City Council

CITY OF STERLING HEIGHTS MINUTES OF REGULAR MEETING OF CITY COUNCIL TUESDAY, JUNE 4, 2013 IN CITY HALL Mayor Richard J. Notte called the meeting to order at 7:30 p.m. Mayor Notte led the Pledge of Allegiance to the Flag and Mark Carufel, City Clerk, gave the Invocation. Council Members present at roll call: Deanna Koski, Richard J. Notte, Joseph V. Romano, Maria G. Schmidt, Paul Smith, Michael C. Taylor, Barbara A. Ziarko. Also Present: Mark Vanderpool, City Manager; Jeffrey Bahorski, City Attorney; Mark Carufel, City Clerk; Madeline L. Ranella, Recording Secretary. APPROVAL OF AGENDA Councilman Smith removed Consent Agenda Item E and made it Consideration Item 9. Moved by Koski, seconded by Romano, to approve the Agenda with the removal of the meeting minutes from the May 21, 2013 regular meeting from the consent agenda, Item 4-A, and making this Consideration Item 8 and substituting the blue sheet Ambulance Service Agreement under Consent Agenda Item 4-I and removal of Consent Agenda Item 4-E and making this Consideration Item 9. Yes: All. The motion carried. REPORT FROM CITY MANAGER Mr. Vanderpool reminded residents about the fireworks regulations and pointed out the State law prohibits the City from enacting an ordinance to regulate the use of “consumer fireworks” on the day before, the day of, and the day after a national holiday. This means that everyone has the right to “use” the types of fireworks that discharge into the air for 30 days each year. The national holidays are: New Year’s Day, Martin Luther King Jr.’s Birthday, Washington’s Birthday, Memorial Day, Independence Day, Labor Day, Columbus Day, Veterans Day, Thanksgiving Day and Christmas Day. During these days, legal fireworks can only be discharged from 7:00 am to 11 pm and only on private property with permission. The City has enacted an ordinance that prohibits the use of “consumer fireworks” for the remaining 335 days each year. Regular City Council Meeting Tuesday, June 4, 2013 Page 2 Mr. Vanderpool discussed the ongoing unique partnership with Utica Community Schools and the City called Velocity Jr. It is an entrepreneur business type of program that fosters student growth in science, technology, engineering and mathematics throughout the summer at various summer camps. He pointed out the area colleges, universities, as well as our own Velocity Center, are participating in this endeavor. The concept with this new program is to generate interest in the areas most needed by our local employers so graduates are able to obtain gainful employment and stay in Michigan, and in particular Sterling Heights. Mr. Vanderpool reported the Sterling Heights Parks and Recreation Department is proud to present the 2013 Music in the Park concert series. This series has always offered the best musical entertainment the area has to offer. These free concerts are performed at 7 pm at the Dodge Park Band Shell every Thursday, beginning Thursday, June 6 and continuing through Thursday, July 18, with a concert being held on Wednesday, July 3 as a result of the July 4th holiday. Mr. Vanderpool reported on the free Paper Shredding Day from 10 am to 2 pm on Saturday, June 15 at the Department of Public Works Building. He stated more information is available on the City’s website. Mr. Vanderpool highlighted another unique event this past weekend when the Parks and Recreation Department teamed up with Utica Community Schools for a 5K run inside Dodge Park. He pointed out there were 600 participants for this race. Mr. Vanderpool explained the Parks and Recreation Department has offered a 5K run now for 37 years alone and the schools have just started the last 2 years. Because of budget constraints, the City was not able to do it by themselves, so they combined the event with the schools and were both able to meet their fundraising targets. He complimented Kyle Langois for spearheading this unique partnership, Mark DiSanto of the Parks & Recreation Department, the Public Works Department, Engineering, Police Department and Utica Community Schools’ team that worked hard to make this event possible. Mr. Vanderpool reported fire crews were called Saturday, June 1st at 5:03 p.m. to respond to a call about a boy who had fallen into the Clinton River near the Nature Center and was being swept away by the heavy current. Sterling Heights Fire Battalion Chief Dave Regular City Council Meeting Tuesday, June 4, 2013 Page 3 Gonczar was the first to respond, realized the boy could not hold onto the log any longer, jumped into the water and brought the boy back to the shore. There is no doubt Chief Gonczar saved the boys life and would probably be recognized by the Fire Department and City Council for his lifesaving efforts. PRESENTATION Police Captain John Berg thanked and recognized the Sterling Heights High Noon Kiwanis for their generous donation of training equipment for use by the Police Department’s K9 Unit comprised of three officers and their dogs. Officer Richard Hines was present, along with his dog. Mr. Randy Crowell, President of the Sterling Heights High Noon Kiwanis Club, explained their organization and the donation they were making to the Sterling Heights Police Department’s K9 Unit. Officer Hines pointed out they just returned from certification with the US Police K9 Association and he reported Officer Walt Smith and K9 Sniper finished first top dog in the state for tracking narcotics. Moved by Romano, seconded by Schmidt, RESOLVED, to acknowledge and accept the donation of K9 training equipment by the Sterling Heights High Noon Kiwanis, 2335 Oakcrest Drive, Sterling Heights, Michigan. Yes: All. The motion carried. Mayor Notte recognized Councilwoman Maria G. Schmidt for her 10 years of service on the City Council. Moved by Ziarko, seconded by Notte, RESOLVED, to recognize and honor Council member Maria G. Schmidt with a Service Award in recognition of her ten years of public service to the City of Sterling Heights community. Yes: All. The motion carried. PUBLIC HEARING 1. City Engineer Brent Bashaw made a presentation regarding the request for paving of Gardner Street. He pointed out there are 29 properties within the proposed special assessment district. Regular City Council Meeting Tuesday, June 4, 2013 Page 4 Mr. Bashaw gave a timeline of events that led to tonight’s proceeding: On November 18, 2011, the City Clerk received a petition signed by multiple residents of Gardner Street to have Gardner Street West blacktopped. At the May 8, 2012 meeting, the City Council adopted the fiscal year 2012/2013 budget that included funding for the City’s share of the cost to pave Gardner Street through an assessment on the properties located within a special assessment district. A survey was sent to the residents on Gardner Street to gauge the interest of an assessment project to pave Gardner Street with asphalt, ditch drainage and drive approaches. The survey results were 17 Yes responses, 11 No responses and 1 property owner did not respond to the survey. At the October 16, 2012 regular meeting, City Council directed the City Engineer to fulfill the requirements of City Code 47-6 in preparation of the first public hearing. At the March 5, 2014 regular meeting, a Public Hearing of Necessity was held. The City Council adopted a resolution to proceed with the project and also extended the term for the Special Assessment Roll from 15 years to 25 years. The project was then put out for bids. Eleven bids were received ranging from $218,372.50 to $306,654.00. Nagle Paving Company submitted the low bid. It is nearly 20% less than the engineer’s estimate of $271,507.50 used to create the preliminary special assessment roll. Based on this low bid, the City Assessor has prepared the Special Assessment Roll. The roll was received by City Council at the May 7, 2013 City Council meeting. The breakdown of the roll is as follows: The District will be responsible for $209,789.69. The City will be responsible for $43,503.02. These costs include a 16% charge for administration costs per the special assessment policy that funds items such as contract administration, design, survey, inspection, material testing, etc. The cost for the paving is $62.62 per linear foot of frontage of the parcel. The cost for an asphalt approach is $3.54 per square foot and the cost for a concrete approach is $4.06 per square foot. Mr. Bashaw explained the property owners within the district would be offered three payment options: (1) Payment in full, (2) Payment through 25 annual installments and (3) Deferred Payment. Regular City Council Meeting Tuesday, June 4, 2013 Page 5 The City Council would be voting tonight to confirm the Special Assessment Roll and to award the contract. He explained a supermajority vote shall be required to confirm the roll if 15 objections are made. To date, City administration has received eight written objections from the following addresses: 4110, 4121, 4353, 4356, 4414, 4425, 4507 and 4520 Gardner. Mr. Bashaw pointed out if the City Council confirms the roll tonight and awards the construction contract, it is anticipated that construction will commence within 3-4 weeks and be completed within 45 days of commencement. Mayor Notte opened the public hearing to the audience. Mr. Dennis Polansky, 4393 Gardner, spoke in favor of the paving at this time before the prices increase. He discussed the engineering costs vs the contractor’s costs, stating there is a substantial difference in price. Ms. Linda Vielhauber, 4353 Gardner, spoke against the paving because she sees no direct benefit to the residents and questions whether there would be an increase in property values. She cited Michigan Law in her argument. Mrs. Cynthia Belotti, 4454 Gardner, spoke in favor of the paving and stated the country feeling would be there whether it is paved or not because of the size of the lots. She pointed out it is in the City’s plans to pave all streets in the City so she would rather do it now. Mr. Terry Stein, 4414 Gardner, is opposed to the paving because he likes the fact that it is a dirt road. He stated since the City changed the gravel, there has been a huge improvement in the road. Mr. Pete Woryk, 4337 Gardner, stated he purchased his home with the impression that the street would be paved. He pointed out the majority of the residents want it paved, but the City Council keeps voting it down. He stated it is a matter of quality of life. Mrs. Shirley Roelandt, 4250 Gardner, is in favor of the paving because of the speeding on the road and the dust that causes breathing problems for some residents. Regular City Council Meeting Tuesday, June 4, 2013 Page 6 Mr. Greg Watt, 4424 Gardner, pointed out with the change in gravel, the road was better, but the dust issue is just as bad as it was. He urged the City Council to vote yes so they could keep the dust down. Mayor Notte closed the public hearing. Moved by Ziarko, seconded by Notte, RESOLVED, to adopt the Resolution Confirming Special Assessment Roll for the Gardner Street Asphalt Paving Special Assessment District, AP-12-01. RESOLUTION Confirming the Special Assessment Roll for the Gardner Street Asphalt Paving Special Assessment District, AP-12-01 City of Sterling Heights County of Macomb, State of Michigan Minutes of a regular meeting of the City Council of the City of Sterling Heights, County of Macomb, State of Michigan (the "City"), held on the 4th day of June, 2013, at 7:30 p.m., Eastern Daylight Savings Time. PRESENT: Members Ziarko, Notte, Koski, Romano, Schmidt, Smith, Taylor. ABSENT: None. The following preamble and resolution were offered by Member Ziarko and supported by Member Notte: WHEREAS, the City Council of the City, after due and legal notice, has reviewed a special assessment roll prepared by the City Assessor in conformity with Chapter 47 of the City Code of Ordinances for the purpose of defraying a part of the cost of certain improvements to be situated in the Gardner Street Asphalt Paving Special Assessment District in the City; and WHEREAS, the City Council has conducted a public hearing respecting said roll which hearing was in conformity with the City Charter and Code of Ordinances; and WHEREAS, the City Council deems said special assessment roll to be fair and equitable as reported to it; NOW, THEREFORE, BE IT RESOLVED THAT: Regular City Council Meeting Tuesday, June 4, 2013 Page 7 1. Said special assessment roll shall be designated "Special Assessment Roll No. AP-12-01" (the "Roll") and the district against which it is spread shall be designated as "Gardner Street Asphalt Paving Special Assessment District." 2. The Roll, in the amount of $209,789.69, as prepared and reported to the City Council by the City Assessor, be and the same hereby is confirmed. 3. Said Roll shall be divided into twenty-five (25) equal annual installments, the first installment to be due on July 1, 2014, and the following installments to be due on July 1st of each year thereafter. Said installments of the special assessment roll shall bear interest from and after August 1, 2013 at the rate of four and one-quarter percent (4.25%) per annum, said interest to be payable annually on each installment due date. Provided, however, the whole or any part of such assessment may be paid through May 31, 2014 without penalty or interest. 4. The City Clerk be and is hereby directed to endorse the date of this resolution on the Roll and immediately thereafter transmit the Roll to the City Treasurer for collection. The City Treasurer be and is hereby directed to proceed to collect said assessment and treat with the Roll in accordance with Chapter 47 of the City Code of Ordinances. 5. It is hereby determined that the Roll is final and conclusive. 6. All resolutions and parts of resolutions insofar as they conflict with provisions of this resolution be and they are hereby rescinded. YES: Members Ziarko, Notte, Koski, Schmidt. NAYS: Members Romano, Smith, Taylor. RESOLUTION DECLARED ADOPTED. MARK CARUFEL, City Clerk I hereby certify that the foregoing is a true and complete copy of a resolution adopted by the City Council of the City of Sterling Heights, County of Macomb, State of Michigan, at a regular meeting held on June 4, 2013, and that said meeting was conducted and public notice of said meeting was given pursuant to and in full compliance Regular City Council Meeting Tuesday, June 4, 2013 Page 8 with the Open Meetings Act, being Act 267, Public Acts of Michigan, 1976, and that the minutes of said meeting were kept and will be or have been made available as required by said Act. MARK CARUFEL, City Clerk Councilwoman Ziarko pointed out her job is to listen to what people say and the majority of the people on the street want it paved. She discussed the many man-hours spent by the administration from the time the petition was received to the time of the first public hearing and stated this is a burden to everyone in the City. She pointed out she could not make guarantees that property values would go up, but stated the City plan is to have all the streets in the City paved. Mayor Notte agreed that it is the intent of the City to have all streets paved at one time or another. He believes it is time to pave the road because there is twice as many people in favor of paving it. Mayor Notte discussed the different options available to the residents. Councilman Smith asked Mr. Bashaw to refresh his memory on the results of the survey. Mr. Bashaw responded 17 in favor, 11 against and 1 no response. Councilman Smith would like to see a much better majority vote. He does not believe it is proper for a majority of people to deprive a rather large minority of their assets. He opposes the motion. Councilman Taylor believes by approving this special assessment we would be putting a very high burden on people who do not want it. He cited Michigan law and the City Charter and pointed out all the facts that are irrelevant. Councilman Taylor stated there must be proportionality between the amount assessed and the value, which accrues to the land as a result of the improvements. There is no way to determine whether it would comply with Michigan Law, so he doesn’t know how the City Council could vote on it. He stated he would vote no for this reason. Councilwoman Koski inquired why we would want to show that the property values increase when doing a paving of the street and why they would have to abide by Michigan Law in making a decision about the paving of Gardner. Regular City Council Meeting Tuesday, June 4, 2013 Page 9 Mr. Bahorski recalled there was a discussion at a previous meeting about the impact on assessments and the general consensus was that it would increase the assessments on the properties. He stated the burden is on the property owner to prove whether there is a substantial or unreasonable proportionality. Councilwoman Koski stated her position is to listen to the voice of the people and listen to what they want. The majority of the people wanted it paved and Council voted against the people. They have come back again asking for Council’s help. She believes their property would be worth more and it would not create a tax increase at this time. She stated she would vote in favor of the paving. Councilwoman Schmidt stated she is not here to judge anyone. The City has set up provisions for people to help them manage this cost. Councilwoman Schmidt pointed out the majority of the residents are in favor of the paving and she is in favor of it. Councilman Romano pointed out the many longtime residents that probably have their homes paid off and would not want a 25-year lien on their property. He understands there is a majority of people that want the paving, but it is not an overwhelming majority. Councilman Romano stated he would be voting no on this motion. Roll call vote on Resolution Confirming Special Assessment Roll for Gardener Street: Yes: Ziarko, Notte, Koski, Schmidt. No: Romano, Smith, Taylor. The motion carried. Moved by Ziarko, seconded by Schmidt, RESOLVED, to award the bid for the Gardner Street Asphalt Paving, City Project #12-232, to Nagle Paving Company in the amount of $218,372.50 and authorize the Mayor and City Clerk to sign the contract on behalf of the City. Councilman Romano asked Mr. Bahorski to clarify that the Council would be voting on this company as the lowest bidder. Councilman Smith asked Mr. Bashaw to again address the amounts that would be paid by the homeowners and the amount being paid by the City. Mr. Bashaw responded the cost to the District would be $209,789.69 and the City would be responsible for $43,503.02. Regular City Council Meeting Tuesday, June 4, 2013 Page 10 Councilman Smith stated based on the City’s dire financial problems, the 2.5 mills going on the ballot and the possibility of laying off people if the millage doesn’t pass, we need to look very carefully at going forward and closing a deal that would cost the City another $43,000 that we don’t have. Councilman Taylor stated there would be an additional amount over the $43,000 that the City would carry for any resident that claims a hardship or finances this over a long term. He is voting no. Roll call vote on motion to award the contract: Yes: Ziarko, Schmidt, Koski, Notte, Romano. No: Smith, Taylor. The motion carried. ORDINANCE INTRODUCTION 2. Mr. Brian Baker, Finance & Budget Director, made a presentation explaining the Final Amendment to the 2012/13 Appropriation Ordinance. He pointed out the General Fund expenditures are projected to come in $1.4 million or 1.7% under budget. The expenditure savings is primarily due to employee labor contract savings and from not filling 36 vacant full-time positions due to retirements during the year. Partially offsetting these savings is increased funding for additional part-time employees and higher fuel and equipment repair costs. Mr. Baker pointed out General Fund Revenues will come in $600,000 or 0.7% over budget due to higher than originally estimated State and cable franchise revenues. These revenues were partially offset by lower building permit and 41-A District Court revenues. The net effect of the expenditure savings and revised revenue estimate is a $2.3 million decreased use of self-insurance reserves. The use of reserves declined from $4.7 million to $2.4 million. Mr. Baker pointed out the budget for the remaining City Funds decreased by $1.0 million. The reduction is due to expenditure savings, grant funded items and the timing of road projects, a portion of which will be reappropriated in next year’s budget. The amendment also includes the entry to record the successful refinancing of a 2007 bond in the Road Bond Debt Fund that saved over $200,000 in interest payments. Regular City Council Meeting Tuesday, June 4, 2013 Page 11 Mr. Baker stated this is the first reading on this ordinance, with adoption scheduled for the June 18th City Council meeting. Moved by Romano, seconded by Notte, RESOLVED, to introduce the final amendment to the Appropriations Ordinance for the 2012/13 fiscal year. Yes: All. The motion carried. 3. Mr. Walt Blessed, Human Resources Director, explained in 2001, James Adamo separated from his employment with the City of Sterling Heights as a DPW mechanic to commence work with the 41-A District Court as the Honorable Stephen Sierawski’s court officer. At the time of separation, Mr. Adamo had vested in the General Employees Retirement System (GERS) with approximately 17 years of earned service. Since he had separated service from the City, he could no longer participate and receive additional years of service in the defined benefit pension plan. The 41-A District Court had established a defined contribution plan and he was required to participate in the defined contribution plan as a new employee of the 41-A District Court. Because Mr. Adamo had not achieved the age and service requirements for eligibility to receive his pension benefits, he was categorized as a terminated vested retiree. At the time of his separation from the City of Sterling Heights in 2001, he applied for his terminated vested pension to be payable upon reaching age 60. The GERS Board approved the request making Mr. Adamo eligible to draw his defined benefit pension upon reaching age 60. Recently, Mr. Adamo reached the age and service requirements necessary to begin drawing his pension benefits. The GERS legal Counsel reviewed Chapter 2, Article V of the City Code and determined that an ordinance was required to effectuate the GERS Board approval of the terminated vested pension. This amendment also necessitated some clean up to §41-30 of Chapter 41 of the City Code, which is identified as Section 3 of the ordinance. Finally, the ordinance makes a minor amendment to §2-190 of Chapter 2 of the City Code to make the vacation days in this case consistent with the collective bargaining agreement approved for the members of the Michigan Association of Public Employees (MAPE) – Executive Unit. The court Regular City Council Meeting Tuesday, June 4, 2013 Page 12 ordinance employee’s benefits often track with the MAPE Executive Group and this minor amendment will eliminate an inconsistency. Mr. Blessed stated City Administration is recommending introduction and adoption of the proposed ordinance. Mr. Adamo’s circumstances are truly unique and City Administration does not foresee many future instances where a City employee will separate from employment to work for the 41-A District Court. At the same time, the Court Administration would like for Mr. Adamo to continue his employment as a court officer and the City Code amendment avoids the risk of a negative tax impact for GERS. Moved by Ziarko, seconded by Romano, RESOLVED, to introduce the ordinance amending Sections 2-186 and 2-190(A)(2) of Chapter 2, Article V and Section 41-30 of Chapter 41, Article II of the City Code for the purpose of allowing an employee of the 41-A District Court to receive deferred retirement benefits and revise the allocation of vacation days. Yes: All. The motion carried. CONSENT AGENDA 4. Moved by Koski, seconded by Romano, RESOLVED, to approve the Consent Agenda, as amended: A. Moved to Consideration Item 8. B. To approve payment of the bills as presented: General Fund - $438,872.54, Water & Sewer Fund - $56,426.48, Other Funds - $575,763.72, Total Checks - $1,071,062.74. C. RESOLVED, to extend the terms and conditions of the proposal by LaBelle Electric Services, Inc., 24546 21 Mile Road, Macomb Twp., MI 48042 for electrical services and repairs for a one-year period, at the following unit prices: Year 3 Regular Overtime Emergency/Holiday Master Electrician Hourly Rate $ 74.20 $110.24 $143.10 Second Electrician Hourly Rate $ 74.20 $110.24 $143.10 Apprentice Hourly Rate $ 68.90 $100.70 $132.50 Ball Diamond Lighting Hourly Rate $159.00 $227.90 $296.80 Other Personnel – Project Manager $100.70 N/A N/A Regular City Council Meeting Tuesday, June 4, 2013 Page 13 D. RESOLVED, to renew the Administrative Services Contract with Blue Cross Blue Shield of Michigan for the period July 1, 2013 through June 30, 2014, with monthly fees of $49.35 per employee/retiree contract for claim administration and $30.18 per employee/retiree contract for specific stop loss insurance at a $250,000 self-insured retention for the self-insured health care benefits plan, and authorize the Mayor and City Clerk to sign all documents required in conjunction with this renewal, upon review and approval by the City Attorney. E. Moved to Consideration Item 9. F. RESOLVED, to approve the Cost Sharing Agreement for Schoenherr Road Concrete Repairs, 14 Mile Road to 15 Mile Road, subject to approval by the Macomb County Department of Roads, and authorize the Mayor to execute the Agreement on behalf of the City of Sterling Heights. G. RESOLVED, to award the bid for the 2013 Concrete Replacement Program, City Project #13-238 and Tyler Drive Concrete Pavement Repairs, City Project #11-224, to Galui Construction Co., Inc., 33805 Harper Avenue, Clinton Township, MI 48035 for Section I “Local Roads” and Section II “Sidewalk (Ramps & Repairs)” in the amount of $267,960, Section III “Major Roads” in the amount of $117,600, and Section IV “Tyler Drive Concrete Pavement Repairs” in the amount of $313,504.80 and direct the Mayor and City Clerk to sign the contract on behalf of the City, and authorize a budget amendment to use $58,000 of Local Road Fund Reserves within Account 28700700-988224. H. RESOLVED, to approve the purchase of two 2013 GMC Sierra 2500 HD extended cab, 6 ½-foot box, 4 x 4 pickups, with snowplow packages, to Red Holman Buick GMC, through a State of Michigan MiDeal cooperative bid in the amount of $61,307.44. I. RESOLVED, to approve the Ambulance Service Agreement and Lease Agreement between the City of Sterling Heights and Universal-Macomb Ambulance Service, Inc., 37583 Mound Road, Sterling Heights, MI 48310 for the period July 1, 2013 through June 30, 2014 and authorize the Mayor and City Clerk to execute the agreements on behalf of the City. Regular City Council Meeting Tuesday, June 4, 2013 Page 14 J. RESOLVED, to approve the purchase of excess workers compensation from the Accident Fund Insurance Company of America through CompOne Administrators, Inc. for a one-year period at an estimated annual cost of $54,545, and to authorize the City Manager to sign all documents required in conjunction with this approval, upon review and approval by the City Attorney. K. RESOLVED, to set a public hearing date of June 18, 2013 at 7:30 p.m. regarding the application by K & B Property Holdings, LLC to establish an Industrial Development District at 34400 Mound Road. Yes: All. The motion carried. CONSIDERATION 5. Mr. Vanderpool explained as part of the City’s multi-year, comprehensive financial strategy, City Administration has been engaged in labor negotiations with the bargaining units representing City employees in an attempt to achieve cost savings through wage and benefit concessions. The proposed collective bargaining agreement (CBA) is between the City and Michigan Association of Police (MAP) Police Clerical Employees for the period July1, 2013 to June 30, 2016. The proposed CBA would continue the fifteen percent (15%) reduction in wages and benefits realized under the CBA expiring on June 30, 2013 including the following:  Wages – Police Clerical wages remain frozen at the July 1, 2010 wage scale for the three-year duration of the new CBA.  New Employee Wages – New full-time Police Clerical employees will be paid 15% less than the current wage rates.  Medical Coverage – The medical coverage will continue under the Blue Cross Blue Shield (BCBS) Community Blue PPO 4 modified plan, with 10% premium sharing, increased deductibles and co-pays of $15 for generic scripts, $30 for formulary and $50 for non-formulary prescriptions. This plan reduces the City’s cost to below the state mandated hard cap.  Retiree Medical Coverage - Members of the bargaining unit retiring during the three-year duration of the new collective bargaining agreement will be covered in Regular City Council Meeting Tuesday, June 4, 2013 Page 15 retirement under the same medical coverage as future employees. As future collective bargaining agreements are negotiated with increased deductibles and co-pays, retirees will have to also pay these increased costs. These changes are limited to two changes in the next three consecutive collective bargaining agreements negotiated by the City and Union. New hires to the bargaining unit are not eligible for traditional retiree medical coverage.  Furlough Days and Unpaid Holidays – Members of the bargaining unit will continue a schedule of four unpaid furlough days and four unpaid holidays each fiscal year.  Extended Service Pay – Extended Service pay (longevity) will continue at the 33-1/3 % reduction that took effect under the expiring CBA.  Lay-offs – The City retains the ability to hire part-time members, provided that the ratio of full-time to part-time members does not fall below 65%/35%. Wages for new part-time hires is 80% of the full-time hourly rate of pay with no benefits. A retiree may be re-employed by the City in a part-time position (no benefits) for not more than 1,500 hours per fiscal year for a maximum period of two (2) years. This provision will allow the City to avoid a substantial loss of institutional knowledge and experience while at the same time realizing significant cost savings. The new CBA (2013-2016) adds the following:  New Hire Paid Time Off – New full-time police clerical employees will no longer be granted or credited with separate banks of time for vacation and sick/personal days. Instead, new employees will be allotted Paid Time Off (PTO) on their anniversary date. Cumulatively, the allotted PTO reduces the amount of time off available under the old vacation, sick and personal days’ system, in fact it would be about a 30% reduction, and greatly reduces the administrative burden of accounting for the multiple banks of time.  Defined Benefit (DB) Pension Benefits – Those grandfathered in the fixed pension plan will continue to contribute 8% to the general employees’ retirement system. However, there is a further reduction in the pension Regular City Council Meeting Tuesday, June 4, 2013 Page 16 multiplier (from 2.15% to 2.0%) for service earned on and after July 1, 2013. DB participants will also have their vacation, personal and sick time banks that are bought out reduced by 80% for purposes of computing their final average compensation. The reduced pension multiplier and the reduction in banks results in a 15% pension reduction. The City closed the fixed pension plan for new general employees beginning in 1997 and converted to a defined contribution, or what is equivalent to a 401K-type plan in the private sector. So with respect to that defined contribution plan, participants will continue to receive an annual contribution of 4% to their account, which represents a reduction from the 7% contribution required prior to July 1, 2011.  Vacation buyback – An employee may buy back up to 7 days of unused vacation days per year. The City retains the management right to layoff members under the terms and conditions of the new collective bargaining agreement. Mr. Vanderpool thanked the members of the group for their continued cooperation. Moved by Schmidt, seconded by Romano, RESOLVED, to approve the collective bargaining agreement and memorandum of understanding between the City of Sterling Heights and MAP Police Clerical Employees Association for the period of July 1, 2013 through June 30, 2016 and authorize the Mayor and City Clerk to sign all documents in conjunction with this approval. Councilwoman Schmidt thanked all members of this bargaining unit for their continued concessions and in helping the City get through these tough times. Councilman Romano pointed out there are a lot of unions in the City and the vast majority of them stepped up and gave concessions and the City Council really appreciates it and the residents should also appreciate it. Yes: All. The motion carried. 6. Mr. Vanderpool explained that the current collective bargaining agreement (CBA) between the City of Sterling Heights and the Sterling Heights Police Officers Association/Michigan Association of Police (collectively the Union) expires on June 30, 2013. The expiring CBA was the product of P.A. 312 arbitration. Regular City Council Meeting Tuesday, June 4, 2013 Page 17 In light of the impending expiration date, the City and the Union commenced negotiations on a new collective bargaining agreement and have reached a tentative agreement. Under this tentative agreement, the following savings realized under the arbitration award are continued:  Wages – Police officer wages are frozen at the July 1, 2010 wage scale for the two years of the collective bargaining agreement.  New Employee Wages - New full-time police offices will be paid 10% less until they reach the top step of the wage scale after five years of service.  Defined Benefit (DB) Pension Benefits – Members of the bargaining unit participating in the defined benefit (DB) pension system will continue to contribute 8% to the police and fire retirement system rather than the 5% required under the expiring collective bargaining agreement. Current employees will have their vacation, personal and sick time banks that are bought out reduced by 80% for purposes of computing their final average compensation, which results in approximately a 10% decrease in pension.  Roll call time eliminated – The arbitration award eliminated the 15-minute roll call that was paid as compensatory time at the rate of 1.5 times the hourly rate.  Medical Coverage – The base medical coverage for police officers will continue to be the BCBS Community Blue PPO 4 modified plan, with increased deductibles and co-pays of $15 per script for generic, $30 for formulary and $50 for non-formulary.  Longevity Pay – Longevity pay is reduced by 33-1/3% from the former benefit level.  Holiday Pay – Those that work on a holiday receive 1.5 times their hourly rate rather than the former double time rate. Overtime on holidays are paid at the rate of 2.25 times the hourly rate rather than the former 3 times the hourly rate. Provisions of the new CBA include the following:  Deferred Compensation – The City’s contribution (previously $800) to the deferred compensation accounts of police officers continues to be suspended for the term of the new CBA. Regular City Council Meeting Tuesday, June 4, 2013 Page 18  Essential pay on holidays – The P.A. 312 arbitration award provided that if employees were deemed non-essential, then they would not work on a holiday that fell during their normal work week. They would not be paid for that day; however, they do receive a lump sum holiday paycheck in November of each year. This CBA removes that provision and simply states if they are normally scheduled to work a day of the week that falls on the holiday, then they will work on that day or be on approved vacation or personal leave.  Retiree Medical Coverage and Defined Benefit pension for new hires – Like the firefighters, new employees shall not receive traditional retiree health care coverage. Formerly, new employees received 50% retiree health care coverage. An annual amount of $1,250 will be paid into a retiree health savings account for the retiree to purchase health care coverage in retirement. A provision from the P.A. 312 arbitration award stated that the pension multiplier for new police officers is reduced from 2.8% per year of service to 2.0% per year of service as long as they continue to receive retiree health care insurance. The arbitration award states that if the new police officers no longer receive retiree health care, then they receive a 3.0% pension multiplier. If the CBA is approved by City County, then new hires will receive a 3.0% pension multiplier since they will no longer receive retiree health care. At the time of negotiating these inter-related provisions, the City believed that a 2.0% pension multiplier would apply to new police officers, which would have been consistent with the pension benefit for new firefighters under the CBA recently negotiated with the Sterling Heights Firefighters Association. As required by state law, the City requested an actuarial study of the cost associated with the pension enhancement in the form of the 3.0% pension multiplier. For cost comparative purposes, the City simultaneously requested an actuarial study of the savings associated with the elimination of retiree medical benefits for new police officer hires. Based upon these studies, the new CBA will result in a net increase in cost to the City from the proposed increase in the pension multiplier from 2.0% to 3.0% over the savings to be realized from the elimination of retiree medical benefits for new police officers. Regular City Council Meeting Tuesday, June 4, 2013 Page 19 Mr. Vanderpool stated City Council action is respectively requested. Mayor Notte opened the discussion to the audience. Mr. Rob Kovalcik asked everyone to bow their heads to remember Officer Mark Sawyers, who was assassinated this day nine years ago. Mr. Kovalcik explained on March 14, 2013 the union and the City met in negotiations for a successor agreement beginning July 1, 2013. The City’s bargaining team, represented by legal counsel, proposed further concessions. The City represented to the union that it was seeking to eliminate its OPEB (Other Post Employment Benefit) liability for retiree health care for new hires hired after July 1, 2013. The union, dedicated to moving the City forward, reached a tentative agreement on the total package. Before the parties signed off on the agreement, the City’s bargaining team sought the City Manager’s approval and both parties signed the package that day. The union presented the tentative agreement to its members and within days they ratified the agreement. Mr. Kovalcik stated the new proposed agreement is in keeping with Governor Snyder’s economic vitality incentive program for departments not eligible to receive Social Security. He pointed out the Sterling Heights police officers do not and are not eligible to receive social security benefits as other City employees. The union believes there are significant benefits for both sides in this tentative agreement. Mr. Kovalcik hopes the members of the City Council will approve the tentative agreement offered by the team. Moved by Ziarko, seconded by Notte, RESOLVED, to reject the collective bargaining agreement between the City of Sterling Heights and the Sterling Heights Police Officer’s Association/Michigan Association of Police for the period of July 1, 2013 through June 30, 2015. Councilwoman Ziarko stated the City had to do this only one time before. She believes it is in the best interest of the City to go back and negotiate this contract. Mayor Notte stated the biggest hang-up he has is with the 3.0% multiplier for new hires. He pointed out the Police Department will have a big changeover in the next five years with command officers retiring and quite a few new police officers would be hired. Regular City Council Meeting Tuesday, June 4, 2013 Page 20 Mayor Notte indicated the City Council could overturn the arbitrator’s decision and he is in favor of overturning the arbitrator’s decision on this 3.0% multiplier to make it consistent with the Fire Department. Councilman Romano thanked the POA for coming to the table for concessions and stated he believes this issue will be worked out. Councilwoman Schmidt stated her bottom line is that we need to staff our department and with that 3.0% multiplier it would be more difficult to staff that department. She hopes we can come to a mutual agreement. Councilman Smith believes this agreement is a tiny step in the right direction, but we need a full-size step. In regard to the Police Officers not receiving social security benefits, Councilman Smith stated not paying social security is a benefit that is worth $15,000 every year of the officer’s working life. Councilwoman Koski thanked the POA for making the concessions they have made. She stated the City Council is trying to achieve with our public safety departments what we achieved with our other collective bargaining agreements. The 3.0% multiplier is something we should have caught. She hopes we can work this out and continue with the sterling relationship we have always had. Councilman Taylor stated he would be supporting Councilwoman Ziarko’s motion because there should be parity with the other bargaining agreements. He disagrees with Mayor Notte that we are overturning the arbitrator’s award because it remains in effect until June 30th. He pointed out a 2.0% multiplier results in a $50,00 pension and a 3.0% multiplier would result in a $75,000 pension and this is a significant cost. Roll call vote on motion to reject the collective bargaining agreement: Yes: Ziarko, Notte, Romano, Schmidt, Smith, Taylor, Koski. The motion carried. 7. Mr. Mike Lombardi spoke in support of the members of the Zoning Board of Appeals and the Ordinance Board of Appeals. He expressed his appreciation and support for Mr. Najjar and Mr. Washburn and Mr. DiGaetano. Mayor Notte recommended the reappointment of Benjamin Ancona, Paul Jaboro and Gerald Rowe to the Planning Commission. Regular City Council Meeting Tuesday, June 4, 2013 Page 21 Moved by Romano, seconded by Schmidt, RESOLVED, to confirm the Mayor’s reappointment of Benjamin Ancona, Paul Jaboro and Gerald Rowe to the Planning Commission to a term ending June 30, 2016, subject to the appointees meeting the qualifications set forth in Charter §4.03 and taking the oath of office within two weeks. Yes: All. The motion carried. Moved by Taylor, seconded by Romano, RESOLVED, to reappoint David Graef, Nick Najjar and Raymond D. Washburn to the Zoning Board of Appeals to a term ending June 30, 2016, subject to the appointees meeting the qualifications set forth in Charter §4.03 and taking the oath of office within two weeks. Yes: All. The motion carried. Moved by Schmidt, seconded by Romano, RESOLVED, to reappoint Joseph DiGaetano and Jennifer Hartson to the Ordinance Board of Appeals I to a term ending June 30, 2016, subject to the appointees meeting the qualifications set forth in Charter §4.03 and taking the oath of office within two weeks. Yes: All. The motion carried. Moved by Romano, seconded by Schmidt, RESOLVED, to reappoint Betty Jane M. Sukkar and Mark Valente Jr. to the Board of Review to a term ending June 30, 2016, subject to the appointees meeting the qualifications set forth in Charter §4.03 and taking the oath of office within two weeks. Yes: All. The motion carried. Moved by Taylor, seconded by Ziarko, RESOLVED, to reappoint Richard R. Weiler to the Pension Board – General Employees to a term ending June 30, 2016, subject to the appointee meeting the qualifications set forth in Charter §4.03 and taking the oath of office within two weeks. Councilman Smith expressed concern with Mr. Weiler’s employment and questioned whether it would be appropriate to reappoint him Councilman Taylor sees no conflict of interest with this man’s private employment. He believes the GERS is being well maintained and he sees no reason to make a change. Yes: All. The motion carried. 8. Item 4-A from the Consent Agenda: Regular City Council Meeting Tuesday, June 4, 2013 Page 22 Councilwoman Koski pointed out her reason for pulling the May 21, 2013 meeting minutes. She stated on Page 13, there is a need to correct the last year stated for the completion of the proposed six years millage. Moved by Koski, seconded by Ziarko, RESOLVED, to postpone approval of the May 21, 2013 regular meeting minutes to June 18, 2013 in order to consider the amendment being suggested to the City Clerk. Yes: All. The motion carried. 9. Item E from the Consent Agenda: Moved by Romano, seconded by Taylor, RESOLVED, to approve the agreement with Cornerstone Municipal Advisory Group, LLC, 50 W. Big Beaver, Suite 220, Troy, MI 48084, for healthcare and benefits consulting services at a cost of $75,000 annually, for the period July 1, 2013 through June 30, 2016, and authorize the City Manager to sign all documents required in conjunction with this approval. Councilman Smith stated this item is $75,000 a year for three years. He believes the City’s money could be better spent and he would like to know why we need $75,000 of health care advice. Mr. Vanderpool responded we have this consulting group in place and we have been using them since 2009. He pointed out we have a very lean Human Resources staff with only one dedicated individual. The City relies on consultant services in this area. He pointed out some of the functions of this consulting group, which include overseeing the implementation of the state-mandated Public Act 152, better known as Hard Cap, Developing and presenting the new high deductible plan and health savings account, Retiree Drug Subsidy claim processing since 2005, Early Retiree Reinsurance Program claim processing since 2010, Annual open enrollment meeting with employees and Technical assistance and compliance with state and federal regulations. He pointed out all of these areas are very complex and he believes the City is getting a very great bargain for this $75,000. Councilman Taylor pointed out $75,000 is the maximum amount the City will pay in any given year and that it might be a lesser amount. Regular City Council Meeting Tuesday, June 4, 2013 Page 23 Mr. Carufel clarified the contract calls for $75,000 a year. We purchase life insurance, long-term disability insurance, vision insurance and stop loss insurance with Blue Cross Blue Shield. These are commission based and those commissions would offset the $75,000. We won’t know the actual amount the City will pay Cornerstone until the premiums become due. Yes: All. The motion carried. COMMUNICATIONS FROM CITIZENS Mrs. Josie Haddad, 33766 Chatsworth – Condition of Chatsworth Drive, traffic and speeding. Mr. Paul McKay – Standing water on Chatsworth Drive, Speeding problems. Mr. Kamal Joseph Bitar, 33748 Chatsworth – Repairs to Chatsworth Drive, excessive speeding, need for stop signs on Paulina. Mrs. Kelly Loring, 33822 Chatsworth – Need for four-way stop at one of the intersections around Chatsworth Drive. Mrs. Francis – In favor of proposed millage as a package deal. Mr. Charles Jefferson – Citizen comments. Mr. John deJesus, 13018 Briarstone –Parks and Recreation Program and suggestions for additional revenue from City-owned parks. Mr. Joel Thomas – Majority vs the little guy; Update on pollution from American Import and Auto Parts site. Mr. Jeff Norgrove – Memorial Day Parade success; First Amendment Rights, Proposed millage. REPORTS FROM CITY ADMINISTRATION AND CITY COUNCIL There was no report from Mr. Bahorski at this time. Mr. Vanderpool responded to the inquiry from Mr. Thomas as it relates to the pollution coming from American Import and Auto Parts site. He indicated the City Administration has taken action on that particular site. There have been communications with the Michigan Department of Environmental Quality in addition to the County Health Department. Samples are being taken from the site and the City is taking enforcement Regular City Council Meeting Tuesday, June 4, 2013 Page 24 action with respect to the business itself. He is satisfied that we are exhausting all of our administrative remedies at this point to address the issue at hand. Councilwoman Schmidt was saddened by the words from Mr. deJesus because she is very pleased with all the programs at the Parks and Recreation Department. She would be willing to speak with him after the meeting. UNFINISHED BUSINESS There was no Unfinished Business. NEW BUSINESS Councilman Romano invited residents to attend the Relay for Life this Saturday at Dodge Park, beginning at 9:00 a.m. ADJOURN Moved by Ziarko, seconded by Romano, RESOLVED, to adjourn the meeting. Yes: All. The motion carried. The meeting was adjourned at 10:14 p.m. MARK CARUFEL, City Clerk