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SPECIAL MEETING OF THE COUNCIL OF THE CITY OF NOVI
 THURSDAY, APRIL 26, 2007 AT 7:00 P.M.
COUNCIL CHAMBERS Ė NOVI CIVIC CENTER Ė 45175 W. TEN MILE ROAD

 

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

PLEDGE OF ALLEGIANCE

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

ALSO PRESENT: Clay Pearson, City Manager

Kathy Smith-Roy, Director of Finance

Frank Smith, Chief of the Fire Department

AUDIENCE PARTICIPATION - None

PURPOSE OF SPECIAL MEETING Ė 2007-2008 CITY OF NOVI BUDGET

1. City Council discussion and decisions regarding the plan priorities

Mayor Pro Tem Capello hoped that everyone had the opportunity to voice their concerns in the last two meetings, and that tonight Council could make some motions and amendments.

Member Mutch said one of the issues he raised at the first meeting and in the 2006-2007 Budget was the issue of the millage rate. He knew they had a lengthy memo from Ms. Smith-Roy that tried to address a number of aspects related to the millage rate, how it was determined and set, looking forward to this and future budgets. He appreciated this information, and he generally agreed with comments from Ms. Smith-Roy. However, the two comments he disagreed with was the idea that taxpayers would prefer to see the tax rates stay the same versus having a cut, and the issue of consistency and the impact. He said he knew there wasnít support around the table for a significant reduction in the millage rate, so he would make a motion that would attempt to take a baby step to return the millage back to the rate levied this past year. He believed the additional revenues that were raised from that increase in the General Fund millage was approximately $83,000. He said he would make a motion to transfer $83,000 from the Police and Fire Fund to the General Fund for the purpose of reducing the General Fund millage back to the previous rate in the current budget year.

CM-07-04-083 Moved by Mutch, seconded by Paul; MOTION FAILED:

To transfer $83,000 from the Police and Fire Fund to the General Fund.

Mayor Landry asked if that was a motion to just do that or to pass the budget with that change. Member Mutch said just that specific amendment. Mayor Landry said the motion was to transfer $83,000 from the Police and Fire Fund to the General Fund, and to do what. Member Mutch said that was it. Mayor Landry said so not to change any millage rates, and Member Mutch thought the millages were set at resolution at their future meeting, so he didnít feel the need to get into that.

DISCUSSION

Member Mutch said he saw three points. The first point was the issue of the fact that if Council couldnít find $83,000 in a $34 million budget to return that millage rate to the previous rate, he would have a difficult time with that. He commented the second point was that while he understood the desire to keep the overall millage rate the same, the fact of the matter was they had had an extraordinary amount of growth in the City over the past ten years in terms of the tax base. While recognizing the impact of that growth on the budget at some point residents should see a benefit from that, and he wanted to start that now. Member Mutch said one of the issues stated was that they were in contract negotiations and didnít want to reduce the millage rate while in negotiations. He said that was the same point made last year, and more likely than not they would be in ongoing contract negotiations with different units just about every budget year. He said that could not be the only issue to drive that. The reason he selected the Police and Fire Fund for the transfer was the fund balance for that fund was above the $1.5 million recommended. Also, if looking at the budget and how much was spent on Police and Fire, and the total amount of the budget in terms of where spending had gone up, that was where they were seeing the largest growth. He said this was just a small supplement from a fund that was intended to pay for Police and Fire Services to help offset that.

Member Margolis said she would not support the motion. She thought it was interesting because the memo from Ms. Smith-Roy had a number of points in it. The major point for her was the concern about rating agencies and how they view consistency in millage rate as a positive in how they rate their municipality. She said the reality was $83,000 and she thought they could cut that from somewhere, but giving $83,000 back to the residents amounted to about $1.50 per person. She said while she was not saying that was insignificant in terms of its effect on our rating by the bond agencies, she thought it would be a huge mistake on their part. She said the other part was that people do not track that closely, and they would not remember if next year that had to go up, that it was a reduction this year. She thought it was a political move and a true mistake in terms of their governance of this City. Member Margolis said the other concern she had about it was the strategic direction that the City had taken, which they talked about last time, and they have had a higher debt load than many cities of our size. She noted this was mainly because Novi grew very quickly and they had to build infrastructure very quickly and did some of it on debt. She commented that one of the things the Finance Manager had done for Council, over the past several years, was to start moving them to a more pay as you go. She said the reason there was an increase in the General Fund millage was because the debt millages had dropped also, and she thought it was the right strategic direction to take. She would not support reducing the millage and said she didnít think it was anything significant. She thought giving $1.50 back to each person in population was a huge mistake when the effect was it might reduce their bond rating by the rating agencies.

Member Gatt said he wouldnít support the motion either, although he agreed with Member Mutch that $83,000 could be found. He said Member Mutch commented that they were in contract negotiations now and probably would be next year, etc. He agreed with Member Mutch but went back to what Member Paul said that she wouldnít support a new Sergeant because being in a Sergeantís union they were in negotiations. He said he would never let negotiations stop him from doing anything, Novi was a union shop and there would always be negotiations going on. Member Gatt said he wouldnít support any motion that didnít include passing the budget, as he felt they were at the point that the motion should include "and pass the budget".

Mayor Landry said he wouldnít support this for two reasons. First, his understanding was that the main purpose of the Police and Fire Fund was to fund major fire apparatus and police personnel. Ms. Smith-Roy said correct, the intent was for additional police and fire personnel and apparatus. Mayor Landry said there were a lot of questions of the Administration about the plan for vehicles in the future. They wanted to see a plan to buy this or that vehicle. He said the plan for major fire apparatus was the Police and Fire Fund; so why would they ever take money out of that Fund. He said that was the plan for major fire apparatus, and that was the fund for adding police and fire personnel, which was something this Council would have to deal with. Secondly, Mayor Landry agreed with Member Gatt that this was Councilís third session and they should be entertaining motions to pass the budget. He said there were three motions made on Saturday to pass the budget and all three failed 4 to 3. He said what he was interested in from those who voted no was what it would take for them to vote yes on the budget.

Mr. Pearson said the Public Hearing was scheduled for the May 1 Council meeting, and then consideration was scheduled for May 14. He said the motion could not be adopted tonight without having had the Public Hearing. Mayor Landry said they could, however, all agree that this was the budget they would present and vote on.

Roll call vote on CM-07-04-083 Yeas: Mutch, Paul

Nays: Capello, Gatt, Margolis, Landry

Absent: Nagy

CM-07-04- Moved by Paul, seconded by Capello; MOTION WITHDRAWN:

To approve the 2007-2008 Budget with the following changes:

1) Remove the following positions, Cultural Liaison person, Training Specialist for Human Resources, mid year Sergeant, totaling $72,429.

2) Remove the following studies:

City Space Efficiency Study, Senior Center Expansion Study, Land Use Studies, totaling $106,000.

3) Use money from the Forfeiture Funds for the following: Police vehicles (10 vehicles), Item 105 Clemis, Item 106 Laptops, Item 107 Printers and Laptops, for a total of $488,365.

4) Total savings was $666, 834 to be designated in the 2008-2009 Fire Station improvements to Stations 2 and 3 renovations.

Member Paul said for clarification, Mayor Pro Tem Capello said there was a digital in-car camera system for $304,146; she asked if she left that part of the Forfeiture Fund, was that still remaining in the Forfeiture Fund expenditure. She thought that amendment was accepted and she wanted to verify that.

Mr. Pearson said the budget on the table was the recommended budget plus there was an amendment that passed that added that in, so she was correct. Member Paul said very good.

For all remaining funds in the Forfeiture Funds to be designated towards the gun range. The gun range can not be started until all funds designated by the approved engineering firm and construction company are gathered in its entirety. The entirety stated as such: equipment, building and all accessories are able to be completely funded by Forfeiture Funds. A second component to the Forfeiture Funds is a plaque to be placed in the front of the firing range on the front of the building or on the front entryway of the building to designate the entire police officers, the Administrators, and the dispatchers who were present the night of the original drug bust on the opening of the building. The third component of that was to name the building after Chief Shaeffer. The fourth component was to remove $189,735 out of DPW for the mechanical systems and designate that to the 2008-2009 DPW trucks.

DISCUSSION

Mayor Pro Tem Capello asked for clarification, if the Fire Stations need the work now and Member Paul had found about $600,000 to allocate towards the work, if it was in the budget this year why did she want to wait until 2008-2009.

Member Paul said the Fire Chief said he would need more next year, she said if they wanted to do it this year fine. She said they had found $666,000 for Fire Stations 2 and 3, and they already had approximately that much this year. She asked Chief Smith if he would like some to remain for 2008-2009 or would he like to have it all this year.

Chief Smith said without having the report done he didnít know what number was going to represent fully funding Stations 2 and 3. He said they were progressing with more and more meetings with the architects but they would not be done with that until the second week of July. He said he couldnít give them an exact number right now.

Mayor Pro Tem Capello said if the Chief had use for it this year, he would give it to them this year.

Mr. Pearson said in the recommended budget there was $689,000 already so this would add another $689,000 because that was what was in the CIP programs was two years of $689,000 they funded in the recommended budget the first year. He said on the table now was to pre-fund the second $689,000. He said those were both rough estimates without having done the architectural so he would need to double qualify that.

Mayor Landry asked for clarification as he didnít understand Member Paulís fifth point about remaining funds in the gun range. He asked her to restate that.

Member Paul said the remaining funds could be designated towards the gun range. Mayor Landry said yes, after her fourth point which was total savings $666,834 for Fire Stations 2 and 3, then she added all these things about the gun range, and he didnít get all that.

Member Paul said all the remaining funds that were designated towards the gun range, approximately $800,000, that the gun range could not be started until all funds designated by the approved engineering firm and construction company were gathered in its entirety. Mayor Landry said he didnít understand. Member Paul said she didnít want the building to be started until every bit of the funds were there and ready to pay for the entire building and all the things in it. Mayor Landry said arenít they there now? Member Paul said no, they didnít have all the funds to pay for the entire building. Mayor Landry said they did have all the funds now.

Mr. Pearson said they had the $1 million that had been set aside for that, and thatís when they recommended the additional $728,000 that was needed to finish it. He asked if she said she wanted that $728,000 to come as the last thing when everything else was funded. Member Paul said everything else was to be funded, which was in the motion, and she believed there was enough money for the gun range but wanted to make sure everything was there after they bid it out. Mayor Landry asked if the money was there. Ms. Smith-Roy believed it was and the only qualification was that it had not gone out for construction bid, and they would do that anyway and bring back a construction contract to Council. Member Paul said that was what she was looking for. Mayor Landry said his understanding was that after everything that was in the budget now, which was paying down the debt, making the critical needs, and the firing range, there was about $800,000 left on hand. He asked if the $800,000 was enough to do the 8 police vehicles, Clemis, Laptop and the printer. Member Paul said no, it was the other way around. She wanted the money to come first to pay down the debt, then for the in-car cameras, then the police vehicles, the Clemis, Laptops, the printer and Laptops, all of those to be paid out of the Forfeiture Funds. She then wanted the remainder to go to the gun range which was approximately $800,000. Mayor Landry asked if there was enough in the $800,000 to do all the other things she wanted to do and the gun range.

Mr. Pearson said yes, the only thing he would suggest was that at the Saturday budget meeting they also added in an additional officer with the first year salary being paid out of it. He said that was not mentioned and that was included in the $800,000 now.

Member Paul said then she would like to amend that to remove the police officer because she wanted as much as possible there for them, and this was her very bottom line, and she was trying to be as reasonable as she could. She said this was a huge stretch for her because she didnít want the gun range at all. She wanted the debt paid and all these other things out of there. So, she was giving as much as she could. Mayor Landry said they werenít disagreeing; he just wanted to see the numbers.

Mr. Pearson said he thought this was right because if they had $800,000 going into this that was undesignated and that was after theyíd fully funded, from best estimates, the indoor gun range, critical needs and paying down all the debt. So, in essence, Member Paul suggested that with that $800,000 she had identified $489,386 of expenditures so obviously the $800,000 was enough to cover that, $304,000 for the in-car cameras, and then there was around $100,000 left. She said with no remaining police officer, Sergeant, or backfill.

Mayor Landry said youíre confident there was enough money in the Forfeiture Funds to do all of that. Mr. Pearson said they came into this with $800,000 undesignated out of existing Federal Drug Asset Forfeiture monies, so out of that $800,000 if there had only been $700,000 being designated from that, there had to be.

Mayor Landry said letís say this passed, and at the very end they needed $750,000 to do the gun range, and there was only $700,000 in the Forfeiture Funds, all that $700,000 was designated for the gun range and they would have to come up with another $50,000 somewhere. Ms. Smith-Roy said they might be able to do that out of interest earnings. Mayor Landry asked if whatever was left she was willing to commit to put towards the gun range. Member Paul said she was willing to do that.

Mayor Pro Tem Capello said, for clarification, the motion on the table and seconded included the additional officer. Member Paul said she wanted the police officer out, so he could decide whether he wanted to second it or not. He said he would not accept an amendment to that motion. Mayor Landry said the current motion included the police officer to be used with Forfeiture Funds. Mayor Pro Tem Capello said yes. Member Paul said she wanted to pull the police officer. Mayor Landry asked if they received a memo that said they couldnít do that.

Mr. Pearson said there was a memo that said they could not use Federal Drug Assets for a promotional opportunity, but the $18,000 could be used to backfill a police officer.

Mayor Pro Tem Capello said the reason he couldnít accept the amendment was because they would have trouble with Member Gatt. Member Gatt said they wouldnít have trouble with him but he would like to see the Sergeant made mid year out of the General Funds not out of the Forfeiture Funds, which was already in the budget. Mayor Landry suggested the Police and Fire Fund and Member Gatt said out of any fund because he wanted to see a mid year promotion to Sergeant. He said if they didnít backfill it, he would go along with Member Paulís wishes. Member Paul said no.

Mayor Landry said the motion on the table now and seconded was there would be no Sergeant position, but there was a backfilled police officer.

Member Paul said, for clarification, if the maker of the motion got clarification that the police officer was still there, and she would like to pull that and amended her motion, then what was on the table.

Ms. Cornelius she said for clarification, Mayor Pro Tem Capello seconded it at the point that he assumed Member Paul had completed her motion. Now, at this point, she believed Mayor Pro Tem Capello would be correct in feeling that it was an amendment rather than a clarification at this point by removing the police officer or backfilling that position. Mayor Landry said Member Paul could withdraw her entire motion. Member Paul said she would withdraw her entire motion because that was her bottom line, and she couldnít go anymore. She said she had stretched her ability to negotiate and felt what she had brought to the table was extremely fair for everyone, for paying down the debt and for planning in the future. She didnít think she was being unreasonable. She said she took the position of the police officer that was added into it, took the Sergeant out that they couldnít pay for out of that. She said they could make a motion mid year of what they would do because she might or might not be sitting on Council. She felt this was a good negotiation, and that was it.

Mayor Landry asked if she wanted to make another motion and she did.

CM-07-04-084 Moved by Paul, seconded by Mutch; MOTION CARRIED:

To approve the 2007-2008 Budget after the Public Hearing with the following changes:

1) Remove the following positions, Cultural Liaison person, Training Specialist for Human Resources, mid year Sergeant, totaling $72,429. Also, removal of the Police Officer.

2) Remove the following studies: City Space Efficiency Study, Senior Center Expansion Study, Land Use Studies, totaling $106,000.

3) Use money from the Forfeiture Funds for the following: Police vehicles (10 vehicles), Item 105 Clemis, Item 106 Laptops, Item 107 Printers and Laptops, for a total of $488,365.

Total savings was $666, 834 to be designated in the 2008-2009 Fire Station improvements to Stations 2 and 3 renovations.

For all remaining funds in the Forfeiture Funds to be designated towards the gun range. The gun range can not be started until all funds designated by the approved engineering firm and construction company are gathered in its entirety. The entirety stated as such: equipment, building and all accessories are able to be completely funded by Forfeiture Funds. A second component to the Forfeiture Funds is a plaque to be placed in the front of the firing range on the front of the building or on the front entryway of the building to designate the entire police officers, the Administrators, and the dispatchers who were present the night of the original drug bust on the opening of the building. The third component of that was to name the building after Chief Shaeffer. The fourth component was to remove $189,735 out of DPW for the mechanical systems and designate that to the 2008-2009 DPW trucks.

DISCUSSION

Member Mutch wanted to clarify that there were 10 vehicles because of the two unmarked vehicles, and it didnít change the total monies. He said the Forfeiture Fund total that Member Paul stated was $488,000 and he believed Mayor Pro Tem Capelloís amendment at the previous meeting was $402,000 so that would put this at $900,000 out of the $800,000 they had to work with. He stated that they were $100,000 over and the quickest way to resolve that would be to remove the police officer position since Member Gatt stated he didnít have an issue with that position being removed. He said then they could fully fund everything as it was presented. Member Mutch said for those members who had concerns about items being cut, actually only represent not even a third of the total. He said most of the money was just coming from the Forfeiture Fund to cover General Fund items. He pointed out to members who had concerns about items being cut that if they look at last yearís budget he thought everything cut out eventually ended up back in the budget when funds were found later on in the year. He said nothing was ever completely out of the budget, apparently. Member Mutch said the designation of the funds for those items regarding the fire station improvements and the DPW equipment had been one of his big concerns about the budget. He said if they looked at the CIP Program for next year just for Parks and Recreation and other items such as the Fire Station, they had approximately $5.7 million in proposed CIP projects. Member Mutch pointed out this didnít include what wasnít funded this year because there wasnít enough money. He thought making a down payment on those made sense. He noted he had said all along that he didnít support having the gun range in the budget but felt the proposal of Member Paul sounded like it was a way to meet the needs of those on Council who did want the gun range in the budget.

Mayor Pro Tem Capello said they had allocated $750,000 towards the gun range, in addition to that they had $800,000 of forfeiture money, $304,000 was allocated for digital in-car cameras, and $488,356 allocated to the line items that were General Fund. He said so they were really ending up with an addition $8,000 in Forfeiture Fund money. He said they really had $758,000 they could allocate towards the gun range. Ms. Smith-Roy said that sounded correct.

Member Margolis thought the cuts were reasonable and she would support the motion. However, she said the training specialist was something she thought they needed to look at later on. She thought it would be a cost effective way of implementing the kinds of things that they ask to see of staff throughout the year. She thought this made a lot of sense, and made sense of the money already allocated to the gun range and did not put those dollars to waste.

Member Gatt said he would also support the motion because he knew the importance of the gun range. He said he wanted to see the Sergeant at mid year because he thought it was a very important position at the Police Department. Member Gatt said having been on the Police Department for nearly 3 decades, he knew the importance of that training and facility Sergeant. He commented he would go on record to tell the public that if he was still on Council mid year, he would make a motion to promote someone.

Mayor Landry asked that the roll be called on the motion, which was not to approve the budget but to commit to approve the budget when brought up at the next Council meeting.

Roll call vote on CM-07-04-084 Yeas: Margolis, Paul, Landry, Capello, Gatt

Nays: Mutch

Absent: Nagy

AUDIENCE PARTICIPATION - None

ADJOURNMENT

There being no further business to come before Council, the meeting was adjourned at 7:34P.M.

__________________________________ _________________________________

David Landry, Mayor Maryanne Cornelius, City Clerk

__________________________________ Date approved: May 14, 2007

Transcribed by Charlene Mc Lean