Financial Services Committee
Rochester Hills
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1000 Rochester Hills |
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Drive |
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Rochester Hills, MI 48309 |
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Home Page: |
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www.rochesterhills.org |
Minutes
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Erik Ambrozaitis, Donald Atkinson, Kurt Dawson, Barbara Holder, Julie Jenuwine, |
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Jonathan Rea, Kyle Sucher, Alexandra Tatu, Ravi Yalamanchi |
6:00 PM
1000 Rochester Hills Drive
Thursday, February 9, 2006
CALL TO ORDER
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Chairperson Holder called the Financial Services Committee meeting to order at 6:04 |
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p.m. |
ROLL CALL
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Erik Ambrozaitis, Donald Atkinson, Barbara Holder, Jonathan Rea and Ravi |
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Yalamanchi |
Present:
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Non-Voting Members Present: Julie Jenuwine, Kyle Sucher |
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Non-Voting Members Absent: Kurt Dawson and Alexandra Tatu |
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Others Present: Roger Rousse |
APPROVAL OF MINUTES
None Presented
COMMUNICATIONS
None Presented
UNFINISHED BUSINESS
2006-0005
Election of Financial Services Committee Vice Chairperson for 2006.
Resolution Vice Chair.pdf
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Committee members inadvertently elected Citizen Representative Jonathan Rea as the |
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Financial Services Committee vice Chairperson for calendar year 2006. |
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Committee is required to elect a City Council member and placed this agenda item back |
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on the February Financial Services Committee agenda. |
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A motion was made by Ambrozaitis, seconded by Rea, that this matter be |
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Approved. |
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Resolved that Committee rescinds the January 2006 appointment of Citizen |
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Representative Jonathan Rea as Financial Services Committee Vice Chairperson |
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and to appoint City Council Representative Ravi Yalamanchi as Financial |
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Services Committee Vice Chairperson. |
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The motion carried by the following vote: |
Aye:
Ambrozaitis, Atkinson, Holder, Rea and Yalamanchi
2005-0102
City of Rochester Hills Street Lighting Policy
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Street Lighting Policy.pdf; Street Lighting Policy.Revised.pdf; Street |
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Lighting Policy FS 101305.pdf |
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Roger Rousse, Director of DPS, distributed third revision of the Proposed Street Lighting |
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Policy noting the following: |
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* Proposed policy is modeled after the Street Sign request procedure. |
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* Street Lighting requests will require a City Council budget approval because of the |
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costs involved. |
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* Policy is intended for full financial support from the residents. |
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* Policy would provide a procedure to process requests and for placement for approval |
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on City Council through the budgeting process. |
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* DTE would like the City to make formal request for lighting so that payment can be |
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guaranteed. |
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* Policy would insure proper spacing, correct elevation, and provide the greatest good |
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for pedestrian crossing and schools. |
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* Policy would consist of three tiers for new lighting: |
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* Advisory Traffic and Safety Board review and recommendation |
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Council member Yalamanchi stated that this is an independent issue and suggested |
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keeping the responsibility with the homeowners association so as not to increase |
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additional responsibilities for City staff. |
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Mr. Rousse responded that he would further research Mr. Yalamanchi's request. |
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Ms. Jenuwine stated that adding delinquent SAD's rolls to the taxes generates additional |
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work for the Treasurers Office. |
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Mr. Atkinson felt that it was the City's responsibility to maintain lighting especially if |
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lighting is tied to traffic safety and/or safety for the public. |
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Mr. Rousse indicated that the policy provides the City with a methodology to evaluate |
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street light requests. |
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Council member Yalamanchi indicated that he did not want to proceed with the policy at |
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this time, noting that on going billing is shifting the burden to the City. |
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Mr. Rousse, noting this request is possibility coming forward at DTE's request, stated he |
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will do further research pertaining to history regarding DTE payments and bring it back |
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to the next Financial Services meeting. |
Discussed
2005-0847
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Referral from City Council requesting Financial Services Committee study the |
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possible financial impacts of Homeowner/City cost sharing divisions in |
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association with Special Assessment Districts |
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Agenda Summary.pdf; Referral Notice SAD.pdf; 060806 FS Dft Min.pdf; |
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0847 Resolution.pdf; 0847 Minutes.pdf |
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Committee members discussed the referral from City Council requesting the Financial |
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Services Committee study the possible financial impacts of Homeowner/City cost |
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sharing divisions in association with Special Assessment Districts noting the following: |
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* Current SAD policy is from gravel to pavement, there is no official policy for |
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reconstruction. |
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* A new policy is needed that would require residents help to pay for repairs and/or |
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complete reconstruction |
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* The cost are different for various options: |
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* Currently the policy for gravel to pavement caps the residents cost at $4,700 and the |
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City pays the remaining costs. Those costs for the City are currently averaging $10,000 |
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to $11,000 per frontage. |
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Erik Ambrozaitis stated that through bonding, budget cutbacks and incremental |
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necessities of the tax increases, road improvements could be accomplished. |
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The committee continued to discuss the issue noting the following: |
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* The issue is not looking for funding for a particular subdivision but rather look for a |
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long term solution to address the roads. It has been the policy of the City , which is |
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considered good financial playing, to have long term policies and make long term |
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decisions. |
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* There have been subdivisions that were paved without SAD's and received the |
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benefit. |
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* The policy was not to raise taxes but to utilize what the City is levies and transfer out |
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of the General Fund |
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* With a perpetual problem rather than a one time capital expense, bonding is not the |
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solution because each year the City has more debt and that it is not prudent solution in |
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the financial municipal finance world. |
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Mr. Rousse provided history noting the following: |
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* Currently there are forty-two (42) miles of local roads rated poor and sixty (60) miles |
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of local roads rated fair. |
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* Poor rated roads consist of thirty (30) miles of concrete and twelve (12) miles of |
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asphalt. |
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* Asphalt roads are in need of total reconstruction and concrete roads require large |
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section repairs. |
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* The consultant determined that $103 million was needed over ten (10) years for |
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repair/reconstruction of local roads. |
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* Routine maintenance, traffic services and snow removal required $45 million. |
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* ACT 51 monies totaled $12 million |
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* City of Farmington Hills SAD program is City paying twenty (20%) percent vs. |
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residents paying eighty (80%) percent. |
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Mr. Yalamanchi suggested presenting a possible three to four year short term SAD |
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policy to do the worst case subdivisions. He suggested that depending upon their |
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response or agreed upon cost sharing, the City would then repair the worst-case |
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subdivisions and in the meantime work on a long-term solution. |
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Mr. Rousse stated that the City has a mounting backlog of projects, noting if the City |
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does not do reconstruction, maintenance costs increase. He further noted that |
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Powderhorn Ridge Road is a Major Road; therefore would cost the residents nothing |
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due to repairs being funded 100% percent out of the Major Road Fund. |
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In response to questions Ms. Jenuwine concurred that the City could take one half mil |
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that it is putting into the major road fund and appropriate it into the local road fund and |
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that one-half (1/2) mil would generate $1.7 million |
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Mr. Rousse stated that the City has a cost sharing responsibility with State projects on |
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the "drawing board" which the State has postponed. He further reminded Committee |
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members that if the State should come back tomorrow with intent to begin a project, the |
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City would have to come up with cost sharing funding. |
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Consensus of the Committee to have Ms. Jenuwine and Mr. Rousse bring additional |
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information to the next meeting for further discussion. |
Discussed
2006-0078
National Twist Drill Corporation - Sewer Collapse
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Roger Rousse, Director of DPS, provided an update on National Twist Drill Sewer |
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Collapse noting the following: |
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* City has given notice to the owner of its intention to file suit in local court to recover |
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costs and the owner has ten (10) days to respond. |
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* Investigation proved that plugging of the sewer was caused by substance discharged |
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into the sewer, which softened the plastic pipe. Eventually the sewer collapsed. |
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* City's replacement cost less legal fees amounts to $433,000. |
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* The City is seeking to get back the cost of the sewer replacement and the legal fees. |
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* One complication is the person who leased to two cleaning companies owns the |
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property. However, the ordinance states that the owner of the property is technically the |
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user of the property; so they can, by putting a deposit, transfer the responsibility for |
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payment of those charges to the lessee if they so choose. But in this case that did not |
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happen and everything we have on record indicates that the user, under the terminology |
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of the ordinance, is the owner of the building and is therefore held responsible for |
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damage. |
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* The cleaning companies have since moved out of the building but the suit seeks to put |
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the responsibility on both the property owner and Elite Cleaning Room Services. |
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* Elite Cleaning Room Services laundered automotive rags, which contained a volatile |
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compound, discharging into the sewer causing the collapse. |
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* City had two independent laboratories research the compounds and the pipe. |
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* Employees became ill from the substances that were being vaporized out of the |
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sanitary sewer, City hired an occupational safety and health hygienist come out and |
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investigate who recommended the use of respirators as protection. |
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* By Ordinance the control agency is DWSD and all enforcements technically go |
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through them, but the Ordinance allows the City to recover damages through a civil suit. |
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* DWSD supports the City and provided documentation regarding their analysis, |
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violations DWSD recorded and corrective actions that they had suggested. |
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Committee member inquired why the City cannot place this on the owner of the |
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building's tax bill. |
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Mr. Rousse explained that pursuant to legal direction from John Staran, City Attorney, |
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the City should file civil suit. |
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Committee member suggested doing both, placing a lean on the property and filing a |
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civil suit. |
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Mr. Rousse stated that he would meet with the City Attorney for further information. It |
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was also suggested that Mr. Rousse contact other communities to find out if they have |
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had similar issues. |
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Mr. Rousse explained that this situation has exposed some weaknesses in the City |
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Ordinance and suggested to Committee members that it needs revisions. Currently the |
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Ordinance does not have specific language pertaining to any damage done to sewers. |
Follow-Up
NEW BUSINESS
2006-0043
Financial Policies Review
Agenda Summary.pdf; 2006 financial Policies to review.pdf
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Julie Jenuwine, Finance Directive, inquired if Financial Services Committee members |
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would like to discuss Financial Polices that give instruction where the monies go. |
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Ms. Holder stated that discussion should take place at a City Council workshop so that |
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all City Council members are present. |
Approved and Referred to the City Council Work Session
2006-0112
Pathway Millage
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Referral Pathway Millage Notice.pdf; Referral Pathway Millage |
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Resolution.pdf; Agenda Summary.pdf |
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Julie Jenuwine, Finance Director, brought the expiring Pathway Millage discussion |
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forward noting the following: |
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* Pathway Millage has expired and this is the last year of the levy. If it is not renewed, |
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there will be no funding for pathways. |
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* Paul Davis, City Engineer, has met with the Pathway Committee and the Committee |
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has indicated they would like to see a renewal of the millage. |
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* Tying Pathway Millage to Local Road Millage is not appropriate because pathways are |
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linked to Major Roads |
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* Currently the Millage is .1876 |
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Committee members discussed the possibility of combining Pathways with a possible |
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Parks Millage including the following points: |
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* Currently Parks and Forestry costs $3 million out of the General Fund to operate |
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minus $500,000 user fees; Forestry Department is another $500,000 |
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* If a Parks Millage passed, the General Funds would be freed up to pay for other |
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concerns such as roads. |
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* A Parks Millage at 1 (one) mil would equal $3 million, which equates to approximately |
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$130 to $140 per household. |
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Ms. Holder requested that Finance meet with the Pathway Committee to discuss the |
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Pathway Millage. |
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Ms. Jenuwine suggested discussion take place after City Council budget workshops in |
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March. |
Discussed
2006-0114
Special Police II Millage
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Julie Jenuwine, Finance Director, brought the Special Police II millage forward for |
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discussion noting the following: |
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* Final levy of Special Police II is December 2006 which revenue will be collected in the |
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2007 calendar year. |
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* Public Safety is currently discussing this issue |
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Consensus of the Committee was to hold discussion and wait for a recommendation |
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from Public Safety Committee. |
Discussed
2006-0115
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Acceptance for First Reading - An Ordinance to amend Sections 102-61 |
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through 102-64 of Chapter 102, Utilities, of the Code of Ordinances of the City |
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of Rochester Hills, Oakland County, Michigan, to review the fund structure for |
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Water and Sewage Disposal System Revenues, and to Repeal Conflicting |
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Ordinances |
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Agenda Summary.pdf; First Reading Agenda Summary.pdf; Ordinance |
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Amendment Chapter 102.pdf; Ordinance re fund structures.pdf; Memo |
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FSC to reconsider fund structure.pdf; First Reading Resolution.pdf; 0115 |
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Resolution.pdf |
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Julie Jenuwine, Finance Director, requested Financial Services Committee to consider |
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changing Chapter 102, Utilities (Water & Sewer) Ordinance noting the following: |
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* In 2005 Ms. Jenuwine requested a change in the Utility Ordinance to change the Fund |
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Structure. |
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* Originally Utility Ordinance had six (6) funds, which were not all utilized. |
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* It was requested to reduce the six (6) funds down to three (3) funds. |
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* Financial Services Committee agreed to reduce the Utility Ordinance to four (4) funds. |
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* City Council concurred with Financial Services recommendation and agreed to reduce |
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the six funds to the following four (4) funds: |
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* Operations/Maintenance Fund (daily operations) |
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* Capital Replacement Fund (future infrastructure replacement) |
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* Bond Redemption Fund (pay off water/sewer bond debt) |
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* Capital Improvement Fund (revenue received from developers) |
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* If the recommendation for three (3) funds would have been accepted , reducing them |
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down to three (3) funds would have been accomplished by combining the Replacement |
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and Improvement Funds; currently these funds are separate |
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* Reasons behind requesting three funds as opposed to four are because: |
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* It was anticipated that there would be significant debate on what is considered a |
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Replacement and what is considered an Improvement |
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* Funding levels between the two (2) funds would vary greatly |
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* Capital Improvement Fund would decrease due to City's maximum |
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Development |
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* Capital Replacement Fund would continue to increase with annual |
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depreciation monies |
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* Combining the Improvement Fund with Replacement Fund would prevent |
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disputes over project funding. |
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* Additional Accounting Department issue is separating existing assets by determining |
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what goes into the Improvement or Replacement Funds. |
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Pam Lee, City Accountant, stated that she could not determine what is a replacement |
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and what is considered an improvement and someone would have to go through the |
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current assets and make that determination. She stated that the other issue is that at |
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times one fund needs to pay a different fund back; so the issue becomes who is going to |
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split the assets. |
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Ms. Jenuwine reiterated that this request is asking Financial Services Committee to |
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consider making a decision and then Ms. Jenuwine would bring this item to City Council |
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in late May or early June along with Water and Sewer rates that go to City Council. |
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Ms. Pam Lee, City Accountant, stated that she would not transfer assets until after the |
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City audit in March and therefore concurred with Ms. Jenuwine. |
Discussed
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Enactment No: RES0218-2006 |
YOUTH COMMENTS
None Presented
ANY OTHER BUSINESS
None Presented
NEXT MEETING DATE
The next Financial Services meeting will be held Thursday, March 9, 2006 at 6:00 p.m.
ADJOURNMENT
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There being no further business to discuss, Chairperson Holder adjourned the meeting |
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at 8:33 p.m. |
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Minutes prepared by Sue Busam |
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Minutes were approved as presented December 13, 2006 Regular Financial Services |
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Committee Meeting. |
