Mayor Clark called the meeting to order at 7:10 PM.

ROLL CALL Mayor Clark, Mayor Pro-Tem Lorenzo, Council Members Bononi (arrived 7:18 pm), Crawford, Csordas, DeRoche (absent/excused) and Kramer.

ALSO PRESENT Richard Helwig, Craig Klaver, Kathy Smith-Roy, Kelly LaLonde, Bruce Jerome and Chris Pargoff

Mr. Craig Klaver said at the previous Budget Hearing Council requested Water & Sewer Department be carried over so Mr. Bruce Jerome could be present. It will be added as item number one to the Agenda. Mr. Klaver also mentioned the last tab in the budget book labeled Enterprise Fund was in Sections 81-83 in the yellow booklet handed out.

Mr. Klaver asked Ms. Kathy Smith-Roy to explain the updated information. Mrs. Smith-Roy explained the documents were an updated traditional budget to include all funds and to incorporate the changed pages given out at the previous meeting. Also passed out to Council was a yellow package for budget wrap-up, two summary pages, one for DPW Department from Mr. Tony Nowicki, and one for the available Drain and Road Funds.

Mr. Klaver commented that Mr. Nowick could not be present because of a meeting at Quail Ridge, but would try to join the budget process when he had finished. Mr. Klaver will be giving the presentation for DPS in conjunction with Mr. Bruce Jerome and Ms. Kathy Smith-Roy.

Mr. Klaver started with a review of the memorandum, with the organizational chart, dated April 5^th. There are five items listed that he gave the following brief overview on. Item one, description of sidewalk/bike paths, a new program that was included in the General Fund. Mayor Clark asked about the statement "replacement of deteriorated bike path along Taft Road between Nine and Ten Miles", wasn’t this already done? Mr. Jerome stated the portion already completed was part of the road program last year. The portion not completed would be south of the High School driveway. Item two was Forestry issues, including an irrigation system on the Twelve Mile Boulevard and the

interchange cutting and fertilization program. These are also out of the Road Fund. Item three, was not included in the Budget, it originally would have been out of the Road Fund. Item three was a computer-modeling program with the cost of implementation and data. The computer had been asked for in last two years-proposed budgets but funding had not been available. Mr. Nowicki had asked that it be presented as a continuing need. Item four, GIS funding, also was removed from the budget to balance it. Mr. Nowicki initially proposed funding out of the Water & Sewer and Drainage funds. Mrs. Smith-Roy was asked where funding should come from if the GIS funding were put back in the budget? She answered it would be allocated from the Drain Fund, DPW Fund and Water & Sewer Fund. She would be hesitant taking money from the Road Funds, Act 51 had specific requirements under the Local/Major Street funds expenditure that would not make it cost effective for the City to allocate a percentage of the funds. Mr. Klaver finished the overview with Item five, funded out of the Water and Sewer Fund, the storage reservoir booster pump station.

Member Kramer asked about the irrigation system for Twelve Mile Road Boulevard being funded out of the Road Funds, but the wrap up documentation showed it out of the General Fund. Mrs. Smith-Roy said the irrigation system could be appropriated out of Road Funds. It was originally proposed out of the General Fund.

Mr. Jerome started the presentation with an overview of the department. The Water and Sewer Department was a wholesale customer of the Detroit Water and Sewerage Department. The majority of the water purchased came from Lake Huron through the Detroit plant in Port Huron. In 1999 we purchased approximately 2.1 billion gallons of treated water. The Sanitary Sewer system was divided into two separate systems, the Huron Rouge System, whose material goes to the Detroit Water and Sewer Treatment Plant and the Walled Lake/Novi Treatment Plant, which was maintained by the Oakland County DPW. The service area for this plant was everything north of 12 ½ Mile Road and one half-mile east of Novi Road, the old Decker Road.

The 2000 - 2001 water rate information currently supplied to the City from the Detroit Water and Sewer Plant was that the wholesale rates had risen 2.3%. Last year rates to Novi customers were not adjusted, the City absorbed a 2.4% increase. Mr. Jerome is anticipating an increase in the water rates.

The sewer rates for the Huron Rouge system had payments to the City of Detroit but also two pass-throughs the sewer flows move through a Wayne County and Oakland County interceptor systems. Rate information had been received from the City of Detroit and the Wayne County DPW. Because rate information had not been received from the Oakland County DPW, a recommendation cannot be made at this time. Oakland County anticipated having the information form Mr. Jerome in the next week or two. In the last five years, the user rates on the Walled Lake/Novi plant have decreased consistently.

A couple of months ago the Detroit Water and Sewer Department released survey information on a rate structure of the wholesale customer communities. On the waterside, of one hundred and eighteen communities surveyed, Novi was the twenty-

first from the bottom for community mark-up. On the sewer side, Novi’s mark-up was the fifth lowest.

Programs Ms. Smith-Roy and Mr. Babinchak initiated this year have increased some costs in some areas, but have made the payments easier for the customer and shortened the turn around time for deposits and investments.

One item Water and Sewer was proposing to have a revise was the water utility plan. The projected cost is about $15,0000. As the community grows and land use changes, the Water Department looked at what the needs were to provide service to the different areas of City. Detroit had changed their posture on system storage. Mr. Jerome anticipated bringing a proposal for either ground or elevated storage. The ability to store water would do two things for Novi, one would be to maintain constant water pressure and this would add reliability to the system. At this time we are dependent on incoming pressure from Detroit. The other is Detroit used peek hour demand as a factor in determining water rates. If we fill the storage tanks during off peek hour times then run the system from the storage tanks which should reduce our peek hour demand and equate to a reduction or slowing of rate increases in the water user rates.

Member Kramer asked about the Fourteen-Mile reservoir project. Mr. Jerome responded it was a joint effort with the Detroit Water System. Novi helped secure the property, the station and reservoir would be part of the Detroit system. Novi gained a metered connection at that point, which meant another source of water in Section One. A problem we have with the water system was only one point of crossing of I-96. We are currently working on the twenty-four inch water main at West Park Drive. What is being proposed in the Capital Improvements Program was to extend the main up to Pontiac Trail for a connection with the City of Detroit system when they bring the water around Walled Lake to service the City of Wixom. The plans have already been drawn up, we are in negotiations with Detroit and the City of Walled Lake for the restoration. Mr. Klaver commented on the van issue, which was part of the same system. This would be an exchange of right-of-way value for a van service the City of Walled Lake wanted to initiate. The City’s recommendation was the City of Novi exchange checks with the City of Walled Lake, this makes it an appropriate expenditure out of the Water Department to pay Walled Lake for the right-of-way to install the water main and in return they would pay for the van services.

Mr. Pargoff commented that Forestry was asking for an addition to the current 1999-2000 Budget for a tractor at $15,000. The original estimate was based on a tractor purchased by Parks & Recreation, which they thought would be comparable. When bids were received there were no side-mounted mowers that would work on a 40-horse tractor. They had to upgrade the amount of horsepower to operate the side-mounted mowers. Also included was $45,000 in the upgrade for service of the interchange and $60,000 for the manually operated irrigation system on the Twelve Mile Road Boulevard. Ms. Smith-Roy noted the $45,000 tractor was included in the Capital Improvement Fund and in the 2000-2001 Budget as a roll over item. Member Kramer asked what roll over item meant? Ms. Smith-Roy responded it meant $25,000 of funds included in the 1999 - 2000 Budget for the tractor was added to additional money in this

year’s Budget in the Capital Improvement Funds. It was placed in the Capital Improvement Fund because it was an item greater than $25,000. Mayor Pro Tem Lorenzo said the irrigation system was not included? Ms. Smith-Roy responded that was correct. Member Crawford asked if the $60,000 was in the Budget, no was the response, but it was in Mr. Nowicki’s write-up as being in the Budget, please explain the difference? Ms. Smith-Roy answered it was not included in the Budget and was not in the Road or General Funds.

Mr. Pargoff continued explaining other situations the Forestry Department was involved in. Every Tuesday night, during the summer, there was a meet the Forester Program; Spring and Fall it was every other Tuesday, to discuss horticulture issues with him. He was also in negotiations with Detroit Edison to expand the City’s tree nursery underneath the power lines adjacent to the Sports Park. The program was to eventually use these seedlings as street trees, we should be able to harvest the first group planted at the DPW yard in the next two years.

Member Csordas asked when the most recent tree planting was on Twelve Mile, between Haggerty and Meadowbrook Roads? Mr. Pargoff responded an additional tree planting was in autumn of 1999. This finished the area closest to the freeway, the entryway coming off of M-5 to the freeway and the entryway southbound from M-5 to the freeway. The trees are under warranty until June, those that are failing now will be replaced. Member Csordas believed, after a drive-by inspection, most of the trees were dead. Mr. Pargoff answered that most of the deciduous trees are alive, with the addition of the irrigation system the performance of the trees would improve. Member Csordas asked Mr. Pargoff for a brief overview of the Vista Hills tree replacement program? Mr. Pargoff said a contractor, who had been previously on retainer to the City, had been contacted to do woodlands replacement plantings, provided the developer did not start working. The work should begin on Tuesday. Mr. Watson had reviewed the legality of using woodlands and street funds from the developer and a positive indication had been given.

Member Crawford questioned the $10,000 in the Budget for trees. Mr. Pargoff stated it was primarily for street trees, but there had been an extensive number of cars vs. trees over the winter. The Forestry Department had approximately twelve trees, at $300 per tree, needing replacement. They also hoped to use about $1,000 for seedling acquisition. Member Crawford said we only get thirty trees for $10,000? How big are these trees? Mr. Pargoff replied yes, the trees are two and one half-inch caliper trees, and run between ten and sixteen feet tall. Member Crawford then asked when can they expect to see buds and leaves on the trees on Novi Road north of Twelve Mile Road and Eleven-Mile between Wixom and Clark? Mr. Pargoff said he had not had a chance to inspect those particular areas. Any trees that were failing would be removed; there were no funds for replacements. Member Crawford asked how much money was available in the Woodlands account? Mr. Pargoff believed most of the funds were allocated and held for individual sub-divisions for when the developer had exhausted his program of replanting. Member Crawford asked if the trees on Novi Road north of Ten-Mile and Twelve-Mile and the trees on Eleven-Mile were covered by a warranty? Mr. Pargoff answered no. There are about twenty replacement trees in the current planting program.

Mayor Pro Tem Lorenzo could not believe there were no funds in the tree fund. She wanted a full accounting of the fund from Mr. Pargoff. Mr. Pargoff would have the report to her on Monday. Two years ago she suggested that any trees come from that fund. If there were no contributions to the tree fund, then the City was not doing something correctly. Ms. Smith-Roy stated there was no line item for trees, the money was in a Trust and Agency Fund. The Fund was not presented in the budget it was set aside in the Trust and Agency Fund because it could only be expended for trees. There was no fund balance liste. There was a balance but it might be committed. Mr. Pargoff interjected last year the majority of the money from the tree planting account was used for the Twelve-Mile Road island trees. Mayor Pro Tem Lorenzo hoped there was at least $10,000 left in this account. Mr. Pargoff answered if the City had not received a major contribution over the last year there might not be $10,000 in the account. Mayor Pro Tem Lorenzo told Mr. Pargoff in the future budget process she would like the monies in the tree fund included.

Mr. Klaver stated the Municipal Garage budget was primarily a maintenance budget. Under the area of personnel services there was an increase in health care, otherwise it was almost identical to the number from the previous year. Other Services and Supplies are down from the previous year. There are two pick-up trucks listed under Capital expenditures. Not listed in the budget was a request for a tandem axle dump truck. Mr. Jerome had further information if Council required it.

Member Crawford asked if the pick-up trucks were available through an Oakland County joint purchasing?

Mr. Klaver said yes, it was always their preferred method of acquisition. It varies from year to year what they bid and whether it met our needs but in most cases we have been able to do that.

Mr. Jerome said the Purchasing Director used both the State bid and the Oakland County Cooperative Purchasing and depending which was lowest and provided the equipment needed that was the one they went with unless that price was higher then they thought they could get independently.

Member Kramer said the tandem axle dump truck was not funded but the pick-ups were so he trusted that they trusted the pick-ups more than the tandem axle dump truck.

Mr. Klaver said some of that might be that the heavy equipment requested was $180,000.

Member Kramer said correct, we spend many $25,000’s on a lot of light vehicles so he assumed those were all more important than the heavier capital items. If that was not the case then the department should look at the way the capital was being spent.

Mr. Klaver said understood.

Mayor Clark asked where the vehicles were they were proposing in the budget? Mr. Klaver said they were on page 26 under heavy equipment and were $45,000.

Member Kramer said there were two pick-ups that ran about the same so therefore there might be a choice. Chances are he would not get both and by default the pick-up is not funded and because there is no other money the dump truck was not funded.

Member Bononi asked if they were replacing existing vehicles? Ms. Smith-Roy said they were both replacements. Member Bononi asked about the wear and tear on the vehicles they were seeking to replace.

Mr. Jerome did not have that information. Mr. Klaver said he could get that information for her but normally they have very high mileage because they tend to run the equipment until it collapses.

Mr. Jerome said one of the vehicles was for the foreman and has over 90,000.

Ms. Smith-Roy asked Council to turn to Page 30 in the traditional budget. It started out with the Major Street Fund and was just an overview, the revenue from the Major and Local Street Funds comes primarily from the Act 51 Revenue which is the gas and weight tax revenue. We have a policy of transferring the maximum amount allowable by that Act from the Major Street to the Local Street. The other component of revenue for that fund was interest earnings.

In the Municipal Street Fund the primary source of revenue was the one-mil tax levy, which is not one mil because of Headley. The funds used for the Municipal Street Fund are typically transfers for subsidies for the Major and Local Street Funds for either construction or maintenance.

She said the County had asked her to prepare a summary for Council, which Council has and it was called the Summary of Drain and Road Funds. For the most part the expenditures and the Major and Local Street relate to the maintenance such as traffic service, winter and routine maintenance of the roads. The item that they did not specifically allocate line by line was the Construction Funds. So what is presented in the budget was a line item typically called Construction or an item called Not Allocated. So what she had done in the separate document was indicate for this year and next the funds available and not allocated. Mr. Nowicki wanted her to present the projects that had been bid but not awarded yet which represented the items under Bituminous and Concrete Paving. She cautioned on the balance available that there was potential that some of the contracts had not been completed that were in process right now. She did not think there were a lot of funds in there because most of the contracts were coming out of the road bonds. She was not able to identify every one of those contracts to be sure which ones were major or local streets.

Mr. Klaver said the Six Year Road Program was really something that was presented in the summer around June or July. He said why it was presented as part of the budget

was that it could be revised at any point in the future if Council wanted to reallocate these.

Ms. Smith-Roy said also the irrigation could come out of these funds because they are not allocated.

Mayor Clark asked what was sitting and available now?

Mr. Helwig learned that because of high bids last summer there was no annual street maintenance program initiative so that had been carried over to this year. He felt Council had the opportunity to look at these priorities and give administration direction including the funding here and elsewhere in their deliberations to tell them to get cracking on bringing bids back for this entire program. This would include that which would normally wait until June or July to come back to them. It seemed to him this was a golden opportunity to make immediate improvements in the community this construction season. It would rekindle that confidence and objective that Council was focusing on neighborhood priorities before going onto bigger challenges in the fall and ask for the communities vote of confidence that we would deliver to the neighborhoods first and foremost. He was encouraged when he saw these numbers. He did not know there was an opportunity not only from the carry over last year and the fact that one of those road projects to be programmed had fallen out based on their feedback from the election last fall. Perhaps we could go through this and get whatever policy direction they could from Council.

Mayor Clark said he had a drawing that Ms. Nagy dropped off at his home with reference to the problems in the Lakewood Homes Association that had to be addressed. It was clear what the problems were and a copy would be left with the Clerk and have it marked as part of the record. It is probably a major concern that needed addressing. These are items that can not be delayed any longer and if there is money there then we have to move and get this work done.

Ms. Smith-Roy said behind the memo from Mr. Nowicki was the six year Capital Improvement Program. A lot of this money had been programmed but they had not been bid so this is your opportunity to reprogram them however Council saw fit. Mr. Nowicki thought it was important for Council to see where the six-year program was headed.

Mayor Clark asked what was available in the Major and Local Street Funds? Ms. Smith-Roy said in the Major Street Fund there was $2.7 million and in the Local Street Fund there was $178,000. If the bid was awarded it would be $178,000 and if they decided to decline those bids then it would be the $1.3 million to start reprogramming from the beginning.

Mayor Clark said every of the City has some problems and concerns but it seemed to make common sense to be prudent and fair to start with some of the older areas first. For example Timber Ridge is on the list and compared to Village Oaks it is relatively new and there is $271,410 projected there and maybe that could be deferred to another year so problems that are more long standing could be dealt with.

Mayor Pro Tem Lorenzo concurred with Mr. Helwig and the Mayor on this matter. The Municipal Street Fund could be transferred over to the Local Street Fund according to Ms. Smith-Roy and the Major Street Fund could transfer 25%. She felt the Council should get more involved in prioritizing based on condition. She said if they took the Major Street Fund and eliminated Vincenti Drive there would be $3 million in the fund and 25% of that would be $750,000 that could be transferred over to the Local Street Fund for subdivision repair.

Ms. Smith-Roy apologized for misleading Mayor Pro Tem Lorenzo and said the transfers are done as the revenue comes in. So none of that could be transferred. None of the Major Street Funds could be transferred and the 25% transfer was already included in that $1.3 million that was in the Local Street Fund. However, the $1.6 million could be moved. Ms. Smith-Roy explained the funds and what was available.

Mayor Pro Tem Lorenzo said there was one proposal from Mr. Pakala, JCK, for $7,000 and now an updated one for $2,500 and she asked why were we paying for this service instead of having it done in house?

Mr. Helwig said after Mayor Pro Tem Lorenzo called he did follow up with Mr. Nowicki and that would be done in house. He would like for the staff to serve Council and give them some best thinking based on the condition inventory that was prepared. Based upon Council policy direction they would do what they decided.

Mr. Helwig had worked with a pavement management system for the last several years. He realized that the $40,000 to set up that system could not be mustered at this time. It pays some tremendous long term dividends and has proven itself time and again. He said it pays for itself in terms of laying out what should be done and he would like to give them the benefit of their thoughts on the condition statement but Council would get all the raw information. He would like to expedite this because he felt they had the opportunity to show the community that they were going to make a difference this year in terms of the neighborhoods and the conditions of these roadways. He wanted to get back on track in terms of their confidence that their money is being used wisely, that things would get done and then move on and hopefully gather their support in the fall for other initiatives.

Mayor Pro Tem Lorenzo said she appreciated that and agreed and asked him not to count that $40,000 out because they were still prioritizing and she felt this was a need.

Member Kramer agreed with previous comments.

Mr. Klaver said occasionally the funds were used as the City match on grant applications as well.

Mr. Helwig said in talking with Mr. Nowicki he thought it would take about $200,000 to do the entire roadway network in Lakewood. $200,000 was an estimate based on Mr. Nowicki’s experience to put that project into perspective, as they are thinking between now and the May 15^th meeting about the scale of things. This information would come to Council well in advance of that and would contain the conditions, roadways and maps so Council could come prepared to give the final go ahead.

Ms. Smith-Roy said the primary source of revenue for the fund was the 1-mil drain property tax. Also, interest earned was included and some contribution from others which related to grants. In terms of the expenditures, they are self explanatory in terms of the maintenance program. This fund has $780,000 that had not been allocated and also $200,000 from the current year that had not been specifically allocated to a specific program. The only Capital included in this budget in the Drain Fund was for a replacement vehicle. Dave Maurice was present to answer questions relating to the GIS or the DGPS unit, which is included in the DPW for $11,000.

Mayor Pro Tem Lorenzo asked what the vehicle replacement was? She said it was a vehicle for the foreman. It was listed on the wrap up sheet, page 3 under Drain Funds and the vehicle was $25,000. Above that was the DPW and Municipal Garage Equipment, included in the budget, $11,000 for the DGPS and $45,800 for the two trucks.

Member Bononi asked what the miscellaneous taxpayer request item of $75,000 was for and does it lump residential with commercial. Ms. Smith-Roy said it represented requests that they respond to. Mr. Jerome said when a homeowner or commercial property owner called and said they have ponding of water on their property that was the fund where the initial investigation started. Sometimes it involved installing a french drain or doing minor work to the existing system and it is funded out of that. He said the more rain the more the fund was drawn on because there were more complaints. There used to be a committee that would meet with the homeowners and discussed the drainage problems and that came out of the fund as well.

Member Bononi asked if these were mostly residential or commercial complaints? Mr. Jerome said residential. She said looking at the Storm Sewer Maintenance funding it seemed that less was being spent and asked if that was because maintenance was not as aggressive as it should be? Ms. Smith-Roy said that line and the previous line item were quite sporadic and the incidents are not something that is easily budgeted for. The types of expenditures that come out of this account are both the DPW salaries for doing repairs, materials used, consultanting engineer, etc. Member Bononi asked if it was the fund that maintained the Storm Sewer System?

Mr. Jerome said yes. It was the money used to rebuild catch basins, repair structures and to clean the catch basins. Member Bononi was concerned about the amount being asked for and the amount spent and why that was.

Mr. Klaver said it was something that fluctuated and the average was not that high. She asked if this money was for routine maintenance then the allocation should be rather consistent and it is not and she wanted to know why. Mr. Klaver said they would get additional information on it.

Member Csordas asked Council if they were familiar with letters from Bob Gatt? Mr. Helwig said that was a sanitary issue and they were going to the site tomorrow with representatives from Oakland County to try to sort through this. It is raw sewage and it was serious and it needed to be taken care of.

Mayor Pro Tem Lorenzo shared Member Bononi’s concerns and questions. She stated she wanted to see a program for maintenance on storm sewers.

Mr. Jerome said the crew had to fill out paperwork when they inspected/cleaned the system and those forms could be made available and there is a program in the budget that they have targeted for projects in this budget year. She wanted to know how often they were cleaned and inspected.

Member Kramer suggested she request Department Reports be brought back in a summary fashion at an upcoming agenda. She would like to see them beefing up the storm sewer and detention basin maintenance, catch basin cleanings. They should be done once or twice a year and it did not seem to be enough money.

Mr. Klaver said this was a maintenance budget. Under personal services there was a slight increase and also an increase on the insurance. Supplies remain constant and under Other Service is where they budget for other activities such as recycling and resource, consortium, etc.

Ms. Smith-Roy said the only thing to highlight was the bike sidewalks and trails. The $101,000 discussed earlier was in this Other Service and Charge section. Under data processing the schedule it showed $19,720 and they did intend to include that, however, they made a mathematical error and it was excluded from the dollars. They had corrected that.

Mayor Clark said there was the sidewalk that went east on Ten Mile Road and then it kind of dead ended at the wetland. He thought there was going to be some type of a boardwalk to traverse that wetland area and then pick up the sidewalk by White Hall Manor.

Mr. Jerome said the work was done and there were soil borings for the boardwalk and it was a project programmed for this construction season. He thought the DEQ Permit had been approved.

Member Crawford said there was a bike path Mr. Nowicki gave them that totaled $86,000 and then one in the DPW budget was one for $101,000 and asked if these were two different programs? Ms. Smith-Roy said no it was the $101,000. Member Crawford asked if it would include snow removal proposal and some construction. She said it would.

Member Bononi said the Consultanting line had an erratic history and asked what they were using consulting for? Ms. Smith-Roy said that Consultanting line was used for a variety of issues and that was why there was no consistent dollar amount. It was primarily engineering services from JCK. Member Bononi asked what vehicles were in miscellaneous equipment? Ms. Smith-Roy said it was the $11,000 for the DGPS unit.

Mr. Klaver said administrative wages were the only group where there was no collective bargaining. They have across the board increases with all of the collective bargaining groups that have contracts at this time for 3%. That is the proposal regarding across the board wages that’s on the table with the other groups they are currently bargaining with. Therefore, that was their recommendation for administrative salaries. In addition, each year there was a budget request for performance adjustments, which are based on salaries, goals and objectives and a variety of different techniques. They also recommended and Council had reviewed a proposal to bring an outside firm in to conduct a wage salary. It would present them with information that they need to assess the positions and whether or not they are appropriate given the other labor market issues and whether there are any inequities between positions. They asked for the same $30,000 as in the past to accommodate those adjustments. He asked that it be done by separate resolution and be listed as 3% and a $30,000 budget for the adjustments.

Member Crawford asked where the wage survey was? Mr. Klaver said it was in the budget. Member Crawford thought this was extremely important. We have lost a lot of good personnel and the number one reason is probably compensation and it needed to be looked at very closely. He hoped there would be a commitment from Council to abide by it. It would be a shallow gesture to spend $20,000 and go through the process without trying to implement it.. He felt there were a lot of department heads that he had thought for years were not compensated for the job and responsibilities that they have.

Mr. Klaver said administrative employees are unique compared to the other contract employees regarding their movement. He said they have a range system that reflects the appropriate compensation and they want to update that with a salary study.

Mayor Clark asked if Ms. Hannah would have an exit interview because we have to start finding out why people are leaving and factor that into the decisions made in the future in regard to compensation. Mr. Klaver said that was a standard practice.

Member Kramer proposed they accept the recommendation of $158,080 without any stipulation as to whether it is 3% and any amount for appraisal and performance and request that Mr. Helwig make a recommendation before July 1^st in terms of how he wished to allocate that.

Member Csordas agreed with Member Crawford, however, he did not feel they could compete with the private sector. Member Crawford asked about the compensation study?

Mr. Klaver said it was being bid out and once the firm was hired it would take 6 to 8 weeks for a firm to conduct a compensation study which would be past the July 1^st date but the compensation would be made retroactive.

Mr. Helwig commented he appreciated all their comments, interest and support to have the type of high performance organization they need to have to meet their expectations. He viewed this as a two step process. First, they have to take stock of their compensation condition and then the ability to pay would be the second step that rises and falls on its own analysis and facts of life. It was important information for them to

have but by no means does that lock in a set of automatic decisions. It was important that Council retain that policy setting prerogative after they have the information in front of them. It is like everything else choices have to be made as to what the priorities are.

Mr. Klaver said this was done by separate resolution and one of the reasons being was that Member Crawford needed to abstain from the vote and then it became adopted as part of the entire budget. It had always been a separate motion and then they adopted the budget as a whole.

Member Kramer attempted to identify areas he thought they could clip to create a pot that would be reallocatable to Parks and Recommended. He took the Buildings and Grounds section at $150,000 and proposed it be reduced by $50,000 and there would be a phase two to come back in the following year.

Under Historical Commission he would reduce it $7,000 and would reduce the Beautification Commission by $2,000.

Police Building Maintenance he would reduce by $15,000 which would leave $10,000.

DPW – He proposed to reduce it from $101,000 to last years amount of $60,000 therefore saving $41,000.

Planning – Planning Commissioner Briefing and Education and also MSPO and he proposed clipping the $6,500 total. He said Novi Land Use Analysis was not required if a Novi Corridor study was done so he wanted to clip that $8,000.

Planning and Community Development – There was $13,865 which is a new initiative and he proposed to make that $5,000 clipping $8,865.

He also felt the GIS person was fundable by some other funds that they should talk about and he wanted to know the relationship between that persons work and this item to find out if that could be an appropriate cut back.

Traffic Model – He really supported the traffic model but would like to take it out of the budget and put it in the Road Bond Program and make the $98,800 available for other items.

Opticom System, Fire Equipment – He proposed this item also go to the Road Bond since it was road traffic control which would make $30,000.

He said all of this totaled was $297,000 and another $165 that he proposed should go to Parks and Recreation.

He said there was an add they should consider which was the irrigation that came from the DPW. He thought that was Road Fund not General Fund.

Member Crawford did not have real specifics and did agree with some that Member Kramer had to offer. He asked if the traffic model was something that could go in a Road Bond.

Mr. Klaver thought the attorney should look at it but did not think it was any different than some of the engineering and other cost that were in there.

Ms. Smith-Roy said it would be an appropriate cost for the bond. Member Crawford would hesitate to muddle up the Road Bond Proposal with these kinds of things that might ruin the whole thing. It could be enough to confuse the issue. He felt it was important to get the Traffic Model going as soon as possible. Perhaps it could come out of existing road funds. He thought it would be difficult to do everything that Council and staff would like to see and pare down other places in this budget because it was a bare bones budget already. He felt the video cameras in police cars were important. There are other avenues and someday they would have to be considered.

Mayor Pro Tem Lorenzo agreed with Member Kramer except for the Traffic Model. She felt it was an important planning tool and felt that the City should be paying for it out of the General Fund. She wanted the trees removed from the General Fund and put in the Tree Fund. She questioned the need for Mr. Pargoff’s $45,000 tractor. She would eliminate the two pick-up trucks and the axle dump from the Municipal Garage. She would eliminate the $90,000 for computer replacements, the $15,000 for Building Department Office restructure, $9,900 for the Police Academy a make it a pay to participate program.

Under Planning Commission Studies she would eliminate everything other than the Planning Commission Briefing and Education.

She would eliminate the $23,000 for the Fifties Festival.

She would like to see Mr. Helwig’s suggestion for a Pavement Management Program for $40,000.

Planning and Community Development Studies - She would eliminate the planning outreach program and the environmental information enhancement.

She also questioned the number of vehicles in the entire budget and who needed them.

Mayor Clark agreed with Member Kramer on a number of these items. He did not want to redirect it all into Parks and Recreation and that was yet to be defined. If at all possible because it was a public safety issue he wanted to keep the Opticom for the Fire Department and the video cameras in the police cars if possible.

Member Bononi agreed with a majority of the things Member Kramer brought up with regard to the first page of Capital items.

Under Building and Grounds she would eliminate the Carpet Tower Replacement of $51,500 and the replacement of tables and chairs totally and ask Building and Grounds

to reallocate among the other items they have a plan in which this could be done over a two or three year period.

General Administration - She agreed that the Historical Commission should be cut back to $15,000 and the Beautification Commission to $5,000.

Police - She felt they could do better than the $25,000 Building Maintenance.

DPW – She would knock down the bike trails and sidewalks to $50,000.

Planning Section – Remove Industrial and OST Inventory and Analysis, Novi Road Land Use analysis, ranking of environmental areas and the Beck Road corridor. This would bring this category down by $29,407.

She wanted all this cash to come back to the General Fund.

Planning and Community Development – Eliminate the Environmental Information Enhancement.

Forestry – Eliminate the $10,000 for trees and the $45,000 tractor.

Building Improvements – Eliminate the $15,000 item and all three vehicles.

Ordinance and Code Enforcement – Eliminate the new vehicle.

Municipal Garage – Eliminate the two pick up trucks.

Parks and Recreation – Eliminate the two vehicles

Member Bononi was looking for a 20% across the board cut as per the department head discretion in regard to memberships, dues, conferences, workshops and magazines and subscriptions.

Member Csordas said it appeared the new revenue for the year 2000 was anticipated to be $509,000 additional tax revenue and $270,000 State Shared Revenue for approximately $779, 500 in new revenue. That money had been eaten up by the money that had been allocated for pay raises,etc. There does not appear to be additional money for the year 2000 budget..

Building and Grounds – The Fuerst Property – Reduce by $5,000 to $20,000.

General Administration – Historical Commission reduce from $22,000 to $15,000.

Police - Building Maintenance – Reduce from $25,000 to ??

DPW – Bikes, Trails and Sidewalks – Reduce from $101,000 to $50,000

Planning – Eliminate the Industrial and OST Inventory Analysis for $11,605.

Planning and Community Development – Keep Traffic Model

Building and Grounds – Eliminate the computer and move one from back room.

Municipal Garage – Eliminate one of the pick up trucks.

Capital Improvement Fund – Delete Forestry and Misc. Equipment

Police – Misc. Equipment – Keep in car videos

Member Kramer agreed about the vehicles and should all be reviewed for necessity. There are some opportunities for grants. There are a number of open salary positions and if they are not filled then that money should be reprogrammed. He also felt the police video equipment was important and thought they could be phased in or possibly grant funding on those.

Member Kramer said the Goals and Objectives read Council’s intentions well. He encouraged using them as a starting point and thought they should schedule a work session. He felt it was helpful to use a facilitator but also felt they could manage it themselves.

Member Crawford said if Council decided to do a work session for Goals and Objectives he felt it was important to have a facilitator. The gentleman who conducted these sessions the last couple years was very productive because he was familiar with City government and how it worked.

Mayor Pro Tem Lorenzo said the one goal and objective she would speak to would be prioritizing wants versus needs. She felt they were going off in a lot of different directions starting things and then not completing them. She gave the parks and the ice arena as examples. They have to decide what they are going to branch out to, what they would complete and what they would not subsidize. The more subsidies the more departments like Mr. Davis’ would be shortchanged.

Mayor Clark had no problem with having a session. He said goals could carry on and did not have to be confined to a fiscal year and it would give the community a sense of awareness of where they wanted to go and what the priorities were. His priorities were to have the community feel that this Council was citizen responsive and that when there was a problem it would be addressed expeditiously. Also, the citizens needed to be aware that Council was prudent with their tax dollars and would separate the needs from the wants across the board for employees of this City. They had to know that the City’s first priority, not only to the citizens but also to the employees, was that people come first and things come second.

Member Bononi missed not having Council Goals and Objectives. She felt it was a most important point to have clearly designed goals and objectives that make them answerable to the people who elected them. She had heard comments that what the citizens would like the City to be like was not reflected in what it was becoming. These were not things that could not be overcome but it would take personal, professional and political will to be able to define what those things are by way of setting goals and objectives. She would like to see Council do this independently and see what kind of quality goals and objectives they could come up with that would be unique to this working group.

She would also like to see a much more defined, sophisticated financial planning process that would be put to work for all of us. She said there would come a point when they could not depend on the citizens to bail them out everytime they wanted to do a new development or improvement. The last Road Bond created a polarization of the

community that she did not want to see again. She thought it did a lot of damage and a lot could be learned from that. She was looking for Council to be a lean, smart work team and felt that a lot could be done to improve that particularly with regard to performance evaluations of the employees and their evaluations would be done the next time they run for office. Council should provide that accountability every time they come here and she looked for an increased attitude in regard to customer service and thought they could improve 200% in that regard.

Member Csordas said if they heard comments that Council did not seem to have goals it might be because they had been at City Hall so much dealing with significant issues never seen by this City before. There was a new City Manager for the first time in 25 years, new City Clerk, the budget and executive session after executive session. He felt this new Council got off to a rough start but the team had really come together. He thought they were moving along fairly well and had brought good talent to this City. He thanked the department heads and employees of the City for being an extremely talented and dedicated staff.

Some of his personal goals would be to continue to do what they could to balance the budget and show fiscal responsibility. To do what they could to attract and maintain high quality people for the City and to retain these people once we have them. Fiscal responsibility would be to do what they could to attract this OST type development to the City to bring in all that additional revenue. This would take the load off the residents and increase the revenue on the OST side and non-residential and mitigate the need to increase resident’s taxes in the future.

A personal goal for him would be to do whatever they could to bring a Road Bond forward by the end of the year. He thought the road infrastructure needed significant attention. Some of the key challenges would be Novi Road between Ten Mile and Grand River and Grand River from Novi to Wixom. There had been a lot of work already done on areas of Grand River but all of those things needed to be tied together and Grand River could be a major thoroughfare and a crowing jewel for the City of Novi. This should not be done piecemeal.

Mr. Helwig said in terms of goals and objectives he hoped Council would find it in their stamina to have a focused dedicated session to do that. It would be very helpful to the administration. He said Council was their leadership policy board and administration wanted to do everything they could to take the guesswork out of the direction they needed to follow. He would be supportive of that and as many members of their leadership team would be present as possible so they could hear Council’s thoughts on the overall direction the community was going.

Mr. Klaver said they would like to hear Council’s priorities and try to fashion their goals to follow and implement what they had identified. There are obvious issues in terms of contract settlements that we are all aware of and they would be looking to Council for policy direction on it. He said that would follow and not precede City Council goals.

Mayor Clark felt a trust fund for unfunded, unanticipated potential liabilities should be established and perhaps part of that could come from the General Fund. He thought a portion of new revenues should be dedicated to go directly into such a trust fund. For example, new income from the OST District. He thought this was one way to do it, it was long overdue and it was something Council needed to consider and he would be looking for that possibility in any potential budget that came forward.

Member Kramer would like a few proposals developed to support discussion and a time frame to let Council know when this would begin and he hoped the time frame would be early June or late May. He felt Council could come to a consensus fairly quickly and then it could be put in gear.

Mr. Helwig was aware of the cloud that the litigation had placed over this community and Council’s leadership. He knew it was really on Council’s mind to commit themselves in some way realizing that anything that could be done would not cover the magnitude of the exposure at this point. They were trying to deal with that in the real terms through the appeal process and certainly preventing a reoccurrence.

Mr. Helwig said in both communities he served there was a Judgement Trust Fund. It was a prudent means of dealing with unknowns and basically dedicating rainy day resources for that purpose. He thought that the General Fund Balance of $1.7 million, which Ms. Smith-Roy would like to hold on to for the 10% bond rating, but it could be lowered to 8% with the commitment to set up a Judgement Trust Fund with the 2% or $300,000, as a starting point. He said they could always do more and he suggested that they do. The general way a Judgement Trust Fund worked was a commitment was made now for each year. Let’s say Council made a commitment for $500,000. The rule of thumb was that if that was put in each year for a 20-year Judgement Bond the debt service could be paid on the principal and interest for ten times that amount. So $500,000 each year would be able to service $5 million of debt. He was in a community where he had to issue Judgement Bonds and it was the only relief valve to not affect basic services and the health, welfare and safety of the community.

Mr. Helwig urged Council to come to a conclusion first and foremost on a policy of establishing such a fund and secondly a beginning step commitment of dollars that could always be revisited as they get more information and greater flexibility on resources.

Mayor Clark asked, in light of Member Kramer’s comments, if that information could be put together to be available by June? Mr. Helwig said it would be done as quickly as Council would like.

Member Crawford and Mayor Pro Tem Lorenzo concurred with Mr. Helwig’s suggestion.

Member Bononi agreed and supported the proposal but would like to make the fund contribution larger if possible.

Member Csordas agreed but felt it was unfortunate they had to take taxpayers money and set it aside and not let it stay in their pockets. He felt it was a sad state of affairs

that this had to be considered but he would support a prudent plan as long as he knew that all of that money would never be used for anything else unless someday it went back to the General Fund. He would not want future Council’s to be able to pick away at it until the money was not there for the intended purpose. He asked if it was possible for development that came to the City to set aside a portion of that incremental revenue even if it was per district like the OST District? Would it be possible to set aside a percentage of the revenue generated from that new development to fund a plan like that? He felt the fund was needed but did not like having it because now we are all paying taxes and the money is being put aside and nobody was getting any advantage of it. He thought it was a necessary evil that he would support.

Mayor Clark said we are all talking about a real trust fund that touch it and we would break your arm. We are not talking about a Federal Trust Fund where the word trust was there but there was never any money.

Member Kramer asked what methods and mechanisms Council had to encumber the fund to the extent that if the funds were ever considered for other use it would have to go to the voters. He knew when they tried to do things in the past that would more or less commit a future Council to a current Council’s action that it was not possible. Nonetheless, if a trust fund was going to be set up there had to be more than intent and he wanted to find out if there was anyway possible this fund could be established with that provision.

Mayor Clark said they would get legal input to find out what constraints could be put on it.

________________________________ _______________________________

Richard J. Clark, Mayor Maryanne Cornelius, City Clerk

Transcribed by: _____________________

Charlene McLean

Date: May 15, 2000