City Council Minutes

Mayor Johnson called the meeting to order with the Pledge of Allegiance at 7:30 p.m. in the Northville City Hall Council Chambers, 215 West Main Street, Northville, Michigan.

Present: Mayor Johnson, Mayor Pro Tem Carolann Ayers, Councilmembers Kevin Hartshorne, Jerome Mittman and Thomas Swigart

Absent: None

Also City Manager Gary Word, Assistant City Manager/Finance Director Nicolette Bateson,

Present: Director of Public Works James Gallogly, City Clerk Dianne Massa, Accounting Supervisor Sandi Wiktorowski, Plante & Moran representatives Mike Swartz, Chris Jones, and Kris Wood, Reporters Heather Connor and Pauline Lupercio, and one citizen.

A. Citizen Comments None

Motion Ayers, seconded by Mittman to approve the agenda and consent agenda as presented. Consent agenda as follows:

Approve City Council Minutes:

Regular Meeting of September 16, 2002

Approve Bills List: Checks #28682 to #28906 and Checks #28907 to #29093

Receive Departmental Reports:

Police Department: 8/02

DNA Sample Collection Agreement

Halloween Night Street Closures

The City received a request from St. Paul’s Lutheran Church to place directional signs at four locations for their rummage sale being held on October 18 – 19, 2002. The proposed locations are:

• SW corner of Walnut and Center Street
• SE corner of East Street and Walnut
• SW corner of Randolph and Center Street
• NE corner of High and Randolph Streets

Motion Ayers, seconded by Swigart to approve the request by St. Paul’s Lutheran Church to place four signs at the designated locations from the morning of October 18, 2002 until the afternoon of October 19, 2002. Motion carried unanimously.

Mike Swartz, Chris Jones, and Kris Wood, of Plante & Moran, summarized the Audited Finance Report for the Fiscal Year ended June 30, 2002, and the Management Letter. Comments included:

The Fund Balance increased to 31.6%. It was suggested that the City Manager and Finance Director determine an adequate fund balance percentage for the City.

The City’s revenue sharing has decreased over the recent three-year period. Given the State’s budgetary difficulties, the future of the statutory portion of revenue sharing is still uncertain. The City should continue to evaluate the impact of the State Revenue-Sharing reductions on the 2002-2003 budget.

With the 2001 amendment of the Municipal Finance Act, the City is required to submit an annual filing with the Michigan Department of Treasury if a debt issue is planned during the fiscal year. The filing serves as a pre-approval for the debt issuances, is due with within six months of year end, and is good through the extended due date of the next financial statement filing.

Public Act 149 of 1999 allows funds to be invested in accordance with the Public Pension Investment Act, which, over a long period of time, could significantly reduce the cost of funding retiree health care. It was suggested that the City consider implementing Act 149 for funding its retiree health care, with a further suggestion that the City contract with an actuary to perform an updated liability calculation in order to provide insight into the funding shortfall.

Senate Bill 880 relates to fees charged to communication companies by local governments. Under the bill, current right-of-way fees are reduced; however, SBC and Ameritech are now included in the fee structure. The City would need to amend its ordinances by November 1, 2002 for the bill to be applicable to its operations. Amending the ordinance would entitle the City to receive a portion of the state fund that is collecting 5 cents per linear foot on existing lines, with the actual funding based on a formula tied to the City’s level of Act 51 funding.

Changes to the City’s financial statements, as a result of GASB No. 34, include the addition of a Management’s Discussion and Analysis section and the preparation of full accrual, government-wide financial statements that include all long-term assets and liabilities. Plante & Moran will continue to assist the City in finalizing the information necessary to implement GASB No. 34 and educate the City Council and others on how to read and interpret the new statements.

Council Comments / Discussion: Questions were raised relative to state-shared revenue, funding of the MERS defined benefit pensions plan, and the operating income reflected in the Water and Sewer Supply System and the Refuse and Recycling Funds.

Motion Mittman, seconded by Ayers to accept the City of Northville’s Fiscal Year 2002 financial statements and Plante & Moran’s Audit Report of those financial statements. In addition, City staff is directed to place a copy of the reports on file in the City Clerk’s office. Motion carried unanimously.

Nickie Bateson, Assistant City Manager/Finance Director, summarized the Year End FY 2002 Budget Report. In the General Fund, the overall favorable variance was $95,412, which represents 2% of budgeted expenditures. Two significant variances were the Police Department (favorable) and Contributions to Other Funds (unfavorable). It was explained that the variance in the Police Department was due primarily to the timing of expenditures, which were delayed until FY 2003. A higher than budgeted amount was incurred for routine maintenance in the Major and Local Street Funds, with a transfer made to maintain the financial position of those funds. This contributed to the unfavorable variance in Contributions to Other Funds.

The Special Revenue Funds had an overall favorable variance of $429,410 or 8% of total expenditures due to a delay in street construction, which impacted contributions to and from other funds. The other significant variance is due to the collection of racetrack breakage, which is not budgeted until received.

A summary of the FY 2002 Annual Investment Report noted that all investment activity conformed to the City’s investment policy, earnings on investments exceeded the City’s benchmark of the U.S. Treasury Bill rate for short-term investments, and interest earnings continue to grow each year, providing an alternate to taxation as a source of revenue.

Racetrack funds, in excess of the cost of police department service provided at the racetrack, are recorded in the Public Improvement Fund. Over the past decade, those funds have mostly been used for capital outlay and construction related activities. Based upon the FY 2002 audited financial report, the Public Improvement Fund received breakage revenue of $412,094. During the FY 2003 budget discussion sessions, City Council designated the use of $34,000 of the funds. The proposed designations for the remaining funds received during FY 2002 are as follows:

Council Comments / Discussion: Comments included the need to replace the damaged Emerald Ash trees with sizable trees, suggestion to fund the cemetery expansion through increased cemetery fees, addition of a reverse-911 system as a designated project, using breakage funds to cover budgeted items in order to protect the City in the event of revenue shortfalls and other economic risks, and opposition to using racetrack breakage funds for normal budgetary items that the City is expected to provide.

After further discussion, Council deferred action on this item and directed staff to provide more detailed information relative to the proposed projects as well as status reports on the Cemetery Expansion Project, Senior Center Project, and Mill Pond Project funds.

From time to time, the Northville Historic District Commission (HDC) is requested to review and approve the demolition of structures within the Historic District. Since there are no established guidelines to evaluate such requests, the HDC has struggled with some of the demolition applications. Although the City contacted various consultants, only one proposal was received. As outlined in the proposal, Elisabeth Knibbe Architects would assist the HDC in developing demolition standards, assist the City Attorney or another attorney in revising the Historic District Ordinance, and provide training to the HDC for implementing the ordinance and reviewing demolition requests. It was recommended that funding come from the Public Improvement Fund.

Council Comments / Discussion: While it was noted that it is important for the City to have demolition standards, there was concern with designating any portion of the racetrack breakage funds at this time in order to fund the project. It was further suggested that the project be approved with funding to be determined at a later date.

Motion Swigart, seconded by Hartshorne to approve the proposal from Elisabeth Knibbe Architects as submitted for Historic District Ordinance modification, development of demolition guidelines, and training at a cost not-to-exceed $9,750, with the project to be funded through FY 2002 racetrack breakage funds. Further, the City Manager is authorized to sign the agreement on behalf of the City. Yes: Swigart, Hartshorne, Johnson. No: Ayers, Mittman. Motion carried.

The City Charter requires that one member of the City Council, who shall not be a candidate for elective office at the election, be appointed to serve on the Election Commission. A Commissioner is needed for the November 5, 2002 General Election.

Motion Ayers, seconded by Mittman to appoint Councilmember Thomas Swigart to serve as an Election Commissioner for the November 5, 2002 General Election. Motion carried unanimously.

Mittman noted that he would be out of town and not available for the October 21, 2002 meeting. He further noted that he will be attending the American Heritage Rivers National Conference in Detroit and that he participated with the Chief in the State Police race held at Mayberry Park last weekend.

B. Staff Communications None

There being no further business to come before Council, the meeting was adjourned.

Respectfully submitted,

Dianne Massa

City Clerk