ROLL CALL: Mayor Csordas, Mayor Pro Tem Landry, Council Members Capello, Gatt, Lorenzo, Nagy and Paul

ALSO PRESENT: Rick Helwig – City Manager

Craig Klaver – Chief Operating Officer

Clay Pearson – Assistant City Manager

Tom Schultz – City Attorney

Kathy Smith-Roy – Finance Director

` Barbara McBeth – Planning Director

Benny McCusker – Public Works Director

Member Capello added Item No. 2 under Mayor and Council Issues to "discuss scheduling a joint meeting with the Parks and Recreation Commission". Member Nagy added Item No. 3, "Galway Drive", and Item No. 4, "Screening at Lakeshore Park". Member Paul added Item No. 5, "Reduction of Water Level at Autumn Park Pond", and Item No. 6, "Chip and Seal Roads". Member Lorenzo added under Consent under Executive Session, Item B, "Adell". Mayor Csordas added Item No. 7, "Novi Sign Ordinance".

Mayor Csordas said Council wanted to thank a couple of the members of our community who served very well on the boards and commissions for the City.

1. Appreciation Plaque to David A. Ruyle for volunteer service on the Zoning Board of Appeals.

2. Appreciation Plaque to James Lawrence for volunteer service on the Library Board of Trustees.

3. 2004 Comprehensive Annual Financial Report & Audit – Joe Heffernan, Partner, Plante & Moran LLC

Mr. Heffeman stated that Wendy Thomas was there with him tonight to help present the results of the audit; Ms. Thomas, with a group of three others, conducted the audit on a daily basis.

He stated that the financial statements (about 95 pages) were in Council packets and that pages 3-10 was management’s discussion analysis; he said it was the second year that Novi had been adopting the new accounting rules that were referred to as "GAS B34"; it was a significant change a year ago. He said one of the real improvements was the seven-page letter management discussion analysis letter. He said the Finance Department did a really good job of writing the letter, which was prose form of how the City did. Mr. Heffernan had five or six graphs that would focus on how the City did for the year; he would answer questions as he went along.

On the first page was the General Fund Revenue Trends. He said the most significant revenue for the City was property taxes, which increased about 6.8 percent for the year, and was approximately $15,500,000 for the year.

The second most important revenue source for the City was State-shared revenues. He said it could be seen that four years in a row it had been declining from $4.7-million, to $4.6-million, to $4.2-million, to $3.8-million. He said that the year the City was going into now, that began July 1, 2004 through June 30, 2005, it would have another slight decrease; he said the State was projecting revenue sharing to be flat, but in fact, for the City of Novi, was projected to be a one percent decrease. There were some townships, an actual significant number of townships, that had lost all of their statutory revenue sharing. There was nothing else the State could take away from them, so in order to give those townships the money that they had to have by constitution, it was taking away about one percent from everybody else in order to keep the total the same, so there was a slight decrease that was scheduled for the year the City was in right now. Going beyond this next year, it was difficult to prognosticate; everyone had said the country had been in economic recovery for two years now. He said that he hoped it was stabilized; that was optimistic as he could be.

Mr. Heffernan said that building permits were the third largest revenue, which had been relatively stable; Novi had been quite lucky in that regard. He said that the economic downturn that dictated plays from 1999 to about 2001 or 2002 really had caused most communities to have reductions in their building permits; that had not been the case for Novi. He said, as Council knew, there had been a lot of pressure to continue building and that was the result of that. He wanted to focus on the detail of the millage rates for Oakland County communities. He said the millage rate was low for the City of Novi, the millage rate being the amount of property taxes paid per $1,000 of taxable value on a house. He said Novi was able to do that for a couple of reasons: One, that it had a relatively high taxable value per house, and two, because Novi had a really good industrial/commercial mix. He said the mix was healthier than a lot of the bedroom communities, which caused the millage rates to have to be a little bit higher.

Mayor Csordas asked if he had a chart that reflected that balance of residential and industrial/commercial?

Mr. Heffernan said he would put that together for next year or send it in the mail.

Mayor Csordas asked if he would copy all of Council as well.

Mr. Heffernan said he would be happy to do that.

Mr. Helwig stated that Administration just received from Southeastern Michigan Council of Governments a profile of the I-275 corridor communities; it had what Mayor Csordas just described. He said it covered all of Novi, Farmington Hills, Livonia, and so forth, which Administration would send to Council this Thursday.

Mr. Heffernan said that the next chart was the General Fund Expenditure Trends, so he was switching from the revenue side to the expenditures. The largest expenditures were the Police and Fire, with about a 7 percent in Police this year and 5 percent increase in Fire. The third highest category was Building and Planning, which was significantly lower; everything else, the remaining expenditures of about $7.2-million was a 14 percent increase, basically because of the DPW capital spending that would have been during the current year.

Mr. Heffernan said the next two charts were intended to show the General Fund’s fund balance; there was really two different ways of looking at it. The first chart showed the total amount of fund balance over the five-year history. In the year 2000, it had been relatively low because of transfers out of the General Fund, but for the last four years it had been at a relatively healthy and consistent level of $4.4-million, $4.8-million, $5.2-million and a little drop for the current year. The year ended June 30, 2004; the fund balance remained strong, although it was less than the year before. That meant that the expenditures for 2004 were slightly higher than the revenues. He thought, personally, that it was good news that the expenditures were only slightly higher. In the original budget, they projected close to a $2-million reduction because of some of the reductions in State revenue, interest earnings being down. On the expenditure side, with health care costs significantly increasing, as well as insurance rates, to end up where it did with just a slight $150,000 reduction really was a success.

Mr. Heffernan said the second way of looking at fund balance on the next chart, the pink line was the undesignated fund balance, the portion of fund balance that hadn’t already been earmarked as to how it would be used, as compared to the blue line, which were the total expenditures. So as a percentage of expenditures, fund balance in the lasts four years had gone from 22 percent to 16, 17 and 19.9 percent, just about 20 percent. He said that was a good level of fund balance; the City had set targets and it was a little bit above that target; he thought that was great news considering where it had been the last three or four years with the pressures. He knew the June 30, 2005, year there would continue to be some pressures in the budget; he knew it was also a difficult budget to put together. He didn’t want to make light of it by saying that everyone else was going through the same thing, but they were; all the other Southeast Michigan communities were experiencing the same struggle, and, to the extent that Council was putting together budgets that showed fund balances reducing significantly, that was not unusual. He said that one of the good things he wanted to leave Council with was that when doing spending, it could be seen that every single department was spending less in its budget, so there was a good culture at the City that yes, a budget was prepared and it was done as tightly as it could be done, but, in fact, the department heads were trying to perform the level of services the City asked them to perform for less than budget. He said they hadn’t gotten into a position where they were trying to use up their budgets, which was very healthy to see every department spending less than budgeted.

Mr. Heffernan said the next graph switched from General Fund to the Water and Sewer Funds; they also remained in very healthy condition. He said in all but one of the years, the revenue was slightly in excess of the expense; in 2001, it was a little bit in the other direction. The working capital of the water and sewer fund continued to increase at a faster pace than the operating revenues, mainly because of additional tap-in fees. He said that new people tapping into the system significantly contributed to the fund remaining very healthy.

He said that the last two charts were trying to present the information that was in the new Government-wide financial statements, the new GAS B34-thing, where all revenues, all expenses and all the assets are now counted; Novi had total net assets of approximately $102-million. He said the chart showed the makeup of the $102-million. The blue piece of the pie, invested in capital assets, told us the portion of our assets had actually already been spent, if you will, to invest in the infrastructure, the building Council was in, the roads driven on, the fire trucks, etc.; that number was about $62-million. The other pieces of the pie were legally restricted pieces of the net assets: special assessments. That money, as the assessments were paid by homeowners, legally had to be used to pay the special assessment debt. He said drains would be the same thing; millages that had been collected and not yet spent on drains, streets and highways would be millage and Act 51 money that had been collected and not yet spent. He said the gray piece, about $4-million, would be unrestricted; that was about the same number as last year’s. So, the unrestricted, which was probably the most important component there, was $4.3-million; he thought it was a healthy number to have relative to about $30-million of total activity, so it was somewhere in the neighborhood of 15 percent, a little less than that.

Mayor Csordas asked if Mr. Heffernan considered that the surplus.

Mr. Heffernan answered that the surplus was generally the fund balance, which Council looked at earlier where it was at 19 percent. He said the unrestricted net asset component was kind of the new concept that was coming in with GAS B34 and, quite honestly, everybody was still struggling with what was the right amount of net assets to have. He said a lot of communities had a negative number there; when the net assets were counted, take away what had been invested, take away what was legally restricted, and what was left – a lot of communities had negative numbers there, primarily because they had not yet funded the employee obligations for sick and vacation pay and retiree health care. He said that the fact that Novi had a positive number meant the taxpayers had really paid the full cost of the services and Novi had not pushed those kinds of liabilities off onto future taxpayers. That was really what the full accrual method was trying to measure.

Mayor Csordas said that would mean that fiscal responsibility would dictate that in order to maintain that, it seemed to him that there were some hard decisions coming in the future.

Mr. Heffernan answered that if he were to look more than a couple years into the future, he thought that was the case. One of the things that the City would experience in about three years would be – which he would cover in his letter of comments in a second – a requirement to consider funding retiree health care. He said that was something that the private sector started doing about 10 years ago, and the accounting rules were actually just finished for the public in August of this year. In about three years the City will have a requirement to measure that liability and start counting that over a 30-year period. He said that whether it did or did not put money aside physically, that number of unrestricted net assets would be affected by that. He said whatever number the actuary came up with that the City should be setting aside if funding that, would be charged against the City’s operations. He said that the number Council was looking at now would be impacted by that.

Member Nagy asked, since Mr. Heffernan was on the topic about the future taxpayer, what other impacts they would have; what about retirees and retirement benefits, outside of medical.

Mr. Heffernan answered that all of the other retirement benefits the City had already been setting aside; the rules for that had been written decades ago and he thought the City had been funding that appropriately. On page 47, was a three-year trend of the pension plan; the funded ratio was about 75 percent right now, which was where it had been the last three years. It had been growing and the stock market caused that to stabilize at about 75 percent; everyone was expecting the next five years to be a more normal stock market , meaning average returns of maybe 8 percent, not the 20 percent that were seen before and certainly not the declines that were seen. He thought that they expected the 75 percent funding to continue increasing. He said the City had been funding that on an actuarial basis for the regular pension benefits, had paid in the amount that the actuary had been recommending, and there was no surprise coming there; it was already built into the City’s annual cost. He said the retiree health care was the new thing or surprise where, prior to this rule it wasn’t allowed to be counted as a liability yet; now it had taken five years to agree on the rules and, starting in June 30, 2007, approximately, the City would start recording that as an expense.

Member Nagy asked if there was any other thing the future taxpayer would have to take into account or any other changes that he could foresee.

Mr. Heffernan answered that there were no other significant changes like that in terms of the accounting rules; really, the only things the City needed to worry about were "real" events, if the State changed State-shared revenue and deleted – there had been some discussion about whether to completely get rid of the statutory portion of State-shared revenue, so that type of thing if it were to happen, would have a significant impact. He didn’t have any information if that would or wouldn’t, but from an accounting perspective, that was the only significant change.

Mayor Csordas stated that he managed two health care funds and they already have to accrue for the post-retirement liability. He asked why Mr. Heffernan said 2007 before the City had to do that.

Mr. Heffernan asked if those plans were in the private sector or the public sector.

Mayor Csordas answered that they were in the private sector.

Mr. Heffernan said that the rules said that those rules were written 10 years ago; at the time, the public sector said don’t follow the private sector rules because the Governmental Accounting Standards Board was a separate standard-setting body than the Financial Accounting Standards Board. The FASB had written the rules in about 1993, and the public sector at the time, the Governmental Accounting Standards Board, said it would be writing its own rules soon.

Mayor Csordas stated that the post-retirement liabilities were there, it had just been ignored.

Mr. Heffernan answered yes. The rules had not been there to measure them and start counting the liability.

Mr. Heffernan said that the last graph still looked at the City’s government-wide statements on a full accrual basis; again, not necessarily how the money was spent but where the efforts were put, so that roads, to the extent roads were purchased several years ago as they were being depreciated or being used, it was being counted as depreciation. Mr. Heffernan said the chart reflected the cost of providing the various services: It showed 40 percent of the cost of operating the governmental activities would be public safety (police and fire); next largest was really a tie between general government (different departments: running the elections, collecting the money, assessing, collecting tax bills, etc.) and public works (roads). He said interest on long-term debt was about 12 percent of where City money went, and recreation/culture about the same 12 percent (11.8 percent).

Mayor Csordas stated the City had a clean audit and asked Mr. Heffernan to give a brief description to Council and the residents of what a clean audit was.

Mr. Heffernan answered that what an audit was: Plante Moran was not responsible for the financial statements (the 95-page document), the responsibility for that was the Finance Department, which was a really competent department with three CPA’s there and the job was done right. Plante Moran’s responsibility was to come in and do two things: 1) Look at the internal control systems to make sure there was an adequate system of checks and balances as it related to the financial-related controls: receiving cash, disbursing cash, managing cash, those types of financial-related transactions. If Plante Moran found that there were significant problems where the City didn’t have the right checks and balances, Plante Moran was obligated to bring that to the City’s attention. 2) An audit looked at the general ledger, the accounting records created by the Finance Department and it tested it on a sample basis to make sure that it was fairly stated. He said Plante Moran looked at the cash that had been recorded, confirmed it with the bank; he said Plante Moran didn’t make sure that it was 100 percent right, because if everything was tested that would be a reproduction and would cost as much as having the City’s own finance department. He said they tested on a sample; what type of things was more susceptible to risk, what things were riskier, to make sure cash was cash, etc. So, on a sample basis, they looked at some of the transactions; they looked at balances that were there and tested them to give an opinion that the City Finance Department’s general ledger it put together was reflective of reality.

Mr. Heffernan said the opinion given by Plante Moran was a clean opinion. He stated that clean opinions didn’t mean that the City was in good financial shape; they meant that the general ledger was reflective of reality and was fairly stated. The numbers were intended to tell whether the City was in good or bad shape. He said the graphs showed that the City was in good shape; it had been a difficult year and he thought the year the City was in now was another difficult year because of the things talked about earlier, State-shared revenue being cut four years in a row, with the building permits not growing as quickly as they could have. On the cost side, health care double-digit increased for a few years in a row, insurance increased – general liability, property – all those cost pressures Council already knew about. He said given that difficult position, he thought the City had done quite well. By having revenues come within $150,000 of expenditures was outstanding. He said that in the year the City was in now would be a struggle, and he was guessing, based on Novi’s history, that the City would probably lose fund balance this year but not as much as in the budget, because, in fact, the department heads were doing the right thing in trying to provide the service level that Council asked them to provide but they’re trying to do it for lower costs. He said they knew it was a maximum, not a minimum, and they had consistently done a good job. He said Novi was in as good a condition as it could be in, given today’s economic climate.

Mayor Csordas thanked Mr. Heffernan and agreed. He said there was no way the City wanted to undervalue the clean opinion that Plante Moran had given the Finance Department; they really did a good job. He understood that a clean opinion didn’t mean financially stable, except for the City of Novi where clean opinion did coincide with financially stable. Mayor Csordas and Council thanked the entire finance department, all the people that put the program together here, and all of the department heads that did continue to come in under budget; it was appreciated. He also thanked Kathy Smith-Roy and her staff that ensured every year that the City had a clean opinion; all of the presentation and awards came to them rightfully so.

1. SPECIAL COMMITTEE – None

Mayor Csordas commented that, although he didn’t have a Committee Report or Special Report, he wanted to thank City Clerk, Maryanne Cornelius, and all of her staff and all of the people that worked on the election, which was the largest election since the turnout for Nixon and Kennedy. He said he understood that 79 percent of the registered voters turned out.

Ms. Cornelius answered that barely under 80 percent of the registered voters turned out, the largest turnout that Novi had ever had.

Mayor Csordas congratulated all of the people who came out to vote, and congratulated Ms. Cornelius’ staff; he knew that it went off without a hitch. He knew there was a 50-60 percent increase in the absentee ballots, which was a big struggle to get that done. On behalf of City Council, all of them thanked all of the people that helped her put that together.

2. CITY MANAGER

Mr. Helwig said that he wanted to underscore that last Wednesday afternoon at approximately 3:30 p.m., the much-anticipated reopening of the intersection at Grand River Avenue and Novi Road was accomplished. Administration had been busy assuring everyone that there was not $1 budgeted or programmed for any further improvements to Grand River Avenue in the City of Novi. People had asked, "What comes next" because of the way it had been segmented. There were four segments, as Council recalled, starting from Wixom to Beck, Beck to the bridge, the bridge, and now the bridge to Novi Road. He said it had been accomplished with huge inconvenience and struggle for the motoring public; the businesses which had been affected by each of these segments, particularly the most recent segment, hats off to them, and trusted long-term prosperity would be theirs. There were no further improvements funded east of that intersection. It was a stated City Council goal to widen to Haggerty from Novi Road, but there was not a single dollar budgeted anywhere for that activity to occur.

Mr. Helwig thanked Council for helping this to happen. As he looked back four years ago, speaking of elections, to the Novi Road bond, he commented on just how critical it was to come up with the City’s share to leverage that for the County, State and Federal dollars to help Grand River Avenue to get funded and hopefully to relieve traffic in some of the residential corridors.

Mayor Csordas agreed that was a huge accomplishment; it seemed like it had a huge positive impact on Ten Mile Road; the bottleneck seemed to be opening up a little bit there.

3. DEPARTMENTAL

Mr. Helwig asked Mr. Saven, the City’s chief building official, to introduce the City’s newest colleague, Mr. John Hines, the Deputy Building official.

Mr. Saven stated it was an honor and privilege to introduce John Hines, who came to the City from Rochester Hills where he had been the Deputy Building Official for approximately four years. He had also served with the Bureau of Construction Codes with the State of Michigan for about 10 years in the planning examination area where he performed a multitude of tasks; it was there that he had the honor to work with Mr. Hines on the Ad Hoc Committee for the Michigan Energy Code. Mr. Hines had provided the Committee all of the materials needed to do its job; he did it beautifully. Mr. Saven stated that Mr. Hines had also worked for Canton Township.

Mr. Hines stated that he and Mr. Saven had known each other for as long as he had been in the business; he had been in code enforcement at Canton Township going on 19 years. He said before that he had been in the private sector doing construction work, so he had been around in construction and code enforcement. He was honored to be there and looked forward to serving the City of Novi.

Mayor Csordas thanked Mr. Hines for coming to Novi; he stated that Mr. Saven led by good example and surrounded himself with high quality people. Council appreciated that; congratulations to both.

4. ATTORNEY – None

AUDIENCE PARTICIPATION

Dick Faulkner of the City of Novi Retirees Association introduced himself and stated that at this time of year the City administration presented to the Council consideration for a cost of living increase for the retirees; Item No. 5 on the Agenda tonight was just that. He said that the Novi Retirees were seeking Council to approve one-half of one percent increase over last year, which would increase their adjustment from 2.5 percent, which Council approved last year, to 3 percent, hopefully effective 2005. He said the matter would come up later in the evening, so if there were any questions, please call on him to answer them. He thanked Council for its consideration.

Member Gatt removed Item J from the Consent Agenda.

CONSENT AGENDA (Background information for Consent Agenda items is available for review at the City Clerk’s Office)

A. Approve Minutes of:

1. October 18, 2004, Regular meeting

B. Approval to enter into Executive Session in the Council Annex immediately following the regular meeting of November 8, 2004 for the purpose of discussing pending litigation regarding The Grand Court of Novi.

C. Authorization to Participate in the Traffic Improvement Grant 2004-2005, "Drive Michigan Safely Task Force".

D. Approval to award bid for a trophy contract to McNish’s Sporting Goods, the low bidder, based on unit pricing.

E. Approval to award snow removal and salt application contract for Meadowbrook Commons to J.C.’s Lawn Care, low qualified quote, as recommended by Midwest Management (estimated annual cost of $25,000-35,000).

F. Approval to purchase seventeen (17) Motorola Minitor IV replacement Fire Pagers from Advanced wireless Telecom, the low quotation, in the amount of $6,840.

G. Approval of Resolution for the Michigan Employees Retirement System B- 4 Benefit Program for City Clerk, City Assessor.

H. Approval of Final Pay Estimate No. 6 to Tiseo Brothers, Inc. for the concrete portion of the 2003 Neighborhood Roadway Repaving Program in the amount of $51,027.81, which includes the final balancing change order No. 2 and the interest on the retainage account.

I. Acceptance of onsite and offsite water main and sanitary sewer as public utilities with corresponding 20-foot permanent easements for each utility from Eberspaecher North America, Inc., for property located at 29101 Haggerty Road.

K. Approval to award contract for remanufactured Steelcase furniture to Global Office Solution, the low qualified bidder, based on design fee and percentage discount from list, and to award the Building Department office reconfiguration in the amount of $2,734.

L. Approval of Claims and Accounts – Warrant No. 684.

1. Approval of the Program Year 2005 Community Development Block Grant Application in the approximate amount of $134,143 and authorize the Mayor to sign the Application and Subrecipient Agreement.

Mr. Klaver stated there had been a public hearing at the last Council meeting in which there had been no public comment, so Dan Tyrrell and Tom Lindberg were present on behalf of the Housing and Community Development Committee to submit the Application for Council approval. He said there was summary of last year’s allocation and recommendation for this year and opened it up for questions.

Mayor Pro Tem Landry stated that he noticed a couple of new items on the potential disbursements this year, one was the Novi Lion’s Club Eblind Program, which he knew from his experience with the Library was an excellent program. He said he was very happy to see it on there; it helped a lot of people and was a very worthy cause. He said that to allow people in the library with sight problems to use the internet by sound was exactly where the City’s dollars should be going. He noted that there was slight decrease in the residential repair program. He asked if the City would be able to meet all of the requests this year, given that slight decrease.

Mr. Klaver answered that he was.

2. Acceptance of streets and utilities in Island Lake of Novi Condominiums – Phase 2A (The Vineyards) from Toll MI II Limited Partnership and adoption of Act 51 New Street Resolution for Island Lake Drive, Glenwood Drive, Crestwood Drive, Anchorage Court, Leyland Circle and Timber Trail.

Member Capello said that this was before Council at the last meeting, and the one request Council had was to send out the City’s DPW to do a second visual inspection of the streets and utilities on top of the inspection that JCK did, just to make sure that JCK’s walk-through was accurate. He said that the DPW had stated that the streets appeared to be in like new condition; he was satisfied that with the JCK review and the DPW’s review that these streets and utilities were in the condition that should be accepted by the City.

Member Lorenzo stated that at last Council meeting she had asked Maryanne Cornelius, City Clerk, to provide Council with the original RUD agreement. It had had a specific proviso in it which stated that the City would not necessarily be obligated to accept any of the streets in Island Lake. She asked Mr. Schultz if the City accepted that portion of the streets in Island Lake, if Council would be setting a precedent to then go ahead and subsequently accept all thirteen and one-half miles of streets, or could Council look at each, section by section as they came forward.

Mr. Schultz thought that Council would look section by section but said it would be governed by the reasonableness standards that Mr. Fisher explained in his August 13, 2003 letter to the Council.

Member Lorenzo stated that Council would not be losing any part of the original agreement in terms of the proviso that didn’t obligate the City to accept the roads as long as it was doing it with reasonableness.

Mr. Schultz answered that it would be the same provision of the RUD agreement that governed; it would be the same inquiry that Council would make each time. He said it would look at the factual scenario before it and make a determination whether there was any basis for deciding, in light of the fact that site plans typically had contemplated public streets, was there some reason for not going forward with that program. He said it didn’t bind Council in the sense that it was absolutely precluded from making that consideration; in fact, Council would be obligated to make it each time. He said it really was the same inquiry each time: Was there a good factual basis, as described in Mr. Fisher’s opinion letter not to do it.

Member Lorenzo said that between the last meeting and this meeting, she talked to Mr. Helwig and Mr. McCusker and her concern was that if all 13.5 miles were accepted today or in the near future, Mr. McCusker’s department would not be able to service all of those streets without perhaps impacting the service to the existing streets in Novi and the existing residents. She said that since there didn’t appear to be any timeframe from Island Lake as to the period under which it would come forward with all 13.5 miles, it placed Council in a difficult position if they were to do that next week or next month and Council was contemplating accepting them. The City would not be able to service those streets and the existing streets without some type of an impact in terms of a service level. She wanted to make sure that Council was aware of that and suggested that Council even inquire of Island Lake as to what its intention was in terms of the rest of the streets there and that it realized the predicament the City might be in. She said that during the budget deliberations, not only this year but in the coming years, if Council’s philosophy was going to be to accept all of the streets, she thought that Council needed to realize that there were demands in terms of additional personnel and additional equipment, and that the City would not be in the position of not funding that because if the City didn’t fund it, it would be in a predicament of not being able to service the citizens even at the level it was doing today.

Mayor Csordas stated that it seemed like it was an eight to ten year project to completion through a number of phases; he presumed that as the phases came along there would be more roads with that and it would certainly have to be addressed by future Councils, but Member Lorenzo made a valid point.

Mayor Pro Tem Landry asked Mr. Schultz if he was correct in stating that the concern that Member Lorenzo so correctly pointed out, if in the future at any time this developer came forward and asked Council to accept streets, would it not be a reasonable matter for the City to say it could not accept the streets because to do so would adversely affect its ability to deal with all the other streets. He asked if it would qualify under the reasonableness standard.

Mr. Schultz answered that if there was a factual basis for that. He said the RUD specifically said Council could decline to accept any of the same, so any street. He said it was an exercise of discretion; the Council had reserved that discretion. He said it just had to be reasonable and fact-based.

Mayor Pro Tem Landry asked if the City’s inability to accept additional streets and not adversely affect anybody else would satisfy as a good reason.

Mr. Schultz answered if there was an evidentiary basis for that, sure.

Member Nagy stated that , in looking back at some of the Planning Commission meetings and various representatives of Island Lakes that came before it, she thought they all received an email this evening from a Mr. Foley who seemed to have the same memory that she did that there was a Mary Jacourie who made certain representations in response to Mr. Mutch’s questions that the roads would be the responsibility of the association. She said she had a difficult time voting for the motion basically because Mayor Pro Tem Landry and the City Attorney had a discussion regarding facts and factual reasons to deny. She said nothing had been elicited that told her what that meant, "facts" like what. She wanted an example. She asked if the fact that the City didn’t have enough equipment or manpower, did that make it factually something that Council could adhere to and say it couldn’t do it because of lack of manpower and equipment.

Mr. Schultz stated that last time the issue came up in August of last year, the advice from his office was that under the policy in the ordinance, Council reserved some discretion in the ordinance but it was somewhat limited. He said in the RUD, Council reserved a little bit more discretion, but after the RUD was entered into as an agreement, all of these site plans had come through under the assumption that these were going to be public roads in terms of the drawings, in terms of the motions; he understood that there were going to be comments that as she knew as a former Planning Commission member that sometimes worked their way into the minutes, but the plans generally showed these as public roads. He said the City had to meet essentially a pretty high burden that there was substantial basis for determining not to accept the roads. He said that not having enough manpower, not being able to maintain them would be a legitimate basis as long as if they challenged Council’s refusal to accept the public roads, Council was able to convince someone who reviewed that decision that, yes, it was based in fact; it was a reasonable choice on Council’s part.

Member Nagy appreciated Mr. Schultz’ answer. She said that having dealt with that developer for several years on the Planning Commission, they did have different representatives. She said some representatives were clear-cut; some were not. Some things were supposed to have been done by them and they were not. As she had said, Ms. Jacourie had made the representation that they would be maintaining their roads. She couldn’t support the motion because she didn’t think the City had enough manpower and equipment at the present time. She said it was her understanding that there were people of age within the DPW who might be retiring; she wanted to know where that put the City. She was talking about five, hypothetically, people. She was concerned about the residents because of the fact that she mentioned that to some City official that there were many complaints last year from Autumn Park and in the area that she lived in, which were condominiums where residents paid for snow removal, but if she went down the main street, Cranbrooke, and looked into Village Woods side streets, they were not plowed. She understood there was a certain amount of time that they could plow within; she was also not criticizing the DPW. She was concerned that if the City had problems getting existing subdivisions plowed, how the City could handle new streets. She thought there was such a thing as equity and fairness; she felt that all the people that had lived there before the people that came to Island Lakes had been paying their taxes and they deserved to get their streets plowed, not to take away from people in Island Lakes or any place like that. She just had a concern about the manpower and equipment; she didn’t see anything presented to Council to show that the City had sufficient manpower and sufficient amount of equipment to take on this road; the City had just taken on Haverhill, so she was taking that into account as well. She would not be supporting the motion.

Member Capello stated that that wasn’t the only subdivision that was under construction with homes; the City had several, so he guessed the City would not be able to turn down accepting of these streets for all the subdivisions. He thought the City needed to get proactive and figure out what the City needed to do to gear up for equipment and manpower. He asked Mr. Helwig if the DPW had not taken into account new roads coming into place and new roads being accepted and not have some plan to accommodate the plowing and maintenance of those roads.

Mr. Helwig asked Mr. McCusker to answer questions. He said the administration had, with City Council support, added personnel, added equipment, and had provided the assurance that everything that was seen on the drawing board leading into this upcoming winter deicing, snow removal season. He said the City could handle it with the personnel and the equipment that it had on board; he had said it before and he would say it again tonight. He wanted Mr. McCusker to qualify that in any way, but that was the planning that administration did going into a season of such importance as the winter season.

Mr. McCusker stated that the snow removal season actually started around July where DPW figured out what it anticipated as what might be coming on. He said the DPW had been going through a shakeout on the Act 51 maps; he had been working with Mr. Pearson and the Engineering Department to figure out what actually hadn’t been accepted to bring that to Council. He said the DPW had fully anticipated some stuff coming on this year; the DPW had thought there would probably be five subdivisions this year that would have additional streets, with the maximum would be somewhere in the neighborhood of four to five miles. He said the City purchased the new truck, outside the budget year, that helped the DPW to prepare for this year. He said that truck would do things that the other trucks didn’t do; it was a state of the art truck. He said it could plow up to 16 feet of roadway at a time and would take up some of the major roads at the time, so DPW fully anticipated additional streets this year. Down the line, Island Lake was a huge complex; the DPW figured that the build out on that, usually on a subdivision of that size, took five or six years, a little bit more. He said the DPW hoped through the budget process to battle with the police and everyone else to try to get things approved.

Member Capello stated that the DPW was then prepared ahead and if the DPW needed new trucks, would estimate how many roads were coming on and ask Council for more money for trucks and more money for personnel.

Mr. McCusker answered that the DPW had a 5-year, 10-year, 15-year and a 20-year program for both equipment and manpower.

Member Capello said that with the roads coming on line, it was not as if 90 days ahead of time somebody asked the City to accept the roads; it could be monitored as the homes were constructed what percentage of completion they were in and when the top coat of road went down to have an idea in advance.

Mr. McCusker answered that the DPW worked along with Engineering in the beginning process and looked at the possibilities of what was going to be in the future. There were 30-some subdivisions in a build right now, so the DPW knew that down the line a lot of them would be on board. He stated that the DPW would go to City Council to ask for manpower and equipment as much as it could.

Member Capello asked how much money the City got per household once the roads were accepted.

Mr. McCusker answered that there was a guideline for Act 51 monies; the City got about $7,000-$9,000 for local roads; about $2,600 per lane mile.

Member Capello asked what the local roads were.

Mr. McCusker answered that local roads were in the $2,000 range per lane mile, a lot less than a major road or a connector road.

Member Capello asked if the City got $7,000 per lane mile.

Mr. McCusker answered that it was more like $2,000 per lane mile for local road.

Member Capello asked if $2,000 per lane mile was doubled or tripled per actual mile.

Mr. McCusker answered no it didn’t; it took into consideration personnel. There was a schedule that was set up by the State where the DPW charged back its equipment time, man hours and operational equipment to.

Member Capello stated that the City might have to fund that in advance to provide new equipment for the DPW but technically it should wash out with the money the City received from the State.

Mr. McCusker answered that the DPW hoped that State revenues were there; he said through the budget process the DPW would go back to Council, especially when there was a real need.

Member Capello stated if Council accepted those roads and gave DPW half of what it asked for, the DPW could handle that.

Mr. McCusker answered that the DPW would take half.

Member Paul asked about the funny-looking circle around 2A and she wanted to know if all the construction was done in that space.

Mr. McCusker answered that there were a few odd lots that hadn’t been completed, but most of it was fully completed.

Member Paul asked why Council was only looking at 1.3 miles in 2A and not more for 2A.

Mr. McCusker answered that the utilities that had been extended beyond that point and they hadn’t fully finished the next phase, usually when they were about 80-85 percent was when they started requesting the City to take over the streets or utilities.

Member Paul stated that they were not at 85 percent build-out yet.

Mr. McCusker answered no.

Member Paul said it was her understanding that the DPW would not travel on the circular area around 2A; there would be some construction traffic on that area.

Mr. McCusker answered that there would probably be some construction traffic in there.

Member Paul said that her feeling on Island Lakes was that in the future the City would probably look at that as a whole package, not as a partial package; Member Capello and she had worked on a financial guarantee committee to talk about if there was construction, the City had to be 90 percent build-out before the City would return the financial guarantee to the developer. So, if it wasn’t at 85 percent build-out yet, she wanted to look at the whole 2A as one package at some later time. It was her feeling that if construction traffic would continue on the roads, the City might have more damage to those roads; what the City had been putting on DPW, building a facility at the DPW yard for Parks and Recreation and themselves, plus all the road repair, and cleaning out storm drains, if there was still construction traffic in that area, she thought it was premature to accept the 1.3 miles.

CM-04-11-393 Moved by Paul, seconded by Nagy; MOTION FAILED: To table acceptance of streets and utilities in Island Lake of Novi Condominiums – Phase 2A (The Vineyards) from Toll MI II Limited Partnership and adoption of Act 51 New Street Resolution for Island Lake Drive, Glenwood Drive, Crestwood Drive, Anchorage Court, Leyland Circle and Timber Trail until the construction traffic was completed in 2A and Council could look at the entire proposal at one time.

Mr. Pearson stated that there was a question asked and interpreted differently. The proposal was to accept all of 2A streets; the question of 85 percent was referring to all of Island Lake but he believed it was well past that for 2A as far as construction. He said that they were built more than the aerial showed and they were past that point for construction; the proposal was to accept the 1.3 miles which were shown within the red in 2A.

Mr. Coburn clarified that, according to Eric Mondrush of Toll Brothers, there were only four or five lots in 2A that had not been built yet.

Member Paul asked what percentage had been built out; she was going on the financial guarantee of being 90 percent completion.

Mr. Coburn indicated that there were 125 lots, so it was over 90 percent completion.

Member Paul asked if the City was accepting just the road that was in red all the way around or the entire section.

Mr. Coburn answered that, if Council approved that, it was accepting the roads where they were segmented by the red lines, so the east-west one in the north portion of 2A was Island Lake Drive; so from Wixom Road to where the red line intersects would be the portion of Island Lake Drive that Council was accepting.

Member Paul asked if there would be any construction traffic on those areas.

Mr. McCusker answered that all of the adjacent streets were connected to them.

Member Paul said there would then be some construction traffic on the roads until the other phases were done.

Mr. McCusker answered yes.

Member Paul stated that there was still going to be construction roads over sections of those; Council in Executive Session, just went through talking about this with another developer and Council was going to take some measures to make sure more problems weren’t existent with the actual construction of those roads. She still felt more comfortable knowing that all the phases were completed and there wouldn’t be bulldozers rolling over the roads that the City would accept the liability on. She would not be able to support at that time approving the 1.35 miles of road acceptance because she didn’t want the City to assume the responsibility of road repair until the bulldozers were gone.

Member Gatt asked if there was bond money set aside to ensure that those roads were maintained.

Mr. McCusker answered that there were maintenance bonds attached up to two years. Most of the soil erosion control measures and things of that nature were still left in place; Wixom Road to this day still had soil erosion control measures that we still make Island Lake responsible for. The DPW could make them limit the amount of construction traffic that went through the general streets.

Member Gatt asked if the DPW planned on doing that.

Mr. McCusker answered that it could. He said the Engineering Department could make them adhere to those standards.

Member Gatt asked if a road was damaged because of construction traffic if the bond money would cover repairs to that road.

Mr. McCusker answered yes.

Mayor Csordas wanted to clarify before he called the roll that all of the roads that were encircled by the red line, there was in excess of 90 percent build-out there. Logically speaking, the roads were connected to the roads that were on either the north or south of it but he couldn’t be convinced that a construction truck was going to go on those roads to get there or there. Mayor Csordas asked a representative of Toll Brothers to come to the podium. He asked how much construction traffic for the other sections of their project would go through those exact streets.

Eric Mondrush of Toll Brothers answered that there was signage posted to restrict construction traffic through those areas that had been built out. He also pointed out that there was a maintenance bond in place for two years in case something happened within a two-year period.

Mayor Csordas asked if the City were to prohibit construction traffic servicing other phases of that project in there, how it would be handled.

Mr. Mondrush answered that they had signage posted.

Mayor Csordas asked if it said "prohibited".

Mr. Mondrush answered that the exact wordage didn’t come to mind but it did prohibit it.

Mayor Csordas stated that it did need to say "prohibited". He said that Mr. McCusker needed to make sure that construction traffic other than for the five lots was prohibited. He didn’t know how it would be monitored. Mayor Csordas stated that the people who moved in there expected the City to maintain those streets. He said as far as an email from a resident, he would need some research on that. He asked Mr. Helwig to pull out the minutes and research the accusation made in the email.

3. Approval to award the contract for Engineering Services for the Lanny’s Relief Sanitary Sewer study to the low bidder, Fishbeck, Thompson, Carr & Huber, in the not-to-exceed bid amount of $7,980.

Mr. Helwig noted that City Council had visited the matter at prior meetings and it was determined to have a final study phase before proceeding with design or construction engineering services, so proposals were received on that basis to review the March 2004 report by JCK to check the assumptions in the initial report, to provide detailed parcel information for any easements, model the flows in the sanitary sewer district and come back with recommendations. Proposals were sought and administration was essentially recommending the lowest fee for this final study phase.

Mayor Csordas stated that, before he turned it over to Council for discussion, there was a fairly disturbing sentence in the third paragraph that read, "if the relief sewer is not built, it was possible that the capacity needed for Providence and the other participants that paid for the construction of the sanitary sewer in SAD 83 may not exist". He said that concerned him greatly.

CM-04-11-394 Moved by Lorenzo, seconded by Landry; CARRIED UNANIMOUSLY: To award the contract for Engineering Services for the Lanny’s Relief Sanitary Sewer study to the low bidder, Fishbeck, Thompson, Carr & Huber, in the not-to-exceed bid amount of $7,980.

Member Nagy asked Mr. Helwig why OHM couldn’t have added this part into the several hundred thousand dollars that it had already been paid because they were already working on the City’s sanitary sewer CMOM study. She said that, be that as it may, one of her concerns was that a district had not been set up here. She asked if Council should set up a district.

Mr. Helwig asked Mr. Coburn to share his thoughts on that.

Mr. Coburn thought that one of the outcomes of the report would be setting up a district and then combining, if he understood correctly from the Finance Department, the payback so that everything was together. He said that some of the unknowns that were out there about how the payback would work would be answered by the report when it was completed.

Member Nagy asked if there was intent to set up a district.

Mr. Coburn answered yes.

Member Lorenzo agreed with the previous speaker that it would have been more natural for Orchard, Hiltz & McCliment to receive that bid; however, they were almost twice the price of the low bidder. She said that was disappointing to her because it would have been a good business move on OHM’s part to say it would absorb the cost because the City had just given it over $300,000 worth of business and there would be more business in the future to obtain from the City of Novi. She said she fully supported the low bid.

Member Capello stated that he was a little concerned with how low the bid was; he asked if anyone had analyzed the scope of work in the City’s request for bids with the scope of work that Fishbeck set forth in its letter.

Mr. Coburn answered that all three proposals had been reviewed, and the proposal required them to send back a statement of understanding. Then the statement of understanding was compared to what was in the proposal to make sure that what their bid price and what they said it incorporated was actually what the City asked for. All three of those had been reviewed.

Member Capello asked if Mr. Coburn was confident that they were not missing something that the City would get a change order for later.

Mr. Coburn answered that they had also had discussions with them and they included all of the things that the City was looking for.

Member Capello asked how many people worked out of the Farmington Hills office.

Mr. Coburn answered that he was not sure, but Shari Wright with Fishbeck was here this evening.

Ms. Wright answered 30 people.

Member Paul stated that Providence paid into the SAD83 and asked who the other participants were.

Kathy Smith-Roy answered that the previous owner of the Providence property actually entered into the SAD district and then that transferred to Providence; Providence was the only entity outside of a small percentage that the City received that was less than 5 percent.

Member Paul said it was mainly Providence; and they need to be paid back. She stated that she was supportive of the motion and was very much supportive of Providence. She just wanted clarification.

Mayor Pro Tem Landry stated, "Amen" to the comments of Member Lorenzo.

4. Consideration of Budget Amendment #2005-4 to provide an additional appropriation for legal services for the balance of the fiscal year in the amount of $162,500 with a corresponding amendment of the legal services contract with Secrest Wardle.

Mayor Csordas stated that the proposal before Council was a mirror of the proposal presented by one of the competitors and, whether it passed or not, he wanted to thank Secrest Wardle for working with him and Council to do the best they could to serve the wishes of people on City Council.

Mr. Helwig recapped that the City Council had appropriated for the first six months of this fiscal year $187,500, which was half of what the staff had recommended the appropriation for general fund legal services fee for this fiscal year. He said that the suggestion tonight, as offered by members of Council and Mayor, was to appropriate $162,500 for ostensibly the second six months of the fiscal year, or $25,000 below what had been recommended in the budget process.

Mr. Helwig said there were other changes in the document, as alluded to aligning the partner/senior associate/associate pay levels with what had been found in the competition, as well as a greater Council oversight involvement with legal services, which he quite honestly welcomed. The City Attorney reported to City Council by Charter, and he thought that the notion that there would be a monthly discussion of outstanding cases and direction from City Council was excellent; that could only help in the performance of the City’s legal services.

Mr. Helwig stated that Council had asked him to raise his right hand and pledge to control costs during this six month period of time, and he wanted to give a little feedback on that. He said if Council looked at the cost sheet included at the back of this motion sheet, there was data through October 15; he said the City received bills for basically twice a month. That was a change made at Council request. He said if, looking at the general legal column, Council took $123,134 and subtracted, the City did in the spirit of what was being suggested for how it operated from here on out and looked at one-time cases a little differently for consideration. The City did subtract out Nanda, the $10,399; if that was subtracted from the $123,134 and get $112,735 and divide it by three and one-half months, it was $32,210 a month. To make the $187,500 work for six months, it would need to be $1,000 less than that per month, so while the City was not on it, it was very, very close to that. If Council adopted that tonight, a further stretch objective for the next six months if you divide the $162,500 by six, came down to $27,000 a month, or $5,000 less a month than the City had been spending. He said the City’s work was cut out for it but it was a stretch objective, wrapped around Council direction and he wanted to outline that so Council could fully understand that the oversight, the teamwork and, perhaps, special appropriations for one-time cases might be necessary to make that work but certainly welcomed Council direction in that matter.

Member Lorenzo stated that if there was a theme for tonight’s meeting, it would be fiscal responsibility; what stuck with her was what Mr. Heffernan talked about before was the culture in the City of Novi in all departments to provide continuous levels of service at a lower cost. That was in a nutshell what she was looking for from legal services in our consultants, as well; that was where her attention would be placed this evening.

Member Lorenzo still had a few outstanding concerns that had not been met by the proposed amendment this evening, and she would speak to those. First, she had a concern with the added classification of senior associate because that added classification went beyond Secrest Wardle’s original bid; she would say it was not appropriate. So, as Secrest thought it was inappropriate to include additional information with regard to the competitor with regard to all of the other add-on items that Secrest was going to agree to a flat two percent, she would be looking at removing the senior associate classification. Additionally, she had amended some verbiage in the contract and even added some additional verbiage. On the last page of the contract, the second full paragraph she had changed to read, "The City Council appropriated monies for the fiscal year 2004-2005 legal services. It is recognized that in addition to the day-to-day demands of the City, the law firm performs work in response to specific Council direction and critical circumstances as they arise." She said she thought it was very important in the contract to make it very clear that the law firm reported to the City Council; the contract was with the City Council, not the City Administration. She wanted to make it very clear in the contract that they were talking about the relationship between City Council and the law firm.

Additionally, Member Lorenzo stated that it was recognized that the amount appropriated for legal services in the 2004-2005 fiscal year was less than the Council had anticipated during budget deliberations earlier in the year; accordingly, the City Council agreed that, if needed, a budget amendment shall not be unreasonably withheld. Here she had additional language, "for work performed following specific City Council direction approved by five votes or in response to critical circumstances as they arise, for example, unforeseen litigation". Those would be the only items, from her perspective, that should go above and beyond the $350,000. Nanda was a good case in point; there would be others, she was sure. She was looking for more accountability from the law firm coming to the City Council for specific direction before anything went to court, before those costs would be incurred. She was expecting much more information to come to the Council and from the Council back to the law firm.

Thirdly, she thought there needed to be a separate category in the contract for how the City dealt with escrows. She knew there had been a lot of consternation between the law firm and the Administration and the Finance Department; she thought Council needed to take the mystery and the consternation out of that subject matter and put it very clearly into the contract so that everybody was on the same page. It was her understanding that what had been happening was that in a lot of the cases, the escrow amount had been an estimated amount and that in cases where the estimated amount was underestimated, it had been up to Finance to go back to the applicant and try to collect additional fees above and beyond what they thought were going to be the fees connected with the legal service. She wanted to remove that equation from the process; therefore, her language would include and would probably fall between the detailed billing paragraph and the paragraph previously read, and it would say, "Escrow billing amounts shall be on a not-to-exceed basis unless otherwise specified within the rate structure in the ordinance. Escrow work shall not begin until such amounts are collected by the City. If work begins prior to collection by the City, the uncollected amounts shall be absorbed by the firm." In other words, if the firm for any reason decided it was going to go ahead and do some work that the City had not yet collected funds for, then they were going to absorb that cost. It would not be up to the City to go back to the applicant and look for the collected amounts.

Member Lorenzo stated, with regard to the monthly billing statements, if the bimonthly billing statements had been working, she thought that should be included in there, in other words, "detailed bimonthly billing statements shall be provided" and she thought should be given a specific date or number of days in which they would be provided, such as within 30 days of the billing cycle. She said that once again it had been an area where, from her perspective, there had been performance issues in receiving the bills in a timely fashion; she didn’t think the Administration could disagree with her on that point; she thought it would behoove everyone to get that very clearly in the contract. She thought basically, with that in terms of the contract, she would be amenable to approving the monies this evening. She said that without those amendments in there, she would be unable to do so because, again, to her this all went to fiscal responsibility. She did have to clarify that there was another firm out there equally qualified that would very enthusiastically want the City’s business; she saw that as very reasonable and thought that her compromise to give this firm the benefit of the doubts that she had had with the amendments that she proposed this evening.

Mayor Csordas asked Mr. Fisher to respond to the comments.

Mr. Fisher stated that it was a very important subject for the City because the City had considerable legal services that needed to be performed; it was very important to his firm because the City was a very valuable client to the firm. He wanted to thank Council for taking this up expeditiously, knowing that it needed to get done in the near future. There were negotiations on this matter, and he thought negotiated in good faith with the understanding that there would not be further negotiations at that meeting to detract from some of the compromises that they had made because Secrest Wardle did make the compromises under the understanding that Secrest was giving this and the City would agree to this, so with all due respect to the suggestion of changing the fee structure again, the structure that Secrest bid and the City approved was $135 per hour per senior partners, $125 for other partners. He said Secrest really believed that if the City was going to ask them to come down $10 per hour in one category to meet the Beier Howlett bid, then Secrest should have exactly what Beier Howlett had, that was the senior associate category; Secrest would have three lawyers that fell into that category, all 9-13 year lawyers that would be available to service the City of Novi in a similar fashion as they had before. He said it would really be two particular lawyers: Vahan Vanerian, who was responsible for district and circuit court cases principally, handling cases on his own; and Stephanie Simon-Morita who basically was fully responsible for the Tax Tribunal docket of the City and had brought it into pretty good shape. He stated that these lawyers met or exceeded the category that they had established for senior associate. Mr. Fisher stated that to say Council would like Secrest to meet the Beier Howlett bid but didn’t want to pay them on the same schedule that Beier Howlett would be paid, he submitted was not appropriate and he would ask Council to reconsider that. He asked Council to either go with what Beier Howlett proprosed or to go with what Secrest Wardle proposed. Mr. Fisher said that was his response to that issue.

Mr. Fisher answered that with regard to the escrow matter, he was not fully clear in terms of what was being proposed. He didn’t have any problem with the arrangement that Secrest would not do any work before they received notice that the monies had been collected, that was the arrangement they had now and were perfectly satisfied with that. He said if that was what the added provision was, that was fine; there were some other statements made that he didn’t follow entirely but the substance of the arrangement, if that was what it was, that would be fine if it was just that Secrest wouldn’t begin the work. He said in setting a "not to exceed", he didn’t know what that meant, if Secrest didn’t finish a job based upon the monies but it took additional time and service to finish the job, did that mean that Secrest just didn’t get paid for finishing the job. He didn’t know what the answer to that was, so that would have to be clarified. Obviously, they would expect to get paid for finishing the job; he wanted to digress on that. He said that was the situation where the City General Fund had been paying for all of those reviews for applications that had been submitted. He suggested that maybe the City could save something approaching $100,000 a year if it set up this escrow arrangement; he suggested an ordinance for that purpose. So, basically, thought that since Secrest had helped the City and the interests of the City to the tune of maybe $100,000 a year that Secrest should not be made to perform free services if the work requirement exceeded the estimate that was advanced arbitrarily, to some extent; a history had been created of what it took to generally review a particular item. In some instances it could be done within that and in some instances there were three or four extra drafts of documents that had to be reviewed, and it depended upon any number of circumstances. He said as long as Secrest would be paid for the work they did in good faith, and did the work only after the money was there, that would be fine with him; he thought that would be a good arrangement. He said that as far as amending the budget, that the budget amendment would not be unreasonably withheld; he would suggest that it would read "for any services the firm had been requested and authorized to perform". He said to say anything else would be to suggest that Secrest was asked to perform services and not get paid for it; he didn’t think that was a good suggestion. He did think it was just fine to say that Secrest only account for services for which it had been authorized and requested to perform. He thought that covered the areas that had been suggested; he would beg the Council’s consideration of going forward on the basis of the hard work that the Mayor had performed in trying to accomplish a compromise and bring a fast demise to that issue.

Mayor Csordas stated that Mr. Fisher had mentioned names this evening, so when he asked Mr. Fisher to match the Beier Howlett proposal, he had mentioned two names. Were there three?

Mr. Fisher answered that the third name was Mark Roberts, who did not in any regular course of duties perform work for Novi but was only in those instances when additional manpower was needed on a short-term basis, he did help with one opinion some time ago. Mr. Fisher said that Mr. Roberts had been a lawyer for a considerable period of time; he did state and federal cases on his own and was a research attorney for Oakland County Circuit Court for a period of time and had a lot of experience; he would be the third name.

Mayor Csordas said that, in essence, Mr. Fisher had done what he had requested him to do on the fee schedule; in fact, he had dropped the partner fee $10 to match Beier Howlett’s and right across the board matched their proposal.

Mr. Fisher answered that was correct.

Member Capello said that perhaps he didn’t understand how the escrow worked. He asked who came up with the estimate of the cost of the fees.

Mr. Fisher answered that they had two methods that they utilized; that was not anything that was cast in stone. They could modify that in any respect that Council wished. Secrest Wardle had a designated set of work that they had established a fixed fee for; reviewing certain deed restrictions and so forth would be a fixed fee. He said the applicant would pay the fixed fee, and they would do the review and attempt to come in within the fixed fee arrangement.

Member Capello asked how he would exceed that fixed fee arrangement.

Mr. Fisher answered that the typical type of situation was if there was an unusual circumstance in the review and the applicant drafted something, they reviewed it and stated that it didn’t meet the City’s standards and the Council needed to go back and change it in this respect, and they refused or came back with another proposal. That would give rise to yet another review and negotiation; there were times that it could go back and forth two, three, four times, which was not the normal course but happened on occasion.

Member Capello stated that Secrest Wardle was billing the City hourly for those reviews.

Mr. Fisher answered that was correct.

Member Capello stated that in some circumstances, the Council got to a point, maybe in Engineering where a re-review fee was charged; he asked if the City could do that to protect you to require an additional amount of money for re-review.

Mr. Fisher answered that was really what they did in the other category where they were really not able to make an analysis or draw a conclusion of what it would be expected to be because of the nature of the review expected, because not being any certainty to it, not being a customary-type of review, so in those cases they estimated an amount for the particular project and when they got to the end of the estimate, then the Finance Department went back to the property owner and said, or at the end of that part, we’re still going, so we needed more money.

Member Capello stated that if the project was approved, Council could always require the entire fee to be paid before the City issued any permits, means of collection.

Mr. Fisher answered that, the way it was set up, and it wasn’t cast in stone or concrete, was that they had a number of things that were fixed amounts where they did not go back to the property owner or applicant for additional money.

Member Capello said he was saying those that were not fixed. So, the risk to the City or your firm was if they decided not to go forward with the project, then the hammer wasn’t over their head to require everything to be paid at the pre-con meeting.

Mr. Fisher said that was right, although they tried to make sure that monies were paid ahead so that they were reviewing based upon monies that were in hand. On the other reviews where there was a fixed amount, sometimes the City would make additional money and sometimes it would go into the red, but the theory was that it would all balance out and the City would be made whole.

Member Capello stated that he was just trying to ascertain how much risk they were really talking about either on the City’s behalf or his firm’s behalf; it seemed like the risk would be pretty minimal because somebody would have had to invest all of that money moving forward with the project and then drop the project would be the only situation and that Secrest exceeded would be the only situation where somebody get cut short.

Mr. Fisher answered that if the process was followed properly, there was substantially no risk.

Member Capello said that he wasn’t saying that he should take that risk, but he was looking at the City’s viewpoint of what kind of risk it was assuming; he really didn’t think it was that great a risk. Member Capello asked if Mr. Fisher had said there was a fee not to exceed.

Mr. Fisher answered that he knew there was a not to exceed, and he wanted to make sure that if there was a clause not to exceed, that didn’t mean that once they got to a certain level that Secrest would stop being paid.

Member Capello said that in one comment that had nothing to do with Mr. Fisher, he understood Member Lorenzo to say that she wanted to eliminate the senior associates at $115 an hour; in his opinion, all that would do would push the $115 fee onto the partners at $125. He didn’t think that it would push the senior associates’ work down to the associates; he just thought it would push it up and charge the City $10 an hour more. He thought having that additional level in there protected the City more than it harmed it. He thought Secrest would probably give more grunt work to the senior associates, as opposed to a partner. He looked at that as beneficial to the City, as opposed to detrimental. Other than that, actually he thought Mr. Fisher had more questions of Member Lorenzo as opposed to responding to some of the things she said, so maybe that needed to be clarified.

Member Lorenzo stated that with regard to liability on the City’s part, what she was trying to do was to smooth out areas that had been rough between the Finance Department and the legal firm. She said there were cases where, for whatever reason, the firm underestimated the amount of work or the cost of the work, and then the City Finance Department had to hunt and chase the applicant to pay the additional monies; of course the firm wanted to be paid. She said the City was paying out of the General Fund monies up front that hadn’t been collected yet, and one of the whole points of the escrow was to collect all that money before work was done. Her feeling was that Mr. Fisher’s firm had to do a better job of estimating or estimating more conservatively, perhaps. She said that was in Mr. Fisher’s court; if his firm couldn’t manage that, it wasn’t the City’s issue. She said he had one of those choices; the other choice was to go back to the ordinance and change the rate structures if he was finding that the rate structures were not meeting his work needs and the amounts, then the rates needed to be changed. She said she was giving him flexibility to either tighten up his estimates or go to the ordinance and change the fees. She said it was in Mr. Fisher’s court, but the City was not going to get cut short. It went back to fiscal responsibility; she didn’t want the City to get cut short.

Member Lorenzo stated that there had been circumstances where the work had been done before the money was collected. She didn’t know if that was a year ago or six months ago, but there had been some cases where that occurred. If that occurred, the City was not going to eat the cost if those monies were not collected. She said that if his firm started the work before it knew the money was collected, then his firm would have to absorb the costs. Member Lorenzo stated that it might be more of a challenge for his firm to make sure that its records were complete and everyone was on target, but the City shouldn’t have to be penalized for that. She was trying to eliminate any consternation between Administration, Finance and Mr. Fisher’s firm and make sure that everyone was on the same page and there was no question as to what the process was.

Member Lorenzo stated that with regard to the next paragraph in terms of exceeding, her feeling was that the $350,000 should cover the day-to-day demands placed on the firm by the Administration, by Council meetings, ZBA meetings, etc. She thought that the only things that should be above and beyond the $350,000 were if there were unforeseen litigation that came forward that the City had to defend or if there was litigation initiated by the City by virtue of five Council votes specifically giving the firm direction to litigate. Other than that, she didn’t see any circumstances that should go beyond the $350,000. Again, in the spirit of what Mr. Heffernan said, "culture to provide continuous service level at a lower cost". Member Lorenzo said the City demanded it of its departments and should be demanding it of its consultants.

Member Lorenzo stated that with regard to the senior associates, once again, if Mr. Fisher was going to open the door and say that it could now add an additional classification that wasn’t part of its bid, then she could open the door and say Beier Howlett after the fact told Council that they wouldn’t charge for copies and FAXES and everything else, then Council should be able to turn to Secrest Wardle and ask it to meet that for the City. In terms of what the bid was, she wasn’t looking for Secrest to meet the bid structure; she was looking for Secrest to meet the bid costs. She said the bid costs were that all partners were $125 and the associates were $105; that was what she was looking for Secrest to meet. In addition to that, about six to eight months ago, Secrest came to Council with a request to increase the associates’ fees to $115. Council did not approve that. She was not going to, by virtue of that, give the firm what it was looking for six or eight months ago; that was what she thought was happening here.

Member Lorenzo stated that if she went back to Beier Howlett’s proposal, it was utilizing its senior associates differently than perhaps Secrest would. She said the senior associates that they were choosing would be perhaps, for example, serving the ZBA as partner would in the City’s case. She said that in that instance she could justify it with Beier Howlett, but with the individuals that Mr. Fisher had said would be senior associates, they would be doing more "associate" work that associates had been doing now, not what partners had been doing now. She said that in other words, what the City would be paying $105 an hour for, it would be paying $115 an hour; she said it was unacceptable to her. She said she was giving Secrest the benefit of the doubt of even trying to come to that compromise; she would not compromise any further in that and it was her bottom line. She thought she had been pretty reasonable in going that far; once again, she would be honest with him that she preferred the other firm for many reasons, but specifically for costs.

Member Capello stated that, if he understood that, he thought two of the four issues within Mr. Fisher’s control to resolve. With the escrow, if Secrest Wardle could just assess higher, it was protecting itself; reimburse what it didn’t use. He said that any complaint should go back to Council because it was forcing Secrest to do that.

Mr. Fisher wanted to clarify one point. He stated that Secrest didn’t set the fees; Council had to approve them in a resolution. He suggested that the Council approve the amounts that Secrest suggested.

Member Capello answered that what he understood was that the suggestion was for Secrest to come back with higher fees and Council would approve them.

Mr. Fisher answered that would be fine.

Member Capello said that the second issue was that the request was for Secrest not to begin work until the money was in escrow; if it did and the City didn’t get paid, Secrest ate it.

Mr. Fisher answered that it was fine.

Member Capello stated that he had a problem with the other two issues. He could not personally see Secrest giving Council a not to exceed amount when the City was paying Secrest hourly and directing what it did. He understood the City had a budget and Secrest had to go back to Council for an increase in the budget, anyway. He didn’t see how Council could put a not to exceed; that just didn’t make sense. He guessed the senior associate was still open. Given the fact that Council had to approve the budget anyway and an increase in the budget, what was the necessity of not to exceed?

Member Lorenzo stated that the not to exceed was basically what was done in a business or any household where there was a firm price that not to be exceeded for that year.

Member Capello stated that if Council gave Secrest more work, would Secrest just stop at that amount and if Council gave them an extra $150,000 for the work?

Member Lorenzo answered that when he said more work, obviously some of that would be incumbent upon Administration to control, as Mr. Helwig had largely been in control of legal costs. She said when in doubt, it had to come back to Council. What she didn’t like was that there were a lot of things going on above and beyond that had not come to Council. She thought that $350,000 was a significant amount of money; if the firm couldn’t handle the day-to-day things, she wasn’t talking about litigation because that was an aside of that obviously; but, she thought for $350,000 Secrest should be able to sit at ZBA, Planning and Council meetings. She thought Secrest should be able to handle the day-to-day demands that the Administration and departments placed on them, asking questions, etc. She thought that part of that would be incumbent upon Mr. Helwig to make sure that his department wasn’t over utilizing legal services in a frivolous manner or unnecessary manner. Member Lorenzo said that if reasonable things came in after the fact, obviously the Council would consider those, but it appeared to her that with the language there that the law firm was basically looking for free rein and saying it knew there was a number there but the firm could exceed that and handle that with a budget amendment. She didn’t want to be so cavalier about that; she didn’t think Council should expect overages. She expected that if given a not to exceed figure, all parties involved would work hard to not exceed that figure.

Mr. Helwig stated that it seemed to him that the reason for the discussion tonight was that they were prudently planning ahead for the next six months. He said Administration had not had to flag that the City was right on the eve of using all of that $187,500; it had been monitored very carefully since July 1 and Administration intended to do that with the $350,000. He said what he was hearing made a lot of sense and listening to wrestling with legal services costs, he thought there was a consensus there that whatever the figure was, $350,000 just like it was $187,500 for six months, must be lived with. He said that was a stretch; he thought just like the Council was stretching departments and operations, but if that was the number set, that’s Council’s appropriating role. In terms of another ingredient that he liked that Council had been talking about in Executive Sessions or in public was when the City hit upon litigation, Council wanted frequent communication about that litigation and an understanding of what the costs were at several bench points along the way; that would be facilitated by what Council had outlined as the process here. So, he sensed a consensus on that; now, how that was worded, the not to exceed; it’s not to exceed whether it was said here or not because of what Council was doing here tonight, being asked to approve a budget amendment as a part of this change to the contract, so Council was setting a not-to-exceed whether said or not.

Mr. Helwig added here a fourth point that Council hadn’t discussed that much. He said Administration was now clicking on the detailed billings bimonthly; that was now working within 30 days at the close of the billing cycle, so if Council wanted that put in there, Administration talked with the firm Friday and he wanted clarity because he didn’t want to be in May not knowing the City was already there in terms of the not to exceed. So, he heard consensus in terms of the not to exceed.

Member Capello stated that the difference in what he thought he and Member Lorenzo were looking at was that he was agreeing to put a cap on the current budget and Administration needed to monitor that and come back to Council and explain why. He said that to put a not-to-exceed in their contract meant that if Secrest went over $350,000, they worked for free even though it was out of their control. Council was the one that told them what to do and when to do it; it was not as if Council was giving a defined task and saying to control how many hours it took to complete it, give Council a finished product, Secrest could take that risk. He said on an hourly basis Council couldn’t ask them to take the risk when working hourly and Council was not asking for that.

Member Lorenzo stated that she thought it took too long or utilizing too many billable hours or not working as efficiently as one could. She stated that she was trying to challenge the firm to do better on that. That was what Council asked of the departments and what Council asked of Mr. Helwig. She didn’t think Council should ask any different with the law firm. She said that was what she was trying to do by saying not-to-exceed; become more efficient.

Member Capello stated that the only way that could be accomplished would be to bring attorneys in house and on staff.

Member Lorenzo stated maybe that should be discussed during budget.

Mayor Pro Tem Landry stated that Secrest Wardle submitted a bid; in that bid it agreed to match its legal fees that it had already been charging, it did not ask for an increase. He said that fee schedule was published so all the other contractors could see what it was and undercut it to look good. There was nothing unfair about that, but it was sort of a slight advantage. He said Beier Howlett came up and undercut Secrest Wardle’s bid. Secrest Wardle just kept its same bid; so now Secrest Wardle had agreed to match Beier Howlett’s bid. Secrest Wardle would decrease its fees, and now Council was asking it to go lower than Beier Howlett. He didn’t think that was fair. Secrest Wardle had agreed to match Beier Howlett; that was in good faith if it was willing to do that. The City would be saving some money; he didn’t think it was appropriate for Council to ask it to go even below Beier Howlett’s bid. He said that the notion that Beier Howlett would be staffing the City’s ZBA with associates and the City would save money was not appropriate; he thought the Council wanted partners at ZBA meetings. He would not be in favor of asking Secrest Wardle to go even lower than Beier Howlett’s bid. With respect to the escrow, he asked Mr. Fisher if Secrest Wardle came up with the idea of charging escrows in the first place.

Mr. Fisher answered that that was correct.

Mayor Pro Tem Landry stated that before Secrest Wardle was even on board, the City paid for all the legal services.

Mr. Fisher answered all of them.

Mayor Pro Tem Landry stated that Secrest came up with the idea to save the money and now Secrest was being asked to eat the overages as a reward for coming forward and suggesting to the City how to save money dealing with the contractors. He said the problem he had with asking Secrest Wardle to eat the difference was 1) the City was saving money in the first place, and 2) as a lawyer, if you’re not getting paid, you’re not going to work as hard. He said the other side could prolong the negotiations, knowing the hourly rate was published. The other side could tell what the hourly rate was and if it was negotiating with you and knew you were getting $125 an hour and stretched the negotiations out until it knew Secrest wasn’t going to be paid any more and had other clients that paid hourly; how hard would Secrest work on that development agreement on behalf of the City if it weren’t getting paid. He couldn’t agree to that because any time you asked somebody to work for free, the incentive just wasn’t there to work. He didn’t think there was anywhere other than legal services where the City should be as concerned about the level and quality of service. So, he thought since Secrest Wardle came up with the escrow idea and maybe a compromise was that the City agreed that whatever amount Secrest set, five of Council would approve; he said to go ahead and set it at the limit. If Secrest was willing to accept that, he was willing to accept that, but there had to be an agreement that whatever escrow Secrest set, at least five Council members had to agree.

Mayor Pro Tem Landry stated that as far as not-to-exceed, the problem he had with that was again, if you’re not getting paid, you’re not going to work as hard. Secrest didn’t control what it worked on; it was his understanding that Council could ask Secrest what to do; he asked Mr. Helwig how many people on staff were authorized to request legal services.

Mr. Helwig answered that it was now centralized with him.

Mayor Pro Tem Landry stated that the City Manager, as he understood Member Lorenzo’s suggestion, was that it was not to exceed $350,000 for the year unless five members of Council approved it. So according to his understanding of Member Lorenzo’s suggestion, if the City Manager called you up and said he wanted this legal service done and you knew it would take you over $350,000, you just had to do it and you’re not going to get paid. Then you’re going to tell the Manager of the City, no I’m sorry I can’t do it because I’m not getting paid. He thought the key to controlling costs was at Council table and at the City Manager’s desk. The Council and City Manager were the ones that, as it got close to the $350,000 or whatever was set, were to take a look at this; to tell the contractor that it wasn’t going to be paid was not the answer. He thought that Mr. Helwig had identified the fact that since this discussion began several months ago, the monthly fees had come down, Council had committed to meet monthly to talk in Executive Session. He thought those were the kinds of steps to be taken. Personally, any suggestion that this firm had charged excessive hours, he hadn’t seen it. He looked at every single bill that everybody else had looked at and he hadn’t seen excessive hours anywhere in what Secrest had done. He said there was a trend that Secrest had already lowered the fees; he didn’t think to tell Secrest to work for free beyond that was fair. He didn’t think that anybody at Council table did that at home, and he thought that if Council wanted to keep a handle on fees, Council had to look at it and control what Council asked Secrest to do. He said the answer was not to ask the firm to work for free; the answer was to stop asking the firm to work. Once a project was started, it couldn’t be halted because the City lost when that was done; ethically there was an obligation. From what he understood, Secrest indicated a willingness to match Beier Howlett’s fees and indicated a willingness to meet monthly with Council in Executive Session, had made compromises off the initial position, Council had a not-to-exceed of $162,500, in Mr. Helwig’s words just by its very nature that when the money ended up, Council had to make a budget amendment.

Member Paul stated that there had been a lot of good discussion tonight; she thought all of Council needed legal services and the City had two firms that were willing to do that. She thought that it was great that Secrest came down with its costs, but one of her concerns was that the main partner for Beier Howlett was at $125; the senior associate was going to be doing the ZBA. She said another senior associate was the tax lawyer who was state-renowned; Stephanie Simon in all fairness was not of that caliber and she was previously an associate at $105 an hour, was that correct, Mr. Fisher?

Mr. Fisher answered that was correct.

Member Paul stated that she had been given a $10 an hour raise.

Mr. Fisher answered no, as a matter of fact, she was proposed at $110; the contract Secrest had was at $110. He said the firm was coming down at the top of $135 to $125.

Member Paul stated that previously before the firm re-bid, she believed she was at $105.

Mr. Fisher answered that was four years ago.

Member Paul stated that when talking about different municipalities and having Beier Howlett having an advantage, she did some research in that area; the same exact fee structure was for Birmingham, Rochester Hills, Ferndale, and Franklin. So there were four other municipalities with that exact fee structure from Beier Howlett, so she didn’t think it was just undercutting the City’s present legal services; that was what their fee service was. In all fairness, she really appreciated all legal work that the City had, and the City desperately needed it; Council knew that very much at that table and at the Administration’s level. No one was arguing that or that Mr. Fisher would be sorely missed, but she did respect fiscal responsibility; that did seem to be the thread of this evening’s meeting. Stephanie Simon was someone in the Tax Tribunal, which was a very responsible job, but the person at Beier Howlett at the same tier was going to be making $115, and her being state-renowned, she didn’t think the same caliber existed. She said what Council was asking was that Vahan Vanerian and Stephanie Simon would be at the $105 level. She said he had two people servicing the City at $125 an hour, where Beier Howlett was going to have the partner, John Sterin at $125 an hour for City Council and some Planning Commission meetings, but mainly the senior associate would be at $115 for both ZBA and Planning, so she didn’t think it was unfair to look at this to compare that there was a difference in cost. She said the Planning Commission meetings were very long, so that was as savings for the City. She stated that was not to say that Mr. Gillam wouldn’t do a fine job, but he would cost $10 an hour more; so to put Stephanie Simon and Vahan Vanerian who weren’t going to be doing those meetings at the same level as what they were going to propose, they’re not in the same caliber. She wanted to see those two stay at $105; she respected everyone’s opinion but really hoped to have that small thing tweaked.

Member Paul stated that she would be interested in seeing what Secrest proposed in the resolution for the escrow fees. She appreciated very much Mr. Fisher’s coming forward with that; she also wanted to give credit to two Council members at that time that asked him to look into that.

Mr. Fisher stated that was not correct.

Member Paul believed that Member Lorenzo was in the minutes as saying that.

Mr. Fisher stated that it was his suggestion.

Member Paul appreciated his doing that work. She also thought a re-review fee that Member Capello mentioned was extremely valid. So, if Secrest was going to have a re-review fee and were going to come forward or set a higher amount; if the firm thought it would only be 10 hours that the firm normally did, put 15 in there. If the City returned the fees, great; if not, your firm was not shortchanged.

Mr. Fisher stated that he thought it could be worked out.

Member Paul stated, good; she thought that was fair to Mr. Fisher and wanted him to be paid for that service. She thought it helped clean up a lot of the issues that the Finance Department and the Planning Department had with the whole escrow fees. She also wanted to see us try to work within that $350,000 a year; she did not think it was unreasonable to say that the City would be under litigation; Council had many that it was going to be discussing tonight in Executive Session, so she believed that Council could look at the extra fees that the City would be paying in that regard and having the different stepping processes approved, but the day-to-day minutia of $350,000 was what Beier Howlett had done in Rochester Hills, Birmingham and Franklin. She wanted to stay in that same realm.

Member Paul stated that she appreciated Mr. Helwig trying to keep the financial amount under control; that was huge. As of a month ago, though, the City was still looking a little bit further behind in bills because she asked for a request of those bills, so that had been caught up and she appreciated that. She hoped the City could stay on target there; she thought the City should be that way with every single one of the City consultants, as Administration did with every department; she thought that was fiscally prudent for everyone to function in that capacity. She also wanted to thank both of them for agreeing to have Executive Sessions. She was very surprised to look down at the Agenda, No. 7, Approval of Consent Judgment of Thirteen Mile and Meadowbrook Road; she had never heard a darned thing about that. That concerned her; if the City had a consent judgment and seven members of Council weren’t informed about that. She thought maybe she missed that, so she asked the Mayor if that was something he knew about, and he did not recall it. She thought Council had the responsibility to know what lawsuits the City was entering in and give guidance in that regard.

Member Paul wanted to mention that there was one excessive billing, in her opinion; that was the park foundation. One of the Park’s and Recreation members brought forward the Foundation agreement; they brought it from another city, 26.5 hours were put into an already previous agreement. She hoped they could stay within the $350,000; she thought they were all very close to having resolution here tonight. She thought that with the verbiage that Member Lorenzo mentioned tonight, she could be agreeable to that; she would like to see the escrow put into that; she liked the verbiage that she said in the second paragraph, and she liked when she said City Council instead of just City, which was more vague. She thought specifying City Council was more appropriate. If Council could do all of those things, it could make resolution for this evening and hoped it would be something that all members could be satisfied with and be done with the issue.

Member Nagy agreed with Mr. Helwig that same page and we were ahead of the schedule. She appreciated the work of the Consultant Review Committee. Having her occupation made her listen; she was amazed at how differently people listen and what they hear. She thought one thing they could make consensus on was that the law firm would not work for the City pro bono. She didn’t really think it was understandable in this regard when talking about the bids; Mr. Fisher said his firm would match the original bid of Beier Howlett, and she thought the difficulty she had in reading this was that the structure of the firm was changed. In other words, Mr. Fisher wasn’t calling them senior partners, partners, associates but were calling them the same as Beier Howlett. With all due respect, it did look like Secrest Wardle was giving itself a raise. Her question was who those people in his firm were: Mr. Gillam was a partner, Mr. Schultz was a partner.

Mr. Fisher said that was correct.

Member Nagy said Mr. Gillam would attend the ZBA and the Planning Commission.

Mr. Fisher answered that was correct.

Member Nagy said Mr. Schultz would be coming to Council.

Mr. Fisher answered that was right.

Member Nagy said they were at the $125 fee. She thought there was some legitimacy with regard to the fees; it looked like he changed it, although she knew it was not his intent. The additional information that was brought forward with regard to the ancillary items, such as photocopying, those sorts of things, Secrest Wardle was not meeting those because it wasn’t considered to be part of the original bid.

Mr. Fisher answered that Secrest obviously changed its bid, but it was changed to conform to the Beier Howlett bid.

Member Nagy answered the two percent thing.

Mr. Fisher said it was the two percent for the cost that Secrest met, which obviously resulted in a loss to the firm.

Member Nagy appreciated members of Council, as well as Mr. Fisher, coming up with the idea of escrow; it had been a little bit of a stickler for everyone. She also believed that the ability to lose business kept everyone working to their full potential, contrary to what one of the previous speakers had mentioned that if you were bidding and didn’t get paid a certain hourly rate, you wouldn’t work as hard. She did not imagine that Mr. Schultz would be less of an attorney working for the City, nor Mr. Gillam nor anyone else in the firm.

Member Nagy also appreciated the escrow billing system because one of the things she looked at was the City department heads. One of the things she didn’t want to was to become a collection agency. She thought it was very important that this be worked out. She said she didn’t feel very threatened by some of the things that Member Lorenzo made; she thought that Member Capello came up with some good ideas. She thought they could meld the two together and come up with something that all could agree on. She really appreciated the bimonthly billings that Mr. Helwig talked about.

Member Nagy wanted to be very upfront; she respected Mr. Fisher and liked him personally, but would have preferred the other firm, not for the reasons of people sitting in this room but for the associates who were elevated to a position which she didn’t think they were performing at.

Member Nagy stated that she and Mr. Fisher had a discussion with regard to that when she was on Planning Commission; she was worried about a person being elevated into another position. She said Mr. Fisher mentioned Mark Roberts and asked if they were just talking about putting a body in place when someone couldn’t make it.

Mr. Fisher said that he put Mr. Roberts in there because he had performed work and was really an individual who was not likely to see a lot of service but he put him in there so that if he happened to be called upon in an emergency to do something, that Council wasn’t caught by surprise.

Member Nagy appreciated that and would be willing to support the motion wherein Mr. Fisher himself gave good verbiage regarding Member Lorenzo’s comments for any services the law firm had been authorized and requested to perform. She wanted to see the delineation of partners, associates, the $125, $110, $105, $115; she thought that basically they could be on the same page with that because it made good business practice. The City received 21 bids, and, with all due respect, she didn’t want Mr. Fisher to feel he was being put on the spot, but there was a distinct advantage when he was the incumbent. She wanted to make some of the changes and incorporate some of the things that all had agreed on; when that happened she would support the motion. Member Nagy stated that at the present time, she would not support the motion.

Mr. Fisher asked Member Nagy as clarification if she was supporting the $125, $115, $105.

Member Nagy asked who the senior partner, now called the partner, was.

Mr. Fisher answered Bill Hampton and himself, but they were previously being paid $135 an hour; now they were being paid $125 an hour.

Mayor Csordas stated that Secrest Wardle did match Beier Howlett’s fee schedule.

Member Nagy said that it was confusing that Secrest Wardle never had a senior associate; now there is a senior associate in there to go from $110 to $115.

Mr. Fisher answered that the purpose of that was because Secrest Wardle was asked to match Beier Howlett; Beier Howlett had a senior associate, so Secrest Wardle matched Beier Howlett and put a senior associate in there. He said Secrest Wardle was asked to reduce the associate from $110 to $105, which they did.

Member Nagy asked if Mr. Gillam, Mr. Schultz, Mr. Hampton and Mr. Fisher would be the partners at $125.

Mr. Fisher answered that was correct.

Member Nagy asked if Stephanie Simon, Mark Roberts, Vahan Vanerian, and was there a Mr. Martin?

Mr. Fisher answered that Mr. Martin was a partner and was not doing a great deal of service for Novi.

Member Nagy stated that those three people would be at $115, but if Mr. Martin showed up at Planning Commission he would be at $125.

Mr. Fisher stated that would be if he was requested to show up.

Member Nagy stated that the three people that used to be associates at $105.

Mr. Fisher stated that his suggestion was to say there were two categories: partners and associates; the partners were $125 and the associates were $110.

Member Nagy said that Mr. Fisher had answered all her questions, and that was all the questions she had right now.

Member Gatt stated that members had been talking for an hour, so he would very brief. He wanted to thank Mr. Fisher for compromising, for trying to bring this Council together. He said the City could not survive without legal services. He would never ask Mr. Fisher or anybody else to work for free, and when Council put a not-to-exceed that was asking him to work for free; he wouldn’t do that.

Mr. Fisher thanked Member Gatt.

Mayor Csordas stated that the fact was the City would exceed $350,000 in legal fees this year; there was no question about it but there would be a whole lot more control about it. The City was growing and with the recent history of lawsuits, it would be folly to think it was not going to be sued. He said $350,000 annual cap was significant control over what there used to be; as sure as everyone was sitting here, the City would spend significantly more than $350,000 in legal fees this year and every year from now on. He thought the negotiated agreement was fair; Mr. Fisher did exactly what he asked on behalf of members of Council and exceeded the bid from Beier Howlett and he thanked Mr. Fisher for that.

Mayor Csordas stated that, as far as his firm’s performance, a majority of Council believed that it did a yeoman’s job and it deserved the renewal of the contract, which was why it had the support of the majority of Council. He happened to be one of those people that thanked his firm; it had done a very fine job. He said that to suggest that Council downgrade the level of qualification of legal representation at the ZBA was not acceptable to not have the level of experience and knowledge and professionalism that City had at ZBA and Planning Commission; to go below that and have associates from Beier Howlett or anyone there was not acceptable.

5. Consideration of Cost of living adjustment for City of Novi retirees, effective January 1, 2005 (3%).

Member Gatt asked to be recused; he was a member of the Novi retirees and the matter directly affected him.

Mr. Helwig stated that he was very uncomfortable with how any figure was justified or reached as he looked over the history, it had mostly been two percent; this was the only place he had worked where it hadn’t been a statewide decision for cost of living increases. He said what Administration started to do more last year and bringing to Council was relating it to the policy line movement underscoring that for what Novi active City employees were receiving and giving cost of living information for Council to consider, as well as just referring to what some of the other statewide systems had now put into State law so it didn’t come up for review every year.

DISCUSSION

Mayor Pro Tem Landry stated he would support the motion; the three percent increase was in line with the proficient performance of the administrative employees, and the other thing to him, as he understood this, was that cost of living increases would be cumulative. So, if the City chose not to give one this year but decided to give one next year, the City would have to make up what it didn’t give this year next year.

Mr. Klaver answered that was correct.

Mayor Pro Tem Landry asked if the City didn’t give a three percent increase this year and decided to give a two percent increase next year, would the City have to give a five percent increase next year.

Mr. Klaver answered that it would be based on the two percent, which was the standard Benefit E. He said that there were some years that were skipped. For example, in 1981 there was no increase passed along and in 1982 it was four percent; so that was how it worked.

Mayor Pro Tem Landry asked if the City would have to basically match the cost of living increase previously given.

Mr. Klaver answered that the two percent standard would be used for one of the benefit options. So, if the City didn’t do anything and came back and wanted to be a two percent, it would have to be four percent.

Mayor Pro Tem Landry stated that he didn’t think Council was prepared to say the City would never give a cost of living increase, but he didn’t want to postpone it now and have to bite off a huge increase in the future. He wanted to keep up with the cost of living, put it in the budget, and give the retirees a cost of living increase every year. He would be happy to support the motion.

Member Nagy asked Kathy Smith-Roy, Finance Director, to explain as to whether or not there was any policy that said the City must give cost of living increases. She asked how MERS worked. She stated that in the City of Farmington Hills when a person retired, a pension was all that person received; there were no other raises. She asked if that was how Novi worked.

Ms. Smith-Roy answered that the City’s Plan Document and the Pension Plan called for specific retirement payments. The Administration had an option annually to present to City Council cost of living adjustments. She did have a slight correction to what Mr. Klaver said, in that when the MERS plan document was amended several years ago to add the flexible Benefit E, the percentage was no longer cumulative, so Council could do one percent this year, nothing next year, half a percent the year after, and so on. In the past it was cumulative and the history did show that previously before they allowed the flexible Benefit E that it was cumulative.

Member Nagy asked if there were 49 members in the retirement group.

Ms. Smith-Roy answered that was correct.

Member Nagy asked if they had paid into the system to give back into system all these raises.

Ms. Smith-Roy answered that most of the groups, except for the library employee group, have contributed two percent or less; that was as result of the timing of when contributions were set up for the City. She said that the library group was the only group that had a fixed amount of contribution rate for their entire salary period.

Member Nagy asked if Ms. Smith-Roy could simplify that for her. In other words, had they paid in enough money that from now until the 10, 20, 30 years you could keep giving cost of living increases; she said we all pay into our retirement.

Ms. Smith-Roy answered no, that was why that was shown as an accrued liability; so it would be additional contribution by the City.

Member Nagy asked, in that retirement group, when the Council raised the medical insurance, if those were some of the people in the retirement group.

Ms. Smith-Roy answered that was correct.

Member Nagy asked if that amount was, in some cases, $20,000.

Ms. Smith-Roy answered that it started out the first year was an annual increase of $20,000 and would continue thereafter.

Member Paul asked Mr. Helwig, when he lived in Ohio, what he paid into the system to receive the pension back.

Mr. Helwig said he would guess that it was almost eight percent, and he had referenced that he was surprised that the contribution levels were not higher.

Member Paul said that he had made reference in the past, she thought in the consent approval, that the City had all members contributing into their pension. Member Paul said he said it was absolutely wrong if they did not do that. So her concern was that there was a large portion of the 49 people that did not pay into the pension in the past, but he was still recommending it at this time. She stated that he had said before that they should be paying into their pension, and now he was saying that even though they didn’t, it would be okay to give them a raise.

Mr. Helwig stated that he had two points to make: Life went on and these were individuals that built the foundation for this community through City services, and to have their pension eroded through inflation cost of living forever he didn’t think was fair. He didn’t like the way it was done; he would prefer that it were done on a statewide system and the employees contributed. He said that now the City was correcting the contributions policy every opportunity it got and Council supported that. He could justify in his mind that they were individuals that had daily living needs and had served the community for a lot of years; to now all of a sudden say go to zero he didn’t think would be good faith. He stated he was trying to find a way to relate it to what was happening in the world of work in terms of inflation.

Member Paul stated that it was hard to correlate the two because there was not much in comparison even between Ohio and this state how they did things, or in the private sector and municipalities. She called Michelle Hoyo, who was the Director of the Fiscal Administration in Dublin, Ohio, and what they did as a municipality was to pay 13.55 percent as a city for each employee and the employee paid 8.5 percent of their salary into that statewide pension plan. She said that was for nonunion employees, the administrative staff. For the police and fire, the city paid 19.5 percent and the police actually paid 10 percent of their salary into their pension. She said that when he gave reference to Ohio increasing three percent annually, they pay considerably into that themselves, so there was not a similarity to her between the two. She just wanted to get that real clear; she wanted to ask real specifically to Kathy Smith-Roy what role the increase of cost over this plan for its entirety would be for the Novi taxpayer because she was talking about a 30-year increment.

Ms. Smith-Roy stated that, according to the actuary report Administration received, the total cost was $651,000.

Member Paul stated that was a lot of money. She wanted to know what the group of 49 employees had paid into their retirement this far.

Ms. Smith-Roy answered that in terms of the exact dollar amounts, Administration did not have a report with regard to that; the range, as mentioned previously, was that some had paid zero and the highest was the library group which paid up to three percent of their salary. She said that the contributions ranged typically from a couple of thousand to $25,000-$30,000.

Member Paul asked what the cost was annually for the eight employees that the City had previously changed their health insurance from $3,500 to the 80/20 plan.

Ms. Smith-Roy answered that it was $20,000.

Member Paul asked if that was part of the 49 employees.

Ms. Smith-Roy answered that it was the same group.

Member Paul said that they had already had an increase, then, at least eight people. She asked what percentage of the salary increase the City had given the retirees thus far.

Ms. Smith-Roy answered that, again, going on an individual basis, so a retiree who had been retired for 10 years would have received 20 percent increases because it would be two percent per year for the 10-year period.

Mayor Csordas stated that it was actually more than that; from 1977 to 2004, there had been a 71 percent increase in the benefit.

Ms. Smith-Roy said that she was referring to an example of someone retired for 10 years, they would have had two percent per year and then it would have been compounded. So it depended on when the person actually retired. If they retired last year, they would have only gotten the two and one-half percent.

Mayor Csordas stated that the time period from 1977 to current was 71 percent increase.

Member Paul wanted to make some very clear statements. She really appreciated all of the work that many of the people in the audience had done; she thought they had done exemplary jobs to set up the City in the capacity that it was functioning in today. She also had to look at where the City was going to be in 30 years from now; $651,000 for a three percent increase for 49 people was a lot. She was struggling very much with that amount of money for 49 people. She said that the City hadn’t even given every one of the City’s employees who were actively working a three percent raise; the City also asked them to pay from 2.29 percent of their salary into their pension to 4.48 percent. The City also increased their health care premium; they were at zero and now they’re at 2.5 percent. Their co-pay was also increased from $5/$10 to $10/$20. She said with all of those amounts for active employees, she could not support this at this time. She appreciated all their work in the past but she could not be fiscally that irresponsible; she hoped they understood.

Member Lorenzo asked Ms. Smith-Roy when she talked about $651,000 over the 30-year period, could that be cut in half and give a one and one-half percent increase; would that be like $300,000-some odd dollars over 30 years?

Ms. Smith-Roy answered that it didn’t exactly work out like that but it would be relatively close.

Member Lorenzo stated and so on, that the figure could go up and down by changing the percentage and go between that $651,000 figure and on down.

Ms. Smith-Roy answered that was correct. She said it could be even more specific under the flexible E program; MERS allowed the City to do an amount per month per person. It was totally up to the City Council’s discretion.

Member Lorenzo stated that the City Council had the discretion to give zero on up; she asked what the highest amount it could go up.

Ms. Smith-Roy said she did not know if there was a limit.

Member Lorenzo asked if they were doing that in the private sector; in terms of pensions, did they give percentage increases each year?

Ms. Smith-Roy answered that it had not been her experience that they did that in the private sector.

Member Lorenzo stated that this was a municipal phenomenon, then.

Ms. Smith-Roy answered that there were even some municipalities that she knew of that did not.

Member Lorenzo asked that not all municipalities did that, either.

Ms. Smith-Roy answered no.

Mayor Csordas asked what the City’s Master Plan Document Pension Plan calls for as far as cost of living increases.

Ms. Smith-Roy answered that there was no specific cost of living increase.

Mayor Csordas stated that it was silent on the issue.

Ms. Smith-Roy answered that it was.

Mayor Csordas asked if MERS required cost of living adjustment.

Ms. Smith-Roy answered that it did not; that was why that option was purely an option for each City Council to consider.

Mayor Csordas stated that it had just been a practice of this City; it was silent in the Plan Documents and it was not required by MERS.

Ms. Smith-Roy answered that was correct.

Mayor Csordas stated that about 40 of the current retirees had paid in essence zero into the retirement program. The City was changing that currently; about 9 retirees had contributed less than one percent. He said it was not a three percent decision or one-half of one percent decision, it was a $651,000 decision. He said it was in essence a $652,000 tax increase over the next 30 years. Council had received a memo from Debra Peake to Tia Gronlund-Fox, Personnel Director, that showed the amount of cost of living increased from 1977 to 2004. There were variances but it had been primarily two percent; there were two years where it was four percent and then last year it was two and one-half percent. He said that running the numbers as an actuary would do that, compounding it was a 71 percent increase in the retirement benefits in that time period. He said that Ms. Smith-Roy was absolutely correct if you retired in 2000, for example, the two percent and the two and one-half percent would have been compounded annually. There was also a spreadsheet in the packet in a memo from Ms. Smith-Roy to Administration dated October 19^th. He wanted to make sure he understood the numbers; there was a number there, current annual pension amount for 2005 that was the $1,355,950 amount. He asked if that was this year’s contribution or was it the benefits that were expected to be paid out.

Ms. Smith-Roy answered it was the benefits that that group of individuals was receiving.

Mayor Csordas stated that it was a $1,355,000 expense that the retirees were receiving. The increase in pension benefits would be $40,136 this year, due to the three percent increase; but the ultimate liability was $651,989.

Ms. Smith-Roy answered that was correct.

Mayor Csordas stated those were all the questions he had; that was why he could not support the motion.

Member Lorenzo asked if the City were anticipating five to six, on-the-bubble, persons that might retire in early 2005, how that figured in. She asked if they had to wait a year.

Ms. Smith-Roy answered that she was not sure of the exact date, but it was a year; she wasn’t sure if it was January 1^st or February 1^st, if they were not already retired at that point, they would not be eligible for that increase.

Member Lorenzo asked before January 1^st?

Ms. Smith-Roy answered before January 1, 2005; so if they were not retired now and collecting a pension, they would not be eligible for that increase.

Member Lorenzo stated that anyone that retired subsequently would not be eligible for that? Their MERS increase would occur next year if the Council gave it.

Ms. Smith-Roy answered that was correct.

Mayor Csordas stated that he forgot to address a couple of things: Cost of living in the private sector as it related to pensions was virtually nonexistent. He said there were some negotiated agreements in companies that were trying to do everything they could to not go bankrupt and whatever they wanted to do to get out of that, but that was a fact. Although Council wasn’t talking about this in health care, remove the word "the", although the City’s trend was kind of bucking the private industry sector, health care, the cost sharing, was absolutely going over to the participants. If it was a negotiated deal, typically the contributions increased dramatically because the benefits couldn’t be changed but the contributions could be changed to support the plan.

Dick Faulkner stated he and members from the Novi Retirees Association stated that they were naturally a little disappointed but they understood Council had a tough job.

Mr. Faulkner was now putting on another hat and wanted to thank Mayor Csordas for supporting the New Toys for Children. Rather than constantly asking for things all the time, the Retirees decided it was time to give back again; that was something they had done for years as past employees. He said that a lot of the former employees had worn other hats in relationship to groups, associations, etc. The City of Novi Retirees Association will have been in existence for five years as of February of next year and felt it was time it should do something since Christmas was around the corner.

The Association contacted The Salvation Army; they came in and spoke with the Association and suggested collecting toys. Mr. Faulkner said that they worked with the City and had a flyer that was being passed out. On Thursday, December 2^nd, "Ringing in the Holidays", families were encouraged to support the Salvation Army in partnership with the Novi Retirees Association and bring a new toy to help make the holiday bright for area needy children. The captain from the Salvation Army indicated it serviced 250 clients in the area, and the Retirees Association wanted to help them. The Novi Good Fellows would also host a canned food drive at that event; he could assure Council that the Retirees Association would help in that regard also.

Mayor Csordas thanked the Novi City Retirees Association; he said Member Gatt had approached him on behalf of the group because he knew that he supported the Good Fellows. He had expressed to Member Gatt that he didn’t want to dilute contributions to the Novi Good Fellows; Member Gatt assured him that the Retirees would empty their cabinets and make sure that the Good Fellows would at least get what they typically would get. Mayor Csordas talked to the captain of the Salvation Army, received input on that, and would be happy to support that. He hadn’t seen the flyer yet but hoped that both get great support.

Dave Maychek stated he had been before Council several times; he was the landscaper and lawn maintenance contractor. He had received a letter from Mr. McCusker on behalf of the City Council; he wasn’t too happy with the content of the letter. He said that the last sentence in the letter stated that if he had any inquiries to contact Mr. Schultz, which he did. Mr. Schultz had indicated that Mr. Maychek needed to get permission from City Council to talk to him about a number of issues of concern; so he was there tonight to get permission to speak with Mr. Schultz.

Mr. Maychek stated that , in doing this he wanted to share information that was really important that the citizens, the Council, everyone involved in this get this information.

Mayor Csordas recessed the meeting at 10:01 p.m.

Mayor Csordas called the meeting back to order at 10:16 p.m.

6. Approval of Contract Amendment for $31,953 with Ayres, Lewis, Norris & May, Inc. for 2003 Neighborhood Road Reconstruction, including Pioneer Meadows Road Projects, for new total contract of $214,130.11.

CM-04-11-400 Moved by Landry, seconded by Gatt; MOTION CARRIED: To Approve the Contract Amendment for $31,953 with Ayres, Lewis, Norris & May, Inc. for 2003 Neighborhood Road Reconstruction, including Pioneer Meadows Road Projects, for new total contract of $214,130.11.

Member Capello asked for the breakdown of the $31,953 and then $12,000 for reimbursements.

Phil Loud of Ayres Lewis answered that the actual incurred cost for this portion of work was quite a bit in excess of the number Ayres Lewis was asking for tonight, but they tried to break it down in discussions with Finance and the City Manager’s Office to a number that Administration thought could be worked into the budget of the two projects that were helping fund Ayres Lewis efforts. The way it was presented in this was to identify $12,000 to help cover the costs of the geotechnical sub consultant they used for the extra costs they had in that effort. It was identified almost a year ago that Ayres Lewis would incur extra costs in that. The other portion was just straight, reimbursable time in the amount of $19,000 for direct Ayres Lewis costs, ranging from everyone from Mr. Loud to the resident engineer on site to this day finishing up the project.

Member Capello asked if Council usually got a backup, maybe the invoices from the geotechnical services.

Mr. Loud answered yes; Ayres Lewis hadn’t actually invoiced for that yet because they didn’t have the authority from the City to do that yet; he said they were issued a PO originally for an amount which they actually exceeded last Fall; at the point they were approaching exceeding that number while the primary project was still under construction, the installation of the water and sewer and the beginnings of the road project, they identified that they would exceed that and only billed up to the actual current PO.

Member Capello asked if it was a not-to-exceed contract.

Mr. Loud answered that it was a contract that was tied to a percentage of construction for the original scope of work, as identified. The scope of work was added onto with several different additions that occurred at different times throughout the construction period; also the actual identification of Ayres Lewis while they were out in the field and working closely with the City Engineering Department at the time on the fact that Pioneer Meadows in particular really had bad drainage issues that had to be addressed during the completion of the project that weren’t addressed in the original design, the original design not being their work.

Member Capello asked if Mr. Loud was talking about the design for the road.

Mr. Loud answered not for the main road portion. He said the problem was that they were blending two projects; the 2003 Roads Project was designed by Ayres Lewis and the Pioneer Meadows Water Sewer Storm and Roads Project was designed by JCK. Ayres Lewis was asked to do the design administration on that, which was basically working with the contractor, providing all the resident observation during construction all the way through to completion of all the restoration, and then all the geotechnical work as well was under that contract. Mr. Loud said that the funding for the roads portion of Pioneer Meadows came from the 2003 Road Project, so it was a kind of cross-over funding, which was part of the complication, unfortunately.

Member Capello said he wanted to see the backup; there was a meeting next Monday. He just wanted to see the backup next Monday to see where it came from.

Mr. Loud offered to generate an invoice for their services up to that amount that reflected the actual work done by their employees and the geotechnical part.

Member Capello asked what he meant by "generating" an invoice.

Mr. Loud answered that they had the time accounted for; the normal process of things would be they accumulated time at the month and then they invoiced at the end of the month. He said that process stopped last Fall when they started exceeding the original PO; they started communicating with the City Engineering Department at that time for an increase in their budget. He said it had taken until now to get it to this point, unfortunately.

Member Capello stated that he wanted to see Ayres Lewis backup and the original PO to compare apples to apples.

Member Paul asked if Mr. Loud was telling Council that the Engineering Department asked Ayres Lewis to do more work out of the scope of that project.

Mr. Loud answered that for portions of that, he didn’t know if it was the Engineering Department or Mr. Pearson’s department, the City needed some additional projects added to the 2003 Roads, that was part of it. He said the City didn’t really ask Ayres Lewis to do anything additional for the Pioneer Meadows project, but they identified in the course of construction additional scope of work that had to be undertaken to protect the interests of the City and to get the project built properly. He said a lot of that was the geotechnical effort, because there was a lot of bad ground out there that had to be accommodated and had to be tested, analyzed, and reviewed as the contractor was building the project, just in the due course of things. He said it also dramatically increased the amount of time that Ayres Lewis had to spend observing the project, quantifying the components of the unit price contract just to get it done. He said that was just to get them through building the project so it could be operational and you could drive down the roads.

Mr. Loud said that since the first of the Spring of this year Ayres Lewis had been out there on a regular basis helping the City get the contractor to finish the restoration work. In the process of doing that, there had been an inordinate amount of drainage improvements that had to be made to accommodate almost every single individual resident, because there were private drainage systems out there almost at every house: sump drains that came out and were piped under the culverts, under the drainage ditches to other devices that were unknown by the designer of the project. He said they had been basically designing the storm work as they went in trying to finish up the project and make the thing work the way it was intended.

Member Paul appreciated that explanation; she had a conversation with Mr. McCusker specifically about the sump pumps being left out and untied in different phases of different projects. In the subdivision she lived in, in Addington and in several others, what happened was they were done in phases, but the developers didn’t connect the drainage systems, so they were having some difficulty with the phases being inclusive in the drainage system as one. She knew that they specifically were asking for clarification and some help in that area; she knew that there were several areas of poor soil, one of the reasons they knew they lived on clay, but also that some of the roads were deteriorating at a faster rate. She did remember a project that Council had to increase the amount, she believed it was to an engineering firm, not this one, saying there were additional soils that had to be brought in. She asked if it was JCK that the Council awarded more money for because of Taft Road.

Mr. Helwig answered that Village Oaks was the one that was brought to mind. There was bad soil on Taft Road.

Member Paul thought there were situations that the City came across because of poor soil and the drainage situation that was across the City; she would be in support of the motion.

Member Lorenzo asked Mr. Loud if Ayres Lewis knew about the bad ground conditions before getting in there.

Mr. Loud answered no.

Member Lorenzo asked if there weren’t any soil borings taken or anything like that.

Mr. Loud answered that there were some soil borings taken, but typically they’re done at 300 to 500 foot intervals; they didn’t order them; they didn’t pick them; they didn’t assign them. He said unfortunately they were in a bad situation to begin with because they were trying to execute someone else’s design, working with the information made available to us. He said the contractor found in the construction of the project at some of the places, where even if you went out there today you’d see evidence of it off the project where there were really bad soils. He said when that happened, they had to bring the geotechnical people out there and make sure the contractor was getting the compaction on a regular basis to ensure that the road would have the foundation it needed when it was completed.

Member Lorenzo asked who designed the project.

Mr. Loud answered that JCK designed it.

Member Lorenzo asked if what he was saying was that there wasn’t any information about the condition of the soil.

Mr. Loud answered that there were some soil borings provided.

Member Lorenzo stated not what Ayres Lewis would have done.

Mr. Loud said was hard to say because he didn’t review the soil borings; the normal process when they designed it was that as you were going along, depending on the uniformity of the soil borings from point to point to point, you may condense those borings and do it more frequently if you saw varying soils. He said you had to do more them frequently if you were going to count on them or you build more cushion or structure into the design of your unit price structure to accommodate that.

Member Lorenzo thought the City had run across the issue before, in Village Oaks, with the sub base, and she thought the City had already determined that they were going to do the soil borings necessary to know what they were getting into so the City didn’t have cost overrun. She asked Mr. Helwig what happened in that case.

Mr. Helwig said that what he recalled in terms of the Neighborhood Road Reconstruction Program 2003, there was a separate company, not one of the engineering firms that had been mentioned, that was awarded the soil boring contract.

Mr. Pearson thought in 2003 it was separated.

Mr. Helwig said that it was separated out and overseen by the City Engineer before the City went out for design services for the Neighborhood Road Program. He wasn’t sure about the handoff here.

Member Lorenzo asked if it was best in these situations to have the contract person that was awarded that actually do the soil borings. It seemed that they had spent more money now because they had to bring in the geotechnical people than the City would have spent if the soil borings had been done right to begin with.

Mr. Helwig stated that in Village Oaks there was an engineering firm that had or had not done the soil borings, then the City got into the situation it did. He said it could be done either way.

Member Lorenzo stated that the City needed accurate soil borings and good information from those soil borings. If the companies that the City hired weren’t taking them as frequently or in the locations that were needed to get a good, solid base of what the City was dealing with, what good was it then?

Mr. Loud didn’t want to suggest totally that the work done previously was inappropriately done; it was just the nature of, unfortunately this glacially driven soil geology that we have around here that could become variable from you to me; they ran into pockets of that out there. That was part of the reason why the storm system in that subdivision had had troubles in the past because of conditions in the old storm sewer that had allowed that pipe to deteriorate because the soils were variable.

Mr. Loud said the next thing that could help with this sometimes with budgeting, but it was philosophically in opposition to the way Novi did work right now, was to put the burden of the geotechnical work during construction on the contractor. He said that was their standard way of doing it; it wasn’t every community’s standard; it was not every firm’s standard but that was one way to shift the burden to him. Then if he had to prove that he was doing compaction, it was his cost and he took that risk, because he knew the soil condition may be even better than we did just because it was his business.

Member Lorenzo said that might be something Council might need to consider; perhaps the City had a new engineer coming on board. Maybe that needed to be discussed further. Again, working more efficiently; she certainly didn’t want to throw more money than the City needed to at these things. She said the City spent good money on the soil borings and then had to bring in additional information which was costing the City more. She felt like the City was double spending on the same thing.

Member Lorenzo said that she would like to have the information that Member Capello had requested, so she would be amenable to postponing it to the next meeting.

CM-04-11-401 Moved by Lorenzo, seconded by Capello; MOTION FAILED: To postpone the Approval of Contract Amendment for $31,953 with Ayres, Lewis, Norris & May, Inc. for 2003 Neighborhood Road Reconstruction, including Pioneer Meadows Road Projects, for new total contract of $214,130.11.

Member Nagy reminded everyone that some of the soil borings that were done in the past were done in January, so she didn’t want to debate this but she thought it was a great idea that the burden of geotechnical services went to the contractors so they could prove he was doing compaction. She didn’t think some of the contractors the City had dealt with were doing compaction at all. She said she would support a motion to postpone.

Mayor Csordas asked Mr. Helwig if the bill should be paid; if it was done correctly and should be paid. He said if Mr. Helwig felt they should be paid, he believed they should be paid also.

Mr. Helwig answered yes.

Mayor Pro Tem Landry thought they should be paid; he thought that it was something that was unforeseen. The City hired engineers to oversee construction and their job was to see that it was done right; if they’re going to make sure it was done right, they needed to make changes as they saw them in the field, that’s what the City hired them for.

7. The approval of Consent Judgment with Fivegees Investments to clarify City right-of-way at the southeast corner of Thirteen Mile Road and Meadowbrook Road.

Member Capello said it seemed to be a simple matter; somebody purchased the property at tax sale and there was a question of whether or not the City had the right-of-way, so they were basically going to give the City the right-of-way. He thought that in Mr. Gillam’s letter, he identified the fact that there was going to be language in the Consent Judgment that guaranteed the City the right-of-way along Thirteen Mile and Meadowbrook but he didn’t see that language in the Consent Judgment.

Mr. Schultz stated that the way they set it up was the recitation in the legal description described where the right-of-way starts, ends, and that was sufficient for their purposes.

Member Capello thought that, too, but they started off on page two in that paragraph, relative to fee simple title, they just give us the parcel ID number, which would indicate the entire piece as to the Defendant City of Novi. He was looking for Mr. Gillam’s specific language saying that it didn’t affect the City’s right-of-way; he wanted to know if there was any problem with putting that in there.

Mr. Schultz answered that there wouldn’t be any problem with adding a specific paragraph, but, again, he thought the way they did it if he looked at the legal description continuing onto page two where it talked about doing the metes and bounds from the centerlines of the two roadways, describing the right-of-way as 66 feet and 120 feet, but there wouldn’t be any trouble if he wanted to make that a "subject to"; it certainly was the intent.

Member Nagy agreed with Member Capello and wanted to add something in there for clarity.

8. Consideration of Water Monitoring Agreement to provide amended calculation of usage for the new Novi Expo Center.

Blair Bowman, representing TBON, 43700 Expo Center Drive, stated as a water monitoring agreement, that was something under the arrangements the City had the right to request that they enter into when dealing with a new project like this. He said that when they negotiated this, they talked in terms of the normal method of calculation being a peak four-quarter period, that was the typical approach, and with the unique nature of their business, being that there were oftentimes single-use events that happened only once that might occur in a particular period or with rotating schedules being oftentimes within the three to five year range with rotating cycles of other conventions and events that a more appropriate and reasonable method would be on an average calculation of the entire period of time. He thought it would also be reasonable in that case because of the fact that they were talking in terms of a business operation that was not a start-up or something that was going to be moving in and ramping up and then getting to a peak period of time or normal period of time at their peak. He said theirs was something that would be largely moving over to a new operation and facility but in a start-up fashion from the standpoint of moving a business from one location to another. He would be happy to answer any questions.

DISCUSSION

Member Nagy asked Mr. McCusker how the City monitored water.

Mr. McCusker answered that it was usually based upon the number of anticipated taps but in a usage like Mr. Bowman had on the Expo, he thought it was largely going to be based on the type of events, how many events. The first year could just be the newness of the Center, too, and he could have an unusual amount of events happen the first year. It was usually a three-quarter or five-quarter guide-on, taking a look over that length of time to see when the most usage was during those times. Again, when he said there was not a real good view of it because the facility was nothing like the City had here now in size or in structure, it would mean what type of events: a mini circus or something with a lot of horses, things like that could use 10 times as much water as just a car show; it was those type of things because of the odd usage of the facility, it was hard to really gauge.

Member Nagy didn’t understand why the City needed to do this. She wanted to know what benefit there was to the City of Novi to do that?

Mr. Bowman asked Member Nagy, to monitor the water? He said it was brought to his attention that the City would require them to enter into it; then, when talking in terms of the normal procedure that you follow, it concerned him that it might give a skewed identification of tap usage.

Member Nagy asked who brought it to his attention.

Mr. Bowman answered that he thought it was Ms. Smith-Roy and then other members of the Administration talked in terms of that.

Member Nagy asked if the City had done that before and, if the City had, what was the reason it was done, from a financial aspect.

Ms. Smith-Roy answered that a monitoring agreement was entered into in the event where it was not clear and there was no guideline by the specific document that the City used to look up the number of tap units that an entity was going to use, when it was not specifically identified, it was the opportunity of the individual business or the City to request that we enter into a monitoring agreement to determine the number of taps based on water used during a three-year period. The structure of the monitoring agreement that was provided for in the ordinance stated that it was the highest four quarters in a three-year period dictated what the number of tap units would be used to do the final calculation at the end of the three-year period.

Mayor Csordas asked if it was consecutive four quarters.

Ms. Smith-Roy answered that it was consecutive. The second part to the question was, had the City ever entered into changes in monitoring agreements; yes, the City had, but for other reasons. The last two examples that she was able to find was in 2003 and 2001; in those cases what the City was amending to the agreement was not to lien the property, but instead accepted a letter of credit rather than put a lien on the property; it was unrelated to the computation of the monitoring agreement itself.

Member Nagy asked if there was a savings generated by one business when doing this, where did that savings that the one business generated, where did it come back to the City financially.

Ms. Smith-Roy answered that there wasn’t really a savings, per se. She said that it was the Water and Sewer Fund, not the General Fund, and it was based on usage, the actual volume of water being used was used to calculate the number of taps; so there wasn’t really a savings feature there. She said there may be in the normal course of business where the City didn’t enter into a monitoring agreement, and those savings would flow through the Water and Sewer Fund; what she meant by that was if they had a restaurant that had X amount of restroom facilities and the City was charging them two tap units and they were really using seven, yes the Water and Sewer Fund was eating that. The City didn’t enter into a monitoring agreement with those normal businesses.

Member Nagy asked if the City had a monitoring agreement and Mr. Bowman’s property had 19 taps and he actually used 14 or actually used 30, that was what it was going to monitor. Then once it was monitored, then the correction was made.

Ms. Smith-Roy answered that was correct, either a refund was given or additional payment was made.

Member Paul asked where the Expo Center currently gets its water.

Mr. Bowman asked if she was talking about the current Expo Center.

Member Paul answered yes.

Mr. Bowman answered that was under the Novi Expo Center, Incorporated and the existing Expo Center was on a domestic large service commercial well system that supplied the water tower.

Member Paul asked, the one that said Expo Center on it? What was going to happen to that, by the way?

Mr. Bowman answered that it would remain in place and services that property and facility.

Member Paul stated that the City couldn’t judge what the Expo Center was using now because of the well system.

Mr. Bowman answered that was the whole point; the City had the right when it felt there was not enough information exacted for it. Even though they did provide a decent amount of information on other similar types of properties, the City had done its own research, there was differing information, so it wanted to enter into this agreement. He was just looking at it from a reasonableness perspective in trying to get what a more reasonable and accurate reflection would be; that would be over an average period.

Member Paul asked how many bathroom stalls there were going to be at the new Expo Center.

Mr. Bowman said that he wanted to say 80 or 85; again, he didn’t have the exact numbers in front of him. If it helped, in the allowable amount of taps that they had associated with the property, it was like everyone attending could go to the restroom facility twice and have two pops in any given day, 365 days a year; they were pretty confident they could handle the situation. They were looking very seriously at water saving devices, not only limited flush mechanisms but actually in a considerable amount of the urinal facilities being waterless that were now being installed in a number of public facilities, stadium-style facilities and things like that around the country.

Member Paul asked how many bathrooms were at the rest area.

Mr. Bowman didn’t know; but it was another reason why they thought it reasonable in the calculation because that facility was there, even though maybe not the amount of individuals coming for any events that they had, but certainly on a day-in and day-out basis, 365 days, 24/7, that was what people were utilizing that for; it was heavily utilized.

Member Paul didn’t understand why the City had to enter into an agreement. If the City had a one-year agreement and looked at it on a quarterly basis and averaged it out on an annual amount per quarter.

Ms. Smith-Roy answered what happened was the City monitored the activity each quarter for entire three-year period. Under the normal terms of the agreement, the City took the highest consecutive four quarters and used that to determine the maximum number of tap units that that facility needed. The only time it was adjusted was if a new business came in place.

Member Paul asked if the City entered into that 12-quarter period when normally it was in a 4-quarter period, what the benefit to the City in that regard was.

Ms. Smith-Roy answered that there probably wasn’t a benefit to the City.

Member Paul asked what the down side would be.

Ms. Smith-Roy said the down side would be in the numbers if there was a significant difference from any one year to the highest year, then the full amount of taps wouldn’t be recovered.

Member Paul asked if Ms. Smith-Roy was comfortable that the City did that on an annual basis and looked at it from an entire year and felt that the City was being fair and averaging it out for a 4-quarter period.

Ms. Smith-Roy asked, of the existing monitoring agreement?

Member Paul answered not on that, not on the 12-quarter period, but it the City had a 4-quarter period.

Ms. Smith-Roy asked, if the City took the highest?

Member Paul answered yes. Did she feel that it would be fair to this business and fair to the City, that it would recover all the taps and would also be able to negotiate between the highs and lows.

Ms. Smith-Roy answered yes. She said it was more of a policy discussion for the Council than a mathematical one.

Member Paul stated that she really wanted to support all businesses in this area and really felt that the City had helped this business partner in other avenues, by the tax abatement and the easement the City paid and sewer taps that he had in that area, so she really felt that the 4-quarter period was what she would support. She really felt that the City had to be fair to all of the business partners in the community; she wished him well but would not be able to support the motion for a three-year period because she wanted to make sure the City recovered all of its water taps.

Mayor Pro Tem Landry asked Ms. Smith-Roy if the goal of the estimate to be accurate? Wasn’t it true that the longer period of time used to make the estimate, the more accurate the estimate was?

Ms. Smith-Roy answered that it wasn’t an estimate about usage. She wanted to back up. The computation was for the one-time capital charge; it really didn’t have anything to do with volume. So in the goal of all of the calculations for tap units, it was the maximum amount that entity would ever use, just like building any portion of your infrastructure, you want the building to be built for the maximum size you’re going to accommodate, not the average you’re going to accommodate.

Mayor Pro Tem Landry asked if the Expo Center during the period that the City used had the largest expositions ever in its history, that would be not an accurate estimate, correct. Or if it had the lowest, it would also be not an accurate estimate.

Ms. Smith-Roy answered that was correct. She believed that was why Council had adopted the highest work order during that period, to give some fairness or equity rather than pick the very highest. She thought that was the reasonable approach was to take the highest four consecutive quarters to get the most accurate usage period.

Mayor Pro Tem Landry asked if it would be even more accurate if it were extended over a 12-quarter period.

Ms. Smith-Roy answered that the usage would be accurate.

Mayor Pro Tem Landry stated that she just said Council used the highest four to be the most accurate.

Ms. Smith-Roy answered because she believed it was the most accurate for the capital charge, not usage charge.

Mayor Pro Tem Landry asked if she thought using a 12-quarter base would be even more accurate for a capital charge.

Ms. Smith-Roy answered no, because she thought that in the event that there were four consecutive quarters that were very low, it would soften that number and lower the number of tap units.

Member Lorenzo asked Ms. Smith-Roy if she was saying that she didn’t support what was being proposed to the Council this evening.

Ms. Smith-Roy said that she was saying from a financial standpoint, it was not going to get the maximum dollars for the Water and Sewer Fund, in her opinion.

Member Lorenzo asked what would.

Ms. Smith-Roy answered the recommended monitoring agreement the way it was intended to be used.

Member Lorenzo stated that was the one she would support, for those reasons.

Mayor Csordas asked Ms. Smith-Roy if she wanted to say something else.

Ms. Smith-Roy answered there were other reasons, obviously, for attracting businesses in the community, so that was why it was a policy discussion as well. It wasn’t just about the numbers.

Mayor Csordas stated that as he understood, was part of the process that typically you looked for like usage in the City, state or area and then tried to apply that.

Ms. Smith-Roy answered yes. As Mr. Bowman mentioned, they both looked at different facilities throughout the country that they felt were comparable.

Mayor Csordas asked how many they found in Michigan.

Ms. Smith-Roy answered virtually none. The Cobo facility wasn’t really comparable one.

Mayor Csordas stated that it was an unusual use; that was easy to say for Novi. It looked like it was almost an unusual use for the state of Michigan, so there was nothing to compare it to. He tried to think of some of the larger projects that the City had in the last few years: there was an ice arena and a senior facility. He asked if there was any way to judge those two fairly large projects, as compared to this.

Ms. Smith-Roy stated that they tried to do that comparison, but the usage was different. To give an idea, the City did enter into a monitoring agreement with ourselves in both of those cases. They entered into the agreement with the Ice Arena with 23 units that turned out to be using 27 units; in Meadowbrook Commons the City entered into an agreement for 42 units and it was using 58 units.

Mayor Csordas stated that at the end of the three-year period, those two entities had to make up the difference.

Ms. Smith-Roy answered that was correct.

Mayor Csordas asked if that was what the new Expo Center would have to do also.

Ms. Smith-Roy answered yes. She said there was an exception on the Meadowbrook Commons when they installed the well, they extended the period to see if there was a skew in the usage as a result of using a well versus irrigation for that property, since it was significant.

Mayor Csordas asked about the Ice Arena and the Senior Center, they probably weren’t a good comparison because the shows were mostly Thursday or Friday through Sunday.

Mr. Bowman answered that would be correct; he would say 65 to 70 percent of their events were in that vein. Likewise, it really was difficult to look at any of these "standard" types of uses, including the ice arena because their usage was constant and they also had the Zamboni machines, the chiller units that took up a considerable amount of water, and the Expo Center didn’t have those. So, it was unique; just as a point of reference even trying to look at a Cobo Hall or anything of that nature pointed out the very unique nature of this again in that they didn’t pay any water bills; they were all publicly owned. He said it was a situation again where it was an anomaly in that regard in the state, and one of the few in the country. All he would also say was that Mayor Pro Tem Landry said what if they had the single largest situation come in and they were looking at a concern with the Super Bowl coming in. For a very short, intense period of time, they could use a large amount of water, and all of a sudden their peak usage period was fixed and after a year and a half of operation in the community would be fixed for the remainder. That’s what kind of started to isolate for him the inequality of that. So, he looked at it from a fairness and uniqueness standpoint and would respectfully request that Council consider that.

Mayor Csordas stated that he assumed he would hit the ground running, that if they opened in July, any events that opened in a prior July would likely move over there; he didn’t know that for a fact. He asked if all of his shows were annual; did he have anything that came in every other year or every three years?

Mr. Bowman answered that there were a number of shows that were currently done on cycles of three- and five-year situations; many of them rotated amongst various locations in the state, various locations in the Midwest and various locations in the country. In addition to those isolated, one-time style events that they enjoyed and liked to do, there were schedules and rotations that occurred that would be outside of the three-year cycle that could again happen in one situation but on the very next calendar year or the next two or three calendar years would not occur.

Mayor Csordas asked Ms. Smith-Roy on the 19 taps that the facility already had, they were there for the rest area, those were transferred to this new facility. He asked if there was a cost to the Expo Center.

Ms. Smith-Roy answered that there was no charge to the Expo Center for the 19 taps for the sewer; they did pay for the 19 water taps. She said it affected both in making the determination; the number of tap units affected both water and sewer. She said the capital charge was related to both of those.

Mayor Csordas asked if they paid for the water but not for the sewer.

Ms. Smith-Roy answered that the 19 tap units would affect both water and sewer; it would affect the capital charges for both water and sewer.

Mayor Csordas said that his position on that was that it was a truly unique project; he thought what might happen there was there could be a spike because there was an every other year use or an every third use. He believed it was a zero sum gain the City was playing here, either way? He didn’t know if anyone here could figure out which would be more advantageous or disadvantageous to the City; that was the only thing that Council was concerned about. Council was always concerned about new business. He didn’t think that the three six month averages was unreasonable that was being requested here, so he would support that motion.

Member Nagy asked if the City was going to do a water monitoring agreement was for the fun park.

Ms. Smith-Roy answered that she did not know; she didn’t know if they had requested that but she could research that and let Council know that.

Member Nagy stated that Ms. Smith-Roy’s recommendation was the normal, standard thing that the City did. Then she ended up with the comment that it was a zero sum gain for everybody. She didn’t understand that, so she would not support the motion, based on what Ms. Smith-Roy said.

9. Resolution for the Approval of the Deficit Elimination Plan for the Ice Arena.

10. Approval of Resolution to authorize Budget Amendment #2005-5.

J. Adoption of Policy reconfirming the past practice governing the employee purchase of prior governmental service.

Member Gatt asked Ms. Smith-Roy if the proposal would cement the past practice that had not been in writing before that allowed employees to purchase prior municipal and/or military service credit toward their MERS pension.

Ms. Smith-Roy answered that was correct.

Member Gatt asked if that practice cost the taxpayers one thin dime.

Ms. Smith-Roy answered that except for two exceptions, it did not. She said they were unique exceptions in those cases where a contract had either an F50 or an F55 rider; those riders were riders that allowed you to retire early with additional years of service. She said there could be a potential for cost of up to five years of medical coverage; that would be the maximum exposure.

Member Gatt stated those were not fairly common.

Ms. Smith-Roy answered no.

Member Gatt asked how many employees in the past 20 years, to her knowledge, had purchased time.

Ms. Smith-Roy stated that she could speak to the last 13 years, and answered that less than 10 employees purchased time.

Member Gatt asked if Ms. Smith-Roy had ever heard of generic time.

Ms. Smith-Roy answered that it was a relatively new offering since 1997 of MERS.

Member Gatt asked Ms. Smith-Roy to explain what generic time meant.

Ms. Smith-Roy stated that generic time meant purchasing years of service, any kind of work service, not prior governmental and not military.

Member Gatt stated that in layman’s terms, if an employee started with the City of Novi right out of college and worked 24 or 25 years, was nearing retirement, and wanted to buy four years toward his MERS pension, he didn’t have any prior military service or any other municipal service; that was generic time, correct?

Ms. Smith-Roy answered said she believed it was, as long as he had worked somewhere. She believed that he had to have some work experience, but she didn’t know that for a fact; that was a new request. She had not heard anyone buying time that didn’t work somewhere.

Member Gatt he worked for the City of Novi.

Ms. Smith-Roy answered that Member Gatt was saying that he wanted to purchase years of service and came out of college. She asked if he worked or not worked. If he went to a job first and worked somewhere four years, yes. Yes, if he went somewhere else nongovernmental.

Member Gatt asked if somebody started with the City of Novi right out of college and worked any amount of years and wanted to buy time; let’s back up. He got out of the military after spending six years in the Marine Corps and then worked for the City of Novi, worked 24 or 25 years and wanted to retire, he could buy that military time.

Ms. Smith-Roy answered that he could buy up to five years of military time.

Member Gatt said that the other employee who didn’t have military, just started with the City outside of college, he or she could buy, according to MERS, generic time. It was not military, not past municipal time. He said the same expense or lack of expense would be incurred by the citizens, was that correct? He asked if generic time was the same cost as the military or prior municipal service.

Ms. Smith-Roy answered yes; the computation was actuarially based on the individual employee.

Member Gatt would move that, if the City Council was to adopt this policy, that it include the term "generic time" which would give an employee who didn’t have prior military experience, by the way this didn’t affect him, he was already retired, but it would allow an employee who didn’t have prior military service, that was most people today. When he hired into the Police Department 30 years ago, most people had military experience; today most don’t. Generic time would allow the person without military and without prior municipal service the same benefit that Council was prepared to give to the other two classes of individuals. If Council passed that; if employee A worked for Royal Oak or any other city for two to three years and didn’t like it and came to Novi, then that person would be rewarded by having the ability to purchase prior municipal service; again, it didn’t cost the City money, but he or she would be rewarded. He said that by excluding the person who didn’t have prior municipal service or prior military service, he didn’t think the City was being fair. He didn’t think it was fair to the employee who started out with the City of Novi, worked his whole career and then wanted the same benefit that the City was prepared to give those other people.

Mayor Pro Tem Landry asked Ms. Smith Roy two scenarios following up on Member Gatt’s discussion to see if he understood this. He asked if two people get out of college with a degree and one person went to the City of Novi and worked for 25 years; the second person got out of college, worked the same 25 years as the first employee but employee No. 2 had worked five years previously at another city. Employee No. 2 under what was being proposed could purchase up to that five years toward his retirement. Employee No. 1 could not, although both had put the same time towards the citizens of the City of Novi, correct?

Ms. Smith-Roy answered that was correct.

Mayor Pro Tem Landry stated that if Council adopted what Member Gatt was proposing, was there any negative cost to the taxpayer by allowing employee No. 1, who had put the same 25 years for the City of Novi to purchase that same five years?

Ms. Smith-Roy answered except for the exceptions mentioned at the beginning regarding retiree health care, there was no other cost.

Mayor Pro Tem Landry asked what extra cost would be involved.

Ms. Smith-Roy answered that the maximum potential cost of purchasing years of service came in the scenario where the City had the riders to retire early, where there was an F50 rider where at age 50 you could retire with 25 years of service, or an F55 rider where at age 55 you could retire with 25 years of service. The City could potentially be paying medical benefits up to five years sooner than the City would have otherwise.

Mayor Pro Tem Landry asked how often in her opinion that would occur.

Ms. Smith-Roy answered that she couldn’t speculate because she would imagine, from a personal standpoint, she would opt to do that if she had that available to her as an employee. She said that if she thought she could collect her medical retirement early and leave at an earlier age; so she couldn’t possibly guess how many people would want to do that. She would guess that it was a small number because it was very expensive to buy years of service.

Mayor Csordas asked how much it was.

Ms. Smith-Roy answered that it ranged; if you were a relatively young employee at the beginning of your employment, you might only spend $2,000 to $3,000 per year.

Mayor Csordas said it was like term life insurance.

Ms. Smith-Roy answered yes.

Member Nagy said before Council went any further, she didn’t think the subject had been researched that much; with all due respect, she didn’t want to make a rash decision. She wanted to ask for Mr. Helwig’s thoughts on that.

Mayor Csordas asked Ms. Smith-Roy if the contributions went into MERS.

Ms. Smith-Roy answered that was correct.

Mayor Csordas asked if they were tax dollars, City tax dollars.

Ms. Smith-Roy answered that they were employee contributions.

Mayor Csordas asked when you bought additional years, did you have increased benefits? He said the term of the benefits was increased, which would be in essence an increase in financial benefit.

Ms. Smith-Roy answered that was correct.

Mayor Csordas asked if that was paid by the taxpayers.

Ms. Smith-Roy answered for the pension benefit, it was not; it came out of MERS.

Mayor Csordas stated that that might answer an earlier question as to whether it cost the City anything. He said it was a separate entity; he would watch it closely, also, but it was the classic sum gain for the taxpayers of the City. He said the taxpayer of the City didn’t have any liability or contribution to this fund, except for the potential medical benefits.

Mr. Helwig said that with his knowledge of pension systems, this was the first place where he had encountered "generic". He said the public purpose for being able, that he was aware of, to buy military time or other municipal time, which had been the practice here, had been to aid transferability, particularly with municipal service. For example, the City had just hired someone from Rochester Hills; he didn’t have those four years in the City pension system but he had the opportunity to buy them. He said that was a recruiting tool. He said there had been value given in the public interests, if you will; he realized that was sometimes in the eye of the beholder, but that was the purpose. He said one other point was that when someone came out of college and just came to work at the City, he would hope he would have to work, even for generic time, to buy it; you couldn’t just grab five years where you didn’t work. He said he was concerned about the rush to retirement; it seemed like the City had been dealing a lot with retirement issues lately, but it was important and he wanted to get this policy in front of Council and sanctioned because it hadn’t been. He said there were people now very interested in this that had administrators who had the ability to retire at age 55.

Member Nagy would not support the motion; she listened to our City Manager and didn’t want to make a gigantic decision when there was not enough laid out.

Member Gatt added that this was on the Consent Agenda; Council would have passed it that would allow two classes of individuals to have this. His motion merely added people who didn’t have prior military experience or prior municipal service to be included in this benefit. He said it didn’t cost the taxpayers anything; he saw it as a fairness issue.

Mayor Csordas stated that he agreed with Mr. Helwig that you should have some work time somewhere to be able to buy generic time.

Ms. Smith-Roy said that she believed that was the case; she’d have to get back on that.

Mayor Csordas asked her to confirm that at the next meeting.

Member Lorenzo was concerned about the medical benefits that could be coming five years sooner; that could affect the City’s budget. She said it was like Council wanted to do everything; obviously there was only a certain amount of money here. Just the things discussed tonight: accepting the streets and what that meant for the DPW in equipment and personnel; attorneys wanted raises; now employees could retire and the City had to pay benefits five years sooner. She said there was only one pot of money; Council had to remember that. She looked at this very reluctantly to go to at all; how would that affect the budget? She said she was in favor of postponing the motion.

1. Temporary relief from the Sign Ordinance for businesses during the upcoming Holiday shopping season ending December 31, 2004 – Member Capello

Member Capello stated that it was categorized as temporary relief; he didn’t know whether he would look at some kind of pilot program or some type of waiver variance or special use, but what he was thinking was that businesses had suffered with all the construction up and down Grand River, Novi and Ten Mile Roads, and in the past few years Novi’s tax base was strong in retail; however, its retail merchants had suffered, even at Twelve Oaks Mall. So he was trying to get a Thanksgiving to Christmas Eve ordinance passed to allow limited signs for retail and service commercial businesses. He wasn’t looking for industrial or manufacturing, just retail and service businesses. He was looking either for a two-sided sign the size of a campaign sign or a lot of businesses have A-frames that are on the sidewalk in front of the business – pretty much the same size, 2’ by 3’ two-sided temporary signs; one sign per business which have to be physically related to the location of the business; have some of the restrictions that the City had for political sign ordinance: they had to be so far away from the right-of-way; couldn’t have off premises signs. He said it would be a temporary relief, kind of a Merry Christmas to the businesses; thanks for putting up with this.

Member Nagy stated that if that was a motion, she agreed.

Mayor Pro Tem Landry said that he agreed and thought it was very important that the commercial signs be the same size as the City’s political signs, because under the First Amendment the City wanted to make sure that all of the political signs had the exact same opportunity as any commercial signs did.

Mayor Csordas stated that he thought there was a consensus on that.

Member Capello wanted to hear from Ms. Uglow on that issue.

Mr. Pearson, Assistant City Manager, asked Mayor Csordas if the intention was to have this City-wide; there was talk about some specific corridors. Frankly, while the City had been through the construction, it had been hard to define that; there were people further down Grand River that said that they had had some impact, too.

Members Capello, Nagy said it should be City-wide.

Cindy Uglow, Director of Neighborhood Services, said that some months ago with Code Compliance was now part of the Chambers Sign Ordinance Revisions and Recommendations; so they had met. They also met with Ginger Barrons for the realtors’ input, and they had just received a letter from John Bowen’s part of the committee of the Chamber listing the requested revisions to the sign ordinance; there were approximately six. Neighborhood Services with Code Enforcement had three pages of housecleaning and revisions. She said that part of the revisions were that the City knew that commercial and industrial had suffered through the construction period; the City wanted them to consider multi-tenant, standardization of the size, the font, the format of the signs; they just wanted consistency. She said there were over 1,500 businesses; she wanted to know where to put a lid on some of that. She said the City had been extremely generous with waivers during the construction time, even with the City going out of its way to make them personalized; she understood the businesses and sympathized, but if Council could just do this while they met to get a consistency for those waivers, that would help Neighborhood Services out a lot. She didn’t know where Council would put a lid on; the businesses in the Mall seeing some of the places at Novi Road and Grand River; Council would need public hearings if this was some sort of amendment. She said Council really needed to be careful; City ordinances were black and white; there was a little bit of gray area the had been working with. She said they had a meeting this month with Tom Schultz; they had the draft ready for the attorney to review.

Member Capello said the next 30 days she could drive by the sign this way or just wave; just say Merry Christmas.

2. Parks and Recreation Meeting – Member Capello

Member Capello stated there was a letter in Council packet from Parks and Recreation asking for a joint meeting on December 9^th at 7:00 p.m.

There was a general consensus to have a joint meeting with Parks and Recreation on December 9^th from 7:00 p.m. to 8:00 p.m.

3. Galway Drive – Member Nagy

Member Nagy stated that several people had written her; Mr. Pearson was privy to some of the information and some of the email, as well as others in the City. She said she was getting distraught with some of the subcontractors that the contractor hired; she thought the City should look at the contractors that it hired and keep a list of the ones that hired decent subcontractors and the ones that didn’t. There was a real problem with that. She wanted to make sure that Mr. Moore’s sprinkler problems and mailbox problems were completed. She had received an email that Mr. and Mrs. Young’s mailbox wasn’t in. With all due respect, if the City could just take care of these people; they were taxpayers.

Member Nagy stated that oftentimes the City seemed to treat those who came to the City to build something or whatever, a business, much better than our own residents who had been here for years.

Member Lorenzo shared the previous speaker’s concerns. She said she used that street all the time and it took a long time to finish. She wanted to know administratively what happened; why were the streets completed and then there was such a delay in the restoration work being done.

Mr. Pearson answered that the contractor, John Carlo, Inc, had a landscape subcontractor, which was typical to have a subcontractor, that subcontractor left and John Carlo was in the process of getting someone else and then the original one came back, so they were within the limits of the contract but too far out, from our opinion. They talked about all of the City contracts having tighter performance criteria.

Member Nagy stated that this was not a blame thing on the Administration, but she had a grave concern that it was not the first time that she had brought up resident issues and the residents in the City seemed to be second class citizens. She said these things should have been done all along, the tightening up, etc. She personally never wanted to see that subcontractor here again; it was not the first time they had not done an adequate job.

Mr. Pearson responded to the point made of treating people as second-hand citizens; obviously that was not what Administration was about; they were all about getting out and seeing things for themselves. There had been a ton of work with all the projects going on. Administration didn’t try to make judgments on that; they just try to get the work done.

Member Nagy stated that she was not saying he personally was treating anyone like second-hand citizens; she was saying that was what the residents felt like. It was not something just about projects that happened in the City; it was about other things as well. For her personally, that was her first obligation.

4. The Screen at Lakeshore Park – Member Nagy

Member Nagy, again, with regard to a Mr. Stopinski here, she had gone out to see the area here. She asked who was in charge of the screening.

Mr. Klaver answered that Administration was having a meeting out there tomorrow at 11:00 a.m. with Mr. Stopinski; Mr. Auler was going to be there and Steve Printz, our forester. He said they had probably met a half dozen times with him to talk about the screening.

Member Nagy wanted to know if the City could just stick some bushes on his side of the fence at least to get that over with.

Mr. Klaver answered that the City had planted 20 evergreens out there.

Member Nagy stated that she saw them planted out there and she could see where Mr. Stopinski wanted his screening; she thought it could be simplified. She just wanted to see it done.

5. Reduction of the Water Level at Autumn Park – Member Paul

Member Paul asked Mr. McCusker about the reduction of the water level at the Autumn Park ponds; she and Mayor Pro Tem Landry were contacted by residents; she saw his October 28^th letter and wanted to clarify if there was going to be a meeting with the homeowners.

Mr. McCusker answered that the City had talked to Mr. Timmer twice; he was supposed to actually set the meeting up and had not gotten back in touch with the City. The DEQ was also involved in it now also, and Mrs. Tracey Jones in probably attending that meeting.

Member Paul asked that they be contacted again and maybe by next Monday, send out another letter asking them if they needed help in any way. She said they were very upset; she said there were a lot of things that they were promised and a lot of extra money they put in for their property that abutted the park pond and she knew they were very angry. She asked Mr. Helwig to help in that area to see what could be done for the residents.

Mayor Csordas asked if that was the property where someone took a log and shaped it to the size of that drain and blocked it.

Mr. McCusker answered yes; the City cleared it and someone went back and jammed it up again.

Mayor Csordas stated that was not good. He wanted to know if it met the DEQ requirement when the log was removed.

Mr. McCusker answered that it did.

Mayor Csordas stated that the log had to be kept out of there.

Mayor Pro Tem Landry asked when Mr. McCusker was meeting with the members of Autumn Park.

Mr. McCusker answered that Mr. Timmer was going to set it up, and he was going to call back to set up a meeting in this facility somewhere. Mr. McCusker was waiting for Mr. Timmer to call back.

Mayor Pro Tem Landry asked who Mr. Timmer was.

Mr. McCusker answered that he was someone who abutted the pond there and really had a stake in it.

Mayor Pro Tem Landry asked if Mr. McCusker was going to try to have a member from the MDEQ at that meeting.

Mr. McCusker answered that Mrs. Tracey Jones from the DEQ was actually coming to the meeting.

Mayor Pro Tem Landry asked to have all members of Council notified of the meeting.

6. Chip and Seal Roads – Member Paul

A resident contacted her who was on Crown Drive, on the north end of town. The resident said there was one more portion left on the chip and seal; that was to remove the very loose cinders. She asked if there was a timeframe in which the DPW would do that.

Mr. McCusker stated that they actually left that on a little bit longer this time because the longer it was on, the better it was. He said the DPW would probably be sweeping within the next two weeks or so to remove the loose material before wintertime. Member Paul asked Mr. McCusker to let Council know when that was completed; that would be helpful. She would make sure when she saw the resident that they knew it was for the benefit of their roads.

7. Tree and Shrub Reclearing on Ten Mile Road and Taft Roads – Member Paul

Member Paul said that she knew that a lot of Council had received a call about that. She felt very badly for them because these residents that were upset were on the corner of Ten Mile and Taft Roads; they had screening and it was now gone. Yes, the gas company was in the right-of-way; yes, these people were very upset because it was something they bought into when they bought their property. She asked if the City had any foreknowledge from the Consumer Energy personnel that that was going to happen.

Mr. Helwig answered not very much. He said there was a note that Mr. Pearson included in the packet while he was absent, stating that it was about to happen. Administration confirmed that, first of all, they weren’t going to be working on the new road north of Ten Mile Road, and south of Ten Mile, working through Mr. McCusker, that they would be working in the easement where they were entitled to work. Mr. Klaver had been communicating with them about tree, shrubbery replacement.

Mr. Klaver spoke with the City forester this morning who just finished reviewing the plans. The City was fast-tracking it to get it back to them; he was going to return it to them this afternoon. He said he was very pleased with their response; there was over 200 bushes and additional trees that they would be planting in the next two or three weeks. He said that a lot of that screening material would be back in place very shortly.

Member Paul asked if it would be put in place prior to the freeze in December.

Mr. Helwig answered yes; that was the big push the City made because they were not going to do anything until Spring; Administration absolutely insisted that it be done this Fall.

Member Paul wondered if there was any foreknowledge in the future if the City could let residents know why their backyard was going to be ripped up; several people went to work, came home and their backyard was amok. She said a letter would have gone a long way.

Mr. Helwig stated that, please be assured that had the City had any kind of notification, it would have done just that. He said that utility in particular, the City was fighting with their subcontractor for the water main break on Novi Road, had been ravaging our community in a number of ways. He said the City was recovering in this instance, and it was a shame that it couldn’t do as she suggested. He said it was to the point where the City was harassing them, because the City wasn’t even getting basic courtesy for residents or businesses.

Member Paul thanked Mr. Helwig for that.

Mayor Pro Tem Landry stated that it was his understanding that the trees that were cut down were completely in the right-of-way of the easement so, although the City would have liked to have controlled the way that they took them down, the City really had no ability to control that. He wanted to know if that was a situation where after the City forced them to replace as many trees as it could legally enforce them to replace, was it a situation where the City could utilize Catholic Central’s promise to plant trees in the City and have them plant some additional trees in this area.

Mr. Helwig was trying to recall if it kicked in next June or it was the first year of occupancy, but he would be happy to research that.

Mayor Pro Tem Landry wondered if the City had the ability to control where the trees were to be planted. The area had been really "hacked" everything down, so if the City had the control, he thought it would be the perfect place to use it if we could.

Mr. Helwig said he would research it and focus on the Spring after Administration saw what the utility accomplished in the next few weeks.

8. Novi Sign Ordinance – Mayor Csordas

Mayor Csordas stated that Council was aware of the fact that it had been put on notice by the ALCU that its sign ordinances were probably suspect. It was his opinion that the City had no sign ordinance now because it had all kinds of political signs all over the City for the last race. He called Mr. Helwig to ask Ms. Uglow to go out and get them taken down; that was stopped because our attorney said it could jeopardize the City’s sign ordinance. That meant to him that there was no sign ordinance, the City needed to either throw it out or start all over again because there wasn’t a sign ordinance for this political campaign; there were huge signs all over the City. He guaranteed it would be a big issue 12 months from now. He said they didn’t stick to the rules this time; they should stick to the rules every time, so he wanted to see what Council thought about that. He said it was either fix it or throw it out because it didn’t work this time. He said it was just going to get worse; Novi could turn into cities like Warren with huge billboards out there and saying we don’t want to have our signboards challenged.

Mayor Pro Tem Landry asked Mr. Schultz if the ACLU had selected its target yet.

Mr. Schultz answered that there had been a number of cities that during that 30-day period before the election were in and out of court and had their ordinances enjoined for various things: size, time limitations. Secrest Wardle did its analysis and gave the Council its opinion with regard to particular items that the ACLU raised for Novi’s ordinance. He said the assumption was that the second half of the assignment was to propose language that would solve the issues raised. He said Council heard Ms. Uglow indicate that there had actually been a fair amount of work done here administratively, maybe with the help of the Chamber of Commerce, to propose an overall amendment; Secrest Wardle’s hope would be at some point shortly they would be authorized to work with Ms. Uglow and whoever else at the City to fit the changes needed in the political sign ordinance in with whatever else had been proposed, brought back probably to the Planning Commission and then to Council.

Mayor Csordas asked if there was consensus on Council to do that.

Member Lorenzo thought it needed to be a priority in terms of being proactive. She didn’t want to see Council get into a situation where it had to defend a lawsuit for that. It was issues like this that obviously she agreed the City should spend money, and Council was agreeing to spend money and obviously if that went over, it got paid because Council was agreeing to spend money; that was exactly what she was talking about.

Member Gatt asked Mr. Schultz if it was true that every federal court ruling in the last 30-40 days had been against the cities.

Mr. Schultz answered that pretty much every one went against the municipality; he said it was a pretty elaborate effort by the ACLU. He said they picked their targets well, and a lot of them, and went ordinance by ordinance, provision by provision and sent out the letters.

Member Gatt asked what Mr. Schultz’ opinion was, when it was all washed out, about Novi’s political sign ordinance.

Mr. Schultz answered that it would be rewritten.

Member Paul asked if it needed to be put into the ordinance review committee at this level, because the legal information going back and forth might be a little bit faster. She knew Planning Commission always had a list of things it was attending to.

Mr. Schultz answered that the one thing they tried to do when there was time to do it was try to take the sign ordinance to the Planning Commission process, because the sign ordinance regulated by districts. He said Novi didn’t want to be caught in a situation, if the City could avoid it, of somebody saying it should have gone through the zoning ordinance-type process. Obviously, this Council had recently directly passed ordinance amendments; we’re not saying that it was improper, but they were kind of doing a belt and suspenders thing. So, if the City was going to go through the process of amending it, they would like it to at least get a hearing at the Planning Commission, but it may want to start here so there was direction to what it was Council wanted, then send it there.

Mayor Pro Tem Landry asked if it would strengthen the ordinance ultimately if Council had it proceed with the commercial sign ordinance and whatever amendment Council would make to that.

Mr. Schultz answered yes. His assumption was that they were far enough along that they could put it all together and bring it in one package rather than two.

Mayor Pro Tem Landry stated that maybe with the prodding by City Council, both ordinances could be moved forward quicker. But from a legal standpoint, the big First Amendment issue was that you couldn’t restrict political speech more than commercial speech. It was a basic rule; you couldn’t treat them any worse. So to strengthen our ordinance, he wanted it to have the same path as the commercial sign ordinance, so if the City ever ended up in court the City could say it was not treating political speech any different; the City amended the commercial sign ordinance and it amended its political sign ordinance together. So maybe Council could speed up everything.

Member Paul stated that she thought it was an excellent idea; she wanted to make sure that Ms. Uglow had some input.

Mr. Schultz stated that he assumed that; couldn’t do it without her.

AUDIENCE PARTICIPATION – None

There being no further business to come before Council, Mayor Csordas adjourned the meeting at 12 midnight.

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Lou Csordas, Mayor Maryanne Cornelius, City Clerk

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Transcribed by Sue Troutman

Date approved: November 22, 2004