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REGULAR MEETING OF THE NOVI CITY COUNCIL
Mayor Csordas called the meeting to order at 7:00 p.m.
PLEDGE OF ALLEGIANCE Led by Brownie Troop No. 664
ROLL CALL: Mayor Csordas, Mayor Pro Tem Landry, Council Members Capello, Gatt, Lorenzo, Nagy* and Paul
ALSO PRESENT: Rich Helwig Ė City Manager
Craig Klaver Ė Chief Operating Officer
Clay Pearson Ė Assistant City Manager
Tom Schultz Ė City Attorney
Kathy Smith-Roy Ė Finance Director
Tia Gronlund-Fox Ė Human Resources Director
Benny McCusker Ė Public Works Director
Barb McBeth Ė Planning Director
APPROVAL OF AGENDA
Member Capello added under Mayor and Council Issues Item No. 1, "Beck Road Design", Item No. 2, "Tax Base Committee"; Item No. 3, "Rescheduling Board Commission Interviews on December 13th to see if some could be put on the 7th, some on the 20th and maybe the first meeting in January to save Council a meeting during December"; Member Paul added Item No. 4, "Road Standards Committee".
CM-04-11-409 Moved by Landry, seconded by Lorenzo; CARRIED UNANIMOUSLY: To approve the agenda as amended.
Voice Vote on CM-04-11-409 CARRIED UNANIMOUSLY
1. Recognition of 30-Year Service Award by International City/County Management Association for City Manager, Rick Helwig
Mayor Csordas stated that Mr. Helwig was recognized for 30 years of service by the International City/County Management Association for City Managers for distinguished service for 30 years in the public sector for significant contributions and achievements in the advancement of local government administration. The award was presented at ICMAís Annual Conference in San Diego, California, on October 20, 2004.
1. SPECIAL/COMMITTEE Ė None
Mayor Csordas stated that there were Minutes from Walled Lake in Council packets; he wanted Council and citizens to be aware that there was a petition being circulated around the Walled Lake area that residents wanted their names taken off, because they could be assigning themselves with a special assessment without their knowledge. He said the petition had not been presented to Council yet, but he wanted Council to know that the Committee was trying to form a lake improvement board committee. It was being circulated by Lakes Area Homeowners Association. He said the upset with a number of people that attended the Walled Lake meeting was that "although the statute requires the establishment of an autonomous lake board that has special assessment authority, there is no requirement that petitions disclose the possibility of special assessments." He said that some people were fairly upset with that because they had signed the petition that might get them a tax increase and wanted their names removed.
Member Paul stated that she was on the ad hoc committee between Walled Lake and Novi; Mr. McCusker was on that committee with her. She wanted to clarify that a lot of the services the City was providing between Walled Lake and Novi with the ad hoc committee was really being duplicated by the Cityís Neighborhood Services Committee; since that group did not have an ability to make action votes or move forward, it was more of an educational board and she thought that that could be included in her Neighborhood Services packet and the City would not be duplicating the amount of time for staff to be in those meetings, and the amount of effort to find resources to pay for another letter. When they referenced that in the Minutes to Walled Lake, they basically said they dropped that committee; she said that was not quite accurate, the City wasnít having that separate subcommittee, but Cindy Uglow did serve that group of people and was willing to put educational information that they would bring forward or otherwise place with the City Managerís letter. They didnít want to duplicate the services because it was expensive. Member Paul wanted people to know that the Committee didnít just say it was done with them; there was another venue that served that purpose, so the Committee streamlined that service.
2. CITY MANAGER ĖIntroduction of Robert Hayes Ė City Engineer
Mr. Helwig stated that Mr. Hayes came from the private sector; 12 years of a broad array of engineering services to private and public sector clients, and prior to those 11 years with the U.S. Army Corps of Engineers. Mr. Helwig said that Mr. Hayesí undergraduate Civil Engineering Degree was obtained at West Point; he earned his Masters Degree in construction engineering from the University of Michigan and 9 years later completed a Masters Degree in Business Administration from the University of Michigan, so Administration felt very fortunate to have Mr. Hayes join the leadership group and looked forward to his serving the community in an outstanding manner.
Mr. Hayes stated that it was nice to be there; he enjoyed working with everyone and looked forward to ensuring that the City provided quality engineering and construction services to the community.
3. DEPARTMENTAL Ė Restoration of Taft Road right-of-way following Consumer Gas construction Ė Clay Pearson
Mr. Helwig stated that City Council was quite concerned to see the work done along the Consumers Energy easement along Taft Road north and south of Ten Mile, particularly the wide swath of buffering landscaping and trees that was removed. Administration pushed hard to get that replaced just recently. Mr. Pearson worked very hard on that and would present what had been accomplished for the community.
Mr. Pearson stated that, just to complete some of the communications, the City was advised in mid-October by Consumers Gas that they had done some investigation of their main transmission mains and found actually 12 locations in Novi that required repairs that went into the winter heating season. He said that in reviewing paperwork with them, a lot of that work was on Taft Road where the road repaving had just been completed and was one of the Cityís concerns. The City had a very good working relationship with Consumers on that particular project; in addition to maintaining the Cityís newly reconstructed road, there were a lot of questions about restoration, as it was such a late time of the year, and concerns about the planting materials because even though the area was overgrown with a lot of shrubs and scrub brush, it did provide a very good screen between Taft Road and some of the adjoining residences which added varying levels of their own screening.
Mr. Pearson said that it had been a team effort on both sides; the City had a lot of its landscape foresters look at their plans and came up with what he thought was a good restoration plan. He was pleased to report that it had all been installed. He thought that once it flowered and filled out a little bit more, the City would be quite proud; its condition might be even better than previous conditions. He said the City was very grateful to Consumers in working with it and thanked everyone for their efforts on that.
Mr. Helwig asked what the number of plantings was; it was well over 200.
Mr. Pearson answered there were about 150 trees and on the order of 50 different shrubs to help provide a little variety; it was all done at Consumersí Energy expense.
4. ATTORNEY Ė None
Ken Paluzek with Dykema Gossett spoke representing Chawney Realty, LLC. He asked that Item E on the Consent Agenda be removed and placed as a separate item. He stated that his client lived in a special assessment district and had not gotten information from the City to date; his client would like to have that information before there was a vote on that.
Rob Siemens, of Royal Arc, said he was the original steel contractor on the Fire Station three years ago and still had not been paid. He took the contract in 2001 and first started going to Council meetings in February of 2002, and the City asked at the time to be patient. He said he had contacted the City 52 times through e-mail and telephone. He said he was not sure why he had to go to a Council meeting tonight; he said he was very disappointed and felt someone should have contacted him. He was told by the City Attorney that everyone had been paid on the job but him. He noted that he had been an annoyance to the City Attorney and was told not to come to the Council meeting. He said his patience had now worn out; he had names and dates and wanted the courtesy to be addressed.
Mayor Csordas told Mr. Siemens to feel free to give it to the City Clerk and asked Mr. Helwig for the rest of the story.
Mr. Helwig answered that he did not know the rest of the story; Mr. Siemens had not contacted him, so he would like to find out and have a chance to report to Council and to contact Mr. Siemens.
Frances Loynes, a retiree, wanted to make a few comments about the retirees increase that had been discussed. She stated that from 1977 to 2004 there had been a 71 percent increase in retireesí pay; she said that was not exactly true. She said there were 9 employees who had passed away, so those early retirees had all died. She stated that a lot of the retirees had to work until they were 60 or 62, outside of the police; when Council talked about 30 years from now, she thought she would be long gone, as a lot of the others; there were only about 17 policemen and the rest of the 49 were other employees. She stated that there were 14 employees that did not get insurance; to take $300-$400 out of the retirees checks to pay for insurance was a lot of money.
CONSENT AGENDA (Approval/Removals)
Member Lorenzo asked to remove Item E, Approval to close Special Assessment Districts 77, 78 and 92 for the Novi Road Water & Sewer Extensions to the Water & Sewer Fund, based on the request, and removed Item H, Warrant No. 685
CM-04-11-410 Moved by Paul, seconded by Lorenzo: To approve the Consent Agenda as amended.
Voice Vote on CM-04-11-410 CARRIED UNANIMOUSLY
CONSENT AGENDA: (Background information for Consent Agenda items is available for review at the City Clerkís Office)
A. Approve Minutes of:
1. November 8, 2004, Regular meeting
B. Approval to extend the pavement marking contract for the 2005 season with the low bidder, based on original contract pricing, per the bid from R.S. Contracting, Inc. of May 1, 2003.
C. Approval of Resolution Number 4 for the Bentley and Blomfield Subdivision Water Main Extension Ė Special Assessment District 172 receiving the roll and setting the second public hearing for the project for December 20, 2004.
D. Approval to award bid for thirty (30) Holographic Weapon Sights to Firearm Exchange, the low bidder, in the amount of $8,400.
F. Approval of extension of Debris Removal Contract with Lukas & Sons Enterprises, Inc., the low qualified bidder based on unit pricing of $12.50 per cubic yard.
G. Approval of Final Pay Estimate No. 5 to South Hill Construction for the Taft Road Reconstruction in the amount of $65,071.60, which includes the final balancing change order No. 2 in the amount of $26,014.50 and the interest on the retainage account.
MATTERS FOR COUNCIL ACTION Ė PART I
1. Approval of Ordinance No. 04-171.01, Chapter 2, Article VII, Section 2- 210, and associated resolution, to amend requirements, obligations and fee amounts for the private payment of "Escrow" legal review expenses. 1st Reading
Mr. Helwig stated that two weeks ago at the City Council meeting, that was a topic of discussion and there was a plan for Mr. Fisher on behalf of the City Attorneyís Office to come back with the appropriate fee schedule revisions for Council consideration that would ensure that the City was not at risk for any escrow-related legal review fees; in that spirit, Mr. Fisher had developed the schedule. He said that last Thursday it came in late in the day, apologized for not being able to provide that in packets, so it was at Council places tonight to see what the changes were. He said that Mr. Fisher was there to respond to questions.
Member Lorenzo appreciated Mr. Fisherís and the staffís prompt attention to that; most of it looked very acceptable. She did have a couple of requests to change and a couple of questions, also.
On Page 2 of the document, number six, the additional review in escrow, Member Lorenzo proposed that where it said, "work on the review may be suspended", should read, "work on the review shall be suspended" until the additional payment had been escrowed.
On Page 3, with regard to Section 2-211, which was the appeals section, Member Lorenzo suggested that first, since Council was talking about potential additional monies and additional expense to General Fund or from another source as City Council shall determine. She felt that it should actually be an appeal to the City Council, not to the Administration. Secondly, where it discussed "if an appeal is granted unless it is disclosed that the amount incurred for the review was arbitrarily high", she believed it should say, "arbitrarily or unreasonably high", so if there was an arbitrary decision or if for some reason someone wanted to appeal what they believed to be an unreasonable amount. She would also have a question here as to what other types of grievances perhaps the Administration had received or what was thought of to be an additional appeal. Other than for her own purposes, she only saw those two areas where someone would be aggrieved because they believed the number was arbitrary or unreasonable; she would like to hear what other types of grievances people would have.
Mr. Klaver stated that Administration had received three requests for an appeal; one of them was involving a project where there were escrow fees as well as SAD fees. He believed it was the Maybury project, and it became a clarification of which account they should be placed against. Mr. Klaver said they were able to resolve that by agreeing that some of the money that was originally in the escrow account could have and should have been in the SAD and was transferred and that resolved that. The other three were strictly based on the amount of the reviews. One involved Park Place; there was an exchange of information and a discussion with the applicant and the City Attorney, as well as communications to his office, and ultimately that was resolved and the fees were paid. With the other two, they had meetings and they explained with the assistance of the City Attorneyís Office, what the necessary reviews were for, and they were just simply going to look at that and give us a response; those two had not been resolved yet, but there had not been a follow-up, either, so he didnít know whether they have simply dropped them or what. Mr. Klaver said that had been their experience to date on the appeal process.
Member Lorenzo stated that those would be her changes, the three changes that she proposed would be again, "shall" on page 2 instead of "may"; "arbitrarily or unreasonably high" and changing the appeal to the City Council instead of the Administration.
CM-04-11-411 Moved by Lorenzo, seconded by Paul; CARRIED UNANIMOUSLY: To approve Ordinance No. 04-171.01, Chapter 2, Article VII, Section 2-210, and the associated resolution, to amend requirements, obligations and fee amounts for the private payment of "Escrow" legal review expenses, with changes from "may" to "shall" on page 2 and from "arbitrarily high" to "arbitrarily or unreasonably high" on page 3.
Mayor Pro Tem Landry answered only with respect to the previous speakerís suggestion that the appeals go to City Council. His concern was that the City Council would be involved in something which really could be handled administratively. He suggested that the appeal initially be heard by the City Managerís Office and the City Managerís Office indicate in perhaps an off-week packet what the proposed action would be. If the City Council chose to pull it and bring it before us, or any one of Council could do that he guessed, but rather than have Council get inundated with those kinds of appeals, he wanted to see the administration deal with it, report on a proposed action, and that if any one of Council disagreed, they could ask that it be forwarded to the full Council.
Member Lorenzo said she would be amenable to that.
Mayor Pro Tem Landry stated that he would have no problem with that.
Mayor Csordas asked if the seconder did.
Member Paul wanted to have clarification. She thought between Ms. Neumaier and Ms. Smith-Roy, Council kind of had a combination of those, but when she went through the idea of different communities and what the pension was paid in Ohio, they had different names of finance director, and when she went through here, she kept reading finance director four or five times. Instead of designating one person for collection, Member Paul wanted to ask the Finance Department if it was something they were comfortable with; her concern was if they ever changed the name or we could just say "designee" or just say "city" in place of just finance director and just have it be just city as title, instead of the finance director. Then whomever the Administration deemed, it might change. She knew that the Planning Coordinator, Juanita Freeman, was doing a portion of that; she didnít know if you wanted to designate just one person if it could be made broader, so the ordinance didnít have to be changed and have two meetings for something that was minutia.
Mr. Helwig answered that he was very comfortable with that because it was a Charter position, it was called out in the Charter, and it would involve some type of interaction at a minimum with City Council to change that name. He thought it was very appropriate to have finance director.
Member Paul asked if they should have finance director or designee; she was just trying to get it broader so you wouldnít have to go back and maybe hold up escrow for whatever reason.
Mr. Helwig stated that it was consistent with other ordinances that Council had adopted and it worked; if the finance director was not here, someone was named acting in her absence, so it was covered, and it was a charter position, so he was very comfortable with that.
*Member Nagy arrived at 7:31 p.m.
Member Paul had a question for Ms. Smith-Roy. When she looked through the legal bills that the City had received, her concern was that when you looked at the escrow, it just said the name of the actual escrow that it was using, Maybury Park Estates or whatever it may be; it didnít say all of those things that were in there, such as development agreement, zoning ordinance, Master Plan amendment, Master Deed, whatever it might be. She wanted to know, with the verbiage in that, how it would work with the current legal bills that the City had.
Ms. Smith-Roy answered that in reading that on Friday, she shared the same concern. She said in her opinion, one of two things had to change: either the ordinance could be worded so that it included accumulative fees, the cumulative fees by project would be reviewed rather than by type of fee, because Member Paul was right, the billings werenít identified. So, for example, if they had one project, they may have five or six of these types of fees, they donít separate those because the billing the City received from Secrest was not separated. That was one option. The other option was to require Secrest Wardle to identify and assign each one of those fees in a line item.
Member Paul asked Mr. Schultz or Mr. Fisher what their choice would be, because she was not going to be writing the bill, they were. She said as it was written there, it said it would call out what you were doing, and when she asked this specifically to the Finance Department, she said she had a bill in front of her and she couldnít understand how we went back and forth and thought we could really put ourselves in jeopardy if someone challenged or put a grievance forward for our bills that your bills werenít calling out which item was being specified. She asked what would be most practical between the two departments, would it be accumulative fees somewhere in that verbiage or legal bills to identify specific points in each project.
Mr. Fisher suggested not to amend the ordinance, because really the ordinance was intended to establish a basic framework, but they would establish a working procedure between them, which they really had been doing at this point in time with establishing numbers for accounts that Secrest provided each time now, and payments would be made in connection with those numbers and the like. He suggested merely establishing an operating procedure that need not be in the ordinance; one of the reasons for that was that if it was in the ordinance and Council wanted to change an operating procedure because it turned out to be somewhat imperfect, then Council would have to come back and do two readings of an ordinance just to change that operating procedure, which was not the most efficient way of proceeding.
Member Paul said she understood, that was why she mentioned the Finance Director being just or designee for that same reason; she was not trying to be unreasonable but trying to look at this as what would be the best verbiage and wondered if Council put accumulative fee somewhere so that you could spell it out if desired but it could be per project, too.
Mayor Csordas suggested a job order system where if there was a certain job that you were working on, a job order could be assigned to that project, but then you could assign line item projects that were underneath that job number.
Ms. Smith-Roy answered that they were amenable to anything; it was just that to date they had been unable to meet the administration of the ordinance the way the billing was currently being received.
Mayor Csordas stated if that made sense to her or some other process similar to that where job orders were assigned and sub-line items underneath that, he saw that a lot of times with some of the things he worked with, that would allow you to identify the project that you were working on and also allow you to assign the fees to that particular job number.
Member Paul agreed with Mayor Csordasí comments; it was an excellent idea. She had a developer contact her last week who said whatever the fees were, it didnít matter, but donít go over them once you set them. He said go way high and then give money back, because when someone was contracting that out, it would be better to have it all up front and financed; when they start getting hit after the fact, they got very upset. She would be fine with the first reading, she just wanted Council to hear what one developer had to say that he was very concerned about; he probably had that happen to him on more than one occasion and was concerned. She just wanted to share that with Council and wanted to be fair to the City Finance administration and to Mr. Fisher, our business partner.
Member Capello stated that he could see where there could be some honest disagreement over some verbiage in certain documents between the Cityís attorney and the developerís attorney. He thought, more and more, Council would find the developers not being familiar with the City, and the documents that they were submitting were not being consistent with the Cityís ordinances and the City Attorney would have to go over and actually educate the developer and the developerís attorney and go over the documents until they were in compliance. That was where he could really see that they would go over the amount set in escrow; that was certainly not the Cityís fault or the City Attorneyís fault.
Roll Call Vote on CM-04-11-411 Yeas: Csordas, Landry, Capello, Gatt, Lorenzo,
2. Consideration of Budget Amendment #2005-4 to provide an additional appropriation for legal services for the balance of the fiscal year in the amount of $162,500 with a corresponding amendment of the legal services contract with Secrest Wardle, particularly a further reduction of the fee schedule.
CM-04-11-412 Moved by Lorenzo, seconded by Nagy; CARRIED UNANIMOUSLY: To approve Budget Amendment #2005-4 to provide an additional appropriation for legal services for the balance of the fiscal year in the amount of $162,500 with a corresponding amendment of the legal services contract with Secrest Wardle, particularly a further reduction of the fee schedule.
Member Paul wanted to make a comment and thank Mr. Fisher for coming up with the third proposal that everyone would hopefully be agreeable to tonight; she wanted to thank Administration for following through on a difficult process. She also wanted to thank Mayor Csordas for his leadership in trying to work the items out.
Member Capello asked if, as he read the additional language on page 7, "litigation matters and circumstances as they arise", which he understood to be outside the day-to-day demands of the City, Council didnít appropriate money for either of those circumstances, the City Attorney had the option of not performing the work.
Mr. Helwig stated that the understanding was if they were not given that assignment; he didnít sign the document because Council hadnít authorized the funding.
Member Capello stated that he just wanted to make sure that was understood; particularly, in litigation, he didnít think it was fair for an attorney to undertake litigation on a retainer or a budgeted amount less than they thought it was going to cover all of their fees and expenses, and then get caught in the middle where the court wouldnít allow them to withdraw and they were stuck representing without any budgeted amount. He just wanted to make sure that Council understood that if Mr. Fisher came to Council and stated that he thought it would take $80,000 on this case and Council wanted to budget $10,000, he didnít have to take the case.
Mr. Helwig stated that was his understanding, and, so it didnít appear so harsh, they did have as a part of that agreement the monthly meet and confer in Executive Session, which they planned on holding the first Council meeting of each month. So on December 6,th Council would have the first meeting where there would be that discussion and there would be an opportunity for there to be a great grasp and understanding of what the issue was and perhaps more time devoted to it than had been devoted in the past before Council reached that decision.
Roll Call Vote on CM-04-11-412 Yeas: Landry, Capello, Gatt,
Lorenzo, Nagy, Paul,
Csordas Nays: None
Mayor Csordas stated that Council was pleased to have the new Speaker of the House present tonight; he made the City of Novi proud.
Craig DeRoche, new Speaker of the House of Representatives, wanted to attend the Council meeting, where he sat for five years, and wanted to let the citizens know that his being elected Speaker of the House meant good things for the City of Novi. Oakland County hadnít had a Speaker of the House of Representatives since 1867; it was a great opportunity for Novi and Southeast Michigan. He invited everyone for his swearing in on January 12, 2005.
3. Consideration of request from Too Chez, Inc. to transfer all stock in 2004 12 months resort Class C liquor license with dance-entertainment permit located in escrow at 27155 Sheraton Drive by dropping Anthony E. Wisne as stockholder through transfer of his 10,000 shares of stock to Toni Ann Wisne Sabina.
CM-04-11-413 Moved by Nagy, seconded by Capello; CARRIED UNANIMOUSLY: To approve request from Too Chez, Inc. to transfer all stock in 2004 12 months resort Class C liquor license with dance-entertainment permit located in escrow at 27155 Sheraton Drive by dropping Anthony E. Wisne as stockholder through transfer of his 10,000 shares of stock to Toni Ann Wisne Sabina.
Roll Call Vote on CM-04-11-413 Yeas: Capello, Gatt, Lorenzo,
Nagy, Paul, Csordas,
Landry Nays: None
4. Consideration of cost of living adjustment for City of Novi retirees, effective January 1, 2005.
Member Gatt stated that he felt he had to recuse himself from the issue since he was a retiree and a beneficiary from this potential motion.
CM-04-11-414 Moved by Landry, seconded by Lorenzo; CARRIED UNANIMOUSLY: To recuse Member Gatt because he was a member of the Novi retirees and the matter directly affected him.
Voice Vote on CM-04-11-414 CARRIED UNANIMOUSLY
Member Paul had requested that Ms. Gronlund-Fox prepare information about other communities around Novi and supply it to Council. She said that her question had been how much percentage were the employees paying into the pension; she said it varied from community to community. She had asked the population of Bloomfield Township, Farmington Hills, Ferndale, Madison Heights, Novi, Royal Oak, Southfield, Troy, Waterford and West Bloomfield. She had asked the population of those cities to look at a tax base number and then how many active employees there were and how many retirees, and then look at how much these groups as a whole, because there were many different groups within each city, how much percentage they paid into their pension.
Ms. Gronlund-Fox stated that she had called each of the communities this morning and listed all the communities that Novi generally used as comparable communities, and, depending upon the group, they varied; so instead of listing police, fire, general administration, they gave her ranges.
Percentage of employee salary contributions toward pension (depending on the group):
Bloomfield Township 1 to 2 percent
Farmington Hills 5 to 6 percent
Ferndale 1.6 to 5.35 percent
Madison Heights 2.44 to 6.67 percent
Novi 0 to 6.4 percent
Royal Oak 1.5 to 2 percent
Southfield 0 to 3.75 percent
Troy 4 percent
Waterford did not respond
West Bloomfield 0 to 3 percent
Member Paul thanked Ms. Gronlund-Fox for the information; previously, Council had several cities in Ohio which were paying 8.8 percent into their pension, so they received an automatic 3 percent raise every year. She asked Ms. Smith-Roy what the cost of MERS over the last five years had been.
Ms. Smith-Roy answered that there was a memo with three items behind it; the first schedule showed the annual pension computations on an average annual basis. The second page had the five-year summary of Benefit E costs; at the top of the page showed the summary and the detail followed by year by bargaining unit.
Member Paul asked, at the top of the page, starting at year 2000, was increased and accrued liability annually $128,884?
Ms. Smith-Roy answered no. She said that the increase in the accrued liability would have been the cost in that year had the City paid for that benefit that year instead of amortizing it over 30 years.
Member Paul asked what the City was currently doing in those years.
Ms. Smith-Roy answered that the City was doing the 30 years, so it was contributing the $7,305 annually for 30 years.
Member Paul stated that it was almost double if the City paid over 30 years, if not more, but if it paid it all one lump sum, it was a less amount. She asked if Ms. Smith-Roy could explain why.
Ms. Smith-Roy answered that the City was financing it over 30 years, and the life expectancy of the group wasnít 30 years.
Member Paul stated that, so far, one of the members of the group came forward and mentioned that a lot of people had passed away since then; she asked if the City still paid for those people that were deceased because it was accruing over 30 years, so no matter what, the City had to pay for it.
Ms. Smith-Roy answered that because the City had made the option to pay for that over 30 years, it was still making that annual contribution.
Member Paul asked, alive or not, the City still paid for those people?
Ms. Smith-Roy answered that was correct, because it was factored; those were actuary estimates of payment, so it was factored into the total. She said the fact that a retiree had passed away did not preclude them from having their spouse continue to collect benefits depending on the option they elected at the date of their retirement. She said that the number of members receiving benefits was identified in the summary page on the five-year summary; it identified the number of people who were still collecting benefits, be it the retiree or some beneficiary.
Member Paul asked that it still was the 49 people?
Ms. Smith-Roy answered yes.
Member Paul said that, looking at the year 2000, it was a 2 percent increase, as well as í01, í02, í03 and then in í04, 2.5 percent, so totaling that would cost the City $1,578,783.
Ms. Smith-Roy answered that was correct.
Member Paul stated that was a lot of money. She asked if that was what the City was already committed to.
Ms. Smith-Roy answered yes.
Member Paul asked if Council moved forward, Ms. Smith-Roy had given an actuary of numbers, so if the City gave the 2 percent and paid for it all in one year, that would be $264,000; if the City paid for it over 30 years, it would be $424,000.
Ms. Smith-Roy answered that was correct.
Member Paul stated that Ms. Smith-Roy went down the page in increments, so the shaded area was what it was for this year alone.
Ms. Smith-Roy answered that it was what it would cost to approve that benefit today; it was not this yearís cost. This yearís cost was the increase in pension benefits, which was the column to the left of the shaded column, that was one yearís cost, so that was this year. If you wanted to pay for that benefit to go forward through the life expectancy calculated by the actuary, the recommended payment to the pension fund would be the shaded area next to it.
Member Paul asked when the City had to pay that entire amount.
Ms. Smith-Roy answered that it depended on the option elected by Council; if Council so chose, we could do a budget amendment and put it into the pension fund immediately and pay for that benefit, thereby reducing the amount of percentage that would be computed in the payroll every year, added to the current payroll. She said if Council elected to do the method that had been used in previous years, we would amortize it over 30 years and it would be included in the pension computation as it was presented during the budget.
Member Paul received a phone call today from a retiree who specifically told her that there was a period where they did not receive any pay increase, but what happened was they paid more into their pensions. They went down into zero percent in their pensions. The retiree now looked back and saw it as a mistake because not as much money was building up in her pension and Social Security, so she felt she had been penalized for several years because of that. Member Paulís concern was that Council was just looking at five years and what was going to be paid out was over $1-million in the actuary of the last five years of the percentage of increase. She felt the City had given a considerable amount of money, and $1,578,000 was a lot of money and it wasnít even the entire actuality of what the City had done increase-wise; it was only the last five years. She also had a man who worked at Smith Jones who said he had a pay cut for the last four years; he was very upset that the City would be giving any increase at all because when he retires, his pension is his pension. Just for clarification, she thought Mayor Csordas asked at the last meeting, the City was not required in any of the information to do an annual increase?
Ms. Smith-Roy answered that was correct; this was not currently included in any bargaining agreement.
Member Paul stated that she had a hard time coming up with that kind of money when the City had already given $1,578,000 over five years. She struggled with this; these people were hard-working employees but she also felt that they had already given a very large compensation to this group; she only had the five-year number and couldnít imagine what previous years would accumulate to.
Member Capello stated that those individuals had served the City well, and now they were on fixed incomes. He thought the City needed to do something for them to attempt to keep them up somewhat with the cost of living; a three percent increase was probably below the cost of living.
Ms. Smith-Roy answered that the cost of living that the City used, for example, the CPI that it was using for Headlee for property taxes was 2.3 percent.
Member Capello asked if the City gave them at least 2.3 percent would it at least keep them even.
Ms. Smith-Roy answered with the CPI being used for that property tax index, yes.
Member Capello stated that he had the same concerns that continually impact on the budget was going to increase; he thought that Council needed to do something about that but not by denying the retirees an increase just to keep even with the cost of living. He thought Council needed to look at the entire pension package with all the employees; otherwise, as you could see, Southfield and Royal Oak seemed to be getting into somewhat serious trouble. Royal Oak had more retirees than active employees. He thought they needed to address that as a City Council as a whole, maybe in its goal setting. He didnít think now was a time to fix the City budget concerns by penalizing those retirees.
CM-04-11-415 Moved by Capello, seconded by Landry; MOTION FAILED: To grant a 2.3 percent cost of living adjustment for City of Novi retirees, effective January 1, 2005.
Member Nagy said she wouldnít be able to support the motion. Member Nagy stated that some of the cities that were comparable to Novi in size were also cities that were older and more established. She had grave concerns that it was November and this was coming to Council and had asked to explain why Council didnít receive it during the budget session. She said Council was close to budget session starting in March; she also asked Mr. Helwig if Council could be provided with their compensation, which here was four years old. She didnít think it was a matter of denying someone or penalizing someone, but Council was so close to budget, she would rather review it and maybe consider it then. She said they had already made a budget; they already had things that Council had amended the budget on; the City had just taken on Island Lakes, Haverhill; there was additional costs that the City would have to incur. She thought that at the present time she would not be able to support the motion; Council had haggled out over the budget and the City just didnít have a bunch of money was the bottom line. She thought that it was an issue that could wait until March; she, too, had received telephone calls from residents who were not in favor of their tax dollars being spent on this because they said it was not part of the retireesí agreement that there would be annual increases when they retired. She said that many people had explained to her their own retirement; she understood that the City didnít have to compare anything to anything. The City increased their medical benefits just recently, which was a substantial increase.
Member Lorenzo agreed with the previous speaker and disagreed with the previous previous speaker. She said this was not about denying anyone or penalizing anyone; she chose to look at it as the City for many years had been very generous to the retirees when it had not been obligated to do so, and there hadnít been anything, as the previous speaker stated, contractually regarding that. She said that it had been a bad year, as the previous speaker said, in terms of the national and local economy. She chose to look at this on a year-to-year basis, to review the year to see where the City was and to make a decision. She, too, believed that it would be better discussed during budget deliberations. She appreciated the retireesí past contributions to the City, but she felt that her first obligation in terms of prioritizing was to the taxpayer and to City services. She said if there was money after that, then she thought Council could look at other groups, in a good year. Mr. Heffernan of Plante Moran spoke to Council at the last meeting and hadnít necessarily given the City a rosy picture for the next couple of years. She said those were her reasons for not supporting the motion.
Mayor Pro Tem Landry supported giving some cost of living increase to the retirees, for this reason: He thought when you compare government employees to the private sector, there was a danger. In many ways they were commensurate, but in certain areas they were not. In the private sector there was an opportunity for an employeeís pay while they were active in any given year to be commensurate with their performance; that didnít happen in the government sector. For example: There was an active employee in the private sector who had a phenomenal year and did something when ended up getting that personís company an extra million dollars. That person was going to get a fat bonus, and they should. But if a government employee had a super year, what were they going to get, a raise from between 0 to 4 percent; that was all theyíre going to get. They couldnít get a $20,000 raise. What was the trade-off; why would anyone ever work for a government when you were giving that up. Well, generally speaking, when you work for the government you had good benefits and a steady, decent retirement; that was the trade-off. To him, there were similarities but there were fundamental differences with the private sector.
Mayor Csordas wanted to remind everyone that the cost of living increase had been a practice but not a policy; Council did need to set policy so City administration really knew what direction Council would like to go to in the future. He said that the charts given to them this evening were very interesting; he actually did some numbers based on his experience in this business and he was off just a little bit, but not that much. He wanted everyone to understand that this was a decision that was compounded annually. For example, if you looked at the last three years, City Council had increased the obligation to that group of individuals by $1.1-million; that just kept going forward. So they were significant decisions being made financially. The column that Member Paul referred to as far as increased liability, he wanted to run the numbers so that everyone would understand that if Council were to grant a 2 percent cost of living increase, the contributions over a 30-year period would be $424,000. For a city like Novi that currently had some money, it would make sense to pay $264,000 right now to save the finance charges. What this did was bring to light the amount of money youíre talking about here; that would never go down and it had only been less in prior years simply because it had been ratcheted up over those 20 years or so. He said it was a significant commitment in the long run. The chart given to Council this evening that showed a number of communities, and he could tell you that the health plans that he managed for cities other than the cities listed here were all in a lot of trouble, for the same reason that Ferndale, Madison Heights and Royal Oak were in trouble. He said that Royal Oak had 475 retirees and 370 actives; he couldnít even imagine what was happening to the staff with the reductions in state-shared revenue what was going on at that city council at their budget time. That was a difficult situation; the City of Novi was a long way from that, but it was going there. It was not a personal issue; it was all numbers and policy. He said it was very easy to say yes now and pass that very hard decision off to future City Councils, and he was not prepared to do that. He said that was one of the reasons why the Federal Government was in trouble; thatís one of the reasons that the State of Michigan would face a billion dollar deficit next year. He couldnít support anything that would cause future Councils and future residents of the City that type of a problem.
Mayor Csordas stated that someone had mentioned that the signs were not good for the future. The City had had a significant reduction in shared revenue in the last two years in the City, and he had been talking to people in Lansing where Novi could expect further reductions in state-shared revenue. The health care benefits that had been talked about; the City Council had been very generous in that for 2004 the increase in City contributions to the health benefits for a certain number of employees had been 39.32 percent, prior to that 30 percent, very significant. He stated that there was another chart in there that compared 13 cities and some townships that showed that only 4 out of the 13 had cost of living increases. He said that Wixom, Walled Lake, Birmingham, Troy, Royal Oak, Madison Heights, Ferndale, and Farmington Hills did not have cost of living increases, so he would not support the motion.
Mayor Csordas had a question on Attachment C. He said it was a very interesting chart to him; rather than go over the whole thing, percentage of payroll, line-item No. 13, estimated monthly contribution for division 13, the City contributed 55 percent of the annual salary?
Ms. Smith-Roy answered 55 percent of the annual salary of the three people in that group.
Mayor Csordas stated that for those three people the monthly contribution would be $7,100; he said that was significant.
Ms. Smith-Roy answered that a lot of it had to do with the column she highlighted, unfunded accrued liability. She said that one of the components was the Benefit E that Council continued to approve each year, because that was where it fell. It fell on the current employee pension rate, but a good portion of that column also came from benefit improvements that occurred after the position had been there, and it was retroactive to the date of hire for employees that were in that position. Of particular impact was when you had an improvement and then significant retirement thereafter.
Mayor Csordas wanted to close by saying that one of the plans that he administered was a city that had 1,500 participants in its program; 700 of those were active and 800 were retirees. He said they are laying off and they are slashing; it was a very ugly situation. For those reasons, he would not support the motion.
Member Capello asked Ms. Smith-Roy if the City gave the retirees a 2 percent increase and paid the amount into the fund now, over the next 30 years for those 49 employees, what would the Cityís contribution today have to be?
Ms. Smith-Roy answered that the Cityís contribution would not change, so going back to Attachment C, those percentage of contributions would remain, in theory, obviously there would be salary adjustments and other considerations when the actuaries recomputed this, but in theory there would be no change to those percentages if the City, in fact, paid the amount in the shaded columns.
Member Capello stated that he was asking for that amount.
Ms. Smith-Roy answered $264,000.
Member Capello stated that if the City paid $264,000 today, it covered the 2 percent increase for the 49 retirees, all the retirees for 30 years.
Ms. Smith-Roy answered that it covered them to have the increase effective January 1st until they were no longer collecting a pension.
Member Capello stated that was what he thought; he was only looking at that as a $264,000 contribution from the City for 49 employees over the remainder of the life. He didnít think that was too much money for the City to spend.
Member Nagy stated that she thought Mayor Csordas really put that very well; that was, this was numbers. She knew it affected people, but as a City and for her as a Councilperson, it was about being fiscally responsible. She said the City would not be getting as much state funds next year. She asked Mr. Helwig if he brought that up during the City Managerís report regarding his municipal league/city managerís conference.
Mr. Helwig said he did not, simply because they were waiting to get through the December 3rd (he thought) state revenue update; they were having a special conference for leadership of state government that day, so they could bring Council a better glimpse. He said what was heard two weeks ago from the Michigan Municipal League representatives at the Oakland County Managerís meeting was that already this year, the fiscal year that had just started, the State was apparently close to $150-million out of balance; that was just a month and a half since October 1st in the current fiscal year, and it was projected, as Mayor Csordas alluded to just now, that the upcoming fiscal year that begins October 1, 2005, as much as a billion dollars out of balance. He said that the Cityís number was up next. He said there were four entities that you kept reading about; so much of the State budget was already encumbered, and there were four entities. Cities and villages are one of those four entities; k-12 and universities and hospitals are the fourth. He said you bleed into the whole Medicaid discussion and everything; it was very likely that there would be greater hardships for municipalities coming, not just this fiscal year, which you would hope you were already through that. He said the City bit the bullet in its budgeting this fiscal year, but what about the following fiscal year?
Member Nagy said that was what she was looking at. She wanted to do the feel good kind of thing and say letís give them a cost of living raise because it made you feel good. But she thought her greater obligation was to the population as a whole. She had talked before about the private sector; she wasnít really looking at the white collar management which had the ability, depending on their job, to get a bonus. She looked at people that negotiated contracts, like teachers, and she investigated some of their retirement and what it was that they did, what they contributed, things like that. She thought that the previous speaker was right that you couldnít compare it to the private sector, but she was trying to find what the general populace was experiencing. Since this had been a practice and not a policy, and the City had no contractual agreement, the City would be having financial difficulties next year. She said the road bond was retiring, the City had increased the number of lane miles that it plowed, Parks and Recreation was not even done removing the ash trees, so in the three months that Council would be doing the budget, it would be looking at employee benefits, the police, the fire. During budget time she brought up the fact that the Fire Department needed some kind of maintenance program because their doors were a mess; there were a lot things it needed. Council would also be looking at the DPW, the Parks and Recreation; all those departments would be competing for money next year, and to take $264,000 ,which didnít seem like a lot of money; it was when you were in a financial crunch. The City would be getting less from the State, as well. In trying to do what was best for the City as a whole, she just could not support the motion at this time; the economic times were just not there.
Roll Call Vote on CM-04-11-415 Yeas: Landry, Capello
Nays: Lorenzo, Nagy,
Mayor Csordas recommended to Council that, rather than ratchet it down a quarter point at a time, not to just back this down to wherever it landed; consider that for the next motion.
CM-04-11-416 Moved by Nagy, seconded by Lorenzo, MOTION CARRIED: To not give a cost of living adjustment to City of Novi retirees, which would have been effective January 1, 2005, at the present time.
Roll Call Vote on CM-04-11-416 Yeas: Lorenzo, Nagy,
Nays: Landry, Capello
AUDIENCE PARTICIPATION -- None
MATTERS FOR COUNCIL ACTION Ė PART II
5. Adoption of Policy reconfirming the past practice governing the employee purchase of prior governmental service.
Mr. Helwig recapped from the last Council meeting that a recommendation was brought forward to reaffirm past practice which permitted active City employees to purchase military time, to purchase prior governmental service. He said it was important because the City had some employees that were eligible now and would need to bring their request to Council in the month of December in order consummate their plans to retire, particularly under the F55 25-year rider, where if you were 55 years of age and had 25 years of service, which could include under past practice purchase time up to a certain number of years, that all needed to come to fruition. It was very important, consistent with the last discussion, that City Council confirm a policy or establish a policy. He said the discussion was raised and Administration was asked to get additional information about "generic" service, and that had been provided; so Administration awaits Councilís policy direction. He said that Tia Gronlund-Fox, Human Resources Director, had been involved in much of the research and would be available to answer any questions.
Member Nagy asked if the paragraph called the "generic" was part of the current policy.
Ms. Gronlund-Fox answered that the policy as written, the two pages, that was the policy that she had drawn up based on the Cityís past practice. At the last Council meeting, Member Gatt brought up also allowing staff to purchase "generic" time; that was what brought us here today. She said that would have to be added if that were Councilís desire to add that.
Member Nagy looked into "generic" time, and the way it was explained to her was that it would not be a fair exchange financially; she asked Ms. Smith-Royís opinion on that.
Ms. Smith-Roy stated that there were really two issues that were non-financial about the generic time: 1) the generic time, the way the Plan Document was currently written by MERS, included time not worked anywhere else. She said there was a comment at the last meeting about if someone came from college and went right to work, could they purchase generic. So, number one, it would include time not worked anywhere. 2) The cost of that time would be calculated actuarially just like purchasing years of service as if you had worked. She said that from a financial standpoint, there was not a difference in the cost but it would obviously increase the number of inquiries and probably people that would be interested in purchasing years of service. She said the third item that was confirmed today was that the City Council could further restrict that generic time to include only time served at some other place of employment; however, the City would be required to administer that. She said MERS would not be the one. She said that right now MERS would verify other governmental service, but MERS would not verify other types of service; that would be administered by the City.
Member Nagy stated, for example, that if she worked at the City of Farmington and had worked there for 15 years and then came to work at the City of Novi. She asked how many years someone had to have to retire from the City of Novi. She asked for an example.
Ms. Gronlund-Fox asked if Member Nagy was speaking about generic or prior governmental or military. She said that in the scenario Member Nagy gave, if someone came to work for the City of Novi and they had worked at the City of Farmington for 15 years, under the policy that she had drafted, that person could come to Novi and buy up to six years of service from prior service that they had worked at the City of Farmington. She said that would count towards their retirement eligibility and their pension when they came to draw their pension, as far as their calculation; those six years would count for that employee that they purchased. So for instance if they had 10 years here (vested) and they purchased six years, they would now have 16 years with the City of Novi.
Member Nagy asked if you bought four years, wouldnít that also increase the Cityís medical benefits it paid out.
Ms. Gronlund-Fox answered that it would allow that person to retire possibly four years sooner; however, in the policy that the City had here, any time purchased did not count towards the time you needed to collect or to get your retiree health care. She said if someone at the City of Novi had 20 years of service and purchased five years of service, they could retire with 20 years here with health care; but they would actually have 25 years because they purchased those five years, so they would be able to collect on the retiree health care five years earlier.
Member Nagy stated that she would support the policy governing the retiree policy; however, she would not support the portion that talked about generic. She didnít think that was a good idea.
Member Capello stated that he didnít understand why there was even an issue over whether the generic portion of the proposed ordinance. He stated that the City hired a new engineer today; if that engineer came from Ferndale or if he came from JCK, what did it matter; he still had service; he was going to come to the City of Novi; Novi should allow him to buy into that previous service, regardless of who he worked for; the same thing with the Finance Department. To him, it didnít matter if they came from an accounting firm, from a private corporation or from another city; they were doing the job, coming to the City. He said it gave the City more of an ability to hire more qualified people because the pool that it was hiring from was much broader than just taking employees from other cities; the City could take him from the private sector. He didnít see why anybody was against offering the generic.
Member Gatt asked if, with the same scenario, the City hired the person from Royal Oak who worked there for 15 years; that person was the worst employee that Royal Oak had ever seen, and after 15 years he was fired but Novi didnít do a good job doing their background and it hired that person. He asked if that person would still be eligible for that.
Ms. Gronlund-Fox stated that, first of all, she hoped that wouldnít happen, because they did a very thorough background check. However, yes, if this policy were adopted as it was stated right now, that person coming from Royal Oak would be able to purchase.
Member Gatt asked if Council adopted a policy tonight that included military, prior governmental service and generic but limited any one of those three categories to people who were only eligible to retire already. In other words, to save the cost of, using the scenario of someone who worked 20 years; in Novi you have to work 20 years to get medical benefits, but you have to work 25 years to retire under MERS. So, letís say someone worked 20 years here, and we adopted this policy. By the way, weíve already given this policy to several people, right?
Ms. Gronlund-Fox answered yes.
Member Gatt stated without any discussion by Council; it just sailed through on Consent Agendas and so on. Somebody worked here 20 years; they buy the five years. It would cost the City money because now the City had to pay that personís medical five years earlier, if they chose to retire, correct?
Ms. Gronlund-Fox answered yes, if they chose to retire.
Member Gatt said that if they chose to retire, if the City adopted a policy that said you could buy your five or six years but you had to be here 25 years before you were allowed to, would that then be a cost liability to the taxpayers, whether it was generic, military or prior governmental experience?
Ms. Gronlund-Fox answered that she would not think so, but she wanted to defer to Ms. Smith-Roy.
Ms. Smith-Roy offered a suggestion; a different way of getting to the same thing that Member Gatt was trying to get at here. She said the way to do that would put a restriction on the retiree health care, rather than on the pension benefit, because the pension benefit referred to was actually a part of negotiations, a part of bargaining unit contracts. She said the policy could be worded as such, it already included, she believed, that it didnít count toward the 20 years of medical, so it could be expanded to either: 1) say that the employee would forego the retiree health care for that time period.
Member Gatt stated until he or she would have been eligible.
Ms. Smith-Roy answered, yes, that was one. Or, 2) the City could actually do a computation where that employee could elect to pay into our retiree health care, just like they were buying the years of service, they could buy their medical benefits in advance by paying some amount to the Cityís retiree health care.
Member Gatt asked if that could be figured out where it wouldnít cost the taxpayers a nickel, assuming the rising 30 percent per year costs?
Ms. Gronlund-Fox answered that that was the problem without knowing how much it was going to go up, it was kind of a guess.
Ms. Smith-Roy stated that Administration could do an estimate. She said that would be true of anything, even the actuary computation was an estimate.
CM-04-11-417 Moved by Gatt, seconded by Capello; MOTION CARRIED: To adopt the policy governing the employee purchase of prior government service, as written here, with the addition of generic time, only for time worked somewhere, with the caveat being that the employee must either be eligible to retire already with years of service or that employee who opted out early agreed to pay the medical with the 10 percent medical trend or forego all of his or her medical care benefits until he or she would have been eligible to retire, and in addition to that, the multiplier would be calculated at the known benefit improvement amount.
Mayor Pro Tem Landry asked Ms. Gronlund-Fox if he was correct that the way generic time was defined by MERS, a person did not have to have worked anywhere.
Ms. Gronlund-Fox answered that that was one of the things that Ms. Smith-Roy checked into; she called MERS to find that out and spoke with its legal counsel.
Ms. Smith-Roy answered that that was the fact. She said the way the MERS Plan Document, if the City just left it as the definition as defined by MERS, then yes, it included service not previously worked anywhere.
Mayor Pro Tem Landry answered okay. He believed that Member Capelloís rhetorical question that he posed assumed that, as he recalled his question was, the policy as proposed applied to military or prior government service.
Ms. Gronlund-Fox answered that was correct.
Mayor Pro Tem Landry said that he believed Member Capello proposed the question, what if someone worked in the private sector, why, in order to be fair, he believed, why should the City offer that person an opportunity to purchase time that they had worked in the private sector. Mayor Pro Tem Landryís point was that as "generic" time was defined by MERS, you donít even have to work anywhere, correct?
Ms. Smith-Roy answered that was correct.
Mayor Pro Tem Landry stated that the City could adopt its own definition of "generic" time and say that the City defined "generic" time as having worked somewhere; the City didnít have to restrict it to military or prior governmental service.
Ms. Gronlund-Fox answered that was correct.
Mayor Pro Tem Landry would support the ability to include generic time as long as it was "work" somewhere. He said he would go that far and include that.
Mayor Csordas asked if the maker and the seconder of the motion accept that friendly amendment.
Member Gatt answered that he could not, only because they were working somewhere; they were working here. Again, take the situation where somebody graduated from college and got a job out of college and came here and worked here for 20 years. He said it was not like they werenít working; they just didnít start somewhere else and then move here. They didnít start in the private sector; they didnít start in the military; they didnít start at another city; they started here. He said that under his motion it would not cost the taxpayers a plain cent, not a nickel, on any of them. He said if the City adopted the policy as written, it would end up costing the City money, or it might end up costing the taxpayers money; he said Council just went through a long discussion on how much that could be over the years compounded.
Member Paul stated that she was following Mayor Pro Tem Landryís discussion and she had a hard time with anyone being able to purchase someoneís time and they did not work. She had to work after college, and that was when she started her work life. She said sometimes people take a break with having children or medical leave with their families, and that was not considered working; they couldnít purchase that in her eyes. She asked Mr. Helwig if the City had a horrible employee, as Member Gatt said for 15 years in another city and they came to work for Novi, did they have six month reviews before they were permanent to alleviate their responsibilities in this City if they werenít meeting its expectations.
Mr. Helwig answered there was a probationary period by contract.
Member Paul asked in the contract, if the City had six months and this employee was not a good employee, the City would be able to exit that employeeís contract and move along. She just wanted to verify that. Secondly, she asked the same question if that had ever been done with generic time, and, in fact, it had been done in previous practice, but she still could not put a written document together saying generic time because she did not feel comfortable if MERS had a definition and the City was paying into MERS; she didnít even feel comfortable re-creating the wheel. She said she was concerned that there could be a legal ramification that the City could enter into that would be something against the City. She didnít propose to enter into anything that could possibly come up against the City, if it was paying into MERS and that was their definition, she thought the City would have a hard case if someone said they purchased these years and this was what it really meant. She said she thought it could be arguable.
Mr. Helwig stated that since he had been here, there had been one "generic" that was, in fact, prior governmental service; the Chief of Police, correct?
Ms. Gronlund-Fox answered that was correct.
Mr. Helwig stated that he didnít know if there had been other generic situations prior to his coming, which was another reason why the City needed the policy confirmed.
Ms. Gronlund-Fox answered that she was not aware of any since she had been here, but prior to her service, she didnít know.
Mr. Helwig stated that he was not sure why it was called generic if it was prior governmental service, other than it was out of state.
Ms. Smith-Roy answered it was because he was drawing a pension, so there was another caveat to the rule that said you could not buy other governmental service if you were on the pension of another government of the government you were buying from.
Member Paul stated that there were a lot of caveats here, and she was uncomfortable amending the policy. She believed that if someone has had prior governmental experience, she knew Mr. Klaver had worked in other cities; she thought it was only fair that he would be able to buy the other governmental services in this state or other states, because it really did serve a purpose. She really believed that the City lost a lot of really wonderful employees with a lot of valuable experience when the City allowed some of that to be bought out and retire early. She knew that was a discussion that she and the City Manager had during budget discussions, so she would not be in support of the motion.
Member Lorenzo asked Ms. Smith-Roy as to whether or not there could be a restriction on the letter A(b) in terms of potential financial liability and how we would go about doing that.
Ms. Smith-Roy answered that Administration provided two examples where there was a financial liability relating to pension improvements after the purchase of years of service. In the first scenario under Item A, the pension improvement was not identifiable because the City didnít know there would be future improvements and, therefore, the people could purchase their years of service without knowing in the future what any improvements would be. She said there was no way to calculate what that potential liability was, even on down the road. So to answer Member Lorenzoís question, in Item A there was not an opportunity. In Item B, the City could request the information when there was a known improvement. For example, she believed, the City had an improvement coming up on the COAM contract or POAM contract on July 1st, so knowing that, the City could ask for different actuary reports based on what the future pension improvement would be, what the cost difference would be. She said that Admin was an example; the City had a policy that was going to change January 1st. She said people could potentially buy years of service today at todayís rate, versus what the rate would be after January 1st. She said that in that scenario, there would be obviously some advance notice and it would be calculable what that difference would be.
Member Lorenzo wanted to make a formal amendment to the motion to remove the generic and add what Ms. Smith-Roy just gave Council in terms of the multiplier to calculate at the known benefit improvement amount to further reduce liability for this.
CM-04-11-418 Moved by Lorenzo, seconded by Nagy; WITHDRAWN: To adopt the policy governing the employee purchase of prior government service, as written here, with the caveat being that the employee must either be eligible to retire already with years of service or that employee who opted out early agreed to pay the medical with the 10 percent medical trend or forego all of his or her medical care benefits until he or she would have been eligible to retire, and in addition to that, the multiplier would be calculated at the known benefit improvement amount.
Member Nagy asked if that could be restated.
Member Lorenzo answered that Member Gatt made a motion that when he added generic, using the MERS definition, he also said that with regard to the medical that the employee would either have to forego the medical or they would have to pay into the retiree health care fund, and that option would be up to the retiree. She said that she agreed with that part of Member Gattís motion; what she disagreed with was the generic. She said that her motion was to remove the generic portion of his motion, so that this policy would not apply to generic and it would also add what Ms. Smith-Roy just told Council that under A(b), Council had the option of further reducing the Cityís financial liability by specifying that the multiplier would be calculated at the known benefit improvement amount.
Mayor Csordas wanted to put a clarification on that. He said there needed to be a number set on the health care, because, just so everybody knows, family coverage, which he understood not a lot of retirees would have, was $15,000 a year. He said the City would have to put a minimal percentage increase annually; it couldnít be anything less than 10 percent or weíre kidding ourselves. He said there could be a lot of two-person coverage, member and spouse, and that was $12,000 annually. He said that was the number that needed to be done, not some portion of that, for him to support it.
Member Lorenzo said she was agreeable to that through the chair. Obviously, her point was that she was looking to reduce the financial liability to the City however much and wherever Council could. She said then she could support that.
Mayor Csordas said that was the way he would support it, but he would also require some sort of an escalator to keep up with the cost of living. He didnít want to say the City had five years of people coming up on that and the annual coverage for two-person coverage contract was $12,000, whatever it was; in five years it would be $20,000. He said the City needed some sort of an escalator on that.
Member Nagy stated that she would be willing to support that motion with what she said but she really liked what Mayor Csordas said. She asked Ms. Smith-Roy is she could figure out the escalator.
Ms. Smith-Roy answered no, that Administration would probably recommend some type of present value actuarial computation, which they could ask Gabriel Roder to help with.
Member Nagy asked if it would be easier to get that actuarial computation and it should be postponed until Council had the figures.
Mayor Csordas stated that there was one thing that it could be tied to; he knew Council was blown out of the water here as far as procedure, but he thought an open discussion was good because that was fairly complex. He said there was not a CPI per se on medical benefits, but there was medical trend. He said medical trend changed every year, but medical trend recently had been 9 percent consistently. Next year, Council needed to talk about 10 percent. He said Council talked about this now because it did impact the City. He would be willing to say medical trend, call it 10 percent which he knew for sure wouldnít cover the whole deal for the next five years, but rather than try to calculate numbers, it would keep the City close. He stated then the City wouldnít be more than 2-5 percent off on any one year; why micromanage that, but there would have to be some sort of medical trend established and he would recommend 10 percent.
Member Lorenzo would be willing to amend the motion accordingly.
Mayor Csordas stated that the City would cap medical trend at 10 percent, because medical trend would go up.
Member Nagy asked what if it went up more.
Member Lorenzo stated that her motion would remove the generic, would add the trend that Mayor Csordas just spoke to, and then add the calculation at the known benefit improvement amount for the multiplier.
Member Nagy stated she would second that motion.
Mayor Csordas asked if Member Lorenzoís generic include time not worked anywhere?
Member Nagy stated generic was not in there.
Member Lorenzo stated she added it back in just for time worked somewhere.
Member Nagy stated she would not support that.
Mayor Csordas wanted to make clear if the motion did or did not include time not worked anywhere.
Member Lorenzo answered that was correct, it did not include time not worked anywhere.
Mayor Csordas stated Council would go back to procedure now.
Member Capello stated that the motion word "generic" is in and must have worked somewhere. He asked with the medical, couldnít the City require, regardless of some form, limit 10 percent. Could the City just require them to pay their actual until the time they would have been qualified to retire?
Ms. Smith-Roy stated that to her, that would be under the option where they would make the election not to pay in because they would be eligible to do that under COBRA anyway.
Mayor Csordas stated for 18 months.
Ms. Smith-Roy answered yes, and 36 if they . . .
Member Capello asked what if they retired five years early, COBRA would only cover them for. Couldnít they just agree to pay whatever their actual medical was?
Ms. Smith-Roy answered as long as no insurance company was listening to Council speaking tonight, yes.
Ms. Gronlund-Fox stated you couldnít be on a plan covered by an employee group and still be under that umbrella if youíre not actually employed by that group any longer; they wouldnít be under the retiree umbrella, so that could be a problem.
Mayor Csordas stated that was why he thought medical trend, call it medical trend of 10 percent, was a better way to do it.
Ms. Smith-Roy stated the City would require they pay in and not even offer the option.
Member Lorenzo stated through the Chair, as Member Gatt stated, either they forego or they pay medical trend.
Member Capello asked if Member Lorenzo in her motion had some type of a multiplier other than as it affected the health care.
Member Lorenzo answered yes, it was to the A(b), to calculate that at the known benefit improvement amount.
Member Capello stated that was the only thing he wasnít quite sure about.
Member Lorenzo asked Ms. Smith-Roy to elaborate to make Member Capello more comfortable with that.
Ms. Smith-Roy answered the City had an example of that coming up right now, and that was that City Council just recently adopted a benefit improvement for the administrative employees to receive a higher multiplier, and that benefit was known to be in effect January 1st. So if we presented to Council purchasing years of service on the next City Council agenda, our question for policy purposes, did you want it calculated at the benefit today of B3 or the known benefit of B4, the higher multiplier that we knew would be in effect January 1st, and we knew that they were going to receive that benefit.
Member Capello stated that Member Lorenzo was saying calculate it at the known amount. Member Capello stated that could be accepted as a friendly amendment.
Ms. Cornelius stated that Member Gattís motion was to adopt the policy as written with addition of generic time, only for time worked somewhere, the employee must be eligible with the years of service and must agree to either pay the medical with the 10 percent medical trend or forego the medical benefits until they would have been eligible to retire, and in addition to that multiplier, would be calculated at the known benefit improvement amount.
Member Lorenzo asked if Council wanted to say 10 percent or just medical trend.
Mayor Csordas answered that medical trend was determined in different manners by actuaries at different companies. He could tell Council that 10 percent was way easier. His company might say 9 percent; another company might say 10 percent. He said that 10 percent was safe because medical trend in the future five years would be more than 10 percent.
Member Lorenzo asked if Council just wanted medical trend, not 10 percent.
Mayor Csordas answered that medical trend was really not determinable; that was why he would say medical trend of 10 percent going forward. He said that way the City was covered if medical trend would go to 11 or 12 percent; the City would still only be 2 percent off.
Member Nagy stated that she no longer wanted to support the motion to amend that she seconded because she had not heard Member Lorenzo say "generic" and didnít know what the procedure was for that.
Mr. Schultz said it was his understanding that Member Lorenzoís motion to amend had been withdrawn and Member Gatt had accepted it as a friendly amendment restated.
Member Nagy wanted to say that she would not be supporting the motion. She remembered that Council discussed that during budget time about early retirement, things like that, buying into it, and she remembered the City Manager talking to Council about this; she thought that was far afield from what the City Manager talked about. She thought that was going beyond what Council originally thought, and through the Chair, she asked Mr. Helwig if she was correct that it didnít seem to be what they had talked about.
Mr. Helwig answered as a recap, City Council had approved the Administrationís recommendation and made it effective January 1 where there were enhancements to the administrative staffís pension circumstance to standardize with other employee groups in other communities and to make the City more competitive. That would enhance the multiplier from 2.25 percent to 2.5 percent starting January 1 and would also enable someone 55 years of age with 25 years of service to retire, which was standard. He said that based on that, they were trying to prepare, as Ms. Smith-Roy and Ms. Gronlund-Fox had been saying, for individuals who wanted to avail themselves of that some time starting in the New Year. He said while the City already had requests that, in order for some who did not meet the 25 years of service but met the age, they would like to purchase service in accordance with past practice, raised a flag that Administration really wanted to get a firm City Council policy on the books. He said Administration brought to Council a recommended policy that Ms. Gronlund-Fox had crafted based on past practice. He didnít know that he needed to restate those because this was Councilís policy work session now, but he awaited Council direction.
Member Nagy stated that she thought that it was not what she was really looking for. She had another question: Say she wanted to retire next year and she was 55 years old but was at 23 years, not 25 years. She wanted to know how the policy would affect her if she wanted to buy those two years.
Ms. Gronlund-Fox answered that she could purchase those two years and then retire with 25 years of service at your age of 55.
Member Nagy stated that, with the motion that was on the table, that was how it would work.
Ms. Gronlund-Fox answered that was correct.
Mayor Csordas wanted to call the roll.
Ms. Gronlund-Fox asked Mayor Csordas for one clarification. She said that she and Ms. Smith-Roy had just been talking briefly and thought that he had mentioned that coverage would be limited to two-person. She asked if he said that.
Mayor Csordas answered no; he said that realistically it would mostly be two-person coverage, probably not families.
Ms. Smith-Roy asked, for point of clarification, how they would be able to calculate that.
Mayor Csordas answered she was looking at it right there.
Ms. Smith-Roy asked 10 percent of what number?
Mayor Csordas answered of that number.
Ms. Gronlund-Fox answered whichever number they were at.
Ms. Smith-Roy asked where they were at currently on the books right now.
Mayor Csordas answered right. Which was family coverage was $15,126; two-person was $12,808; and single coverage was $5,788.
Ms. Smith-Roy said if they bought into the retiree health care program, for example letís say that they were 52 years old and had family coverage and family continuation coverage.
Mayor Csordas answered that they wouldnít have anyone in college at that age; well, maybe they would.
Ms. Gronlund-Fox answered that they had some.
Ms. Smith-Roy answered that the City actually had retirees who had family coverage. She stated that what didnít make sense to her was that may not be where theyíre at when they retire. So, say if someone was at 35 years old and theyíre at family coverage, did he want them to pay, at family coverage contribute to the retiree health care? She said that was why they thought it would be limited to maybe two-person and then when they retired, they would also be limited to two-person; anything above that, they would pay for that. She said that would resolve any differences; just like someone who was 25 could buy years of service and be single and retire.
Mayor Csordas stated that all he was saying was that if they wanted to buy medical coverage on an annual basis that they would not have been entitled for, to pay the entire amount, whether it was single, couple, or family. He wanted to know if they could administer that; did it make sense to you?
Ms. Gronlund-Fox answered that she understood that.
Ms. Smith-Roy asked if they were going to pay it to the retiree health care program when they bought the years of service or were they going to pay it at the end; that was her question that she didnít understand.
Ms. Gronlund-Fox answered when they went to retire.
Mayor Csordas answered when they went to retire; did that make sense?
Ms. Smith-Roy answered that if they were going to pay when they retired, they might as well just pay the rate at retirement. She thought, for purposes of discussion, what they were talking about was computing today what they would contribute to the retiree health care fund.
Mayor Csordas answered that was not what he was thinking.
Member Paul asked if the City had someone who was collecting a pension from another city and they did not have 25 years of service in and they were purchasing those years when they were receiving the pension, because weíre putting generic time in, how did that work?
Ms. Smith-Roy answered that it would not be allowed. She said the generic would not be relative to the community that they were drawing the pension from. She said generic meant exactly what it was; it would have to be some other type of employment. For example, if someone only had other governmental experience and no other work experience and they were collecting a pension, they were in the military all those years and they were collecting a pension from the military, they would not be eligible for generic or other governmental.
Mayor Csordas said that made sense.
Roll Call Vote on CM-04-11-417 Yeas: Lorenzo, Csordas,
Landry, Capello, Gatt
Nays: Nagy, Paul
6. Referral to the Planning Commission for a public hearing and recommendation of Zoning Ordinance Amendments to enhance setbacks and beautification along major thoroughfares.
Member Capello stated that he was going to ask that this not go to Planning Commission yet, the reason being that he brought that up three years ago and apparently there was some miscommunication between the Planning Department and the Planning Commission, and the minutes of meetings and memos that he had seen back from the Planning Commission were not at all what he had visualized when he asked the Planning Commission to look into that. He wanted to put it on Council agenda, maybe in January, so Council could either craft an ordinance itself and send it to the Planning Commission for a public hearing or give it more direction. What he was afraid was going to happen was Planning Commission would hold its public hearing, it would come back to Council and it would not be anywhere near what he visualized the ordinance to be; then Council would have to send it back anyway. He thought Council needed to give it more direction before it had a public hearing.
CM-04-11-419 Moved by Capello, seconded by Nagy; CARRIED UNANIMOUSLY: To postpone until January the referral to the Planning Commission for a public hearing and recommendation of Zoning Ordinance Amendments to enhance setbacks and beautification along major thoroughfares.
Member Nagy said, with all due respect to Member Capello, that when she was on Planning Commission in the Implementation Committee, she thought that a member did call him to try to figure out what he had wanted. She said that the Committee had spent a lot of time trying to figure out what he had wanted and also brought some stuff forward; she thought it should be delineated what he was looking for, in writing, for all the members to see before Council met with them so that everyone was on the same page.
Mayor Csordas answered that "in writing" could be the minutes of the meeting that Council had.
Roll Call Vote on CM-04-11-419 Yeas: Nagy, Paul, Csordas, Landry, Capello, Gatt,
7. Approval of 2005 Schedule of City Council Meetings.
CM-04-11-420 Moved by Lorenzo, seconded by Landry; CARRIED UNANIMOUSLY: To approve the 2005 Schedule of City Council Meetings, as amended.
Member Capello wanted to make one amendment to it; instead of jamming Council with three meetings in December, he suggested that Council have three meetings in October and only two meetings in December. He suggested the motion, as proposed, with the exception of October 10th, 17th and 24th and December 5th and 19th.
Clerk Cornelius asked Member Capello if the meeting of December 12th, Councilís normal interview meeting, was to be held on October 17th.
Member Capello answered yes.
Roll Call Vote on CM-04-11-420 Yeas: Paul, Csordas, Landry,
Capello, Gatt, Lorenzo,
CONSENT AGENDA REMOVALS FOR COUNCIL ACTION
E. Approval to close Special Assessment Districts 77, 78 and 92 for the Novi Road Water & Sewer Extensions to the Water & Sewer Fund.
Mr. Chawney requested that Item E on the Consent Agenda regarding the SAD 77, 78 and 92 be removed and be tabled to discuss the outstanding issues with the City officials. As a little background, Mr. Chawney stated that he had been trying to get information on that for the last seven years, and he had gotten some information on his own. He then formally made a request under the Freedom of Information Act; he got some information back which he did not feel was adequate. He said that the property that he owned, paid almost 50 percent of the total SAD cost. He wanted to know what his rights were, how many taps he was supposed to get back, what the payback was. He said when he bought the property, the SAD already existed. He didnít believe there was any agreement between the previous property owner and the City at all regarding the SAD, but it had been paid up fully, and he simply wanted to investigate what his rights were and his benefits because he had paid $166,000 for the SADís. He said he had been unable to get satisfactory answers from the City records; he wanted to work with someone designated by Council to work this out amicably and proceed.
Mayor Csordas noted that it was Mr. Helwigís recommendation to close the Special Assessment District. He asked Mr. Helwig if now was the time, and was it appropriate?
Mr. Helwig answered that it was the Administrationís recommendation; he wanted to hear from Ms. Smith-Roy, if she had any new information that would alter that recommendation.
Ms. Smith-Roy answered that she didnít; what she presented for him was regarding the accounting records of those SADís. The history of those SADís went back to 1986 and 1987; that was when the SADís were approved and, to the best of her knowledge from the records she had been able to gather from Water and Sewer, Clerkís Department, and the Finance Department from that time, those SADís were approved and the first two, 77 and 78, appeared to be normal SADís that went through seven resolution process and thereby did not require any special contract agreement. She said that the third SAD, No. 92, on the other hand did appear that it was a contract SAD, and she had been unable to locate a document for that. The total portion of that SAD was $24,000, so, in her humble opinion she wasnít going to pursue it further unless there was some reason to do so. Her presentation was just the accounting portion of it; if there were other issues that needed to be pursued, they could, through legal counsel. She wanted to point out that the recommendation was to not charge the owners of record what the City would normally charge for the overages on this project, and she had included as Attachment B the summary of the receipts the City received and the costs of those projects.
Mayor Csordas asked what that total amount would be.
Ms. Smith-Roy answered that the total amount of the exceeded construction cost was $45,000. Ms. Smith-Roy said that it was their opinion that because it was attempted to be brought back to Council over the years on two or three other occasions as SAD 99 and 100 and also as SAD 107c that those never were approved to get those additional costs covered, that the City forego that at this time because the cost was nominal and also the City financed that through the Water and Sewer Fund and retained the interest earnings, which helped the City at those costs.
Mayor Csordas stated, which took it down to $15,000.
Ms. Smith-Roy answered that was correct. She said at this time, it was their recommendation to close them for purposes of the books, because technically if there was an overage, the City was to go back if it was in excess of 5 percent of the cost of the project and reassess those properties for that overage.
Mayor Csordas stated that was not what she was recommending.
Ms. Smith-Roy stated that the recommendation was to not reassess the property, to write off the losses, and close these SADís on a financial basis.
Mayor Csordas stated, if Council were to close the financial portion of this per her request, he didnít know that it impacted her issue.
Ms. Smith-Roy answered that she didnít think that would impact this individualís rights to further pursue through Tax Tribunal.
Mayor Csordas said he thought that was what Council should do.
Mr. Helwig stated that Mr. Schultz wanted to interject some history.
Mr. Schultz stated that he did go back when he found out that it would be an issue on tonightís agenda, found Mr. Fisherís file on this and there was extensive correspondence with the previous attorney, Marty Burnstein, regarding this property and all three SADís and the issue that sounded like was being raised tonight was raised through correspondence and probably verbally as well; copies of the two seven-resolution SADís and the SAD 92, which was fairly old at this point, were given in May and June of 2001 to the prior attorney, and there was no further correspondence in the file. He didnít get a chance to talk to Mr. Fisher tonight but it did not appear that there were further requests for information at that point from 2001 on. He just wanted to clarify the lack of information; there was quite a bit of discussion several years ago on that very issue.
Member Lorenzo stated that, based on Ms. Smith-Royís recommendation, she would move to approve.
CM-04-11-421 Moved by Lorenzo, seconded by Nagy; CARRIED UNANIMOUSLY: To approve to close Special Assessment Districts 77, 78 and 92 for the Novi Road Water & Sewer Extensions to the Water & Sewer Fund.
Voice Vote on CM-04-11-421 CARRIED UNANIMOUSLY
Ken Paluzek asked for clarification if his client could meet with Mr. Helwig.
Mr. Chawney came forward when he found out it was to be closed. He asked that a person be designated with whom he could speak.
Mayor Csordas stated that Mr. Helwig would meet with Mr. Chawney.
Member Capello stated that he didnít want to spend any legal fees on that.
Mayor Csordas and Member Lorenzo agreed.
Mayor Csordas stated Mr. Helwig could report to Council his opinion.
H. Approval of Claims and Accounts Ė Warrant No. 685
Member Lorenzo stated that she pulled the Warrant to review check No. 40454, the Secrest Wardle Lynch bill. She said she reviewed the current billing summary through October 31, 2004, which Council was being asked to put forth as payment, and she had some suggestions to offer in terms of achieving greater efficiency and perhaps even reducing some legal costs.
Member Lorenzo stated that under the heading of litigation being monitored, there was a line-item for receipt and review of a new lawsuit, called Stephens, which she was not sure anyone else on Council was aware of but she was not. In speaking to Mr. Klaver, she was made aware that this was actually covered under the Cityís insurance, so she would suggest that when there were items already covered by insurance that, unless the Council specifically directed the law firm, there shouldnít necessarily be any monitoring by Secrest. She said that was a redundancy; the City already paid a lot of money towards insurance, so that the insurance attorney could represent the City in those matters. That was one area where she thought Council could eliminate those costs. Here it was $148.50; if they kept monitoring that, Council would see costs every month until the lawsuit was settled or went to court.
Member Lorenzo stated that there was also a request from 52-1 District Court for information with regard to decriminalizing misdemeanors, which were now civil infractions. Mr. Klaver then sent it over to the Cityís law firm; she questioned Mr. Klaver today because, when she saw the summary of what had been asked, it appeared to be a very simple and routine request. She said it was basically a civil infraction summary of the chapters of the ordinance that the City had recently amended for the civil infractions and what the offenses would be. In those cases, she thought the Administration should be looking at possible in-house persons, such as the PD, that might be able to provide the information without actually having to go to the law firm and spending billable hours. She said that if it was something that was necessary for the law firm to review that the City didnít have anyone in-house capable of doing that, then she would suggest to the law firm that for such routine matters as this, that it would be handled by an associate. In this case, it was handled by a partner; the difference between the partner and the associate at that time was $135 and $105.
Member Lorenzo stated that a third area, she noticed a lot of telephone conference calls with applicants or applicantsí representatives. She said if they were going to spend time talking to the Cityís attorneys, once again, it should be on escrow; it shouldnít be on the Cityís dime.
Member Lorenzo stated that if those four things, that perhaps Council would see the type of efficiency that she had been talking about and also reduce some of the Cityís overall legal costs.
Mayor Pro Tem Landry stated that for the previous speakerís and everyone elseís edification, a great deal of his legal practice was representing municipalities that had been sued through their insurance company; he was appointed through their insurance company. He said that in every single one of those cases, he always reported to the City Attorney. The function of the City Attorney, when there was insurance counsel, was to monitor insurance counsel; they donít appear at any of the depositions; they donít do any of the discovery; they donít do any of the research; he did it all. He said that he did have to report to the City Attorney, so that they generally receive copies; that was just to let you know that was the norm; it went on in every single municipality that he had ever been involved in.
Mayor Pro Tem Landry could see why it would appear to be double monitoring, but it really wasnít; their function was to simply receive the communications with the pleadings, give it a quick look, make sure that the insurance-appointed attorney was not making some huge mistake or going down the wrong path. Oftentimes in several municipalities that he represented, there were defenses they did not want him to raise; they were a Paragon, often. The municipality would tell him it knew it had the defense, donít raise it. He said there were certain trends that certain city councils, township boards, a certain institutional memory or history that the City Attorney could benefit the legal counsel hired by the insurance company. In his opinion, that was a valuable function; he just wanted to share that with everyone.
Member Nagy said that Mayor Pro Tem Landry made a very good point. She had a question that sheís had since sheíd been elected. She thought that Council made a policy that one day a month the City Attorney would be in the City, wherein if you had a question on something, he could be contacted.
Mr. Helwig answered that it was an administrative practice that they tried for a while to efficiently communicate with department heads, and Administration found that it was being spread among a number of different attorneys and really was not being utilized effectively. He said Administration stopped it; what Administration had just decided to start up; in fact, it will be twice a month now following the leadership group staff meeting. Directors who had made an appointment through the Managerís office and said they needed to meet with Mr. Schultz for a maximum of 15 minutes, could do so following that staff meeting. He said they would do that for an hour and one-half or two-hour chunk to see if that facilitated; people saved up their issues, reached him and he knew what they were in advance and so forth. He said they were still experimenting with that; it was sort of the feature of the in-house attorney, but it was not; it was a contract attorney.
Member Nagy stated that she did not make a habit of calling the City Attorney, nor the City for that matter, unless she had a major question. She didnít like the idea that the City Council basically selected the law firm; they basically worked for the City of Novi and they were members of City Council and thought it would be appropriate that once in a great while if a Council member were to call with a question and had to call during business hours that should be part of their obligation to answer questions for the City Council as well, not just at the table.
Mayor Csordas stated that he just called Mr. Helwig and, if it was a legal issue, he got the answer for him.
Member Nagy stated that sometimes a question could be asked and an answer could be given; it was much better when you had a one-on-one rather than through someone, not to take anything away from Mr. Helwig.
Mayor Csordas stated that he believed that nobody would abuse that; he thought they would have a consensus that City Council should have the right to be able to call and not spend a lot of time.
Member Capello stated that he was wholly against that; Council just went through that. About four months ago, Council decided that with any of the employees and the City Attorney and consultants that questions were directed through Mr. Helwig and he would direct them and get the answers. If Mr. Helwig saw fit, he could make that direct connection, but it was in his prerogative and authority to make that decision. He thought Council would open up a whole can of worms to say that each Council member could begin to call the City Attorney to have questions answered. It would increase the Cityís bill outrageously; he saw that it would create problems; the Council just got away from that.
Mayor Csordas thought that with Member Capello and now Member Nagy, now Council needed to give direction to the City.
Mayor Pro Tem Landry said that it was his understanding that the current policy was that if any member of Council called any department director and asked a question, if it was a routine question that could be responded to in five minutes or less, it was responded to. If it was going to take any significant amount of time, that department head had the right to say the Council rule was that it was taking too much time; he could not answer your question, please go through my boss, the City Manager, and if he directed me, I would do it. It was his understanding that every department head had the absolute right to tell him that, if he called anybody, "Mr. Landry, youíre taking too much of my time; I canít answer that question, go through Mr. Helwig. His suggestion would be the same should go with the City Attorney; if anyone of Council wanted to call the City Attorney and he could answer it in a quick two, three, four minutes, he didnít see any problem with that. If it was going to take time or require research, he would not be offended if the City Attorney said, "Mr. Landry, go through Mr. Helwig."
Member Nagy stated that she thought it was reasonable.
Mayor Csordas answered without repercussion or malice.
Member Lorenzo stated that she thought there could be some unique circumstances which, she would say, just recently occurred. To be honest, she tried not to pick up the phone and actually talk to Mr. Schultz or Mr. Fisher; she liked to leave messages. A lot of them were just: "Be prepared for the Council meeting; she was going to ask this, that or the other thing; so that it was heads up". In the case last week, Council was really trying to avoid another extended discussion this evening on the legal services, so in order to have some input into the situation, she felt it was appropriate to call and just leave a message as to what her thoughts were. Now, she didnít ask for a response, nor did she receive one; that was fine. She just wanted to make sure that the intended party knew where she was coming from on an issue. So, there may be occasionally those types of unique circumstances that did require or the Council meetings that if there were situations, questions that Council knew it would have with the City Attorney, just to give them a heads up for their preparation. She thought those were appropriate, because then when she or any other Council member asked a question, the attorney didnít have to say, "Iíll have to get back to you on that," and it took another two weeks. Some people had done that; requested opinions from the City Attorney; some Council members requested information on 52-1 at the time that discussion was going on. She thought all of Council had contacted the City Attorney for whatever individual reasons they had. She thought that as long as Council agreed that it would not abuse the situation, then it should be acceptable.
Member Gatt stated that abuse was a subjective term. He stated that he thought every member on Council had the right to call the Attorney any time they wanted, but he didnít think any member of this Council should then hold the City Manager accountable for those legal bills at the end of the month. Council had put him on a tough, strict, rigid schedule here, and if seven people called three times a month, once a week even, less than that, weíre talking thousands of dollars. He said it was up to the Council to set the policy, call any time you wanted because it might be an emergency in your mind, but donít hold Rick Helwig accountable for those bills at the end of the month.
Mayor Csordas stated that was a point well taken.
CM-04-11-422 Moved by Lorenzo, seconded by Capello; CARRIED UNANIMOUSLY: To Approve Claims and Accounts -- Warrant No. 685.
Roll Call Vote on CM-04-110-422 Yeas: Csordas, Landry, Capello, Gatt, Lorenzo,
Mr. Klaver wanted to thank Member Lorenzo for calling and sharing this. He did have an opportunity to talk to Mr. Schultz about it and did confirm that the request from 52nd District Court was to have an attorney respond to that, because it was more than a simple listing of the ordinances. The other thing he wanted to mention which he shared with Member Lorenzo and which he wanted to share with Council as a whole was that seven to eight months ago Administration changed its procedure so instead of having four people authorize to issue those transmittals, they were now signed by the City Manager. Both Mr. Pearson and he screened requests, and some they didnít forward on. He wanted to explain that; they did try, if it was something that could be done in-house or do themselves, to not forward to the attorneys.
Member Paul had a question on 40370, the Northville Carriage Company, for $600; another $1,000 for ringing in the holidays for Smith Jones Entertainment 40469; she asked what the budget was for ringing in the holidays and what budget it was coming under.
Mr. Auler, Parks and Recreation Director, answered that the Ringing in the Holidays event was completely covered by sponsors and donations for the event.
Member Paul asked if the City paid up front and they would pay the City back .
Mr. Auler answered that was correct. For the carriage rides and for the entertainment coming in, Parks and Recreation had contracts that had to be submitted and partial payment to them and have that approved, then it was funded through the sponsor donations that come in prior to the event.
Member Paul asked on 40435, Ricoh Corporation, office equipment lease in the amount of $7,512.55; she asked what office equipment the City was leasing.
Mr. Klaver answered it was the printer, the City had several; he thought it was the main printer.
Ms. Smith-Roy answered that it was a bimonthly payment that the City made; all of its printer copiers were through a lease agreement through Ricoh approved by Council about two and one-half years ago.
Member Paul asked if it was better to have all of the equipment leased, rather than to own.
Ms. Smith-Roy answered that they did an extensive cost analysis at the time and did find that from a maintenance cost standpoint and also from a purchasing standpoint because the equipment became updated so rapidly that it was better for the City to do that.
MAYOR AND COUNCIL ISSUES
1. Beck Road Design Ė Member Capello
Member Capello stated now that the intersection at Grand River and I-96 was getting done, we see the construction on the south end of Beck in Northville; he thought the response that we got back from the department was that Engineering was not at all "preparing to prepare any plans" for Beck Road. He wanted to bring that back to Council at the beginning of the year in January to make decisions as to how quickly the City wanted to move forward on Beck Road. He didnít want to get stuck like we did on Twelve Mile Road; weíve got the link there that was not done because it wasnít planned properly. He talked to a previous engineer over two years ago at an event at City Hall and was told that they had plans in the move and was going to have a five-lane road; he questioned at that time that Council should have some input on that. He was surprised to hear the opposite, that nothing was getting done.
Mayor Pro Tem Landry suggested that could be a topic at goal setting session.
Member Capello asked when Council was going to do that.
Mr. Helwig answered that at the next Council meeting he was going to ask for a date, because this week Administration was now reviewing with Ms. Smith-Roy the drafts of the fiscal analysis; Administration preferred to get that to Council before it embarked on the goal-setting. Administrationís hope was that they would have a better feel at the next Council meeting when the fiscal analysis would go to Council, and, to be most effective for the budget, it would be helpful to have goal setting no later than the end of January. He realized there were a lot of activities in January, so if Council could be thinking about what would work best for it, maybe not a weekend. He said the last Saturday in January was a homeowners leadersí breakfast. Mr. Helwig wanted to bring that up at goal setting; he had been looking at the CIP program in advance of their work as staff on the budget, and Beck Road from Ten Mile to Grand River was in there but it was a couple of years out. The question was, was that acceptable. The City had accomplished a lot, so if Council zeroed in on that in goal setting and decide how Council wanted Administration to proceed, Administration would then know how to proceed with Engineering.
Member Capello stated that January was fine.
Mr. Helwig stated that on December 6th, if Council could come prepared with what would work best, hopefully a date could be set; then Administration would also set the date for fiscal analysis before that.
2. A Tax Base Committee Ė Member Capello
Member Capello stated that Council had talked about this about a month ago, and suggestions were thrown out that Council invite the development community in to see what would work for them to increase tax base for the City. He wanted to know if any progress was made on that, or could he just suggest that Council create a committee and then go out and get a couple of developers and start moving in January.
Mr. Helwig stated that he thought that came up when he was gone in October, and, as he had been briefed on it, it was anywhere from building heights, to densities, and so forth, to get the most return for remaining office service technology land or other initiatives, was that correct?
Member Capello answered yes; he thought Council needed a committee to do that.
Mr. Helwig stated that was certainly Councilís prerogative; Administration would like to get some information back to Council. The fiscal analysis would touch on that. Remember, it was going to be an insert in the Master Plan for Land Use update that the Planning Commission was positioned to consider adopting in December at a special meeting. He said, in looking at the draft of the fiscal analysis, he thought when the fiscal analysis came up it would be an ideal time to perhaps give more meat as to how Council wanted to pursue those issues.
Member Capello asked when that was coming to Council.
Mr. Helwig stated that right now, if there werenít holidays, it would be going to Council at the second meeting in December in terms of a City Council meeting, not a special meeting, if they could prune other things off that agenda. He said they would get it to Council in an off-week packet, perhaps in two weeks, so Council would have a couple of weeks before that.
Member Capello stated that Council was looking at the end of December, beginning of January, then?
Mr. Helwig answered December 20th, the second Council meeting; much of that meeting would be devoted to the fiscal analysis.
Member Capello stated at that point Council could decide how it wished to pursue it.
3. Rescheduling Board Commission Interviews Ė Member Capello
Member Capello stated that since Council already talked about rescheduling, Council could skip this item.
4. Road Standards Committee Ė Member Paul
Member Paul stated that she and Member Capello decided to join together to do the financial committee for Chapter 38 for the Financial Development Committee, they also looked at actual road standards. She thought Council wanted to have all asphalt roads, concrete gutters and driveways. She said they had some suggestions; she met with Ben Croy and Clay Pearson about two months ago, and she wanted to know if there had been any changes or suggestions from the City Engineer at that point.
Mr. Pearson stated that they got through the bulk of that task force work with the updates to the financial guarantees and the acceptance of the streets; frankly, that was one of the topics that they tried to broach at several of those meetings and always got sidetracked with the meat of it. He said in finishing up the projects and the transition they had gone through, they would probably have some time to renew the effort to call for input from the development community like they did last time, get input from the Engineering staff to try to get that group together again. It was really a question of when the Members of Council who served on the task force were available and wished to start that up again.
Member Paul said that she looked to Member Capello because he was one of the people on the Committee with her, but she would really like to have the development community involved. She said they had several developers that were with them on the financial guarantee meeting; they were excellent and helped a lot in understanding what would be acceptable to them and what practices to really enforce what they were asking.
Member Capello stated that it was a no brainer, this weekend he spent time jockeying his kids around the City and happened to be on several concrete roads in subdivisions and every one of them was a mess. To him it was a no brainer; you would have to come forward with strong information to indicate to him that the City shouldnít require asphalt roads in subdivisions.
Member Nagy and Mayor Csordas agreed.
Member Paul agreed, with one comment. She said there were some structures that were placed in driveways and sidewalks that were manholes or sewer holes, and in certain cities that was not allowed. She said what was happening was a concrete mantle or brick mantle that would support that manhole structure would shift, which would break driveways and sidewalks, which was costly to remove the concrete, even in those areas, so there were some small fixes that they suggested. She said there were also some people that really wanted concrete roads; she was not saying she was a fan, since hers was crumbling in front of her driveway, but she was suggesting that the City had the option and making it almost impossible, if that was the case, have an 8" base, 8" thick concrete edge drains and if they still wanted to go forward, they would have to do it the right way. She said they had already suggested that; she thought some of the concrete road standards were already met in that area.
Member Capello had a question that wasnít on the agenda. In the packet, there was a letter from Civil Engineer Brian Coburn relative to the engineering consultant review process. He asked if that was something that could be brought back with a recommendation at the next meeting.
Mr. Helwig stated that was the recommendation and the Administration was kind of out the door with that, unless Council had strong feelings otherwise.
Member Capello stated that he thought it was going to go back to Council.
Mr. Helwig stated that it was back to Council, but the timing was now for the beginning of next yearís cycle; if he had any comments, they would welcome them.
Member Capello stated that he had two comments. One, on page two, in what appeared to be his recommendation, he was going back to the QBS (Qualification Based Selection) criteria; that was one of the things he objected to, it was too subjective. Number Two, he liked the way Mr. Coburn broke it down between water/sanitary sewer, then the other, the road building, but just to limit it from three to five, he thought the City was really limiting to get competitive bids out there. He thought they should qualify a larger group to get more bids in; then the City had the opportunity to get the lower bid. He said if it was limited to three on every bid, those guys would know what was going on and the City would get consistently high bids. He said those were his only two comments; otherwise, he was glad it was coming back.
Member Nagy stated that since Council had the new time slot of 7:00 p.m., and if you happened to be late, you could still put something under Mayor and Council Issues, she wanted to put one thing; it was short and quick, if she might.
Member Nagy stated that she had brought up several months ago and she thought there was some support from other Council Members regarding investigating doing a farmers market at Fuerst Farm; she knew that it was November and the Administration was busy, but was that something that could be assigned to Ms. Walsh or whoever did those things.
Mr. Helwig stated that it would be a major undertaking; he had had two meetings because she had mentioned it previously to scope it out. He said Administration had been sort of looking at what other communities had done and how long it took to really get something viable. He asked if it would be appropriate to raise the issue at goal setting and see where it fell in Councilís priorities. To do it well would be a significant undertaking.
Member Nagy answered that it was late and she didnít want to delay discussion, so that was fine.
Mayor Csordas wanted to congratulate City Council on a very productive evening. He also wanted to wish Council a very happy and safe Thanksgiving.
There being no further business to come before Council, Mayor Csordas adjourned the meeting at 9:51 p.m.
Lou Csordas, Mayor Maryanne Cornelius, City Clerk
Transcribed by Sue Troutman
Date approved: December 6, 2004