Mayor McLallen called the meeting to order at 7:33 P.M.

ROLL CALL: Mayor McLallen (absent/excused), Mayor Pro Tem Crawford, Council Members Clark, Kramer, Mitzel, Mutch, Schmid

ALSO PRESENT: City Manager Ed Kriewall, Assistant City Manager Craig Klaver, City Clerk Tonni Bartholomew, Finance Director Les Gibson, Budget Analyst Kim Pittl

AUDIENCE PARTICIPATION - None

Mr. Kriewall asked to add an Executive Session as Item 9.

Nay: Mitzel

PURPOSE OF MEETING - 1997-98 Budget Study Session

PROPOSED BUDGET REVIEW:

Mr. Gibson began on Page 69, Revenues and reported there are a couple of major contributors to the increase of revenues. He explained property taxes have increased by approximately $500,000 and they analyzed where that revenue is coming from on Page 6. On the General Fund line, revenue generated from New Construction is $324,000 and the balance of $180,000 comes from market investments. The other big item is the State Shared Revenues. Mr. Gibson stated this is especially interesting because of the census money. Mr. Gibson stated the City has taken the position there will be a six-month delay just as there was in the first year. Mr. Gibson explained when the Special Census took effect retroactively in the 1995-96 Budget; they received $83,686 in August 1996. They received the remaining amount six months later and it fell into the 1996-97 Budget. Mr. Gibson reported the State has appropriated approximately 10% or $57,000 of the Special Census Revenue. Mr. Gibson stated they assume the same situation for the following year and that the City will receive $513,000 six months late. The way they put together the budget is that they are anticipating a six-month delay on the bulk of the money.

Mr. Gibson stated that the Appropriation of Fund Balance is another major contributor to the General Fund financing. Mr. Gibson referred to the summary of how they calculate the fund balance on the bottom of Page 69. Mr. Gibson explained they began with last year’s audited number which is $2,733,000 and they added the estimated revenue for the current year. They have done this same thing on a line item basis and estimated what they believe their expenses will be for the year which totals $16,672,657. Historically, they found these estimates are always conservative and they end up with more Fund Balance than they anticipated. Consequently, they have adjusted the estimated expenditures by 2½% and are expecting a net expenditure of $16,255,841. Therefore, they are anticipating a Fund Balance of $2,682,908. Mr. Gibson added they review what Council has previously said they want to maintain as a Fund Balance which is basically 10% of the published budget. The only adjustment they make is they back out the pass-through money from the Police Department. He explained they record all of the Police and Fire expenditures within the General Fund. To meet the 10% recommended Fund Balance, they need $1,483,764.

Mr. Gibson noted that they want to move the budget to a point where the current revenue is exclusive of the Fund Balance to support the operation. Anyone looking at this budget who has not seen it for several years would say they are going to draw down the equivalent of the savings by $1.2M and would ask what they are going to do next year.

Councilman Kramer asked what did the City do with the money they received from the State in this calendar year. Mr. Gibson replied that much of that money has passed through. He noted $425,000 was appropriated as a transfer to the Municipal Street Fund and the rest went to the Fund Balance, and includes the State Shared Revenue money that was not appropriated.

Mr. Gibson added that there are several items reflected in the budget that were not considered as special uses for the State Shared Revenue Special Census Money. In the General Administration area they put in the estimated balance; $75,000 to clean up the Lakeshore property, $175,000 for ADA compliance and $125,000 in the General Fund Budget as a transfer to Parks and Recreation to allow the restrooms for the community park development.

Councilman Schmid is unclear about the revenue numbers. Mr. Gibson explained the total is $6.9M and increased $500,000 from last year.

Councilman Schmid asked where is the $400,000 they recently received from the State. Mr. Gibson replied they include it in the estimated column for State Shared Revenues where they are estimating $3,366,000 for the current year.

Councilman Schmid asked for a further explanation about the difference between the $366,000 and $400,000 received from the State Shared Revenue money. Mr. Gibson replied that number when compared with the original budget of $2.8M, is the increase of $500,000. Further, they are anticipating receipt of those monies in the General Fund for the 1996-97 Budget.

Councilman Kramer asked if the unappropriated balance will go into the next budget. Mr. Gibson said that is correct.

Councilman Schmid said the bottom line is that they are recommending $17,269,048 and have utilized $16,205,000 for the 1997-98 Budget. Mr. Gibson replied that is correct.

Councilman Schmid asked why are they using 10% of the Fund Balance. Mr. Gibson replied it is his opinion that 10% is appropriate because they usually end up with more than that at the end of the year. Mr. Gibson added he believes their revenue estimates are conservative based on what they estimate their expenditures to be.

Mayor ProTem Crawford said the recommended percentage seemed to be in the 8-15% range. Mr. Gibson believes that is correct.

Mayor ProTem Crawford asked if they have always used 10%. Mr. Gibson believes they recommended a decrease at one time, but they did not implement it.

Councilman Kramer noted on Page 7 that they are saying given inflation and the new debt of the fire station that the budget would require a 9% increase in taxes per home. Further, of that 9%, 5.8% were bond issues. Mr. Gibson interjected, that figure is in the Municipal Street Fund.

Councilman Kramer assumes they are looking at the burden on the taxpayer and are recommending less than that full millage. Mr. Gibson stated that is correct.

2. City Council

Mr. Kriewall referred to Page 75 and he believes the numbers are reasonable as proposed based upon the prior year’s expenditures. Mr. Kriewall is recommending approval.

3. City Manager

Mr. Kriewall noted any change greater than $10,000 appears on the summary page to highlight those numbers that have changed significantly.

Mr. Kriewall referred to Page 76 and 77, and reported the budget is down somewhat for the next year because there have been no vehicle purchases or cash flow elevations. However, he noted there is one computer purchase included. Further, there is a pension increase contributed to whatever the MERS contribution has to be. Mr. Kriewall also noted they apparently missed an accounting number of $10,576 in the 1995-96 budget. He added they list the detail on Page 6 and the only real change is the request for a title change for the Executive Secretary position which will remain within the same pay range. Mr. Kriewall explained it is a recognition that the position has evolved into something more than a secretarial position.

Councilman Schmid stated Page 76 suggests support of alternative funding for the Motor Sports Museum. Mr. Kriewall replied that item will fall under General Administration.

Councilman Kramer asked what the first item under Goals and Objectives, To Reinstate a Regular Program of Television Communication with the Public means. Mr. Kriewall replied they have attempted cable programming in the past called, Inside City Hall and he believes they need to bring it back. Mr. Kriewall added it would serve as an information service and noted other surrounding community’s are providing it.

Councilwoman Mutch noted the title change would be in the same salary range, but asked if that title has a different salary within that range. Mr. Kriewall replied they will probably give a performance increase. Mr. Kriewall noted it is more of a recognition change and the salary will not change substantially. Mr. Kriewall added the title will be Administrative Assistant/Executive Secretary.

Councilman Mitzel asked if they are proposing the same change for all Executive Secretary positions. Mr. Kriewall replied they are not because they are all different. Mr. Kriewall reported it was determined that the Executive Secretary for the City Manager is a defined position after they made their comparisons with other communities. However, he noted there is discussion about changing some other titles.

Mr. Kriewall said they are also requesting the addition of a Clerk/Typist to be split three ways between the City Manager’s office, the Public Information Director and back up for the reception area in the Manager’s office.

Councilman Clark noted one goal is to decide whether to assume snow and ice removals for various county roads. He asked if Novi could receive state revenue if they made those roads municipal roads. Mr. Kriewall said the City can get more money for a contracted service than if they took over the jurisdiction. There are also additional liabilities if they took over the jurisdiction.

Councilman Clark is thinking in terms of getting something done about Grand River. He noted the County has done nothing to Grand River since 1979 when he became a resident.

Mr. Kriewall reported that is a part of the debate between the State and the Oakland County Road Commission and the problem throughout the State is that localities are funding County road improvements. The typical situation in Oakland County is that localities have to step forward, and assume the responsibilities of reconstructing and widening County roads. Mr. Kriewall believes there is no reason for the Road Commission to exist other than as a planning agency or a traffic signal agency because they do very little from a funding standpoint.

Councilman Clark understands the county’s portion of state funds is all they spend on roads and they do not spend any money from their general fund. Mr. Kriewall stated that is correct.

Mr. Kriewall believes Oakland County ranks forty-eighth in General Fund contributions to their road construction efforts. Further, they have taken the position that they fund the Road Commission through gasoline and weight tax dollars, and that is all they are going to get. He noted that around the country general government has funded road improvements and it has become a real issue.

Councilman Clark noted Oakland County is the sixth wealthiest county in the United States and it has some of the worst roads.

Mr. Kriewall reminded Council that the widening of Twelve Mile Road between Haggerty and Meadowbrook Roads was largely a local funding effort. However, he noted they received a state grant for $500,000 for right-of-way acquisition. He added this is common and that Troy has been doing this for years.

Councilman Schmid believes the difficulty is in the formula for getting money from the state.

Mr. Kriewall reported the formula is based upon population and miles of road. He explained they cannot change it politically because the outstate townships and counties line up with Detroit and Wayne County on this issue. He explained they block out Oakland, Macomb and Livingston counties. Further, Detroit does well because the distribution formula specifically gives more money to any jurisdiction more than one million in population. Mr. Kriewall understands the formula will expire next year and suggested that they may have an opportunity to make some changes.

Mr. Klaver added that jurisdiction also increases liability. Councilman Clark interjected, if someone sues the county, they will sue Novi anyway. Mr. Klaver stated cities are typically able to get out of lawsuits for county roads based upon lack of jurisdiction.

Councilman Mitzel believes the Mayor is going to bring a letter forward about county roads at the next meeting.

Councilwoman Mutch reminded Council that the Road Commission is separate from the County Commission and they can do what they want.

4. Public Information

Mr. Kriewall asked Council to refer to Page 94.

Lou Martin stated Council allocated $5,000 for communication equipment last November along with the City’s calendar. Mr. Martin noted there are some high-tech innovations with the newly purchased automated playback equipment and that the final cost was approximately $2,300. Mr. Martin also reported they saved money on the production of the City calendar because the Public Information Department was able to produce it on the computer before forwarding it to a printing company. Mr. Martin explained the department’s Goals and Objectives for 1997-98 on Page 94 reflect the $5,000 that they already received for the communications equipment. Mr. Martin reported during its installation, they realized that there are many qualitative issues in terms of sound. He explained the main master, the controls for the sound levels and the microphones need improvement. Mr. Martin believes these modifications will use a large portion of the rest of the fund. Mr. Martin reported the new playback equipment would allow them to access playback videos. Consequently, this capability will increase their visibility on the cable channel and give them additional functions. Mr. Martin reported when they produced past videos, they played it on Channel 12 at Time Warner’s discretion. Mr. Martin advised now they can independently play it on Channels 12 and 13 which will increase the viewing audience. In addition, they are also able to run it as often as they would like. Further, because they can produce more, the City can offer a lending library for those who do not have cable.

Councilman Kramer knows one issue high on the 20/20 discussion list was communication. He asked if they will see the output from the 20/20 effort before they are through with the budget process. Mr. Kriewall replied they will discuss the 20/20 results when Planning presents their budget proposal. Mr. Martin interjected, he advised he spoke with Craig DeRoche who advised they will present the final document to Council at their next meeting and that is when Public Information will step in.

Councilman Kramer referred to the Goals and Objectives on Page 29 and noted an item which states "evaluate the potential for forming a City newsletter for residents." Councilman Kramer believes this should also be a part of Public Information Goals and Objectives.

Mr. Kriewall believes it would be Mr. Martin’s responsibility to facilitate the newsletter. He added they have evaluated a newsletter in the past and they determined it would not be cost effective because of postage costs.

Councilman Kramer suggested that they should evaluate any potential for additional communications. He added the people who participated in 20/20 seemed to want more information.

Mr. Klaver believes they will carry this issue forward into focus groups to address in more detail.

Mr. Martin explained his involvement with 20/20 was at the beginning when they produced quite a bit of information to get the word out and he also believes they will participate when they finalize. Mr. Martin added they are currently producing a program focusing on citizen issues that they will possibly call The Answer Man. He advised that it will be available for rental at the Novi Library. Mr. Martin believes they will use the same man who appeared in the Walled Lake Casino video and the Novi History Farms documentaries. He noted although it is separate from the 20/20 program, they are moving in the same direction.

Councilman Schmid agreed that mailings are extremely expense.

Mayor ProTem Crawford added that they discussed combining mailings with the Parks and Recreation brochures which occur four times per year.

Mr. Martin believes they should include the 20/20 Vision Statement in the City calendar.

Mr. Kriewall reported the annual cost for the Novi School District’s quarterly newsletter was $25,000-$30,000.

Councilman Kramer would like to explore additional methods of communication beyond cable.

Mr. Klaver said they are currently reacting to the input from the 20/20 meetings and agreed they should look at broader types of communication.

Councilman Mitzel asked if they can use the Novi Library instead of starting an independent City library. Mr. Martin replied their library will be in conjunction with using the Novi Library because it will provide another avenue for communication.

Councilman Mitzel asked if it will be a burden for Administration and the secretarial support. He also does not understand why they would want to repeat the services that the library already provides. Mr. Martin said they took the bond tape to the library and had it available at City Hall, and reported they had approximately a half dozen people view it. Consequently, he does not think this will overload City staff.

Mr. Martin added that some of the balance of communications equipment budget would be used to purchase dubbing equipment to copy tapes.

Councilman Mitzel supports any improvement to the sound system and asked if they have also considered improving the lighting. He would also like improvements made for presentations. Mr. Martin replied he just purchased T.V. Elite so that presentations can be made from the Council podium by laptop. He reported there is an RCA cord that will extend into the Council Chamber and he converted the coaxial cable from the podium to RCA. He added they will also look at three major items in terms of improving the sound.

Councilman Mitzel reiterated he is concerned about lighting and that the projection is faint. Mr. Martin replied he moved the screen control lights over the screen into the audio visual room so that the operator is able to turn them off. He added presentations from the laptop should improve that.

Mayor ProTem Crawford added it is still difficult to see, even with the lights off.

Mr. Martin asked Council to watch the computer presentation given at Wednesday’s Planning Commission meeting. However he noted, that if the camera hits the presentation board, it will not be a clear picture and would be a matter of replacing the projector.

Mayor ProTem Crawford asked if they need to get a cost estimate for that because he believes it is probably 50% of what it used to be. Further, he agrees they should upgrade the lighting system, the microphones and the video. He believes it has various degrees of Council support and various degrees of funding by Council. He believes they need to improve the presentation of meetings in the Chamber and would like to see something in this year’s budget.

Councilwoman Mutch reported that the Parks and Recreation Department mails their brochure four times a year and asked if they could piggyback a newsletter on that mailing.

Mr. Martin believes that is a possibility; they could include quarterly updates. However, if they get too extensive, there would be added costs.

Councilwoman Mutch referred to Responsibilities, The Coordination of Government Access Cable Programing and to Increased Cable Programming under Goals and Objectives. She noted that she does not see anything about production. Mr. Martin replied he would serve as a coordinator and would contract someone else to operate the camera.

Councilwoman Mutch asked how will Mr. Martin accomplish increased cable programming when he sees a need. Mr. Martin replied the difference in increasing programming from a work load standpoint to the Public Information Department is not increasing it as it normally would. He explained he and a SWOCC representative recently shot an Inside City Hall program in Council Chambers.

Councilwoman Mutch asked if that means Mr. Martin has access to one SWOCC staff person to schedule filming. Mr. Martin stated that is correct. By increasing cable programming, Mr. Martin explained he means that he will bring Administration into the Council Chamber and use existing equipment to film a quick show by SWOCC personnel. It does not mean he will increase cable programming by doing a full-blown cable production at SWOCC.

Mr. Kriewall referred to Page 15 and noted Cable Production includes the cost of televising Council meetings, Planning Commission meetings, ZBA meetings and some production funding for general programs.

Councilwoman Mutch knows there are many ideas about how they can utilize cable, but there isn’t anybody they can call upon to do it. Mr. Kriewall agreed they are limited. He reported that Farmington Hills invests quite a bit of money into their cable programming. Based on the size of their community and the amount they receive from the 3% cable revenue, Farmington Hills has two or three people that do strictly cable programming.

Mr. Martin added Novi has to be creative and reported they sometimes use City staff to film events in Novi.

Councilwoman Mutch asked what is meant by Electronic Media. Mr. Martin replied it is there to include things like releases to radio.

Councilwoman Mutch thought electronic media might include something like a Web Page or Internet. Mr. Martin replied he receives E-mail through the Web Page and he responds accordingly. He also updates the Web Page as needed.

Councilwoman Mutch noted some information about Novi is inaccurate on the Internet. She asked if Mr. Martin could provide a copy of what is on the Web Page for Council. Mr. Martin reported it is a text site that Mr. Nowicki initiated in August, and they can do updates and send E-mail through that.

Councilwoman Mutch stated this seems like the most obvious way to communicate regularly and believes it holds many possibilities for them.

Mr. Martin reported although it is linked with the Data Management Specialists through D.P.S, he is able to update.

Councilwoman Mutch is concerned that the demand on the people who are responsible for the data is going to be so great in terms of communication that it is not going to be a high priority when they position it within a certain department.

Councilman Schmid was disappointed in the quality of the video for the Daddy-Daughter Dance and does not feel they should have aired it.

5. General Administration

Mr. Kriewall referred to the detail sheet on Pages 16 and 17, and reported this budget addresses all nine of their departmental functions. Mr. Kriewall stated they also included the request for a new Clerk/Typist position in this department. He reminded Council that they propose to share this position between the City Manager’s office, the Public Information Department and relief for the receptionist. Mr. Kriewall reported they are currently in a position of having the Administrative staff cover the phones when the receptionist is absent. Mr. Kriewall does not believe this is a good use of Administrative time and consequently, he believes this position is a priority. Mr. Kriewall added there is an existing position in the Public Information Department’s budget for a part time co-op student, but they believe they do not get enough continuity out of that position.

Mr. Klaver referred to the summary on Page 97 and noted there is a significant increase in Other Services. As members of the Consultant Review Committee will recall, this is predominantly due to almost $100,000 in Planning Consultant fees that they asked to be transferred. Mr. Klaver noted all the other retainers already occur in General Administration.

Mr. Kriewall referred to Page 16 and said the only change made in terms of salaries was the addition of a Clerk/Typist position. He noted they reduced Temporary Salaries, they estimated a decrease in Overtime, and Bonus Pay includes the sick pay bonus for all employees. Mr. Klaver interjected, Bonus Pay is an employee incentive program based on unused sick days. He explained an employee must have at least six unused sick days of the twelve earned per year to receive a percentage based upon any unused days greater than six.

Mr. Kriewall continued by stating Longevity is just for the people within this budget. He reported Performance Adjustments is where they recognize employees within the General Administration Department. He reported they originally budgeted $20,000 in the fund last year and used $17,000. This year they are allocating $25,000 and added they may reduce that number before budget approval.

Mr. Klaver stated they prefund the Retirement Healthcare Coverage and that they include that number in their budget to prefund that expenditure.

Mr. Kriewall reported Pension includes the employees within the department.

Councilman Schmid asked if they have prefunded the pension. Mr. Klaver replied it is based on the actuary studies over the next thirty years.

Mr. Klaver asked what is the difference between the retirees medical and post retirement health care. Mr. Gibson replied the $900 is for the retirees that the City is paying insurance on before the time they instituted the actuarial based off the current.

Mr. Klaver said there are there are two categories. One is the current expense for all those who have retired citywide and the other is prefunding for the employees within this department.

Mayor ProTem Crawford asked if the numbers are discretionary. Mr. Gibson replied they take the numbers from the actuals.

Mayor ProTem Crawford asked if they can change the numbers in terms of the budget process. Mr. Klaver said they could technically change the prefunding because they do not have to prefund it.

Mayor ProTem Crawford asked how would they know which ones they have prefunded. Mr. Klaver replied health care is the only one that they have prefunded. Actuary studies have determined the others or a statute sets them.

Councilman Schmid asked what pension is based on. Mr. Gibson replied the pension is based on the number of employees, their salaries and their ages as determined by the actuary of what is going to be necessary to meet their retirement.

Mr. Kriewall reported Workmen’s Compensation applies to the employees in this budget. Supplies for Resale is for promotional items they stock for resale and the income is noted somewhere else.

Carol Kalinovik interjected, Office Supplies under General Administration includes the Manager’s Office, Finance, Treasurer’s, the Clerk’s office and Assessing. She added they categorize Postage the same way.

Mr. Kriewall reported Consulting includes things they cannot normally charge to developers, projects or special assessment districts.

Mr. Kriewall advised there are several items included in Memberships and Dues. It includes SEMCOG dues, National League of City dues, Michigan Municipal League dues, Chamber of Commerce, and so forth.

Mr. Klaver reported they included a General Consulting Account and historically, it has always included a couple of projects. He reminded Council that last year they contracted Coopers Lybrand to perform a study on staffing and inevitably, they always have two or three studies they have not really anticipated, but find a need for. Further, there are some examples listed in the back up material, but it is not very specific.

Mr. Kriewall reported they removed Traffic Consultant from the Planning Commission budget, Transportation is mileage for the department and Community Promotion includes several things. Ms. Kalinovik interjected, Community Promotion includes items like plaque presentations, flags, receptions in the atrium and the Mayors Exchange Day.

Mr. Klaver reported the Historical Commission’s request is submitted according to what they originally requested last year and what they actually received. Further, their expenditures are similar to what they were last year for the operation and maintenance of Township Hall. Mr. Klaver reported they are interested in supporting another marker, and they have $2,000 set aside for education, conferences and workshops. Mr. Klaver added that the Committee is willing to come before Council if they have any further questions.

Councilman Schmid asked how is the additional $5,000-$6,000 being spent. Mr. Klaver explained they have suffered a heavy turnover and the group is getting restarted. Mr. Klaver suggested that the number may be high, but there are many projects that they would like to work on that have been set aside.

Councilman Schmid asked if they have a budget. Mr. Klaver briefly summarized their budget.

Mayor ProTem Crawford asked if they generate any revenue from the building. Mr. Klaver replied it is limited and is given to Parks and Recreation for use of the building. Further, the revenue received from the sale of the historical book, No. VI on the Trail has decreased.

Councilman Schmid said it frightens him when he thinks about the Fuerst property. He asked if they are going to pick up an additional $20,000 to fund that project. Mr. Klaver replied that is not included in this budget, but it is conceivable.

Councilwoman Mutch reported a photographic exhibit is currently under production for Michigan Week. Further, she stated the Historical Commission would like to sponsor Larry Massey, a Michigan author, to come back to the Library in May to publicize the concert they are also sponsoring. Councilwoman Mutch believes much thought went into the preparation of this budget and they can justify their requests. One thing they have to decide this year is how much the building gets used. Part of the philosophical battle over the past year was should it be promoted and used more to generate revenue. She is inclined to think it will generate some revenue.

Councilman Kramer asked where would the revenue go. Councilwoman Mutch believes it would go to the General Fund. She added the only money the Historical Commission could ever count on was from the book sale.

Mr. Kriewall reported the Beautification Commission is requesting $650.

Ms. Kalinovik summarized their request.

Councilman Schmid believes the committee may need more funding.

Mr. Kriewall suggested allocating $2,000.

Mayor ProTem Crawford would like to see them come back with a proposal.

Mr. Kriewall stated the 50's Festival request for $20,000 includes Police, the Water Department and D.P.W. overtime.

Mayor ProTem Crawford asked if the City is reimbursed for a portion of that. Mr. Kriewall replied they do not reimburse them because all the profits come back to the City and consequently, the City is making money. Mr. Kriewall reported the latest project is to build a bandstand at the corner of Main and Market Streets with a $90,000 budget.

Mayor ProTem Crawford asked who does the clean up and what does the D.P.W. Department do. Mr. Kriewall replied the Boy Scouts clean up, the D.P.W. sets up the barricades and the Water Department sets up the water supply. Mr. Kriewall explained most cities typically provide these things and according to a survey they conducted several years ago, they spend more on their municipal events than Novi does. Further, this is Novi’s only event and all the participants do well.

Mr. Kriewall stated the Motor Hall Museum is a new item introduced this year. He explained the museum has had a difficult time maintaining its existence in the community and this is Novi’s only cultural activity of any significance other than the Old Township Hall. Mr. Kriewall noted the Expo Center and the Visitors and Convention Bureau featured the Motor Hall Museum in an ad in the Detroit Monthly. Further, the Motor Hall Museum is a premier event associated with the Grand Prix and Novi is part of its activities. Mr. Kriewall stated they embody Novi’s historical importance in the museum and the Novi Race Car, and measuring its importance is difficult. He believes the City should support Novi’s main historical and promotional venue. He noted they are currently receiving some private sector support from the automotive companies.

Councilman Schmid has great difficulty spending $20,000. It is not because it is not a worthy cause, but he does not see it progressing and it is not an attractive attraction.

Ron Watson believes it comes down to whether it is a part of their vision. Mr. Watson said the whole concept of reverse was imposed upon them and they elected to accept it. However, it was something that hurt them, but they are making the best of it. Mr. Watson explained they are in the premises of a private entrepreneur who he believes was reluctant to have them there from day one. Mr. Watson was told the landlord basically values another tenant and did not want to lose that tenant. Consequently, the landlord imposed the reduction in size upon them. Mr. Watson explained, they cut their losses and may look for another location. He added they were cut back by one half. Mr. Watson said they put them out of business because they had to move and redecorate. Mr. Watson was disappointed that they were unable to continue the Novi seventh grade student tours.

Mayor ProTem Crawford would dispute they are going in reverse. He agrees they had an unfortunate setback, but he thinks they upgraded a number of things like the number of contacts throughout the country and the world. He asked Mr. Watson to speak about the type of people they have.

Mr. Watson said it is a slow process and what is key to the development of this is the development of the board. He explained they have moved up in terms of power and corporate rank each year. Further, they have added people with personal wealth which he thinks is essential to make this successful. Mr. Watson is very encouraged.

Councilman Clark asked if they would consider another location in Novi. Further, he asked if they have given any thought to establishing fundraising to acquire land and construct a building with corporate sponsors. He also asked if there are federal grants available. Councilman Clark believes part of the problem is with the current site and it might be a bigger draw if it had its own location.

Mr. Watson concurs and believes the uses there are conflicting. He believes the people who attempt to find them are inconvenienced by the other events there. He believes when the Museum grows to what they want it to be, they will be an inconvenience at their current location. Mr. Watson believes there is a site that is still a possibility and was committed to the Hall of Fame located along the freeway and north of the D.P.W.

Councilman Kramer appreciates the volunteers’ efforts and believes Council should seriously consider the funding. Councilman Kramer visited a museum that existed on the fifth floor of a hotel’s parking garage and he asked if they would consider a similar situation if a joint effort would create a parking structure off a road that would go around the northwest quadrant of the Town Center.

Mr. Kriewall said they had this discussion with Blair Bowman. Apparently, within four years they will have the opportunity to acquire the Expo Center and in about in a five-year period, there might be a proposal for an actual hotel attached to the Expo Center. However, the only way it would work would be to include a parking deck and he believes it is a possibility.

Mr. Kriewall reported they attempted to tap into the Cobo Hall funds and hotel tax throughout the metropolitan area with their Lobbyist two years ago. However, the politics were not right at the time. He reported they could not even get the hotels that were paying into that tax to buy into their concept for several political reasons. Now the time might be approaching when they may have the opportunity to get the excess funds that go to Cobo Hall.

Councilman Kramer encouraged grants or other creative forms of funding.

Mr. Kriewall believes much of it has to do with timing. He explained the Expo Center has struggled, but now they are up and running. Further, he believes many things are going to happen in the next three to five years and it would be a shame to lose what they have already built up.

Councilman Schmid does not believe $20,000 is going to make or break the Motor Sports Museum. He is concerned that it is a project using taxpayers money and fears it may not be here a year or so from now. He wants to be certain the taxpayer’s money is well spent and he does not know where the money is actually going.

Mr. Watson reminded Council that the museum had steady growth before the reduction of space came about and that it was self-sufficient on a subsistence budget. Mr. Watson believes because of the heritage of this town, it should stay here and they have one chance to have a cultural institution of this magnitude. Mr. Watson is committed to do it.

Councilman Mitzel asked how the Automotive Hall of Fame they are building in Dearborn affects this. Mr. Watson said they talked about doing a joint venture with them and he believes they would be a natural partner. He explained it took them fifty years with automotive support to come up with a project that had a viable museum on the grounds of the Henry Ford Museum. He thinks it would add another great attraction to see in the Detroit area.

Councilman Mitzel said if Council is serious about allocating money to the museum, he would expect that Council would ask for financial statements, guarantees for how the money was spent and so forth. He is not certain he will support this.

Councilwoman Mutch asked what authority does Council and the City have even to discuss this in terms of using taxpayer’s money in this manner. Mr. Kriewall said they could get an opinion from the attorney that would support this. He believes they permit it primarily under the guise of community promotion and historical preservation. He said they had legal opinions from prior years that state they can use Economic Development Corporation funds to purchase the race car or they can use EDC funds to purchase Novi engines. Mr. Kriewall’s point is that there is a history of spending those kinds of monies on this. This also means the City owns the car and the engines.

Councilwoman Mutch believes community development, economic development and historic preservation are excellent concepts. However, she noted this is not a City museum and she wants to be certain that this is appropriate. Mr. Kriewall said they could address that.

Councilwoman Mutch said there are building authorities in communities that would build a museum and create a lease relationship with the city. She believes the City should support the museum and further, she believes Mr. Watson made a good point when he said that the City had not really supported the museum. She thinks he needs to establish that the community supports the museum.

Councilman Kramer suggested that they bring this back during the budget sessions and address concerns raised today.

Councilman Mitzel would also like to know if there is community support.

Councilwoman Mutch asked Mr. Watson to provide his long term vision of what relationship he would like to see between the museum and the City.

Mr. Kriewall reported they allocated $2,500 for the Project Novi Suggestion Program.

Mr. Kriewall reported Youth Assistance includes a shared clerical position with the Novi Community School District and they receive a revenue to offset half the amount.

Mayor ProTem Crawford asked if they charge them for use of the facility. Mr. Kriewall replied they do not charge them because they claim they provide a lot of printed materials.

Mr. Klaver said they broke down these numbers and they are matching in kind.

Mayor ProTem Crawford believes they take up prime office space and asked if they have evaluated that. Mr. Klaver replied they originally based this on input from the Citizen’s Committee when they designed the facility. He added there was a conscious decision made to provide that office space and they are honoring that original commitment.

Mr. Kriewall added they are looking at moving this operation to the Fuerst house.

Although they are self-insured, Mr. Klaver said Insurance reflects their annual fees tied to the budget numbers. It is basically the same rate, but it includes an increased volume of property insured and so forth.

Mr. Kriewall said the Lighting is to support their policy to light the main entrances of each subdivision as it meets a mile road and the large increase in cost is due to Edison’s rate change a few years ago. He explained they initiated a legal challenge of Edison’s request to the Public Service Commission to charge a capital charge for installing a light up front. Mr. Kriewall reported Edison formerly built this charge into the monthly electrical charge, but they determined they were losing money on the street lighting. Mr. Kriewall reported the Public Service Commission granted the rate increase approximately three years ago and Novi’s lawsuit was an exercise in futility.

Mayor ProTem Crawford asked if they could build that into the cost of the development as a design requirement. Mr. Kriewall will review that policy.

Councilman Kramer believes lighting at a subdivision entrance is as important to public safety as a turn lane is.

Councilwoman Mutch asked if they need to add this as an agenda item to Ordinance Review. Councilwoman Mutch will contact Dennis Watson to add to agenda.

Mr. Kriewall stated there will then be a potential to cut this number back somewhat. However, he does not know if the number is based on projection or actual. Ms. Kalinovik interjected, it is based upon projection.

Mr. Kriewall said the 20/20 Project came in under budget because they hired a staff person who could facilitate the program without hiring a consultant. Consequently, they saved half the cost and it will enable them to extend the program into next year’s budget.

Councilman Schmid asked what the total budget was. Mr. Kriewall replied it was $30,000 and they spent $4,059 to date. Mr. Kriewall reported they estimated they may spend $15,000 by the end of this fiscal year. Mr. Kriewall noted Council should keep in mind that there are points where they can stop that process when the Planning Department comes forward with their budget.

Mr. Kriewall discussed Bike Trails and Sidewalks with Tony Nowicki today who advised that although most of that money has been spent, they have not made the transfers yet.

In other words, all the projects that they have commissioned are completed or nearly completed. Mr. Kriewall stated Council can get an update when the D.P.W. comes forward. He added they are moving that through the road funds as a separate item.

Councilwoman Mutch asked if Conferences and Workshops under General Administration is something that a body like the Historical Commission would do completely within their budget. Mr. Kriewall said that was correct.

Councilwoman Mutch asked if there is anybody else like that. Mr. Klaver replied that is the only one that they include.

Mayor ProTem Crawford stated in other words, the Conferences and Workshops are for those people mentioned before.

Ms. Kalinovik stated Conferences and Workshops also includes all the seminars for the entire employee population.

Mr. Kriewall reported they funded the Lakeshore Clean up with the Mid-Decade Census money.

Ms. Kalinovik reported there are two computers included in Data Processing. She explained one is for the proposed new position and one is for the City Manager. It also includes costs for training and certification of the software for the purchasing program. She reported their current version will not meet nor support the City’s needs in approximately two years and they will need to make a migration to the next program.

Councilman Clark assumes the new software will not crash in the year 2000. He read software purchasers should make certain they get a disclosure and guarantees for that very problem.

Mr. Gibson added there is a $30,000 balance left over from the original system installation. The amount includes the outbound faxing and some internal systems.

Councilman Mitzel reminded Council that they requested an Administrative Functionality Study in January and he does not believe Council ever changed the direction that they were interested in doing that. He personally has a difficult time supporting any new personnel without some sort of evaluation.

Mr. Klaver said Councilman Mitzel is correct and reminded Council that Mrs. Bartholomew had shared some experiences she had in Oak Park. Mr. Klaver spent some time discussing this matter with Oak Park’s Manager, who supplied a copy of their report. Mr. Klaver said the study addressed operational issues, and it appeared to consider functions and issues that did not appear on their agenda. Mr. Klaver said when they got into the questions that seemed to have generated this, they seemed to be fairly narrow. He added this was a $30,000 study. Mr. Klaver said they did not get much reaction or a level of support from Council and they got the impression that undergoing that level of detail was unnecessary. However, if Council feels otherwise, they would like to know.

Councilman Mitzel reminded Council that they discussed in January that they have not had any kind of comprehensive evaluation in the way Administration is set up and whether it is most effective, if they need more personnel or if there is a better way for it to be organized so they do not need more people. He believes they need to take a closer look at the big picture and there was general Council support for that in January.

Mr. Klaver spoke with a Director of Personnel Services who is branching off to provide general consulting services. Mr. Klaver stated that this professional suggested that he could conduct what he called a blackboard session to help determine whether they even needed to do a study. Mr. Klaver believes he would charge a nominal fee.

Councilman Kramer asked if they could meet before they conclude the budget process.

Councilman Mitzel asked if there has been mention of finding a security system for the Civic Center building.

Mr. Klaver reported Ms. Kalinovik has a list of keys that they have assigned to employees and they are not meant to be duplicated.

Councilman Mitzel suggested that they consider a badge system to provide access to the building during certain hours. They could then easily drop people off the computer system as they terminate.

Mr. Klaver believes they have always felt there is a trade off in making the building secure versus making the building sensible. He added they have only experienced minor theft problems over the years.

Councilwoman Mutch added there is also the question of personal security.

Councilman Mitzel is surprised there are no resources available and no security measures taken. He would also like to see lockdown devices on the computers.

Councilman Kramer does not support lockdown devices for the computers; he would rather lock the doors.

Councilman Clark would hate to see a trade off between security and accessibility in terms of public perception. He suggested that the problem may be more of internal education of the staff about the importance of security.

Mr. Kriewall stated most of their problems occurred right after construction and they suspect that the contractors may have had access.

Mayor ProTem Crawford asked whether drafting a memo or policy to reemphasize personal safety would be sufficient.

BREAK - 10:20 p.m. - 10:30 p.m.

6. City Clerk

Tonni Bartholomew, City Clerk, reported their budget will not change much for this fiscal year. However, she is proposing an increase for laser fiche for the preservation of all the City’s documents and permanent records. She explained its main function is to preserve all the City’s documents because they currently have only one hard copy and if they suffer a major catastrophe, the history of Novi will be gone. Secondarily, she reported it will reduce storage space required because they can scan all the records they currently store into the system. She added they are looking at acquiring approximately five new four-drawer filing cabinets because they are storing some records in mail bins. She added they are also running out of office space to put the cabinets. In addition, they are currently storing 50% of their documentation at the D.P.W. Yard and they also have records in the Civic Center’s central storage. Consequently, this arrangement makes it difficult to respond to Freedom of Information requests. Further, because the recommended system is capable of character recognition, it would be as simple as making a copy to reproduce it. She reported they would store documents on optical discs and as the system grows, they would add an optical juke box to permit additional storage. Additionally, other departments could retrieve a record from the existing computer system. They could also load Council Packets onto optical discs and make them available through electronic media instead of hard paper copies.

Mayor ProTem Crawford asked if it is under Capital Outlay. Ms. Bartholomew replied it is classified into two spots. She explained it is in Capital Outlay, but they also included it under Data Processing because there is a software element involved.

Mrs. Bartholomew noted there is a decrease in their Election Supplies from last year’s estimated. She explained this is primarily due to the law change and this year the requirement to provide one poll booth for every two hundred voters especially affected them because it mandated that they double all of their booths for a cost of $13,000. She added that it did not fall under Headlee.

Mrs. Bartholomew said there is a personnel issue involving a title change that Mr. Klaver will review with Council.

Mr. Klaver reported the City currently does not have a policy for reclassifications. He stated in addition to the reclassification of Mr. Kriewall’s secretary, Mrs. Bartholomew would like to reclassify a member of her staff into an administrative position as an Executive Secretary. Mr. Klaver added the difference in wages is minor and they were planning to accommodate it in the Performance Adjustment Funds. Further, because it did not have its own budget category, they also did not include it in the back up material. He added they will provide that back up material to Council. Although this reclassification would remove a position from the Union, it would put this employee in an exempt position to assume responsibilities appropriate for that classification. Further, Mr. Klaver noted they have informed the Union about their decision and they do not anticipate any problems. Mr. Klaver reminded Council that the Clerk’s office added a staff member during the prior year and now that they have sorted the job responsibilities within the department, Mrs. Bartholomew would like to reclassify one of her staff members to handle some confidential matters that pass through the Clerk’s office. He added there will be approximately a $1,000 increase in salary per year.

Councilman Schmid asked what is the cost for the laser fiche. Mrs. Bartholomew replied the total cost is approximately $28,000.

Mayor ProTem Crawford asked if the Building Department’s equipment would meet the Clerk’s office needs. Mrs. Bartholomew replied they have microfilm and the difference is in the optical recognition. She explained their system will be available citywide on any computer and the Building Departments’ is read from a tape. She also spoke with Oak Park staff who purchased a laser fiche machine after she left and they advised her that one staff member has copied ten years in less than one month. Further, because Novi’s documents have not suffered any major destruction, she was advised that their documents should copy well. However, she noted they would have to send out larger documents. In addition, after they have recorded crucial records, they would open it up to other departments. She reported her request is for a two user which means they could have one person viewing while another loads at all times. Further, if it went citywide, she suggested that they upgrade it to a five user. In addition, documents that are currently on computer discs can be loaded directly into the system.

Councilman Mitzel asked if they can access electronic copies of consultants’ reports. Mrs. Bartholomew replied they cannot currently access that because there is no way for them to retain it. However, according to JCK and Dennis Watson, she understands theirs would be available and at that point, they would down load them. However, anything prior to their existing system would have to be scanned.

Mr. Kriewall noted the Building Department will address similar needs during their budget presentation.

Mrs. Bartholomew stated the Building Department’s use is somewhat different. She explained because they read blueprints, they will need a larger and more expensive scanner. Further, they do not require character recognition. Consequently, the Clerk’s system would be useful to them, but theirs would not be useful to the Clerk’s office.

Councilman Mitzel noted there was discussion in January about packet issues. He recalled that Council requested one page meeting summaries from boards and commissions, and it is his thought that it may be sufficient instead of actual copies of the entire minutes.

Councilman Mitzel asked how many copies of packets are being prepared. Mrs. Bartholomew replied they are currently copying twenty-five packets. She reported there are seven for Council, one for Mr. Kriewall, one for herself, one for Mr. Klaver, one for Finance, five for Planning, one for Chamber of Commerce, one for the Library, one for the Novi News, one for the attorney, one for Dan Davis, one for Tony Nowicki, one for Kathy Smith-Roy, one for Chief Shaeffer and one File copy. Mrs. Bartholomew added she notified the Departments that the Clerk’s office would no longer provide them with Council minutes and so forth because they can access them on the computer through the s drive.

Councilman Mitzel supports this policy because it will save staff time and money. Further, Councilman Mitzel said he would also like boards and commissions to comply with Council’s directive to provide a summary of their meetings. He advised Parks and Recreation, the Planning Commission, the Construction Board of Appeals, Stormwater and Council currently prepare summaries. Councilman Mitzel does not need an entire set of minutes because when an issue does arise, they are provided.

Mr. Klaver noted when minutes are only two pages, providing the minutes would be more timely instead of a summary.

7. Assessing

Glenn Lemon, Assessor introduced Ken Cheyne as the Deputy Assessor. Mr. Lemon reported there have been many positive changes in the Assessing Department over the last eight months. He reported they are taking a hard look at their data and they are updating everything that needs to be updated. Mr. Lemon stated 70% of their budget is for items they have no control over and most of those appear in Personnel Services. Mr. Lemon added they are currently converting to a more user friendly computer system and the conversion of the data from the Data General System has not gone as smoothly as they would like. He was informed by the people who are performing the conversion that it the biggest mess they have ever encountered. Consequently, they have not yet attempted the gleaning of that information in terms of what needs to be cleaned up and what does not. Therefore, it has not been necessary to use the Temporary Salaries to any great degree. Mr. Lemon explained Council allocated $58,000 last year and they have been unable to use $45,000 of that allocation because of the conversion difficulties they are experiencing. Mr. Lemon hopes to get the conversion back in early May at which time they will require a portion of the $58,000 back through the fiscal year and then complete the conversion for the end of the assessment year in December. Unfortunately, Mr. Lemon reported Data Processing, and Other Services and Charges will be in the same situation. Mr. Lemon would like to get as much as they can from this budget and not request as much in the subsequent year’s budget.

Mr. Lemon reported they are reducing every other category and he has tried to pare back on as much as he can. However, he reported they have one major request for four economy vehicles for the appraisers. He reported they currently receive recycled police cars with as much as 104,000 miles on them. Mr. Lemon reported they must keep seven vehicles just so they can keep four on the road at any given time. He noted they are at 130% of their budget for vehicle maintenance and repair already. Mr. Lemon added they do not put a large amount of mileage on the vehicles and consequently, they can keep these cars eight to ten years.

Mr. Kriewall stated they support Mr. Lemon’s request for four cars and added they are looking at Chevrolet Cavaliers.

Councilman Schmid asked if the Assessor and Deputy Assessor have city owned cars. Mr. Lemon replied they do not have personal vehicles, but have cars available to them during business hours for meetings and so forth.

Mayor ProTem Crawford asked if the $30,000 request for Temporary Salaries is in addition to what they anticipate spending or is it the roll over figure. Mr. Lemon replied it is a roll over figure.

Councilman Schmid stated that he always assumed that the estimated figure was a true estimate. Mr. Lemon replied it was true assuming they were going to be able to get the conversion underway.

Councilman Schmid asked if all the estimated figures are accurate or is that just a figure they throw in. Mr. Klaver said most of the figures are fairly accurate and this is something that they anticipated that did not happen because of other factors.

Councilman Schmid saw some dollar value figures that showed Novi’s substantial growth. However, he noted that the SEV dramatically decreased with the growth so that they came up with almost the same figure as last year. Councilman Schmid stated he was advised that the Assessing Department had intentionally and consistently lowered the assessment, particularly in the business districts because they thought they were too high. Mr. Lemon replied that is untrue. He explained Plante & Moran can make the figures say whatever they want them to. He stated they have divided the total property taxes over a series of years from commercial and industrial properties by some fictitious number of households. Mr. Lemon appreciates what they did, but they may as well have used the number of windows in the City. He does not think it is a good report. Mr. Lemon added the business economy in southeast Michigan has been fairly stagnant for the last eight years and he can only reflect what the value of property is. He does not create value, he is only a historian. He explained three basic things affect value: they are scarcity, utility and desirability. Novi is a desirable address. In terms of scarcity, the whole market was saturated in southeast Michigan. However, now they have absorbed most of the properties and they are beginning to see some growth in Novi. However, if they talk to the commercial and industrial business owners, they talk about how much easier it is to develop in other communities. He suggested it may be because of the utility of the property which is governed by what they can do with it. Mr. Lemon believes these restrictions may have an affect on the development and value of property also. Mr. Lemon stated the Plante & Moran report has taken every apartment unit and added it as a household. This would make the $20,000 apartment the same as a $300,000 home; it is comparing apples with oranges. Further, they are combining commercial and residential properties, and it appears as though commercial and industrial do not pay any taxes.

Mr. Klaver agreed with Mr. Lemon’s assessment of the report. He then cited the Hotel Baronette as a dramatic example of a commercial property where they would roll back a property because they built it poorly.

Mr. Kriewall added they built the Hotel Baronette for $14M and they sold it back for $3.8M, and all they have to do is take the sale documents to the tax tribunal to be assessed at $3.8M.

Mr. Klaver believes these types of things created an impression that does not exist.

8. Fire

Chief Lenaghan reported the Fire Department’s budget is a maintenance budget. He explained they do not have any major projects or too much capital included because they currently have two building projects under way and are in the process of implementing a change in their radio system.

Chief Lenaghan noted they have additional personnel and as a result they have almost one hundred employees. Although they are primarily part time, Chief Lenaghan reported they still have equipment and uniform needs.

Chief Lenaghan reported some changes within the Department in general terms include A.V. equipment, a tanker pumper, and the specs on a replacement for their rescue. Further, Chief Lenaghan stated because of the bond issue for a new station and training center, it would be difficult to start any new programs.

Chief Lenaghan believes their request is $300,000 less than last year and most of it is in capital items.

Under Personnel, Chief Lenaghan requested a fifty-cent increase in the hourly rate for the sleep-in, auxiliary and clerical staff. Chief Lenaghan noted initially their policy for things like a set of turn out gear was purchased out of Capital and replaced out of Uniforms, now it is under one account.

Chief Lenaghan reported they changed the heating systems to a radiant heating system at two stations and advised that the energy savings is anywhere from 20-35%. Consequently, they can possibly recover much of the cost for installation within five years. Further, they would like to upgrade the telephone system at Station 1 and increase the parking at Station 3 to accommodate additional employees.

Mayor ProTem Crawford asked what is the status of the $174,000 of which only $15,000 has been spent. Chief Lenaghan replied that money is allocated for the remodeling of Station 1.

Councilman Kramer asked if the remainder will go into the Fund Balance equation if the rest is not spent. Mr. Gibson replied it will, but they will not review an estimated number because that is how they forecast it.

Mr. Klaver added it is on hold. He stated they approved some at a recent meeting and they amended it just to provide the essentials.

Mayor ProTem Crawford asked about the balances for the other capital outlays on Page 21. Chief Lenaghan replied they already talked about the building improvements and they just approved the purchase of turn out gear for $25,0000. They increased Communications to pay for the change over on the radio system, but they will not pay it off until they completely install the system. Chief Lenaghan said Vehicles would include the engine, a car, a pick up truck, the rescue and the tanker. He concluded most of it has been spent.

He added they also requested a lot of equipment because their current equipment is not complete. The request for a heavy duty washing machine is so they can wash their turn out gear annually.

Councilman Schmid said it appears they are receiving all of their equipment except the one automobile and asked if it will come from the General Fund. Mr. Kriewall replied it will.

Councilman Schmid asked if they have plans to set money aside for Capital and noted the increase in the budget compared to last year. Mr. Kriewall said they will find when they get to the end, they have shorted the Department of Public Works.

Mayor ProTem Crawford suggested that they should review the Capital Improvement Program along with Councilman Schmid’s suggestion.

Councilman Schmid sees a lot of overall data processing expenditures and asked what it includes. Mr. Gibson said he could provide a summary.

9. To Schedule an Executive Session

CM-97-04-119: Moved by Clark, Seconded by Schmid, MOTION CARRIED: To schedule an Executive Session immediately following the Regular Meeting

COUNCIL DISCUSSION

Councilman Mitzel questioned amending the agenda and reminded Council about the time they wanted to add Ice Arena to the agenda at a previous meeting. Mrs. Bartholomew spoke with Mr. Watson for his opinion and he stated it is appropriate.

Nay: Mitzel

ADJOURNMENT

There being no further business before City Council, the meeting was adjourned at 11:37 P.M.

Transcribed by Barbara Holmes