SPECIAL MEETING OF THE COUNCIL OF THE CITY OF NOVI
 SUNDAY, APRIL 30, 2006 AT 10:00 A.M.
COUNCIL CHAMBERS – NOVI CIVIC CENTER – 45175 W. TEN MILE ROAD

Mayor Landry called the meeting to order at 10:00 a.m.

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

ALSO PRESENT: Clay Pearson, Interim City Manager

Kathy Smith-Roy, Finance Director

Rob Hayes, City Engineer

Benny McCusker, Director of the Department of Public Works

*Member Nagy arrived at 10:04 a.m.

*Member Paul arrived at 10:08 a.m.

Kevin Grobe, 42185 Park Ridge, was present representing Meadowbrook Glens regarding sidewalks as a matter of public safety, health and welfare. He thought this was something that would not just impact Meadowbrook Glens, but also the entire east side community. He said a 369 meter section of sidewalk was missing on the north side of Ten Mile between Hampton Hill Road and Novi Road. It is a piece of sidewalk that is the interconnecting link that’s missing between all of the east side neighborhoods, which includes the new neighborhood across the railroad tracks, the apartment complex, Meadowbrook Glens, Orchard Hills, Willowbrook 1,2 and 3, Willowbrook Farms, and anything down to the Jaguar dealership. He said none of those neighborhoods have the ability to access the public services that the neighborhoods on the west side of Novi Road have access to by a sidewalk on either the south or north side of the road. Mr. Grobe said he had asked the Planning Department if there would ever be plans to connect the sidewalk. He said between Novi Road and the J.S. Trudeau building there is a sidewalk. Then, there is a piece missing between there and the railroad tracks. On the other side of the railroad there are sidewalks because of the new neighborhood, and from there to Hampton Hill there are no sidewalks. He said none of the residents of all of the neighborhoods have the ability, unless in a vehicle, to access the High School, the Library, Ice Rink, shopping plazas, medical facilities or anything along Ten Mile Road. Having to drive to events caused more vehicle congestion because there was no way a child could safely go to these places on a bike. Mr. Grobe asked Council to consider, over and above some of the other sidewalk projects, interconnecting the east side of Novi to the west side of Novi and Ten Mile Road. He said there are sidewalks along Nine Mile even though there wasn’t near the residential along the Nine Mile stretch as there was along Ten Mile. He had discussed this with the Police Chief and he acknowledged that he was responsible for the total safety of the residents of the City of Novi, but he did recognize that the stretch along Ten Mile was extremely dangerous. He said if the children are trying to go to the ice rink or wherever there was no safe haven. They are either walking through the swamps or the dirt piles, and the traffic is whipping by. He would hate to see someone get hurt. Mr. Grobe walked the area with a meter wheel and it is 369 meters. He didn’t think it would be very costly to offer so much benefit and safety for so many Novi residents. He said there was no other connection and he would be e-mailing Council his proposal.

1. City Council discussion and decisions regarding the plan priorities

Mayor Landry thought the biggest item would be the funding of the unfunded legacy costs for retiree and suggested that this item be discussed first.

Member Margolis felt this was an essential item. She said Council had been trying to address this from both ends; to fund the unfunded legacy costs that had already accrued, and the other to look at the kind of liabilities being taken on for the future. She said it was essential to do both, and that they are in an unusual position this year to be able to put $1 million away towards that unfunded liability. She was not willing to leave that liability to future Councils to grapple with.

Member Paul agreed with Member Margolis, but said she was looking for a very specific long range plan regarding how much would have to be put away next year. She asked what the long term goal was over the next 10 years. Ms. Smith-Roy responded that the long term goal for that fund was based on an actuary report. So each time an actuary study was done it would be adjusted taking into consideration the current assumptions that were available at that time. She said from now until 2007 continuing along the same mechanism that had been suggested by the actuaries, and when a new report was done the information would be updated, and they would be given new percentages. She said the report would provide recommendations of a percentage of payroll to be put in that fund. Since payroll increases each year with salary increases, etc., the actual amount contributed also increases. She said they had taken that into consideration in their assumptions. She said from here forward they would use the actuary study as a guide and contribute 100% of what they recommend. Member Paul asked how often the actuary study would be done. Ms. Smith-Roy said it would be done as required by the GASB, which has set the range at 3 to 5 years. She said it was very expensive to do it annually. Ms. Smith-Roy said unlike the pension actuary report, health care costs are more challenging to predict and the assumptions that go with them. So they were recommending that they be done only as required. Member Paul asked if she would be able to tell Council how often they would have to do that according to GASB and how much it would cost. Ms. Smith-Roy said yes, the last two reports done were $11,000 and $15,000 respectively, and they would do it again around 2007, and then again in 3 or 5 years based on their recommendations. Member Paul said she would like to have that plan. Ms. Smith-Roy said one of the things Council did was to allow them to use MERS as an investment vehicle, and in doing such if we utilize their actuary we get a 50% fee reduction on the report by having money invested with MERS, which Council approved when brought forward a year ago. Member Paul was looking forward to having the money set aside, paying the retiree health down and then continue on that same path. She was concerned with a decrease in new growth as the Building Department had been down in actual building reviews. She credited former Mayor Lou Csordas because he was the one that brought that forward to Council, and she thought it was very well done and appreciated his knowledge while he was Mayor.

Member Nagy also thanked former Mayor Csordas for making Council really aware of this. It was one of his finest moments. Member Nagy asked what the percentage of funding was with the million dollars. Ms. Smith-Roy said it would add a little over 5% based on the 2002 report.

She said a computation would be done in July of the amount that has been contributed to date that would show the percentage of the estimated liability at that time. Member Nagy asked if there was only about 15% funded last year? Ms. Smith-Roy replied the 15% funded was based on the 2002 actuary report, and they have made strides to improve that. She asked how much was put in 2003 and 2004. Ms. Smith-Roy replied they put in the amount required and in 2005-06 an additional $268,000 was put in. In 2005-05 $624,000 was contributed and 2003-04, $485,000 was contributed and in 2002-03, $466,000 was contributed. Member Nagy thought this was great and would support the motion.

Member Mutch said this was the first year 100% was paid, and if a 100% had been paid since 2002 we would have paid an additional $721,000. He still felt there were other items in the budget to be addressed, but had listened to the Council members and recognized there was support for this million dollars, and if that was Council’s consensus he would support it.

Mayor Pro Tem Capello said this needed to be addressed, but it was important to understand that this wasn’t a debt created by our taxpayers. He was concerned with contributing $1 million, and would be happy with $700,000. He said these taxpayers are contributing their tax dollars and would like to see them get more direct services back out of their tax dollars. He said to take that money to pay a past debt or to bring that account closer to being current was enough of a contribution from the taxpayers. He would rather take that $300,000 and directly give it back to them by way of contributing to the parks, sidewalks and neighborhood roads. He stated he would support the motion, but preferred the $700,000 figure.

Mayor Landry stated he was in complete support of the $1 million. He said it was a problem they inherited and it had to be dealt with, and it was an obligation owed to the taxpayers. He said Council had to get a hold of this and if they didn’t start now it would be more difficult for Councils in the future.

Member Nagy asked if this unfunded liability was not funded, would a tax increase be needed in 10 years because there wasn’t enough money. Ms. Smith-Roy said it was a required liability as a result of contracts, and would come first ahead of other expenditures. Member Nagy said then if we didn’t have enough money they would have to reduce other areas of the budget, and Council would then have to cut items from the budget. She asked if they would consider going to the taxpayers for an increase in millage. Ms. Smith-Roy said that would be an option and a policy decision of Council at that time. Member Nagy agreed with Mayor Pro Tem Capello, but didn’t want to put future taxpayers in that position. She would support the motion.

Nays: None

Member Margolis stated staff provided Council with a summary of their priorities were regarding changes in the budget. The information from staff was excellent, logical, why they set their priorities, etc. and she commended the staff.

primary signs. Also, $75,000 for the installation of four signs at 12

with the Beautification Committee.

Member Margolis said the Economic Development Coordinator had been her soap box since being on Council. However, she believed that what supervisors and manager’s need to have the ability to set their staff as they see fit to get the job done. She said she would support adding, once a new City Manager was hired, some type of position to do economic development if that was necessary. She would like the new City Manager to be able to configure the staff the way they thought was appropriate.

Mayor Landry asked Member Margolis to list the changes for the audience and Council was clear on what the motion was.

Member Margolis said there was a change in estimate from the City Center fire alarm system that was included in the previous budget, however the estimate for that work was lower than expected so that reduced by $47,700. There was also a reduction in the estimate for the DPW

Facility and Grounds Master Plan Study adding $23,150 to the budget. She said $20,000 was added to Site Plan Review to process, analysis and recommendations. She said deferring the planning interns reduced by $15,000. She said added was entry way signage for $153.000, and an additional transfer to Parks, Recreation and Forestry for a portable sound system, and extension of senior van transportation hours of operation added $35,756. She said the total of additional funds required was $122,906.

Member Margolis said it would change the Major Street Fund budget to add construction on Beck Road for an alternate project of $586,000, defers construction on 11 Mile rehabilitation conversion to asphalt that reduced it by $250,000, and add a transfer from the Municipal Street Fund revenue line item of $350,000.

Municipal Street Fund Summary of Changes were to defer construction to traffic signals at 11 Mile and Wixom Roads and Beck and Cider Mill, which reduced by $250,000, and add a transfer to the Major Street Fund of $350,000.

The Parks, Recreation & Forestry Fund Budget was to increase the transfer from the General Fund of $35,756, add a portable sound system for $10,000 and increase the senior van transportation hours of operation $25,756.

Member Paul said she didn’t have a problem with the Civic Center fire alarm system, the DPW Facility Master Plan, but she would like to wait on adding the Site Plan Review to the Process Analysis. She said Council doesn’t know who the City Manager would be, we have 16% in our

Rainy Day Fund, and if Council would like to do this, it could be done after the new City Manager reviews the entire employee operations.

Mayor Landry suggested that as comments are made Council members request a friendly amendment, and if it was not accepted Council could discuss it and come up with something they had consensus. Member Paul understood but said she would like to look at the streets as one motion, major and local. She agreed with deferring planning interns, and deferring the

Economic Development Coordinator as she thought the new City Manager should address that. She said she was in support of doing some of the entryway signage, but would like to spend $50,000 and chose only 4 locations. She suggested asking the Chamber of Commerce to assist Council, and see if they would do some funding also. She thought the portable sound system and the senior van increase in hours was wonderful. She said regarding the project for Beck Road she supported doing the $586,000 for a five year stint; that way the construction for Providence Hospital would be completed and they wouldn’t be ripping up a brand new road. She said, regarding Beck Road, that there were several long term issues that needed to be addressed. She asked what would be done with the 10 Mile and Beck corner, as we only have one area when going westward on 10 Mile approaching Beck. Member Paul said that is the only area that makes the right hand turn. There are three other segments that do not have right hand turn lanes, and they all require land acquisition. She said that was a concern of hers because that has been a contention for the developer that owns that property, at least on two corners and she wasn’t sure about the third corner on the south east corner of Beck and Ten Mile. She asked for clarification. She said deferring the 11 Mile rehab was a good idea as well as deferring traffic signals at 11 Mile and Wixom and Beck and Cider Mill. She understood those but would like to do them as a second motion.

Mayor Pro Tem Capello felt the Economic Development Coordinator was absolutely necessary, but agreed it should wait for the new City Manager. However, given the atmosphere that Council had been functioning under for the last couple of years, freezes in hiring, he wanted to make it clear to the new City Manager that this was a concern of Council’s, and he wanted this back in the budget for the new City Manager to make a decision and move forward.

Member Nagy agreed that the new City Manager should have the ability to hire staff and needs time to see what’s going on in the administration. She asked if the EDC monies could be put in Rainy Day Funds and taken out later as necessary. Ms. Smith-Roy said yes, and if the next City Manager wanted to fund that position it could be done from Fund Balance with an appropriation of budget money. Member Nagy agreed with the removal of $20,000 for the Planning Department Study, and she would like to see what the results are of the Building Department Study, and how good these people are, and what information would be garnered from that study. She was not in favor of $153,000 for signage. She would like to see 4 signs funded at a total of $44,000 with another $6,000 for landscaping at 8 Mile & Haggerty, 12 Mile & Haggerty, Novi Road and I- 96 interchange, and should look at the Chamber of Commerce partnering with the City. The City can add more signs later. She would support the motion with those changes.

Member Mutch said there would have to be some amendments, because so far they had reduced or saved $85,850, we have a motion for $122,906, and no indication where the rest would come from. He did want to see some signage but agreed with Member Nagy’s suggestion, and would also like fewer signs. Regarding the EDC, he saw both sides, and

thought it was an important position in terms of the functions that person would do. He thought they needed someone who was accountable for that specifically, and agreed with that coming back to Council in the future. He asked Mr. Auler if there would be any financial assistance for the sound system. Mr. Auler said they would reallocate the $25,000 currently used to rent the

equipment and a sound person towards the purchase. Then they would meet with the Friends Board to ask them to consider a $5,000 contribution. The total cost of the system would be

$35,000 to $40,000. Member Mutch said he would like to have $15,000 in the budget to make sure it was covered not putting them on the spot in terms of making up the difference. He said $15,000 plus the $25,000 would give them the money needed to purchase the system. Member Mutch said he would like to deal with the street items separately with separate motions.

Mayor Pro Tem Capello said he thought Member Mutch was looking for motion to get this off dead center. He offered a friendly amendment irrigation to reduce the entryway signage from $153,000 to $75,000. The total amount suggested, without landscaping, lighting or was about $210,000. To bring that down to $75,000, which has to include the landscaping, lighting and irrigation, it was reasonable to start with the four major primary signs. Member Margolis accepted the amendment. She thought one of the mistakes Council made was not working with our commissions and boards. She asked if they could talk to the Beautification Commission and advise them that this was an area they would like them to be involved in.

Member Paul said she would want to stay with the monument signs and within the sign ordinance. Mayor Landry thought she meant "the Primary Entry Sign". She would want to know if it met the ordinance and the cost of the signs. Mayor Pro Tem Capello thought the cost was $11,000 without lighting, irrigation or landscaping. He thought the four signs, lighting irrigation and landscaping could be done for $75,000 for four signs. She asked if Tree Fund money could go toward the landscaping around the signage. Mr. Pearson said that might be a stretch. He felt it was more of a General Fund item; $11,000 for the hardware itself, buy the plant materials in cooperation with the Beautification Commission and let them help in design and installation of it. Member Paul said if there was irrigation and Tree Fund money that might be a suggestion on how to landscape more in that area, plus there are the Catholic Central trees to be put in our City. She asked if England’s, Glenda’s and Great Oaks landscaping companies might be asked to help do some of the landscaping as a promotion. The most important thing the Chamber wanted was for the City to look viable to bring in more business, which helps support the businesses currently located in the City. She thought any time they could stretch the money and do more signs would be a great idea. She liked the locations of 12 and Haggerty, 8 and Haggerty, Novi and I-96 and Beck and the Interchange. She would approve the amendments.

Mayor Pro Tem Capello said it appeared that Council wanted to discuss the roads separately. He asked if the 2006-2007 Major Street Fund Budget and the 2006-2007 Municipal Street Fund Budget improvements could be taken out of the motion and leave in the 2006-2007 General Fund Proposed Budget and the 2006-2007 Parks, Recreation & Forestry Fund Budget. Member Margolis agreed.

Member Paul suggested taking the Parks, Recreation and Forestry Fund Budget out also because there was a suggestion about the sound system, and Parks and Recreation could be dealt with separately.

Mayor Pro Tem Capello said all he wanted to do was take the roads out to be addressed separately, that was what the friendly amendment was. Member Paul accepted the amendment.

Member Mutch said the sound system was under the General Fund Budget and also in the bottom section, which was an explanation of where it’s going. Member Mutch said $10,000 was in the budget and Member Mutch thought it should be $15,000. Mayor Pro Tem Capello made a friendly amendment to add another $5,000 in for the portable sound system.

Member Margolis didn’t have a problem with that and accepted the amendment. Mayor Landry said the seconder needed to accept the amendment before moving on.

Member Paul said it sounded like it could be done for $35,000 and she didn’t want to keep spending, and wanted to curb that, and ask the Friends to contribute as she would like to keep it at $10,000. She did not support the amendment.

Mayor Pro Tem Capello said he was not going to make a request or friendly amendment to take out the site plan review analysis for $20,000 even if it went into General Fund and Council took it back out, the money was still there. He wanted to send a message that this needed to be done, and should have been done years ago, and he wanted to keep it in the budget. He said he would like to add the Economic Development Coordinator back in a $69,951. If Council doesn’t spend the money and if the new City Manager decided that he doesn’t need that position the money would stay in the General Fund.

Member Margolis asked if there was a way for Council to designate an amount of money that would be part of Fund Balance that would not be a line item for a position. She asked what the difference would be between those two things. Ms. Smith-Roy replied that Council was allowed to designate a portion of Fund Balance for any specific purpose out of any of the funds available. For example, this was done in the Drain Fund when a special designation was set up for the dredging of Village Oaks. She said if the position were filled they would still need a budget amendment to do that and by doing a designation all it would do was provide an intent, which a future Council could change. Member Margolis said she so strongly believed in the importance of a City Manager being able to design their staff in a way that fits their process. It seemed like a fine line, but it was intent without prescribing or micro managing who should be there and how it should be configured. A new City Manager might want to designate that responsibility to an assistant City Manager and use another position for another purpose. She rejected the friendly amendment.

Mayor Landry said he could support all these changes, but with respect to the sound system he appreciated the support of Council to get that done, and thought it would help the theatre program and the entire Parks and Recreation program. He thought it would encourage young people to participate in music, etc. However, he wanted to keep the pressure on the Friends of the Theatre to donate the $5,000, and if Council funds this there would be no reason for them to give the $5,000. He wanted to budget the $10,000 and go to the Friends of the Theatre and ask for the $5,000. He would not support the amendment. He could support all these changes.

Member Mutch said, from the baseline, Council has added $20,000 for site plan review, $35,756 for senior transportation hours and sound system, $75,000 for entryway signs, which is a total of $130,756. He said Council had saved $85,850 from the fire alarm system, the DPW Facility Master Plan and the planning interns. Member Mutch said Council was approximately $45,000 short so he would not approve a motion until he knew where the $45,000 was coming from. Mayor Landry asked if he counted the $66, 951that wasn’t being spent, and Member Mutch responded that it was not in the budget.

Mayor Landry asked if the $20,000 for the site plan review was still in and was informed it was.

Member Nagy said to take it out.

Member Paul requested a friendly amendment to remove the $20,000 for the Planning Review Process.

Member Margolis was not in favor of the amendment. She thought this was an investment in future cost savings. The reality was if the process was improved it would save money down the road. She believed the reason it was only $20,000 was if it was done in conjunction with the Building Department process analysis they would save money because they would not be bringing someone back in to do that, because the handoffs between those two processes are so close.

Mr. Pearson said Member Margolis was correct. This was discussed in the first session regarding how they made a big effort toward the building permit process and the separate but related site plan review process. They did, as Council suggested, receive a quotation that would be on the next Council agenda to solidify how to be funded out of this budget. Mr. Pearson said that process was started last week and they took advantage of the fact that they were in town and when they met with the developers, builders, contractors and the staff they asked a lot of questions. They would be the next step and mapping out the existing process for both building permits and site plan reviews. He said they were glad Council was looking at them at the same time. He felt the timing was right as Novi goes into its next boom cycle. He asked Council’s strong consideration to leave this item in the budget and take advantage of the economics of it.

Member Margolis said her understanding was that they were at a 16% Fund Balance because they were leaving 2% in the Fund Balance for contingencies for negotiations and other things. Mr. Smith-Roy said the 16% was for other items that were pending, with regard to the $45,000 it’s approximately one tenth of 1%. Member Margolis said then we have a 14% Fund Balance and then Council put a 2% contingency in them. She didn’t think $47,906 would make a huge difference on Fund Balance. They would still be maintaining a very high Fund Balance if this money was spent. She rejected the amendment.

Member Mutch stated he understood the discussion about the Fund Balance, but he thought they needed to account for the dollars, and it might be one tenth of one percent but we are spending millions of dollars above and beyond last year’s budget and he didn’t want it to look like Council was just throwing around dollars.

Member Mutch asked if Council could do a formal motion. Mayor Landry said if a friendly amendment was rejected it would need a motion to formally amend the motion.

Mayor Pro Tem Capello said the Community Perception Study was not a part of the motion on the table.

Member Mutch withdrew his motion.

Member Mutch said he thought their was some benefit to doing this, but also felt it needed to be funded, and said if someone wants to come up with a way to find an additional $47,000 he would listen to that. At this point he was trying to get Council to a balance and based on the items funded so far he would not pull the senior transport or the entryway signs.

Mayor Pro Tem Capello said he would not support the motion because he thought it was important. He said he would support the next motion, which would get them within $20,000 and then wait for Ms. Smith-Roy to look over and bring it back to Council

Member Paul noted this was not part of this motion. She suggested saving $42,000 by pulling the Compensation Study of $20,000 and the Results Oriented Strategy for $10,000. She also had some questions about the Employee Assistance Program of $12,000, and that would all total $42,000.

Member Gatt said he could not support this motion based on what Mr. Pearson said, but would support the next motion she would make.

Member Nagy said there were areas she would like to reduce too. She said in Community Relations there had been an awful lot of videos, according to residents, and she would like to reduce that budget to $50,000. If we take the Community Perception as $24,000, the printing of the calendar could be reduced to $20,000 and raise the cost of advertisements, and for that department it would be $57,800. Also, reduce the cable production to $50,000, which would save $16,950. Then take away the Community Perception Survey saving another $24,000.

Mayor Landry asked if there was any further discussion on the formal motion to withdraw from the prior motion the Site Plan Review Process.

Mayor Landry said they have Member Margolis’ motion as amended pursuant to friendly amendments, and asked if there was any further discussion on that motion. Clerk Cornelius was asked to restate the original motion.

Ms. Cornelius said the original motion was:

To accept the summary of potential changes to the proposed budget. It was amended to change the amount of the entryway signs to $75,000, remove the road portions.

Member Margolis stated she would not support the motion. She said this sounds like a fluff item but in her view it was not. The survey would allow Council to understand what it was the community wanted from them. Market driven businesses are fond of the term adding value and the most successful ones are those that add value that was wanted by their customers. She said that was why they made a profit. Member Margolis said they are not market driven so they don’t know what residents want from them. Therefore, we end up in sessions like this discussing money based on our own viewpoints. She thought the survey would allow them to focus resources on the things that the citizens want. The only way Council knew what they wanted was based on their experience and the people they talk to in the community. She didn’t think it was an appropriate way to focus resources. It would allow Council to focus resources on things citizens want rather than spend X amount of money on this that has no value to our citizens.

Member Paul agreed to remove it as there have been a lot of these studies done which are now on shelves and they were a lot of money. Of the few people who responded the number one thing they wanted was no more strip malls and more trees. Out of 700 surveys 207 came back. She suggested surveys be sent out in the tax bills as everyone received those, it could also be done on the website, etc. without having any money expended. Someone could be designated to determine what the information was, and then disperse it to Council.

Member Gatt concurred 100% with Member Margolis in the importance of the survey. However, he also concurred 100% with Member Paul. He didn’t believe that the public would respond in the numbers Council would need to get a true sense of what they wanted. It would be $20,000 that won’t be well spent; however they did need to find a way to poll the public. Therefore, he could not support this.

Member Nagy agreed with the survey not producing many responses. She felt there was a greater need to put the $25,000 away. Last year Council worked hard on the budget and saved $1.5 million. She respected Member Margolis’ comments. She requested a printout of the studies done by the Planning Commission over a period of five years, and Mr. Pearson gave her the information on a 10 year period. She said it seemed like they were funding the same studies all the time but never utilizing what was already there. She said that alone told her this was money that could be spent somewhere else or saved.

Member Mutch said the Community Perception Survey took place every two years, and if you as a Council member have values or actions that don’t reflect the desires of this community, you get to join the ranks of former Council members. He thought Member Margolis raised some valid points, but he was approaching this budget that one of his goals was to save $400,000 for a millage reduction. We are still above and beyond even what they saved and he was trying to identify areas that could be revisited next year if they were fortunate to have additional funds next year. This year it falls into one of those things they want but it was not a need. Member Mutch said this was $24,000 that didn’t have to be spent this year.

Mayor Landry agreed with Member Margolis and would not support the motion.

Member Margolis said one of the issues about previous studies was that she felt it was incumbent on Council to pay attention to those studies, and Council needed to utilize those studies to set priorities. She said this was different from previous studies. Previous studies were not valid in that they asked question about things Council had no control over. The other issue was this was not a written survey and people don’t respond to those, this would be a phone survey. There would be a much higher response rate to a short phone survey than there would be with a written survey. She very strongly believed in this and in being oriented to your market, and suggested they at least keep this on the burner.

Mayor Pro Tem Capello stated he would support taking this out of the budget now, but if additional money was found, even after the budget was done, he would be willing to revisit it.

Mayor Pro Tem Capello said Council had not addressed the cost of living increase for the retirees. He understood and believed when Member Gatt told them that a promise was made to the retirees that they would receive cost of living increases, and he intended to keep that promise. He made it clear to current employees that Council was making no promise to future retirees that they would receive any cost of living increase. He was also not making any promises of anything in the future beyond this year.

However, Mayor Pro Tem Capello proposed a one time $1,000 to each of the 62 retirees, and therefore was proposing a $62,000 addition to the budget. This will not incur a liability for the future and the retirees are not promised this next year or any other or will not affect their checks or health care in the future.

Member Gatt said, for clarification, this is not through the MERS retirement system that pays their pensions. Mayor Pro Tem Capello said that’s correct. Member Gatt said this would not incur any liability on any future Councils or taxpayers, and this was just a $62,000 payment. Mayor Capello replied yes. Member Gatt said the retirees are not being promised this next year or the year after, and it would not be rolled into their monthly pensions. Mayor Pro Tem Capello said he was correct.

Member Nagy stated retirees are receiving between $42,000 and $76,000 yearly, not that they didn’t earn it, but they also receive Social Security benefits and medical benefits. She said each person would receive a check for $1,000 and it would not be a monthly increase. Mayor Pro Tem Capello agreed it would be $1,000 minus taxes and it was not a monthly increase. Member Nagy said the retirees have never contributed, and most other communities surrounding the City, don’t receive any COLA. Member Nagy said two years ago Council voted to have their health care benefits improved, which was a substantial increase. She said if we do a one time contribution, she would like a formal agreement because sometimes people would say promises were made, etc. She spoke with former Mayors and Council members and they didn’t recall any promises made and nothing was put into writing. As former Mayor Csordas said "there’s an increase every year". She thought these were very generous salaries for retirement, plus Social Security and medical. She would be willing to consider this but wanted an agreement written that there would be no more demands for increases in COLA, because there has never been an agreement of any sort in writing. She requested a friendly amendment requiring an agreement and the motion maker rejected the amendment. He thought they should address it but not at the time of the budget

Member Mutch said an agreement sounded like a good idea to him, but on the other hand they had to keep in mind that there was nothing binding on future Councils. He stated he would not support the COLA increase, he stated up front during his campaign he wouldn’t support COLA. Member Mutch thought Council did want to give consideration to retirees. He said he knows many of those who have served the City and felt that due consideration had to be given to current employees as well. He felt the two issues were tied together. He said the City was currently in negotiations with current employees, and making requests in terms of sacrifice for them. He said $62,000 given to retirees was $62,000 not being spent on our current employees. Council would be rewarding one group of employees and asking sacrifice from current employees. Member Mutch said he was looking for that millage reduction for residents and a comment was made it wouldn’t look good going into negotiations with employees. He said the same argument could be made about COLA especially since 20 years down the road a lot of new employees coming in probably won’t have a pension style program or any type of COLA. He didn’t think it made sense while employee negotiations are going on, and where would the $62,000 come from. He said Council had saved $109,000 and spent $130,000. He would not support the motion and asked Council members to keep that in mind.

Mayor Landry said he could support this because the retirees did receive COLA’s from 1992 through 2004, and he believed they were told they would receive COLA increases during negotiations throughout the years. He thought that because of the economic conditions now COLA increases our cost prohibitive, the kind we have been giving in the past. Mayor Landry said if Council were to be given a mere 2% COLA increase like was done in the past it would cost $264,000. Mayor Landry said he wouldn’t support any COLA that was not fully funded. He said the COLA being discussed would be way less than what was ever discussed in the past. He thought that as they are approaching administrative employees and legacy costs they are asking them to take less and contribute more. In his opinion, Council should step it out. Don’t ask them for everything in one year and this was what he had told administrative employees. Cuts are coming but they need to be stepped out so that everyone could react in their own personal budgets. He said the employees had not received a COLA increase in two years. He thought this was a perfect compromise, because it would be a one time check to everybody, fully funded, and it was far less than paid out in the past. He was not in favor of

annual COLA’s because they just can’t afford it. Mayor Landry said he is on record as not supporting even this kind of COLA every year. He felt this would help in negotiations as the City would be showing that they cared about the employees while they are active and in the future. He said we are saying that we care about you now while you are active and we would care about them when they retire. He said they are part of our family and we are going to watch out for them. He could not imagine any active employee asking Council to benefit them at the cost of a retiree; he didn’t think their people would do that. He said for this incremental cost he could support this.

Member Margolis said she would support the motion and thought it was a great compromise. These employees didn’t have the opportunity to plan ahead because at the time they were employees this was the way retirements were funded. She said when she looked at those COLA increases being passed by the Council, as an employee she would see that as a promise. She said they relied on the COLA. The amount Member Nagy read about the retirees pension amounts per year were some of the larger ones. There are some very small amounts on that list too. What she liked about the set amount was that it gives the retirees who have lower pension amounts a better increase. We are taking care of the people who retired at lower levels at a much higher basis. She thought it was a great compromise and thought this was a year to year thing. She thought it should be fully funded when Council did it and not leave a cost for future Council’s. She would support this proposal.

Member Paul asked how many retirees there were presently. Ms. Smith-Roy said 67 total, including family members or other recipients who are receiving a pension from MERS at this time. Member Paul asked if they were talking about $1,000 to all 67 or $62,000 to 62 employees. Mayor Pro Tem Capello said 62 to 62. Mayor Landry stated employees as of December 31^st; it would not include those who have retired in the last two months. Member Paul had a problem with that because they were segregating the two groups. She asked how many are spouses to employees, and Ms. Smith-Roy didn’t have the exact number. She was trying not to close her mind to this and asked Council for their understanding. She said the active employees liked to look at what they are doing now. Our current active employees are paying more for their health care, we are asking in negotiations to pay more in premiums and co-pays. She thought they are related as Member Mutch stated. Council was asking that employees pay more in the premiums and yet Council had $62,000 to give to retirees, and we increased health benefits to retirees already. She thought retiree health costs, pension liability and our active employees are all one lump sum. She has heard current employees say that "they were not getting the pay increases. Some other people might get larger sums and we might not get any or we might get a small stipend but we are paying more for our insurance. We are paying more every year not getting more even with our increases." She said she has had that concern people have raised. As well as these 50 or 60 some retirees are getting more and the employees are not always getting the same amount. She said a $1,000 was not even close to what they would get in their increase.

Ms. Smith-Roy replied there were approximately 10 individuals that are other than the employee that retired from the City of Novi by virtue of someone being deceased or other situation where they became a beneficiary under the current plan. Member Paul said then that would be 52 employees not 62. Ms. Smith-Roy said that would be up to Council. The COLA in the past has applied to everyone receiving a pension because it was based on a percentage. So those family members also received the increase in the COLA. Member Paul asked why this wasn’t included in the budget. Ms. Smith-Roy said this item had always come before Council usually in November based on an actuary report from MERS. She said from an administrative standpoint they felt this was a policy decision by City Council and it was not up to the administration to make this recommendation. Member Paul said in the retiree’s contracts, was there anything written that there would be one lump sum or a stipend? Ms. Smith-Roy said no, none of the current contracts, administrative policy or the library policy include that. Member Paul suggested that if Council considered a COLA increase to either 52 actual employees or 62 retirees in this lump sum, she would like to see a formal written agreement from each of those people stating they would have an actual HMO or PPO to go with as their insurance plan. She said Blue Cross/Blue Shield was the highest insurance carrier that the City had and if Council could have them do that as a whole package, we could save money and therefore actually put a stipend in. Since a million dollars was being paid now into the retiree health care fund, if there could be some kind of a long term savings with this very large group, then that might be a way to look at this one time increase. Member Paul said a one time increase was better than a COLA increase. There are companies in this country that are dying because of this issue and she didn’t want to be part of that. We could look at how much the COLA increase over the years has increased the retiree health plan as well as our pension plan. She said if the HMO or PPO was attached to the increase she could possibly look at it, and maybe postpone the amount we contribute they might be able to think of an actual one lump sum.

Member Nagy said to clarify; out of the 67 people only 9 are under the amount of $10,000. Everyone else was $10,000 plus. To give someone who is getting the higher amounts of pension monies an increase when they are also getting Social Security and medical benefits without having any formal agreement, this is a policy decision and the promise thing bothers her because no one remembers in 1995, when this started, any promises being made. These people are employees, they worked and go paid for a job and she thought they were doing quite well in retirement. She knew some of them receive all these benefits and also work. Since there can’t be an agreement, she would not support this. She said Member Mutch made a lot of good comments regarding our present employees. We are asking them to pay more into their insurance, we are in negotiations and say we average a 2% salary increase for our present employees, but then we are saying they need to contribute more to their medical. She said there are only 9 people under $10,000 and everybody else is doing well, and some are doing better than those out there making a living. She said she wouldn’t do this at the cost of our own employees at the present time. She would not support the motion.

Member Paul wanted to discuss some of the sewer issues and capacity. She asked what sewer capacity was on the north end. Mr. Pearson advised Council that Mr. Hayes, City Engineer, had been meeting with Commerce Township and others. Mr. Hayes said if talking about the Walled Lake District said they have exceeded the contractual capacity at that plant,

although there’s physical capacity left. He said they have exceeded the number of taps that they are authorized to discharge too, and are working with MDEQ and the OCDC office to get things resolved so that additional capacity would be available. They have identified a project and are working on it now to divert flow from the Commerce District to the North Huron Valley District, which is the largest of our City’s districts to handle what was currently exceeding the contract. Member Paul asked what was being done to meet our sewer needs for capacity in that end of town. We are diverting it but what about new development in that area. What can be done? Mr. Hayes said right now with diversion being built, any development in the future would be handled with that flow diverted to the south. Now, we are no where near reaching physical capacity to the south.

Mr. Pearson stated that there was no physical problem to the south now or in the near term of three to five years. In the north, there isn’t anything we can do. It’s a question of Commerce Township who we have contracted capacity with, existing, being allowed to move forward for their plant expansion. There was nothing we would have to physically construct or do. It’s Commerce being able fulfill what they’ve already obligated themselves to do, to provide us capacity for the new development in the northeast. Mr. Hayes said there are really two issues here, the capacity for the Walled Lake District, and then the capacity issues for the Commerce District. Member Paul said when she read his memo it talked about not having quite the capacity in the interceptor and he was concerned it might be a problem in the Northville side. Mr. Hayes said currently there was plenty of capacity in the North Huron valley system. He said looking at build out in about five years it would become an issue, and that’s why they are looking for purchasing capacity downstream from us in the Western Township Utilities Authority District in Plymouth Township. Member Paul asked how they proposed to pay for the capacity. He said it would be a long range budget decision as far as whether to go ahead with the purchase as a result of working with those communities to negotiate a price. Mr. Pearson stated it wouldn’t be a budget issue for this year. They were just starting to get into that issue and once an agreement was set up, the payback could be set up overtime as its utilized. Mr. Pearson said they don’t anticipate any problems whatsoever. Member Paul said in their budget book there was a trailer that’s a mounted stand by pump and there’s also a sanitary TV trailer. She wanted to know what they were needed for. Mr. Hayes said they were all related to maintaining our existing system. Member Paul said her concern was that when we do phases of our actual study, we did Phase I and just implemented Phase II, and we purchased the pumping stations we are going to replace. She said recently there had been problems in Meadowbrook Glens, which was an older and large subdivision and some of the tree roots are getting into some of the sewer areas. It was also where they had some leakage of our storm system. She said when we pay for the sewer district, we pay more for the storm water being in that area. She asked how they would pay for long term capacity as well as repairs. She knew there was about $30 million in the sewer fund. She asked if the TV trailer was really needed in this year’s budget. Mr. McCusker said the pump she first talked about was something they did need because they have pumping stations that they have X amount of generators for and during a major power outage they probably couldn’t cover all of them. He said they would set up a standby pump and they could close the sewer off and pump it and use the portable pumps to re-circulate those existing areas so there wouldn’t be sewer backups in the homes. He said the TV trailer was something they were looking at that would help with future maintenance. Usually when going into a bad area such as Meadowbrook Glens that has vitrified pipe that we know root infiltration was severe there. He said they can contract those needs through a private company and part of the CMOM program would pay for those pieces of the next phase. Member Paul said there was also an emergency backup generator, and she knew that they had borrowed some from the company CAT. Mr. McCusker said they have three that he borrows from W. Bloomfield when there are major problems. They know that the one they bought would have to be dedicated to the senior complex, which would probably take one out of service that might be needed for the pump stations. All the new pump stations that are being bid out would have a permanent generator on site. There are 19 locations that must be serviced due to a major power outage. She asked how many pump stations have generators. Mr. McCusker said they have four that have them now, and the new ones have generators going in. Knights Bridge Gate just bought a nice new one to service that district and it was part of the whole consent agreement. Member Paul asked if he thought they should just do the trailer 101 for the standby pump or do we have need of the sanitary sewer TV trailer and the electric generator. Mr. McCusker said he would like to continue contracting for that until we get further into the CMOM and then we’ll know what the real needs are for the future.

Ms. Smith-Roy stated for the Water and Sewer Fund, they don’t adopt a formal budget for because it’s an enterprise fund. So the items they have included in the Water and Sewer Fund don’t require a specific vote, however if there are issues that any of Council has with the Sewer and Water Funds that they would like to bring forward for the purposes of discussion and direction that’s great. She said when they come to Council with the rates each year that was a separate motion and resolution. The rates actually dictate the funds that are available. She said with regard to paying for capital infrastructure there was a policy now to set aside the capital charges we collect to pay for those improvements.

Employee Assistance Program – Member Paul asked what the employee assistance program for $12,000 cost per employee per month. Ms. Gronlund-Fox stated the annual cost was between $18 and $36 per person depending on the program and coverage. Mr. Pearson said it was $3.58 per month. Member Paul asked how many people use the EAP. Ms. Gronlund-Fox said none because we don’t have this program yet. Member Paul said where she worked before they had a doctor’s office and 16 employees. Almost every one of them used the phone consult and they didn’t have near as lush an insurance program that has benefits that they could actually talk to a psychiatrist or whoever and very few had face to face contact. She said that was one area she wanted to remove and also results oriented strategy, which was $10,000, and the compensation study that was $20,000, which totaled $42,000 in savings.

Mr. Pearson said the Compensation Study was already underway. They had contracted with the Michigan Municipal League to perform for the administrative group an external compensation study so we have those comparisons. The last one was done six years ago and the date would be available in the next six to eight weeks. This was to anticipate that there would be some positions over time that have gotten out of whack with those external comparisons so that overtime they would have the ability to make up that ground in those positions. He said it was not the study itself, it was actually implementing for year one, and not trying to make it all up in one year. It’s just trying to go after the ones that are the most out of kilter with the comparison.

Member Paul said every year she had been on Council they have had small budget amendments basically doing what Mr. Pearson was talking about. She said with our amount in Rainy Day Funds she would still like to put that as a General Fund amount and take that out. She would like to include it in the amendment.

Mayor Pro Tem Capello thought about four or five months ago Mr. Pearson came to Council for a budget amendment and money was allocated to do the study. Mr. Pearson said it wasn’t a study; it was the implementation of the results of the studies underway for the Administrative Group External Wage Study. Mayor Pro Tem Capello asked if this was where he was allocating payroll to bring some of these salaries back up. Mr. Pearson said yes, there would be some results of that and it makes sense to do, and they are trying to anticipate and set that aside going into the budget rather than after the fact. Mayor Pro Tem Capello said the money had already been spent and they all agreed to spend it to do the study because they needed to know which of our employee categories were below the standard. He thought whoever the City Manager would be they needed to give him some money in the budget and not depend on the General Fund. If they know they are going to spend the money they need to put it in the budget. Hopefully what would happen was Council would have some input in the increases that certain employees get and how this was phased in so that they don’t get stuck with it every year. It needed to be budgeted to fund the study they just paid for.

Member Nagy asked where the $42,000 would be put, and Member Paul said it could be designated back to the General Fund. Member Nagy said then it could be used to do other expenditures when it was put into the General Fund. Member Paul said right, or just put it into savings or Major Road. Member Nagy thought if there was a place to designate it she would be more comfortable. She said since Mr. Pearson explained it she didn’t think the motion could be done.

Member Gatt thought they could do but didn’t know why they would do it if the money was already spent to do a study, and a result of the study was forthcoming and money would be needed to fulfill the results of the study why would we not fund it.

Member Margolis said she agreed. However, she remembered when this study was discussed one of the issues she brought up was that they look at total compensation packages of our employees, including benefits, against private sector employees. She agreed and said they just talked about being fair to our current employees versus our retirees. She thought these items and the others brought up were the items that we need to say to our current employees also that we value you and want to invest in you. It was no longer on the table, but the EAP was a small price to pay for the kinds of problems that an EAP can pick up and take care of a head of time. She said this compensation study goes along with it.

Member Paul asked what the percentage of wage increase was. Mr. Pearson said it was the generic 3 ¼ % as a mass amount allocated for performance rating in the administration group. She said if there was a 3.25% increase what is the sum of money being allocated out of the General Fund for that. Ms. Smith-Roy said she didn’t have the exact figures for each of the various groups. The lump sum for all groups was $1.2 million. Member Paul said $1.2 million was already being proposed. She said at companies she had worked in if you did your job well a higher percentage was given up to 3.25%. If not doing such a great job you didn’t get as much. She said as a manager she had to do that for 60 nurses. She said many companies are not getting any raises and haven’t for years. She said this was generous and since she had been on Council 3% or more was given every year. She said another $20,000 on top of $1.2 million was a lot of money, and she didn’t think the extra $20,000 was necessary. If the $1.2 million is being divvied up around the City maybe someone only gets 1% and someone gets 3% and that helps make up their compensation. She was not saying pay more on your health care and we’re not going to give you any money extra. She was looking at saving $20,000 out of $1.2 million.

Mayor Landry said last fall the employees made it very clear that they think that they are not being heard. They considered unionizing, which was their right, and decided not to unionize because, he thought, they had faith administration was going to listen to them. Mayor Landry thought they had listened and had done a very good job of listening to them. He didn’t think it made sense to do the study and then not fund implementing the study. One of the things they voiced was that they thought their compensation was out of step with other municipalities, so a study was done. He thought money had to be budgeted to implement the study. If we are out in step wonderful and if we are out of step we need to fix it. He felt if there was one employee that the EAP could give assistance to for $12,000 they should give it to them. This is not a lot of money and it was a way to show employees in these times when we are asking them to contribute toward health care, pension, and moving toward a Defined Contribution Plan, the least Council could do was support our employees and those who need assistance. He felt these were not areas that should be looked at to cut dollars. He said they could save hundreds of thousands of dollars on Beck Road. He would not support the motion.

Member Mutch said to clarify how this process works. They do a study, look at the police chief and compare to other police chief around southeast Michigan. If his salary was below the median or average they would consider bumping that up to match that. Mr. Pearson said it begins with review of the actual position description which hasn’t been done comprehensively in a long time. Human Resources is leading that to make sure the existing position descriptions are reflective of the knowledge and skills it takes to do the job. Once those are updated then true comparisons can be found. Member Mutch said the money allocated from the $20,000 was a salary increase in that their base salary might increase, but it was not the typical 3.5 % increase, that would be completely separate as a funding item. Mr. Pearson said it would be called an equity adjustment. Member Mutch said they talked earlier about studies being put on the shelf, so if the study was done and recommends adjustments then this was something that could be done.

Mayor Landry asked Ms. Gronachan to come to the podium. He asked her how long she had served on the ZBA and what her plans were. Ms. Gronachan said she had been on the ZBA for twelve years plus and would resign on May 3, 2006 and would be going back to Brewster New York, her home state after being a resident of Novi for 25 years. Mayor Landry noted that Ms. Gronachan had been an exemplary ZBA member and would be missed and thanked her for her service. She thanked the first City Clerk Mabel Ash who provided her the opportunity to be the knowledgeable expert that she was of Garfield Road after her death in 1994. She also thanked Mayor Clark for that famous Saturday morning when he took 2 hours of his time, and

allowed the decision to be made for the 100 year declaration for the Garfield Road wetland. She thanked former and present members of Council. Also, Toni Nagy, Lynne Paul, David Landry, and thanked Don Saven. She said if there was ever a statue to be erected to someone; it should be for Mr. Saven. He is a historian and has more knowledge in his little finger than anybody has in regards to Novi, Ordinance, in the proper way, and decorum that he handles people on a day to day basis. She said on the ZBA she had learned to listen, not talk, be patient not blow up and Don had taught that to her and members of the ZBA and she thanked him. She was looking forward to her last meeting. She wished Novi well.

Mayor Pro Tem Capello said the one thing pulled before the last motion was the Beck Road reconstruction. He said at the last budget session they agreed to totally rebuild from 81/2 to Nine Mile Road, with a three lane highway, a median if possible, with trees, closed sewer, and curb and gutter. Then Engineering said it couldn’t be done for that amount so there should still be about $500,000 there towards Beck Road from the last budget. Ms. Smith-Roy said that was put back into Fund Balance and reprogrammed it. So, that money is not sitting there for Beck Road. He asked if it was spent or was it sitting somewhere. She said they put a hold on the Beck Road funds when they realized it wasn’t enough to cover the whole project. What happened was it was put back into the Fund Balance and then they used the total monies available to determine what projects would be used during the current year’s recommendation for 2006-2007. We’ve already incorporated that into other changes they made. It was not set aside for Beck Road. Mayor Pro Tem Capello said when the Beck Road improvement came before Council at the last budget session he thought they were all in agreement that it was not something they could deal with during a budget session. He said they need to identify what they planned for Beck Road and how to improve it. He didn’t want to put a lot of money into Beck Road until we decide what should be done. He thought they should have a four lane divided highway from Ten Mile to Grand River. South of Ten Mile Road a four lane was needed but he could live with a two or three lane with a median between 8 ½ and Nine Mile Road. He said whatever was done Nine Mile and Eleven Mile should be used as examples. They are two lane highways, they have curb and gutter and they look residential and are nice clean looking roads. He also wants that look on Taft Road and 10 Mile also. He would have an objection to the alternate two, spending $250,000. He didn’t know if they wanted to do it from Ten Mile to Grand River or pick up between Nine and Ten Mile Road. Last year the goal was between 8 ½ Mile and Nine and now we are jumping to Ten Mile and moving forward. He thought Council should act on that quickly because if they could get a four land divided highway we’ve got the opportunity with the Bosco School property, opportunity with Providence that the right of way would be much easier to acquire now before there is any more buildup or development along that area. If we are going to look for anything wider now is the time to do it. He told administration that they needed to move forward on this soon and get a plan together for Beck Road so we are not in this predicament every time we come to budget.

Member Mutch wanted to go through each of the three street funds. The Major Streets has only two projects in the fund. One is $750,000 for Taft Road and there was consensus of Council to leave that in. $750,000 for 11 Mile Road, $250,000 of that for repaving and $500,000 of that was to replace the culverts. A report came back from administration that they had no problem deferring the $250,000 repaving. He would like to put off 11 Mile until next year because it didn’t make sense to do the culverts this year and the repaving next year.

Let’s just do it all at one time and that would give us $750,000 to work with in that fund. Member Mutch asked if the culverts could be put off until the next budget year. Mr. Pearson said it was one culvert on 11 Mile west of Meadowbrook and they are concerned that it was moving and they didn’t want another Meadowbrook Road situation. Mr. Hayes said the culvert was failing as they speak and the DPW continually had to wedge it with asphalt to maintain a uniform grade. He didn’t know how long it would be before it completely failed. He said they are doing the design now and hope to have it bid out this summer. Member Mutch said that was $500,000 that would have to be set aside. He said the consensus was that the repaving could be put off until next year. The question was do they want to do the culvert this year.

Mayor Landry said he would favor doing the culvert this year.

Member Nagy asked Mr. McCusker’s opinion, and he stated that it was in a critical failure now, and the concern was if the culvert completely collapsed the entire intersection will slide at 11 Mile and Beck Roads. Mr. Hayes was right that if it fails there would be another Meadowbrook situation.

Member Mutch said that does give us $250,000 and asked Ms. Smith-Roy how much Fund Balance could be allocated to a specific project this year. She said what was identified in the summary presented to Council, with the 11 Mile Road deferment, that $250,000 could be reallocated. Additionally, they had identified the alternate for Beck Road that’s optional, and have identified a transfer from the Municipal Street Fund of $350,000. So, the total of those two items is $600,000, and they currently have in this summary of proposal using Beck Road alternate as the project. However, that would be up to Council’s discretion. Member Mutch said just looking at the Fund Balance in Major Streets of that $640,000 he asked how much she would be comfortable with Council allocating to a specific project. Ms. Smith-Roy said depending on the project. Member Mutch said the project would be for the Beck Road overlay. She would suggest that it should not be reduced more than $100,000 at the most. Member Mutch said Council could take $100,000 from Fund Balance. Ms. Smith-Roy said as long as it doesn’t start as a project before next spring because of the timing of when the Act 51 money comes in. Member Mutch asked Mr. Pearson for the timing if the Beck Road overlay was done. Mr. Pearson said it could be done in late summer or early spring. Also Providence opening would be 2007 so that would still be in advance of their opening.

Mayor Landry asked if the $750,000 for Taft Road was already in the budget. Ms. Smith-Roy said it was, and Mayor Landry said then that’s no change. Member Mutch said the only change would be using $100,000 from Fund Balance for Beck Road, and then the $250,000 would be re-appropriated from Eleven Mile repaving to Beck Road. He said that would give Council $350,000 for Beck Road. Mayor Landry asked if Alternative 2 in the April 24^th memo what he was suggesting that being Beck Road from Ten Mile to Providence Hospital. Member Mutch said he had not identified a specific section, but wanted to do as much as possible because there are areas south of Ten Mile that also need to be done. Mayor Landry asked if he was just allocating $350,000 to Beck Road and not getting to what would be done with it yet. Member Mutch said yes; let’s just get it set aside.

Member Paul appreciated setting money aside for Beck as it would our major thoroughfare for our largest business and our largest employer. Taft Road was put off last year, and going from Nine Mile south there are areas that are in bad need. She thought it would be similar to Beck that the base was probably gone, and asked if the soil borings were done for Taft yet. Mr. Pearson said they did not but made the assumption that it would be in the same bad situation and that’s why the cost went up from $500,000 to $750,000. Mr. Pearson said regarding the Beck Road timing, he said the Novi Road link would be going into construction next year and he didn’t know if they would want to have Beck Road worked on next spring when at the same time Novi Road would be worked on. Member Paul said that’s a good point and they were up against this last year and there were problems with the Act 51 money. Member Paul stated she would be in support of doing Beck Road sooner with money from a different fund and they could play with the numbers. She thought they should be very cognizant of jamming our City up, and two north/south corridors could not be closed at the same time. If the Road Commission comes through and the actual project of Novi Road from Grand River to Ten Mile was to be completed it would be a mess. She said they have lived in this situation for the last two years, and she would appreciate looking at the timing of these projects. She asked if the new 80,000 sq. ft. medical center going into that corridor would they have to look at what to do in that corridor as far as traffic. She thought they might contribute to if something had to be done regarding traffic solutions.

Mr. Pearson said they have fully anticipated and planned that whatever they had to do needed to anticipate any accommodation to future signal, widening or whatever so that it wouldn’t have to be ripped out. He said there was no plan or money for signalization. Mr. Pearson said any other business that’s relocating along 11 Mile asked if a signal would be done at 11 Mile and Beck, the answer being as soon as they are ready to contribute to it one would be there. He said that would be anticipated with the culvert work to make sure future improvements could be accommodated but there are no guarantees of that. The medical office building was just one more into that increasingly busy area. Member Paul said her point of getting Beck Road done was that they have $4.6 million that would have to be allocated eventually to Beck Road. She wanted to see sidewalks continued in that area, medians with trees and understory, closer to the hospital, Mayor Pro Tem Capello’s point about curb and gutter was very accurate and helpful. She was not in favor of 4 lanes south of 10 Mile, and felt that waiting on the light at Beck was necessary until there was a full term plan.

Member Mutch said he just wanted to recognize the timing of the projects, and thought when they got to the Municipal Street Fund they could talk about where to get some additional money to get around that in terms of voting for the motion to set this money aside because this is a separate fund.

Mayor Pro Tem Capello said they had some real timing issues with Beck Road, not just Novi Road, if they are going to do anything north of Beck Road it should be done before school starts to avoid gridlock when the traffic from Cider Mill and Greenwood Oaks traffic was dumped onto Ten Mile. He didn’t think they could get the engineering and award the contract and have it done before school begins. He asked if the $350,000 was allocated for north/south and Member Mutch said he didn’t because he wanted to pull some additional money from the

Municipal Street Fund when that was discussed and then determine how big the pot was and where they wanted it to go.

Mayor Landry stated Beck Road comes up every year. He said in 2001-2002 the discussion at Council table was that the major north/south arteries in the City should be Novi and Haggerty Roads, so decisions were made not to widen Beck because they wanted to encourage north/south traffic off of Beck to those two roads. Haggerty Road is zoned commercial and Beck is basically residential from 8 1/2 Mile Road to about 11 Mile Road and then it becomes commercial. The general thinking was to have it remain residential with a median, and that’s the most expensive way to do a road. The discussion has historically been some day when Beck was widened we’ll do it with a median but they didn’t know where to get the money so no money had gone into Beck Road. Now with the hospital and the interchange, there’s more traffic so they might have to rethink that. Mayor Landry said he would agree that Beck Road should be 5 lanes from 11 Mile north and maybe even 10 Mile north to provide relief from all those subdivisions. He was not opposed to doing 3 lanes south of 10 Mile and not doing the median because of the expense. However, looking at the April 24^th memo it would be about $5.5 million if they did it all. He didn’t want to put a lot of money into the road if it was going to be ripped up and redone. Mayor Landry said something had to be done so he would support the motion. He would like to do an overlay from 10 Mile north to Grand River for about $250,000. He said redoing Beck completely would cost millions of dollars and he thought it needed to be discussed at a goal setting session, which would be in August or September.

Member Margolis also had major concerns about doing too much improvement south of 11 Mile Road or 10 Mile. She thought the more that was improved the more it was a corridor from M-14 to I-96, and she thought anyone who wanted to go from M-14 Beck Road to be pushed around to 275 and up to I-96. She wanted them to see that was the faster route. She said the traffic was bad on that route now but she sees a lot of information about the fact that the more a road was improved, the higher traffic count would be. She liked the idea of a goal setting session and thought goals should be set as to what they want that route to be. Member Margolis wanted a nice road to come off of Beck and go to Providence Hospital and that commercial area. However, they needed to discourage people from using Beck Road as a cut through to M-14. She would support a short term improvement with a longer goal setting later.

Member Nagy said south of 10 Mile was bad and there was residential there and she thought they deserved to have that done, and south of Nine Mile was very bad.

Member Mutch said his follow up comment was what was proposed under Alternative 2. All they are doing on Beck Road was to put a cap over it to get it into shape. Mr. Pearson pointed out that there was an allocation in the proposed budget for Beck Road between 9 Mile and 10 Mile Road to do the overlay which our own road crews did last year for $35,000. Member Mutch said he would incorporate that into the Beck Road amount. Mayor Pro Tem Capello’s concern was getting this done before school starts. He asked if there were any existing contractors, whose contracts weren’t closed, that an add on could be done instead of putting it out to bid. Mr. Pearson said no, but if Council decided they want one of these overlay treatments done he was confident, because it was a simpler design, etc., that it could be done if not by the day school started shortly thereafter.

Member Mutch said in the Municipal Street Fund the administration, based on Council input, had recommended removing two traffic signal items, the 11 Mile/Wixom signalization at $150,000, $200,000 for Beck/Cider Mill.

Member Mutch said the Council had previously agreed that the signalization should be pulled out. The Novi Road sidewalk for the Ice Arena was removed because there has been a site plan submitted for that property. He thought the consensus from Council was to get one side of the road done before tackling both sides. The two projects for Meadowbrook between Nine Mile and Ten Mile the Orchard Hills West development went in and they put in sidewalks which completed the gap from there to Peach Tree and complete the gap from the bridge to south of Nine Mile. The second project would complete the only two gaps left just north of Eight Mile Road on the west side of Meadowbrook. Doing these to segments would provide continuous on the west side of Meadowbrook Road from Eight Mile to Nine Mile, to Ten Mile and a sidewalk up to Cherry Hill. It would complete an entire corridor for $135,000. The $50,000 for signalization at 14 Mile and Novi Road, because that’s a major route to M-5 and north and is important to the north end of town and likewise with the Beck Road Interchange open a lot of people are coming off of Beck, across 12 Mile and up West Park Dr. but the turn lane is only two cars worth and added to the congestion of that area.

Ms. Smith-Roy summarized that sidewalks were being added at $105,000, and $30,000, adding the signal for $50,000, $100,000 for the 12 Mile turn, which totals $285,000. The removals were $115,000 for the Novi sidewalk, $350,000 for the signalizations, which are reductions of $465,000 with a net of $180,000.

Mr. Pearson said for clarification, portions of Meadowbrook sidewalk from 9 Mile and 10 Mile are listed as being $250,000 in the Capital Improvement Program. Member Mutch offered the e-mail from Mr. Hayes with the revised numbers. Mr. Hayes said the estimate was based on from the Seven Eleven to Orchard Hills West was about 1200 linear feet and from the bridge south to 9 Mile Road was about 2000. The total would be 3,200 feet and based on their average unit costs it works out to be $105,000. Then from 8 to 9 Mile he identified two gaps totaling about 850 feet and the cost came up to $30,000. Mr. Pearson asked about the swale at Penton Rise, and Mr. Hayes said the earth work that had to be done had been taken into account.

Member Paul was in favor of doing all the sidewalks initially proposed. She had spoken to a resident and the west side Meadowbrook as well as 10 Mile were very important to him. She said if they could do a very large segment of Meadowbrook as well as filling in those gaps for $135,000 it was a good idea. She said a lot of the east side older section of our City doesn’t have sidewalks where the newer part of town has neighborhood sidewalks. This resident is an old gentleman with issue with his health and he wants to walk on a sidewalk, and she thought that was very important. She asked if there was no arrow at the 14Mile and Novi Road light, and Mr. Hayes said that was his understanding that it needed a left turn signal. Member Paul said when that change was made, there wouldn’t be any road or pole change. It would just add an arrow light. She asked how much that would cost. Mr. Hayes responded a rough estimate would be $150,000 and they have typically used Tri Party funds so our exposure would be less. Mr. Pearson said they were just robbing Peter to pay Paul because they had already committed to Tri Party for the Novi Road link and land acquisition. He said they really needed to come up with a different funding source. He thought Member Mutch had done that. Member Paul asked if, regarding the 12 Mile turn, if they had R.O.W. Mr. Pearson said there might be some land acquisition. Member Paul said we have to different developments. One on the northeast corridor of 12 Mile Road and West Park Drive and one on the south west side of that area on 12 Mile Road. She asked if they were interested in having that improved in anyway. Mr. Pearson said they would have given the City the land for that improvement but nothing else in terms of road construction. Her concern was that it might be land acquisition. Mr. Pearson said right in front of that parcel there shouldn’t be land acquisition. He said he was figuring more to the west if doing an east bound improvement to get that in they might have some trouble.

Member Paul said she supported the sidewalk changes on the west side of Meadowbrook. She was looking to people regarding 14 Mile because she didn’t travel that often and she would support it.

Mayor Landry stated that is an excellent point and asked for an administrative report on whether extra money would be needed for land acquisition. Mr. Pearson said they would do an early viability on all of these kinds of things.

Member Margolis was in support of the sidewalks but expressed concern about signalization and asked for some input from administration. She said signalization had come up before this budget session and her comment was how does this fit in the priorities and why for this year. She said why these signals versus other areas of the City and are there studies that show that these areas are the most important. Mr. Pearson said at these particular intersections they had not done a traffic analysis. It was different from the others in that these are modifications to existing signals at both locations it’s adding a turn signal and they are not nearly as difficult. He said they would want confirmation from a traffic person that these would help not hurt. He couldn’t answer how these would rank against other traffic possibilities. Member Margolis said she couldn’t support the light at 14 Mile and Novi Road because she needed to understand that where the money goes made sense as opposed to every where else in the budget. She would have to be sure this made sense versus other projects in the City. She would support the sidewalks but not the signalization. Member Mutch asked Mr. Hayes if, with the statutory 66 ft R.O.W., they could do a three lane cross section eastbound/westbound or north- bound/southbound plus a center turn lane without running into R.O.W. issues. Mr. Hayes said it would be tight. Member Mutch said it might be an issue at 12 Mile and Mr. Hayes agreed. He said they are required shy distance on either side and have to be able to accommodate future sidewalks. Member Mutch was just talking about actual road improvement, not sidewalks, and asked if they could put the three lanes in 66 feet. Mr. Hayes said he thought so but would have to look at what’s existing. Member Mutch said he would like to have the information but felt confident that even if there wasn’t a full 120 ft. right of way there, it could be done. In response, Member Margolis raised some good points. He said one of the things he was looking at was that as they look at the budget in terms of road improvements and sidewalk improvements they had nothing north of 12 Mile Road. He said he had resident input about those particular locations because those are really choke points for a lot of traffic at that end of town. They might not be number one for signal requests, but they had to keep in mind that there would be locations that need these kinds of improvements that have to be addressed that would never reach number one. For instance Cherry Hill was done based on input from residents that it was important.

Member Nagy said she also has had many people in the north end state the same thing. She’d like to see these tax dollars dispersed as evenly as possible. She said that area was congested and she thought they needed to do it. One of the things she wanted to see in the budget was the money dispersed evenly. She was all for this.

Member Gatt said Mr. Grobe, during Audience Participation, mentioned sidewalks on Ten Mile east of Meadowbrook Road. He asked if they had any idea of the cost of that sidewalk. Mr. Pearson said it had not been designed, but there was a railroad crossing, City parkland and drainage easement grades. He didn’t think it would be an easy simple thing but it could be done. It was a lot like the configuration of Nine Mile Road. It would take some work and planning, and maybe they could start to work towards that. They have asked for a grant to improve the City property east of the tracks and perhaps it could be built in as an overlook of that property.

Member Mutch said there is $180,000 that has not been allocated out of the Municipal Street Fund and he would ask for the discretion of Council to decide how to allocate the rest of that money. They might want to go back to Beck Road to discuss how much of that they want to do, keeping in mind the timing, and how much they need for Beck Road would determine how much should be transferred to Major Streets. If Council didn’t want to do the whole 8 Mile to Providence they didn’t need $586,000.

Mayor Landry understood where the net $180,000 came from but if we step back a motion passed to allocate $350,000 to Beck Road in Major Street. He said they would get that money from saving $250,000 from repaving 11 Mile Road and $100,000 from Fund Balance. Member Mutch said correct and Major Street, plus $35,000 that had been allocated to Beck Road for a total of $385,000 towards Beck Road right now.

Member Gatt said the City starts at 8 ½ Mile. Mr. Pearson said on the west side it does but on the east side it was Northville. Mr. Pearson said last year they did the simple overlay from 8 Mile to 8 ½ Mile and that was all ours. Then it was stopped where the shared borders began. They had talked with Northville and they don’t have the money, although they would like to do something with this. Member Gatt said he would not want to bear 100% of the improvements when Northville was certainly not a City going under.

Mayor Landry said they have $350,000 they would allocate to Beck Road and they needed to decide where they would do that.

Mayor Pro Tem Capello said after the COLA motion they were $83,000 short, they added Beck Road in for $350,000. He asked Ms. Smith-Roy where they were at and she replied they had $385,000 dedicated in the Major Street Fund for Beck Road. There’s $180,000 available in the Municipal Street Fund to put towards Beck Road if Council chooses. She thought it could probably be bumped another $20,000 from the Fund Balance to get it to the $585,000, but she wouldn’t want to go much above that. She said they had just received a consent judgment that had to come out of the Fund Balance and she wanted to be sure the funds were available.

Mayor Pro Tem Capello asked if part of that money could be allocated to the shortage in the current General Fund Budget. She said no, because they are for a specific purpose.

Mayor Pro Tem Capello said at this point with Providence and all that construction going on, without a clear design, he didn’t see any sense in putting and improvements into Beck Road north of 11 Mile Road. He would like to concentrate somewhere between 9 and 10 Mile Roads if that was one of the weakest spots, and maybe between 10 and 11 Mile Roads. He said he would really like to concentrate to do that 8 ½ Mile Road to 9 Mile and do it the right way as quickly as possible. He said from 9 Mile to 10 Mile would cost $213,000. He asked what the cost would be between 10 and 11 Mile Roads.

Mr. Pearson said the Haggerty Road pinch points, which everyone was in favor of, a number was put in of $500,000, and he said that would be something they could go in on with the RCOC and Farmington Hills. He believed it wouldn’t be near $500,000. He said they could allocate $300,000 of that to get to the table and see what happens. He said that might be another $200,000 savings to be put towards Beck Road and still get the Haggerty Road pinch points done.

Mayor Landry said so there’s $200,000 that might be available, in addition, to contribute to Beck Road. Mr. Pearson said based on what he has seen our $300,000 coupled with the RCOC and Farmington Hills would put a good dent in the pinch points. Mr. Hayes said the way it was split up under Alternative 2 between 10 and 11 Mile Roads they estimated of that $247,000 a $167,000 would be for 10 and 11 Mile Roads. Mayor Landry said and $213,000 to 9 and 10 Mile Roads, so out of the $385,000 we’ve really got enough money to go from 9 Mile Road to 11 Mile Road with Alternate 2.

$200,000 to Beck Road without any designation of what it would be used for with priorities to be set soon, at a later date, by Council when strong policy decisions could be made. Also, that for the section from 8 to 8 ½ Mile Road, that the City Administration work with the City of Northville and Wayne County to see if they would allocate money to that project.

Member Paul said when she looked at Beck Road she saw division on our southern border. Novi borders 8 Mile on the west side but on the east side there was a half mile stretch that was Northville. She asked who received the Act 51 money in that half mile. Mr. Hayes said Novi does. She said Northville had not done any overlays in that area and our worst portion was 8 ½ Mile and the overlay was done and it’s very smooth. If Novi receives the Act 51 money for that should we go to 8 Mile. Mr. Hayes thought it would be prudent as it was the worst part of Beck Road. He said they did borings last year and there was no base material every placed and the pavements real thin. Member Paul said if we do this Alternate 2 what was the estimate in length of years. She said he said it was two to five years in that section, and asked if it would be possible to go to our 8 Mile southern border because the 8 ½ Mile section to 8 Mile is really problematic. The worst section is there, so why not do it if we receive money from Act 51. She would like to visit the idea of doing the extra stretch all the way to our southern border and finishing it.

Member Paul said, regarding sidewalks, she was looking at the 11 Mile stretch. On the south side of the road there is the church on Taft Road all the way to Cedar Springs. If you’re looking at how to get to the schools the other stretch would be to do the other stretch of that road from Taft to Clark. The Clark area doesn’t have any sidewalks, and that section has no trees, no swale and no landscaping and we have right of way. She thought it would be a quick easy segment to complete. She said Mayor Pro Tem Capello also had a suggestion, at the first meting, about doing the north side of 10 Mile from Mockingbird Glen to Dinser.

Mr. Pearson commented on the Beck Road 81/2 Mile to 9 Mile was a simple repair to last one to two years so he wouldn’t want to call that done. Any of these treatments would be the next step up.

Mr. Hayes said he misspoke. We do maintain Beck Road from 8 to 81/2 Mile but Northville gets the Act 51 money for its half of Beck Road. Mr. McCusker explained we do the snow plowing, but Wayne County does the maintenance on the Beck Road section of 8 Mile to 8 ½ Mile. Novi does remove the snow to Eight Mile though for the convenience of our residents.

Member Margolis said Council is talking now about $765,000. If we take the $385,000 available in Major Street Fund, $180,000 freed up from the Municipal Street Fund and the possibility of $200,000 from Haggerty Road, which adds up to $765,000. She said she had no problem allocating and prioritizing that to Beck Road but her concern was that they were making these kind of priority decisions and asked if there was a possibly of designation that to Beck Road. Then Council could determine how to allocate that at a later date. She offered this as a friendly amendment to allocate the $385,000, $180,000 and the $200,000 to Beck Road without any designation of what it would be used for with priorities to be set soon at a later date by Council when strong policy decisions could be made. Member Capello accepted the friendly amendment as did the seconder. Member Paul asked if the $385,000 was still available in the Major Street Funds and was advised that it was.

Member Mutch agreed with the approach Member Margolis has but his concern was to do everything based on the estimates Council now has from 8 Mile to Providence would be $586,000. We are talking about tying up over $700,000 towards that if Alternative 2 was done. He would have no problem reallocating $94.000 from the Municipal Street Fund to the Major Street Fund and that would give us the amount needed for Beck Road. Then, there would still be $296,000 to discuss if additional money was put toward Beck Road. He just had a concern about tying up $300,000 when based on the numbers available that money could be available for something else.

Mayor Landry asked Mr. Pearson if Member Mutch was correct that if Alternative 2 was done to Beck Road, City limits to Providence Hospital, the total cost would be $500,000. Mr. Pearson said that was their best guest for the entire stretch. He cautioned Council about allocating that balance right away without having a plan and spending that money twice. He said it was $561,000 for Alternative 2, and the section between 9 and 10 Mile Roads was a PASER 5 now. He suggested Council go with the $700,000 because they would always have the prerogative for other projects after the Beck Road final recommendations.

Member Mutch would support the motion, but made a friendly amendment that the Section from 8 to 8 ½ Mile Road absolutely had to be done, and that City Administration would work with the City of Northville and Wayne County to see if they would allocate money to that project. He said if they don’t they should still move forward with it. Mayor Landry said even if we loan them the money to get it done. The seconder accepted the amendment.

Member Gatt questioned repairing the section of road that belonged to Northville. Mayor Landry said Council was just setting aside enough money if Council chose to do that at a later time. They are not deciding whether or not to do that.

Mayor Pro Tem Capello said the General Fund was $83,000 short somewhere, and it needed to be found.

Mayor Pro Tem Capello said there were requests from various departments for a total of four Jeeps at $21,000 each. He said DPW had requested one but they were not in the budget, but they could get a ¾ ton pickup with a removal plow for $24,000. He thought it would make more sense to spend the extra $3,000 and have a four wheel drive pickup vehicle with a plow to be used as an emergency vehicle or for Parks and Recreation use. He didn’t feel the Jeep would be the best purchase. Also, departments could share a vehicle. Mr. Pearson explained that the Jeeps were going to the Building Department and Neighborhood Services because they would be field vehicles used everyday for inspections. The Cavaliers are really getting pounded going to job sites, looking at R.O.W.’s, and they get stuck in the mud. He said this year they got the first round of the Jeep Libertys, and had very good feedback from the inspectors. They also have the closed cabs that are good for equipment.

Member Mutch said the Ice Arena debt item had not been discussed, and it involved transfer from the General Fund. He said it was a policy decision that Council needed to make and so he would like to discuss it and vote.

Mayor Landry said currently, in the budget, it was proposed that Council forget it and that was what they would do unless it was taken out of the budget.

Member Margolis disagreed and would not support the motion because it was not just an accounting change. It was being carried as an accounts receivable as though it was an asset on the books. Therefore, the Fund Balance, with this on our books was deceptive, and by taking this off the books the Fund Balance would be truly the amount available. The bottom line was the Ice Arena was the City’s and any money they made Council allocates. She said there was no body that was going to take this money, and every year they make money, Council would allocate where it went.

Member Gatt asked if the ice arena had been paying back that debt. Ms. Smith-Roy said they have made small strides towards paying off the debt typically between $20,000 and $30,000 a year or they would break even and not make any contribution back. The reason she felt that would not happen was that they have been in operation for 7 years, they have some compressors that would need attention in the next few years, and would have the normal cost that goes with any infrastructure. The reality was that even with the small amounts of money they are setting aside they should be setting aside for the infrastructure, maintenance and capital improvements that would be needed in the future. She said they believe it would be sufficient to satisfy that need, but the reality was that this money was spent back in 1999 and 2000, and we haven’t been able to make any ground on it. If our goal was to set rates to be competitive and yet provide a service to residents, she didn’t see them increasing the rates dramatically, and revenue might be lost in doing so. The market was a lot tighter now then it was when this was started. It was unlikely that it would be paid off. Member Gatt asked what the agreement was when the debt was incurred. How many years did the City anticipate allocating before the debt was paid off? Ms. Smith-Roy said they report to the State each year that it should be 5 years, but realistically they keep stretching that out and redo the plan every year. There was no goal set and Council realized they had to do the transfer to pay the debt because we are still obligated for it. There was no commitment, there was discussion about charging interest at one point, but if they aren’t paying the principle they aren’t going to pay the interest. She said the turnaround had been made and it would be self supporting from here forward, but there were things that happened and a series of events that were out of the control of Council. She said it was just not likely that they would recover from that.

Mayor Pro Tem Capello asked what the amount was and she responded $694,000. He asked overall how much the City had contributed towards the ice rink. Ms. Smith-Roy said the City had made zero contributions. All this was now was a loan and our goal wa to make this a one time contribution towards the ice arena for money that’s already been paid. It was paid to pay off the debt. Mayor Pro Tem Capello said for the citizens of this City all they’ve ever paid was $694,000 and they have a two sheet rink. She said that was their goal. He thought that was incredible and he was in favor of it.

Member Paul asked what the cost of construction was. Ms. Smith-Roy said it was a bond that was set up and it was being supported by the revenue from the arena, and was not being charged to the taxpayers. When this was coming to the voters as a ballot issue her understanding was that the money the ice arena would make would pay for itself, and that hasn’t happened. She asked if the $20,000 to $30,000 a year was from the cell tower on that site. Ms. Smith-Roy said that was also included in that number. She said we are basically breaking even with the operation. Member Paul asked if it was ever discussed what the ice arena would be worth if it was put up for sale. Ms. Smith-Roy said in general she didn’t think it would be a practical solution. Member Paul said she would not support paying down the debt.

Mayor Landry couldn’t support removing it from the budget. He thought Council should just forgive it on the books as it was tied to the General Fund in that we have to keep bailing them out. We know they are going to have capital and reserve costs, etc. every year. They are just breaking even, and if they are making $20,000 a year they should be putting that into a reserve account so they don’t have to come to Council. If Council forgave this debt no dollars would change hands. Let them set up their reserve account and they would truly be a stand alone operation because they would be able to budget for themselves. Future City Council’s should not have to keep dealing with this. It’s a drain on the General Fund so let’s get it off the General Fund. He was in favor of forgiving the debt, it would not cost the City a dime as it is an accounting function.

Member Mutch said he understood the accounting function, but it’s an IOU on the City books that says the ice arena incurred these costs. They’re making an effort to pay that off and have been on a fairly consistent basis and that reflects on the operation and management of the facility. They are paying back an IOU to the General Fund, and they should. His other concern was that while the goal was to give them a clean slate and allow them to start fresh and build a Capital Reserve Fund if $100,000 item came forward in the next five years they wouldn’t have it. His suggestion was to leave this amount on the books, give them $100,000 to establish a Capital Reserve Fund and then they could move forward with the security they need towards an Enterprise Fund. He thought they would be back to Council in 5 years whether or not Council takes action.

Mayor Pro Tem Capello said the ice rink is one of our major City amenities. People look for a City with an ice rink so they don’t have to drive long distances for their kids to play hockey or figure skate. It is an asset; we still have a good piece of property and a good piece of vacant property behind it. He thought it provided a great service to the City and people move here so they can have their kids skate close by. If we have to give them $145,000 because they need new Zambonis, he didn’t care.

Mayor Landry asked the Clerk to call the roll on the motion to remove the forgiveness of the debt from the proposed budget.

Member Paul commented that they were putting the Community Sports Park storage shelter up and that would save approximately 45 minutes to an hour a day loading equipment. Also, the bat wing mower was in the budget, which would save man hours. She asked Mr. Auler to share with the public how these improvements would be made to soccer and baseball fields. Mr. Auler said they would be able to rotate soccer fields out to improve the quality of the turf, work on proper drainage at each of the facilities and the same on the baseball fields. It also enabled them to get to some of the projects within the park system, they couldn’t get to now. He said they have 3 full time members that work in the parks, and they also use seasonal staff.

He said they maintain 47 fields that the City and the schools own, and that ties up a lot of their staff and they can’t get to other projects such as repairing park shelters, grills, old storage shed, and Earth Day project with Husky, improved landscaping, playground inspections on a weekly basis during summer. Member Paul was looking for physical amenities to be done that the people could see who use the fields in our park system. She asked for a periodic report of what was being utilized with the extra time.

Member Paul said they have been sitting on the Walled Lake property for a long time. She would like to ask the Parks Commission through Mr. Auler what their intention was for that site as there had always been a lot of debate because the area was very dense. She also wanted to know if there would be development. She asked that Mr. Auler report back to Council regarding this by early July. Mr. Auler said they were working on an amendment/update to the Community Recreation Plan, and previously Council requested a balanced look at the system and he would bring that back for their consideration and discussion.

Member Paul said last year the SAFER Grant was applied for and she wanted to know why the grant wasn’t received. Acting Fire Chief Johnson stated they applied but there were only 2 in Michigan that received the grant. The City’s application had to show certain needs, and they were asking for one person and couldn’t show significant improvement in the service by hiring just one person. Most of the grants that got through were asking for any where from 8 to16 people. Member Paul understood that Fire Station 4 needed night time staffing. She asked if that was accurate. Fire Chief Johnson said it was a concern. They have 10 paid on call fire personnel out of that station, and Station 2, and they have targeted those for recruiting. Member Paul asked how they are improving the recruiting and retention of firefighters. He said he and Ms. Gronlund-Fox are handing out flyers, putting them on doors, Schoolcraft College had a job fair they were involved in, advertisements on the City’s website, and the Novi News. They also began a new committee last fall to work in conjunction with Human Resources and Public Relations, and on call members to get a handle on the best way to move forward with their efforts. He said word of mouth seemed to be the best way to get the word out that they are looking for more qualified people. Member Paul asked how they would pay for the architectural analysis and design to be completed once the Fire Department buildings were studied. Ms. Smith-Roy said their intention was to proceed forward with the architectural analysis and design, for their recommendations, so next year in the proposed budget they would bring forward, as indicated in the CIP document, some ideas about moving forward with one station at a time and addressing those hopefully through General Fund monies. Mr. Pearson said in this budget they had the most pressing item, which was the roof replacement for Station 1, which was $90,000. Then going forward, it would give Council an actual plan because every year there would be some expenditure and it could be accommodated. It would give Council a firm document to prioritize those items. Member Paul said if a new roof was going to be put on this facility, and an architectural analysis was going to be done, there might be a portion of that roof that would need to be extended out. She asked if there was any chance a roof would be put on, and then adding or replacing a section would be needed. Mr. Pearson said given the configuration of the building and the way it’s landlocked, he couldn’t see that happening. Chief Johnson said in the proposal Stations 1, 2 and 3 were requested in the analysis. He said he had spoken to an architectural firm and the $25,000 figure was probably on the high end. Member Paul said she was comfortable with that expenditure.

Mayor Landry commented he was the one who requested some information on recruitment for paid on call at the last meting. He understood the explanation of the efforts, and it looked to him like they had spent a whopping $1,600 on recruiting efforts. Mayor Landry said they had been talking about not having enough paid on call firefighters to staff Station 2, and now we don’t have enough to staff the overnight program at Station 4. Mayor Landry said with $1,600 budgeted for recruitment efforts it was not a surprise to him why there weren’t enough firefighters to staff those stations. He said having nothing more than this, he couldn’t ask to allocate more dollars because there was no plan. He said he would ask Council to take a hard look at recruitment efforts and see what could be done to step those up. If more money was needed come to Council for discussion. He thought with all this discussion staffing this station or that station, his first thought was to step up these efforts. He would be asking for that in the next couple of weeks, and asked everyone to discuss this and see what could be done about the staffing shortage.

Member Margolis agreed and would also be looking at increased recruitment. We have neighboring communities that are more successful in doing that, and we need to look at what they are doing. She said one of the questions she had asked at their first study session was about Fund Balance and the percentage in there. She said they received good information back from Ms. Smith-Roy and she understood why they were on the higher level in Fund Balance. Our policy was 8% to 12%; we are now estimating 14% plus the set aside bringing it to about 16%. She thought it was time for Council to look at increasing Fund Balance for particular reasons. She said they should make conscious decisions and intentions to budget a head of time for Capital items that are not huge amounts. The question was asked how to continue funding the Fire Department and a rational intention had to be made to continue increasing that amount. She said Novi actually had a higher debt issue than a lot of municipalities. It might have been for very appropriate reasons, we are a fast growing community and there might not have been time to set aside that money, but she would like to see them, as a Council, consider intentionally increasing the Fund Balance. She believed by what they do by forgiving the Ice Arena debt was actually truly adding a couple of real percent to our Fund Balance that are real dollars. She suggested and would look to increase that each year going forward so that the Fund Balance would be increased each year 1% or 2% with the intention to use that to offset CIP items. She preferred saving ahead of time rather than going back and issuing debt to fund these items.

Member Paul appreciated the intent, and agreed with increasing the Fund Balance, but was not willing to buy down the ice arena debt. She wanted to hear what the City Manager’s perspective would be on staffing before allocating any money to any position.

Member Mutch agreed there was value in designating specific amounts for Fund Balance. He would not vote for it now because there’s $83,000 in expenditures that we haven’t identified a source for yet. He thought this was just another $66,000, even if coming out of Fund Balance, and he was not willing to do that. He said if at a future meeting, they could resolve the $83,000, he would consider it. He would not support it now.

Member Gatt asked where the $66,000 would be put. Member Margolis said it basically would sit in Fund Balance but it would be designated for use in Economic Development personnel. It would signify Council’s intention that it would be there but not having a specific personnel line item in the budget. Member Gatt said if a new City Manager didn’t want to use it for that they wouldn’t have to. Member Margolis agreed.

Mayor Pro Tem Capello said this would not be a direction for any City Manager to hire an Economic Development Coordinator, it was not an approval for the administration to hire an Economic Development Coordinator, it was just earmarking funds so if the City Manager chose to do this it would be there. Member Margolis said Council would then have to allocate it and vote on it.

Nays: Mutch, Nagy, Paul

Mayor Pro Tem Capello had questioned the $420,000 for the Pumper Rescue Vehicle replacement and had asked for specific information on how often it would be used, and how often it would be used for the purpose it was constructed. He also asked for information regarding the last time the SCBA (Self Contained Breathing Apparatus) was used. He said he didn’t see anything on these items in his packet.

Mr. Pearson said it was Attachment #15 from Ms. Smith-Roy and both of those items were covered in that attachment. Mr. Pearson said the pumper truck had $82,000 miles and was 14 years old. Once Council allocated for the pumper the lead time was nine months to a year and a half to acquire, so it would be 16 years old by then.

Chief Johnson said this truck operates out of Fire Station 1, and was a mid size pumper on a commercial chasse. They were proposing to take that vehicle and what was in the rescue truck and put them together into one unit, which would maximize the use of that vehicle. He said that truck went out on every call for the paid on call system. They don’t have a full size fire pumper out of Station 1. There was a tanker truck that ran out of there but the capacity for the pump was only 500 gallons per minute, whereas the new tanker pumper would have a

1,250 or 1,500 gallon per minute pump, which would be much more effective for the downtown district area, for the malls, etc. At the present time if there was a vehicle accident and they needed a pumper to wash down fluids they had to call for it if they were in the rescue truck. He said if the pumper and the rescue are combined then there would be one vehicle being utilized for both functions. Mayor Pro Tem Capello asked how many times it went out and was utilized for its purpose. Chief Johnson said to actually know when they had hooked up to water he would have to see if they were the first unit on the scene, and they usually were. He said there were roughly 60 structure fires and it was typically one of the first vehicles there so they would be pulling hand lines off the truck and using them to fight the fire. He said not necessarily the primary pump because it only had a 500 GPM pump on it so usually when the next pumper gets there they are feeding water to it or vice versa. Mayor Pro Tem Capello said over what period of time were the 60 fires. Chief Johnson said for last year.

Mayor Pro Tem Capello said they are asking for 40 of the SCBA’s allocating $175,000.

Mayor Pro Ten Capello stated that would reduce the $83,000 shortage to a $5,000 positive, and then allocate that other $5,000 back to the Fire Department for recruitment of paid on call firefighters.

Mayor Landry stated the motion died for lack of a second.

Mayor Pro Tem Capello suggested, if it was going to take nine months to a year and a half to order this pumper rescue vehicle replacement at $420,000, allocating half of it this year and plan on getting it next year, and allocate the other half of the money in next year’s budget. He said that would give us $200,000 to make up some of the $83,000 arrearage. He said possibly pay it for some paid on call firefighters and have a little money left to put in more sidewalks.

Mr. Pearson said he appreciated the intent but didn’t think it could be ordered without having the money set aside and ready to go for it all. Ms. Smith-Roy said they do need to appropriate for 100% of whatever was being purchasing. She said the money actually used for this would come from the Police and Fire millage. Mayor Pro Tem Capello withdrew his motion.

Member Mutch requested a summary from the Finance Department outlining all the changes made at this meeting. He would also look towards fellow Council members to identify where the $83,000 would come from. He found $24,000 and found $184,000 in roads. He wanted to see some suggestions from Council members on how they were going to balance the budget.

Member Margolis requested an estimate of specifically what was the estimate for Fund Balance, with where we stand at this point. She was looking for a percentage. She said they were looking at this $82,906 as a magic point and that really was administration’s estimate and submission to Council of what the budget should be. She asked if that was true it was a magic point. The reality was if the $82,906 was spent, they might still end up with a 14% Fund Balance because it was such a small percentage. She asked if she was correct. Mr. Pearson said that would be first when they came back. They would come back with a running total of changes and that would be the first place to balance that. He said they had talked about 14% as a point, and they talked about that being a little more than our policy range for various reasons. He said they also have the additional allocation for the salaries and the settlement of the contracts. He said that would be a bottom line new that they would get when they have this on May 8^th for consideration to adopt the budget. Otherwise, a special session would be needed.

Member Mutch commented he had been working on the budget with a bottom line number and a fixed number. He said they are making priority choices in terms of services and capital expenditures based on having a balance budget. If they have a mushy budget where they could go $100,000 or $200,000 either way he would be looking at this differently, because he could say there might be things he would like to see done that haven’t gone into the budget yet. He said they needed to have a fixed number because they needed to have something they approve that was consistent if they come back and do Fund Balance budget amendments down the line, which are allowed in our process. He said if they legitimately have money because items came in at less than they were projected that’s fine, but he would have a real problem with the numbers jumping all over the place to accommodate requests that people aren’t finding money to fund.

Member Paul commented that last year they saved $1.2 million, and this year she hadn’t heard anything about savings. This year there are more tax dollars accrued, plus the $1.2 million in savings, plus the $400,000 it was increased in our appropriate millage. Her concern was that they had blown the money without a savings account. The State Shared Revenue was in question, and it might not affect us this November because it was an election year and no one is going to really make changes, but the following year it might be questionable if there was Act 51 money, or if there was enough for our Police Department, or if they have different grants that are normally available that supply some of our funds. Member Paul was concerned and would like to hear from Council if they have any interest in saving money so they can direct administration. She said she had not heard anything and she was concerned.

Member Nagy agreed with the comments from Members Mutch and Paul. She said it was only prudent that they try to save money and find places to cut, but never cut the basic services provided to the taxpayer.

Mayor Pro Tem Capello suggested buying half of the SCBA’s. They are buying 40 of them and that would be ten per station. He suggested allocating five per station this year. He said if there was an emergency and they were not sufficient they could easily have someone bring some over from the other stations. He said that would solve the budget issue and would give them enough to get started this year. He said that would save them the $88,000 and the budget would balance.

Mayor Landry stated the motion died for lack of second.

Member Nagy commented she toured the Fire Department last year, and they have greater needs and she would not cut anything they want from this budget. They have been sorely, sorely lacking and she would not cut anything that in anyway would impede their safety.

AUDIENCE PARTICIPATION - None

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

2:32 p.m.

______________________________ _______________________________

David Landry, Mayor Maryanne Cornelius, City Clerk

______________________________ Date approved: May 8, 2006

Transcribed by Charlene Mc Lean