View Agenda for this meeting

MONDAY, MAY 8, 2006 AT 7:00 P.M.

Mayor Landry called the meeting to order at 7:00 P.M.


ROLL CALL: Mayor Landry, Mayor Pro Tem Capello, Council Members Gatt, Margolis, Mutch, Nagy, Paul

ALSO PRESENT: Clay Pearson, Interim City Manager

Tom Schultz, City Attorney

Kathy Smith-Roy, Finance Director

Tia Gronlund-Fox, Director of Human Resources

Rob Hayes, City Engineer

Cheryl Walsh, Director of Public Relations


CM-06-05-012 Moved by Paul, seconded by Nagy; CARRIED UNANIMOUSLY:

To removed Item 5, Consideration of Zoning Ordinance Text

Amendment 18.204 under Matters for Council Action Part I and

add Item 13 to discuss the next interview date for City Manager.

Roll call vote on CM-06-05-012 Yeas: Capello, Gatt, Margolis, Mutch, Nagy,

Paul, Landry

Nays: None


1. Building Safety Week May 7-13, 2006.

Mayor Landry declared Building Safety Week as May 7-13, 2006 in the City of Novi, and the proclamation was given to Building Department Director Don Saven. Mr. Saven pointed out that the Building Department revenue for last month was the highest ever achieved. He said in years past everything had been related to the auto industry. However, today the diversity was in a medical center, medical buildings going in outside the hospital, a 200,000 sq. ft. medical office building, an Orthopedic Center of 76,000 sq. ft. and the various medical centers already present in this community. This was an industry that would bring people into Novi. Mr. Saven was confident Novi would be very progressive in this area, and would continue to outshine other communities.

2. National Police Week & Peace Officersí Memorial Day Week of May 14-20, 2006.

Mayor Landry presented a proclamation to Chief Molloy for National Police Week. Chief Molloy said he was very proud to accept the proclamation on behalf of the 99 hard working professional men and women that made up the Novi Police Department. He said he was very proud that there were several officers, on their own time, currently up at the Michigan Concerns of Police Survivor Law Enforcement Candle Light Vigil in Lansing on the Capitol steps. They were there to recognize law enforcement officers who had lost their lives in the last year. In the audience, he saw colleagues who they had worked with in the past, and he thanked them for their efforts in setting the ground to make this one of the most professional,

hardest working law enforcement agencies in the Country. Lastly, he thanked Council for their continued support throughout the year, and said they couldnít do it without them.

3. Proclamation for National Association of Letter Carriers Food Drive Day, May 13, 2006.

Mayor Landry presented a proclamation for National Association of Letter Carriers Food Drive Day, May 13, 2006 to Janelle Thompson. Ms. Thompson said this was her sixth year coordinating for the food drive, and across America in the last 14 years they had collected over a half a billion pounds of food. Last year, across America, they collected 71 million pounds of food. She said they are very dedicated to this, and every year the residents and customers of Novi are so generous it was unbelievable. Ms. Thompson noted they donated to three food banks in Novi every year, and thanked everyone in Novi for their generosity.


1. Proposed Budget for 2006-2007

Mayor Landry opened the public hearing.

Ron Johnson, Meadowbrook Homeowners Association, 24610 Highland Drive, was present to reiterate what Mr. Grobe said at the April 30th Council meeting. He said in order to connect, they would like a sidewalk on 10 Mile from Meadowbrook Glens connecting to about DTE so they would have access to the west side of town. They were imploring the Council and Mayor Landry to consider this. He knew it might be too late for this budget session, but asked Council to work it in because there were a lot of children in the neighborhood, and they are one of the largest associations in the City with 375 homes.

Mayor Landry closed the public hearing at 7:14 P.M.




Mr. Pearson said under Departmental Reports, in addition to counting votes this year he would ask Maryanne Cornelius, City Clerk to also count every Novi resident as part of this special Census. He thought it was time to update the Council and the community on how that was progressing, and Ms. Cornelius would speak to that under Departmental Reports.


A. Update on Implementing Special Census

Ms. Cornelius said Novi was conducting a mid decade Census. A Census was the act of counting every man, woman and child that lived in a Novi home as of a specific date.

She noted that City Council adopted a resolution on April 3rd to appoint the enumerators or Census takers. Human Resources, Geographic Information Services, Community Relations, Purchasing, Assessing and the City Clerkís Department have all been involved in the preparation to recruit and hire 50 to 60 people to conduct the Census. She said supplies had been ordered, special maps prepared, and publicity had been arranged so the community would be informed of the project. The City would do a Mid-Decade Census because the last Mid-Decade Census in 1996 resulted in the City getting an additional $3.5 million in revenue sharing. This helped to maintain many of the City services. In order to receive additional funding from the State, the City would need a minimum increase of 10% over the 2000 population count of 47,386. The current population estimate was 53,000 and the count would be done to verify that number.

Ms. Cornelius advised that each enumerator would receive training and supplies at the meeting of May 22nd here at the Civic Center. They would carry an ID badge from the City and credentials presented to them by the State of Michigan. They would be out in the community seven days a week from 2 P.M. until 8 P.M. going door to door to obtain this valuable information. They would present ID at the door and ask for the first and last name of the head of household, and the first names of all other adults or children that live there on that date. No other personal information would be requested. A call back form in a clear plastic bag would be on the door handle if no one was home to be filled out and left on the door for the enumerators return date, which would be listed on the form.

There would also be information regarding the Census in the City newsletter, Update Novi, on the Cityís website and on cable Channel 13 and

Ms. Cornelius said questions could be directed to the City Clerkís office. She noted that Clay Pearson offered a slogan, Remember, in order for the Census to be successful, weíre counting on you!

4. ATTORNEY - None


CONSENT AGENDA (Approval/Removals)

CM-06-05-013 Moved by Gatt, seconded by Paul; CARRIED UNINANIMOUSLY:

To approve the Consent Agenda as presented.

Roll call vote on CM-06-05-013 Yeas: Gatt, Margolis, Mutch, Nagy, Paul,

Landry, Capello

Nays: None

A. Approve Minutes of:

1. March 22, 2006 Ė Special Meeting

1. April 17, 2006 Ė Regular Meeting

2. April 30, 2006 Ė Special Meeting

B. Enter Executive Session immediately following the regular meeting of May 8, 2006 in the Council Annex for the purpose of discussing pending litigation, privileged correspondence from legal counsel and labor negotiations.

C. Approval to apply for the 2006 SAFER Grant for the purpose of enhancing recruitment of paid on-call.

D. Acceptance of Sanitary Sewer Pump Station Easement Agreement and Sanitary Sewer Easement Agreement with Providence Hospital and Medical Centers, Inc. in conjunction with the Lannys Bypass Sanitary Sewer Project.

E. Acceptance of water main and sanitary sewer as public utilities with corresponding 20-foot permanent easement from Grand/Sakwa/Jacobson Novi, LLC and approval of the Storm Drainage Facility Maintenance Easement Agreement for Knightsbridge Gate Site Condominiums, located near Twelve Mile Road and Napier Road.

F. Approval of final Change Order No. 2 and final Pay Estimate No. 11 to Lawrence M. Clarke, Inc. for the West Park Drive Water Main extention project in the amount of $28,690.00.

G. Approval of renewal of Pawnbroker and Precious Items Dealer Licenses requested by Weinstein Jewelers, 42400 Grand River, Suite 104.

H. Approval to Apply for and Accept the 2005 State Homeland Security Grant Program (SHSGP) Ė Law Enforcement Terrorism Prevention Program (LETPP) through Oakland County Emergency Response and preparedness.

I. Approval to enter a Wireless Oakland Agreement for use of City facilities for wireless equipment between Oakland County and the City of Novi.

J. Approval for the sale of obsolete rifles (7), shotguns (47), sights and approximately 600 magazines to Michigan Police Equipment, the high bidder, in the amount of $10,210.

K. Approval to extend the sports apparel contract with American Silkscreen (2nd renewal) based on original pricing and conditions of October 2, 2003.

L. Approval to extend the contract for miscellaneous concrete repairs to Centro Construction for the 2006 season based on the existing pricing and conditions of the bid of May 9, 2005.

M. Approval of the final adjusting change order and final pay estimate to Six-S, Inc. for the 2005 Additional Neighborhood Streets project in the amount of $13,037.50.

N. Acceptance of Miracle Software site (located at 45645 Grand River Avenue) water main as a public utility, and approval of the Miracle Software site storm drainage facility maintenance easement agreement.

O. Approval of proposal from Sikich Group in the amount of $20,300 for the Site Plan Review process analysis and study recommendation.

P. Approval of License Agreement from Joanne Loeffler for the placement of brick pavers within the right-of-way at 1341 S. Lake Drive.

Q. Approval of an amendment to the agreement with Anderson, Eckstein & Westrick, Inc. in the amount of $29,886.95 (for design and construction engineering of added scope items, and for additional construction inspection services from liquidated damages assessed against the contractor) for the Woodham Water Main Project Ė SAD 171.

R. Approval of Resolution increasing fees for Liquor License applications, Zoning Ordinance text amendments and Rezoning requests.

S. Approval of Claims and Accounts Ė Warrant No. 719


1. Adoption of Budget Resolution for fiscal year 2006-2007 and millage rates.

Member Mutch felt the Drain Revenue Fund needed to be discussed as it had not been addressed during budget sessions. He wanted to discuss the long term maintenance and construction costs related to projects associated with that fund. He said the Administration had requested some direction to allow them to do a Phase II Storm Water Plan to provide Council with an accurate assessment of the long term construction and maintenance costs associated with that fund. Also, it would allow them to return to Council with a proposal that would allow a Phase II of that Storm Water Plan to be presented and funded at some future point. Then in the next budget year, Council could discuss the Drain Revenue Fund and decide whether the millage levied now covered all the cost or whether it would need to be increased or decreased for the long term.

CM-06-05-014 Moved by Mutch, seconded by Paul; CARRIED

UNANIMOUSLY: To direct City Administration to draft a

proposal for a Phase II for the Storm Water Master Plan

and return their proposal to City Council at a future date to


Roll call vote on CM-06-05-014 Yeas: Margolis, Mutch, Nagy, Paul,

Landry, Capello, Gatt

Nays: None

Member Mutch said while discussing the Tree Fund in the past one of the items discussed was the issue of the long term maintenance costs related to activities related to this fund, including maintenance of street trees, trees in the parks, etc. In the current

budget, Council had pulled the Tree Fund out as a separate fund; it used to be under Parks and Recreation, and there was a small amount of revenue from that for Tree Fund Maintenance. He asked how they would insure the money was kept set aside for maintenance activities and didnít get co-mingled with the money being spent on tree plantings.

Ms. Smith-Roy said currently the Tree Fund was set up so there was no specific direction to do so. However, at Councilís direction on February 11th, they have now separated the revenue collected for maintenance, and were now able to track it. She believed this was a matter of City Council policy decision in regard to how the Tree Fund proceeds were used whether for maintenance, tree replacement, equipment, etc.

Member Mutch said if it was separated out would there be any fiscal impact to the Tree Fund in terms of the interest that would accrue if the maintenance revenue was separated out. Ms. Smith-Roy said they could set up, at the direction of Council, a separate retainage account that would track the interest separately for the two cash accounts, Other Tree Fund Revenue versus the $25.00 per tree the City collected. The amounts appear to be relatively small in the scope of the amount that was collected for the Tree Fund in total.

Member Mutch said the amounts are small but he wanted to lay the ground work. He thought this matter was a policy discussion the Council needed to have. He was concerned because Council knew that, long term, the amount of money coming into the Tree Fund would decrease because of less development. There would be fewer trees for developers to cut down so there would be less in reimbursement. He was concerned that with the long term decrease in revenue, the fund would not be set aside to cover the cost of maintenance. If funds arenít set aside they would have to dip into the General Fund or not do it at all.

CM-06-05-01 5 Moved by Mutch, seconded by Nagy; CARRIED

UNANIMOUSLY: To separate out the Tree Fund Maintenance

Revenue into a separate account specifically for maintenance.


Member Nagy agreed with Member Mutch that the maintenance was quite costly, and the first year over $60,000 was spent on maintenance alone.

Member Margolis said, for clarification, this was just a tracking mechanism. It would still be, at this point, at the discretion of Council to use those funds for either purpose.

Ms. Smith-Roy said that was how she understood the motion. The initial discussion was just to set it aside and later there would be a policy discussion on how to spend it.

Mayor Landry asked if he understood correctly that this would not mean there would be less interest accrued. Ms. Smith-Roy said, correct and the money would be invested in the same manner as the rest of the funds.

Roll call vote on CM-06-05-015 Yeas: Mutch, Nagy, Paul, Landry, Capello,

Gatt, Margolis

Nays: None

Member Mutch wanted to continue a discussion from the budget session of May 7th. One of the items left unfinished was the issue of approximately $94,000 of allocations that Council made that were above and beyond the target Fund Balance. The practical

affect of that was to dip in beyond the 14% Fund Balance that Administration had set as a target for the budget. He new there were proposals on how to address the $94,000. Related to that, he was concerned about the $66,000 set aside for the Economic Development Director. He was concerned that Council was trying to count the money for Fund Balance with the understanding they would eventually fund that position out of Fund Balance. He said that kind of accounting looked like they were trying to count

the money for Fund Balance. However, if it was realistically going to be spent then he felt it had to be accounted for in the budget, adjusted accordingly, and set aside the appropriate Fund Balance so that all comes into balance. Member Mutch said if the Economic Development Director was factored in to the General Fund expenditures, they needed to come up with approximately $144,000 in adjustments to the budget.

CM-06-05-016 Moved by Mutch, seconded by Paul; MOTION FAILED:

To remove the following items from the budget of the General

Fund: Elevator modernization at $46,800, Fire Station

Architectural Analysis at $25,000, reduce Judgment Trust

Fund transfer by $25,000, exterior aluminum restoration at

$16,380, Results Oriented Strategies for $10,000, Park &

Recreation utility vehicle at $10,000, reduction of the

community calendar by $6,750, and a reduction in the Planning

Commission Conference budget of $8,000, for a total reduction

of $147,930.


Mr. Pearson suggested that before Council started the discussion, it might be helpful for Ms. Smith-Roy to explain the table of the General Fund Fund Balance.

Ms. Smith-Roy said the way the computation was done for the proposed budget was to start with the expenditures and determine what they would be. Then, calculate 14% of the General Fund expenditures, and add items that were pending but didnít have appropriation. Once they had those numbers the total was about 16%. Since Council allocated the funds set aside for the building department renovations at old Fire Station #4, those funds have been removed and put into the budget in the appropriation account for the current fiscal year.

Ms. Smith-Roy said they took into consideration three different options for Council to look at. One was for the General Fund Fund Balance to absorb the additional expenditures above what was appropriated in the proposed appropriations. The other was to reduce the retiree health care, and lastly to postpone the chiller, and set aside $250,000 towards that purchase. This would cover the goal target difference to get to the 14% they had planned on.

Member Mutch said in terms of the fire station, architectural analysis funds had not been set aside to implement such a plan. While important, he didnít want to do another study that was going to sit on the shelf. The community calendar expenditures were budgeted at $26,750, and looking at past expenditures that seemed particularly high and was brought down to $20,000. The Planning Commission Conference line item in comparison to previous money spent on that line item seemed high.

Member Mutch did not support the removal of the chiller from the budget as proposed. There are significant costs associated with that project, and he didnĎt want to get to a point where the funds werenít available to fund it or they were dipping below the 14%

Fund Balance. The same with the Economic Development Coordinator, which he voted in support of, but on reflection he was not comfortable taking that money out of Fund

Balance. It created a situation where they are trying to count it as Fund Balance, but then coming back and actually taking it out and reducing the amount of money set aside below the 14%. If Council wanted a policy direction that 14% wasnít the appropriate amount, that was their prerogative. However, that discussion had not occurred and there was no motion to that effect. He wanted to get on a truly balanced budget with the proposal for $144,930 in reductions, where items added to the budget were paid for and they were not setting aside anything in the Fund Balance with the purpose of counting it and then spending it down the road. If there were additional revenues in 3 to 6 months, Council could add back any of these items.

Member Margolis asked Mr. Pearson to comment on the deferring of the new chiller.

Mr. Pearson said the chiller was one of three items for Council to look at. It wouldnít be done until next spring because they would need time to design and bid. He went back to the original recommendations Council received, which did not include the Economic Development position and they had nine months for that. There are items that would make a concerted effort to take care of the facilities and catch up on some things. He asked for Councilís attention to the Performance Measurement Program as it would aid them in how 90% of the budget was spent. He thought it would pay some big dividends and asked for Councilís consideration. There are things swirling around the EDC position, and they still needed to have the meeting with the Economic Development Corporation to make goals, and felt it could be delayed a little while.

Member Margolis stated she could not support the motion. She spoke with Ms. Smith-Roy, and while the things he was talking about were true, she thought gutting the budget for these items would be a mistake. She said some of these are maintenance items that needed to be taken care of, and the reality was they were carrying a 15.56% Fund Balance. She noted there were a number of items in the budget that were not set numbers and were contingency items, because there were a number of things up in the air such as administrative salary review and union negotiations. She commented that what the staff had done was very conservatively put those numbers in the budget. She supported deferring the chiller. She said after the audit in November there would be real numbers on the budget and Council would be able to make these decisions.

Money had not been set aside for the EDC position and that could be revisited in November.

Mayor Pro Tem Capello asked if the EDC position was part of the motion. Member Mutch said his motion should have included the $66,000 for the EDC position but it didnít. He said the $144,000 could be a second motion or an amendment to the motion. The $144,000 was based on the inclusion of the EDC position. Mayor Pro Tem Capello

questioned if that was how he came up with the $144,000 over the amount that was needed of $85,000 or $95,000. Member Mutch said that would be part of his motion. Mayor Pro Tem Capello said previously he had asked about the utility vehicle and why they would expend that now when the trail wasnít built. He was told the money had already been funded from Singh. Mr. Pearson said money was received as part of the agreement and was available for that purpose. It was not allocated for it specifically, but there was money that would offset that expenditure. Ms. Smith-Roy advised that the money was in an escrow account until the trail was finished, and it was finished in the spring. The idea behind the vehicle was that it would not be purchased this summer but would be purchased in the spring. Mayor Pro Tem Capello said if the $10,000 was taken out of the budget they were not saving money because the money was sitting in escrow anyway. Ms. Smith-Roy said that was not how she budgeted for it, and that she had included it in the budget. She did not include offsetting it with the proceeds Singh had set in escrow. Her understanding was that was going to be for maintenance of the trail itself. She said the utility vehicle was in the General Fund as an expenditure. Mayor Pro Tem Capello questioned whether the escrowed monies would be used to pay for it. Ms. Smith-Roy said that would be a policy discussion of Council, but that was not her intention in this budget. Mayor Pro Tem Capello agreed with Member Margolis that there was room for mobility because all they could do, at this point, was get estimates. He said Council had received conservative estimates to make sure that there was enough money available for each of the line items. True as it might be, he felt that there could be a higher Fund Balance down the line.

Member Nagy asked if interest was accrued on Fund Balance. Ms. Smith-Roy said interest was paid on cash invested on a daily basis. Member Nagy commented she could support the motion because next spring money might have to be taken out, but in the meantime it was paying interest. Member Nagy amended the motion to reduce cable production from $66,950 to $55,000 and remove the $9,000 for the camera remote equipment. The friendly amendment was accepted by the mover and the seconder.

Mayor Landry stated he would not support the motion. He said looking at the budget, and all the changes made by Council, they were down $82,900. He said there was $82,900 that was being proposed in the budget as opposed to what was presented to City Council. The question was where would Council get that, and he thought it should come from General Fund Fund Balance. He said the City Charter stated the General Fund Fund Balance should be maintained between 8% and 12% and in this budget it was 15%. The Rainy Day Fund was in excess of all the dollars the City received from State Shared Revenues. This is a very conservative budget. The Major and Municipal Street Funds were changed by Council. The signalization was deferred; Council beefed up money going to Beck Road, added signalization on 14 Mile, intersection improvements, etc. To do all that they dipped into the Major Street Fund for $100,000, and dipped into Fund Balance to do what they wanted to do with the streets. He asked

Ms. Smith-Roy if she would be comfortable dipping into the General Fund Fund Balance $82,900 to pay for those extra items. Ms. Smith-Roy replied she felt there would be sufficient General Fund Fund Balance to accommodate the needs of the community. Mayor Landry thought, keeping the EDC Director in the fund, the $82,900 should come out of the General Fund Fund Balance, and for that reason he would not support the motion. Mayor Landry commented that elevator repairs, cable and items in the motion should not be put off or decreased.

Member Paul commented she had agreed with shifting postponement of some of the road projects. She still thought roads were the high priority in the community, and second would be fire and police. She looked at cable production, and felt there was no comparison to a road signalization or sidewalks when the majority of the population had Satellite disks. The reduction in Planning seminars still left them with the ability to have some seminars or local conferences, and $5,000 was logical to her. She would like to take out the elevator because it might not need repair as quickly, and put more money towards the chiller. She thought the chiller made sense because our long term costs would be a savings. The Judgment Trust Fund seemed logical but she asked Ms. Smith- Roy to explain how one item was $250,000 and another $275,000 and where that $25,000 came from. Ms. Smith-Roy said that was set up in case claims exceeded the amount rather than budget a larger amount for the claims. Their intent was that it would be better if there was some small amount of money left over in that fund in case they ran over on claims. She explained what the community production line item was. It was primarily made up of wages. She commented there was a full time person, and they had a contract with SWOCC to pay for that personís salary and benefits, and all the part time staff that does the meetings, plus other meetings have been added to the programming, which has caused that number to go up. If that line item was reduced, she would expect that some of the programming and televised meetings would have to be reduced. She said everything was included in the Cable Production line item but it was primarily wages. Member Paul asked how much the wages were for all the meetings. Ms. Smith-Roy said she would have to defer to Sheryl Walsh. Member Paul asked what the camera would be used for. Sheryl Walsh, Director of Community Relations, explained it was $40 to $45,000 in wages and benefits for the video production specialist who had an office at SWOCC. There were 90 to 95 meetings per year with Council, Parks and Recreation and Library, and that staff was roughly $10,000 to $12,000 per year, and the rest was for miscellaneous equipment that might break throughout the year, tapes, DVDís, etc.. The camera being requested would be a remote camera and was not for the Council Chambers. It would be used at SWOCC to go on video productions when she and the Mayor do any of the community events. The present camera was 7 or 8 years old and in constant need of repair. She said they were now using Farmington Hills and SWOCCís equipment, and were at their mercy as to when they could use it. Member Paul explained that $1.2 million was saved last year, and there was an increase in the tax revenue of almost $3 million. She said to take all of the money and spend it, and then take more and spend it where it was initially projected was a big problem for her. She commented that it didnít seem like they were cutting much. She would support the motion because she wanted to save a little instead of dipping into Fund Balance. She would like to see the chiller paid for now, and postpone the Parks and Recreation vehicle since it was for the Singh trail.

Mayor Pro Tem Capello stated he could support the motion with the additional deletions. He thought cable production was extremely important to the City as one of the roles of the City was to keep the City informed. He said he totally enjoyed the road construction and updates, emergency situations and meetings so he would support the remote camera. He said the quality of the Farmington Hills productions was so much better than Noviís that he was embarrassed. He had no problem with those line items, and would not support this without them.

Member Nagy withdrew her amendment. She still supported the motion because gas prices were predicted to increase through 2007. The increase in gas prices had a domino affect, which meant there would be an increase in the cost of asphalt, and City vehicles. Also, there wonít be any road bond money next year. So if there was the same amount of need with neighborhood street programs the money wouldnít be there, and gas prices continue to rise. She said Council didnít know what the future needs would be. The Fund Balance was high, and if something was needed next year, it would have gained interest toward the purchase, such as the vehicle for the Singh trail. She thought it was important to save some money, think about the future, and not just the year ahead; so she would support the motion.

Member Margolis clarified that the reality was Council saved $1 million this year that went into the unfunded liability for retiree health care. Last year, $1 million was saved because City staff was so frugal it was left over at the end of the year. She believed it would happen again this year. She knew costs were rising, and believed that they had built in rising costs into this budget. She said Fund Balance does not mean that money was put away somewhere; it meant the excess over the budget. The City accrued interest on anything that was not spent so it didnít have to do with a 14% Fund Balance; it just had to do with the timing of expenditures. Ms. Smith-Roy said all funds that are available are invested, and interest was earned daily; only the checks that are cleared each day are funds not earning interest.

Member Mutch wanted to address the Judgment Trust Fund on page 183 of the budget where it showed the transfer from the General Fund of $250,000. If there wasnít support for the motion, he wanted to see those numbers reconciled because the statements and the numbers wouldnít match. Member Mutch stated he had discussed the issue of Fund Balance and what would be available for the roads with Ms. Smith-Roy. She indicated there was $100,000 available from Fund Balance; just as in this Fund Balance they are appropriating about $2.7 million from Fund Balance. He didnít see any difference in the approaches they took. The difference was that he found dollars for every project they funded, and didnít leave money unaccounted for when he presented the list of projects. In fact, they fully funded the projects on Beck Road and put an additional $200,000 towards that. In the General Fund, they took the opposite approach and had not fully funded all the items. They set at least one item into Fund Balance that the intent of Council was to spend, and are still short from the 14% target. He wouldnít argue with Ms. Smith-Roy about whether there would be enough money or not as she was the financial expert and he trusted her judgment. However, from a budgeting view point, as a Council when they set a 14% target in the beginning of the process, and then get to the end of the process and say the 14% doesnít count, we are not playing straight with each other. If he knew there was another $100,000 in the General Fund to fund additional items there might have been some items he would have suggested to the Council. In fact, in terms of the General Fund, he didnít add any items and in an attempt to balance the budget at the last meeting he removed the community survey item. In an attempt to balance this budget he came up with another $144,000 in reductions. Those departments would look at him as the bad guy, but it was important that the money be accounted for. In six months there might be excess revenue, but they were working with fixed numbers in the budget, and that was his approach to the budget. Member Mutch said if they wanted to say they were off by $100,000 or $200,000 give or take, then state that up front next time so that time wasnít wasted trying to balance the budget.

Member Gatt felt both Member Mutch and Member Margolis were probably two of the best additions to the Council in many years. He agreed with Member Margolis and

Mayor Landry that this budget should not be cherry picked apart. He thought Council should dip into the Fund Balance and resolve this matter.

Member Paul said Council might be able to save money with some of the expenditures because of estimates. Council needed to remember that some of the things would require acquisition; some might cost more including the oil and gas charges for asphalt that wasnít accounted for. Those items have not been discussed and she agreed with Member Mutch to try to stick with their number, and they have tried. Member Margolis had made a comment about saving $1.2 million last year but they cut, changed and moved around. Some was savings by Council, by staff and then an additional 1% was put away for unfunded liability for retiree health care. There was a lot done at the Council table in instructions to administration to save money; it wasnít just what comes back. A lot of time was spent taking bits and pieces out of all departments, and we have the luxury of doing that this year. She wanted to see some of the items, and some that would be amenable to the Council, and she would go from there.

Mayor Pro Tem Capello asked Ms. Smith-Roy if the $82,900 included a line item for EDC coordinator or was that money still in the General Fund. Ms. Smith-Roy said the way she understood it, it would be designated a portion of Fund Balance for $66,000. So the $82,000 was only for those items which Council appropriated or reduced. He said the EDC position would still be in Fund Balance. She replied that it was in Fund Balance, and was designated for that purpose. He asked if she was alright with taking the $82,800 out of the Fund Balance. She replied this was a unique year in that there are three significant items that are estimates, and they donít have fixed contracts for. It was somewhat unusual to set aside money, for example, the reserve for the Building Department in the amount they thought they would be over next year for salaries or contracts to do that work. Additionally, there are still three union contracts estimated in the budget, and she was more comfortable with fixed contracts. She felt there was probably enough cushion between those items that they have, if Council chooses, to make that adjustment. On the Judgment Trust calculation they determined an amount to transfer, and allowed enough in Fund Balance just in case the estimates for the claims during the year go over what they estimated. Mayor Pro Tem Capello said it made sense to remove the study, utility vehicle, justification of Judgment Trust Fund, but the entire motion, given the fact that she didnít have a problem with the $82,900, and did a good job for the City, still had him at a quandary.

Roll call vote on CM-06-05-016 Yeas: Nagy, Paul, Mutch

Nays: Landry, Capello, Gatt, Margolis

Member Gatt thanked some of his colleagues in the audience for coming to the meeting. He said there was a $62,000 line item in the budget for COLA for retirees. He said the COLA was an implied promise, and one only had to look at the record of the COLAís in the last 15 years to see evidence of that promise. The City Attorney had

researched the matter and ruled publicly that Member Gatt was entitled to also receive the $1,000. He stated Member Nagy didnít agree with the attorney and researched this herself, and came up with a ruling that said he was not eligible for the retiree COLA. He said he had learned many years ago from Dick Faulkner that perception was often worse than reality. He said he had worked too long and too hard for 30 years for this City building a reputation that he had never, ever sullied. He had never been accused of doing anything wrong and had never done anything wrong, but perception was often worse than reality. Member Nagy had opened the door that perhaps, what he was about to do was wrong and he would now close that door. He said his wife was driving down 9 Mile Road and was pulled over for speeding here in Novi and she didnít have a badge to flash around like some of the members of this table have, and she was given a ticket and would pay that ticket tomorrow.

CM-06-05-017 Moved by Gatt, seconded by Landry; CARRIED

UNANIMOUSLY: To remove from the budget the COLA which

had previously been placed on this budget by a vote of 4 to 3,

with Member Gatt voting in favor of that.


Member Nagy thought there was a misunderstanding of what her conversation with the City Attorney was. She said she had received a number of telephone calls from residents who watched the Saturday budget meeting. They asked whether Member Gatt could vote on the increase in benefits since he had recused himself in previous discussions. She reviewed the Council rules which said they could not vote for things that would be of direct interest to them, City Charter, etc. and called the City Attorney, to see if the vote was valid. The residentís concerns were not because of one person on Council receiving it or not, but whether or not the vote was valid. In discussion with the attorney, she looked under the Attorney Generalís opinion. His opinion said that "under home rule cities, if retired, anyone could run, but if thereís a change in a retirement plan affecting retirees thatís before Council the change will require approval of two thirds of the full membership without the vote of the retiree." Later on in a conclusion it stated "a retiree must refrain from voting on matters affecting the pension or retirement benefits he or she receives from the City." The City Attorney disagreed with how she read it because he mentioned to her that they were referring to accrued benefits; so they disagreed. She said she didnít raise the point and was not going to raise the point until it was brought up. Member Nagy would not support a COLA increase because she didnít believe there had been any written agreement given, and the bottom line was she would not take taxpayer dollars to support retirees. The $62,000 could buy more equipment; these were taxpayers dollars, and should go for the benefit of the taxpayers.

Mayor Pro Tem Capello asked Mr. Schultz if he had looked into this and prepared an opinion. Mr. Schultz said a written opinion was not prepared but he would be happy to address the points raised. Mr. Schultz said he was asked whether Member Gatt, as a retired City employee, was allowed to vote on the budget. They gave a preliminary indication that on the budget, a large document that the public has an interest, and any member of City Council should not be, as a matter of public policy, deprived of a vote. They rendered the opinion with the assumption that this budget was what the budget always was, which was an appropriation of funds with a disbursement to come later.

There might still be a question as to how the disbursement would happen. If it happened through Council, Member Gatt would have to address at the time the conflict question in the Charter, the issue of pecuniary interest. Mr. Schultz said for the purposes of this document, the Attorney General opinion that relates to contracts and a separate constitutional provision, they read it and it does not answer the question. This was a typical question under the City Charter. He said is there a benefit from this motion. Their answer was Member Gatt could vote on this subject so as not to be deprived of participating in Council discussion, but there might be a later action at which he would have to address the conflict.

Mayor Pro Tem Capello said then the thousand dollars allocated per senior, which included Member Gatt, he could vote on the budget with that item in there, but when it came time for a check to be disbursed to him he would not be able to vote because he had a direct benefit and interest in that particular check at that point. Mr. Schultz said with regard to the large budget and the millions of dollars at issue he would not be deprived of the opportunity to participate. Mayor Pro Tem Capello said it was not the time to remove that $1,000 from the budget. He said at the time it comes in a warrant to Council would be the time he could take the warrant off the Consent Agenda, and then Member Gatt could sequester himself and Council could vote.

Member Gatt stated he wasnít doing anything wrong taking the $1,000 and was entitled to it. However, he didnít want to jeopardize the 61 people in the audience. He respectfully requested that Council members agree with the motion.

Member Margolis regretfully supported the motion in deference to Member Gatt. She offered her admiration for his honesty and integrity, and said she continued to be impressed.

Member Paul said there have been several discussions about COLA in the past and there were times Member Gatt had to recuse himself. She said Council had a motion specifically regarding the $1,000 stipend per retiree at the last meeting. She said that was voted on in a 4-3 motion and asked if that was something Member Gatt was allowed to vote on. Mr. Schultz replied that they were straw votes and votes to create a document, which was the document being voted on tonight, and was the only vote that was a binding formal vote. The binding formal vote in the study sessions are not formally taken elsewhere, and are actions to get the discussion going on the formal budget. He said that action, for the same reason that budget as a whole, was in

Member Gattís purview. It was to get the discussion going on the ultimate vote on the budget and the issue of when a benefit was conferred was a subsequent action, and that would be the time it would be an issue.

Member Paul said when Westmont came up, she gave $625 dollars to the City, and she wasnít even allowed to discuss it. She thought that was very odd, and asked for an explanation.

Mr. Schultz said that was an entirely different issue. It was a one time action that was not an appropriation to be dealt with at a later date. It was an issue, and the Charter talked about a personal and pecuniary interest, and that was the only Council action. He said this was a large budget and might be the most major thing the Council did. If the

Charter language was construed to say that a Council Member, who happens to be a retiree, could be excluded from the Council to date, because that was really what would happen here, a Council member in a minority of one or two could theoretically be shut out of any debate or any vote on the motion just by offering some benefit that the

Council Member doesnít even want. You have to distinguish from the overall budget from when there was a benefit actually conferred by Council action, and that would not be with the budget. It was a later act.

Member Paul said she was disappointed in the response to disagree with the Attorney General and thought it was unbelievable, but she heard the communication from him loud and clear and all the things in between. She appreciated Member Gattís thoughts to try to help some of the retirees. However, her concern was that they were only talking about 61 or 62 retirees, but whatever happened with this motion, there are 67.

Member Mutch stated he was a little troubled by what he had seen in the Attorney Generalís opinion because the language was clear. He understood the distinction Mr. Schultz was presenting to the Council. He appreciated Mr. Gattís offer and considered it generous, but he was not comfortable with the situation and preferred to have a written legal opinion before Council voted. The only written legal opinion he had to reference that seemed to apply to this situation was from the Attorney General, which seemed to speak directly to this. The concern he had was Member Gattís point, which was perception. Whether itís considered a straw vote or not, those were formal motions. To have a Council member voting on an item that directly benefited them in a way that was different than Council voting on the budget at large, he thought, created a difficult perception within the community. He said, like Member Nagy, he had also heard some of those comments. Member Mutch would not be comfortable voting without a written legal opinion addressing this situation. He wanted to see the full legal issue spelled out because there wasnít enough information.

Member Nagy stated she wouldnít support the motion, because she was not at all questioning the integrity of Member Gatt. It was the residents who raised the issue to her. They wanted to know why the vote was made. Even though Council had a straw vote, if this had been resolved before the straw vote, it might not have involved seven Council members voting on it. She thought that was the crux of the matter. She agreed that a written opinion was needed. She understood what Mr. Schultz said about accrued financial benefits of the plans but that was not how she read it. She said she realized she was not an attorney but in summary that was what they were saying and thatís how she read it as well. According to Council rules all it said was voting. It did not say when or what the vote was for. It just says voting and what you can and cannot vote for. Itís a question Council needed to ask so they know for the future, and a question she had to ask because it was her responsibility to answer the residents that called. She had no problem with Member Gatt in any way. She would not want to give the appearance of impropriety. She would not vote for a very generous offer by Member Gatt, but in her mind totally unnecessary.

Mr. Schultz stated if Council wanted a written legal opinion he would be happy to do it, but the opinion would not change. In the time that this issue came up they had read every opinion that existed not just in Michigan but anywhere in the nation that they could look for retirees, Council members, etc. This Attorney General opinion was about the only thing they found and there wasnít anything left to look at. There was nothing that governed this. We have our Charter that spoke to a member not voting on an issue where there was pecuniary benefit, which was not this motion on the budget because further action needed to be taken. Regarding the Attorney General opinion, it simply doesnít apply. You canít take a legal opinion and read the last paragraph with some general language and say it applied. The Attorney General was asked can a retiree be a member of the city council in the city where heís a retiree. The answer was yes they can because there was no inherent conflict but realize there might be issues that come up where there would be a conflict. The only issued identified was a constitutional provision that says accrued pension benefits are contractual in nature and canít be taken away. He said that phrase got in there in 1963 because before then pension benefits were taken away regularly even though people had paid into a pension. He said it was to protect accrued pension benefits and this was a one time $1,000 payment, and that constitutional provision that was the only provision the Attorney General was addressing was not involved. The answer remained the motion for a budget was different than the action that would come later to disburse the funds.

Mayor Pro Tem Capello said he would rely on Mr. Schultzís opinion. He said Member Gatt understood that the budget needed to be passed tonight because time was running out. He appreciated Member Gattís effort to get the budget approved tonight. He said the motion now was to remove Member Gattís name from the retiree list. However, the vote that put the stipend into the budget was voted on by Member Gatt. He asked if they should remove all of the seniors out of the budget and motion in all of the seniors except for Member Gatt. Member Schultz said that was a question for Council regarding how they wanted the record to exist. He said he had given the opinion that those Saturday sessions are all efforts to the one motion that counts, and thatís on the budget as a whole. If Council wanted to take that vote over without Member Gatt, they would have to have a motion to recuse him and all of that but said it was not required.

Mayor Pro Tem Capello followed Mr. Schultzís advice that it was not necessary.

Member Mutch said to Mr. Schultz that he said there was nothing in the Charter, Council rules, or in State statute that would preclude Member Gatt from voting on a motion where there was a direct financial benefit to him, in the context of a budget, a budget discussion, and knowing that it was a formal motion.

Mr. Schultz said our position again, was that even as a retired employee, Mr. Gattís vote was on the budget, not on any distribution, not on any benefit that was being conferred at that point. Any other conclusion runs the risk of excluding Member Gatt or any Council member from discussion of the budget whether accidentally, intentionally, or unfortunately depending on what other Council members do. They have to separate the budget from when the actual benefits confer. Member Mutch said on several occasions Member Gatt was asked and did recuse himself and those were the vote. The vote on the COLA increase was the same situation, there was no appropriation, no warrant was signed, and he was having a difficult time seeing the difference. Mr. Schultz said those are one item issues and not a part of the discussion of the budget as a whole, and that was a self executing motion where the funds are appropriated, and approved the distribution with a MERS resolution and there would be no further action. Mr. Schultz said here you canít lose sight of the fact that itís the budget as a whole.

Member Landry said he wanted to follow up on comments by Member Gatt and Mayor Pro Tem Capello. He thought Mayor Pro Tem Capello was on the right track. He said Mr. Schultz had given his opinion on what the Council had done, and his opinion was that what the Council did was appropriate. To clear this up with no misconceptions, he told Member Gatt that he would like to ask for a friendly amendment that the motion be to withdraw all COLA from this budget for all of the retirees. If that passed, a motion could then be made to give $1,000 COLA to everyone but Member Gatt. Then the matter was squeaky clean. He asked if Member Gatt would accept the friendly amendment. Member Gatt said that vote would only take four yes votes, Mayor Landry agreed, and Member Gatt said they were talking about 61 retirees who would have been eligible for a MERS benefit had they gone that route. Mayor Landry said correct. Member Gatt accepted the amendment.

Roll all vote on CM-06-05-017 Yeas: Landry, Capello, Gatt, Margolis,

Mutch, Nagy

Nays: Paul

CM-06-05-018 Moved by Capello, seconded by Mutch; MOTION CARRIED:

To remove the $25,000 architectural fee for the Fire Station,

remove the $25,000 difference for the Judgment Trust Fund

and the $10,000 for the emergency utility vehicle for the Singh

Trail, and to include $61,000 for the one time $1,000 stipend to

the retirees, except for Member Gatt, and to allocate $21,900

from the General Fund Balance which should then balance the budget.


Member Gatt asked to amend the motion to add the $61,000 expenditure for the 61 retirees to each receive a $1,000 check, except for him. Mayor Landry asked if the maker of the motion accepted the friendly amendment. Mayor Pro Tem Capello said he understood in the last motion that they withdrew the motion that all retirees would get the money and included the motion that all retirees except Member Gatt would get the stipend. Mayor Landry said no, all they did previously was remove all COLA and all stipends for all retirees.


Mayor Pro Tem Capello restated the motion to remove $25,000 Architectural fee for the Fire Station, remove the $25,000 difference for the Judgment Trust Fund, to remove the $10,000 for emergence utility vehicle, and to include $61,000 for the one time $1,000 stipend to the retirees, except for Member Gatt, and to allocate $21,900 from the General Fund Balance, which should then balance the budget.

Roll call vote on CM-06-05-018 Yeas: Landry, Capello, Gatt, Margolis

Nays: Mutch, Nagy, Paul

CM-06-05-019 Moved by Capello, seconded by Margolis; MOTION FAILED:

To approve the budget as amended.


Member Mutch stated he couldnít support the motion with COLA, and he had not supported removing the money from the Fund Balance. He did support the initial motion thinking that they had pulled the $61,000 out and knowing that would balance.

He would not support removing dollars from the Fund Balance unless there was an equal offset. He wanted a balanced budget. He would not support the motion. He said the other issue that had not been addressed was forfeiture funds so he was not ready to vote on the final budget.

Member Paul said regarding forfeiture funds there was $182,000 for vehicles that they want to spend out of the General Fund or Fund Balance. Ms. Smith-Roy said they had not appropriated any money; they have increased the Fund Balance in the event they needed to appropriate funds. Member Paul asked how the Fund Balance was increased. Ms. Smith-Roy said by adding the amount for the vehicles plus 14% to Fund Balance. Member Paul said that money was being taken and put into the Fund Balance to pay for the $182,000 for the police vehicles. Ms. Smith-Roy said no, they are not appropriating any money. If they were to appropriate the money, they could not, later, use the forfeiture funds because it would be supplanting of funds. Member Paul said her understanding was that there was $700,000 in Forfeiture Funds for the drug money received in the past. Ms. Smith-Roy said at City Councilís direction the money that was set aside was set aside as a percentage of the expenditures that had already been approved. Member Paul said thereís $1.2 million that went to paying down the debt, $1 million for the firing range, and asked what money remained. Ms. Smith-Roy said $643,000 was the remaining Fund Balance as of the date of the document, and to that there had been some additional deposits and interest earned, but she didnít have the exact number to date. Member Paul stated she wanted to take $182,000 out of Fund Balance and take the Forfeiture Fund money and have $182,000 paid for out of the Forfeiture Funds, and take the rest of the money to pay down the debt. The amount owing was $1.2 million, and she wanted to take approximately $450,000 and put it toward the millage debt. She wanted to take the money for the cars out of the Rainy Day Fund. She wanted to use the money wisely for all of the Police Department. The police, per their contract, have a requirement to have between 8 and 9 vehicles the City had to purchase per year, and that would be $182,000 for this budget. She didnít think it was fair for the hard working Forfeiture Funds received to not help the taxpayers. Regarding COLA, she had said at the last meeting that she would be interested in supporting the $1,000 stipend if each of the retirees would consider a different insurance carrier. It doesnít have to be an HMO or PPO, other than the Blue Cross/Blue Shield. There are a lot of hidden costs with Blue Cross/Blue Shield, and there are other carriers that are equally as good, and that was where she would like to see a trade off. She would not support any budget with any stipend in it.

Member Nagy asked if the amount for police vehicles was $182,000 or $184,564. Ms. Smith-Roy said it was the $184,564. Member Nagy thought it would be a good idea to have a Council policy to get bids and reduce the number of carriers, because it could reduce the cost of health care over all. She could not support the motion as it was. She didnít support the increase and didnít think it would ever be put in writing, and 3 to 5 years down the road it could come back. She also thought it should affect everyone not just those up to December 31, 2005. She felt they were spending tax payerís dollars on a small group of people. It might not seem like a lot but it could buy two trucks for the departments.

Member Mutch said regarding the Forfeiture Funds he would be looking to take the $184,564 for police vehicles. Time and again it had been stated that there would be enough to do everything everyone wanted to do with the funds that would come in. He said they had received several million dollars and the expectation was that they would receive several million dollars more. However, from the perspective of this budget they had set aside $184,564 for these vehicles out of the General Fund. If additional Forfeiture Funds come in he didnít know how much they would have to wait on before getting the OK to do the vehicles. Apparently thereís some need to sit on $643,000 of Forfeiture Funds that are unallocated for any purpose. He said they were taking $184,000 out of the General Fund, and it could come out of the Forfeiture Funds and in another six months another million dollars would be received, and those who want a gun range or to pay down the debt, the money would still be there. If the money could be taken out of the Forfeiture Funds that would free up $184,000 in the General Fund, which he would like to see a portion go to insure the budget was balanced, and the remainder to go for something like neighborhood roads.

CM-06-05-020 Moved by Mutch, seconded by Nagy; MOTION FAILED:

To amend the motion to allocate $184,564 from the Forfeiture

Fund for the police vehicles, and from the General Fund

allocate $21,906 to Fund Balance and transfer $117,000 to Municipal Street Funds.

Ms. Smith-Roy said Member Mutch was talking about taking it out of the Fund Balance to get to the 14%, because we have included that in order to get to our balance. Actually, that number was $210,400 because they added 14% to that. $210,400 would be added to the General Fund Fund Balance on a permanent basis. Member Mutch said then his motion would be to transfer, of the $210,000, $150,000 to the Municipal Street Fund. Ms. Smith-Roy said the difference after the 14% of the expenditures was around . Member Mutch asked how much he had to work with; Ms. Smith-Roy said $117,027.

Mayor Landry said the motion was on whether or not to amend the motion to pay for the police cars out of the Forfeiture Fund and allocate $117,027 to the Municipal Street Fund.

Mayor Pro Tem Capello said he didnít accept it as a friendly amendment and would not approve any motion or budget that allocated any more money out of the Forfeiture Fund to any more police vehicles. Last year he reluctantly approved a few police vehicles out of the Forfeiture Fund, and we have now committed ourselves to paying off the bond. He didnít want to continue to wheedle away the money in the Forfeiture Funds so that there was less than a quality product, this time, when improving the Police Department.

Member Paul said her understanding of the motion was that there was one million dollars set aside for the firing range, and half the money paid down for the debt. She thought it was fair to take the money and buy the vehicles out of there.

She said there was $3.6 million and they were estimating another $4 million to come in. She said taking $184,564 for vehicles was not a lot of money, and it would not hamper the firing range. To insure the taxpayers get some real benefit from this, she thought this was very beneficial for the people who have the roads to use. It was a fair estimation that most people think roads are very important. Most people donít see the benefit of police vehicles other than they want to see them in their neighborhood, they want to see the police available to them, but they donít know if the vehicle was old or new. This would give relief to the General Fund and she would support the motion.

Mayor Pro Tem Capello said the money was already in the budget for the police vehicles in the General Fund Balance. He said his motion balanced the budget and addressed almost every concern that had been brought up over the last four or five meetings. He was not ready for this additional amendment. The money was there, everyone knew it was there, itís allocated and itís where it should be. The vehicles should be bought out of the budgeted monies because the Forfeiture Funds would not always be there.

Member Margolis said her frustration with this process was that there were two study sessions where there was time to talk and request information. She said if there was anything that drove her crazy it was to make decisions without information. She stated she would strongly support Mayor Landry regarding going into goal setting next September so that Council would not be in this position next year. She would not support the motion to take money from Fund Balance which was what Council had said they didnít want to do. The Finance Department set aside in case that money did not come out of Forfeiture Funds, that money would be available. The money for the Police vehicles was never allocated; it was not part of the budget at this point. Ms. Smith-Roy said Member Margolis was correct. Member Margolis said she would be willing to look at taking vehicles out of the Forfeiture Funds. She thought it was a chance to offset some of the budget monies, but Council was not looking at that now and that decision should be made when all the information was available, including how much they would get in Forfeiture Funds.

Member Gatt said he was against Forfeiture Funds being given out piecemeal. Last year they talked about spending money out of that fund to purchase police cars and they had all agreed it would be a one time only expenditure. Itís time to put money into the General Fund to pay required debts and police cars every year.

Roll call vote on CM-06-05-020 Yeas: Mutch, Nagy, Paul

Amendment Nays: Capello, Gatt, Margolis, Landry

Roll all vote on CM-06-05-019 Yeas: Gatt, Margolis, Landry, Capello

Main Motion Nays: Mutch, Nagy, Paul

Motion failed 5-3 because five votes are required.

Member Margolis suggested that $21,900 was needed out of a $27 million budget. She said they had allocated entryway signage at $75,000 and she believed it was needed, but not at the expense of the other items. She felt that in an effort to get the budget passed and move forward to do the important work they were supposed to do, they needed to not go back and forth about $21,900.

CM-06-05-021 Moved by Margolis, seconded by Gatt; MOTION FAILED:

That the budget be approved with a reduction in the amount

of entryway signage of $21,900.

Motion failed as five votes were needed.


Mayor Pro Tem Capello thought that the entryway signage had already been reduced to $44,000. He was informed that it went from $150,000 to $75,000 and nothing would have to be taken out of Fund Balance.

Member Mutch asked if the EDC coordinator position was still coming out of Fund Balance for $66,000. She said that $66,000 would be a part of the 14% that was being designated. He was not comfortable with that as he thought it was budgeting both ways. They were counting the money towards Fund Balance with the expectation they would spend it. At the point they spent it they were going below the 14% set as a target.

Member Margolis said in order to allocate the money there would have to be a 5 Ė 2 vote at the time it was allocated. Ms. Smith-Roy said it was an appropriation and it would take a 5 Ė 2 vote. Member Margolis thought it would be close to the time when an audit would return to see where our Fund Balance came in, and they could make the decision of whether or not it was appropriate. If the new City Manager thought that was an appropriate position.

Mayor Pro Tem Capello agreed with Member Margolis and added at that time Council could make the determination if they had reached in excess of the 14% Fund Balance because they assumed they would have more money in there. If not below the 14% and they donít believe in it they donít vote for it. If in excess of the 14% they could vote for it at that time. He said they are postponing that vote for the future.

Mayor Landry said he would support the motion. He hoped the EDC coordinator issue didnít hold this up because he thought everyone at the table agreed that it was a decision for the new City Manager to make. He said they had not allocated the money yet and it would take five votes. He thought they all agreed that something had to be done along the economic development lines but that money was not being appropriated at this time. He encouraged his fellow Council Members to pass the budget.

Mr. Schultz said he understood the motion was to make up the $21,900 with a cut to entranceway signs. He said the motion didnít pick up all the previous motion made by the Mayor Pro Tem and asked if that was the intent.

Member Paul said there were still unresolved issues. She would support the COLA stipend if the insurance carrier was changed, and that was the only reason she could support the $1,000 stipend, and with It she would not move forward on this budget. She also thought spending half the Forfeiture Fund money for half the cars would be a compromise. She would not support the budget as it was.

Mr. Pearson questioned the motion.

Mayor Landry said the motion for the COLA, Fire Station and Judgment Trust all passed. Then there was a separate motion, given all of that, to pass the budget. At that time it would have required taking $21,900 out of the General Fund Fund Balance and that motion failed. Now there was a motion on the table to reduce the signage allocation by $21,900 and with that to pass the entire budget. This meant if the motion

passed there would be no need to take additional funds out of the General Fund Fund Balance.

Roll all vote on CM-06-05-021 Yeas: Margolis, Landry, Capello, Gatt

Nays: Mutch, Nagy, Paul

Council recessed at 9:00 P.M.

Council reconvened at 9:15 P.M.

Mayor Landry stated Council was discussing Agenda Item #1 the 2006-2007 Budget.

CM-06-05-022 Moved by Margolis, seconded by Gatt; MOTION CARRIED:

That Council pass the budget with the deletion of $21,900

from entryway signage, and pay the $184,564 for the police

vehicles out of the drug forfeiture funds.


Member Paul said the COLA was still intact and no regard about insurance carriers. Mayor Landry said that was correct. Member Paul said she appreciated the forfeiture fund money for the vehicles, but could not vote for the motion if it didnít include changing health carriers.

Member Gatt said he had said he would not change on the forfeiture funds but in the spirit of passing the budget he would. Member Gatt said regarding the previous speaker everyone should be aware that most retirees retired under a contract and in the contract they have it stipulates that they are entitled to Blue Cross. He didnít think the Council was in the business of taking people who spent 30 plus years with the City of Novi and changing their retirement plan at this stage in their life. He said they are addressing the issue with present and future employees and thought they were making great headway.

Mayor Landry said he didnít like paying for police vehicles out of Forfeiture Funds and had said he wouldnít do it, however, he didnít expect everything in the budget would meet every Council persons likings. Some of it doesnít meet his liking but in the spirit of passing the budget and in the interest of the City he would support the motion.

Roll call vote on CM-06-05-022 Yeas: Mutch, Landry, Capello, Gatt,


Nays: Nagy, Paul


2. Approval of the Resolution to adopt Administrative Policy Changes.

Mr. Pearson said this item dealt with part of the compensation package for existing administrative employees and new hires. He said it was an amendment to the Administrative policy; the items had been presented in their recommended budgets, and represented significant savings to the City.

Member Mutch wanted to express concern with the inclusion of the Library employees within these changes. He understood that the changes had not been approved by the Library Board yet, and they are responsible for setting policy, benefits and wages of Library employees. He didnít think it would be appropriate to include them and they had fairly short notice, in terms of including them.

CM-06-05-023 Moved by Mutch, seconded by Paul; CARRIED UNANIMOUSLY:

To approve the general policy, and subject to the Library Board if necessary.

Mr. Pearson said, for clarification, that this was the same way it was done last year in terms of following the pattern. He said the notice provided to the Library was more than was done in the past and there was no such meeting. Ms. Gronlund-Fox and her assistant went to the Library to explain the changes. He said to have the Library Board approve these would be different than how it was done last year.

Ms. Gronlund-Fox said she had spoken with Mr. Sturing from the Library Board who had thanked her for going to the Library and explaining to the staff what would be going on. Then he told her that there was a resolution that the Board had adopted that whatever the administrative employees did with benefits exclusively the Library Board employees would also follow. She said the issue had been addressed.


Member Paul said if looking at health care benefit changes at the second bullet, the third page in this item it says "effective July 1, 2006 introduce a three tier drug co-pay system." She said one of the things discussed was a $10 for generic, $25 instead of $20 for preferred drugs, and $40 for non preferred drug. She said that helps drive people to the generic drug and has continued cost savings for the City. She asked Ms. Gronlund-Fox if the generic drug was $6 instead of $10 would they have to pay the $10. Ms. Gronlund-Fox said no, they would pay the $6. She offered a friendly amendment that the drug co-pays would be $10, $25 and $40. Mayor Landry asked if the maker of the motion accepted the friendly amendment.

Member Mutch said he would not accept the friendly amendment.

CM-06-05- Moved by Paul, seconded by Nagy; MOTION WITHDRAWN:

Amendment To have a three tier system of drug co-pays at $10, $25 and $40.


Member Margolis asked if that was within the contract vehicle to set that. Ms. Gronlund-Fox

said that was currently what was on the table with the Teamster bargaining group. When she looked into this a couple of the carriers, she thought they were M-Care and HAP, one of them charged more to do that because it was not a standard co-pay and the other carrier didnít do it at all so that was why this was before Council. Member Paul withdrew the motion because it would affect two insurance carriers and would not save the City any money.

Member Nagy asked what they did have for co-pays. Ms. Gronlund-Fox said they did have different co-pay plans, however, they each have their own plans and they have specific plans, and if you go outside of those additional costs are incurred or they would not do it at all. She checked the $25 and $40 and one plan didnít offer it and another would charge more because it was outside of their norm. Ms. Nagy asked what their plan would be. She said she would have to check but all of the plans offer this particular three tiered co-pay and it did save the City substantially.

Mayor Pro Tem Capello asked Ms. Gronlund-Fox what the earliest was that an employee could retire. Administrative employee can retire at 25 years with age 55 to retire with full benefits. If vested they can retire at ten years of service. He asked for union employees and she said ten year vesting. He said for the employees that have the option offered to them to convert to the defined contribution plan was there protection in there that people with five years of service couldnít convert and then quit. Ms. Gronlund-Fox said they would vest immediately in the monies that were in MERS for them currently, and any other monies they would vest at the vesting schedule that was prepared. He said under the new plan if they converted they could retire at six years and walk away with money, and otherwise the employee would have to wait for ten years to see any benefits. Ms. Smith-Roy said that was one of the draw backs in allowing the existing employees to participate in the defined contribution plan. He asked if there was someway to protect the City from that and she said there was not. It was required by the plan document from MERS, we are a member of MERS and would continue to be for purposes of this, even though ICMA would actually be the financial administrator of the funds. She said the City cannot withdraw from MERS without a vote of the residents of Novi. He said anyone planning on leaving over the next couple of years would be a fool not to convert, take their money and leave. She said no, we are proud of Novi and hoped those people would stay and invest longer in the defined contribution plan.

Mr. Pearson said that was true in that particular case if someone left between four and ten. As Ms. Smith-Roy pointed out that was a reality that youíre vested in those if people convert. However, the fact was that the new people would be coming in under the defined contribution plan, which was what they wished to see as a benefit, and also the cities exposure would end. He said that was a big benefit. If someone was to leave after six or ten years thatís it and the City doesnít have any future obligations, and the replacement hire would be the same deal and the City would know what the expenses would be.

Member Mutch said in light of the fact that there was a resolution passed by the Library Board to abide by whatever changes were effective with respect to the administration, he would ask for a friendly amendment to include the Library Board in the motion.

Member Mutch asked if the Library Board would generally have the authority to set wages and benefits for the Library Director and staff. Mr. Schultz said the Library Board has general powers to hire, fire and set general policies. However, the City does approve their budget on an annual basis, and does get a report as to how those monies are expended. He would

expect some concurrence generally, at some point, would come from the Library. Member Mutch asked if he was aware of a policy that allowed a delegation of the Library Boards powers to the City Council for the purpose of approving health care or other benefit changes. Mr. Schultz didnít think there was a specific policy that talked about delegation, but as a practical matter it would be impractical for them to have a different set of rules and regulations because all of these policies are appropriately administered through the City and always have been.

He didnít know what the resolution of the Library Board was but the better way to do it was to make the approval so that weíre clear on what the Cityís policy was subject to approval, if necessary, from the Library Board. Member Mutch thought that would be the clearer amendment. Member Mutch said the Library employees have not had the same benefits package as the City employees, particularly when looking at retirement. The Library Board, in the past, had set separate and different policies from the City Council. He said that was the history, as to a specific policy, he would like to see the specific question of whether the Library Board would have to approve, as it applied to Library employees, changes to salaries and benefits for their employees.

Mr. Schultz said if they do he thought Council was covered if there was approval of the general policy and itís subject to the Library Board if necessary.

Member Mutch said as his motion he would amend the language to address that, and he thought it covered if the Library Board did not need to approve this, they could move forward, but if they did need to approve this that would happen as well.

Mayor Landry said with that he would support the motion because it was consistent with the Cityís position with union contract negotiations. He felt it was very important to treat the staff the same way they treat the unions. This was reasonable because it introduced changes gradually; and gave people time to adjust and adapt, and took the necessary step to change from a defined benefit retirement to a defined contribution retirement.

Member Margolis said she was on the Library Board last year when this change was made. Her understanding, at the time, through multiple discussions was that the Library Board does set complete budget for the Library, and had approval of that because they have discretion over that. She also understood that the City, as a courtesy, had administered the health care plan for the Library for no cost since its inception. The Library was at total discretion to have any health care policy they would like. It had always been more cost effective for the Library to purchase policies as part of a package, and that way the Library Board had always approved, up to this point, to be part of the administrative because the cost ,and the benefit package they could get was better than taking their group out of that package. She said the Library Board did have to approve this but their choice was then to bid this out themselves and have it approved.

Ms. Gronlund-Fox said Member Margolis was correct. The City used to charge the Library an administrative fee for doing the payroll and benefit administration. However, several years ago the City actually stopped charging that fee; the Library does not pay for that service any longer.

Member Margolis said she would support the motion and saw no harm in asking the Library Board to approve this. She thought this was a great progression of benefits and appreciated the staff taking some responsibility as we go forward. She supported the concept of reducing the number of carriers in the future, as she knew that was an issue in terms of costs, and wanted to give that direction to staff that she would be looking for that in the future. Member Margolis said there had been discussion about moving people to a different plan off of Blue Cross, and she would like, when contracts are renegotiated, to see a carrot offered to people who do go to lower choice plans. Now, employees are being asked to pay the same percentage of their premium whether they have a high cost plan or a low cost plan. She would like to see the City offer no co-pay of premium for the low cost plans and a higher premium for the high cost plans. She thought the City would still come out ahead and the employees would come out ahead with a health care that was a lower cost to them, and it would be a win win situation.

Member Mutch asked Ms. Gronlund-Fox when the information was presented to the Library employees. She replied Tuesday or Wednesday of last week. He asked if she felt it was enough time for them to assimilate all of this. She said the co-pay and the drug card go into effect July 1, and the rest of the changes do not go into effect until January. Member Mutch asked that, in the future, if Library employees are to be included under the same plan they get the same notification. He had heard from people about the very short time frame of getting this information and learning that it applied to them, and he agreed with them that it was not much notice.

Roll call vote on CM-06-05-023 Yeas: Nagy, Paul, Landry, Capello, Gatt,

Margolis, Mutch

Nays: None3. Adoption of MERS Revised Uniform Defined Contribution Program Resolution (for the General Non-Union/Administrative Division), and the related ICMA Retirement Corporation Resolution.

CM-06-05-024 Moved by Gatt, seconded by Margolis; CARRIED UNANIMOUSLY:

To adopt the MERS Revised Uniform Defined Contribution Program

Resolution (for the General Non-Union/Administrative Division), and

the related ICMA Retirement Corporation Resolution.


Member Mutch asked if the employees could take their defined contribution to another MERS municipality. Ms. Smith-Roy said yes. He asked if this policy included Library employees as well and she replied it did not because this was considered a pension benefit and was excluded from the resolution.

Roll call vote on CM-06-05-024 Yeas: Paul, Landry, Capello, Gatt, Margolis,

Mutch, Nagy

Nays: None


4. Approval of Resolution for Adoption of the VantageCare Retirement Health Savings (RHS) Program.

CM-06-05-025 Moved by Gatt, seconded by Margolis; CARRIED UNANIMOUSLY:

To approve Resolution for Adoption of the VantageCare Retirement

Health Savings (RHS) Program.


Mayor Pro Tem Capello asked why they didnít mirror the Countyís program where we have the eleven vesting periods beginning at year 15 as opposed to three beginning at year eight. He asked if the County program would be more advantageous to the City.

Ms. Smith-Roy said there are a few items both in the DC plan and in this plan that were not mirrored exactly because of differences in our previous benefits. For example, currently you could earn a retirement health care plan from the City if you worked 20 years; so thatís what made the vesting period rather than 25 like the County. Also, they have a range of about ten different percentages of vesting and we reduced that to three. Mayor Pro Tem Capello said his question was why. Ms. Smith-Roy said because they wanted it to mirror what they had for current employees. She said they felt that number one to administer the additional number of percentages didnít seem to make sense. The Countyís a much larger organization than the City of Novi, secondly, since 20 years was offered to current employees it made sense to offer 20 years for this program for new employees.

Member Nagy asked how this saved any money at all in the long run. Ms. Smith-Roy said fixed amount was deposited in each employees account on a monthly basis. Therefore, the City wonít be subject to that and the retiree would bear the burden. Member Nagy said so they would take it out of that and Ms. Smith-Roy said she was correct.

Member Mutch said the general structure of the plan was that the employees would contribute on a pretax contribution. Ms. Smith-Roy said no, this would be a contribution by the City. If employees wanted to make contributions it would be post tax. He asked if they had that option of making contributions. She said they do, and it was irrevocable for the lifetime of their employment with the City. He said essentially the City was building accounts for the employees that at the point that they retire, instead of getting retiree health care benefits from the City, they would essentially be relying on these accounts until they die or exhaust the benefit in the accounts. She said he was correct.

Roll call vote on CM-06-05-025 Yeas: Landry, Capello, Gatt, Margolis, Nagy,


Nays: None


5. Consideration of Zoning Ordinance Text Amendment 18.204 to amend the City of Novi Zoning Ordinance, as amended, to increase building height, modify density calculations for mixed use buildings, and allow modified room counts, in the TC-1, Town Center Zoning District. First Reading

Member Paul removed Item #5 from the agenda.


6. Consideration of a request by Soave Corp-Novi, LLC for a variance from Section 11-194(a)(2), which requires that paved streets be designed with curb and gutter sections, to allow the paving of approximately 270 feet of Joseph Drive excluding curb and gutter for the Pinebrook Professional Plaza project (SP 05-21).

Mr. Rino Soave, Soave Corporation-Novi, LLC, was present and said they realized they were in conflict with the ordinance but were doing this for the primary purpose of better enhancing their project, and to add to the marketability and value of their project. They felt that not having the paved surface to the buildings would undermine the value of the buildings.

Mr. Pearson said their proposal to pave the road was over and above the requirement. It was a technical requirement to have the curb and gutter. Mr. Pearson said they felt that the curb and gutter was a better solution that would protect the road to the edge way. In the same token the paving, in and of itself, was better than what was there now, and would be an extra benefit. He said it a mild recommendation with some concern, and he thought they would be very happy to have the road paved as Mr. Soave proposes.


Mayor Pro Tem Capello said he could not support the variance. He thought it was very important to have curb and gutter on all of the streets; not necessarily the storm sewer, although he would prefer the storm sewer. He said he could foresee in the near future that the repairs and maintenance that would have to be done, especially the road edge and failure of the road would cost the City more money than it would be to put the road in. He appreciated the fact that they were offering their private dollars to improve a City Street. Mayor Pro Tem Capello said he asked Mr. Pearson the cost of curb and gutter and he said it was between $4,000 and $6,500.

CM-06-05-026 Moved by Capello, seconded by Paul; CARRIED UNANIMOUSLY:

To allocate up to $5,000 from the Street Fund to contribute towards

the construction of the street as proposed by Soave Corp-Novi LLC,

to the City standards and to deny the request for variance.

Mayor Pro Tem Capello said their concern was the economics, and if the City was giving them the money they could put in the curb and gutter. Mr. Soave agreed and asked if it would require any kind of storm system. Mr. Pearson said the way it was envisioned, whether done by the City or Mr. Soave, was to use open drainage, not pipes, and that the existing swales would be used. Mayor Pro Tem Capello said that was his understanding too. The curb and gutter would drain into the existing drainage ditches that are there.

Mayor Pro Tem Capello asked where the money would come from. Mr. Pearson said from the Municipal Street Fund if Council chose to do this. He said an allocation out of undesignated fund balance for $5,000 would be their chose to have a curb and gutter at the Cityís expense.

Mayor Pro Tem Capello said the motion would be to allocate up to $5,000 from the Street Fund to contribute towards the construction of the street as proposed by Soave Corp-Novi, LLC, to the City standards and to deny their request for variance.

Mr. Soave said that was just up to their proposed entrance and Mayor Pro Tem Capello said yes, it was just how they proposed it.

Member Paul said one of the things she garnered from Councilís previous interview sessions was infrastructure and the importance of it. The other thing Mayor Pro Tem Capello had brought forward on many occasions was how it keeps the residential feel of a neighborhood when there was curb and gutter. She said wondered how they could partner with this developer to do something that he was not required to do and get it to the benefits that Council really wanted to see. She supported the motion and thought it was an excellent idea. She hoped Council could continue to encourage people to do off sight improvements that arenít required, but met the standards that Council was looking for.

Member Nagy said this would serve the residents on Joseph Street well. She asked if there was any plan to do anything further on Joseph Street in the next two or three years. Mr. Pearson said no.

Mayor Landry said he would wholeheartedly support this motion, and thanked Mr. Soave for stepping forward and building a very quality in the City. Mayor Landry felt that when Council saw developers do that, in his opinion, Council should be eager to partner with them.

Roll call vote on CM-06-05-026 Yeas: Capello, Gatt, Margolis, Mutch, Nagy, Paul,


Nays: None




7. Approval of locker room construction, and related agreements with Novi & Northville High Schools for the Novi Ice Arena.

CM-06-05-027 Moved by Nagy, seconded by Mutch; CARRIED

UNANIMOUSLY: To approve locker room construction, and

related agreements with Novi & Northville High Schools for

the Novi Ice Arena.

Roll call vote on CM-06-05-027 Yeas: Gatt, Margolis, Mutch, Nagy, Paul,

Landry, Capello

Nays: None



8. Approval to award a contract for design and construction engineering services for the 2006 Neighborhood Road Program to Fishbeck Thompson Carr & Huber, Inc. for a not-to-exceed study/design fee of $65,958 and a construction engineering fee equal to a fixed 8.88% of construction cost (estimated to be $88,776) for a total of $154,734.

CM-06-05-028 Moved by Margolis, seconded by Landry; MOTION FAILED:

To approve to award a contract for design and construction

engineering services for the 2006 Neighborhood Road Program to

Fishbeck Thompson Carr & Huber, Inc. for a not-to-exceed

study/design fee of $65,958 and a construction engineering fee equal

to a fixed 8.88% of construction cost (estimated to be $88,776) for a

total of $154,734.


Member Nagy was disappointed that, again, it was the middle of May and this was just going out for bid. She said several times Council had asked for this to come before Council earlier. She would not support the motion. She was not very pleased with this company regarding the Nine Mile Road construction and was not sure if the restoration work was finished. She was not pleased with the Eleven Mile Pathway. Also, she was trying to keep something straight

with regard to what the Cityís Engineering Department seemed to be up and down in, and thatís fixed percentage of construction costs. She had extensive experience with JCK with regard to the neighborhood roads, and was quite pleased with them. She said whenever there was a resident issue involved she was quite pleased with Ms. Kapelczakís response and their oversight was very good. She also had a problem with the whole bid coming to Council at once for the following reasons: 1) Soil borings had to be done and would take 10 days, 2) then a study had to be done on what would be done on the streets and return to Council, 3) then it had to be designed, 4) then the bids had to be sent out and get them back, 5) the bids had to be awarded. She was not sure this could all be done by the time the school opened.

Roll call vote on CM-06-05-028 Yeas: Margolis, Landry, Capello, Gatt

Nays: Mutch, Nagy, Paul,

Motion failed for lack of five votes

CM-06-05-029 Moved by Nagy, seconded by Capello; MOTION FAILED:

That the bid for the 2006 Neighborhood Road Program be awarded to

JCK and Associates for a total estimated fee of $155,275, and that

they do the asphalt portion this year to be completed by the

beginning of school in the fall, and bid the concrete out but defer the

concrete portion of this project until the spring of 2007.


Member Mutch said in the budget just approved there was $1.5 million for 2006. He asked what would be allocated for construction costs. Mr. Pearson said when the proposal process was started earlier in the year, it was before the budget and they knew those numbers, so $1 million was presented to all the companies so they would have the same thing to upgrade and base their estimates on. He said the advantage was that the percentage would go off of

whatever the actual was. He said they would be ordering up the larger program based on the budget that Council adopted tonight. Member Mutch asked how much Council was expecting to spend on construction. Mr. Pearson said $1.5 million less engineering, so it would be approximately $1.2 million or $1.3 million. Member Mutch said that was an important issue for him because one of the things he was looking at was the issue of the fixed percentage for construction. JCK has the second lowest fixed percentage and dollars and cents wise thereís a $500 difference based on a million dollar construction cost. Construction costs would be above a million dollars, and that fixed percentage would work to the Cityís advantage in terms of a bottom line. He appreciated Mr. Hayesí information but didnít follow the rankings in terms of how the scores were arrived at on the matrix. He asked him to explain Anderson Eckstein as an example.

Mr. Hayes explained the decision matrix, which help them arrive at a total cumulative score for each firm. There are five different criteria and each criterion was weighted. He pointed out that the engineering fee had the highest weight and that was consistent with all the other engineering proposals that were evaluated this year. It had a weight of 7. The evaluation of approach, schedule and proposed staff had a weight of 5. Evaluation of statement of understanding had a weight of 5. The analysis of subjective statements was weighted a 3 and evaluation of past performance was also weighted a 3. He said each evaluator had 15 points at his disposal to award across the board. The firm with the highest rating received a 5, and

then down to 1. When he saw firms that were tied he would split the score. He said those rankings, 1 through 5, are multiplied by the weight and that would give the total points awarded. He explained the Anderson Eckstein compilation. Member Mutch appreciated the information. He said he would support awarding the bid to JCK. He said the top three were all close and he was looking at the bottom line as well and what they were trying to do to get the most bang for the buck. He thought that would be where they would see a difference with the larger program than what was projected because they did have the second lowest fixed percentage of construction.

Mayor Pro Tem Capello felt it was his job to re-qualify them if theyíve had changes to their structure. He asked when they went back to this subjective ranking standard again. Mr. Hayes said as far as he knew it hadnít changed since December 20, 2004 when the qualifications based procedure was approved by Council. He said the QBS procedure took into account not only the fee but the other criteria that he saw on the ratings. Mayor Pro Tem Capello said it was his understanding that they were done with the ranking system. He said they have qualified bidders and he Mr. Hayes thought there was someone on their staff that couldnít handle it or the project this was confusing and way to subjective. It allowed too much for personal opinion of individual employees and Council was getting away from that. Member Nagy agreed.

Mr. Hayes said the reason Council approved this system was because every project was different, every firm was different, and even though they were qualified in 2004 there are several firms on the list that have had tremendous turnover and donít have the same staff available. Mayor Pro Tem Capello responded this ranking system was never approved by Council and it was Mr. Hayesí obligation to come back to Council and advise Council that a firm had changed and they needed to be re-qualified. He said Council had always left the door open to him if he thought a firm could not handle a project.

Member Gatt asked Mr. Hayes if any of these companies could fulfill their contract before the schools were back in session. Mr. Hayes said it would definitely be a fast track design. They had identified in the scope of work given to the consultants and what they have reiterated in their proposals was that they would be looking at discreet segments that might need the full reconstruction versus a repaving or rehab. He said that was why they structured it so thereís a study phase where they would make a determination of what was necessary on this road based on the borings and the data from the borings. He said there was no work being done and didnít anticipate getting the bid. This had been a moving target because they have been out of road bond money and they didnít know how much money would be available in order to prepare an RFP.

Member Margolis noted she researched the qualification based system and found some terrific reviews of the system. It was a national standard for looking at engineering services, and after her research she found it was a high quality standard to use. The engineering portion of construction was actually the lowest part of construction. The concern was that if the engineering wasnít done well then the construction costs could increase. Mr. Hayes agreed. She would not support the motion because part of the motion was to defer paving peopleís streets until next year. She did want to tell the residents whose greatest concern was their crumbling streets that they would not be done until next year. She believed in supporting professional staff doing what they do best. She didnít know engineering services and respected Mr. Hayesí expertise in that area. She would like staff to give Council the qualification score of the firms awarded contracts and the percentage of the construction costs and how much those might have gone over the budgeted amount. She would like to see what the correlation was. If there was a high correlation between highly ranked firms and lower construction costs then that says the system was worth keeping. She said everything she had seen so far said yes, but she would like to see that. Mr. Hayes said the best measure of performance of an engineering firm was what was the dollar value of the change orders added to the contract. He said things would have to be pulled out that no one would have foreseen.

Mayor Landry said he could not support the motion because he could not defer concrete in the neighborhood streets for another year, and there was no magic in when school buses roll. He thought there would be time to do construction after late August. He said with respect to this system Fishbeck, Thompson, Carr and Huber was ranked #1, and they are the cheapest, and he asked why would Council not go with them. He said on the very next issue, JCK was the cheapest so under the system they should get the next contract. If thereís a system it had to be followed otherwise why have a system. Mayor Landry said Council pre-approved seven engineering firms for a two year term, but that doesnít mean that every job they are qualified to do they would do the same. You have to find out how they would do the job and how they would do it would change because that was the difference in the ranking. She thought the ranking was necessary and if Council wasnít going to follow the system then they should get rid of the system. She said the difference in the score was also significant as Fishbeck, Thompson, Carr and Huber was 408 and JCK was 263.

Member Paul understood both sides. She thought Fishbeck and JCK had both done good projects. She thought the project had gone smoothly. However, there were some problems in Addington that called and JCK really delivered well on those problems. The one thing she wanted to talk to Mr. Hayes about was that some of the roads that they are proposing to do construction on have recently been paved. She wanted to make sure there would be no gravel haulers or dumpsters on them that weigh a significant amount on brand new roads as she didnít want problems with the new roads. She asked if it was possible to use smaller trucks and more trips. Mr. Hayes said they asked the consultant prepare a construction routing plan so the impact was minimized to all streets. They were asked to use the main arteries as much as possible. Mr. Hayes said they couldnít limit the contractor and the type of equipment heís allowed to use or the price would be escalated because efficiency would be decreased. She asked if they could make sure they werenít on the brand new roads and he said they could do their best with the routing plan.

Mayor Pro Tem Capello asked Council tried to do an amendment to the Ordinance to require that all new neighborhood streets were all curb and gutter and get away from the concrete that seemed to cause us numerous problems. Mr. Pearson said no, what Council did was change the Design and Construction Standards so how they did if they chose asphalt or concrete. He said he didnít think Council could preclude one of those construction measures, but Council said if they were going to do concrete itís being done to this standard. Mr. Hayes said the previous standard called for full depth concrete directly on the native soil, which if thick enough t might perform and it might not. He said his experience was that it didnít perform very well, because Novi had expansive clay soils that cause it to heave and break up. So the Design and construction standards were changed to include a foot of base material underneath the concrete, and that was more than adequate to handle just about anything out there. Mayor Pro Tem Capello was concerned about the wear and tear and the maintenance of it. He wanted to see it come back before Council again. He asked if it made sense to replace the concrete streets with asphalt. Mr. Hayes said in some cases it does. They replaced Center Street with asphalt last year instead of concrete and everyone seemed to be happy with it. He asked if there was a reason that these proposed concrete streets were being replaced with concrete instead of asphalt. Mr. Hayes said in some cases it was a matter of aesthetics as there are some neighborhoods that want to keep their neighborhood character the same. Other than that there was really no rational between selecting concrete or asphalt.

Mr. Pearson said the concrete streets proposed a number of them are sectional and that was how the City would save some money to do some of the additional streets identified. These arenít total block to block necessarily. Also, Center Street was different because they called it a neighborhood collector and that was how they got into switching from concrete to asphalt and it also matched up with Northville to the south. He said itís a combination of just doing the bad sections versus the whole street. Mayor Pro Tem Capello agreed with Mayor Landry that he didnít want to put off some of these streets into the next season if they didnít have to. He asked for a friendly amendment that all of the streets be done during this season as time and weather permits. Member Nagy accepted the friendly amendment.

Member Mutch said he had run some numbers on the cost comparison between the $1 million estimate and the $1.2 million they were talking about spending. Between the two proposals they were discussing it was a $15,000 difference due to the difference in the fixed percentage of construction. He said Meadowbrook Glens had both concrete and asphalt streets, he understood neighborhoods wanted to maintain uniformity but if a neighborhood was comfortable moving to that Council could discuss it with them. They might want their street done soon and completely versus done in a patchwork fashion.

Member Nagy said she agreed with Member Capello as she had talked with him about this ranking before.


Roll call vote on CM-06-05-029 Yeas: Mutch, Nagy, Paul, Capello,

Nays: Landry, Gatt, Margolis

Motion failed for lack of fifth vote

CM-06-05-030 Moved by Capello, seconded by Paul; MOTION CARRIED:

To award the contract to Fishbeck, Thompson, Carr and Huber,

and all streets proposed are to be done as weather and time


Roll call vote on CM-06-05-030 Yeas: Paul, Landry, Capello, Gatt, Margolis,

Nays: Nagy, Mutch


9. Approval to award a contract to JCK & Associates, Inc. for wetland mitigation monitoring for the Haggerty Regional Storm Water Detention Basin for the purpose of monitoring and reporting as required by the Michigan Department of Environmental Quality for a not-to-exceed fee of $17,400.

CM-06-05-031 Moved by Nagy, seconded by Paul; CARRIED UNANIMOUSLY:

To award contract to JCK & Associates, Inc. for wetland mitigation

monitoring for the Haggerty Regional Storm Water Detention Basin

for the purpose of monitoring and reporting as required by the

Michigan Department of Environmental Quality for a not-to-exceed

fee of $17,400.


Member Mutch asked if the City or JCK submitted the report to the MDEQ. Mr. Hayes said it was formally submitted by the City. He said they would receive a draft each year, review it and make their comments, revisions and they would submit it. Member Mutch asked if that was in the proposal that they would submit it to Mr. Hayes for review. Mr. Hayes said that was his understanding and how they typically dealt with any reports from consultants. Member Mutch said the other proposal talked about reporting any conditions that would require attention from the City over the course of wetland mitigation. He didnít see that language in JCKís proposal and asked if he felt comfortable that would be addressed within the scope of the proposal. Mr. Hayes said he was and that they would also have their construction coordinator out during the annual inspections with a JCK person to serve as a second set of eyes to make sure if anything didnít look right it would get reported and addressed by the City. Member Mutch would support the motion.

Mayor Pro Tem Capello asked if the form that JCK used for submittal was pre-approved by the MDEQ. Mr. Hayes said there was no formal template that he was aware of. The regulation would tell what was to be in the body of the report, the minimum requirements that had to be reported on. As long as those requirements were met then that should meet MDEQís satisfaction. He asked if he would confirm that before it was sent out and Mr. Hayes responded he would.

Roll call vote on CM-06-05-031 Yeas: Paul, Capello, Gatt, Margolis, Mutch, Nagy

Nays: None

Absent: Landry


10. Approval of an Ordinance Amendment 06-97.02 to Chapter 4, Amusements and Entertainments, Article III, Pinball Arcades and Machines of the City of Novi Code for licensing procedure for pinball arcades and machines. First Reading

CM-06-05-032 Moved by Nagy, seconded by Mutch; CARRIED UNANIMOUSLY:

To approve Ordinance Amendment 06-97.02 to Chapter 4,

Amusements and Entertainments, Article III, Pinball Arcades and

Machines of the City of Novi Code for licensing procedure for pinball

arcades and machines. First Reading

Roll call vote on CM-06-05-032 Yeas: Landry, Capello, Gatt, Margolis, Mutch,

Nagy, Paul

Nays; None


11. Consideration of Ordinance No. 06-7.01, an Ordinance to amend, Appendix B Franchises, Article II of the City of Novi Code of Ordinance for the proposed Consumers Energy Company Gas Franchise Ordinance. First Reading

CM-06-05-033 Moved by Mutch, seconded by Nagy; CARRIED UNANIMOUSLY:

To approve Ordinance No. 06-7.01, an Ordinance to amend, Appendix

B Franchises, Article II of the City of Novi Code of Ordinance for the

proposed Consumers Energy Company Gas Franchise Ordinance.

First Reading


Mayor Pro Tem Capello asked if this was an exclusive franchise and Mr. Schultz said it was not.

Roll call vote on CM-06-05-033 Yeas: Capello, Gatt, Margolis, Mutch, Nagy,

Paul, Landry

Nays: None


12. Consideration of offer from Catholic Central High School for tree replacement associated with the Woodland Permit.

Mr. Pearson stated he spoke with Catholic Central when they were present earlier and they requested that this item be withdrawn and they did not intend to bring this back. Mayor Landry said then there would be no change in their obligation to replace the trees.


13. Interview dates for City Manager

Mayor Landry said they had originally set this Thursday as a proposed date, and it was his understanding that it was now necessary to move that date. Member Mutch said he would be out of town for a week beginning May 16th. Member Paul suggested keeping the date on the

11th as everyone could make it except her. She said she would get a tape and would give Council members some questions to ask for her. Mayor Pro Tem Capello said he might have to be in front of the Livonia City Council for part of the interviews but didnít mind reviewing tapes.

Mayor Landry said the City Manager interviews are this Thursday, May 11th at 7, 8 and 9 PM.





There being no further business to come before Council, the meeting was adjourned at

10:41 P.M.

________________________________ _____________________________

David Landry, Mayor Maryanne Cornelius, City Clerk


________________________________ Date approved: May 22, 2006

Transcribed by Charlene Mc Lean