SPECIAL MEETING OF THE COUNCIL OF THE CITY OF NOVI

 TUESDAY, JULY 18, 2000 AT 6:00 PM

COUNCIL CHAMBERS – NOVI CIVIC CENTER – 45175 W. TEN MILE ROAD

Mayor Clark called the meeting to order at 6:00 PM.

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

John Markham expressed concern about the unsightliness of telephone poles and asked if telephone poles would be a part of the road bond issue?

Mr. Nowicki responded it is about $80,000 per intersection and was approved by the previous Council.

Mr. Helwig noted this type of mast arm would provide better types of signage, would consolidate the number of poles and added clarity to the safety of the intersection. They would serve a useful purpose in highly used traffic corridors and there would be more in the Novi/Grand River corridor and on Twelve Mile.

Mr. Helwig stated the staff had been seeking input from focus groups throughout the community and reviewed the following list of criteria for recommendations. This was developed by a group of staff after digesting the focus group information. Mr. Helwig had spoken with each member of Council to get a history of last year’s issues and this was the criterion they developed. Most of this came through interaction with citizens.

Any road bond proposal should provide tangible benefits for residents. As in the case of

the recently approved 12-Mile Special Assessment District, the developers must shoulder

their associated road improvement costs.

Any road bond proposal should be less than the $28.5 million issue that lost by 572 votes in

November of 1999.

Any road bond proposal should provide good stewardship of tax dollars. It should be a realistic, achievable program to be completed in a specified period of time.

Any road proposal should focus on improving neighborhood streets, increasing the safety

and capacity of high-accident intersections, and leveraging dollars from outside Novi for major street improvements.

Any road bond proposal should be accompanied by a policy resolution of the City Council

stating there would not be another general obligation road bond proposal placed before

the voters for a minimum of five years.

Any road bond proposal should have the potential of achieving broad-based community

support.

Mr. Helwig noted they had divided this into three categories.

First, to build upon the momentum of this year’s expanded street resurfacing program and the suggestion to provide for an additional $950,00 per year, over and above what had been dedicated for neighborhood street resurfacing, for the next five years, which is a total of $4,750,000. In 1994-98 the average the City was spending on neighborhood streets was $470,000; the last two years had been consolidated to $2.3 million. This amount would provide for nearly $1.5 million a year of neighborhood street resurfacing but did not envision unpaved roads. A Pavement Management System was authorized in this year’s budget, which would be implemented to give the residents the best, most objective analysis of the condition of the roads. Then in the next budget cycle a more informed choice could be made as to what should be done in a five-year plan for neighborhood streets. At present, no other commitments have been made for the next five years other than Village Oaks.

While working on this they had Chief Shaeffer’s top twenty accident intersection list in front of them. Novi and Ten Mile was the number one accident intersection, Novi Road and Grand River was number three high accident intersection, Meadowbrook Road and Ten Mile was number seven and Beck Road and Ten Mile was number ten. If the two intersections are added that are included in the Twelve Mile developer Special Assessment District, I-96 and Novi Road and Novi Road and Twelve Mile, they would be numbers two and four on the list of high accident intersections. This proposal would enhance six of the top ten high accident intersections.

Mr. Helwig reviewed leveraged dollars for Major Street Improvements which included the dollars from the State and County that would be leveraged for the local amount suggested in the road bond proposal.

Beck Road Interchange would be $6,000,000 of local funds and would leverage $24 million of State funds.

Novi Road and Ten Mile to Grand River would be $1,115,000 plus the $70,000 up above in the intersections they would leverage $9,480,000 in State funds and $1,185,000 in County funds. This would widen and provide an overpass of the railroad tracks, a grade separation as well as improving the intersections at Novi and Ten Mile and Novi and Grand River.

Grand River from Beck Road to the bridge over the CSX would be $4,250,000 of local funds and would leverage $5 million of State funds.

Grand River from Beck Road to the City limits would be $550,000 of local funds and would leverage $4,400,000 of State funds and $550,000 of County funds.

The final item was the one Mr. Helwig was the least convinced of but wanted their consideration. They worked very hard with the developer of Fountain Walk to achieve $18,400,000 of public improvements along the roadway of Twelve Mile and a section of Novi Road between I-96 and the Twelve Mile intersection. There is 6/10^th of a mile along Twelve Mile Road from McDonalds to about 1,300 feet west of Meadowbrook and Twelve Mile that would remain unimproved. It had been suggested that Taubman should see the need for this and they would accrue the benefit. Council said they would negotiate tougher and longer with developers to enhance these development corridors.

The total of this program is $17,735,000 and it would leverage $50,465,000. The total program would be just about $68,000,000 of which the voters would be asked to support $17,735,000. This proposal would result in an increased millage average over the life of the bonds for 17 years of ½ a mil. It would start out in the first year at 3/10ths of a mil. A debt schedule was included for the community. The existing debt millage would peak in 2000-2001 at 2.5 debt. Adding this program the peak year would occur in 2003-2004 at 2.52. The actual debt millage almost remains the same in its peak year because the other debt was being retired.

Member Csordas attended one of the focus groups and complimented Mr. Helwig and Maureen Malone on the way they were handled and felt the proposal was a great start. He suggested changing "street" resurfacing to "pavement" resurfacing to avoid confusion on the dirt road issues. When moving into a subdivision and the roads are already paved the property owners have already paid for the roads because they were included in the price of their homes. Homeowners on unpaved roads pay for them through special assessments so in the end every resident would pay for their own roads. He did not want this to change because it was fair to everyone. He thought $950,000 a year for five years was fine but would like to see it go to $1 million a year over the term of the agreement. It would take the total bond to $17,985,000.

He noted, regarding the accident section, the choice of intersections was excellent. He liked the leveraged dollar amounts of the intersections stating they were 284% over and above what the City would contribute. He liked Item #5, Twelve Mile and Meadowbrook, because that was where the highest percentage of dollars would be leveraged at about 9 to 1 and felt that financially it was the most prudent component of Mr. Helwig’s suggested road bond.

Member Bononi noted it was important that the amount of $470,000 per year between 1994-98 regarding road improvements was stated in this information and she believed that small amount of investment was now reflecting itself in the tangibles and quality of life issues. With regard to the state of our streets we have concerns everyday about how streets work or don’t

work, how traffic signals are frustrating when waiting through multiple signal phases and this is not reflected in all of these things. Intersection signalization updates also need to be looked at because updates could solve many of the traffic problems. Those conspicuous by their absence are Meadowbrook at Ten Mile, Beck at Ten Mile, Meadowbrook at Eight Mile, Novi and Nine Mile, Beck and Grand River, Taft and Ten Mile, Beck at Ten, Haggerty at Nine Mile and there was nothing about working with our neighbors regarding Eight Mile Road at both Beck and Taft. These areas really do affect our quality of life.

Member Bononi asked about the items with regard to Beck Road Interchange, Novi Road to Grand River, Grand River City limits to Beck Road and Twelve Mile Road. She opposed Twelve Mile Road improvements from Meadowbrook to Novi because if this is the greatest financial opportunity we have for leverage then all the more reason those folks who are going to benefit commercially along that stretch should be kicking in. The additional $650,000 could be put into our neighborhood roads and improvements. She asked when the unconstructed or dirt lane streets would be improved?

Mr. Helwig suggested that it was a divisive, volatile issue to include in the road bond and suggested that when the City Council had goal setting sessions in November they would want staff to research and develop alternative policy direction choices as it dealt with unpaved roads. He suggested looking at what other communities were doing. For example, a number of cities do pay a percent of the special assessment district costs as an inducement for neighbors to come together to get their road improvements, etc. Also, look at other funding mechanisms, concentrating HCD funds on road improvements, other funds on unpaved roads and being opportunistic with developers on unpaved roads and throwing them in the mix of negotiations. He would make it a very high priority issue for the staff to address with Council’s direction during the next budget cycle. He noted that putting it into the road bond issue violated that last criteria where they try to insure as much broad based support for what they would be going for, which is a lower amount of dollars than last fall. He did not have all the answers but would commit to a major staff work program trying to explore creative approaches to get the job done.

Member Bononi concurred with Mr. Helwig. However, she was concerned that the approach would not be inclusive of all of our residents especially in those older neighborhoods where residents have been paying taxes for years. It was important to have a plan. If looking for broad-based support she felt that by not including those streets a lot of folks would not support this plan.

Member Bononi, regarding the Grand River improvements, felt taxpayers were shouldering a disproportionate share of the cost. She believed that Grand River was a road that needed improvement and agreed that it would take the burden off the arteries that are taking a disproportionate share of traffic and affecting peoples lives adversely. She didn’t know how they would determine what the disproportionate share of cost was. Taxpayers are paying their fair share, landowners of vacant parcels are paying their fair share at the time the road is improved and then there is a disproportionate gain as a result of the value added to those parcels. So, there can be an argument made on almost any street/road improvement with regard to who benefits most. On Grand River there are enough parcels that that question is honestly raised. The ratio of funding with regard to the $950,000 per year for neighborhood programs was smaller than she would like to see percentage wise but taking the Twelve Mile Road Meadowbrook to Novi funding and kicking it in there would make her a little happier.

She noted concern about time frames for residential programs and the Beck/Novi/Grand River programs and when they would be implemented and if they would all be completed within the five-year period?

Mr. Helwig said they would all be completed.

Mayor Pro Tem Lorenzo commended administration and staff for the proposal. She felt the neighborhood street improvements could be beefed up. She would not support the Twelve Mile Meadowbrook to Novi share of $650,000 and suggested they go back to Taubman and/or Ramco Gershenson for funds. She agreed with Member Bononi regarding disproportionate funding and was concerned about the Grand River/Beck/ bridge to CSX. She asked why the County wasn’t kicking in and felt Council and the residents should be lobbying the County to kick in on that stretch. She felt that the intersection, safety and capacity improvements were very light as there were several intersections that should still be addressed some of which were addressed in the previous bond proposal. Improvements should be at Haggerty and Eight Mile and Nine Mile, Beck and Nine Mile and Cranbrooke and Ten Mile because of children and senior citizens in that area. She would like to take the $650,000 from Twelve Mile and Meadowbrook and increase the improvements to the intersections and beef up the pavement resurfacing areas.

Member Crawford commended staff and focus groups for making excellent suggestions, comments and priorities and would support exactly what was in front of Council. Council needed to be flexible in whatever the package was because of the many different views of this.

It appeared that Twelve Mile between Meadowbrook and Novi had surfaced as an issue and as Member Csordas pointed out this is probably the best leverage dollars they have. It would be great if Taubman would contribute all or some of that and he knew it had not been from the lack of staff trying to convince him to contribute. It would be unfair to ask anymore from Ramco-Gershenson since they contributed $18 million to their project and beyond their project. It would be foolish to leave that bottleneck there. The resurfacing of streets and the dirt or gravel roads was certainly cause for concern. Some complications would arise when coordinating with other communities and counties on roads that border more than one community. He suggested trying to be more inclusive of everyone in the community. Perhaps, if the $950,000 were upped to $1 million a commitment could be made to pave all the dirt roads within a five-year period which would make this package all-inclusive. If the $1 milIion was upped X number all the dirt roads might be done within five years. He noted that in all the focus groups the widening of Beck Road was mentioned and they could not afford to wait five years to do something. Beck Road is a residential collector not only in Novi but other cities. The gap on Twelve Mile is important and they should lobby the developer.

Member Kramer had no problem with $1 million instead of $950,000. He said there are dirt residential subdivision roads and dirt collector roads; Delmont and Dinser are dirt collector roads. He supported Member Csordas’ discussion on how roads have historically been paid for and supported the suggestion to look for other ways of doing it. It is not reasonable to expect all residents to pay for the paving of remaining dirt roads and this should be reviewed. He liked the overall list for intersection safety capacity improvements. A good job had been done identifying major street improvements and critical items to the city and the items other jurisdictions had and indicated they would contribute to. These are highly leveraged projects and should the county contribute to Beck Road bridge over CSX paving of Grand River the

State had come forward with $5,000,000 and he felt it was short sited to take this off the project because there was no county money at this point. It is important to move forward with the proposal and firm it up in the next two months and encourage other participation. He strongly recommended that the developers who would benefit from the Twelve Mile Road improvements should step up to the plate and solicit the maximum contributions to get this job done. The difference between this year and last year is there is $5.2 million of State funds that were not on the table last year.

Member Kramer felt this proposal was an excellent piece of work but a policy resolution for five years might be too long because Beck Road had to be addressed. Traffic patterns would change when this was done that would take some pressure off of Ten Mile but the pressure on Beck Road would escalate rapidly once a better access was provided to the road. He thought four years might be better. Meadowbrook Road was not included and it is in poor shape and asked if it could be addressed with the annual major road maintenance funds from the State?

Mr. Helwig said there was still the possibility of a developer driven improvement.

Mayor Clark commended Mr. Helwig and the staff on a job well done and appreciated the emphasis on neighborhoods. This proposal more than doubled our commitment to neighborhood street resurfacing and noted that more funds are being spent due to the time elapsed in between. The substantial decrease in the overall amount of the bond issue was a step in the right direction and this amount was more doable. He agreed with the five-year policy resolution. The emphasis on the major intersections was well placed and made sense. The part of the bonding proposal that dealt with Twelve Mile Road and Meadowbrook to Novi Road he would support. Private property owners could not be forced to pay public road improvements. It should be emphasized that Taubman was in partnership with Ramco-Gershenson on the $18.2 million in improvements that the City would get on Twelve Mile Road and was making a contribution already but he would welcome their support and contribution in this area. Other intersections such as Haggerty and Eight Mile took years because of multi jurisdiction and it would be the same problem on Beck Road. It would require effort on the part of the State to contact all municipalities that abut Beck Road and he would support getting all these communities, the State and the counties together to talk as soon as possible. He did not want to put anymore on this community’s plate than they could afford. It is a proposal that is reasonable, fair, doable and one that the city has committed to if the community would support it. Council would not come back for another road bond for the next five years for any reason.

Mayor Pro Tem Lorenzo noted the lack of willingness and reluctance on the part of Council to take a hard stance toward a developer or County not paying a fair share, which was precisely why they would not pay. There was no incentive for the developer to kick in. She commented Ramco-Gershenson would not have agreed to the $18 million if Council had not stood strong and the taxpayers would have been paying for that project. The gap on Twelve Mile would hurt them and Fountain Walk and the only way they will pay for it is if Council tells them the taxpayers are not going to pay for it. She asked Mr. Neiman how many bonds of indebtedness could the City have before it affected our credit rating. She requested the information be available at the next Council meeting.

Member Bononi thought the five-year term was appropriate and reasonable because it would presume if that amount of time were reduced no other hands would be outstretched with regard to needs. What about the library, fire department and the $53 million lawsuit debt? She would not support expanding this program to anything greater particularly regarding Beck Road improvements. It is not our responsibility to expedite travel through our city for motorists who do not live here but it is up to Council to provide safe quality of life roadways.

Member Csordas reiterated it was an excellent proposal as it stands with the intense leveraging of dollars.

Member Kramer noted his proposal was not to include Beck Road in this proposal. This program accomplished a lot and did not significantly increase the burden on our citizens. He encouraged a consortium of communities and entities along the road because it was not a Novi only issue.

Mr. Helwig noted Ms. Cornelius said it would be desirous to adopt a resolution on August 14^th if serious about a November issue. He asked what a good date would be for a work session before August 14^th?

Council concurred on Saturday, August 5^th from 9 AM to 12 Noon.

Sarah Gray, 133 Maudlin, commended the administration for literally taking it to the streets. It is a good proposal but she was not thrilled with paying for the Twelve Mile Road improvements but would because traffic had to be moved. She wanted as much leverage as possible from development with regard to Dixon west to Beck. She commented it did not make sense to pave dirt roads if sewers would be put in in the future and asked Council to look at how to handle this and at what infrastructure was in place now. At the Lakes Area Homeowners Association meeting they suggested Council look at doubling the major road fund in the immediate future because $1.3 was nothing to repave these streets. Council needed to look at where we will be not only in 5 years, but also in 10 and 20. She commented that maybe the Parks and Recreation bond should be doubled or tripled also.

Toni Nagy commended Mr. Helwig and the staff for the excellent job they had done. She asked for an answer to Member Lorenzo’s question regarding the bonds before the end of the meeting. She liked the idea of one bond phasing out while another came in and felt it was a real selling point to the residents.

Mayor Clark asked Bob Bendzinski to answer Member Lorenzo’s question regarding the debt and the credit rating of the City.

Mr. Bendzinski said the City was allowed 10% of its taxable value plus any industrial facilities tax abatement values that are out there minus certain exceptions for Michigan Transportation Fund Bonds, Special Assessment Bonds, Revenue Bonds and bonds that are issued to abate pollution and protect the public health. He did not have what percentage of Novi’s taxable value they had issued in terms of debt. There were Building Authority Bonds issued in August 1999. At that time, the rating agencies were

aware of the $28 million ballot proposal that was going to be voted on in November. They have not indicated a concern with the amount of outstanding debt. Novi has favorable ratings by both Moody’s Investor Service and Standard and Poor’s Rating Group so there was no concern about the amount of debt issued at this time.

Mr. Neiman said a little over a year ago there was approximately $63 million of debt that was subject to the limit to the General Obligation debt of one kind or another. That number had been reduced because some of the debt had been paid off in October 1999 and more would be paid in October of 2000. Currently the taxable value is approximately $2.1 billion and 10% of that is $210 million. Novi is probably less then 3% currently and that was substantially below where they would start getting concerned. Also, the rating agencies look at the ability to pay. Most of the debt is voted debt and the approval by the electors in each issue had the ability to levy whatever taxes were necessary each year to cover the debt. A voted bond issue has within the vote by an ancient vote of the Constitution the ability to pay for it. Therefore, the rating agencies don’t really look at that as a concern and if that is taken away there is probably less than 1% of debt which is General Fund debt.

Mr. Bendzinski noted given the numbers shown on the board with the increase in the taxable value but not deducting any of the bonds that have been due in the last year there is still $147 million within the legal debt limitation. Rating agencies watch debt very closing and they are not concerned and they take into consideration that Novi is still a growing community.

Mr. Neiman said two years ago the rating agencies upgraded the ratings of the City and last year they reaffirmed the City’s ratings and had not expressed any concern regarding the debt. Mr. Bendzinski concurred with Mr. Neiman and noted the rating agencies are aware of the needs of the City such as the lawsuit and November bond issue.

Jerry Vissy, Orchard Ridge Estates, commented the proposal was one they could live with. He asked if Novi Road between Nine and Ten Mile would remain a two-lane road? He felt it would be a bottleneck trying to get to the Expo Center. What contribution would come from Wixom and other communities to the north that would benefit the most from the upgrades to the interchange? He asked that Council keep residents informed about what type of upgrades, lanes, SCATS, etc., would be done when they were proposed.

Asa Smith, commended everyone for their hard work to bring us to this point with a road bond and thought it would be acceptable. As a concerned citizen he felt there should be more intense negotiation with Taubman and Ramco Gershenson. There was still a lot to be done with developers in the Grand River Corridor from the bridge to Wixom Road. He suggested leveraging all sources to the maximum. To cover additional infrastructure services bring everyone into compliance with a millage increase of proportion until all infrastructures are in place. Mr. Helwig had some very good ideas for funding, HCD, Act 51, etc., and they should be put into a working program. North Old Novi needs all the assistance they could get from the City regarding water and roads as well as residents and should have specific attention in terms of being upgraded.

Absent: DeRoche

________________________________ ___________________________

Richard J. Clark, Mayor Maryanne Cornelius, City Clerk

Transcribed by _________________________

Charlene Mc Lean

Date approved: August 14, 2000