Rochester Hills Legistar System

Jamie Smith, Media Specialist, requested Digital Equipment Upgrade noting the

following:

* Total cost to upgrade current analog equipment to digital equipment is $60,000 - $70,

000.

* Suggested cutting the full one (1) percent funding to CMN down to one-half (1/2)

percent, monies could be earmarked to upgrade the equipment in two (2) years or if the

percentage was reduced to one-quarter (1/4) percent would allow for an upgrade in one

(1) year.

Committee members thanked Mr. Smith for the update.

Roger Rousse, DPW Director, provided a brief update noting the following:

* Four (4) potential locations were identified based on grade lines:

*Bloomer Park

*Parcel on John R that the OCDC owns

*Park property on Tienken west of Adams

*Park property City currently acquired - Adams Apple

* Two (2) communications from DWSD received:

*Approval of reservoirs based on the grade lines

*How the rates would be restructured if the City moves to reservoirs

* Two (2) acres should be adequate, which includes an access road and perimeter

fencing.

* Change in thinking by DWSD regarding reservoirs and providing financial incentives:

*Prefer City builds the reservoirs so that the City will incur maintenance and capital

improvement costs.

*Recommend reservoirs be built now because it serves as an alternative to DWSD

having to make improvements to its system.

* The report recommends two (2) reservoirs - one (1) two million gallon and one (1)

three million gallon

* Benefits for DWSD to promote water storage:

*The demand on DWSD is increasing.

*To meet demands, DWSD would have to improve their old infrastructure and

construct and expand system.

*If a municipality constructs a system, it pays for DWSD to offer financial incentives

to not have to incur these additional costs.

*Cost incentives are to reduce usage during peak rates.

* Other benefits the City would see:

* Water available for distribution or redirection if the system fails.

* Second level back-up.

* Maintaining pressure for fire protection.

* There are two (2) peak times - 4:00 AM to 8:30 AM and 3:30 PM to 8:00 PM

* As demand increases, inlet pressure goes down because DWSD cannot meet

demand.

* Another weakness that occurs is when a fire occurs during peak time and it is

combined with DWSD's inability to meet the demand.

* Reviewed what occurs if there is negative pressure in the water main.

Mr. Rousse stated the next step is to request an RFP for design of the system. He

noted that the Mayor is not in favor of reservoirs and feels staff should be working on

other priorities.

Discussion commenced on how the committee should proceed to bring forward an RFP

for the design of the reservoirs. It was noted:

* The reservoirs are in the 2005 budget

* The need has been established

* It is feasible to construct the reservoirs with a return on investment

* It solves some of the major concerns with the current system

* Construction cost is approximately $6 million with $2 million in contingencies and

design

* $1.4 million in savings possible each year

Paul Davis, City Engineer, stated that the current crisis in the City is the local roads and

not the water system. He expressed concern with moving forward with this project

because the perception amongst residents will be that the City has funds available and

that this could negatively impact what the City is trying to accomplish with road funding.

Ms. Hill stated that this project should move forward and that the City should not put on

hold a project that has nothing to financially do with another project. She further stated

that the City needs to do a better job of communicating and educating the residents

regarding these issues through clear and concise messages and better overall Public

Relations.

Mr. Atkinson concurred that the City needs to move forward with this project.

Mr. Dalton stated that the water issues are related to health and safety issues as well as

police and fire and that that takes precedent over the road issue. He further reiterated

that money from water and sewer cannot be used for road projects.

Ms. Hill stated that in addition to looking at the reservoirs, the Committee needs to look

at the City's Water Usage Policy and how water is used in this community today and into

the future. Discussion could include such things as progressive rates, area

maintenance meters and long-term education on appropriate water usage.

Ms. Holder requested information from DWSD stating that they will reduce peak rates to

help the project financially. Mr. Rousse indicated that the communication from DWSD

has been provided in the packet.

A motion was made by Hill, seconded by Atkinson, that this matter be

Recommended for Approval to the City Council Regular Meeting.

Whereas, the Financial Services Committee has reviewed and studied all of the

information regarding the construction of water reservoirs in the City;

Whereas, the Financial Services Committee sees the benefits of moving the Water

Reservoirs Project forward;

Whereas, the Water Reservoirs Project is in the 2005 budget

Now Therefore Be It Resolved, that the Financial Services Committee

recommends City Council reaffirm its interest in moving forward with the Water

Reservoir Project and request the Administration to move forward with

requesting RFP's for the design phase of the Water Reservoirs.

The motion carried by the following vote:

Hill, Holder, Dalton and Atkinson

Ms. Jenuwine provided a Pension Plan Update noting the following:

* Certified letters were sent to trustee directed participants to keep them informed

regarding pension investment options.

* Letter informed employees of the "self directed option" which has six (6) different

funds and six (6) different age groups with different risk levels.

Ms. Jenuwine discussed Committee Plan Document noting that currently Committee

Plan Document regulations are not in compliance and is under revision due December

31, 2005.