Mayor Csordas called the meeting to order at 9:00 a.m.

ROLL CALL: Mayor Csordas, Mayor Pro Tem Landry, Council Members Capello – absent/excused, Gatt, Lorenzo*, Nagy, Paul*

ALSO PRESENT: Rick Helwig – City Manager

Craig Klaver – Chief Operating Officer

Clay Pearson – Assistant City Manager

Benny McCusker – Director of Public Works

Randy Auler – Director of Parks, Recreation and Forestry

Kathy Smith-Roy – Finance Director

Nancy McClain – City Engineer

Tia Gronlund-Fox – Human Resources Director

Doug Shaeffer – Police Chief

Dave Evancoe – Planning Director

* Member Paul arrived at 9:02 a.m.

James Hinkle, 23701 Harvest Court, said he has lived in Novi for 20 years and has seen the City grow. He knows the City needs extra police patrol officers and firefighters but five months ago a tree was cut in front of his house and the stump is still there. What he hears and sees is that the parks and recreation department does not have a stump grinder to come around and grind stumps with. The City spent over $100,000 to have trees and stumps ground up, but it cannot spend $30,000 to buy a stump grinder. The City needs to make sure that it is operating as it should be. There are many politics being played between the City Council and the City Manager. The community has an excellent City Manager who does a good job. When Council members are vying for election, they say they will do things, but he has not seen anything but talk. The City Council is like Washington D.C. - all they do is talk and do nothing. A police officer would not be placed on the beat without a gun, and the same applies to a forester. The forestry department has a nice truck and a nice chipper to grind up materials, but they do not have the tool to finish the job. He noticed that Council was using pencils, and without those pencils Council could not do its job. If Council cannot do its job, it should resign and let somebody else do the job.

Mayor Csordas said he saw a number of stumps that are ground up around the City, and asked how that was happening.

Mr. Helwig replied that the special allocation the Council had authorized the previous winter for the removal of ash trees included the grinding of those stumps. The City does not have a stump grinder for grinding the stumps from trees taken down by the City forester, as this is rented. He said the City would take care of Mr. Hinkle’s stump.

Lowell Sprague, 24177 Westmont Court, noted that he is a member of the Planning Commission and the Chair of the Commission’s Budget Committee. As much as anything, the Planning Commission views the budget as a way to communicate with City Council. The Commission knows the budget is tight this year, and it certainly appreciates the Council’s role in having to manage many conflicting requests, and appreciates the City Manager’s role in that as well. He distributed a document to Council members, highlighting four columns: this year’s Planning Commission budget, the original budget request which was for almost $112,000, the budget that Council got for $53,730, and a modification the Commission would like to propose to that. The Planning Commission’s budget is really straightforward. The emerging issues and printing and publishing of the master plan are amounts that were submitted by the Planning Commission and came through the City Manager’s budget as well. For conferences and workshops, the Commission requested $11,400 which it feels is appropriate so that all Planning Commissioners can attend either a state or national conference. The environmental maps item request was for $8,000. The Planning Commission works with the maps very regularly and it is clear that the environmental maps, the wetlands and woodlands especially, need to be updated. Perhaps this year is not the year to update those maps, but the Commission does not want Council to be surprised when the issue comes back. The same is true with the next item, the zoning ordinance update. The Planning Commission works with ordinances at a detailed level, and it is clear that some ordinances need a rewrite for clarification and consistency. This year is probably not the year for this, but the Commission wants to put the matter on the table so that Council is aware of the issue. The last item is the one that the Planning Commission would like some consideration on, the Greenways and Trails Plan. The money would be for printing, not to create the plan. Darcy Schmitt in the planning department will develop the plan, but to do it and not print it means that the Commission cannot get it to the agencies that provide the grant money. There is grant money that the Commission would like to get so it could use the money to develop the trail ways in the City, rather than using taxpayer money for them. Without printing the plan, the grant money cannot be accessed. There are $25 million that will be distributed by 2005 by the Michigan Greenways Initiative. If the plan is not printed and distributed this budget year, the City will not have access to those funds. The Planning Commission suggests pulling this money out of conferences and workshops to fund the printing.

* Member Lorenzo arrived at 9:09 a.m.

1. Continuation of Budget Program Categories: (Council discussion regarding the spending plan priorities)

a. City Services

Mr. Helwig thanked Council for again dedicating time for consideration of the budget. Administration is eager to entertain Council’s discussion and priorities for the upcoming fiscal year.

Mr. Helwig noted that Council had already touched on city services, and the City has been living a reduction in State-shared revenues for the last three years. This revenue is the City’s second-highest revenue source. As the City continues to observe the State’s finances hemorrhaging, this funding source becomes more and more vulnerable. He said he could not underscore this enough in terms of the big picture of building the City’s budget. The reduction has been approximately $558,000, which is approximately a 14.6% reduction in the second-greatest revenue source for the general fund. There aren’t many businesses that could continue to do things and grow as the City has while taking that kind of hit. Page 27 of the budget document shows the dollar amount that appears throughout the general fund projections, $3,812,384, which has slid down from the number $558,000 higher in 2002, $4,370,000. This drop is a great concern to administration.

Mr. Helwig said the water master plan implementation is contained in the budget document. In March, City Council adopted the water distribution study and master plan update. The five projects planned to be undertaken this year are listed on pages 37-38. This is a very important master plan, and City staff is very happy to be getting these master plans discussed, developed, debated and adopted by City Council. These master plans reduce surprises and give a certainty to development in the community.

Mr. Helwig said a new key issue this year that was asked for by members of Council, on page 29, is the public works staffing/equipment plan. In the police and fire departments, Council discussed this at great length three weeks earlier, and this is a first attempt to do something similar with the public works department. City Council has made this a priority, and he has felt the same way, that the mission of public works is a very significant one, one that many people take for granted. Like any significant mission it needs resources to accomplish what it needs to do. Given where the City was four years ago, improvements have been very significant. There have been four additional people added, as well as equipment such as the skid steer, a major priority in the current fiscal year. Out of the rainy day funds, the snow plow dump truck is item #605. Given the resources that the City has had and the catch-up that it’s doing, particularly in public safety and in resolving Sandstone and other matters, this is significant. The City has been able to reduce the number of hours it takes to complete deicing and snowplowing throughout the community, allowing workers to get to residential streets sooner. There have been a number of accomplishments with the department of public works.

Member Lorenzo said some of her concerns with public works pertained to personnel. As the City accepts for dedication, new subdivision streets, particularly if the City were to consider accepting the streets in Island Lakes of Novi, this is seemingly a village unto itself. She does not believe the City has any obligation to accept those because the RUD agreement contained specifics that this acceptance would be at the City’s discretion. If the City were to choose to accept those streets, with other subdivisions that would be coming online, she would be concerned about not only whether the department of public works has enough equipment but also personnel to accomplish goals for removing snow on streets within a 24-hour period. She understands that this does not really impact the general fund so much as it does other funds, such as the road funds. She reiterated her concern about whether the City has enough personnel to operate the equipment to accomplish set goals. She would not want to accept streets and then find that the City cannot meet its goal deadlines. By the time Council reaches the end of the budget, she would like some evaluation on personnel and related issues.

With regard to maintaining retention/detention basins, she knew this has been a shortcoming in the City’s budget. She was not sure that the City is still meeting the ambitious schedule that it should be striving for.

Mr. Helwig noted that he and Member Lorenzo had discussed this issue, as had he and Member Nagy. Mr. McCusker has assured that administration that because it is not recommending any additional personnel, which the City cannot afford, the equipment purchase will allow public works to beat the 24-hour goal for snow removal and deicing. Administration wishes it could recommend at least one of the additional people in the budget, but it is not in a position to be able to do so.

Member Paul said she would like to understand better the division of responsibility for snow removal. Her understanding was that parks and recreation has a snow removal component to it, and she would like to know how many people in parks and recreation are allocated for that role, as well as in the DPW. She understood that one of the trucks used by parks and recreation is a snow removal truck that is in deplorable condition where the road can actually be seen through the truck floor, and one of the seats does not work.

Mr. Helwig replied that it is very common for cities to mobilize for snow removal and deicing in the following manner: The principal responsibility is public works, which here is managed by the department of public works. Most of the time, they are able to deal with whatever an emergency presents. However, when it is a 6 or 12 inch snowfall, or back-to-back snowfalls, the City mobilizes with an emergency operation plan. Parks and recreation, water and sewer, and public works are mobilized to deal with that emergency. He said administration could provide a memo as to how many people that mobilization involves. He knows about the truck which Member Paul spoke about, because they talked about it when they were looking at the equipment requests in the budget. Again, because of the City’s constraints, administration is not able to recommend anywhere in the budget the replacement of the equipment other than the three marked cruisers in the police department and the new engine in the fire department. As he highlighted in his budget message three weeks earlier, there is a serious gap of what is needed for basic services and what the City is able to provide. The City will not have someone operating the said vehicle if it is unsafe, but it is getting very close to that level.

Member Paul expressed concern for the individual that would operate a vehicle where the seat does not work and in which the employee can look down and see the road. She asked if there was something that could be done to rectify the hole in the floor or to stabilize the seat so that a person will not go backwards and hit something.

Mr. Helwig replied that he believed Mr. McCusker and Mr. Auler would work something out, or the vehicle will not go on the road.

Member Gatt asked if there is some sort of formula that the City has, where "x" amount of roads requires an additional person to plow. With the police, 1.5 officers per 1,000 citizens is the standard. He asked if something similar applied to the DPW.

Mr. Helwig responded that there was not such a formula.

Member Gatt asked if someone could create a formula whereby if the City were to accept a certain number of roads, it would have to hire one more person.

Mr. Helwig said the short answer to this question was "no." Needs are compounded by topography, lane miles, and how many are side by side. Working on Novi Road or Grand River Avenue is much different than working on a two-lane residential road. There are many variables that come into the City’s needs. Public works and other departments are doing an outstanding job. He recalled his first snow storm at Novi in December of 2000: twelve inches of snow on Monday, and another six inches on Thursday. The City went 24 hours without any deicing or snow plowing on Grand River Avenue, which was the responsibility of the Road Commission. It turned out that the Oakland County Road Commission had a winter maintenance agreement with many other communities whereby those communities could take over the winter maintenance and get paid for it. The City needs to be able to hold its own people accountable. The Road Commission was the City’s consultant, was not doing the job, and was putting Novi at risk for getting people to hospitals, to work, and to schools. Council authorized the winter maintenance agreement by early January and took over Grand River, Novi Road, and Ten Mile that first winter. In addition, this meant that City workers could get into neighborhoods sooner, and have been doing an outstanding job. The community gives City staff much positive feedback for this service. In an emergency, the City does not want to be last in line, dependent on somebody else; the community needs to be self-sufficient to a major extent.

Member Gatt said he agreed with everything that Mr. Helwig has stated. The DPW does an excellent job in clearing the roads and he has no complaints. He pondered whether as the City accepts streets the DPW will be able to continue the job that residents have now come to expect.

Member Nagy asked if parks and recreation staff actually plow certain areas such as parking lots.

Mr. Helwig replied that parks and recreation staff support public works, but they are not the main providers of this service.

Mr. McCusker said that usually with a basic snowstorm, the weather is tracked through satellite so the City knows how much precipitation to expect. If more snow falls than is expected, other departments are called in. There is a regular routing system for the fire department and police department that parks and recreation also uses. As part of the full snowplowing schedule, parks and recreation will drop into neighborhoods based on what kind of snow is falling, and take care of facilities again. If the City gets into a larger snowstorm, one piece of equipment is used to maintain facilities, and all other employees are in the neighborhoods working.

Member Nagy assumed that the DPW maintains its equipment with a mechanic.

Mr. McCusker noted that the DPW has a group of mechanics.

Member Nagy asked if this was the same situation with parks and recreation.

Mr. McCusker said that recently the DPW took over the maintenance of all of parks and recreation’s major equipment. Public works has taken care of the vehicles that there are serious problems, and they have been placed on a regular schedule for maintenance.

Member Nagy asked if parks and recreation had its own mechanic before this switch was made.

Mr. McCusker replied that parks and recreation had its own mechanic in-house, but he was not an ASP certified mechanic. That mechanic had been taking care of smaller equipment, but the problems escalated above what he was capable of doing.

Member Nagy asked why the DPW and parks and recreation are not combined into the same department for maintenance. She thought it would make sense for coordinating maintenance for the City, such as with parks and projects. She asked if there is overlap between work performed by the DPW and parks and recreation.

Mr. McCusker replied that there are overlapping activities; the City has operators that are over and above some of the positions in parks and recreation. DPW loans equipment or actually does work for parks and recreation for some of their more major jobs.

Member Nagy asked if it would then not make sense to combine that work into one department, as this would allow for better scheduling of maintenance and things that need to be done, since they are overlapping anyhow. This could give both the DPW and parks and recreation extra manpower.

Mr. Helwig commented that he appreciates thoughts such as Member Nagy’s. If the City continues on the financial course that it is on, more and more creativity will have to come to bear in how the City delivers services. Any way that can reduce overhead and increase efficiency will become more valuable. The distinction in his mind is that the department of public works, just like police and fire, is a front-line emergency services department. Parks and recreation is not. What has happened in some places where the merger has been done and undone is that the emergency functions have snuffed out the day-to-day maintenance functions for parks and recreation, which have suffered. Then, the powers that be have pulled parks and recreation out of public works because of concern for such deterioration. There are always street situations and other emergencies going on in the community needing public works. Water and sewer have to move some of their street maintenance people over to help out. Many communities have experienced that routine maintenance, such as grass cutting and tree maintenance, do not meet cities’ standards with such mergers.

Member Nagy noted that the City subcontracts out grass cutting. The City has maintenance performed by the DPW that must be done. Maintenance is performed by parks and recreation that is a must. She felt that combining the workforce of those two departments could improve both areas. She understands the emergency issues that arise, but felt that the combined manpower could alleviate some of the burden on the departments. Over the previous weekend she had received a call from a resident, who noted that Powers Park was not well maintained. She asked how many employees parks and recreation has to maintain facilities with.

Mr. Auler said the target date for opening restrooms in the parks is typically between April 15^th and May 1^st, which depends on the weather. There have been many instances where if the restrooms are opened too early, pipes freeze and break.

Member Nagy asked about the portable toilets at parks.

Mr. Auler replied that the portable toilets are managed on contract by a company that comes in once a week and services those. Having the company come in twice a week would double the City’s cost for that service. In terms of the quality of the ball fields, particularly at Power Park, none of the facilities have irrigation or top dress. His department lacks the equipment to perform those tasks.

Member Nagy said she was looking in the budget to irrigate the ball fields, as they are dangerous for children to play on. She asked how many staff parks and recreation has to perform such maintenance.

Mr. Helwig noted that page 92 of the budget document highlighted the department’s total staff, which has four parks maintenance workers for the whole department.

Member Nagy commented that four people to maintain the City’s parks is nothing. In her condominium complex alone they have three staff. She does not feel that four people is enough manpower. The City has to provide something outside of just police and fire for the taxpayers.

Member Gatt asked if the DPW pitches in when parks and recreation needs help maintaining the fields and such.

Mr. Auler said that when there is overtime work, the department uses a call-out list. They go through the in-house staff and DPW staff for assistance. When there are projects, parks and recreation and the DPW share equipment and staff. DPW has done some of the larger projects for parks and recreation in the City’s parks.

Member Gatt asked if DPW could help with field maintenance and related work.

Mr. Auler replied that the DPW is busy with their daily operations. When parks and recreation is in the situation where it needs overtime to get its fields in better condition, it calls the DPW for that help.

Member Nagy asked if, because this happens, somebody could create a maintenance program. It would make sense to coordinate efforts and come up with a maintenance program instead of using overtime, for a certain period of time. Through attrition, the City may be able to add another staff person.

Mayor Csordas commented that City departments are coordinating their efforts in time of need. Logically speaking, there would be a deficit of people-power in one area by taking from one department to add to another. There are no hard lines drawn between departments, and there is a good spirit of cooperation between departments.

Member Nagy felt that departments could schedule accordingly with this type of maintenance to get the full force of labor in areas that it is needed for.

Member Paul said she shared a number of the same concerns, and recalled several conversations with Mr. Auler asking some of the same questions. She expressed concern for the young children using Community Sports Park, as it is the park with the major playing fields and is used the most for soccer and baseball. There is no parking, the City is struggling to keep up with the fields, and there is a major drop off between the asphalt and the cindered parking lot. The fields at Community Sports Park lack irrigation, so the fields can’t be reseeded. The fields cannot be fertilized, and the department lacks an aerator to build up the turf. There are questions about equipment to improve the situation. If the City can allocate some money for that park to irrigate, the department could fertilize and seed, and possibly have an aerator increase the functionality of the turf. Many children that play at the park have heel spurs and shin splints because the fields are so hard. She noted that while the park was built quite some time ago, the equipment is lacking, the play structure should have been built nearer the ball fields, and irrigation and maintenance needs also require attention.

Mr. Auler said the department has shifted around personnel to have better maintenance coverage at the parks. The department relies a lot upon its seasonal staff, some of which will start the next week. The department is hoping to hire 16 employees; two of them will be dedicated to helping with forestry operations, and 14 will be placed in parks to cover mowing operations, ball fields, and restroom cleaning. They are trying to get better coverage in the evening times, which is when the parks are used the most. The department’s biggest challenge is getting the tools to maintain the parks at the level that the community expects.

Member Paul asked if the department has an aerator to work on the field turf with.

Mr. Auler replied that parks and recreation has an old Aerifier that does not work very well. Last year, the department borrowed the school district’s aerator and aerated the ball fields at Sports Park. The school district needs the equipment at the same time the City does, so parks and recreation waits for the district to finish and then does the best it can with the school district’s equipment.

Member Paul asked if an aerator is an expensive piece of equipment.

Mr. Auler said he would have to get back to Council on the pricing of that item.

Member Paul said she would like to understand what the cost of that aerator is. If there is a reasonable plan to incorporate that equipment into the department’s budget, it would make sense to her. The turf does not currently rebuild on those fields.

Mayor Pro Tem Landry said that it is a good idea to get creative, and certainly talk about the merging departments, whether or not it comes to fruition. The DPW reacts to emergencies, and parks and recreation tries to maintain the City’s parks and recreation facilities. If those are combined, the emergencies will swallow general maintenance. Roads and similar emergencies will always be a higher priority than fixing ball fields. Without a dedicated staff to parks and recreation, those facilities will be neglected. He would be willing to consider any creative thoughts, but would be very concerned if the City does not maintain at least some skeleton crew for parks and recreation.

Member Lorenzo said the idea of the combining the departments has merit. While she understands what Mr. Helwig and Mayor Pro Tem Landry’s concerns are for the potential effects of this merger, in her mind this is why the City has oversight. She saw administrators as being in place to prevent such problems from happening. She agreed and shared the concerns about the maintenance of parks. On Council’s goals and objectives, completing parks was number one. Yet, she did not see much in the budget for accomplishing this goal. She asked if Council had any discretion with other sources of funding available to buy equipment for parks and recreation or the DPW. She would like to see more creativity by department head on personnel and equipment issues and then come back to Council before they deliberate for the last time. With regard to the portable toilets, a sanitary situation should be a priority and she would like to see how much money is spent on the matter, and how much it would cost if the toilets were serviced more than once per week.

Member Nagy asked Mr. McCusker if he had ever worked in a situation where there were combined resources for parks and recreation and the department of public works.

Mr. McCusker said he had done this in Inkster, only because at that time that community was pretty much dying at the time. That city had lost residents, and had dropped in population from about 43,000 down to about 26,000 over a period of 11 years. The only way that that city could maintain a parks department was to combine it, but that was a community that has a very high millage and no revenues.

Member Nagy commented that Council is really trying to help the parks and recreation department. She asked how scheduling was done to handle both parks and recreation and emergency situations in the DPW.

Mr. McCusker replied that the situation was temporary for a number of years. Employees were placed on a regular rotation basis, and activities were scheduled. Parks and recreation employees were not drawn out of the department unless they had to be. That was a department that had no money to buy equipment or support the personnel that they had, and had a very large overhead from a multimillion-dollar recreation facility and ice arena. After the DPW was relieved of many of the parks and recreation activities, the subcontractor privatized all of Inkster’s recreation facilities for a number of years.

Member Nagy asked if in the short term by combining the departments, this aided parks and recreation.

Mr. McCusker said the merger was actually to bring parks and recreation back up to a department level that was at least reputable in the community. This allowed the city to purchase equipment and get other equipment working. At the time, the city had laid off DPW, water and sewer, and parks and recreation employees, but that was a community that suffered greatly over a ten-year period, and to his knowledge still is. Inkster has subcontracted half of the police services in the community to the Wayne County Sheriff. The merger had been a temporary basis to buy equipment and get a resource to make sure parks and recreation had equipment for their employees. The crossover work between department employees only happened a short part of the time. Most of the time the emergency work is done by the DPW because those employees and water and sewer are certified differently than parks and recreation staff. In Novi, parks and recreation staff have done a great job with tasks like snow removal and storm damage repairs and cleanup.

Member Nagy commented that perhaps Mr. Auler and Mr. McCusker may want to discuss whether a crossover between those departments would help both.

Mr. Helwig said administration would discuss the matter beyond the conversation to consider what the pros and cons might be of the department merger.

Ms. Smith-Roy said that from a financial standpoint, there are legal restrictions on the funds and resources that the City has available. For example with the water and sewer fund, those funds can only be used for that purpose, and those revenues can only be used to support that system, so that money cannot be used to buy items like parks and recreation equipment. The same applies with special revenue funds, primarily the road funds. The local street and major street funds also have gas and weight tax, with other restrictions, from the State of Michigan. The City’s special revenues such as the police and fire millage were dedicated for a specific purpose and cannot be used for parks or other purposes. The parks and recreation fund does have its own millage; the fund balances that are available are listed in the back of the budget document.

Member Lorenzo asked if snow plow equipment and other related items could be purchased through the road fund.

Ms. Smith-Roy said that if the equipment was dedicated to the road funds this could be done.

Member Lorenzo asked if the particular snow plow vehicle could be purchased with road fund money.

Ms. Smith-Roy noted that this vehicle would then technically not be available to the parks and recreation department.

Member Lorenzo recalled that Council had been told that the departments share equipment.

Mr. Helwig clarified that the DPW and parks and recreation share their equipment in times of emergency. With day to day operations, which are most of the time, the departments do not share their equipment.

Member Lorenzo asked if the snow plow truck were purchased for the DPW out of the road fund, if the DPW could loan this equipment during situations to parks and recreation.

Ms. Smith-Roy replied that this could be done, but that the City would have to create a charge back and eventually this would come out of the general fund.

Member Lorenzo asked if this charge could be alleviated if maintenance were taken and placed with the DPW.

Ms. Smith-Roy replied that this would not be alleviated. If all the equipment were pooled together it would still have to be charged as it was used to each of those funds. This would be a different mechanism, but the funding source would remain the same.

Member Nagy asked if the equipment could be sold outright from the DPW to parks and recreation.

Ms. Smith-Roy said the City has charge-backs that it uses. It purchases equipment through the general fund, and this is charged back to the road funds and the park funds. Park maintenance is the major area where the general fund supports the parks and recreation fund right now. The recreation portion is becoming more and more self-sufficient, but the maintenance is not.

Member Lorenzo recalled Member Paul mention that the routine snowplowing schedule for parks and recreation is typically the parking lots of the civic center and municipal building. If that department was combined with public works and was not called parks and recreation anymore, and the City purchased a vehicle, she asked if the parks and recreation program would be able to use the vehicle since it was purchased out of the road fund.

Ms. Smith-Roy said the road could be used, but as the driver of the truck uses the truck they have to fill out a time card stating where the truck is being used. Because the truck would be used for the parking lots at municipal buildings, the use would be charged to the general fund because the equipment is not being used for roads.

Member Lorenzo asked if parking lots are not considered part of the road system.

Ms. Smith-Roy replied that parking lots are not considered such. The City might possibly be able to creatively charge this use somehow to municipal streets, but this was not the intent of the special revenue fund, which was intended to support the maintenance and construction of roads because the gas and weight tax are not sufficient to do that.

Member Lorenzo commented that she would like to see more information on whether the City could use that fund for those purposes.

Mr. Helwig said administration would pursue the matter. He noted that the 2005 calendar year will be the fifth year of the 2000 road bond neighborhood street repaving augmentation of $1,080,000. The City goes back to approximately $500,000 a year out of the municipal street fund starting in 2006 unless the community mobilizes a vision and decides to do something different. There are several warning signs on the horizon. Council has set the parameters for what can be done. Discussion is great, and is one reason that administration tries to devote time to go through program strategies. Too many cities miss what is coming ahead that they must deal with. He would be concerned if Novi creates an additional vulnerability in any way with the municipal street fund. This is a young city, only 35 years old. The expectations for what Council is focusing on have never adequately been supported in the community’s financial plan. This will not carry the day for what residents are expecting, nor for what Council is expecting. The City is constantly looking for ways to do things more effectively and efficiently within the organization, and will follow up on the suggestions. However, long term problems are serious for the City’s finances.

Mayor Csordas noted that the City needs to maintain at least a 10 to 14 percent surplus in its budget, as the ramifications of not doing that far outweigh what expectations may be. He is very confident that City Council understands its fiscal obligations and the ramifications from tax increases. He is encouraged to hear about working more efficiently and creative solutions. The budget surplus has saved the City many times, and for future success a surplus is critical.

Member Paul said she shared with all of the comments that Mayor Csordas had made. $25 million in the budget seems like a money, but when the realities of expectations and needs in the City are considered, there is not much money available. She questioned how the City will address completion of the parks. Council might find some money in the budget that it can move around, but this will not come close to completing the number one goal for parks and recreation, completing the City’s parks. Council may possibly have to consider another bond in the future. Nobody wants to raise taxes, but the community’s expectations are very high. She asked if the new subdivisions going in on Eight Mile Road will have City water, since she knew that City sewer would be installed on bonds.

Mr. Pearson noted that the plans are for City water and sanitary sewer. SAD 170, which has been before Council, was for placing the sanitary sewer main down Beck Road and west. Part of the plan, the infrastructure improvement with the I-96 water crossing, will make sure that pressures are adequate not only for existing residents but also for those new areas. The developers install the infrastructure themselves, and this is then turned over and becomes part of the City system.

Member Paul asked what the timeline for this project is.

Mr. Pearson replied that this is as development comes. Several of those particular developments have options, if City water isn’t available, where they are open to install wells on an interim basis. Maybury Estates will be the first to receive the services.

Member Paul said she knew that at the Planning Commission they had discussed either using wells or Northville water. Northville said no, and the matter came back.

Ms. McClain noted that the timing of the I-96 water main crossing project will allow Maybury, when it is coming online with its houses, to tap into City water. The water is not currently available, but will be available later this year to meet their schedule. The addition of the booster station at West Park and Twelve Mile will further help that situation. As Tuscany and eventually Singh come online, they also will have City water available. In addition, those two projects also help the existing residents in the southwest portion of the City.

Member Paul asked if by the end of the year there will be water going to that area. She asked where this would end on Eight Mile.

Ms. McClain replied that currently, because of what is known for developments, the service will end at Singh. They City has not completed the loop over to Community Sports Park because it has not received more information about further developments around there. There is also the potential for a project along Nine Mile Road to bring water from Beck Road over to the area of Park Place and the new Preserves development.

Member Paul said she was asking these questions because she would like to use the water and sewer fund if possible to get hot water and irrigation to the Community Sports Park. Her goal is to get water to that area so that the park can be improved. She noted that the concession stands cannot operate properly without hot water. Her understanding is that the City has limitations to what can be served in the concession stands because there is not running hot water in those. She asked if this was accurate.

Mr. Auler replied that there is a water heater at the concession stands at Community Sports Park. That water is well water, and some customers do not like getting soft drinks made with the well water. They have instead gone to selling bottled soda.

Member Paul commented that the concession stands are not open very often. She asked if it would be a money-generating possibility to contribute to that part of parks and recreation.

Mr. Auler said that last year was one of the few years that the department has been able to generate additional revenue above the operating costs of that facility. This year, through the beverage contract, the department hopes to have a piece of equipment that can actually go around the interior of the park while the customers are there. The location of the concession stands is not very convenient, as it requires a long walk that customers don’t usually want to take. Hopefully there will be a mobile concession stand this year, which was successful at Power Park this past year.

Member Paul asked if the concession stand at Power Park was able to make a profit.

Mr. Auler replied that there was a minimal profit at that facility.

Member Paul asked if the goal is to increase that profit margin.

Mr. Auler replied that this was correct.

Mr. Pearson said his understanding was that even when the improvements for the residential developments on Eight Mile are completed, there will still be a significant gap in getting those services to Community Sports Park. He did not believe that even with the improvements by the end of the year that City water could be provided to Community Sports Park.

Ms. McClain agreed with Mr. Pearson, and noted that there will be about a ½ mile gap in each direction that would need to be completed for this service. The City would have to pay for building a water main through that area to get water to the park. This would be a cost that would be put back into the City, in addition to the cost of the water.

Member Paul commented that it might not be a possibility to get City water to that park by the end of this fiscal year, but she sees this as a strong direction that the City could go in. She would also like to know for the next meeting what wells are available and what the possibility is for irrigation in that area. She knows there is water from a well for the soccer fields, and she would like to know what the capacity of this well is and how many fields it serves. She would like to somehow improve the parks; the maintenance program is an integral part of that. On a long term basis, if the concession stand is located in a bad area and there will be City water to Community Sports Park, she inquired if the plan is for that facility to remain there or to be relocated, and asked that this input be obtained from the parks and recreation department or the Parks, Recreation and Forestry Commission.

Mr. Helwig noted that three weeks earlier he had determined the cost of obtaining health insurance and what administration is prepared to implement starting July 1^st with the 61 administrative personnel, in terms of a higher prescription co-pay, paying towards their monthly healthcare premium cost, and 50% co-pay of the 19 to 25-year-old dependent coverage. The City is seeking to negotiate these in a similar stage manner with the Police Officer’s Association. These are difficult negotiations because they have not occurred in the immediate region other than in Troy. A common complaint is that employees would be willing to do this while they are working, but do not want to pay for healthcare when they are retired. Healthcare is a very, very difficult issue. The City has very good people, and Tia Gronlund-Fox and Chief Shaeffer are working hard on it, but it is very difficult to accomplish.

Mayor Csordas noted that benefits are a critical issue everywhere. As Council continues to discuss the future of the City he is confident that both components of the negotiating team will recognize that the future has to be taken into consideration. For the survival of future benefits some concessions have to be made.

Member Gatt said that regarding benefits for union employees, his vision is that the human resource director and administration should target not so much present employees of the City, but rather future employees. He would like to see a two-tiered system, as this would create a much more cooperative attitude from various unions in the City. At Oakland County there are at least two or three tiers of employees. He feels that the City should not take the direction of going backwards and touching the employees that are here, but the City needs to look very closely at future employees’ benefits and their sharing in the cost of those benefits. The MERS retirement plan offered by the City is an excellent plan, and he also assumed that this is very expensive. He does not know why the City cannot look at changing this for new employees and offer them a defined contribution plan instead of a defined benefit plan. He believes this is the standard in the industry today. When he hired into Oakland County two years ago there was no such offer of a defined benefit plan such as the City of Novi has. The City cannot afford to offer the same benefits in the future that it has offered to current employees. Current employees have earned their benefits and were hired under the assumption that those benefits would be there, and there is not a better employee than the one that works for the City of Novi.

Member Lorenzo remarked that this was a good segue for talking about personnel costs in general. She feels that the future is now, and Council needs to start looking at this item now, not waiting for other councils to be burdened with the same challenges. The majority of this budget is personnel costs. The taxpayers are receiving very little out of this budget in relation to personnel costs. This is a step in the right direction in terms of health care cost containment. The City values its employees and recognizes that it needs the employees to meet its operational and other goals, but it also has to have balance in the budget. Basic city services must be provided to the taxpayers. When Mr. Helwig became the City Manager he brought ideas that she has been open-minded to and supportive of. Now is the time to take a look at the cost to the general fund and cost-effectiveness. Another area to take a look at is whether the City is too top-heavy with administrative personnel, and whether the community is getting the results to justify their cost. Over the past couple of years, the City’s administrative employees have been enjoying salary adjustments beyond what the average of corporate America has been. This year, the average adjustment in corporate America has been about 3.5%. Last year, this average was between 2% and 2.5%. The City of Novi’s employees enjoyed of 3% up to 4.75%. Some of the employees have enjoyed two raises in a year, and some of those have equaled 10% together. In order to have some equity in the budget this year, it will be her proposal to examine a 2% across-the-board raise for administrative employees. By doing this, the City would gain close to $59,000 for the general fund. That money would get the City an additional police officer for 6 months, irrigation for four fields at Community Sports Park, or other priorities. There are an extra $600,000 in the budget for personnel costs because this year employees will receive one extra pay period, which amounts to about 3% of the budget. Employees have enjoyed above-average salary increases in administrative jobs for several years, so this year it would be reasonable to drop this down to a 2% level so that Council can focus on other areas that need basic services.

Mayor Csordas asked Mr. Helwig to talk about the two pay increases in one year.

Mr. Helwig said he did not have the specifics in front of him, but what he believed would cause this is a promotion during the year and some other kind of 6-month-later increase. One of the first things that Council authorized when he came to Novi was a compensation study because one had not been done for a long time. Administrative personnel salary ranges were not competitive, which Tia Gronlund-Fox was able to document in the compensation study that Council authorized. There still are some positions where the City is doing equity adjustments to make them, little by little, competitive. This will allow the City to retain and attract the best personnel. He was asked by Member Lorenzo a couple of months ago to submit a report on the pay-for-performance system for administrative personnel, which he did. He feels very strongly that what he inherited was an organization whose compensation system was dysfunctional, whose appraisal system was dysfunctional, and whose budget process was dysfunctional. He is very proud of what this team has provided to Council and the community in terms of improvements and results in those areas, which includes results that were not included in the goals but were very important to the community. He feels strongly that this is a very lean organization. He has jettisoned administrative personnel since he has been with the City. The City is doing more with less all the time in a community that will basically double in population over time. He has to have some tools to get the attention of the organization and hold them accountable, and this is one of the most important tools that he has. The community has never paid its way in the areas to meet expectations. If the City is not careful, this could happen with administrative personnel. With a few exceptions, there has been an across-the-board upgrade in the caliber and professionalism of the administrative personnel in this organization during the past four years. If City leaders are not careful, this could be jeopardized and the clock will be rolled back. He also noted that in fairness there are very rich benefits in this organization. The amount of money that an employee contributes to their pension is very low compared to what he has seen in other states. Full coverage of the health/dental package provided is something that he has not seen elsewhere. What Member Gatt had mentioned has actually been instituted in that employees who started four or five years or ago or less do not receive longevity payments. That was something that was done some years ago and was not based on the pay for performance concept. The new system is a way to get peoples’ attentions and align Council’s expectations with the resources that he has to try to deliver on those.

Mayor Csordas recalled that this was a one-time correction phase. He assumed that the extra pay period meant that there would be 27 pay periods this year. He asked if that meant there would be 25 pay periods next year, or if this was only an anomaly.

Ms. Smith-Roy replied that every 12 years there is an anomaly where there is an additional pay period. Most of the City’s employees are treated as if they are hourly so they will still work that number of hours. This is why the item was included in the budget, because in all fairness the employees are really working that number of hours. The last time this happened for Novi was in 1992. Depending on whether the pay day is Thursday or Friday, it happens in different years for different organizations. This will not recur next year causing some kind of salary increase in 2005.

Member Gatt noted that Ms. Smith-Roy had commented that most of the City’s employees are treated as hourly. He asked if those who are not have their salaries adjusted for the number of pay periods.

Ms. Smith-Roy replied that the City converts annual salaries into bi-weekly and hourly rates. The time that is used is charged by the hour.

Member Gatt asked if this was a choice that administration had made, but was not tied to a contract.

Ms. Smith-Roy replied that this was correct.

Mayor Csordas remarked that it would be interesting to see the impact that the additional pay period would have on the economy this year.

Member Nagy said that in listening to the City Manager and reading Council’s information, she thought that the City had met the correct point for salary adjustments from the compensation analysis. She is looking at the long-term, such as 10, 15, or 20 years down the road. She has reviewed issues regarding in-house staff, such as engineering and planning. The savings from having in-house engineering over two years has been about $30,000, but she did not know if this included calculations for social security, insurance, pension, retirement care, benefits, and worker’s compensation. She felt that the issue of in-house staff versus consultants needs to be revisited as the issue will be constant, and the noted costs will increase each year. With consultants, the City pays them and has the ability to choose and negotiate. The City has had the in-house program for four years now, and while it has good employees, Council must consider costs. The City does not have the proper software to perform the necessary analysis because it is too costly. She suggested that perhaps the in-house program should not be so fully staffed, with perhaps two planners and consultants or a senior engineer and consultants. Other costs to consider are the square footage that the in-house staff occupies, the telephone bill, added expenses for workshops, construction maintenance, supervision costs, and others. This should be looked at as a potential future savings to the City. Finance is one of the most important services to the City, and the needed software would be a benefit to taxpayers. This City is nearly 3/4ths built-out. The city of Warren recently laid off 17 engineers, the city of Wixom made changes, as did Walled Lake and Farmington Hills. $100,000 that could be found in the budget could be manipulated, but would not cover very much. Healthcare is an issue for every person in this country, whether they work for the government or a company. The City needs to look at a very detailed cost analysis.

Mayor Csordas thanked Member Nagy for her comments. There was a very thorough and in-depth discussion about using in-house staff versus consultants several years ago. He would not want to "whip saw" the decision making process or the direction given to the City, because that was a significant functional and fundamental change to the City. In the beginning he was opposed to the use of in-house staff as opposed to external consultants, but as time has gone on the idea has made a lot of sense. He shared many of Member Nagy’s concerns at that time as well. He asked Council to be careful about a "whip saw" effect on the City’s direction that this decision would have on the day to day operations of the City.

Member Nagy said she understood the Mayor’s point, and said she is not trying to cause a "whip saw" effect. It is only prudent business practice that every three years, whether an organization contracts or sub-contracts out work, to review decisions. The City has had in-house staff long enough to consider what is going on and where it wants to go in the future. She is looking to be creative and fiscally responsible, not only to the taxpayers, but also to the people who work in Novi and will continue to do so.

Mayor Csordas noted that last year the City "fired one right across the bow" at Blue Cross/Blue Shield, and that company dropped its prices just to get the City’s business for another year with a 9% increase, when the whole world was getting 18 to 75% rate increases. When most people talk about healthcare benefits they refer to Blue Cross/Blue Shield, but there are many other companies that can provide the same benefits. Contracts require equal benefits, but not a particular provider. The lesson was learned last year that "Big Blue" will try to buy that business and will pass those losses onto somebody else in their system. The City will fire that shot across the bow this year again as well, because he will not allow that company to raise the City’s rates by 32% this year based on its health claims experience. When the City did its analysis for self-funded programs, the analysis result was that it did not make any sense to go to a self-funded plan because it would hurt the City. The City will do the best that it can this year and go out to bid, because Council is absolutely committed to maintaining its benefits, but those do not have to be from Blue Cross/ Blue Shield. Somehow, the City needs to get the necessary software for the finance department. Every time he sits on the Capital Improvements Committee, somehow the chip seal seems to be placed ahead of the software system and some other things. Efficiency today and in the future is very important, and operating on a patchwork software system that is not integrated from a business standpoint makes no sense. He noted that the company that he works for manages the healthcare system for the city of Warren, which is a city that is built out. Maintaining the benefits at that city has caused a significant amount of trouble. What Member Lorenzo had said is very true, that Council does not want to push these decisions off to future Councils. He wants to do everything that he can to preserve employees’ benefits to the highest amount possible based upon the finances available.

Mayor Pro Tem Landry said his view was that he agrees in spirit with Member Gatt in that one way to approach benefits is to deal with new employees on a different level than existing employees. This is a reasonable way to begin to approach the situation. On the other hand, he does not believe that Council can insulate its existing employees from the economic realities of the world. With healthcare premiums raising an average of 14.5% over the last 5 years, he does not think Council can look at City employees and just agree to pay that amount. Council has to start making tough decisions right now. As the City looks at its system in comparison to the environment that its workers work in, if that is a rich aspect of the contract, then this is what Council should first look at. If the nature of the contract is a defined benefit plan, then this should not be changed, as going from a defined benefit plan to a defined contribution plan would be drastic. This would also get into promises made, which is a fundamental change that should be made with new employees. The City can make some changes, and this budget is recommending some items such as changing co-pays from a $10/$20 to a 2.5% pre-tax contribution, and he felt that Council could make some of those "tweaking" changes. However, if this will be done, he does not know how those changes could be made without maintaining employees’ salaries in the marketplace. The City Manager sounds very serious when he talks about inheriting a dysfunctional compensation system, with the only way to get people’s attention being salaries. He does not feel this is a tool that should be taken away from the City Manager. He will not be in favor of only a 2% raise, as Council cannot do both in the same year. He will be in favor of tweaking the benefit program as recommended in the budget, maintaining its fundamental nature. More and more cannot be demanded from employees with less and less pay.

Mayor Pro Tem Landry said that from what he has seen, making a transition from consultants to in-house refers to the plan review center. From the information that he has seen, this transition has turned out to be a financial success. He does not think the City has lost money, and the analysis that was just provided to Council showed approximately $30,000 in net cash provided last year, and a budget for more next year, meaning that the savings is increasing. This analysis includes salaries and benefits. Member Nagy raises a good point that not only salary can be considered, but the analysis that he has seen includes benefits. The City is making money on the plan review center as was promised. He did not see the problem with the consultants issue, as the City is making money.

Member Lorenzo said that with regard to the plan review center, her concern is that the comparison provided to Council does not necessarily compare apples to apples. She would like the reduction in hours and hourly payments broken down as was done in the very beginning when the matter was presented to Council. Her second concern was how much the City was spending when doing the work by external consultants out of the general fund versus how much is being spent out of the general fund right now. In other words, from her recollection the City had three areas where it was paying retainers, for Birchler-Arroyo, JCK, and for woodlands. That amounted to about $158,000, which was coming out of the general fund. There may have been some additional general fund costs, and she would like to know what these were, and compare that to what the City is spending out of the general fund now. As Member Nagy had said, when Council must consider personnel it must also consider benefits, healthcare, pension, furniture, required space, and so forth. This is the comparison that she wants to see. The City implemented a new policy three or four years ago; now the question is whether or not this is working the way Council thought it would, particularly when talking about cost savings and cost effectiveness, both with all funds and out of the general fund.

Mr. Helwig noted that administration wants to give this item much more attention in the spirit of what it now understands as Council’s desire.

Member Lorenzo said that in terms of the compensation study, she did not disagree with Mr. Helwig that previously the City might have been dysfunctional. Her concern is that perhaps the City has moved too far to the other side. She has the compensation study from 2000, and there were recommendations with regard to minimum and maximum administrative salaries. She has calculated out that between that 2000 study and the 2003/2004 administrative salary range, in three years Novi has not only met the study’s recommendations but has increased that by nearly 11% in three years. That means that there was a 3.62% increase each year in the administrative salary range. She feels that this was overly generous. She has no problems in meeting the compensation study, but now she concerned that the City is going too far in the opposite direction. She has no problem with the 2% across-the-board increase for this year because the increases have been very generous over the past couple of years, even in such a downturn economy where corporations were not giving out these types of administrative increases. Corporate administrative salary increases have not been in the range of what the City has been giving out. While the City wants to retain employees, between benefits and salary right now, a very good package is offered to employees. In this economy, everybody is lucky to have a job, period. Health cost containment is a very good step for the City. She asked for the approximate cost savings from that containment.

Mr. Helwig replied that the City will save $36,400 this year because of the administrative health cost containment.

Member Lorenzo said her plan in reducing the administrative salaries to a 2% increase would give the City an additional $59,000. Her suggestion saves more than doing what administration is proposing. She felt that the City should do both this year, as the health cost containment procedure is not enough. The City has been very good to its employees over the past couple of years and they are getting an additional pay period this year. She feels that it is very reasonable to have a 2% pay increase across the board.

Mayor Pro Tem Landry asked if the pay increases are not across the board, but create a pool of money that administration can use to determine merit increases within four categories.

Mr. Helwig replied that this was correct, that there is a pay for performance system. An evaluation is done before there is an allocation made. After that person’s performance is given a rating, the pay is done.

Mayor Pro Tem Landry asked what in this budget would be a pool of money based on a percentage of the entire administration’s salary.

Mr. Helwig said that what administration has suggested is using a line movement, moving the minimum and maximum for each administrative position by 3.25 percent. Council budgets how much money there is to allocate. Each evaluation is done, and they are slotted at the schedule of 2%, 3%, and 3.25%.

Mayor Pro Tem Landry wished to make a point about the IT subject. Nobody disagrees that Council needs to do something about information technology at the City. The problem is that it is such a huge expense, a seven-figure expense that Council is not going to find the money for. However, Council realizes that something needs to be done. He asked if because this is an off-election year for the City if there will be goal sessions this summer for Council.

Mr. Helwig replied that in the past, administration has targeted November of the fall. This was started in 2000 and was also done in 2002. The goals need revision and need Council’s imprint.

Mayor Pro Tem Landry asked if Council has in this budget that is proposed some allocation to do a study for data on information technology.

Mr. Helwig commented that the money is not in the budget.

Mayor Pro Tem Landry’s suggestion for dealing with this was at goal setting time. Over the last few years Council somehow found $800,000 to do Westmont. If Council sets a high enough priority on the matter, administration at budget time next year might be able to find the money to address information technology.

Member Paul said that the concern of what to do with new staff as opposed to old staff is very important. Also, Council needs to look at what other cities around the area are doing. Many communities have laid off city employees. She never wants to go in that direction, as Novi already is operating with the bare minimum number of staff. In regards to parks and recreation, DPW, police and fire, the City is behind in those departments, and Council needs to address those issues in its goals as well. There are federal laws that exist about when to change the insurance plan. If an employee does not like the idea of a $20 co-pay, they may be able to take their spouse’s insurance if it is better, but they cannot do that for a period of time. In all fairness, this insurance change has to be implemented when the employees can change their insurance package.

Mayor Csordas noted that employees can change their insurance during open enrollment and that this is not federally mandated. He asked if there is a City employee whose spouse has equal or better benefits, if the City still provides benefits to that employee.

Ms. Gronlund-Fox replied that the employee is allowed to choose the City’s benefits. There is a cash buyout amount for opting out of the City’s plan.

Member Paul asked when the open enrollment period would apply. If Council changed the current plan, she wondered when employees would have the opportunity to switch over to their spouse’s insurance if they desired.

Ms. Gronlund-Fox said the City’s renewal is January 1. About November of every year the City has its open enrollment. The 2.5% contribution will take place on January 1, so employees will have the chance to opt out.

Member Paul asked when the suggested changes would apply if made by Council.

Ms. Gronlund-Fox said the $10/$20 co-pay change for administration will begin July 1, and the 2.5% contribution will be January 1.

Mr. Helwig noted that the timing of these changes were made exactly with Council’s points and consideration.

Member Paul said that as long the changes will coincide with the open enrollment, she was ok. She does not want to force someone’s hand to change because of budget constraints when they have no opportunity to change over their insurance.

Mr. Helwig responded that this was exactly why the 2.5% contribution was made effective January 1 instead of July 1.

Member Paul commented that the City has many people on the plan review and engineering staffs to consider, something like 12 employees, far more than the 8 employees that Member Gatt was speaking of. She is concerned about the insurance coverage and personnel costs of those departments because of what was shared at the table. Consultants are very important to the City’s future, and to its costs. Sometimes when the City goes out to bid it can realize cost reductions, which is something she wants to look at long term. The most important thing that she promised when she was elected to Council is safety. She wants to make sure that the City has enough police and fire personnel, and make sure that roads and parks are safe. She wants money to be directed to where services can be enhanced. Police, fire, parks and recreation and the DPW are the most important safety issues. The City Council recently approved population increases in several areas, and also increased the Eight Mile and Ten Mile corridors. Right now, the west side of the City is not very populated but is growing. Currently, the FBI standards are 1.5 officers for every 1,000 people. The City is 15 police officers below the FBI level at the moment. Using another standard from not long ago, the City would be 21 below. She feels that adding 2 sergeants is important, but she wondered whether the City is safe with the current practice.

Chief Shaeffer commented that this was a very difficult question to answer, as he could not answer it with a yes or no. Novi is not a community that experiences a great deal of street-level crimes. The City does not see street-level drug dealers or prostitution activities, nor street-level robberies and beatings or similar activities that people read about in the news from other communities. Novi’s crimes happen behind closed doors in its residences or business facilities. The City has an attendant level of crime and has experienced a growing trend in high profile crimes that will continue. People should feel safe in their neighborhoods. When he asks people if they would feel safe walking around their block at 1:00 in the morning, he almost universally hears that they would feel safe. The City is experiencing increasing levels of activities, as these can be seen in the number of calls for service. Police officers are finding themselves involved with self-initiated activities, as well as high-profile crimes that are very demanding on the police force.

Member Paul asked if with the current management practice, if the 8-hour shift for managers is a safe practice at this time.

Chief Shaeffer replied that the police department would much prefer to have a different management setup.

Member Paul commented that preference and safety are different. She asked if the City is safe the way the police department is currently practicing. With the current 8-hour shifts and the current number of sergeants, she wanted to know if the City is functioning efficiently.

Chief Shaeffer said the police are not functioning efficiently with the current 8-hour shift that supervisors are on, or with the number of supervisors that the department has.

Member Paul said she did not completely understand this, because the police department has taken almost a year to replace one of the sergeants that is currently being looked at. She said it was hard for her to understand if the City is not safe and the department is down one sergeant but wants to add two. She is a nurse, and when they went from 8-hour shifts to 12-hour shifts, the management staff stayed on 8-hour shifts. This was not preferable, but it was still a good practice; eventually, this was changed over. They had a similar situation where they were down nurses and they needed nursing bodies to cover the staff at the hospital. To her, the same situation applies to police officers. Nursing and police somewhat correlate in regards to shift work, covering, and making everyone safe in their environment. According to Chief Shaeffer’s memo, police sergeants will cost $74,519 for a six-month period. Police officers during that period would cost almost $52,000. The City could almost hire three police officers instead of two sergeants. She asked for additional information for the next meeting, the breakdown on the cost of a new police car, including what equipment is taken off of a stripped vehicle and goes into a new vehicle. Council needs to increase the number of officers on the street. She would eventually like to add the two sergeants so that the management team can be on the same timeframe as police officers, but she really wants to see more bodies on the street. She will look to see if there is support for three more police officers instead of the two sergeants, and maybe next year look at the two sergeants. She asked if the officers involved with the recent $4.8 million raid were working on the investigation locally or elsewhere.

Chief Shaeffer said the officers are working on the investigation both at the Novi police department and at the DEA headquarters in downtown Detroit.

Member Paul commented that three more police officers were being focused on that investigation. She asked how long those officers would be focused on this investigation.

Chief Shaeffer replied that this is a lengthy investigation.

Member Paul asked how many police officers are stationed on the road.

Chief Shaeffer replied that he believed there are 37 police officers, not supervisors, on the road.

Member Paul said that this number is actually 34 because three are devoted to the noted investigation. She would like to put three more police officers with the small amount of money available, and waiting for the sergeants.

Mr. Helwig said the questions that Member Paul were asked and discussed in depth previously along the way to making the recommendations in the budget proposal. The City has been adding police officers since 1996, but has not added any supervision. The proposal to get at the shortage of road presence, as well as some of the accountability and supervisory issues that the City is vulnerable on, landed on the side of adding two sergeants for six months. This would guarantee, if the police department goes to the 12-hour shifts, a supervisor’s presence on the road for each of those shifts. Right now, one sergeant is drowning in paperwork and follow-up. The additional sergeant will really be an increased road presence, which is what the City really needs because those sergeants are trained supervisors. The City must follow a meticulous policing involvement from the first second of contact. A supervisor’s presence gives police department additional confidence that it will do that, and that an arrest or charges will be filed and justice will be served. The lack of that supervisory presence is a vulnerability that is very difficult to place a value on.

Member Paul said she appreciated Mr. Helwig’s comments and she appreciates both sides. It is a very difficult conflict for her because she can see benefits on both sides.

There are sometimes only a few police officers available to cover the night shift, such as when bars close, as this is also when shifts change. Now the City has three less police officers because of the investigation, which will be a long process. Her concern is that the City is still down bodies on the road at times. She asked if there is so much administrative responsibility that is difficult for the sergeants to maintain, she asked what the second-in-command administrator in the police department does. If administrative work is an issue, she wondered if the deputy chief could take on some of the responsibility and pick up some of the managerial tasks. Council is going to need a long range plan, as it increases in population, to implement additional police officer hiring. Just like the greenways plan that the Planning Commission is proposing, Council needs a long range plan to configure the number of people that need to be hired to increases in population.

Member Gatt stated that he is very close to some of the people involved with the investigation going on downtown. He wanted to assure residents that the City is not down police officers on the street. The chief has assigned detectives to work with the DEA. When the time comes to divvy up the monies, the City’s involvement will ensure that its share is protected.

Chief Shaeffer agreed that this was correct.

Member Gatt said the investigation is not taking away from street personnel at all, as there are no uniformed police officers involved in the investigation. The chief had commented that the police department is not working efficiently, and it is not. Unless there are two sergeants on each shift, the one sergeant that is there is the "officer of the day." He or she is charged with overseeing an operation of all the people working, including dispatchers and clerks, and has to man the front desk for citizens that come in demanding to talk to a supervisor. They are not on the street doing their job, so to speak, and are not able to supervise the street officers. If the police go to a system where there are two sergeants working at all times, then one can stay in and one can stay out. This will ensure that command staff is on the scene of whatever situation that could arise. The two-sergeant theory will only work if the police supervisors can go to 12-hour shifts. He feels that the City should approach that union and get a feel for whether the supervising officers want that schedule or not. The overtime that the City is paying for sergeants and lieutenants is not efficient or effective, and Council should do something about it. Deputy Chief Rasmussen was hired in 1975 and has climbed through the ranks, and he is busy all of the time assisting the police chief. In today’s world, the police chief is more than just that, he is also an administrator, a politician and an ambassador to the public. The chief has to have a number two person there to take charge when he is not there, and Deputy Chief Rasmussen does this admirably. Prior to coming to Novi, the deputy chief worked for the City of Detroit Police, so he is very knowledgeable at his business. To fix any problems in the Novi police department, it would just take adding a few sergeants. The Novi road patrol is the backbone of that organization, is what the public sees and what it demands to monitor the area. The City needs the other support staff to keep the road patrol working. Novi probably has the best detective force right now than any other police force in Oakland County. Put one more sergeant upstairs and the Novi police department will run as efficiently as any police department could possibly run. The Novi police department is the envy of most other communities.

Member Nagy asked if City administration had spoken with the police sergeants’ union on whether they would be willing to change to 12-hour shifts.

Chief Shaeffer said he has had very informal discussions with the leadership of that union and various members. He believes that there is an inclination that the union would eventually go to 12-hour shifts. He noted that he could not represent this as a true fact to Council, however.

Member Nagy asked if Council were to make a decision to hire the sergeants, when the City would know whether the sergeants would be willing to go to 12-hour shifts.

Mr. Helwig said the recommendation is to hire the sergeants effective January 1^st, so the City would try to get that answer as soon as possible. Part of the factor is negotiations.

Member Nagy asked when those negotiations will take place.

Mr. Helwig said that as soon as Council decides what is authorized, administration can undertake those negotiations.

Member Nagy asked what other options the City would have if the negotiations failed and the sergeants and lieutenants opted not to go to 12-hour shifts.

Mr. Helwig said there are a couple of options. One is to apply the two new sergeants to the two most demanding 8-hour shifts. Council could decide not to hire the sergeants and do something else.

Member Nagy summarized that the initial cost for six months for hiring one sergeant would be $74,000; for one year this would cost $149,038. The police department would like to hire two sergeants, which would cost $300,000 for a year.

Member Gatt asked if the numbers being mentioned were not the cost of a sergeant over the cost of a patrolman. He felt that the costs were the cost of hiring a sergeant and hiring a patrolman.

Ms. Smith-Roy said this was not correct.

Member Nagy commented that she was supportive of Member Gatt’s opinion. She asked if the $74,000 would include the officer’s compensation package.

Ms. Smith-Roy replied that it did.

Mr. Helwig noted that the named costs are the full costs of filling one of those positions. Included in the budget is backfilling the police officer position vacated by promoting an officer. The City is not deleting any positions that are currently there in the police department.

Mayor Pro Tem Landry asked Chief Shaeffer that if he had his choice to improve the effectiveness of the Novi police department, if he would choose to hire three road patrol officers or two sergeants if they would work the 12-hour shifts.

Chief Shaeffer replied that the police actually need both. This year, after discussions with administration and City Council members, the police department finds itself really needing supervisors. The department is spending a large amount on overtime. There are situations where one supervisor is supervising as many as 15 officers on the road and another two to four dispatchers at the same time. Usually there are 10 to 15 cars on the road during evening hours, two to four dispatchers, and one supervisor working. Novi’s police department has roughly 15% of its police force in the supervisor/administrator category. Other organizations average 25% of their staff in the supervisor/administrator category. He wants officers and he wants supervisors, but this year he is asking Council for supervisors.

Mayor Pro Tem Landry said that based on the chief’s comments and those of Member Gatt, it seemed that Council was dealing with something relatively simple. Council is dealing with roughly $150,000 to allocate, and his suggestion is to allocate that money with the view of hiring two sergeants in January, as recommended by administration. This gives the City six to eight months to negotiate with the union. If for some reason those negotiations do not work out, the City still has the $150,000 allocated, and Council can decide to hire the three patrol officers for roughly the same amount of money.

Member Lorenzo said she was hearing that it is the preference of the police department to have more supervisors and it would be more efficient from an operational standpoint, but she has not heard of any operational failures because the police don’t currently have the two additional supervisors. This is why she is still leaning toward adding police officers. As Member Gatt had stated, the people see the patrol officers on the street. This is the value judgment that the citizens of Novi make about the police department. They do not know about what administrators do or what is going on inside the police department building, but they do know about what is going on outside on the street. Citizens are concerned about whether there is someone to respond to their emergency, about whether there are patrol officers available to respond if a child is approached by a stranger, in order to thwart those situations. She sees the value of adding both types of staff, as obviously efficiency is valuable. However, if there are no operational failures or issues with the way the department is currently operating, she would rather see the patrol officers on the street, as would citizens. She asked how many new vehicles and equipment the police department would need if Council decided to hire three new patrol officers.

Chief Shaeffer said that one vehicle would be needed.

Member Lorenzo asked if that vehicle would cost roughly $50,000.

Chief Shaeffer said the vehicle would cost about $22,000 to $25,000 fully equipped.

Member Lorenzo asked if that cost would include the computers and other equipment inside the car.

Chief Shaeffer replied that it would.

Mr. Helwig noted that administration is recommending the replacement of three police cruisers for $87,000, which is not including the laptop computer.

Member Lorenzo asked how much these would cost with the laptop.

Ms. Smith-Roy said the cost would be between $30,000 and $35,000 for each cruiser.

Member Lorenzo said that if Council wanted three police officers, if would have to find an extra $35,000 in the budget for a new vehicle.

Ms. Smith-Roy noted that the amount calculated in the six month rate is half of a vehicle. Administration has part of that cost incorporated in the budget. The City would be covered for the vehicle.

Member Lorenzo said the City could hire three patrol officers starting January 1^st, and would not need any more money in the budget to purchase a vehicle.

Ms. Smith-Roy said this was correct.

Member Gatt wished to respond to one thing that Member Lorenzo had said. The beauty of promoting sergeants and putting them on the road is that they are still driving around on the road, making traffic stops, effecting arrests, and doing the work of a patrol officer. Yet, the sergeants are also supervising. Adding sergeants would be "killing two birds with one stone."

Member Lorenzo asked if the sergeants would be on the street as much as a road patrol officer.

Member Gatt said that if there are two sergeants on duty, the answer is yes. When he was a member of the police department, they wanted to get out on the street but were held back in the station too often by tasks that required their presence there. If there are two sergeants working, one should be on the street at all times.

Mr. Helwig commented that this was the tipping point for him. The sergeant is going to be on the road patrol as much as a police officer during each of those shifts, and the City will conservatively save a minimum of $20,000 in overtime. With risk management, you don’t know what the cost will be until it lands. He places a value on preventing a grievous error at a scene because there is not a supervisor there.

Member Lorenzo noted that one supervisor would still have to be at the police station, so Council would really be hiring one new supervisor/patrol officer.

Member Gatt replied that if two sergeants are working, in normal times there would be one in the station and one on the street. Obviously, if there was a catastrophe on the street, both sergeants would be there as would the chief and others. Under normal times, one sergeant would be in the station, the other out on the street for the entire shift.

Member Lorenzo asked Chief Shaeffer if this was how he was anticipating the additional sergeant hires working operationally.

Chief Shaeffer replied that this was correct. As long as there are two sergeants on duty, one of them belongs on the street. This was discussed at a previous meeting as a risk management component, where he also described how many other organizations mandate that supervisors attend certain types of calls for service along with a patrol officer, one type of which is domestic violence because there is such a huge potential for violence, resistance of arrest, and for City liabilities for assaults on officers. This is one of the primary reasons that the police department wants to structure supervisors out on the road so that they can provide necessary oversight and assistance at the same time.

Member Lorenzo said she would still like to hire at least one additional police officer to place out on the street. If Council took the 2% administrative across-the-board pay increase and placed the savings towards a new police officer, she might be willing to compromise and support the addition of two sergeants, as well as one police officer.

Member Gatt said that he wants to see another sergeant promoted. He will find the money if he can get Council’s support because the City needs another sergeant upstairs. The police department had that position filled, lost it a couple of years ago, but it is necessary. That position will help the whole agency run smoother, and he would like Council to remember the matter during voting.

Member Nagy said she understood the concerns of everyone, but she was starting to see the benefit of adding the two sergeants from Member Gatt’s and Chief Shaeffer’s comments. Risk management is very important. However, she does not want to forget a basic concern of hers, parks and recreation. With all due respect, she would compromise and support the police department, but she has to support parks and recreation because of the kids. She said she would also support Member Lorenzo’s proposal for a 2% pay increase. When she looked at some of the allocations for raises last year, she saw some people that received raises of 7.74% for the total year. She asked if bonuses were given for completed projects in departments.

Mr. Helwig said that individual bonuses have been given a couple of times. He recalled doing this when the Twelve Mile and Novi Road intersection was reopened within the 31 days that the City said it would be.

Member Nagy said she believes that staff would understand this pay increase. The City has excellent employees and they are terrific people. People understand that the economy is not good. She is willing to give a 2% across-the-board raise, not necessarily based on merit raises. She would like to see the money saved by this given to parks and recreation, which is very deficient. At that point, she would support the two sergeants. The City has to do something for parks and recreation. She expressed concern for children’s safety at the City’s parks.

Mayor Csordas said he would be supporting Chief Shaeffer’s recommendation of adding two sergeants. He would not be able to support the 2% across-the-board administrative pay increase because it would be a public relations nightmare. Intervening with employee’s pay would eventually lead to having fewer employees to deal with. The 1.5% is not worth the demoralizing impact that this decrease would have on the City.

Member Paul asked Chief Shaeffer to provide a breakdown of what the new police cars would cost. One new vehicle will cost almost $30,000. She knows that equipment is taken off of old cars and placed in the new ones. She asked for a breakdown of what that equipment costs and similar items. Secondly, she could see a benefit to adding both types of police staff, but said she would not support adding three sergeants. She could support two, but also wants road patrol. She understands that the sergeant would also be on road patrol in best circumstances, but she has a hard time accepting three sergeants at this time. Administratively, duties can be shifted and maybe different people can pick up different tasks for the sergeant. The cost of the new car seems a bit high.

Ms. Smith-Roy noted that the details for the car price are listed in book 2 of the budget under the vehicles section. The cost of the vehicle itself is $21,500. To that, the decals and other equipment must be added.

Member Paul said the cost just seemed a bit high to her. She asked for a breakdown of what each car costs, and what it takes to transfer equipment from one car to another. She does not want to say that the 2% raise would be mandated across the board because Mr. Helwig has to have discretion over who gets 3% and who gets 1%. She wished to comment that there are administrative people across the state, from the Governor to school superintendents, which have taken pay cuts or kept their pay at the current level with no increase. Although the City is in serious financial constraints, she does not want to take away the discretionary ability for Mr. Helwig to move money around. The 2% amount of money she supports, because she would like to use whatever the remainder is in another area. Parks and recreation is the area that she would like to focus on. The City’s population of children is huge with all of the young families in this city, and this is also Council’s number one goal. When she budgets, she looks at goals. Parks and recreation and safety are Council’s top goals. Those are the two goals that she will be supportive of. She will support the 2% pay increase, and would also support the sergeants, but will look for support for the parks and recreation department.

CM-04-04-147 Moved by Landry, seconded by Gatt; CARRIED UNANIMOUSLY: To approve the recommendation to add two sergeants effective January 1^st, 2005, with the contingency that if negotiations with the police officers’ union fail to go to a 12-hour shift, the matter revert to Council to consider how to allocate that funding.

Mayor Pro Tem Landry said it was his understanding that during this process, motions are made as discussions go on. If four Council members agree, then the matter is placed in the budget document that all of Council votes on.

Member Lorenzo said she believed that five votes were necessary to place an item in the budget document.

Mayor Pro Tem said that five votes are needed to ultimately approve the budget, but to determine what Council votes on at the table on an appropriate Monday night, only four votes are needed.

Member Lorenzo disagreed.

Ms. Cornelius said she recalled that with previous budgets, Council had approved a matter with four votes, but that the final vote to approve the appropriation takes five votes.

Mayor Pro Tem Landry said that four votes are needed to take an item out of the budget document that will be voted on.

Member Lorenzo believed that five votes were needed to place an item in the budget for an appropriation vote. Unless she sees another police officer added to the motion as a proviso, she will not support the motion. She would hate to reach the last minute and have a budget breaker. If there is a time to talk about an item, this is it, before Council has to adopt the budget. She said she could amend the motion to include another police officer, but if there was not an approval to do so she would not support the motion. The matter would be a budget breaker for her. The City needs another police officer along with the two sergeants. She has come up with an additional $58,000 that she found with the 2% salary increase, and would be agreeable with Member Paul that this increase does not have to be across the board, but instead could be a lump sum of money to be given out at the discretion of the City Manager and department heads. In order for her to support the sergeants she would have to see a guarantee that Council would make the necessary cuts for another police officer. She said she was prepared to look at other areas where she has found an additional $50,000.

Member Nagy asked Chief Shaeffer if Council were to find money for not only the two sergeants but also an extra patrol officer, if this would benefit the police department.

Chief Shaeffer said this would absolutely benefit his department, as well as the community.

Member Nagy said she would support the amendment.

Mayor Csordas noted that the new motion was now that if Council can find the money, there would be two sergeants and one patrol officer added.

Mayor Landry said the budget would contain hiring two sergeants and one patrol officer as of January 1^st. Right now, the budget suggests two sergeants. The motion would amend that suggestion to two sergeants and one police officer. Council would have to find the money for that suggestion.

Mayor Csordas asked when Council has to have the budget process completed by.

Mr. Helwig replied that May 17^th is Council’s second regular meeting in May. By Charter, the upcoming fiscal year budget must be adopted no later than the third Monday in May, May 17^th.

Mayor Csordas asked Mr. Helwig for a quick summary of the next three tabs in the budget document. It seemed that consensus of Council was to get into the blue book and consider line items. He noted that this budget session would be closed at 2:00 p.m.

Mr. Helwig stated that it seemed Council was ready to address the other blue tabbed items in the budget book. The capital improvement program was highlighted three weeks earlier, and is located in Appendix C, as well as right behind his budget message. This is what administration is recommending due to available funding. Administration has spent much more time working with concrete roads since Council’s last budget discussion, and it has some very specific thoughts subject to bidding and such that it would like to layout for Council. The PASER study item will be on the agenda for the May 3^rd Council meeting.

Mayor Csordas noted that Council was now discussing the second budget book, the blue book.

Member Nagy said she had a question about attrition. She asked if any staff members or department heads had been approached regarding the option of early retirement.

Mr. Helwig replied that administration had not done this.

Member Nagy asked if this was something that the City would like to do in case there are those that would like to take the early retirement option.

Mr. Helwig said he would not recommend this action. He has always questioned, since early retirement programs have come on the scene, what is in them for the taxpayers. Early retirement is a quicker way to get newer hires at lesser cost, but to all of a sudden provide sooner retirement which comes with its own costs, without the work being produced to benefit the community, he finds in conflict with good government. The City ought to be able to plan ahead to have what it needs onboard and do it through attrition, rather than through layoffs or early buyouts.

Member Nagy said she was asking because she believed that some people were actually at the 30-year mark. She is not sure what the cost would be for the buyout, but she asked if this was something that administration could provide some calculations for at the next meeting. This would allow her to better understand what Mr. Helwig was saying.

Mr. Helwig said he would be glad to provide thoughts and information on the topic.

Member Nagy asked Mr. Helwig to use either a hypothetical employee or an employee with a great number of years. There might be an interest that would financial benefit the City.

Member Nagy asked to start with page number five under all funds, line item detail. She had reviewed the budget, trying to cut various items to find some extra money. One of the extra things that she felt that could be done for each department was to cut down on magazines and periodicals, since those costs add up. She still receives Planning Commission materials even though she is no longer on the Planning Commission. On page nine, on the same tab under other services and charges, the first is contractual services: Fuerst Farm operating costs, telephone and telephone maintenance. She asked for a breakdown for operating costs for Fuerst Farm. Regarding contractual services for $92,000, she asked what this money covers.

Ms. Smith-Roy replied that for example, janitorial services are a contractual service. Grass cutting falls under the category of grounds maintenance.

Member Nagy referred to page 10: cable productions, web page maintenance, community calendars, newspapers, etc. She asked if it would be feasible to contract out or hire a subcontractor on a part-time basis for these items.

Ms. Smith-Roy said this is basically what the City is already doing with that line item. Those activities are outsourced to another company because it is more cost effective to do so than to perform those functions in-house.

Member Nagy referred to the same tab on the following page, under other services and charges. The membership and dues is something that she had mentioned before. If in-house versus consulting is reviewed, some of those fees would go away. She asked what the professional services for $45,000 item is for.

Ms. Smith-Roy said that line item covers various costs, for example, arbitration costs and actuary studies for negotiations.

Member Nagy asked for a breakdown community promotion, including the neighborhood breakfast and Fall for Novi. She has participated in that activity, which is great for public relations. It is great to acknowledge homeowner’s association presidents. However, she felt that perhaps the City could make the event more cost effective by not buying flowers or some of the food. This would not save a lot of money, but it would save a little.

Ms. Smith-Roy said that the note was placed near the item for Council’s understanding. ‘Community promotions’ includes all of the City’s promotions, including promotional sales of articles that it sells and purchases. Those two items total less than $4,000 of the budget.

Member Nagy referred to page 18, which she thought was the start of where Council could "really start saving some money." She asked if the general fund engineering division would include the four engineers and a secretary.

Ms. Smith-Roy replied that this was correct.

Member Nagy asked if "transportation" included gas reimbursement.

Ms. Smith-Roy said this was correct, and included mileage reimbursement.

Member Nagy asked if, regarding conferences and workshops, this was for any people that must be certified must attend workshops and conferences.

Ms. Smith-Roy said this was correct. The certifications left in the budget are one-day seminars included in the South Oakland County Municipal Engineers Education Program, and the MDOT local roads design seminars.

Mayor Csordas noted that last year, Council removed all conferences and workshops but those that are critical to certification.

Member Nagy said that under the Planning Commission section, the first item: supplies, magazines and periodicals, could be reduced. There might be too much duplication. She wondered whether the Planning commissioners actually have the ability to read all of the literature that they receive. She asked if the $2578 was needed for zoning map amendments.

Ms. Smith-Roy said this was correct.

Member Nagy asked what "communications and liaison" for $1023 was for.

Mr. Evancoe said this was actually the name of a subcommittee of the Planning Commission. There actually is a committee that works on communications and liaison, and this would be money for that committee to put out information about some of the issues that are important to the Planning Commission. This is a committee that has essentially been inactive in the past, but has always been a standing committee of the Planning Commission. There are members of the Commission on that committee that are enthusiastic about restarting that committee, and have ideas about initiatives to begin on. In light of that, some funding for this was proposed.

Member Nagy asked if "emerging issues" is part of the master plan information that will be put out.

Mr. Evancoe said that emerging issues is a longstanding fund that has historically gone back and forth between the planning department budget and the Planning Commission budget. Last year in Council’s deliberations it made the determination that the item should be in the Planning Commission budget. It is essentially what it is named as, for issues that emerge throughout the course of the year that might be unanticipated. For example, there could be a planning-related traffic issue that might require the hiring of a consultant to perform a quick study. This is a fund that is available to handle things that can occur during the year. Nothing was spent out of the fund in the current fiscal year, but nonetheless, the nature of emerging issues is that they emerge unexpectedly. The planning department proposes that funding should remain for emerging issues so that the department can cover such situations.

Member Nagy said that with all due respect, she did not recall anything done with emerging issues for the three years that she was on the Planning Commission. With a tight budget and the fact that Council must find money, she would like to reduce that figure. She would also like to reduce the conferences and workshops item. Sending two planners and two commissioners to the state conference would suffice; the national conference is far too expensive. Only two people from the department should attend at a time. Regarding the general fund for planning, she asked if temporary salaries was for an intern, additional secretarial help, or something else.

Mr. Evancoe said that temporary salaries provides for a summer intern, as well as any possible temporary help that might be needed. In the past when employees have left, there has been a need to bring in temporary help until someone is hired on full-time. He said that magazines and periodicals covers one publication that is very valuable for the Planning Commission, a publication called "Planning and Zoning News" put out by the Lansing-based Planning and Zoning Center. This is a very beneficial publication that is very relevant to Michigan.

Member Nagy asked if $373 was only for that publication.

Mr. Evancoe said this was correct. That subscription was $340 in the previous year, and provides the magazine to all of the planning commissioners, who find it to be a valuable tool.

Mayor Csordas noted that Council had a memo dated April 15, 2004 from Mr. Evancoe regarding a Planning Commission request to change some numbers, and had received the presentation that morning. He recommended that Member Nagy set an amount by which she would like to reduce the conferences and workshops item so that Council could vote on it.

Mayor Pro Tem Landry said that he would not support the motion unless Council could decide what to do with some of the money. He likes the Planning Commission’s recommendation to move $8,000 to the greenways and trails plan. He requested that this be a friendly amendment to the motion.

Member Nagy said she wanted to cover something that the Planning Commission really wants.

Mayor Pro Tem Landry asked Member Nagy if she would accept the friendly amendment to take $8,000 of the money from the conferences and workshops item and move that to the Planning Commission’s greenways and trails plan.

Member Nagy and Member Lorenzo agreed to the friendly amendment.

Mr. Evancoe noted that Member Nagy had mentioned both the Planning Department and the Planning Commission in reducing the conferences and workshops item. He said that his department is already down to just $700 for conferences and workshops. He asked Member Nagy if she was making a change to that figure, or only to the Planning Commission.

Member Nagy said that her motion should only refer to the Planning Commission, not the Planning Department. The allocation to the greenways plan leaves $3,200 from that reduction.

Member Lorenzo commented that she would support the motion. The Communications Liaison Committee was actually established when she was on the Planning Commission. The purpose of that committee was for the officers to act as liaisons between the full Planning Commission and the Planning Department and administration. She did not recall ever spending money, as that was not a committee that ever spent any funds. The committee was only to meet and discuss issues, for example lengthy agendas.

Mr. Evancoe said there is another committee called the Administrative Liaison Committee which was the committee that Member Lorenzo was speaking of. That committee meets with staff to talk about issues of coordination and such. The Communications and Community Liaison Committee is a separate committee that has more to do with outreach to the community. The Administrative Liaison Committee has been active and meets on a fairly regular basis.

Member Lorenzo asked if the Communication Liaison Committee has been inactive.

Mr. Evancoe replied that this was correct.

Member Lorenzo said that with all due respect, she would propose eliminating that committee’s money. She wished to follow the rule, "If you don’t use it, you lose it." If the Planning Commission really needs that money in the future, it should come back to Council and she will be willing to listen and try to find funding for it. As with the emerging issues line item, Council does not have the funds and resources to give out $12,000 for something that might not be needed. This money could instead be put towards the extra police officer. She recalled that Council had only allocated $1,000 to the Planning Commission last year for conferences and workshops. She asked where the Commission found an extra $3,000 to attend conferences.

Ms. Smith-Roy replied that administration had included a budget amendment. The refreshments for the Planning Commission’s meetings are charged to this account. Some of the funding was for a conference that was attended, but about $3,000 a year is used towards refreshments.

Member Lorenzo asked if the conference did not cost $3,000.

Ms. Smith-Roy said this was correct.

Member Lorenzo asked if the Planning Commission spent any more than the $1,000 allocated last year for its conferences and workshops.

Ms. Smith-Roy said she did not know but would get that information for Council.

Member Lorenzo commented that she would not want to see Council allocating money for something, and then have other creative financing by other bodies to find additional money. If there is any creative financing available, it should be given to Council to give to parks and recreation or to hire another police officer.

Member Lorenzo asked for friendly amendment to CM-04-04-149, to eliminate the $1,023 for the Communications Liaison Committee of the Planning Commission, and the $11,765 for emergency issues. That money would be put towards the hiring of an additional police officer.

Member Nagy said she would accept the friendly amendment.

Mayor Pro Tem Landry said he certainly agreed with Member Lorenzo about removing the $1,023 for the Communications and Liaison Committee. He was on that committee and did not recall doing anything on it. He commented that he hates to not leave the Planning Commission any money for contingency with emerging issues. He said he would support cutting that amount in half, but not removing all of the money in case the Commission needs to do a study or hire a consultant.

Member Lorenzo said she would be agreeable to cutting the emerging issues budget in half at this point. As Council moves further along in the budget, it may need to reconsider the item, however.

Mayor Pro Tem Landry said that with the amendment he could accept the motion and vote in favor of it now.

Member Lorenzo said she hoped Council can fund the additional police officer and the $40,000 for the four fields at Community Sports Park.

Mayor Pro Tem Landry suggested cutting the emerging issues budget to $5,000 so that the City gains almost $7,000 to work with.

Member Nagy accepted this friendly amendment, as did Member Lorenzo.

Mayor Pro Tem Landry noted that Council was now saving another $6,765 plus the $1,023 plus the $3,200, totaling $10,988.

Member Paul commented that she would like to take the emerging issues amount down to zero, but she could support the matter for now. Most emerging issues are going to be with consultants that the City has already hired, so it can use those consultants or in-house staff. The Planning Commission just completed the thoroughfare study and the master plan amendments, so most of the studies that need to be done have been completed. She would like to see the bare minimum of magazines go to the planning department. When someone in the department sees an article that they believe should be shared, they can place copies of the article in the Planning Commission’s packets. Most commissioners and Council members would like to read all of the supplemental materials that they receive, but it is not an accurate depiction of what really happens. She suggested that Council decrease funding for magazines and periodicals for the Planning Commission, perhaps from $373 down to $73, thus saving $300. Council could also look at reducing the funding for its own magazines and periodicals. She would like to receive one or two subscriptions to the currently-received magazines and make copies as needed.

Member Nagy noted that Mr. Evancoe had said that the one magazine cost $373.

Member Paul said she still receives magazines from the Planning Commission for her American Planning Association (APA) membership.

Mr. Evancoe said that the membership and dues are for the APA memberships and include publications. The $373 proposed was for the Lansing-based publication.

Mr. Helwig asked if that money was for one subscription or for nine subscriptions.

Mr. Evancoe said the $373 is for all nine subscriptions.

Member Paul said that if staff already receives a magazine or periodical, the same items do not have to go directly to the Planning Commission. When staff finds an appropriate article, it can share those articles with the Planning Commission. She wished to amend the budget to reduce magazines and periodicals for the Planning Commission to zero. She asked what benefit the APA dues do for the community, and said she would like to see funding for the APA dues also reduced to zero.

Member Nagy and Member Lorenzo agreed to the friendly amendments.

Member Paul noted that there was $900 allocated for consultants to come in and do a seminar for the Planning Commission. JCK had once given a one-hour wetlands presentation to the Planning Commission, and that cost $300. Ayers, Lewis, Norris and May and Don Tilton had given the Commission a seminar for free that lasted an hour-and-a-half before Commission meeting. She would like to have seminars that are no cost, and remove this $900 funding.

Mayor Pro Tem Landry said he would not support that amendment. $3000 is budgeted for conferences and workshops, and what is proposed in the plan is less than one-third of what is budgeted for. There are some inexperienced Planning commissioners, and administration has already chopped the Planning Commission’s request by two-thirds. He would favor leaving the $900. He is very supportive of trying to get the City’s consultants to give presentations for free, but Council had already chopped $12,000 off of the Commission’s budget.

Mayor Csordas noted that there was a reduction of $12,198 for a balance of $41,532.

Member Lorenzo referred to the Historical Commission budget on page 11, General Fund – General Admin. The proposed budget is for $15,500, and she would like to reduce that amount to $4,000. There is $3,500 needed for the old Township Hall for utilities, maintenance, and related work, but the rest of the money is what she considers discretionary funds. While the Novi Historical Commission has been enjoying those discretionary funds for the past several years, it is reasonable to reduce this Commission’s budget with this year’s financial situation to the bare minimum necessary to operate.

CM-04-04-150 Moved by Lorenzo, seconded by Paul; CARRIED UNANIMOUSLY: To reduce the Novi Historical Commission’s budget from $15,500 to $4,000.

Mayor Pro Tem Landry inquired how much more money was needed to fund the additional police officer.

Ms. Smith-Roy said that a total of $51,000 was needed for this officer.

Mayor Pro Tem Landry asked if by adding two sergeants, if the City paid $20,000 in overtime last year for the sergeants, but adding the two sergeants eliminates this amount, he asked if this had already been configured into the budget.

Ms. Smith-Roy replied that it had.

Member Nagy noted that Council still needed an additional $18,000.

Mayor Csordas noted that there was supplemental budget information for Council from Kathy Smith-Roy. In that information, Ms. Smith-Roy talked about the water and sewer fund. Administration recommends that the true-up portion of the increase, in the amount of $114,750, be paid for the capital funds collected from the water and sewer fund. He corrected himself and noted that this was for the dedicated water and sewer fund, and said this money would not be available.

Mayor Csordas felt that the above cost increase should be passed on to users. That money, divided by the 51,000 people in the community, amounts to $2.45 per person annually. Rather than taking that money out of the water and sewer fund, the cost can simply be passed along to users. The City is not marking up its water and sewer rates at all.

Member Lorenzo asked that the item be discussed as a regular Council agenda item, rather than voting on the matter that day.

Mayor Csordas said that whenever the item comes up, he would support passing the cost on, however not marking up the City’s rates.

Member Lorenzo noted that Member Nagy had mentioned $10,000 for temporary salaries for the Planning Department, on page 19. She suggested eliminating this funding. The City is paying for enough people in the Planning Department that even if someone was to leave, there should be people available to pick up the slack.

CM-04-04-151 Moved b Lorenzo, seconded by Paul; CARRIED UNANIMOUSLY: To remove $10,000 funding for Temporary Salaries for the Planning Department.

Mayor Csordas said Council had now removed $33,698 for the police officer.

Member Lorenzo referred to the Fifty’s Festival on page 11. The City allocates $11,800 for this event. She felt that the time has come to eliminate this funding. Council has mentioned this possibility for the last couple of years.

Mr. Helwig asked Council to verify with Mr. McCusker what this funding is for.

Ms. Smith-Roy said this money was for wages for police officers and DPW staff, but primarily the police.

Mr. McCusker said the $11,800 is basically for setup, chlorination of the water lines, and other activities that the DPW has to do, including barricading. This amount has been reduced greatly. There are many other activities involved that the City does with this money.

Member Lorenzo said that the City has been supporting the event for years and years. This is a tight budget and she has to look at the good of the greater community. She felt that this funding still needed to be cut out or at least reduced.

Ms. Smith-Roy said that more than 50% of this allocation is related to police officers’ wages, which is for overtime, not for the officers’ normal salaries. The remaining part of the money is for the DPW.

Mayor Pro Tem Landry said that he did not believe Council could eliminate this money. If the festival is going to occur, the City has to provide police protection. If the festival is drawing water and wants a parade, the City has to block certain streets off. He questioned whether Council would tell the Fifty’s Festival organizers that the City would not have the festival. He recalled that last year, Council denied the Walled Lake Casino because the Fifty’s Festival is Novi’s festival. This event is the City’s one event in the summer. He asked that this money be left alone, saying that Council could return the item in the future if necessary.

Member Paul said she has been to the Fifty’s Festival several times in the eight years that she has lived in Novi. The event is dying, and is not populated by many people in the City. When she first moved to the area, there were many people from many different communities that attended the event. She went to the festival last year, and it was a bust. $11,800 goes a long way. If the festival wants to utilize City services, it needs to support the event out of the budget from profits made the previous year. If an event cannot support $12,000, it cannot exist in her eyes. In Northville, there are vendors for that city’s farmer’s market on Thursday mornings. One of those vendors was the popcorn vendor, who said it was "the worst thing he had ever done." Streets were blocked off, and the event was poorly organized. She could not support this amount of money for the Fifty’s Festival, and said she would not support a one-half reduction of the funding.

Member Lorenzo recalled that she had mentioned a possible 2% across-the-board salary increase that would save $58,000. If Council were to make this a 3% reduction, it would save about $12,000. She said she was not so much concerned with where the needed money came from, but rather that it becomes available somehow.

Member Gatt said that if the Fifty’s Festival only threw a party, the City would still have to send police, and this would cost the City out of another line item. If Council reduces the funding to nothing and the Fifty’s Festival still goes on, the City will still have to have police there to block off roads and keep people safe. The Fifty’s Festival has to come up with the money to throw the event, but it is the police department’s responsibility to make sure that the roads are safe and the people are safe. During the holidays, Novi Road and Twelve Mile is jammed. The City usually puts on extra police officers to handle that traffic. Salaries for police officers dedicated to the inside of Twelve Oaks Mall are supplanted by the mall, but the cost for officers on the street is borne by the police department. He felt that the same would apply to the Fifty’s Festival. He did not see how the festival could be forced to pay for police services that the City has to provide.

Mr. Helwig said that a multi-year approach was needed. In the previous community he worked in, there was a major basketball arena downtown. It took a number of years, but eventually the use of officers to deal with parking, the neighborhood, and closing of streets became the total cost of the university. The Fifty’s Festival does not have much money to deal with, but rather than cutting off the funding "cold turkey," he suggested developing a multi-year plan that would make the festival increasingly responsible for security costs. This year, the festival is moving to Fountain Walk, so it is on private property. Previously the event was on Main Street, a public street, where the City truly had some obligation. Since this is a community endorsed festival, he suggested a transition plan, with some discussion now. As the event is being held on private property, the City cannot withhold a permit for the festival being held.

Member Nagy commented that she knew the location of the event had changed, and with that change of locale, the businesses in Fountain Walk will benefit. She questioned why the event would be the City’s burden. She suggested that at this time leaving the line item in the budget. During goals sessions, Council needs to re-evaluate the entire event. At this time, she did not see how Council could not leave the funding in the budget. She does not expect the DPW or police to work for free, and she did not see how Council could reduce the funding.

Mr. Helwig said he had not seen the plan for the layout of the event this year, or what is involved. The funding is very barebones compared to what it was when he came to Novi, which he believed was about $50,000. The question now is if the City can better understand what the event entails, and then act.

Member Nagy said there was no sense in voting on something that Council did not have all the facts for.

Mayor Csordas said the reality of the situation was that the event will happen anyways, and will happen at Fountain Walk. He agreed that the City will have to provide police protection and will have to perform work there. The road blockage might be less because of the layout of Fountain Walk. The City cannot just throw away its safety and setup option. The possibility of phasing funding out for the Fifty’s Festival is a very creative option, but Council needs to work with the event, which has been very valuable to the community. Council is has already reduced funding significantly from past levels, and he could not support eliminating this year’s funding.

Mayor Pro Tem Landry asked why there was a $4,000 difference between the estimated line of $7800 for the Fifty’s Festival, and the $11,800 for the proposed budget.

Mr. Helwig said he believed that estimated was how administration expects this fiscal year to conclude.

Mayor Pro Tem Landry asked if the City incurred $7800 in costs last year when the event was on Main Street.

Ms. Smith-Roy replied that this was correct. The year before that, the cost was $13,700.

Mayor Pro Tem Landry asked if the $11,800 was an in-between cost.

Ms. Smith-Roy said this amount was an anticipation in the change in venue that there may be additional time needed, particularly with the DPW staff in assisting with the setup.

Mayor Pro Tem Landry noted that from being on the Board for the Fifty’s Festival, he could say that Fountain Walk is requiring the festival to go to Fountain Walk’s private security company, Guardian. The company uses uniformed guards, and this was a big cost for the festival. For union reasons, the festival cannot have two security companies at Fountain Walk. The festival is already incurring an increase in security costs. He felt that this might translate into less need for police officers from the City. He suggested possibly reducing the funding from $11,800 down to last year’s level, or bringing a finalization concept of the event’s layout to Council at a later time to make a decision upon.

Mayor Csordas noted that Council had removed $33,698 for the additional officer.

Member Lorenzo said she wanted to reduce the $20,000 for City-wide training on page 11. She realizes that there is value in training, but Council must balance priorities. Cutting that amount in half would mean administration would have to determine priorities, such as whether to continue having the $4,000 leadership meeting once per year, or whether to put some of the money into more training.

Mayor Csordas asked for clarification on what that $20,000 is contributed to.

Member Lorenzo said she knew that the training has value, but giving presentations is "basic stuff," particularly if a person is in a leadership position. She does not want to determine how administration will spend the money.

Ms. Gronlund-Fox said she could respond to the Walsh College training, which is a portion of the $20,000.

Ms. Smith-Roy said the recommendation for next year includes one-day training sessions that are offered from a company that the City has contracted with, Horizon, and the City can buy coupons so that it can have one-day information technology training sessions for staff. Those coupons are distributed between the department head and the IT manager as to who needs those. Administration needs to purchase another set of coupons for next year. That is an important item.

Ms. Gronlund-Fox said that the training that was put together in combination with Walsh last year was approximately $7,000. She understands what Council is trying to do, but there is a great deal of training that is put into that one line item, and Walsh is one part. A portion of that training can be cut, though she does not want to because it is valuable to employees to receive the additional training, especially when other forms of conferences and workshops are being cut. This is really the only training that City employees get throughout the year.

Member Lorenzo said she recognized the training as valuable, but she was performing a balancing act. She felt that a resident looking at the budget would find the item personnel oriented. Council has two goals right now: one is to hire a new police officer, and the other is to find $40,000 for four fields.

Mr. Helwig said that administration has worked over 3 ½ months to get to this point, and the day had been very helpful in determining Council’s priorities. Administration did not know before that Council wanted to hire another police officer in addition to the two sergeants. Training is near and dear to him, as the City is trying to invest in and develop its people so that they serve the community to the highest standard possible. Police and fire are not the only types of training that matter. Many organizations, not just corporate America, have a goal of a minimum of 1% of their annual spending on training so that their people are able to serve. A reduction in this category is justified. He would certainly rather have money available for the movement of the salary policy line than training. The City will coach its employees in other ways.

Mayor Pro Tem Landry suggested reducing the City-wide training budget from $20,000 to $13,000.

Mayor Csordas said he would not support this reduction. Continuing education is critical to any organization. He understands what Council is trying to do, but out of a $26 million General Fund budget, the amount requested for continuing education is nothing. Council cannot give up on the City’s employees and not allow them the opportunity to expand themselves. The community has experienced the results of past trainings. People in the public sector take much more criticism than anyone that he has seen in the private sector. It is a minimal expense to provide the money for continuing education.

Member Nagy said that while some training is valuable, other training might provide nothing to employees. Administration needs to be able to make some decisions on what it needs. If Ms. Gronlund-Fox can work with the $13,000 for this year, Council can always increase the amount next year. The last seminar that employees had was not a great benefit to many people that attended.

Member Gatt said he would agree with the Mayor in this case. Having been a City employee for so long, he knows the value of the provided training, and he knows Ms. Gronlund-Fox’s reputation for putting on a top-notch seminar. He speaks with employees who go to management training seminars, and they come out of the seminars with a great deal of information. If this training saves the City one instance of a lawsuit or another problem, $20,000 is "peanuts" compared to the budget.

Mayor Csordas noted that Council would pick up the remaining issues on Wednesday, May 5^th, at 7:00 p.m.

b. Parks, Recreation & Forestry

c. Environment

d. Growth Management & Development

e. Capital Improvements Program

AUDIENCE PARTICIPATION - None

There being no further business to come before Council, Mayor Csordas adjourned the meeting at 2:04 p.m.

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Lou Csordas, Mayor Maryanne Cornelius, City Clerk

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Transcribed by Steve King

Date approved: May 17, 2004