City Council

CITY OF STERLING HEIGHTS MINUTES OF REGULAR MEETING OF CITY COUNCIL TUESDAY, DECEMBER 5, 2017 IN CITY HALL Mayor Michael C. Taylor called the meeting to order at 7:00 p.m. Mayor Taylor led the Pledge of Allegiance to the Flag and Melanie D. Ryska, City Clerk, gave the Invocation. Council Members present at roll call: Deanna Koski, Michael V. Radtke Jr., Maria G. Schmidt, Nate Shannon, Liz Sierawski, Michael C. Taylor, Barbara A. Ziarko. Also Present: Mark Vanderpool, City Manager; Marc D. Kaszubski, City Attorney; Melanie D. Ryska, City Clerk; Carol Sobosky, Recording Secretary. APPROVAL OF AGENDA, Moved by Koski, seconded by Ziarko, to approve the Agenda as presented. Yes: All. The motion carried. REPORT FROM CITY MANAGER Mr. Vanderpool provided an update on a Citizen Survey that will be conducted within the next few weeks. The goal of the survey is to gain statistically valid responses by residents regarding their satisfaction levels with core city services, providing critical feedback on future planning initiatives. The City engaged Kansas City ETC Institute, a national leader in survey research, to complete the residential survey. Surveys are done about every five years, the last one took Regular City Council Meeting Tuesday, December 5, 2017 Page 2 place in 2012. Approximately 5,000 Sterling Heights households will be randomly selected to participate in the survey, and this number assures an adequate response rate to make it statistically valid. There will be multiple ways for those households to respond to the survey, including mail, on-line or phone. For those not randomly selected, the City is affording all of its residents the opportunity to respond to the survey via the website; however, those results will be tabulated separately. It will take about 15 minutes to complete, and those selected will be receiving it in a couple of weeks. The results will be presented as part of the City’s strategic planning process on January 23rd. Mr. Vanderpool announced that the Sterling Heights Skate Park, which was constructed by Evergreen Skateparks, based in Portland, Oregon, was recently selected as a winner of the Michigan Concrete Association Award of Excellence in the Special Innovative category. He explained the City’s skatepark, which opened a couple of weeks ago, beat sixty projects throughout the state for this year’s program. The award ceremony will be held on Thursday, February 22, 2018 at the Michigan Concrete Association 2018 Conference. He stated the skatepark is already being considered the best in the state, which is something for which to be proud. Mr. Vanderpool stated that the City is partnering for the second year with an on-demand service, Lawn Guru, a company that can be used to clear snow from driveways and sidewalks. He explained the details of the program, noting Regular City Council Meeting Tuesday, December 5, 2017 Page 3 arrangements can be made on line or by downloading the app for a smart phone, entering information, and the service can then be requested anytime from anywhere. A short video was shown, showcasing this service along with the other services offered by Lawn Guru, and upon conclusion of the video, he stated there are about 1,000 people in Sterling Heights and the immediate area that have downloaded the app and use this service, providing a lot of testimonials. He encouraged residents to download the app so they are already registered if they need service. He stressed this program will not hurt local contractors, because it will supplement their workload because it is geo- based, and he encouraged contractors to sign up with Lawn Guru so they can receive additional business. For those who do not want to download the app, or for those who may not have access to the internet, the City will be holding a sign-up fair tomorrow from 9 to 11 a.m. at the Senior Center, and Lawn Guru representatives will be on site and will help individuals get signed up for the service. A phone number will be provided to these individuals, so they can call to receive the service. He advised those who want more information to go the City’s website. Mr. Vanderpool introduced Ms. Tammy Turgeon, Library Director, and Ms. Bridget Kozlowski, Community Relations Director, to provide an update on the City’s 50th Anniversary activities throughout 2018. Regular City Council Meeting Tuesday, December 5, 2017 Page 4 Ms. Kozlowski stated they want to make sure all residents are aware of the upcoming 50th Anniversary celebration and feel part of this momentous occasion. She urged residents to save the dates of some exciting upcoming activities, which are listed in the City’s magazine and on the City’s website at www.sterling-heights.net/50years. Ms. Turgeon stated the first event will be the kick-off celebration on Wednesday, January 3rd at 6 p.m. before the first City Council meeting of the year. A plaque will be unveiled that will recognize the City’s past and current city council members, mayors and city managers. Everyone is invited, and cake will be provided. She stated a book about Sterling Heights, written by the Sterling Heights Public Library’s local history librarian, Ms. Debbie Vercellone, will be on sale for $20 starting December 11th at the Library and at Community Relations. Ms. Kozlowski announced there will be apparel and gifts available for purchase to commemorate the 50th Anniversary, and she explained the logos that will be available on this merchandise. Ms. Turgeon stated in February, they will be hosting “I Love My City” events at the Senior Center and the Library. Residents, business owners and those individuals who work in the City can create hearts that tell everyone what they love about this great city. Residents will also have the opportunity to create a Regular City Council Meeting Tuesday, December 5, 2017 Page 5 video message with SHTV, and Community Relations will be able to use those messages in a compilation later in the year. Ms. Kozlowski announced the 50th Anniversary Party, to be held on June 28, 2018, Thursday before Independence Day, so they are hoping all will plan to attend. At this event, the City will officially reopen the newly designed Dodge Park with a ribbon cutting, kick-off the Music in the Park season, recognize past elected officials, host family events throughout the park, and more. Ms. Turgeon stated they are excited to be able to celebrate with all residents and business owners, and they will be providing periodic updates and at future City Council meetings throughout the year to promote the events taking place. She reminded everyone of the website, and thanked everyone for their continued support of the celebration. Mr. Vanderpool stated that concludes his report this evening. PRESENTATION Mayor Taylor announced this is a swearing-in ceremony for new Sterling Heights Firefighters and he invited Fire Chief Christopher Martin to give the presentation. Fire Chief Chris Martin introduced the three new firefighters who are among the 18 firefighters hired since August of this year. He outlined their training and experience, and performed the swearing-in of the following three new firefighters: Nicholas White, Ryan Delaney and Christopher Lorentz. Regular City Council Meeting Tuesday, December 5, 2017 Page 6 The City Council members congratulated the new firefighters, and each of the three firefighters spoke briefly about their gratitude for the opportunity to work for the City, and are looking forward to long careers here. Mayor Taylor welcomed the new firefighters on behalf of the City Council and residents of Sterling Heights, noting it is an exciting time in the City with the recent implementation of ALS transport services. He added that the City has a great Fire Department full of men and women who are excited to serve the residents. He expressed his utmost confidence in them and wished them well. Mayor Taylor stated the second presentation of the evening is to receive the Comprehensive Annual Financial Report for the Fiscal Year Ended June 30, 2017. He invited Ms. Jennifer Varney, Finance & Budget Director, to give the presentation. Ms. Varney presented the results of the 2017 Financial Audit, and she thanked everyone who was involved. The full 165-page audit report has been supplied to City Council and is available on the City’s website, with hard copies available at the Library. She provided an overview of the audit showing the financial statements of the City and summarized the audited financial results, stating the General Fund Revenues totaled $95.3 million, and General Fund Expenses were $89.4 million, which enabled them to add $5.9 million to General Fund Reserves, bringing that fund balance to $17.3 million, or 19.3% of expenses. Regular City Council Meeting Tuesday, December 5, 2017 Page 7 They are projected to add an additional $2.6 million to reserves in 2018, bringing the City closer to their goal of 25% of expenses. Ms. Varney explained that General Fund Revenues increased $1.6 million, or 1.7% over last year, and General Fund Expenditures decreased by $436,000, or 0.5% from last year, much of this attributed to the lower refuse cost. She stated that nearly every department came in under budget. She outlined the capital spending items, and stated that the 2018 budget continues these investments. Although the City is able to begin to catch up on needed capital purchases, primarily vehicles and equipment, the existing facilities are aging and are in need of significant repair. A facilities assessment was commissioned this fall, and a plan is being developed to address funding these critical needs. She outlined the expenses on road repairs, maintenance and construction, and stated they will have $8 million to invest in local road repair in 2018. She reviewed the road repairs completed in 2017, and informed that road funding from the state was increased by $1.2 million as a result of increased gas taxes and registration fees that went into effect in January 2017, and the State has projected continued increases through at least 2021. Ms. Varney stated the City began its investment in Parks & Recreation in 2017 by issuing a $45 million bond to be funded through the voter-approved ReCreating Recreation millage, and she outlined the progress being made. Regular City Council Meeting Tuesday, December 5, 2017 Page 8 Ms. Varney stated the City has continued to prioritize funding of its three retirement plans, noting that the retiree medical plan has increased funding level from 9% in 2008 to 49% today, which is well above the state-average funding level of 19%. The General Employees pension system is 79% funded, down from 125% before the market declined in 2008, but better than the State average of 78%. These plans are both closed to new employees, and they have reduced the assumed rate of return for both of these plans, which has the effect of increasing the unfunded liability and required contribution short- term; however, it assures long-term stability of the plan. She stated the Police & Fire pension plan is 67% funded and is the only plan lower than the State average, still open to new hires and sees the largest increase in unfunded liability from year to year. She added they have made changes to recent contracts to lower the liability such as reducing the pension multiplier, and changes have been made to reduce final average compensation. The City has reduced the assumed rate of return, and closed the amortization of the unfunded liability, which will result in an increase of total liability and acquired contribution short-term, but will assure long-term stability. Ms. Varney compared the tax rate in Sterling Heights with other communities in Macomb County, and noted the average tax rate for all Macomb County cities is over 22 mils. Sterling Heights is just over 15 mils, which is below average, and will remain below even with the new ReCreating Recreation millage. She pointed Regular City Council Meeting Tuesday, December 5, 2017 Page 9 out the amount of general fund reserves per resident. She concluded that the budget continues to provide the City with an accurate look at their spending, and they are in the process of updating their detailed long-term plan which will be shared at the Strategic Planning Session in January. They have updated their actuarial assumptions to further increase funding in the plans, and have continued to reinvest in the capital assets and make good progress on road repairs, while keeping property taxes low. She noted that the average homeowner still pays $88, or 3.3% less than they did nine years ago, and that includes the ReCreating Recreation millage. She reminded that City revenue increases are capped by inflation, which is estimated to be 2.1% next year, and forecasted to remain at 2% or lower for the next ten years. She stated that concludes her overview, and she introduced Mr. Dave Helisek, partner with Plante Moran, the City’s independent auditors. They have once again issued an unmodified opinion on the audited financial report, which is the highest rating possible. Mr. Nick Mackie, City Controller, will present the City Council with the GFOA financial awards recently received for both their City budget and financial report Mr. Dave Helisek, partner with Plante Moran, introduced Mr. Rumzei Abdallah, manager with Plante Moran, and Ms. Ashley Rayden, who took part in the audit. He reviewed a couple of points that are relevant, including the status on pension retirement plan funding, which is a very Regular City Council Meeting Tuesday, December 5, 2017 Page 10 big topic in Lansing. One of the key points is related to the OPEB funding. He stated Page 112 of the report reflects that in December 2008, the City was 10% funded, and he added that would have been at the high end compared to other communities from a funding standpoint. It is also reflected in the report how proactive the City has been over the next six years in continuing to fund that liability, going from 10% to 43% through 2014. On Page 110, the third number from the bottom, which is 50.9%, reflects where the City was in June of this year regarding their funding. He added there are not a lot of communities that have done that well in their funding. Mr. Helisek explained there are some minimum funding levels being discussed in Lansing, and the most recent level he has heard from OPEB is 30% so, at this point in time, the City’s balance is significantly above what they are considering to be the threshold. Mr. Helisek stated if they find an error in the process of doing the audit, they are required to report it in writing; however, when things are done very good, it is not put in writing, so he stressed he is doing it now in person. He commended the City for the excellent job the Finance Department has done putting this information together throughout the year. Mr. Helisek stated when a community receives more than $750,000 of federal monies, they are Regular City Council Meeting Tuesday, December 5, 2017 Page 11 required to have a Federal Compliance Audit, and he reported that the City passed this with flying colors for the third year in a row. Mr. Rumzei Abdallah clarified the only document they prepared in this report is the first page, which is the audit opinion. He explained the audit process is a year-long process, and he stressed there are no surprises at year end because they are in constant communication with Ms. Varney and Mr. Makie throughout the year. They spend the better part of four weeks going through financial records, examining documents, and occasionally confirming balances with third parties. He stated they have issued an unmodified opinion on the financial statements, which is the best opinion they can receive. Mr. Makie, thanked the City Council for their continued support of the Finance and Budget Department. He stated that Sterling Heights has had a long history of best-in-class financial reporting and budgeting, demonstrated by the 28 consecutive years the City has been awarded the Government Finance Officers Association (GFOA) Certificate of Excellence in Financial Reporting, as well as the 29 years the City has received the Distinguished Budget Award. These represent the City’s commitment to accurate, functional and transparent financial reporting and budgeting, and are proof of the City’s dedication, technical expertise and work ethic. Out of more than 1,700 governmental units in the State, only about 100 receive this recognition for their comprehensive Regular City Council Meeting Tuesday, December 5, 2017 Page 12 financial report, and even fewer receive the Distinguished Budget Award. He stated the City has again received these prestigious awards, and he presented them to Mayor Taylor and City Council. Moved by Sierawski, seconded by Ziarko, RESOLVED, to receive and accept the Comprehensive Annual Financial Report for the fiscal year ended June 30, 2017. Mayor Pro-Tem Sierawski was happy to see the City is doing so well, and she applauded the Finance and Budget Department for the good job they have done. Mayor Taylor thanked Ms. Varney and Mr. Makie, and gave credit to the financial team for putting this together. He commented that it is often taken for granted how good things are here in Sterling Heights, with high-quality staff in every department. He stated it is good to know they can trust the financials they are seeing at every Council meeting and throughout the year. He thanked Plante Moran for their hard work, and was pleased to see where Sterling Heights is compared to other communities, and the good progress they are making in building up the fund balances. Yes: All. The motion carried. ORDINANCE INTRODUCTION 1. Mayor Taylor indicated that this item is to consider introduction of an ordinance amending Chapter 20 of the City Code to adopt the 2015 Regular City Council Meeting Tuesday, December 5, 2017 Page 13 International Fire Code with local amendments. He invited Mr. Donald P. DeNault, Jr., Assistant City Attorney, to give a presentation. Mr. DeNault explained this was put together by a team consisting of himself, along with Fire Chief Chris Martin, Fire Marshall Mike Bauss and Building Official Mike Viazanko, all of whom were integral in putting this together. He stated that, although it does not look like a lot, they had to cover the entire Fire Code, which is a very thick book, to make sure they came up with the most comprehensive and updated Fire Code for the City governing its residences and businesses, and to address any issues they have observed over the last several years. He explained the Fire Code is a general code that is updated every three years by a big national organization, and they recognize that local communities have local needs and local nuances, so this version, even though it is 2015, was just adopted nationally earlier this year. Mr. DeNault outlined some of the items being proposed for change. Under the first item, it was decided they do not need to register those who are doing new installs because they will be pulling permits and doing what needs to be done. A similar change is being made in the second item, with a new exception being proposed for service providers installing new fire suppression or fire alarm systems, because they will be pulling permits from the Building Department. He explained the changes involving the use of open-flame burners and cooking devices, stating they are prohibited on combustible balconies or Regular City Council Meeting Tuesday, December 5, 2017 Page 14 within 10 feet of combustible construction, except in one- and two-family dwellings. There are some changes to the code for commercial kitchens which will require them to minimize the expulsion of grease-laden smoke. For owners of facilities with adjacent spaces, they will be required to visually inspect fire-resistant measures and repair any that have been damaged. Condominium associations, landlords, and apartment building owners will be required to provide a draft stop certification annually or provide proof of fire/smoke barrier wall warning signs if the building was constructed prior to 2004, adding these will not apply to freestanding dwellings or where an attic area is less than 3,000 square feet. He addressed the requirement for all multiple-family residential properties to utilize a 10-year lithium sealed battery for battery back up of smoke alarms in all common areas. He concluded his presentation by stating that automatic fire extinguishing systems would no longer be required at all gasoline dispensing devises open to the public, as long as the facility is attended by trained personnel, adding this is no longer required in most states, including Michigan. Mayor Taylor opened the floor for comments from the audience; no comments were made. Moved by Ziarko, seconded by Schmidt, RESOLVED, to introduce the ordinance amending Chapter 20 of the City Code to adopt the 2015 International Fire Code with local amendments. Regular City Council Meeting Tuesday, December 5, 2017 Page 15 Councilwoman Ziarko felt it has been explained well, and it will come before Council one more time before being adopted, so that will provide another opportunity for discussion if questions arise. Yes: All. The motion carried. ORDINANCE ADOPTION 2. Mayor Taylor indicated that this item is to consider adoption of a map amendment to Zoning Ordinance No. 278 to conditionally rezone property situated on the northeast corner of the intersection of Schoenherr Road and Plumbrook Road in Section 24 from C-1 (Local Convenience Business District) to C-3 (General Business District). He opened the floor for comments from the audience; no comments were made. Moved by Shannon, seconded by Ziarko, RESOLVED, to adopt the map amendment to Zoning Ordinance No. 278 to conditionally rezone property situated on the northeast corner of the intersection of Schoenherr Road and Plumbrook Road in Section 24 from C-1 (Local Convenience Business District) to C-3 (General Business District); Case No. P17-0008, subject to the terms and conditions of the Conditional Rezoning Agreement that the Mayor and City Clerk are hereby authorized to sign on behalf of the City. Councilman Shannon felt they had a good discussion on this at the last meeting, and he had nothing further to add. Regular City Council Meeting Tuesday, December 5, 2017 Page 16 Councilwoman Ziarko inquired as to the “For Sale” sign located on the property and whether the petitioner is anticipating “flipping” this property. Mr. Phil Ruggeri, representative to the petitioner, assured that it is an old sign on the property and it will be removed. Yes: All. The motion carried. 3. Mayor Taylor stated this item is to consider adoption of a map amendment to Zoning Ordinance No. 278 to conditionally rezone property situated on the north side of Branch Street, on the west side of Mound Road, in Section 17, from O-2 (Planned Office District) to M-1 (Light Industrial District). He opened the floor for comments from the audience; no comments were made. Moved by Schmidt, seconded by Ziarko, RESOLVED, to adopt the map amendment to Zoning Ordinance No. 278 to conditionally rezoned property situated on the north side of Branch Street, on the west side of Mound Road, in Section 17, from O-2 (Planned Office District) to M-1 (Light Industrial District); Case No. PZ17-0009, subject to the terms and conditions of the Conditional Rezoning Agreement that the Mayor and City Clerk are hereby authorized to sign on behalf of the City. Councilwoman Schmidt stated this had been discussed at length at the last meeting, and she is comfortable with the proposal. Yes: All. The motion carried. Regular City Council Meeting Tuesday, December 5, 2017 Page 17 4. Mayor Taylor stated this item is to adopt an ordinance amending Chapter 5 of the City Code to revise the City’s liquor control regulations to conform to new state law provisions regulating possession and consumption of alcohol by persons under the age of 21. He opened the floor for comments from the audience; no comments were made. Moved by Koski, seconded by Ziarko, RESOLVED, to adopt the ordinance amending Chapter 5 of the City Code to revise the City’s liquor control regulations to conform to a new state law provisions regulating possession and consumption of alcohol by persons under the age of 21. Councilwoman Koski stated this was explained well at the last meeting. Mayor Taylor agreed, adding that there was a lot of discussion on all three of these items at the last meeting when they were introduced. Yes: All. The motion carried. 5. CONSENT AGENDA Mayor Taylor opened the floor for comments from the audience, but no one from the audience spoke on this item. Moved by Koski, seconded by Ziarko, RESOLVED, to approve the Consent Agenda as presented: A. To approve the minutes of the Regular Meeting of November 21, 2017, as presented. Regular City Council Meeting Tuesday, December 5, 2017 Page 18 B. To approve payment of the bills as presented: General Fund - $349,905.02, Water & Sewer Fund - $165,206.36, Other Funds - $1,666,578.28, Total Checks - $2,181,689.66. C. RESOLVED, to schedule a special meeting of the City Council for a strategic planning session on Tuesday, January 23, 2018 at 6:30 p.m. and direct the City Clerk to post the appropriate notices in accordance with Michigan’s Open Meetings Act. D. RESOLVED, to approve the agreement for animal licensing services between the City of Sterling Heights and PetData, Inc. for a three-year period and authorize the City Manager to sign the agreement on behalf of the City and exercise the option to extend the term for three one-year terms on the stated terms and conditions. E. RESOLVED, to award the bid for snow removal services to Casar Management LLC, PO Box 661, St. Clair Shores, MI 48080, through June 1, 2018 based on unit prices bid. F. RESOLVED, to award the bid for pruning of street trees to Wonsey Tree Service, Inc., PO Box 1142, Alma, MI 48801, for the period of December 6, 2017 to March 15, 2018, at unit prices bid. G. RESOLVED, to purchase pumps, parts, maintenance and repair services from Kennedy Industries, Inc., 4925 Holtz Drive, Wixom, MI 48393 for the Regular City Council Meeting Tuesday, December 5, 2017 Page 19 Department of Public Works inventory of Flygt Products submersible pumps. H. RESOLVED, to approve the Agreement for Retiree Drug Subsidy (“RDS”) Reopening Services between the City of Sterling Heights and RDS Services LLC and authorize the City Manager to sign the Agreement on behalf of the City. I. RESOLVED, to approve: (a) The Administration Services Contract with Blue Cross Blue Shield of Michigan for the period January 1, 2018 through December 31, 2018, with monthly fees of $58.61 per employee/retiree contract for administration, and $76.26 per employee/retiree contract for specific stop loss insurance at $250,000 for the self- insured retention; and (b) The Whyzen Sublicense and Support Agreement between the City of Sterling Heights and Blue Cross Blue Shield of Michigan; and Authorize the Mayor and city Clerk to sign all documents required in conjunction with this approval, upon review and approval by the City Attorney. Yes: All. The motion carried. 6. CONSIDERATION Regular City Council Meeting Tuesday, December 5, 2017 Page 20 Mayor Taylor indicated this item is to consider approval of a Medical Services Agreement between the City of Sterling Heights and CareHere Management, PLLC. He invited Ms. Kate Baldwin, Human Resources and Benefits Manager, to make a presentation. Ms. Baldwin stated she has representatives from Cornerstone Municipal Advisory Group, the City’s benefit consultant, and she is excited to share a new innovative concept of implementing an onsite health and wellness center for the City’s employees here at City Hall, through CareHere Management. Human Resources has been tasked with finding new ways to reduce health care costs, so earlier this year they began looking at wellness programs to help achieve that goal. CareHere is a national firm that assists private and public corporations with the operation of employee health and wellness centers. She explained she, along with others from the City, were able to visit a center jointly operated by the cities of Ferndale, Royal Oak and Madison Heights, and she has visited the site on multiple occasions. City Administration is proposing the City undertake the development of its own on-site employee health and wellness center, to be located in the lower level of City Hall, and this would serve active employees, their eligible dependents and local retirees. Ms. Baldwin explained the City is self-insured, and incurs about $17 million annually in medical expenses for active employees, dependents and retirees on the City’s insurance plans. They are projecting a net savings of over $511,000 Regular City Council Meeting Tuesday, December 5, 2017 Page 21 over a three-year period, and they expect the savings will continue to grow substantially over time as the center becomes more established. She introduced Mr. Mark Manquen, president of Cornerstone Municipal Advisory Group. Mr. Mark Manquen stated there have been a lot of changes occurring in the public sector over the last ten years, and a lot of cost pressure for health care plans and prescriptions to go up. He cited Act PA152, which helped many cities defray costs of health care plans, but put more costs on the backs of the employees, and questioned whether that is a sustainable model. There is a breaking point where they find that, with the high deductibles and copays, individuals no longer use health care. A healthy workforce is also healthy for the City’s budget, and this proposal is the next model that can be used to address the underlying cost of healthcare without continuing to raise deductibles and copays. The City would sponsor the center, not manage it. A management company has set up over 200 of these centers around the country, and they are very low front-end investment. It assists in reducing health care costs by reducing out-of-pocket expenses, not only for the City but for their employees as well. The centers focus on primary care, disease management, occupational health, worker’s comp and triage are the key areas of focus. The keys to its success are its convenience, exclusive Regular City Council Meeting Tuesday, December 5, 2017 Page 22 to employees and dependents and not available to the general public, and they provide a drug dispensary so generic drugs can be dispensed at no cost. Prescriptions can be picked up on the day of the visit, pre- employment physicals can be conducted on-site, and it will provide help for wellness activities. In this case, it will be on-site, which is convenient. He stressed it co-exists with the current health care plan, and does not displace the current high-deductible HSA plans but provides another option. It is HIPAA-protected just like any other doctor’s office, and the management company carries malpractice insurance, does the hiring and firing, and there is a barrier wall between that for which the city is responsible and for which the management company is responsible, so he clarified the City is not taking on malpractice liability and are not managing the day-to-day decisions in the center with the doctors, nor does the City have access to the employees’ health care information. Mr. Manquen explained how cost savings are achieved, through office visit costs, where the staff is paid hourly, and no PPO schedules or reimbursement models, so they are offered outside of the insurance industry market. The City is proposing to open this office for 18 hours a week, with one doctor and one nurse on staff. He explained this creates better efficiency and benefits the employees by the fact the providers Regular City Council Meeting Tuesday, December 5, 2017 Page 23 can treat patients and practice medicine for longer periods of time, with much less paperwork than going through the insurance company. He claimed doctors like this model because they can practice medicine every hour they are in the office. Supplies and lab costs are purchased by the management company through national contracts at cost, so there are no upcharges. The pharmacy is operated the same way, direct through a pharmacy wholesaler, so it is about a 50% savings. It is much faster for the employee to be seen because there is no drive time, so it is a matter of setting up an appointment on line, seeing the doctor, and being back to their desk in less than a half hour. He indicated this does not mean employees will abandon their primary care doctor, but they can work with this one as well, especially considering it is free, so it will enhance the medical community. The physician at this center can make referrals to specialists in the Blue Cross network, so there is that flexibility to allow continuity of care. He outlined the services offered through the carrier management company. He assured the technology is in place, and CareHere has electronic medical record capability. He showed a layout of a similar center, typically about 1,200 square feet, with enough space for a couple of exam rooms and a small waiting area which is not generally needed. He stated management company experience, of which CareHere has a lot of experience in the public Regular City Council Meeting Tuesday, December 5, 2017 Page 24 sector and are familiar with working with municipalities. They also need a good doctor and a good nurse to make it successful, and it is important for the City Council to know and champion this model so the employees know and understand that this is important, and will be a valuable fringe benefit if adopted. He introduced Ms. Jenny Campos, representing CareHere. Ms. Campos, CareHere’s Director of Clinical Services for this area, stated she was formerly the Human Resource Director for the City of Ferndale, so she developed their center along with the other two cities, with Hazel Park and Oak Park recently joining their collaborative. They are now building their second site in Ferndale, scheduled to open in March. Their passion is with local governments, and they work with both collaborations between both public and private firms. It is easy to use, and the average wait time for patients is about two minutes, so employees can get in, out and return to work with medication in hand very quickly. They do a lot in the way of wellness, providing a lot of data to help patients make decisions. She offered to answer questions. Mayor Taylor opened the floor for comments from the audience, but there were no comments made. Moved by Sierawski, seconded by Radtke, RESOLVED, to approve the Medical Services Agreement between the City of Sterling Heights and CareHere Regular City Council Meeting Tuesday, December 5, 2017 Page 25 Management, PLLC, and authorize the City Manager to execute the Agreement and all other documentation required in conjunction with this approval on behalf of the City. Mayor Pro-Tem Sierawski inquired as to whether they will be using nurses at this facility, or whether it will be medical technicians. Mr. Manquen replied they are nurses, and they are using doctors, not Physician’s Assistants. Mayor Pro-Tem Sierawski inquired as to whether there will be a separate room for the pharmacy. Mr. Manquen replied there is typically a locked dispensary cabinet within the medical unit. He assured they are generic drugs, and they will have no narcotics. Mayor Pro-Tem Sierawski recalled Mr. Manquen indicating there will not be much paperwork, but she inquired as to whether they will still keep up the progress-noting. Mr. Manquen assured they do paperwork, but what he was referring to was the paperwork required by the insurance company. Councilman Radtke questioned Ms. Campos as to how this program has been received by the employees in Ferndale, Royal Oak and Madison Heights. Ms. Campos replied that the key to the success is the initial launch with regards to wellness. Incentives drive employees, and CareHere likes to Regular City Council Meeting Tuesday, December 5, 2017 Page 26 see an 85% utilization rate for their model. If the usage rate is higher, patients may not be able to get a same-day appointment, and they look at solutions such as adding hours, etc. If the usage rate is lower, the City will not get the full momentum of savings. The Ferndale location opened in January 2015 and they have had a very positive response from their employees, with about 65% to 70% utilization. They have had positive feedback from their employees as it relates to the confidentiality and trust of the employees, and they have had no union issues. Councilwoman Koski inquired as to whether the same doctor and same nurse will be assigned to this facility all the time, where they come from, and whether they are affiliated with a hospital. Ms. Campos replied that, through their vetting process, they identify various local candidates interested in part-time hours, and there would be one dedicated provider who would not be affiliated with any hospital through their employment with CareHere, although some providers may work some hours out of their network. She assured they have an extensive vetting process for both providers and ancillary team, and when hired, they are employees of CareHere and are managed by the CareHere staff. Regular City Council Meeting Tuesday, December 5, 2017 Page 27 Councilwoman Koski inquired as to whether the doctors and nurses are rotated between locations, or whether this location would be assigned one specific doctor and one specific nurse. Ms. Campos stated in this model, they recommend one doctor and one nurse, each for 18 hours; however, it could change if one of their employees decides they want to make a change, or possibly they have a vacation day, and in that case, they have substitutes available to cover for another provider in the area. She added that employees begin to trust that provider and they become the “go-to” for their medical concerns. Ms. Campos explained that the majority of employees who have taken their surveys utilize the health care centers as their primary care office, so it becomes their day-to-day medical resource. Councilwoman Koski inquired as to whether they would be providing services to employees who want to be seen for colds, regular check-ups, as well as check-up for new hires, etc. Ms. Campos replied they can provide for any of those needs. Many employees utilize them from a wellness perspective for blood draws, to obtain an annual health risk assessment with a 28-panel lab draw. Their facility can then do follow-up and coaching for their employees or patients to encourage different changes in behavior that may help those numbers in a positive direction. Employees often use the facility Regular City Council Meeting Tuesday, December 5, 2017 Page 28 for minor illnesses such as coughs and colds. They can offer preventative care, manage chronic diseases, such as diabetes, hypertension, cholesterol, and can make referrals if anything exceeds what they offer at the center. Councilwoman Koski inquired as to the qualifications a doctor must meet to work for CareHere. Ms. Campos explained their recruitment team handles the vetting of the candidates. They look for providers who have had family care experience in a practice. They can see any age group from two years of age and up. She stated they do not do well-care visits for children at the center, because most people utilize a pediatrician for that. They have an extensive qualification list for doctors, including being board- certified, and must be credentialed if they work with Blue Cross groups. Ms. Campos replied to further inquiry that they would not suggest or recommend a physician who just received his/her license. When they potentially identify three or four candidates interested in the opportunity and they pass the initial due diligence, they would be brought forward to the City of Sterling Heights so Human Resources could interview them and get to know them a little and determine whether they would mesh with the staff before CareHere would ever make a recommendation for hire. Regular City Council Meeting Tuesday, December 5, 2017 Page 29 Councilwoman Koski inquired as to how the drugs are handled, and if they have a patient who needs a certain medicine and they are being seen at this facility, would the doctor order that medicine for them. Ms. Campos replied they work with the brokers to utilize their pharmacy in order to develop a pharmacy with about 150 to 200 of the most commonly-used medications, and they develop their own formulary. They carry antibiotics and medications for chronic conditions, and depending upon the program selected, they can even carry diabetic testing supplies. Anything narcotic-based is not kept at the health center, although their providers have the ability to write prescriptions. If there is something they would like to have a patient take that is not kept “in-house,” or that is narcotic-based, they will prescribe it. Councilwoman Koski inquired as to whether they will have a receptionist at the facility. Ms. Campau replied they do not have a receptionist. The efficiency of their model is that the nursing team manages a lot of that flow during the visit. The doctor and nurse handle their own notes. When the patients come in, there is generally less than a two-minute wait time. They have a 24-hour support center and a lot of patients will call the support center to assist with making appointments, or patients can make the appointments themselves on line or through an app on their Regular City Council Meeting Tuesday, December 5, 2017 Page 30 smart phone. The need for someone to be in the office to greet and serve in a clerical capacity is not included in the model, but saves a lot of money. Councilwoman Ziarko understood that, through the vetting process, once three or four candidates are selected, the City’s Human Resources staff will have the opportunity to interview them and provide input as to who will be working in this clinic. Ms. Campos replied affirmatively. She assured that if there are ever issues that arise relating to staff at the health care center, they take that seriously. A lot of the CareHere staff is spread throughout the country, but she works here locally and could work one-on-one with their providers, nursing teams and clients to bridge any of those issues should they arise. She assured they would work along with Ms. Baldwin and their providers to address any issues. Councilwoman Ziarko inquired as to how the 18-hours per week would be broken up, and whether the health care center would be open a few hours a day, or whether they would be open only on certain days of the week. Ms. Campos replied their clients spread it out in a variety of ways, but CareHere would suggest looking at six hours a day for three days a week. In the recruitment process, it is much easier for them to find a provider and nurse willing to work a longer period within one day Regular City Council Meeting Tuesday, December 5, 2017 Page 31 rather than two to three hours for five days. They do not want to see turnover within the health care center, so that is why they would make the recommendation for the longer days. Councilwoman Ziarko questioned why a doctor who has completed med school would want to work only eighteen hours per week. She inquired as to whether they can work at other facilities as well. Ms. Campos replied that can occur, and there is a lot of room in this model to collaborate with other municipalities or heath care centers. She cited the example of Battle Creek, referring to it as “a well-oiled machine” because it has been in existence for five years, and because of their popularity with the employees, they are now operating a 40-hour- per-week health care center. Mr. Manquen stated the long-term goal is to have more hours available, and collaboration is important. He noted that Battle Creek originally wanted to provide care to their employees only, but they are in collaboration with Calhoun County, and are now going up to between 50 and 60 hours a week because their utilization keeps going up, and they are adding partners. He noted that Madison Heights, Royal Oak and Ferndale started the center called “MiLife” and have added two more partners, so the idea is to bring collaboration to municipalities, and this can be done by attracting private-sector groups as well. Regular City Council Meeting Tuesday, December 5, 2017 Page 32 Councilwoman Ziarko understood this is for ages two and up, and she inquired as to whether they will provide childhood immunizations. Ms. Campos replied they do not provide childhood immunizations, although they do provide flu vaccines, tetanus and other immunizations. Councilwoman Ziarko inquired as to whether this would take effect in the next fiscal year if the City opts to do this. Ms. Baldwin replied affirmatively. She replied to further inquiry that she has contacted the employees about this potential service. She brought about 20 to 25 employees from the various bargaining units, all whom have expressed interest, to the site. They all showed a great interest and see it as a benefit. She explained they have taken tours of the Madison Heights facility, and will bring the director of the Madison Heights facility into discussion as they do the tours with the employees. Councilwoman Ziarko inquired as to how this health care center would compare to the “minute clinics” offered by CVS Pharmacy. Mr. Manquen replied the similarities are in the types of services provided, but the key difference is that the health care center is not open to the public but is exclusive to employees, their dependents and retirees who are eligible. Regular City Council Meeting Tuesday, December 5, 2017 Page 33 Councilman Shannon stated he is impressed with Administration for bringing this forward, which is a cost savings to the City and a valuable service to the employees. He added it will be interesting to see if they can make this happen. Councilwoman Schmidt stated that a lot of her questions have been answered, and she agreed with Mr. Manquen that this is like having four presentations in one, with a lot to take in. She questioned the initial start-up cost for the construction of this facility. Mr. Vanderpool replied it is $35,000 for set-up but that is to build up the space, for which they have ample room to have a 1,500-square-foot center. They estimate the total cost will be between $50,000 and $75,000 to get it started, although they expect it to be less than that. He indicated that, until such time as the City Council would approve it, they are hesitant to complete architectural planning. He replied to further inquiry that they anticipate their cost savings to be a total of $511,104 over the first three years. Councilwoman Schmidt inquired as to whether the physician will have hospital privileges. Ms. Campos confirmed that while they may have hospital privileges through another employer, they do not handle emergent care at the health and wellness centers. Councilwoman Schmidt understood that an employee who needs to be admitted to a hospital would be advised to go to an Emergency Room. She Regular City Council Meeting Tuesday, December 5, 2017 Page 34 questioned whether most of the physicians who work for CareHere are retired from other full-time practices. Ms. Campos replied that they have physicians of all ages. She explained many physicians are frustrated with the amount of paperwork required from the insurance companies, and enjoy this type of opportunity where they can “just practice medicine.” She added that they are fortunate in this area to be able to pull from a lot of health care systems. Councilwoman Schmidt stated she is not opposed to this concept and is more comfortable after tonight’s presentation, but she would like to reach out to a couple of individuals in the communities of Madison Heights and Royal Oak and has not yet been able to talk with them. She added that she would also like to go and visit the site, and for these reasons, she is asking her colleagues to consider postponing this until the first meeting in January. She stated she spoke with Mr. Vanderpool and he did not think that would be an issue. Councilman Radtke inquired as to how they arrived at the proposed savings amount over a three-year period. Mr. Vanderpool replied the number he cited, which was $511,104, is actually the savings in the third year. The cumulative savings over years one through three equate to $766,255, and even netting out the theoretical productivity savings, it still comes to $466,000 cumulatively over the three-year period. He Regular City Council Meeting Tuesday, December 5, 2017 Page 35 stated they estimate they could conservatively save about $1.5 million over a ten-year period of time. Mayor Taylor inquired as to whether they will be paying based on the number of employees per Section 2.02 of the agreement. Mr. Vanderpool replied affirmatively, noting the administrative fee is $125,000 over the three-year period. Mayor Taylor inquired as to the total cost the City will pay to CareHere. Mr. Manquen replied there is an administrative fee of $26.50 cost per month per active employee, totaling $125,000 for the first year, and $12 per month per retiree, which totals $14,000, for a combined total of $140,000 to administer and manage the center. The other charges are the direct charges of 18 hours per week multiplied by the doctor’s rate, and 18 hours per week multiplied by the nurse’s rate, an estimate of supplies and an estimate of prescription drugs. Mayor Taylor thanked Administration for coming forward with this proposal. He studied it a lot and it seems to be a good idea. He stated his neighbor is a physician who works for a similar type health clinic. His neighbor is young, has two young children, and his hours of employment allow him to be home a lot with his family. He noted, on the other hand, his friend is a surgeon who works constantly and is rarely home, so he can understand why some physicians would see this type of employment as desirable, offering them a good living Regular City Council Meeting Tuesday, December 5, 2017 Page 36 but also providing a quality of life. He was confident that they will get a talented physician and nurse, and that it makes great financial sense for an innovative way to provide a quality services to their employees. He stated he is comfortable voting on this today, but if Councilwoman Schmidt would like more time, he has no objection, adding that Administration has assured him the postponement will not conflict with the start-up should the Council vote in favor of this in January. Moved by Schmidt, seconded by Ziarko, RESOLVED, to postpone action on the proposed Medical Services Agreement between the City of Sterling Heights and CareHere Management, PLLC, until January 3, 2018. Yes: All. The motion carried. COMMUNICATIONS FROM CITIZENS Mr. Charles Jefferson – traffic issues at the intersection of Hall Road (M- 59) and Delco, and also by Lakeside Mall. REPORTS FROM CITY ADMINISTRATION AND CITY COUNCIL Councilman Radtke stated he went on a ride-along with the Sterling Heights Police Department this past weekend, and he added he has never been more impressed by the professionalism and good work done by the Police Department. He was impressed with the new officer he met, noting he was courteous and professional. If this is the type of individual the City is bringing into their department, they are in a very good position. Regular City Council Meeting Tuesday, December 5, 2017 Page 37 Councilman Shannon addressed the local government workers pension and reform bills taken up by the State legislature, commenting on the issue of local control. Over the last three or four years, several members of state legislature tried to take away the ability of local municipalities to make decisions that are in the best interest of their residents and employees. He cited some examples, including restriction from certain ordinances on rental properties, prohibiting local governments from educating residents on ballot issues, and now the debate on government workers’ pensions. He would like to see them focus on state issues such as infrastructure, education, and figuring out how to reinstate the revenue-sharing that was promised to local communities. He urged state legislators to take care of their business, and let the local governments do the job they were elected to do. Councilwoman Schmidt stated she is so excited that 15 Mile Road is open. She questioned when Hayes will be open. Mr. Vanderpool replied that he will have to get an update for Councilwoman Schmidt’s question. He is hoping it will be this week. Councilwoman Schmidt acknowledged Mr. Vanderpool and Mr. Bashaw who worked diligently to make sure the Sterling Heights portion of 15 Mile, west of Hayes, which was in deplorable condition, was repaved while this construction was finishing up, so that is in great condition. She is aware that Mr. Bashaw worked hard with the cement contractor to obtain good pricing on that. Regular City Council Meeting Tuesday, December 5, 2017 Page 38 Councilwoman Ziarko agreed with Councilman Shannon, and added that the state has also taken control away from local government on the fireworks law, and also the liquor license approvals. Councilwoman Koski questioned when the dog park will be completed, and where it will be located. Mr. Vanderpool replied that will be at the tail end of the three-year project, and will be located just behind the tennis courts near Delia Park, which is north of Fire Station #5. It is currently a wooded location and ideal for a dog park. There will be some nice serpentine trails and open space through that area that will be fenced off. It is not close to residential homes, and there is ample parking, he will share the plans those with City Council and the community when they are more definitive. The dog park was originally to be located at Magnolia Park, but they received significant feedback from residents in that area regarding their concerns about that location, so they found a more suitable place for it. ADJOURN Moved by Ziarko, seconded by Sierawski, RESOLVED, to adjourn the meeting. Yes: All. The motion carried. The meeting was adjourned at 9:01 p.m. MELANIE D. RYSKA, City Clerk