City of Northville CITY COUNCIL REGULAR MEETING MINUTES November 19, 2012 Mayor Johnson called the meeting to order with the Pledge of Allegiance at 7:30 p.m. in the City of Northville Municipal Building, City Council Chambers, 215 W. Main Street, Northville, Michigan, 48167. ROLL CALL Present: Absent: Also Present: Mayor Christopher Johnson, Mayor Pro Tem James Allen, Councilmembers Nancy Darga, Michele Fecht, and Ryan McKindles None City Manager Patrick Sullivan, City Clerk Dianne Massa, Finance Director/Treasurer Sandi Wiktorowski, Financial Analyst Cindy Kushner, Accountant Nancy Piwowar, Housing Director Sherry Necelis, Parks and Recreation Director Jason Spiller, representatives from Plante & Moran, representatives from Miller Canfield, members of Boy Scout Troop 755, reporter from the Northville Record, and 12 citizens. PRESENTATIONS A. Citizens Comments Members of Boy Scout Troop 755 present at the meeting were working toward their Citizens in the Community badge. APPROVAL OF AGENDA AND CONSENT AGENDA Motion Darga, seconded by Fecht to approve the agenda and consent agenda as presented. Approve City Council Minutes of: - Regular Meeting of November 5, 2012 Receive Bills List: Checks #81508 to #81605, Checks #81606 to #81658, EFT s 500111, 500112 Receive Board and Commission Minutes: - Planning: 9/4/12 Receive Departmental Reports: - Youth Assistance: 11/12 Board and Commission Appointments: None Special Event Request /Jingle Bell Run / December 1, 2012 Special Event Request / Goodfellows Newspaper Sale / December 8, 2012 Request to Place Signs / Optimist Club Christmas Tree Sale Motion carried unanimously.
City Council Regular Meeting November 19, 2012 - Page 2 PUBLIC HEARINGS A. Proposed Uses of Wayne and Oakland County Community Development Block Grant Funds FY2013 The City of Northville is expected to receive $42,000 from the Wayne County Community Development Block Grant (CDBG) program and $5,000 from the Oakland County Community Development Block Grant program for fiscal year 2013. CDBG funds are used to target low to moderate-income residents or to provide an urgent community need. The City of Northville has no low/moderate income census tracts for project eligibility; however, the category of senior citizens qualifies as a presumed benefit group eligible for CDBG expenditures. The CDBG application process requires a public hearing where residents are allowed to provide input on the proposed uses of the funds. Recommendations for uses of the FY2013 CDBG funds are: Project Description Amount Public Services Senior Services $14,442 CDBG funds may be used for the operation of Senior Citizen Centers for transportation, staffing, etc. Rehab Publicly Residential - Allen Terrace $28,438 CDBG funds may be used to perform improvements, such as adding greater R-factor to the insulation in the attic, replacing ceiling tiles with dry wall to prevent air/heat loss, replacement of electronic doors, changing faucets, replacing locks and deadbolts throughout the building, etc. General Program Administration $ 4,120 The CDBG program allows a percentage of the annual allocation for program administration. Total Estimated Allocation Wayne County $42,000 Total Estimated Allocation Oakland County $ 5,000 Public hearing opened at 7:36 p.m. No comments. Public hearing closed at 7:36 p.m. Council Comments and Discussion: In response to a question from City Council, it was further explained that Allen Terrace staff is exploring the merits of a keycard system. This system would replace the standard lock system currently in place. The locks and deadbolts are more than 30 years old and maintenance and parts have become costly, and some of the locks and deadbolts cannot be repaired. As such, some locks and deadbolts may require replacement while Staff continues to explore the merits of a keycard system. Should it be determined that a keycard system is preferred over a lock/deadbolt system, Staff will present the option to Council for further consideration and discussion. Motion Fecht, seconded by Darga to adopt a resolution authorizing the use of the fiscal year 2013 Wayne and Oakland Counties Community Development Block Grant Funds as proposed. Motion carried unanimously.
City Council Regular Meeting November 19, 2012 - Page 3 NEW BUSINESS A. Presentation of Year Ended 6/30/12 Audited Financial Reports and Management Letter The City s auditors, Plante & Moran, reviewed the following reports related to the City of Northville s fiscal year ended June 30, 2012: - Report to the City Council and Management Letter - City of Northville Financial Report Representatives from Plante & Moran highlighted major factors and findings of the year-ended June 30, 2012 audit. The City was again commended on its fiscal responsibility and conservative spending in light of diminishing property tax capabilities and state-shared revenues. It was reminded that beginning in 2011, the Street, Drainage, and Sidewalk Improvement Fund (SDSI) and the Payroll Fund were included in the General Fund. A review was given of the percentages of revenues and expenditures toward the designated categories, and a comparison with the data of the past two years. Several factors that have an impact on the City were reviewed. These included instability of the State s revenue sharing program and other legislative matters in Lansing that could impact local government finance. The City s water loss report for FY 2012 found water loss to be at 8.53%. A water loss rate of less than 10% is considered to be excellent given the age of the City s infrastructure. City staff continues to closely monitor water loss and periodic leak detection surveys continue to be performed. Council Comments and Discussion: Further explanation was given pertaining to revenues and expenditures, funding and liability pertaining to Other Post-Employment Benefits (OPEB), pension fund obligations, the operating losses in the Refuse and Recycling Fund and the Water and Sewer Fund and the use of Fund Balance to off-set those losses, and the City s water loss history as it pertained to recent water and sewer improvements. Motion Allen, seconded by McKindles to accept the City of Northville s fiscal year 2012 financial statements, Plante & Moran s Audit Report of those financial statements, and the Investment Report. In addition, City Staff is directed to place a copy of those reports on file in the City Clerk s office. Motion carried unanimously. B. City Membership in the Michigan Inter-Governmental Trace Network (MITN) The Michigan Inter-Governmental Trade Network (MITN) Purchasing System by Interactive Procurement Technologies (IPT) by BidNet. MITN is a web-based system which provides a way for local agencies across the state to more effectively notify vendors of bidding opportunities. Use of MITN also increases efficiency and lowering costs for member agencies (and taxpayers) through shared resources. MITN delivers convenient, centralized online access to bid opportunities, reducing paperwork and making it easier for vendors to do business with local government. Currently there are 99 local Michigan communities who are participating in the MITN program. Participating in the MITN system would enable the City to post Request for Purchase/Bids online and reach an established database with over 7,000 vendors. On October 16, 2012, the City Attorney reviewed the agreement and found no issues. The City of Northville would be required to submit our current vendor list to IPT via e-mail. IPT would review the vendor list and eliminate vendors who currently have registered with MITN. IPT would send a
City Council Regular Meeting November 19, 2012 - Page 4 revised vendor list back to the City for approval. The City of Northville would be required to provide enough City letterhead and envelopes to accommodate the vendor list. IPT would send letters to our vendors notifying them of the City of Northville joining the MITN program. IPT will send an invoice for reimbursement of postage fees incurred to produce mailing to suppliers for new members. Motion Darga, seconded by Fecht to approve the attached agreement and approve the City Manager to sign the Interactive Procurement Technologies by BidNet Agreement for Services and MITN Bylaws. Motion carried unanimously. C. FY 2014 Budget Schedule As part of the budget process, City Council traditionally schedules one special meeting in January to discuss its goals and objectives and special meetings in the month of April to review the proposed budget. The meeting schedule must conform to the City Charter and the State of Michigan Tax and Budget laws. Motion Darga, seconded by Fecht to set the dates for the fiscal year 2014 goal setting and budget review meetings as follows: - January 14, 2013 Special City Council meeting / Goals and Objectives - April 1, 2013 Regular Meeting Budget document presented to City Council - April 11, 2013 Special Meeting Budget Review Session #1 - April 22, 2013 Special Meeting Budget Review Session #2 - May 9, 2013 Notice of Availability of Budget and Budget Hearing notices published - May 20, 2013 Regular Meeting Public Hearing on Budget, subsequent Budget adoption and establishment of 2013 Operating Millage. Motion carried unanimously. D. Bond Refunding Resolution / 2002 Unlimited Tax General Obligation Bonds In December 2002, $1,375,000 in General Obligation Unlimited Tax Bonds was issued to improve and renovate Allen Terrace. The Bonds are self-supporting through Allen Terrace operations. The Bonds were issued for a term of twenty years, with final payment scheduled for October 2022. Recently, the City s financial advisor, Robert W. Baird & Co., notified the City that these bonds are callable and may achieve interest costs savings through a refunding. The current debt service payments have coupon rates ranging from 4% to 4.875% over the remaining ten years. City Council was provided with a letter dated November 13, 2012 from the City s Bond Counsel, Patrick McGow of Miller, Canfield, Paddock & Stone, P.L.C. This letter advises the City on the refunding process. It is proposed that the refunding be privately placed. A private placement does not require an official statement, underwriter s discount, or bond rating. The City s financial advisor, Robert W. Baird & Co., has negotiated with a bank proposing to refund the bonds at a rate of 2.14%. The City s bond counsel, Miller, Canfield, Paddock & Stone, has prepared a Resolution Authorizing Issuance of 2012 Unlimited Tax General Obligation Refunding Bonds. Refunding to this lower rate would provide an average annual cash flow savings of $8,519 for the Housing Commission or a total of $85,190.17 over the remaining life of the bonds. This private placement may also be negotiated with the City s primary bank which may provide additional savings.
City Council Regular Meeting November 19, 2012 - Page 5 Council Comments and Discussion: Further explanation and discussion pertained to the refunding requirements, interest rates, issuance costs for the new bonds, the principal and interest amounts required for refunding the current bonds and issuance of the new bonds. Motion Fecht, seconded by McKindles to adopt a resolution authorizing the City Manager and Finance Director to proceed with the negotiated sale of the 2012 Unlimited Tax General Obligation Refunding Bonds in an amount not to exceed $875,000 as long as the City achieves net present value savings through the refunding. Motion carried unanimously. E. Employee Health Insurance Contribution Over the last year, City Administration has been studying alternatives to implement a long-term strategy to minimize the effects of healthcare cost increases on City budgets. In addition, PA 152 of 2011 requires that municipalities implement certain reforms in order to continue receiving statutory revenue sharing funds. Those reforms mandate either a maximum premium payment (hard cap), or a minimum employee contribution of 20% of the health insurance premiums. For many years, City employees have contributed toward health insurance premiums in the range of 9% to 11%. City Administration is recommending that the City phase in a 20% employee contribution for the Blue Care Network HMO Plan, and phase in a 35% employee contribution for the more expensive Community Blue PPO plan. The HMO plan would be phased in at 13%, 17%, and 20% over the next three calendar years. The PPO plan would be phased in at 17%, 26%, and 35% over the next three calendar years. It is also recommended that the payments for those that opt out of the City s health insurance be reduced to reflect the reduced net value of the benefit due to the new contribution rate. A maximum cap for all future opt-out payments is recommended at $625 per month. These changes will reduce health care expenditures by $17,706. At this time, only non-union employees will be affected by the change. The City s four collective bargaining agreements expire on June 30, 2013 and it is hoped that these reforms will be implemented for the remainder of the employees as the new contracts are negotiated. As non-union employees have not received a wage adjustment since 2008, City Administration is also recommending a 2% wage adjustment for non-union employees. The cost of this wage increase would be $31,129. By implementing the health care contribution increases and the wage increases simultaneously, the net cost of the wage increase is $13,412 for 22 non-union employees. This offsets the out of pocket increase for the first year of the phase-in period but creates a significant incentive for Administration and the workforce to find lower cost healthcare alternatives in the future. PA 152 mandates that any new policies or agreements with employee groups fully implement either the 20% employee contribution or the hard cap. It also allows communities the option to opt-out of the Act s provisions and still receive the full revenue sharing payment. As the City would be phasing in the new contribution rate over three years, City Administration recommended that Council exercise the optout provision, as we will not be in full compliance until January of 2015. Should Council approve these recommendations, a resolution to opt out of the PA 152 provisions will be placed on the next Council Meeting consent agenda. Council Comments and Discussion: City Council voiced appreciation to the Personnel Committee and City Administration for presenting an overall reasonable and well thought out proposal.
City Council Regular Meeting November 19, 2012 - Page 6 Motion Darga, seconded by Fecht to direct City Administration to increase employee contributions for health insurance to 13%, 17%, and 20% over the next three calendar years for the Blue Care Network HMO plan, to 17%, 26%, and 35% over the next three calendar years for the Community Blue PPO plan, to decrease health insurance opt-out payments in accordance with the new employee contribution rates, and to cap opt-out payments at a maximum of $625 per month. Further, the City Manager is authorized to increase wages for certain non-union employees up to 2%, and City Administration is directed to prepare budget amendments for the adjusted health insurance and wage costs related to these changes. Motion carried unanimously. MAYOR AND COUNCIL COMMUNICATIONS A. Mayor and Council Communications None B. Staff Communications None Being no further business, the meeting was adjourned. Adjournment: 8:31 p.m. Respectfully submitted, Dianne Massa, CMC City Clerk Approved as submitted: 12/3/2012 Christopher J. Johnson Mayor