Rochester Hills Legistar System

Chairperson Holder welcomed the three (3) representative from Lee's Investment. Ms.

Jane Leslie, City Clerk introduced them to the Committee. They were:

. Mr. Li Wai Chen Weng

. Ms. Hazel Yung

. Mr. Frank Bujold, Attorney

Mr. Bujold gave a brief presentation that included the following:

. The corporation and business will remain exactly as it is.

. A copy of the most recent tax return and year-to-date financial statement are available

for review.

. The menu has changed somewhat in the last year because of the addition of a

Japanese-type atmosphere.

. The hours of operation will remain the same.

. Mr. and Mrs. Lee are retiring and would like to transfer their stock to Mr. Weng and

Ms. Yung.

A motion was made by Verschueren, seconded by Duistermars, that this matter

be Approved and Referred to the City Council Regular Meeting.

Resolved that the Administration & Information Services (AIS) Committee

recommends that City Council approve the request from Lee's Investment Inc. to

transfer ownership of 2006 Class C licensed business, by dropping Sik Wai Lee

and Sau Sheung Lee as stockholders, through transfer of 500 shares of stock

each to existing stockholder, Li Wai Chen Weng, and new stockholder, Hazel

Yung located at 173 S. Livernois, Rochester Hills, MI 48307 Oakland County,

Michigan

The motion carried by the following vote:

The Committee reviewed the information from JSBAR, LLC that was included in the

packet and noting the following:

. A suggestion was made that personal names should not be on the name of the license

due to page 20, Article XI, Conflict of Interest, of the JSBAR, LLC Operating Agreement.

. There are about six (6) liquor licenses in the area east of Tienken and Rochester

Roads in the City.

. The Hills Grill is an independent, start-up venture by local residents and not part of a

chain restaurant. The restaurant will be part of the new Papa Joe's development.

. The new Papa Joe's development has been informed at previous meetings by AIS and

City Council that it is not recommended that they request a new license from the City's

quota since they have been granted a new license for Tom's Oyster Bar.

. The partners are young and have never been in business together before.

. The interest rate is 10% on the bank loan of $450,000.

The Committee's consensus was to hear the presentation from the applicants and

suggest a postponement until a full AIS Committee is present.

The applicants were invited to join the meeting and Chairperson Holder welcomed them

The five (5) representatives for JSBAR, LLC were:

. Ms. Kelly Allen, Attorney representing JSBAR, LLC

. Mr. Steven Stauch, partner

. Jonathan Robinson, partner

. Jason Niles, partner

. John Pewinski, partner

Ms. Allen gave a presentation noting the following:

. The applicants are young, but have a lot of experience in different areas with three (3)

partners having experience in the restaurant business.

. Three of the partners were raised in Rochester Hills; two of the partners live in

Rochester Hills.

. The cost of build-out is $750,000. Huntington Bank approved a loan of $450,000

because the partners are using $300,000 of their own money.

. They expect to employ about 60 part and full time people and will strive to hire local

people.

. The alcohol to food ration is about 80 to 20 with a more upscale menu and

atmosphere than CJ Mahoney's or RJ's.

. They have a letter of intent for a 30 year lease with the Curtis Development who are

confident in their abilities.

. Current research shows nine (9) liquor licenses and five (5) resort licenses are

available in Oakland County. Availability changes daily. Many licenses in escrow show

that transfers are pending in the process. Liquor licenses cost roughly $80,000 which

would hinder the partners' current budget. The partners are young men trying to start

their lives and families.

The partners explained that the managerial and labor costs are built into variable costs

on the budgeted financial information; however they are not "tapping themselves out".

The working capital of $28,000 is for initial stocking. The partners stated they have

working relationships with food vendors and have the ability for a 30-day stocking time.

It is understood that if a new license is granted, which is valued at approximately

$80,000, it cannot be sold for three (3) years due to a Michigan Law.

The Committee expressed a concern with the number of liquor licenses currently held in

that area of the City. Ms. Leslie relayed that the Oakland County Sheriff's Department

expressed no concern with another liquor license going into that area which was noted

in her report to the Committee.

Member Verschueren made a motion to postpone the recommendation until the

November AIS Committee Meeting to allow for a full committee and perhaps more

information will be known about the building at that time. The motion failed for lack of

support.

Ms. Kelly also noted that the projected time to open the restaurant is January 2007

which is based upon obtaining a liquor license. However, if JS BAR, LLC is denied a

new license, then the process of finding a license will delay the targeted opening date.

Mr. Bob Grace, MIS Director, gave an update regarding the JDE Financial System

upgrade that included the following:

. The project regarding the upgrade has been completed since July and is going well.

The original project was projected to cost about $320,000 over a year ago. It has been

completed up to this point for about $195,000.

. The staff has worked very diligently to be good stewards with taxpayer money and

would like to continue to advance the software to include functionality improvements for

processes that have been identified.

. The enhancements are in the new software, but they require some assistance from

the vendor in setting them up to make it more functional and improve work processes.

. This is not a request for any additional funds, nor a request for new programming, but

monies left over from the original authorization from Council in February 2006.

. The next step is having all departments identified a list of items that they would like to

see in the financial software and MIS will prioritize them as to what makes sense for the

City. MIS will meet with the implementers to establish the costs and identify which

enhancements are of the greatest value to the City.

Ms. Pam Lee, Human Resource Director, gave a brief update and noted the following:

. Any Mayor or CEO of an organization receives a vehicle or a car allowance. A survey

of various communities who give car allowances was included for comparison purposes.

. The request was made because of the previous Mayor's decision to not upgrade the

assigned City vehicle. It is a fairly old vehicle. The Fleet Manager has inquired if the

vehicle should be retired from the fleet pool.

. The current Mayor is comfortable using his own vehicle but is requesting a car

allowance in lieu of mileage reimbursement

. At the Committee's request, the Mayor has submitted three (3) months of mileage

reimbursements for review which averaged to $267.59 per month. However, that

average may be low due to the fact that he is new in the mayoral position.

. The car allowance would be a cost savings when compared to the purchase of a new

city vehicle for the Mayor.

The Committee discussed the following:

. Whether the City is responsible for maintenance and liability if the Mayor's uses his

personal vehicle.

. It was suggested to seek an opinion from the City attorney regarding the City's liability.

It was also suggested to include, in writing, that the car allowance would assume that

the Mayor would maintain his personal vehicle.

. The car allowance could be reviewed again in 2007.

. A $300 car allowance seems to be a conservative figure when compared to the survey

provided by Ms. Lee. After discussion, the Committee consensus was to recommend a

$350 car allowance.

Ms. Lee offered to research Troy's vehicle related policies and provide information.

be Recommended for Approval to the City Council Regular Meeting.

Whereas, the Administration & Information Services (AIS) Committee has

reviewed and discussed the information provided by the Administration regarding

a car allowance for the Mayor;

Whereas, the Human Resource Director provided copies of Mayor Barnett's

reimbursement expenses for the three-month period of June, July, August, 2006;

Resolved, that the AIS Committee recommends that City Council authorize a

$350.00 per month car allowance for Mayor Barnett as an optional cost savings

measure in lieu of an assigned City Vehicle.

The motion carried by the following vote:

Chairperson Holder opened the floor for discussion. The main question from the

Committee was why Mr. Yalamanchi has submitted the request.

Ms. Leslie, City Clerk, gave a brief background on why the Accounting Division falls

under the Clerk's Office in the City's Charter structure and noted the following:

* According to past comments made by Charter Commissioners that were elected to

create the City's Charter, it was based on a township structure where there is generally

only a Treasurer and a Clerk and not a Finance Department. The accounting processes

are separated from the finance processes to create a "checks and balance" structure.

* The Charter Commissioners were also trying to prevent further annexation attempts of

Avon Township property by surrounding communities and had the desire to protect the

boundaries of Avon Township at the time.

* The Accounting Division cannot be moved unless there is a charter amendment or

charter revision, which would require the vote of the people.

Ms. Lee, Director of Human Resources, asked does the "township structure" still make

sense today. She also noted that the previous Finance Director as well as the current

Finance Director have questioned the "township structure" regarding the Accounting

Division.

Mr. Wojcik expressed appreciation for being able to participate in the committee

discussions.

Discussion Regarding the Advisability of Dissolving the City Council

Communication Committees

Ms. Holder gave an overview as to purpose of the City Council Communication

Committees and noted the following:

* The Communication Committees have served their purpose since they were created

in 1999 and 2000 to provide a forum for Council members and Directors to discuss

issues in an informal committee setting and alleviate in-depth discussion at the Council

meeting level. However, when a recommendation is made at the Committee level, the

Council members wish to review the entire issue at a Council meeting which is

redundant and inefficient for Council members as well as for the Clerk's staff.

* Council and Committee minutes for 2006 are six to nine months behind schedule due

to staffing cuts in the Council team area which has placed an additional burden on

Council team members.

* Some issues, such as liquor licenses, which require a committee review by law, could

by handled by a technical committee. Other issues also could be handled by technical

committees as necessary which Council could create on an "as need" basis.

* Council is discussing a modification for its 2007 meeting schedule to include a work

session on the first and third Wednesdays of each month in addition to Regular

business meetings on the second and fourth Wednesdays of each month. The Work

Sessions would provide all Council members with information on non-consent agenda

items and thus decisions could be made at Regular Meetings which would be held one

week after a Work Sessions.

The Committee discussed the pros and cons of dissolving the Communication

Committees and noted the following:

* The modified Council meeting schedule for 2007 would be beneficial because all

Council members would receive the information at the same time versus some council

members receiving information at the committee level.

* Council is repeatedly discussing at length issues that were discussed and

recommendations made at the Committee level which creates more work for Council

members as well as staff members.

* Council can establish Technical Committees as needed for issues that may require

annual recommendations or require more in-depth discussions. Recommendations

could be presented to Council members at Work Session meetings for review and

discussion. Technical committees can also include citizen and youth representatives.

* Council members continue to have to hear the same information repeated again at

one or more Council meetings that was previously discussed at one or more Committee

meeting.

* Council will review methods include youth representatives from the Rochester Hills

Youth Government Council (RHYGC) at Work Sessions and Regular Meetings if

Communication Committees are dissolved.

* It may be feasible to combine the Communication Committees into two (2) committees,

as their duties may be related; ie: AIS & FS might be combined; CDV & PS might be

combined. LAC may be dissolved completely.

* If Communication Committees are dissolved, Council members and Directors need to

be cognizant of not creating too many technical committees that may be redundant also.

* One way to relieve the redundancy of information is to have the full council hear all

information from the beginning.

* There may be a question of trust between recommendations from the Committees to

Council.

Chairperson Holder explained that she will ask for Council's feedback and encouraged

any additional comments from the AIS Committee to be forwarded to her or the Clerk's

Office. She would like to "fast-track" this item for a final recommendation before

December as the outcome will affect Council's 2007 appointments to committees as well

as its Rules of Procedure.