Mayor McLallen, on behalf of the City with Councilman Schmid, on behalf of the Oakland County Commissioners presented Councilmen Mitzel and Clark with proclamations of appreciation for their public service.

Newly elected Mayor McLallen and Council members DeRoche, Crawford, Kramer and Lorenzo were sworn into office.

Mayor McLallen called the meeting to order at 7:45 p.m.

ROLL CALL: Mayor McLallen, Mayor ProTem Crawford, Council Members DeRoche, Kramer, Lorenzo, Mutch, Schmid

PRESENTATION

1. Department Head Introductions

Ed Kriewall, City Manager introduced his immediate staff, Assistant City Manager/Personnel Director Craig Klaver, Administrative Assistant Lynn George and Public Information Director Lou Martin, and briefly described their various responsibilities.

Tonni Bartholomew, City Clerk explained the Clerk’s office is the core for the city’s general information and briefly described the various functions within the department.

Tony Nowicki, Director of Public Services introduced Water & Sewer Superintendent Bruce Jerome, Department of Public Works Superintendent, Craig Smith and Building Official Don Saven, and each described their individual responsibilities. Mr. Nowicki noted City Forester Chris Pargoff and Construction Coordinator Haim Schlick were unable to attend tonight’s meeting.

Les Gibson, Finance Director introduced Purchasing Director Carol Kalinovik, Treasurer Steve Babinchak, Controller Kathy Smith-Roy, Budget Analyst Kim Pittl and Information Technology Manager Mike Galea, and briefly described their duties.

Jim Wahl, Director of Planning & Community Development introduced Economic Development Coordinator Greg Capote, Staff Planner Steve Rumple and Community Development Specialist Khanh Pham, and described their various responsibilities.

Glenn Lemmon, Assessor introduced Deputy Assessor Ken Cheyne and described the responsibilities of the Assessing Department as it relates to the city’s growth.

Marilyn Troschak, Deputy Parks & Recreation Director is before Council tonight because Dan Davis, Parks & Recreation Director was unable to attend tonight’s meeting. Ms. Troschak introduced Recreation Coordinator Scott Mercer and described the many functions performed by the staff of the Parks & Recreation Department.

Fire Chief Art Lenaghan introduced Fire Marshal Mike Evans and described the functions of the department. Chief Lenaghan stressed the importance of training because of the type of department that they have and gave an overview of their program.

Police Chief Doug Shaeffer introduced Lt. Tim McNamara and Lt. Dave Butler and added Deputy Police Chief Al Rasmussen was not able to attend tonight’s meeting. Chief Shaeffer then described the many responsibilities carried out by the department.

Mr. Kriewall advised Library Administrator Brenda Evans was unable to attend tonight’s meeting because the Library Board meeting was scheduled at the same time.

Mr. Kriewall introduced the city’s consulting attorney David Fried, the city’s consulting engineer Joe Kapelczak of JCK & Associates, bonding attorney Dennis Neiman and planning consultant Brandon Rogers. Mr. Kriewall added they treat their consultants in the same manner as the rest of the city’s staff.

Mr. Kriewall then introduced Diane Risko of the Chamber of Commerce.

James Karlavage - Orchard Hills Subdivision Homeowner’s Association President, thanked Council and the city for the action taken, and a job well done on the 1995 Road Bond Proposal. Mr. Karlavage specifically mentioned city staff members Mr. Kriewall, Mr. Jerome, Mr. Nowicki, and Mr. Smith. He added that he would like to thank JCK & Associates and specifically mentioned John Atkins, Jim Bass and Juliette Garvey. He then thanked Ajax Paving Company. Mr. Karlavage congratulated the new council members and added he believes they will have to make many difficult decisions in the upcoming year.

Diane Risko - Chair for the Novi Chamber of Commerce, welcomed new council members and appreciated their attendance at their luncheon last month on behalf of the Chamber. Ms. Risko advised five of their Board of Directors will be meeting to discuss the sign recommendations of Novi’s Ordinance Review Committee. She added they are going to present some changes that they hope will better represent the business community. Further, through the support of Novi business, Ms. Risko reported they have purchased the Main Street clock to be installed next year. Finally, Ms. Risko advised they are offering a $5,000 shopping spree. She added it will include a limo ride, a lunch at Too Chez’s and the winner will be driven around Novi to spend the $5,000 winnings. She advised they can purchase tickets through the Novi Chamber and the drawing will take place at the December 16 luncheon.

Mary Muller - reminded Council she was on the committee opposing the aquatic facility. Ms. Muller believes the 81% of the voters who voted against the facility made a strong statement. Ms. Muller was disappointed when she read the Mayor’s comments in the Novi News that attributed the failure of the bond proposal to not selling the idea well enough to the public. Ms. Muller does not believe it is the job of any city official to sell anything. She believes the responsibility is to provide citizen’s with complete, truthful and unbiased information so the voters can make a fully informed decision. Ms. Muller believes the primary responsibility of City Council is to serve the best interest of the entire community and not to sell the community on issues in which they have a personal interest. Ms. Muller hopes the new council will keep their roles as public servants in the proper perspective as they make decisions.

Richard Bond - 46700 Nine Mile Rd., offered some performance objectives to the new council that primarily deal with communications. The first suggested improvement is to the in-house cable system. He proposed that staff learn to use it more effectively and that they improve their equipment. Secondly, Mr. Bond would like to see the meetings content, minutes, bylaws, rules and regulations, and an E-mail capability on the city’s web page. Finally, he would like to see improvements made to the community’s cable system through competition and system upgrades.

Mayor McLallen advised they are currently carrying out major changes in the presentation process in the Council Chamber and reported there will be a budget amendment proposed in the next 60-90 days. She added they have spent money this year to research equipment changes. Concerning the web page, Mayor McLallen believes it currently is not representative of this city and improving it is one of their goals for the new year. Mayor McLallen added that they have invited other cable carriers into the community, but they have not taken up the offer. Further, she advised they are in the process of renegotiating the Time-Warner contract to bring improved service to Novi and noted Mr. Kriewall and Mayor ProTem Crawford currently serve on SWOCC.

APPROVAL OF AGENDA

Councilwoman Mutch added to Item 1. Committee Appointments under Mayor and Council Issues, the Addition of a Communication Committee to Standing Committees.

Councilman DeRoche added Resignation from Economic Development Committee under Mayor and Council Issues as Item 3.

CM-97-11-343: Moved by Crawford, Seconded by Schmid, CARRIED UNANIMOUSLY: To approve Agenda as amended

Nays: None

CONSENT AGENDA (Approval/Removals)

Councilwoman Lorenzo removed Item 6.

CM-97-11-344: Moved by Crawford, Seconded by Schmid, CARRIED UNANIMOUSLY: To approve Consent Agenda excluding Item 6

Nays: None

1. Approval of Minutes of Regular City Council Meeting of October 20, 1997 and Special Meeting Minutes of October 27, 1997

2. Approval of Resolution, Re: Benefit E for Retirees

3. Approval of Resolution Authorizing the Vacation of Mansfield Easement - Novi Assessor’s Plat #1

4. Approval of Application for Vic-Eat, Inc., Class C Liquor License, for Temporary Outdoor Service on November 25, 1997

5. Award bid for Aggregate Materials to Hayball Transport, Inc. Based on Unit Pricing (DPW)

7. Award bid for Promotional Supplies to HALO/Creative Concepts and AIBL Advertising based on unit pricing (General Administration)

8. Reschedule Public hearing on S.A.D. #148, Salow’s Walnut Hill Lots 1-21, Extension of Sanitary Sewer, to 7:30 PM Monday, November 24, 1997

9. Approval of Claims and Accounts - Warrant No. 503

REMOVALS

6. Approval of Sanitary Sewer Easement - Detroit Edison - Property located west of Novi Road and North of I-96 Expressway

MATTERS FOR COUNCIL ACTION - Part I

1. Mayoral Appointment of a Mayor ProTem

Mayor McLallen reappointed Member Crawford as Mayor ProTem.

2. Request for Approval of Notice of Intent Resolution, Re: City of Novi Water Supply and Sewage Disposal Revenue Bonds, Series 1998

Bonding attorney Dennis Neiman reported the revenue bonds are for the purpose of paying the city’s share of the cost for major water and sewer improvements throughout the city. Mr. Neiman explained these are projects that are currently being engineered and will be under construction during 1998 and 1999. Mr. Neiman believes the total cost is approximately $12-14M and the bond would be payable solely from the revenue derived from the operation of the system. Mr. Neiman explained it will be derived primarily from the capital charges charged to developers. Mr. Neiman noted they expect that there will be no rate increase required during the term of this issue for the purpose of this debt. Mr. Neiman added the city has been increasing its rates on a periodic basis to cover operation and maintenance costs of the system. Mr. Neiman noted this would be the increased cost passed on to the city by Detroit for waste water system treatment and for the purchase of water. Mr. Neiman stated if Council were to proceed with this, they would adopt a resolution and the Clerk would publish a notice of intent in the newspaper. From there, they would come back before Council within thirty days with a bond ordinance that would authorize the bonds. Mr. Neiman added they could anticipate the sale of the bonds in late January or early February along with the second phase of the city’s road bond.

Councilwoman Lorenzo is concerned about the notice of intent because it states, "from the net revenue is derived from the operation thereof" and if they do not have sufficient funds to pay it, they then may increase the water and sewage rates. However, Councilwoman Lorenzo advised that Mr. Kriewall did indicate to her that they are actually repaying through connection charges.

Councilwoman Lorenzo asked if amending the language in the notice of intent to make that more specific to the citizenry is possible. Mr. Neiman would prefer not to amend the language because it is really a matter of legal interpretation. Mr. Neiman advised the revenues derived by the Revenue Bond Act are monies from rates and charges that include the consumption charge, the availability charge, lateral benefit charge and the tap charge. He explained they are things that are both consumption as well as capital charges. He added it also includes interest income that the system derives from the prudent investment of the funds that the system has. Mr. Neiman advised they take from the pot and deduct the cost of operating, maintaining and administering the system to get net revenues. Mr. Neiman explained the Revenue Bond Act statutorily requires that they pledge those revenues so they cannot pledge a portion of those revenues. Mr. Neiman reported they have analyzed the funds and they are collectively comfortable that they will deduct the funds to pay this debt from capital charges. However, he noted the pledges legally must be the net revenues and to do otherwise would underpin the ability to sell the bonds. Mr. Neiman added the idea is to sell the bonds at the lowest rate they can because the lower the rate, the lower the debt service and the lower the operating costs to the system.

Councilwoman Lorenzo asked if there is another format to notify the citizenry that the connection charges will pay off the bonds. Mr. Neiman hopes they will report tonight’s discussion in the paper. However, to amend the language would not be legally correct and would put them in a situation in which they do not want to be. Mr. Neiman restated there is no intention to increase the rates to pay the debt.

Councilwoman Lorenzo understands that the adequacy of the connection charge amount is being reviewed at this time and asked what would happen if they discover they do not adequately cover the costs. Mr. Neiman believes the city continually reviews whether the capital charges adequately represent the cost of the infra-structure. Further, he believes over a period of time the city has addressed that by increasing rates on a periodic basis. Mr. Neiman believes they would be imprudent if they did not continue to investigate that. Mr. Neiman thinks it is fair to say that connection charges, lateral benefit charges and availability charges will increase along with inflation.

Councilwoman Lorenzo asked if they found they were not adequate would they increase those rates as opposed to water and sewer charges. Mr. Neiman believes city staff would make that recommendation to Council.

Councilman Kramer noted that this clearly states that these are revenue bonds.

CM-97-11-345: Moved by Kramer, Seconded by DeRoche, CARRIED UNANIMOUSLY: To adopt the Notice of Intent Resolution, Re: City of Novi Water Supply and Sewage Disposal Revenue Bonds, Series 1998

COUNCIL DISCUSSION

Councilman Schmid asked if they discussed the current and, future water and sewer projects at the October 29 meeting? Mr. Kriewall replied the October 29 meeting was a staff meeting and not a Council meeting. Mr. Kriewall believes Council is fully aware of the projects represented and added the projects are either under construction or coming forth in the near future. Mr. Kriewall cited the Meadowbrook Road water and sawer project, the extension of water and sewer along the new Taft Road corridor and the direct service for the school site at Eleven Mile and Wixom as examples.

Councilman Schmid asked if there are monies available for the projects just mentioned. Mr. Kriewall replied there is.

Councilman Schmid asked if the request is for new money for future projects? Mr. Kriewall replied there is some debt coverage necessary for some existing bonds.

Mr. Neiman explained there is approximately an $11M balance of cash and they have $14M in city projects for 1998 and 1999. Mr. Neiman added Novi has been a leader in terms of bond rating because of its good fund balance in the General Fund and Enterprise Fund. Mr. Neiman said if they take the Fund Balance down to zero, they would still need approximately $4M to complete the 1998 and 1999 projects, and they would probably substantially impair the city’s debt rating.

Councilman Schmid asked if they have $11M in the fund? Mr. Neiman replied they actually have $15M in the fund.

Councilman Schmid asked if they are suggesting that if they do not add to that fund that they could damage their debt rating? Mr. Neiman replied he is saying if they use the fund for construction they would effectively bring it down to zero and could only fund their projects for the next two years. He added it would do nothing beyond 1999 and he believes it would have a substantial negative impact. Mr. Neiman understands that the city is taking part of their fund balance from the water and sewer system and using it for these projects. He added they are taking the remainder out of new debt which they paid for out of capital charges. Mr. Neiman said they still have the right to pay the whole thing in cash. However, if they do that he suggested that they quickly replenish their cash or they will impair their debt rating.

Councilman Schmid asked if the last time they requested revenue bonds was in 1992? Mr. Neiman agreed and he believes it was for these types of projects.

Councilman Schmid thought they would have had more information in front of them in terms of types of projects forthcoming and the current fund balance. Mr. Kriewall agreed that they should have provided more information.

Councilman Kramer also agreed, but he understands that this motion announces and sets up a thirty to forty five day response period about the intent to sell. He further understands that staff will bring back an ordinance for consideration and suggested that staff provide additional information at that time.

Councilman DeRoche suggested that they provide the information as far in advance as possible.

Nays: None

Mayor McLallen believes municipal finance is one of the most complicated issues before Council and noted none of the current council members is a financial person. Therefore, the Mayor believes they need further education and asked if there are any general publications available to explain the differences in bonds and how they relate to their bond rating. Mr. Neiman offered to provide a presentation on debt management. Further, he will provide printed material to Council through the City Manager’s office.

CONSENT AGENDA REMOVALS FOR COUNCIL ACTION

Councilwoman Lorenzo advised two of her three questions were already answered by Dave Bluhm at JCK & Associates. However, her last question was about which fund this money was coming from. Mr. Kriewall replied the funding is from the water and sewer fund.

Councilwoman Lorenzo understands they will then deduct the cost of approximately $250,000 from the $15M balance. Further, Councilwoman Lorenzo added she had asked for a reason for the relocation, and advised she was told that the existing storm sewer is not working well and is located on unstable soils. She explained the $250,000 cost is attributed to the few experts in this specific type of relocation.

Mayor McLallen noted that the request before them this evening is for an easement and added it is being granted without charge.

COMMITTEE REPORTS - None

MAYOR AND COUNCIL ISSUES

Mayor McLallen referred to the 1997 City Council Committee Appointment listing and asked members to reconsider their assignments. She suggested that the Appointed Officials Evaluation & Compensation Committee become a committee of the whole instead of a rotation of three members because she believes it would be more effective.

Councilwoman Mutch agreed with the Mayor’s suggestion and added a committee of the whole would also be more efficient.

Councilwoman Mutch asked that they form a committee that generally addresses communications in that it would initially meet to suggest ways to improve communications. Councilwoman Mutch further explained the committee would not just discuss how Council communicates with each other or with staff, but also how Council as a group gives and receives information to the community. Councilwoman Mutch added that she discussed this with Lou Martin and advised he would welcome the opportunity to work with Council in this manner.

Councilman Kramer supports the proposal and will volunteer to be a member.

Councilwoman Mutch suggested that they meet as an ad-hoc committee.

Councilman Schmid reminded Council that committees create work for staff and therefore, he would need a clearer definition about what the committee would actually do. Councilwoman Mutch restated that she is suggesting that they form an ad-hoc committee that would meet for a period of time to determine what Council should consider long term. Councilwoman Mutch stated that the committee could discover that things are working well or they cannot be improved upon because of budget constraints. She believes staff input at this point would be primarily limited to Lou Martin and participation from other staff members would only occur from time to time.

Councilman Schmid asked Councilwoman Mutch to provide some examples. Councilwoman Mutch replied the committee could offer suggestions such as improving the city’s web page.

Councilman Schmid has no problem creating this new committee, however he restated that he does not want to see a lot of staff time spent on this.

Councilwoman Mutch reminded Council that they are constantly told that they have an obligation as a body to communicate what the City of Novi is providing by way of programs and services to the community. Councilwoman Mutch believes this will give them an opportunity to evaluate whether they should provide a web page as a form of communication.

As an ad-hoc group, Councilman Kramer believes they should look at its charter, how long they should create it for, what is the agenda and what is its priorities. Councilman Kramer believes if they move forward quickly, they can provide a report by the goal setting session.

Councilwoman Lorenzo supports a communications committee and suggested that the ad-hoc committee consider integrating their committee with the Planning Commission’s committee since there is a budget and staff people already assigned to the committee. Further, Councilwoman Lorenzo believes both bodies have a responsibility to communicate with the public.

Councilman DeRoche believes the committee will quickly find things that the community would like to see and he would like to see some recommendations at the goal setting session so they can work it into the budget for the next year.

Mayor McLallen understands that there is a consensus to permit an ad-hoc Communications Committee.

Mayor McLallen advised the City Council Committee Appointments for 1998 are as follows: Mayor ProTem Crawford will remain on the Cable Commission; Councilman Kramer and Councilwoman Lorenzo will serve on the Capital Improvement Program; Council as a whole will serve on the Appointed Officials Evaluation & Compensation Committee; Mayor ProTem Crawford, and Councilmen Schmid and DeRoche will serve on the Consultant Review Committee; Councilman DeRoche will serve on the HCD Advisory Committee; Mayor McLallen, Councilwoman Mutch, Councilman Schmid with Councilwoman Lorenzo as an alternate will serve on Ordinance Review Committee; Councilwoman Mutch will remain on SEMCOG with Councilman DeRoche serving as the alternate; Mayor ProTem Crawford will serve on the Community Clubs Board of Trustees, Councilwoman Lorenzo will serve on the Stormwater Management Financial Review Committee; Councilman Schmid and Councilwomen Mutch and Lorenzo will serve on the Town Center Steering Committee; and Councilwoman Mutch and Councilman Kramer will serve on the Communications - Ad-hoc Committee.

Mayor McLallen believes the Rules Committee might work better as a committee of the whole. She explained she and the City Clerk reviewed the rules, and made a few changes. She then asked Council to review the rules and bring their recommendations back before Council at the December 1 meeting for adoption.

Councilman DeRoche tendered his resignation from the Economic Development Corporation to focus his efforts on Council.

Mayor McLallen noted there will be an interview session held on November 20.

Mr. Kriewall reported the road contractors for the ice arena paved the subbase for the entire roadway last Saturday and will apply the top coat this year. Further, he advised they are currently preparing for sidewalk construction.

Councilman Schmid noted he had asked for information from the Assessing Department relative to assessments on commercial, industrial, mobile home parks and apartments. Mr. Kriewall advised he will forward that information.

COMMUNICATIONS

1. Memorandum from Chris Pargoff to City Council, Re: Gypsy Moth Update

2. Letter from Fried, Watson & Bugbee to City Council, Re: Settler’s Creek Subdivision

3. Memorandum from Lou Martin to Les Gibson & Mike Galea, Re: Web Site Development

AUDIENCE PARTICIPATION - None

ADJOURNMENT

There being no further business before City Council, the meeting was adjourned at 9:44 p.m.

Transcribed by Barbara Holmes