REGULAR MEETING OF THE COUNCIL OF THE CITY OF NOVI
 FEBRUARY 4, 2002, MONDAY, AT 7:30 PM
NOVI CIVIC CENTER – COUNCIL CHAMBERS – 45175 W. TEN MILE ROAD

Mayor Clark called the meeting to order at 9:13 PM.

ROLL CALL: Mayor Clark, Mayor Pro Tem Bononi, Council Members Capello, Csordas, DeRoche, Landry, Lorenzo

Mayor Clark commented there might be people from the Michigan Citizens for Responsible Gun Ownership present and he wanted them to know that item was not on the agenda this evening. The earliest it would be on the agenda would be February 25^th. They could contact the City Clerk’s office to verify this.

Member Landry removed Item #2 Consideration of Approval of Settlement Agreement with Sandstone for Entry of Consent Judgment for postponement until Saturday, February 23^rd to be addressed in Executive Session at 9 AM. He suggested a public meeting be scheduled immediately thereafter at 10 AM for consideration of the approval of the settlement agreement with Sandstone. He requested additional information from the negotiation team to be provided to Council no later than February 19^th.

To remove the settlement agreement with Sandstone from the

Mr. Capello commented that Item #3 should also be postponed. Mr. Klaver advised the Council that the petitioner requested the postponement.

Mr. Schultz spoke regarding Fire Station #4 and the Training Center Construction Contract. He submitted a three-page memo to Mr. Pearson and to Council. Also, referred to a letter sent to Mr. Chen, which gave notice of the City’s intention to terminate the contract for the Fire Station and for the two parks projects.

Mr. Schultz said over the past several weeks there had been discussions about Greystone’s ability to finish the projects. Their primary concern was the Fire Station project and the parks projects were on the same track. There had been some discussions about a potential voluntary default by Greystone, which would allow the bonding company to step in and complete the contract with a successor contractor. Those talks broke down and with the advice of Mr. Helwig, they exercised their contractual rights to declare Greystone in default and in breech and took the first steps to terminate the contract. Now, a meeting with the bonding company and Greystone would be held and he anticipated it would take place Wednesday, February 6^th at 3 PM. At that point, they would be able to provide written indication as to what the bonding company’s position would be on finishing the contract and where Mr. Chen and Mr. Greystone stood in terms of continuing, contesting or going along with the substitution of another contractor.

Ross Dykman, Attorney for Michigan Coalition for Responsible Gun Owners, asked if commentary would be taken on this subject tonight? Mayor Clark said he could comment tonight but it had been announced that the matter would be discussed February 25^th would not be discussed tonight for any action. He suggested Mr. Dykman call the City Clerk’s office to be sure it would be on the February 25^th agenda.

Mr. Dykman urged the Council to reconsider this in light of two significant statutes, CCW Law Public Act 381 or 2001 and the Michigan Preemption Law Public Act 319 of 1990. Both of these are clear that the State had reserved the power to decide which areas would be off limits to carry by licensed individuals and that power is in no way, shape or form delegated to any local unit of government. It would probably be the key issue if this went further. He was present on behalf of his organization to consider possible litigation against the City of Novi. He asked Council to review those two statutes and the Michigan Constitution regarding the delegated powers and the powers reserved by the State that we might be able to come to an agreement that would forego this entire ordinance issue.

Chris Janik, 22340 Mill Road, spoke to the First Reading of the ordinance regarding possession of weapons. The proposed ordinance added a paragraph 8 to the existing ordinance and he compared the two. He learned that it was illegal for any person to possess a peashooter other than in his own home. He didn’t realize that children playing with peashooters in public was illegal. When laws are written, enforced and interpreted, the words used are critical. A law that prohibited one activity was not cited when charging a person with another offense. The proposed revision of the ordinance would make it unlawful to bring "any weapon whether concealed or otherwise and whether loaded or unloaded from which a projectile may be discharged" into any City of Novi public building". When he read the ordinance, he felt the words were very clear but he was not sure if they conveyed the true intent of Council. This revision would prohibit straws, Bic pens, etc. because they are capable of discharging projectiles. This ordinance affects handguns by making it illegal for any resident to purchase a handgun because they must first obtain a permit from the Police Department and once purchased it would have to be inspected and registered by the Police Department. However, this proposed ordinance made it unlawful for anyone to bring into any City building "any weapon, loaded or unloaded from which a projectile may be discharged." Mr. Janik said there were no exceptions stated for purposes of complying with the existing law requiring registration. There are only two possibilities regarding this, either Council wanted to ban the further purchase of handguns or it was an unintended consequence or an oversight. If an oversight, he suggested adding to paragraph 8C "this subsection shall not apply to any person bringing a handgun into the Police Station for purposes of registering such handgun as required by existing law." He felt this should be done with some clear purpose in mind and asked what that purpose was? Do we have a problem we are trying to fix, are there any cases of residents coming into Novi public buildings and using these dangerous weapons? Is there any history of violence at Council meetings? He spoke with Member Lorenzo and she felt this ordinance was needed because Council dealt with controversial issues and people have been known to snap and do terrible things. She cited cases where postal workers brought a gun into the work place and she felt if it was at all possible for a person to do wrong, the ordinance was needed. He noted it was already illegal to bring a concealed handgun into the building without a permit. This ordinance would do nothing more if the person was already illegally carrying the weapon. Since this ordinance was redundant for people that might be illegally carrying a concealed handgun into a meeting, it must be meant for some other purpose. It just leaves the people who are licensed under the State laws of Michigan to carry concealed weapons. He suggested she should look at data from other States as to what takes place regarding statistics, but Member Lorenzo felt she had to protect the citizens of Novi and if just one shooting was avoided this ordinance was needed. Mr. Janik wondered if Council had the authority to pass such an ordinance that would likely result in future litigation and asked them to contemplate facts and data and to not base their votes entirely on emotion.

Kathleen Jakes, 22421 Mill Road, CCW holder, wife, mother, church member, hunter, neighbor, coach, etc. She meant Council no harm, did not pose to be a threat to them nor did find them to be a threat to her. She never hurt anyone and never intends to. However, she believed that life was a gift of God to be appreciated and treasured and because she believed in the sanctity of life, she believed that we are compelled to defend our lives, our families, and Council’s lives as well if put at risk. She was hurt and insulted by the proposed ordinance. One of the foundations of America is the presumption of innocence and she stood before Council considered guilty. By the fact of owning a gun, Council had equated her with terrorists and murders and she asked what she had done to earn this distain from Council? This ordinance cannot prevent a premeditated act of violence. The CCW process was not an easy one. She had to prove responsibility throughout her life and that she had not committed any crimes, that she was safe in handling a firearm and that she was emotionally and physically secure and able to handle herself in the public. She doesn’t consider gun owners a

threat and asked why Council didn’t trust her. She was very upset that, by this ordinance, she had been characterized as someone who could instantly turn into some crazed person who was emotionally unbalanced and prone to impulsive murderous acts. This country was founded by people who stood up against a tyrannical government and she hoped Council chose to honor the traditions of this Country and the bravery and sacrifice of the veterans and the moral struggle of good over evildoers. She asked that Council consider people like her who are legal holders of CCW’s and to ask themselves why does she threaten them in anyway and why is it that we don’t deserve to defend our own lives and those of our fellow citizens.

Bob Shaw, 40612 Village Oaks, requested a public hearing on agenda item #1 regarding the conservation area for Garfield Road. He objected to paragraph 1B in the ordinance. He read that portion and said this provision was not required as the 10 residents on Garfield Road requested it. The other 50,000 residents of Novi have not been heard on this issue and might like to have input because it discusses 106 acres of land that could be parkland. In1994, it was referred to as being a passive park. He referred to and read portions of the discussions of the park in the minutes of February 27, 1995 and the April 17, 2000 public hearing when Ms. Gronachan stated the requests of the residents. However, he objected to the idea that there are 106 acres of nature park that residents would be told to stay out of.

Andrew Mutch, stated he was speaking for himself and not for the Friends of Novi Parks. He had not seen the City demonstrate commitment to the Parks and suggested actions the City could take that would show their commitment. They are still waiting for Council to protect the remainder of North Novi Park. The City had not applied for the Natural Resources Trust Fund Grant from the State that would allow us to acquire land and to develop parks. The range of funding available each year is in the range of $20 to $30 million dollars. Communities all around Novi have benefited from the NRTF grants and Novi could as well. He asked Council to save the land at 13 Mile and Novi Road as parkland and suggested the Garfield area be opened up for limited uses for other residents to use as a passive park.

Brian Smith, 42434 Park Ridge, did not think the gun ordinance should be on the Council agenda and did not have to be decided now. He suggested letting Ferndale fight this and see what happened and then bring it up at a later date.

Cindy Gronachan, 21668 Garfield Road, spoke about the 100 Year Protection and Conservation Easement that was to be signed. In October 2001, the title was changed over from the State of Michigan to the City of Novi. This project had been in the making for 12 years as the discussion went on for that long. She appreciated that Mayor Clark and Council agreed to the agreement reached after all this time. This is not a decision tonight, it is a final ploy of a 12 year project that is long overdue for a conclusion.

To approve the Consent Agenda as presented.

Approve Minutes of:

1. January 28, 2002, Regular meeting

Approve request for Massage Business License renewal – The Sports Club of Novi, 42500 Arena Drive.

Approve request for Massage Business License renewal – Salon Nadwa, 43236 Eleven Mile Road.

Approve request for Massage Business License renewal – Linda’s Hair and More, 24079 Meadowbrook Road.

Award bid for Water Service Connection Contract to Quality Excavating based on unit pricing.

Approval of Change Order Nos. 15-19 in the amount of $31,738 with Project Control Systems, Inc. for the Police Building Addition Project.

Award bid for one 4 x 4 replacement pickup truck for DPW to Holiday Chevrolet in the amount of $28,118.43.

Approval of Traffic Control Orders 01-49 through 01-50, stop signs at Sunrise Blvd and Mill Street in Whispering Meadows Subdivision.

Member Capello said the City has a 100-acre parcel on the west side of Novi that could be used for passive recreation and would probably have some educational amenities given the wetlands and the woods constructed there. He felt the citizens should have access to that parcel; otherwise, 100 acres of valuable parkland would be reserved for the benefit of 26 residents. There must be a way not to encroach on the backyards of those residents and still have access to the property. He agreed with Mr. Shaw and would like to set this for a Public Hearing and get additional input before taking such a drastic measure tonight to completely restrict any use of this property for a 100-year period.

Mayor Clark said they did have public input and audience participation. On one hand, we are talking about a request to take whatever action necessary to preserve several hundred acres of North Novi Park that would not be affected by the proposed Sandstone settlement. Here we have 106 acres created by MDOT as a wetland mitigation project just coming into its own. A 100 years from now, Novi would be remembered as a community that took this land and preserved it for 100 years. He felt this was the right decision.

Member Landry asked what the "many electrical code violations" were on the memo from Don Saven dated January 28^th. There were two building code violations plus the above. Mr. Pearson would provide that information in a Thursday packet.

Mayor Pro Tem Bononi had a problem approving the application with regard to the outstanding items from the Building Department unless some specification was made of the date the permit would become effective. If the infractions are cleared up prior to the effective date, she could support this. She asked Mr. Fisher what the legal exposure was if harm came to anyone as a result of electrical code infractions? Mr. Fisher said if the premises are currently in operation and there are problems that we knew about, under new case law decided in Michigan in the last six months, there would be potential responsibility. However, that is separate from the Liquor License transfer issue and he thought Mayor Pro Tem Bononi’s idea was that it needed to be moved on as a separate matter. She said her concern was when our in house officials require that applicants meet code requirements, that we support them in their insistence that code requirements are met. She would not support the motion as stated.

Mayor Clark asked if the motion could be worded in such a way that the license transfer would not be effective until code violations were corrected and an inspection conducted by the City clearing them of violations. Mr. Fisher thought the motion said that subject to putting a date in it to say the violations have to be conformed to applicable code within a specified period of time. Mayor Clark asked if the motion maker wanted to do that?

Member DeRoche asked what time period was appropriate? Mr. Fisher didn’t know what the violations were or how much time would be needed to conform. Member Landry thought a 30-day compliance would be appropriate. Member DeRoche added that language to the motion.

City Manager Helwig said they are setting the cycle in motion for more than the $1,080,000 dedicated to neighborhood street rehabilitation through the year 2000 road bond. This is the cycle Council approved last May 7^th approving soliciting construction then, 2001, neighborhood roadway and major street rehabilitation program that actually totaled $1.4 million at that time. Member Lorenzo said we don’t want to preclude City Council through budget deliberations allocating greater resources to the needs of our neighborhoods when it comes to roadway improvements. By setting this cycle in motion for the engineering and related support parameters for going out to bid, we are not precluding that.

Mayor Pro Tem Bononi thanked Mr. McCusker for the manner in which this was brought forward and using the PASER Index Guide. She wanted to know when it would be appropriate for a priority proposal with regard to which streets are improved first. The only exceptions she would consider were emergency situations, otherwise she would be looking at residential streets first.

Member Csordas was concerned about the PASER MAP chart that showed the poor and very poor road segments. He questioned a road in section 11 categorized as very poor and asked if that wasn’t in a brand new residential development? Mr. McCusker said when the GEI did the survey, the top course was not over the project and it picked it up as unfinished. They were making those adjustments and they would also make adjustments in Village Oaks because it was also incomplete. As projects come to fruition, the adjustments would be made. Member Csordas questioned another at Ten Mile and Meadowbrook. Mr. McCusker said it was the entrance into Treetops Apartments, which was accepted by the City sometime back and is a public street in disrepair at this time. The apartment complex had maintained it but asked the City this year to resume maintenance of it.

Member Capello asked when Council would know whether this could be done in house? Mr. Helwig replied in terms of engineering support there would not be enough staff to do this year’s cycle in-house. Member Capello asked what he would need? Mr. Helwig answered they envisioned adding a total of three engineers to provide oversight to various functions and it was a mild breakthrough in terms of trying to develop in-house capacity and coordination of engineering services. In the budget to be submitted, they would do a revised proforma based on what they thought could pay for itself, which was one of the criteria they used last year. So, in terms of having a pavement management engineer, in addition to what was proposed a year ago, they had not formed a final conclusion on that. They could proceed slowly as proposed a year ago or Council might wish them to venture into other functions, in terms of engineering support, that could be done in-house and presumably at a cost savings.

Member Lorenzo asked if the $1,080,000 would be allocated toward the neighborhood streets as opposed to major? Mr. Helwig said it would.

Mr. Helwig asked that Council bear with them because they were in a major transition in terms of Mr. Nowicki’s departure and staff trying to galvanize all the information that is needed for Council’s actions. The $567,355.00 is all from the Water and Sewer Fund. There is no Storm Water Funding in this project.

Mayor Pro Tem Bononi asked how many taps would be served by this extension according to the Master Plan and what was the estimated percentage of pay back the City would get from those who would benefit from this? Mr. McCusker said between Summer Line and North Haven subdivisions with approximately 200 units, Bristol Corners and a potential SAD 153 it would include everyone through the South Lake corridor up to West Lake and back into the lake. He would forward her the exact amounts. She said there was a statement in the packet that "it should be noted that our City Attorneys are in the process of acquiring the last four easements for this project." In the future, she would appreciate and move that if looking at total costs without easements, at least two appraisals of what the easements are worth should be presented to have an idea of what the estimated cost of the project would be.

To Award the bid for West Park Drive Water Main Extension to

Mr. Fisher said they expect that, aside from the Miron property, they will be donated.

Member DeRoche said this water main was the one that his subdivision would tap into if they proceed with their SAD and asked if that was far enough removed for him to vote on this? Mr. Fisher said it was because this would not materially impact him in dollars and cents.

Member Lorenzo asked if this was the project dealing with the Miron property and the larger storm sewer and how it had been financed? Mr. Fisher said the storm sewer is the next item on the agenda. This one is the water line.

Mr. Fisher pointed out that the easements had not been acquired for this project. He could not provide information regarding valuation as they are still getting the information necessary to acquire the easements.

Member Lorenzo asked where the money would come from? Mr. McCusker said originally this was coming out of the drain fund and they partnered it with the water main project. The engineering estimate was $20,000 and less than what they thought it would be. They are looking at a FEMA Grant through the State Police Grant Association and they will send another letter of support that will continue on. They requested $87,000 and in kind for that would be about $29,000. A donation of about $20,000 along with the easements was discussed with Mr. Serlin of Bristol Corners. In turn, the $20,000 would be partnered with the grant, if acceptable at the time, as the in kind on that so they would probably be about $9,000 into it. If we are supported by the grant, it would pay for most of the project.

Mayor Pro Tem Bononi questioned the statement in the history documentation stating "an additional benefit of this project is to the Walled Lake water quality by removing the direct discharge of storm water runoff into the lake." She asked how the water was being treated so that it is an improvement? Mr. McCusker said the water does not run where it is supposed to go. It runs out of the ditch lines, straight down the road, through the end of South Lake Ct. and down into the lake. The 42 inch that the DEQ had permitted for us would send it out into a bermed area that was already in the wetlands area of the Bristol Corners complex. It would follow that ridge and filter down through two series of ponds and filter back below South Lake Drive. She asked what he had at the terminus of this 42-inch storm drainpipe? He replied it was a series of weirs that would control it at the end and then it would go into the ponding areas that are below and filter out. She asked if they had the MDEQ permit to do that? He said they did.

Award bid for Tandem Axle Truck to Motor City Truck, the low bidder, in the amount of $133,140.

Member Lorenzo asked if this was a snowplow and when the date of delivery would be? Mr. McCusker said yes, with delivery near the end of March.

Bob Shaw, 40612 Village Oaks, did not understand the difference between saving a parcel on Garfield Road with a 100-year conservation easement and the other 100-acre parcel on the north end. He would not be able to attend the February 23 meeting regarding Sandstone and hoped that someone would read back the comments that came from Council when they approved the 100-year easement tonight. He suggested the conservation easement be placed on the property to be offered to Sandstone. He hoped it would remind Council about the long-term picture of Novi and the importance of parks and preserving land for the public. The fact that Council had taken away opportunities to enjoy that land for 50,000 plus residents of Novi for the benefit of 26 residents is despicable. He heard that the Garfield land was too sensitive to be used for a park. He said there are 500 acres of the same thing at North Novi Park. Mr. Shaw said Council has told them that there are 700 acres of parkland up there but 500 of them are the same kind of swamp and marsh as Garfield Rd. Will there be a conservation easement that says the 500 acres can’t be touched? Is that what Council wants? The philosophy of both is the same so he felt totally confused, it makes no sense and he felt thoroughly disgusted.

Greg Oblecht, Attorney speaking on behalf of Gary Jonna and Ridge View Center, objected to the acceptance and dedication of Item #11, Cabot Drive. Since this development began, Ridgeview Center had exhausted attempts to have ingress and egress on Cabot Drive. Ridgeview Center and Northern Equities are still in negotiation. If the City accepts this, it must do so keeping the safety of its citizens in mind. Ingress and egress to Cabot Drive from Ridgeview Center is doing that. Traffic studies have shown ingress and egress would be greatly beneficial. Unfortunately, Northern Equities is a private land developer and they have the "double strip" between us and we have not been able to procure an easement or access over that piece of property. Therefore, he requested that the City accept Cabot Drive subject to Ridgeview Center getting

access over this double strip of property owned by Northern Equities or adjourn the matter while the parties continue to negotiate.

Mr. Fisher advised this was a subject that had been before the City for a period of time. It rises out of a contract entered into by the City establishing a SAD, or in connection with a SAD, for the improvement of 12 Mile Rd. east of Novi Rd. extending to the west just past New St. This project has not been funded by the issuance of bonds or by generally accessing citizens of the community but has been funded primarily on the back of one property owner who is the developer of the Fountain Walk project, which is in the process of being completed. The project was broken into four phases as part of an amendment of the contract. The first phase being the boulevarding of 12 Mile from New St. to west of Novi Rd., which has been under construction for an extensive period of time. Iafrate had been doing the work on the project as a sub-contractor to the owner of Fountain Walk and that owner is known as PLC West, a Limited Liability Company.

As we moved through the project, the Road Commission for Oakland County and the State made requirements that were not contemplated. There were various delays that stopped and started this project. As a result, PLC became obligated to pay moneys to its subcontractor, Iafrate, a sum in excess of what had been contemplated when the arrangement was entered into with the City. The question now arises do we tell PLC that this is their problem and they are going to pay the excess or do we allow and make adjustments in the way the contract is going to be done and make an accommodation? That is skipping various controversies that exist in connection with that issue. The City was not pleased that construction took so long and certain obstructions were on the road for an extensive period of time but basically an attempt was made to get along rather than create an environment of controversy. This proposal was designed and calculated to seek a completion of the substantial portion of the project without entering into anticipated lawsuits that might otherwise arise. The lawsuits would arise if the City did not enter into this agreement and PLC took the position that they had insufficient monies to pay its contractor and its contractor would then initiate a case against PLC and PLC would initiate a case against the City. During the course of this there had been some finger pointing, which the City disagreed with, but everyone has the right to pay a fee and start a complicated lawsuit.

This agreement would very, very strongly diminish any likelihood of litigation. It would set aside moneys for the completion of the portion of the project that would go into the intersection of Novi and 12 Mile Road and extend east of the intersection to just before the McDonald’s restaurant where it would terminate. At that point, the GAP project would pick up and extend over to the current boulevarding west of Meadowbrook. The contemplation would be that the second and third phase going into the intersection and then just east, was bid by the Road Commission and as part of the amendment of the contract, a supplemental agreement was entered into that contemplated the potential of the Road Commission doing that portion of the project because it was doing the GAP project and the bid might be better with the contractor doing the whole thing. The bid by the Six-S Company came in and the number was better than the contract price that Iafrate would have utilized. It was roughly between $1.4 and $1.5 million for those two phases not including engineering oversight by the Road Commission, utility relocation and ROW acquisition budgeted as part of this arrangement.

The shortcoming of how this arrangement has been entered into would be that we would be setting aside $2.5 million to do phases 2 and 3. The hard cost contract is $1.5 million so we would have an additional $1 million to handle the oversight by the Road Commission plus the utility relocation and the contingency for the contract amount generally. By all experts that million dollars is a very good cushion to get that done. However, something unforeseen could happen and it would cost more than that.

If Council approves this agreement it would release PLC from its obligation to pay any overage for the construction in those soft costs. The intent would be not to release them from any overage on any ROW acquisition as those cases get finalized in terms of just compensation.

That leaves Phase 4, which is the phase west of New St. He said that phase was emphasized in the supplemental agreement last year but was looking like it might be in jeopardy of not having enough money to do it right away. He thought there was still some jeopardy to that fourth phase. Therefore, this was structured so that PLC would be relieved of its responsibility of doing the fourth phase but all moneys not utilized for completion of phase 1 would go to the completion of phases of 2 and 3 and all monies not utilized for these phases would go to a special fund for phase 4. That money could stay in that fund for a period of time to allow the City to find other moneys to add to it to do phase 4. The only limitation was that after 3 years or so the Internal Revenue Code would require that the money be put back into a debt retirement fund for the bonds.

The net impact of this is that this budget would pay all of PLC’s unanticipated overage for the completion of phase 1, would set aside $2.5 million for phases 2 and 3 and all the balance of the moneys would be applied for phase 4.

Member Lorenzo stated she would not vote for this issue and had not voted for any issue in connection with SAD 155 nor had she voted for anything in connection with Fountain Walk. She had not voted in favor of SAD 155 because the development and improvements of 12 Mile and the other roadways there were on a Road Bond Issue that the residents of Novi in a majority vote said they didn’t want to pay for these types of development driven improvements. She was also concerned that the City and taxpayers would become responsible for any of these payments for these improvements. Unfortunately, what she was hearing was Council is being asked to amend this agreement because they are afraid of being sued for precisely the same reasons they were sued in the Sandstone case. She said without this amendment, PLC had the total obligation of constructing all four of those phases and all of the cost overruns are their responsibility. Is that correct? Mr. Fisher said that is what the documents provide and that would be subject to any claims they could prove.

Member Lorenzo stated Council was being asked to allocate every penny of the SAD and in doing so relieving PLC from their obligation for phase 4 and relieving them of any obligation of more than $2.5 million for phases 2 and 3. She was also concerned about adding phases 2 and 3 to the GAP because the City is still in negotiations with ROW acquisition. She said there were no time frames in this potential amended agreement that would be agreeable to both the City and PLC with regard to the construction of phases 2 and 3. One of the reasons they wanted this contract in 2000 was that they had very specific time frames to meet. If there are time frames with phases 2 and 3 and we don’t know when these ROW acquisitions are resolved, suppose this is dragged out and they come back and say the City had interfered, isn’t that a potential in this particular instance? Mr. Fisher thought it would be appropriate to get the representation on their part that the timing on these two phases would be at the City’s discretion. She wanted other delays also covered. Mr. Fisher agreed. He said due to the diligence of Finance Director, Ms. Smith-Roy they thought they had found an additional $300,000 that was a reimbursement to PLC for unused ROW relocation from Consumers Power, which would be an additional cushion.

Member Lorenzo said some of the parties, if not all, knew that the total amount in this SAD probably would not cover the actual costs. Who knew? Mr. Fisher said at the beginning of this contract time there were plans that had been drawn that were inadequate. She asked who knew this? Mr. Fisher said both the City and PLC and that is why the contract was prepared to put the burden on PLC to pay the additional costs. He said PLC was not claiming the additional costs arose out of an inadequate design. They are indicating the costs arose out of other interferences that delayed them. She wanted Mr. Fisher and the administration to find a way to protect the City from the very circumstance we are facing this evening. She asked that Council get those provisions in this document.

Mayor Clark thought that Mr. Fisher had said part of the delay was because of additional requirements from the County and the State. Mr. Fisher said that wasn’t as much a delay as significant additional costs. For example, the County was requiring two swirl chambers that cost about $250,000 each that no one contemplated at the beginning of this discussion.

Mr. Helwig said when some of us came on the scene, the estimate for this work was some $7 million. What was put before the voters in the fall of 1999 was $6 million for 12 Mile Road. The bonds were sold for $8.4 million, the property acquisition had been a huge challenge on 12 Mile and we had hoped for a start of construction around July 4^th 2001 and that didn’t happen because we were not in a position to start. He thought if there was a vulnerability, that was it. Then comes the 12 Mile GAP which Council wanted funded privately and they were able to get $650,000 committed from Taubman toward the overall estimate of $6.5 million. What is helping to save the day here of cost overruns in phase 1 and a longer than anticipated construction time table is the fact that the Road Commission went out to bid last June and the bid to do the GAP work was just under $4 million. To do this phase 2 and 3 was only an additional $1.3 million because of the economy of scale. That came to just $5.241 million for what was thought to be a hard cost estimate of $6.5 million just for the GAP. They were unable to complete the right of entry to get that started and the intent was to get that started this spring. Six-S said they will honor that contract and the Road Commission has kept it open to start this spring. All this is being funded privately. If able to start the GAP project this spring, the feeling now is that we will have $700,000 to a million dollars toward phase 4 that is the least desirable portion of this whole complex of roadway upgrades. However, we still might come out of this with $700,000 to a million towards the $1.2 million, roughly estimated, to complete that phase.

Member Csordas asked what delays did PLC contend the City caused? Mr. Fisher said a letter had been written to them asking them to itemize dates, times, people involved, etc. and he had not received a response. However, the matter of when they could start the process and have access to the ROW in order to start relocating utilities, etc. is something they had to pull their contractor off the job and then restart the project later. They were advised that contemplates a contractor coming in, pulling off and then re-organizing on the job. The City’s view is that they came in at a time when we were already behind schedule because the design engineer, that PLC was responsible for, did not finish sufficient ROW design so that we could start doing the ROW. In order to start acquiring ROW, you have to have surveys and designs of exactly what is to be taken and those surveys form the basis of getting appraisals and the surveys together with appraisals come before Council for authorization for the taking and making a good faith offer. We did not have that information so it would be a claim, a counter to the claim and we would essentially have a fight.

Member Csordas asked how much more money this document was asking for? Mr. Fisher said it was not asking for any more money. Basically, we are relieving PLC from doing phase 4 with the idea that phase 4 would be done only if the money left over from 1, 2 and 3 could be put together with other monies obtained by the City to do it. In addition to that, it limits PLC’s obligation on phases 2 and 3 to any amount beyond $2.5 million for the actual construction work. We have a reasonably good bid from the Road Commission for the project and they would oversee it in the amount of roughly $1.4 to $1.5 million and $2.5 million is being set aside for that purpose. Member Csordas asked if PLC would be able to meet their obligations for the servicing of the debt? Mr. Fisher responded they were advised that they are current with their obligation. They have represented that they have the monies for the next installment set aside and after that it would depend upon the security for that is the value of the project. The good news is the City’s lien for the security of the payment would probably come before any other financing for that project. So the value of the brick, mortar, leases, etc. would go first to pay the City and his understanding was that it is a $100 million project.

Mayor Pro Tem Bononi said she remembered asking the question of Council and our advisors as to why we would entrust the construction of a complicated roadway to an applicant who had no experience in building roadways. She was sorry our resources were being used to take care of it. It escapes her why we keep doing this over and over again. She noted she didn’t have a bottom line number on what this might or might not cost the taxpayers when all was said and done. She thought it was very important that while all of you are using your professional resources to resolve these matters, it is taking time away from our City. In looking at the material brought before Council she thought it was both hilarious and heartbreaking. Anytime an SAD comes before her in the future that benefits a commercial development, she would look into it so thoroughly that it probably would extend the length of the Council meeting because enough is enough. Mayor Pro Tem Bononi would not be voting to support this nor had she voted on a single issue in regard to SAD 155 which she believed benefited this developer. She was very concerned that the taxpayers would get burned on this one too.

Member DeRoche asked if Mr. Fisher anticipated the taxpayers getting burnt? Mr. Fisher could not say there was no risk associated with this but could say if we don’t do this as represented to him by attorneys on the other side, that it is a virtual certainty that we would have a fight. Member DeRoche asked if there would be enough money to pay for what they are expecting?

Mr. Helwig commented phase 1, 2 and 3 in conjunction with the GAP with some residual dollars towards phase 4 would be completed. Member DeRoche asked if they were, to the best of their knowledge, exposing the taxpayers to a liability. Mr. Helwig said he did not see it. In terms of what is going to be accomplished and what the community is already benefiting from, these are gains that the community had been trying to achieve for many, many years and it is finally happening. In the end the taxpayers are going to benefit dramatically from the road improvements.

Member DeRoche said Novi would get a major road through this community boulevarded without taxpayer expense. He felt the City would benefit enormously.

Mr. Fisher said he would attempt to incorporate some of the beneficial comments that were received about the timing being at the discretion of the City and making allocation of additional monies that we think are involved here.

Member Capello asked if this agreement was approved with phases 1, 2 and 3 where would the divided four lane 12 Mile Rd. end on the west? Mr. Helwig said essentially where it is now. He asked if there were any properties burdened with the SAD that are not getting the benefit of the four-lane road? Mr. Fisher said no, Fountain Walk is the sole obligor on this project. They are making every effort to complete phase 4 and have acquired ROW from property owners in that area giving them the understanding that their road would be constructed. They had not received gifts of ROW and had paid fair market value for that ROW in connection with the project. Nonetheless, they want to make every effort to do the project not only to benefit the City but also to benefit the property owners.

Mr. Capello asked if the improvements at the I-96 Interchange would still be completed? Mr. Helwig said they were in the ground now. Mr. Capello thought there were going to be some straight through lanes which would go to Fountain Walk coming off the exit ramp with an additional lane going directly through. Mr. Helwig said the markings were not in. The additional pavement has been done on the right in order to enable that through lane to be marked but it was completed just as the cold weather was settling in but he didn’t think it had been re-laned yet.

Mr. Fisher noted this is to finally get these utilities and roadways accepted by the City. He reported they had a meeting in his office with Mr. Jonna and Mr. Stewart and their lawyers. Productive discussions followed and he understood that productive discussions have continued. He said they would like to be of service in helping these property owners get together but it is a private matter and he thought they had utilized the offices of the City to the degree they could. Although, they would like to go further, he didn’t think there was a reasonable authorization to condition the acceptance of this ROW upon allowing a private property owner to connect and have access over other private property. Mayor Clark noted we can’t dictate terms to a private property owner. Mr. Fisher said right, but he had every hope that even if this ROW is connected that those two property owners would make their deal.

Mayor Clark said it was his understanding that the recommendation was to accept the Haggerty Corridor Corporate Park/Edison Easements for Lewis and Cabot Drive. Mr. Fisher said yes, subject to our finalizing the insurance aspects related to Edison. He thought they had them in hand and had received a letter this afternoon faxed by the insurance carrier giving them what looked to be positive news.

Member Lorenzo asked what the liability insurance would cover? Mr. Fisher said the difficult aspect of the insurance is what Edison requires that we need to essentially indemnify them for accidents that occur as a result of their own actions on the property.

For example, their electric service is going through there and if an injury occurred as a result of a pole falling or as a result of a failure of maintenance, we would have to indemnify them and that is the kind of insurance we want. She asked what the limit of our insurance for any one particular incident? Mr. Fisher said $10 million. She asked if we had any idea of the amount of actual claims brought against Detroit Edison? Would that cover such a claim? Mr. Fisher said it would cover any kind of general claim you could contemplate but when you start dreaming about the possibilities that could happen as a result of an electrical kind of thing with an automobile driving by with a family in it. She said then this is a significant exposure for the City. He said it certainly could be. Member Lorenzo said we also have to defend the claim, which meant we have to pay legal counsel. Mr. Fisher said the insurance would provide a defense. She asked if we were obligated to accept this as a public street? Mr. Fisher said arguments could be made that we have an obligation and arguments could go the other way. She asked if they would be valid arguments? Mr. Fisher believed that we have acted as a City in this situation so that the property owner could make a strong case. She asked how we have acted? Mr. Fisher said we have given them every impression, not only though things done in connection with this project but with all other projects in the City where we do take the streets including Edison easements, that probably have the same liability and we would be denying it for a reason that we have overlooked in the past.

Member Lorenzo stated it was too much exposure and she would not vote in favor of this.

Member Landry said if he understood the indemnity, paragraph 7 on page 2, the City of Novi would be the Grantee and it does not appear that we are indemnifying Edison for claims arising out of Edison’s sole negligence. Mr. Fisher said correct and it was the advance that he was able to make with them. Member Landry said we would indemnify Edison for any injury arising out of our negligence, our negligence and Edison’s joint negligence, some theoretical third parties negligence but if Edison is solely at fault we are not indemnifying them for that. Mr. Fisher said correct and he got them to take that out. Member Landry said to cover this indemnity that we would be accepting we have to provide a new insurance policy that would name Edison and us as joint insureds and Northern Equities is paying for that policy in perpetuity? Mr. Fisher said yes, and it is a $10 million policy and he assumed that it would be comparable.

Member Landry asked who determines the limits of liability required under this policy? Mr. Pearson said if it were able to fall under the City’s pooled coverage it is set at $10 million. If the pool declines and Northern Equities has to purchase that it could be an amount that Council sets and he pointed out that other projects have been $3 million when we have asked a third party to acquire that kind of insurance. Member Landry said if the pool accepts this risk there is no increased cost. Mr. Pearson said there might be a small administrative amount and Northern Equities would reimburse the City for that.

Mayor Pro Tem Bononi asked why Northern Equities wasn’t acquiring these easements? Mr. Fisher said they did acquire the easement and assigned it to the City. When he met with Edison to try to modify the form contract his preference was to get the easement directly from Edison rather then take an assignment. Northern Equities did initially acquire the easements, at a considerable sum of money, and proposed to assign them to the City and Edison was willing to redraft it and have the easement go directly from Edison to the City. Mayor Pro Tem Bononi said then we are accepting easements for streets that we have not accepted yet. Mr. Fisher said the easements and the streets would be accepted concurrently. She said the alternative is that Northern Equities could have provided these easements had Mr. Fisher found that legally appropriate or Northern Equities could have a private road and alleviate us of the problem. Mr. Fisher said they did discuss that with them and it would require a variance from the Zoning Board of Appeals and Northern Equities was not amenable to that.

Mayor Pro Tem Bononi referred to page 2, regarding indemnifying power interruptions and paying for "sustained electric interruptions or voltage fluctuations including sag arising out of the Grantee’s negligence, Grantee’s and Edison’s joint negligence, or any other person’s negligence." She could see how our negligence might be limited but to indemnify Grantee’s and Edison’s joint negligence and not mention how far $10 million would go on a fine like that. Mr. Fisher said it depended on the incident. She commented that was her concern. She was also concerned with his comment that if we enter into disputes our insurance will pay for legal fees. Mr. Fisher said they provide a defense to cases in which they have coverage. She said but if we don’t prevail we pay? Mr. Fisher said it depended on the policy and whether it has a self-insurance portion where we pick up the first x-number of dollars then we would be paying that portion of it.

Mayor Pro Tem Bononi did not see what the City would get out of this and certainly didn’t see what the taxpayers got out of it with regard to potential payments that could come about as a result of the power generation situation. As a member of the Ordinance Review Committee she would be looking for an ordinance that said: no easements by the applicant, no street acceptance. She would not be supporting this.

Member Capello said we are talking about the small section of road or the small section occupied by the utilities that go underneath the power line, correct? Mr. Fisher said yes, and these two streets have three locations where there is a power crossing. Member Capello asked if there were towers within the easements? Mr. Fisher said no, they are the high overhead power lines. Member Capello said then our exposure would be if we have to repair the roads or the underground utilities and in doing that we affected the overhead power lines, which would cause damage to personal property or cut off service. Mr. Fisher said yes or if someone was driving down the street and hit the overhead lines or if the power lines were down. Member Capello said the risk would only be there if Edison was not negligent in maintaining their power lines or towers. Mr. Fisher said yes, and we are not negligent, that’s right. Member Capello thought the risk for actual damage was minimal. Mr. Fisher thought the instances of liability would be remote but in those instances in which there was liability it would probably be in high numbers.

Mayor Clark assumed that was the bonding company on this project. Mr. Fisher said yes. Mayor Clark said the payments would go to them to make sure that the subs are paid appropriately and the necessary waivers of lien are obtained before they receive payment. Mr. Helwig said that is correct and to resolve the payment issues associated with payment #1.

Member Lorenzo asked if this was to both Greystone and Liberty Bond or just Liberty Bond? Mr. Schultz said both the bonding company and Greystone would be named on the checks.

Member Lorenzo asked if Greystone had to be on the checks. Mr. Schultz said technically the contract has not been terminated. She asked if this could wait a few days until the contract was terminated? Mr. Schultz said they had still earned a certain amount of money that is reflected in payments 1, 2 and 3. The cleanest way is to put them joint on the checks and he didn’t think they would have trouble with the bonding company sorting out who owes what because the plan, as of Wednesday, is once a substitute contractor is in there we can get the project moving again by having the subs paid directly through the bonding company.

Member Capello asked, in giving the checks to the bonding company, would we require the typical conditional waivers of lien from them for even the work that is sent out for pay applications 2 and 3? Mr. Schultz said that is the plan and then we would be free of the Greystone contract and could move on.

Member Csordas said we have assurances that Greystone would not get the check and that Liberty would disperse funds appropriately. Mr. Schultz said Council is approving pay applications 2 and 3 with the caveat that all of the documentation needed to make sure there are no liens on the property, no unpaid work, will be in place before those checks are released.

Mayor Pro Tem Bononi said after looking over the comparison information for compensation rates for City Managers and City Clerks and looking at a proposal that would reward solid performance on behalf of both of them she wanted to propose for the budget year 2001-2002 a 4.5% annual Increase plus an additional contribution to Mr. Helwig’s deferred compensation to allow for the $11,000 per year maximum contribution.

Mayor Clark asked if she would include in the motion Mr. Helwig’s car allowance, etc. She commented any and all benefits currently received were to remain the same.

To approve for City Manager, Richard Helwig, a 4.5% annual increase

Member Lorenzo said this is July 2001 through July 2002? Mayor Clark said correct, this coming July Council would look at it again and that would take it from July 2002 through July 2003. Mayor Clark thought, given the recent reviews of Mr. Helwig and Mrs. Cornelius, at that time, they ought to consider whether another interview was necessary or if the adjustment should just be made.

Member Landry thought it should be noted that the average increase for Novi administrative employees was 4.033% for last year so this is in keeping with the average increase of all administrative employees.

Member DeRoche said in reviewing our City Clerk’s compensation with the data of comparable cities it appears that her salary is off from the average. He was not proposing that Council try to cut that difference out but if we are giving a $3,000 increase to our City Manager’s deferred compensation, he would like to add $3,000 in salary to our Clerk to push her closer to the colleagues she leads as Clerk of the Year. He asked that the motion be amended to be 4.5% plus $3,000 to our City Clerk’s compensation.

Mayor Pro Tem Bononi stated she was not amenable to doing that and it did not have anything to do with the excellent performance of Mrs. Cornelius. However, it does have to do with the fact that we are talking about pay for performance across the board and we are also talking about a 4.5% increase when the national average is 3%. She wanted to send that message to all employees who would be looking at what they have received as a result of their performance evaluations and keep that number static at this point. To be very truthful, when we negotiate our rate coming in we sort of live with that. She had no comment about Mrs. Cornelius’ performance other than that of excellence.

Mayor Clark asked that they bear in mind that in five months this would be reviewed again and that aspect could be looked at again and it would again be retroactive.

Member Capello agreed with Member DeRoche because Mrs. Cornelius’ compensation is so far below the average it needs to be adjusted. She does not get a City vehicle, which most of the City Manager’s get. His intent was to give her a 10% increase and it would still bring her up to about $4,000 less than the average. A 10% increase would be $6,500 and Member DeRoche’s increase would have been about $5,500 and that was why he seconded his motion.

Nays: None

Letter from David Paul Re: Resignation from Cable Access Committee due to his appointment to Parks, Recreation and Forestry Commission.

Letter from George Krieger Re: Televising Library Board meetings

There being no further business to come before Council, the meeting was adjourned at 11:46 PM.

______________________________ _______________________________

Richard J. Clark, Mayor Maryanne Cornelius, City Clerk

Transcribed by: _____________________

Charlene Mc Lean

Date approved: February 25, 2002