, on Page 3, Item 6 regarding severance Paragraphs A, B and C. He suggested that after one year it be two months, after two years four months and after three years six months. He said the way this agreement reads anyone terminated up to 11 months and 30 days would receive no severance. He asked if this was correct and if it was the norm?

Mr. Watson said it was correct and did not know if it was the norm.

Member Crawford thought it would be in the first year, two months etc. as opposed to after the first, second and third year.

Mr. Klaver thought it was the intent of the agreement to be "in" the first year of employment and not "after."

Mayor Clark said Paragraph 6A should read "If the employment is terminated "within" one year of employment." 6B would say "within" the second year and 6C would say "within the third year of employment or any period there after."

Member Bononi agreed that the way the language is written is on the light side but it goes beyond that. The circumstances she knew of were a minimum of six months and that is off the top. She said job searches in this particular salary range are not a piece of cake. This is combined with the fact that this is an at will situation where the circumstances could prove that this person could be terminated through no fault of his own but Council reserves the right to make that decision. This is not a windfall to a person Council thinks is not doing an adequate job and are concerned about rewarding. The rule of thumb was for every $10,000 worth of income at this level, $100,000 and above, we are talking about a month job search to recover that kind position.



What she would be looking at, if they were not looking at something that would total six months off the top is in A, if the employment is terminated after one year she did not feel Council should penalize someone for not making it a year. She would be looking for 3 months and under B if employment were terminated after two years or thereafter she would look for a six-month compensation.

She had done a lot of reading about this and at that salary range it is only fair and is true in other professional areas. The fact that Council would penalize someone for being here less than a year and then give him or her nothing on termination is not fair.

Member Bononi recommended that A would contain a three-month severance package within one year and B would contain within the second year or thereafter a six-month severance package.

Member Crawford stated he had no problem with this proposal and agreed with Member Bononi.

Mayor Clark said the first page of the agreement was fine. Council agreed that on page 2 Paragraph 2 the date would read "on the 15th day of April 2000."

Mayor Clark called for discussion on annual compensation.

Member Csordas’ recommendation was to come within the mean of the range given, which would be $100,000.00 a year. He felt it was close to the former City Manager with 25 years of experience and was a significant increase in compensation and responsibility from his present position.

Council concurred.

Mayor Clark said Item 4 is the deferred compensation contribution that they would propose to make to the International City County Management Association Retirement Corporation in lieu of a contribution to MERS.

Mr. Klaver said the IRS limit on the contributions is based on $8,000 per calendar year and it does apply to both or any combination of contributions from the employer and the employee.

There was a question about a match and Mr. Klaver said it was $4,000 if there is a match situation.

Member Bononi said the supplementary part of it is that most governments also have additional pensions so this is a vehicle just used to defer that income. She felt the amount in the agreement was acceptable.

Member Csordas said $8,000 exceeded the amount allowed.

Mayor Clark said the City can only put in $4,000 under the IRS regulations.

Mr. Klaver said it would exceed it if Council wanted a match. If they want an employer contribution only then the City could put in the entire $8,000 and Mr. Helwig would not be allowed to contribute himself.

Member Bononi asked what the City would contribute to the pension fund he opted out of?

Mr. Klaver said there is not a single number that can be identified for an individual. That is not how they calculate it. He said what was in the memo is what was done on an average. They take all the employees, the average age, average salary and it represents 13 ˝%.

Member Csordas recommended contributing $4,000 annually whether matching funds are contributed or not.

Mayor Clark felt this would be appropriate.

Mayor Clark said regarding Item 7 Council agreed that in lieu of providing a City vehicle to Mr. Helwig that an allowance would be provided of $500.00 a month for the use of his automobile. He would be responsible for maintenance, gas, insurance, etc.

Member Csordas agreed with the amount and asked if it was taxable?

Member Kramer said it would be taxable.

Member Csordas asked if he would be responsible for the taxes or would the City just give him $500 a month?

Mr. Klaver said Mr. Helwig would report it. He said employees with a City vehicle are taxed on the commuting mileage and it is an IRS regulation.

Mayor Clark said Item 8 had been discussed and if the City Manager established a residency in the City within six months of the date of his employment the City would reimburse him for reasonable moving expenses from Birmingham to Novi.

Mr. Klaver said Mr. Helwig was considering having a house built and asked that the time limit be extended until the end of the year.

Member Kramer pointed out that in Item 5 vacation time is 3 weeks this year and 4 weeks in subsequent years.

Mr. Klaver offered clarification dealing with fringe benefits on Page 3, Item 5, which read "that the Manager is subject to this policy for all purposes other than appointment or any other conditions Council may make." He said this would cover all of the fringe benefits, insurance and all those issues.

Member Kramer said there are three subjects within Item 5. He felt they should be addressed separately. He said the first one is a general sentence dealing with other benefits. The second sentence deals specifically with vacation. The third Paragraph has to do with not making contributions to MERS.

Mayor Clark suggested making this Item 5 A, B and C. Council agreed.



Mr. Ingmire spoke regarding the severance package and asked if the City Manager is terminated for cause and gets a job in two weeks why would we pay him $50,000.

Mayor Clark said if the City Manager’s employment is terminated for reasons of incompetence, neglect of City business, misfeasance or malfeasance in office or breach of this agreement, the City Manager shall receive absolutely no severance pay.


Mayor Clark asked Mr. Helwig if he had a chance to review the agreement?

Mr. Helwig stated he did.

Mayor Clark went through the agreement with Mr. Helwig.

Mr. Kramer commented when referring to termination that the word "and" in the last sentence be changed to "or" to read "termination by the City shall be as provided in Section 4.8 of the City Charter "or" by the City Manager upon 30 days notice.

Member Crawford asked if it is an "or" situation does it mean that the severance package would be given if six months from now the City Manager says "I’m out of here"?

Mr. Watson said the severance package is in the event that the City Manager is terminated by the Council.

Mayor Clark said the annual compensation for services the City would pay to the City Manager was $100,000.00 and asked if that was agreeable to Mr. Helwig?

Mr. Helwig said it was agreeable depending on the deferred compensation request. Mayor Clark said they would address that further in the document.

Mayor Clark said in addition, Paragraph 4, to annual compensation the City agrees to annually contribute to the International City County Management Association Retirement Corporation an annual amount equal to $4,000.00.

Mr. Helwig respectfully requested that the maximum allowable of $8,000 be the amount. He stated in his position as City Manager with Illinois he was afforded the full amount then of $7,500 in addition to base compensation. He said he would not be a burden to the pension system at Novi, which would be upwards of 13% of base salary. Deferred compensation is something that is attractive to him at this stage of his career. He said he would accept the salary in Item 3 if Item #4 could be the maximum permitted under law of $8,000.


Member Kramer suggested proceeding with the agreement and discussing the open items together. Council agreed.


Mayor Clark went on to Paragraph 5 on Page 3 A, B and C. He explained these three categories.

Mr. Helwig agreed.

Member Crawford said Item B states "the City Manager shall be provided four weeks vacation leave for each calendar year of employment." He asked if this should read "during" each calendar year of employment." Also to be changed in other applicable sentences referring to weeks of vacation time.

Mayor Clark stated Item C and Mr. Helwig agreed.

Mayor Clark went on to Item 6 regarding severance pay. Mr. Helwig agreed.

Mayor Clark said in Section 6 Paragraph 7 provided that in lieu of a City vehicle Council proposed to provide a $500 per month allowance for an automobile with the understanding that that Mr. Helwig would provide for the maintenance, cost of operating and insurance in connection with the automobile.

Mr. Helwig stated that was also agreeable.

Mayor Clark said Paragraph 8 provided that "as of the effective date of the commencement of the City Manager’s employment he will have established residency in Birmingham Michigan and would establish residency in Novi within six months of that date. The City will reimburse him with reasonable moving expenses from Birmingham Michigan to the City of Novi."

Mr. Helwig stated that he and his wife are looking for homes in Novi and are looking forward to that move. Mrs. Helwig has mentioned to him that there is a possibility they might like new construction and if the spirit of this could be earnest money being put down with a builder within 30 to 60 days so that the moving allowance would still apply. He asked that they be given until the end of the year. He stated he could not imagine doing this job without being a member of the community he serves.

Mayor Clark said he was going to ask if extending the time until the end of the year would help. Mr. Helwig said it would and Council agreed.

Mayor Clark said Council would provide that in the event he elected to build a residence in Novi that that provision would be extended until the end of the year.

Mayor Clark said Paragraph 9 said "during the term that this agreement is in force the City Manager agrees to devote all his time and energy to give his best attention exclusively to the business of the City and carry out his responsibility as City Manager under the City Charter to the best of his ability. He shall hold no other employment nor shall he hold either directly or indirectly an investment in a firm, corporation or legal entity supplying goods or services to the City or in any firm, corporation or other entity which has or is likely to have any dealings with the City."

Mr. Helwig agreed.


Mayor Clark said Paragraph 10 was essentially a severability clause that provides if any portion or portions thereof contained in the agreement is held to be unconstitutional, invalid or unenforceable that provision or any portion thereof shall be deemed severable. However, the remainder of the agreement would not be affected and remain in full force and effect.

Mr. Helwig agreed.

Mayor Clark said Paragraph 11 stated "that this written agreement contains the entire agreement."

Mr. Helwig said he understood and agreed.

Mayor Clark asked Mr. Helwig to let him propose for his consideration an alternative that might be amenable to him. The Council proposed a contribution of $4,000 to the International City County Management Association Retirement Corporation Fund and add to that paragraph a provision that would provide that at the annual review on July 1, 2000 they would look at this for any increase that might be appropriate then.

Mr. Helwig said he would like to start with it. He said he is aware of other City Manager salaries in the region and individuals who have not been City Manager until their last year in their career being higher than the $100,000.00. He said he brings 12 years of City Manager experience in larger communities as well as experience as Assistant Manager. He realized that he had an obligation to prove himself to Council and the community and he understood the spirit of that so he is not making an issue out of the base salary.

He did think that $8,000 in deferred income, since he would not be a burden on the pension system, which is 13% of $100,000 was unreasonable. He said a vehicle allowance is cheaper to the City than owning, operating, maintaining and insuring a vehicle so he thought this was less than what they had been accustomed to in any study he had ever been a part of in City government.

Mr. Helwig said six months is pretty standard regarding the severability clause. He understood the spirit of what Council was doing and, of course, had no desire of being severed or not being here.

Mr. Helwig said they are looking forward to moving to this community but there is risk there. If things totally came unglued and the wheels fell off between us in a very short time there would be a risk that would be much greater on his part.

Mr. Helwig thought, putting all that together, it was fair in terms of the total view of the compensation package. He asked Council to consider this. He said this was very awkward to do because he is in this work for serving the public not for serving his own nest.

Member Crawford thought Mr. Helwig had made a compelling case looking at everything in totality and he recommended he be given the maximum contribution of $8,000.00.




Mayor Clark asked each Council Member if they agreed and each said they did. Mayor Clark also agreed and there was consensus of Council.

Mayor Clark said all of the terms have been agreed upon and Novi has a new City Manager and he asked Mr. Watson and Mr. Bagdady to make the appropriate corrections in the contract. He asked if Mr. Helwig would be here next week?

Mr. Helwig stated he would be here until early Monday afternoon and then would arrive back in town Thursday evening and would be here again until early Monday morning next weekend.

Mr. Watson said he would have a revised draft Monday morning.

Mr. Helwig said he would come to City Hall on Monday on his way back to Dublin.

Mr. Klaver said he would make necessary arrangements.

Mayor Clark said when Mr. Helwig had executed the contract he would do likewise on behalf of the City and Council would look forward to seeing Mr. Helwig on April 15th.

Members Kramer asked that Council discuss a reception for Mr. Helwig at a future meeting.

Mayor Clark said absolutely. He informed Mr. Helwig that during the course of the interview process all of the members of Council received communications in person, over the phone, voice mail and in writing expressing a great deal of support for his candidacy. He said Mr. Helwig comes with a great deal of support from not only this Council but from this community and they are looking forward to his being their City Manager and supporting him in his future endeavors.

Mr. Helwig said that would be wonderful and Novi has made him feel very welcome. He asked that from this day forward everyone call him Rick.



There being no further business before Council the meeting was adjourned at 1:20 PM.



________________________________ _______________________________

Richard J. Clark, Mayor Nancy Reutter, Deputy City Clerk


Transcribed by: ___________________

Charlene McLean

Date approved: April 3, 2000