City Council Minutes

Councilmember Swigart 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: Councilmembers Kevin Hartshorne, Jerome Mittman, and Thomas Swigart

Absent: Mayor Christopher Johnson (excused), Mayor Pro Tem Carolann Ayers (excused)

Citizen Comments

James Stuart, 761 Thayer, addressed several issues, which included a request to delay approval of the February 7, 2005 special and regular City Council meeting minutes; his belief the City failed to defend any legal action against the City’s ordinances as well as the decisions of its commissions; his belief the City gives special consideration to certain property owners and projects that do not meet the ordinance requirements, suggesting the City begin supporting the residents and its ordinances; and his belief that the Board of Zoning Appeals is an unnecessary interim board that should be abolished.

City Council noted that their goals and objectives discussion at the February 7, 2005 special meeting supported funding a review of the zoning ordinance.

Mr. Stuart was asked to provide specific information on alleged ordinance violations and lack of enforcement so those matters could be addressed. Stuart cited Our Lady of Victory (OLV) Church’s non-compliance with previous parking requirements and the City’s lack of enforcement as one example. It was responded that the City continues to work with OLV and, at this time, preferred to continue its dialog with the Church to resolve the matter and force compliance over resorting to legal action.

John Colizzi, 841 W. Main Street, supported the comments made by Mr. Stuart. Mr. Colizzi also addressed additional issues, which included his belief that a 1997 City Attorney opinion eluded that the City’s zoning ordinances would withstand legal challenges pertaining to future OLV expansion; the need to strengthen ordinances related to the special use permit review and approval process to allow site plan review as part of the special use permit approval; parking "overhang" requirements; and the number of parking spaces needed relative to "fixed seats." Colizzi stated that there was a need to fund a thorough review of the zoning ordinance and suggested the City Council consider forming a citizens committee to work with a consultant during the ordinance review process.

Colizzi addressed additional issues pertaining to the Our Lady of Victory school expansion project, which included the fact that most of the people attending OLV do not live in Northville and more than 84% of neighborhood residents surveyed opposed the Our Lady of Victory project; property brokers approaching adjacent OLV property owners to purchase additional property on behalf of OLV and that one such property had been sold, with a comparison of this situation to the properties near Sacred Heart Church in Dearborn which were purchased by brokers and subsequently demolished.

Colizzi also commented on the Orchard Heights Homeowner Association’s resolve to be active in the November election to ensure there are elected officials that support the residents and neighborhoods.

City Council acknowledged the February 21, 2005 letter from Norman and Susan Baker, 45620 Bloomcrest, which pertained to special interest zoning and a request for a zoning ordinance review and update.

Paul Bacigal, 302 Orchard, supported the comments made by Mr. Stuart and Mr. Colizzi. He also urged the City Council to uphold the ordinances and allocate funds to review the ordinances, with revisions made as necessary so that special interest group considerations do not overshadow the wishes of the residents and neighborhoods.

Paul Kelly, 310 Orchard, spoke to his attendance at the City Council, Planning Commission and Board of Zoning Appeals meetings pertaining to the Our Lady of Victory Church school expansion project. He felt the residents have been articulate in their request for change in the direction of the Boards to return to respecting the desire of the residents.

Kevin Jordan, 370 Eaton, addressed the failings of the current zoning ordinance as it pertains to parking. He also stated his belief that the City grants special use permits too easily and that the new school will ultimately erode the tax base and decrease the City’s revenue.

Joy Colizzi, 841, W. Main Street, clarified comments made by John Colizzi that 84% of the neighbors polled opposed the size and impact of the new building, not Our Lady of Victory. She also stated that the special use ordinance should not allow the same set back requirements for buildings the size of the OLV school project as those allowed for residential homes. She supported previous comments made relative to reviewing and revising the zoning ordinances.

Eric Nichols, 19705 Clement, addressed several issues, which included his belief that the City allowed the Board of Zoning Appeals to fraudulently reverse the Planning Commission decision on the OLV Special Use Permit; his belief that the City was railroaded by a legal firm and an organization that does not care about the City, its residents, or following its ordinances; and his acceptance of the Planning Commission denial of plans to improve his home, which prompted his decision to move to the Township so that he could find a home with sufficient land space to met his needs.

Eugene Osentowski, 405 Eaton, echoed his support for all previous comments, adding his belief that having a dialog with OLV to address current non-compliance with the parking ordinances is a sign of weakness by City administration. He requested the City take immediate action to address any non-compliance.

Motion Mittman, seconded by Hartshorne to approve the agenda and consent agenda as presented.

Consent agenda as follows:

• Approve City Council Minutes:
• Special Meeting of February 7, 2005
• Regular Meeting of February 7, 2005

Approve Bills List: Checks #42207 to #42277, and #42278 to #42407

Receive Board and Commission Minutes:

• Historic District Commission: 1/19/05
• Housing Commission: 1/12/05
• Parks and Recreation Commission: 1/12/05
• Planning Commission: 1/4/05
• Youth Assistance: 1/11/05

Receive Departmental Reports:

• Fire Department: 12/04
• Parks and Recreation: 1/05

Resolution to Enter into Grant Agreement for Optical Scan Voting System

Use of City Precincts and Polling Places for the Administration of School Elections

Proposed Cemetery Walk for Sunday, October 2, 2005

In 2004, the City Council approved the use of $66,000 from the 2004 Wayne County CDBG program and the use of $54,206 from Wayne County CDBG Program Income, which were allocated for specific program eligible projects. However, when these funds were approved, it was not realized that these funds were already included in the Senior Center renovation project budget. Therefore, the funds must be reallocated to the Senior Center project. The CDBG reallocation process requires a public hearing.

Motion Hartshorne, seconded by Mittman to reallocate the FY 2004 Wayne County CDBG Funds as follows:

Motion Mittman to reallocate Wayne County CDBG Program Income Funds as follows:

It was suggested the proposed reallocation of Wayne County CDBG Program Income Funds be placed on the March 7, 2005 City Council agenda for further review and possible action.

The City of Northville is expected to receive approximately $56,000 from the Wayne County Community Development Block Grant (CDBG) program for FY 2005. CDBG funds are used to assist low to moderate income residents, eliminate community slums or blight, or provide an urgent community need. While the City of Northville does not have any low/moderate income census tracts for area-wide project eligibility, the category of senior citizens qualifies as a presumed benefit group eligible for CDBG expenditures. The CDBG application process requires a public hearing.

Council Comments and Discussion: Councilmember Hartshorne noted he was recently elected as vice-chairperson of the Wayne County CDBG Committee and that the City of Northville’s estimated FY 2005 allocation was increased to $58,000.

Motion Hartshorne, seconded by Mittman to allocate the estimated FY 2005 Wayne County Community Development Block Grant funds as follows:

The renovation of the original Allen Terrace elevator is the final project funded under the Allen Terrace Renovation Project. Previously, the City Council approved a contract with ThyssenKrupp Elevator Corporation for $79,654 to complete the elevator project and Bolin Electric Company for $4,275 to complete the electrical work. During the electrical component upgrade, it was found that the electrical panel amperage was insufficient for the required amperage needed in the elevator control room. Bolin Electric Company prepared a change order in the amount of $980 and the work was completed so as not to delay the project.

Motion Hartshorne, seconded by Mittman to approve Change Order No. 1 in the amount of $980 for the Allen Terrace electrical panel upgrade. Motion carried unanimously.

Due to the City’s overall financial position in the 1980’s and early 1990’s, liquidity was the primary concern for managing the City’s funds and the complexity of the City’s investment strategy was limited. As the City began to emerge from a General Fund deficit and improve its overall financial health, the amount of funds available for investment steadily grew. To achieve a prudent balance of safety, including diversification, liquidity, and yield, changes to the investment function should be implemented. In August 2000, City staff circulated a Request for Information (RFI) to 20 firms, including banks, investment managers/advisors, and broker dealers. From the 12 responses received, it became evident that the City had several different ways that it could manage its investments, which shifted the decision process from which firm to select to evaluating how best to perform the investment function.

Due to the nature of this decision and its impact it has on the City’s ongoing investment program, over the past four years, Staff carefully evaluated the investment approach and process and determined the most suitable approach for the City was to utilize an investment advisor. Investment advisors work on a stated up-front fee; focus to find the best investments for the City funds, not to sell a particular security; have the ability to function as an extension of Staff as the investment function is a contracted service; and have the knowledge and resources to effectively provide the City’s portfolio with safety, liquidity, and yield/return.

During the RFI evaluation process, Ambassador Capital Management continued to set the standard for which other firms were compared. The firm is Securities and Exchange Commission (SEC) registered; has demonstrated a conservative approach to maintain security of principal, with the focus on fixed income securities; is able to independently evaluate investment options because they are not a broker; offers a reasonable fee structure of 20 basis points; has access to resources as shown during a tour of their offices and operations; has received favorable references from other Michigan cities and townships; and participates in municipal finance professional organizations.

Plante & Moran Financial Advisors performed a background verification and evaluation of Ambassador Capital Management, which revealed no items of concern. The analysis report also confirmed the firm’s fixed income/principal preservation focus. Staff proposes the services of Ambassador Capital Management be utilized for one year and, during this time, their investment approach would be evaluated using the published municipal investment pool rate of return on the Comerica J Fund. The Comerica investment vehicle would continue to be utilized to manage operating cash flow.

Representatives from Ambassador Capital Management reviewed the company profile and investment strategy and were available for questions.

Council Comments and Discussion: Questions pertained to Public Act 20 and what the City can legally invest in, projected investment and budget earnings, and the past performances of Ambassador Capital Management. Discussion ensued pertaining to the proposed investment strategies and it was noted the firm would be instructed to operate within the framework of the City’s investment policy. City Council requested that further information be provided pertaining to the fee structure, past performance and performance benchmarks, and sample accounts and performance of other Ambassador Capital Management clients.

The City of Northville has taken steps to address the long-term liability related to funding post retirement healthcare. An actuarial analysis as of December 31, 2003 calculated an actuarial liability of $8,929,384. This amount is significantly higher than the last actuarial performed in June 1996, when the liability was calculated at $3,143,476. The disparity between the two analyses reflects many years of double digit healthcare cost increases.

Since FY 1998 through June 30, 2004, the City accumulated $1,260,668 in an internal trust fund to offset the liability and the funds were invested in a municipal investment pool fund. In 1999, Public Act 149, the "Public Employee Health Care Fund Investment Act" was adopted. The Act allowed for the creation of a public employee health care fund to allow the funds to be invested in a manner consistent with public pension systems, allowing for greater return on investment and protection from general creditors.

In February 2003, City Council approved the amount of $13,000 for legal services to assist the City in establishing a legal plan document, evaluate investment options/firms, and obtain a qualified plan determination letter from the IRS. However, since that time, the City’s existing employee defined pension system provider, Municipal Employees Retirement System (MERS) has developed the "Retiree Health Funding Vehicle" which has received IRS approval. This "vehicle" is a complement to the existing defined benefit system and both require actuarially defined goals and long-term investment objectives.

Benefits of utilizing the MERS Healthcare Savings Plan include a positive past experience with MERS from both employee and employer standpoint; a history of low administrative costs and lowered fees for future actuarial analyses; no need for specialized legal services to draft a plan (up to $13,000 savings); ability to begin plan implementation 12 to 18 months with an improved return on investment due to earlier implementation; MERS being readily familiar with laws and regulations related to public employee benefit plans; and the minimized impact on City staff time for implementation and management.

Representatives from Gabriel Roeder, Smith & Company and Municipal Employees Retirement System of Michigan reviewed the purpose of the actuarial valuation, determination of unfunded accrued liability, contributions computed to meet the financial objective, the sensitivity analysis, and the retiree health funding vehicle program. It was noted that the overall goal is to achieve the normal cost of funding post retirement healthcare.

Council Comments and Discussion: Questions and comments pertained to the actuarial analysis and the amount to likely be contributed to the program in FY 2005-2006.

Motion Mittman, seconded by Hartshorne to accept the "Report of an Actuarial Valuation as of December 31, 2003 of the City of Northville Retiree Health Care Plan," adopt the Healthcare Savings Program Defined Benefit Program Plan 3 Uniform resolution, and authorize the City Manager and/or City Finance Director to proceed with plan implementation. Motion carried unanimously.

The City Council scheduled a special meeting for February 22, 2005 to continue its discussion on the FY 2005-2005 goals and objectives. However, events warranted the cancellation of the meeting. A meeting date to continue the goals and objectives discussion is needed.

Motion Mittman, seconded by Hartshorne to call a special meeting for Monday, March 7, 2005 at 6:30 p.m. for the purpose of continuing the discussion of FY 2005-2006 goals, objectives, and priorities. Motion carried unanimously.

Hartshorne had questions pertaining to the purchase of the upgraded voting system equipment using the Help America Vote Act (HAVA) funds.

Mittman had questions pertaining to snow removal in the downtown at the street curbs. It was suggested that it be communicated to downtown businesses to clear a walkway at the street curb (where plowed and shoveled snow is piled) to allow sufficient passage from the street to the sidewalk.

Swigart noted that Debra Kubitskey is the new 35^th District Court Administrator.

B. Staff Communications None

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

Respectfully submitted,

Dianne Massa
City Clerk