City Council

CITY OF STERLING HEIGHTS MINUTES OF REGULAR MEETING OF CITY COUNCIL TUESDAY, DECEMBER 4, 2018 IN CITY HALL 1. Mayor Michael C. Taylor called the meeting to order at 7:00 p.m. 2. Mayor Taylor led the Pledge of Allegiance to the Flag and Melanie D. Ryska, City Clerk, gave the Invocation. 3. 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. 4. APPROVAL OF AGENDA Moved by Koski, seconded by Ziarko, to approve the Agenda as amended. Yes: All. The motion carried. 5. REPORT FROM CITY MANAGER Mr. Vanderpool informed that the City offices, which include City Hall, the Library, Parks & Recreation Center, Senior Center and the Nature Center, will be closed for business on Friday, December 14, 2018, due to an in-service training day. He added that the closing will not affect any refuse collection days, so there will be no delays. Mr. Vanderpool stated the University of Michigan Dearborn’s iLabs eCities is honoring the City of Sterling Heights as a five-star community. Sterling Heights Regular City Council Meeting Tuesday, December 4, 2018 Page 2 has been recognized for cutting-edge economic development programs which, in the City’s case, involve a Velocity Collaboration Center, a Michigan Cyber Range, Michigan Defense Center, Macomb OU Incubator and soon-to-be the Robotics Collaboration Center, all located in Sterling Heights. Researchers focused on five-year changes in property values and community assets, which can demonstrate growth, investment and cost of doing business in the City. He commented that the five-star distinction reflects the pro-business environment the City has cultivated over the years, which has created thousands of jobs, strengthened the local economy and has kept local property taxes low for residents. Mr. Vanderpool recognized Luke Bonner, Economic Development Advisor, for his good work and is responsible in a large part for this distinction. Mr. Vanderpool explained that Sterling Christmas was held this past Saturday, and he showed some pictures of the new amenities, including the new ice rink, which was dedicated Saturday evening. He indicated there was a good turnout, and although it was raining, there was no problem with the ice. He informed the ice rink is now open daily and more details are available on the website. He added they also enjoyed the usual Sterling Christmas festivities, including caroling, with the new amphitheater as the stage, the petting zoo, and the Upton House was showcased. They look forward to next year’s event. Mr. Vanderpool advised that the Sterling Relief Drain will be improved, and an image showing some of the new improvements was shown. He explained the Macomb County Public Work’s office is improving a few miles of the drain in Regular City Council Meeting Tuesday, December 4, 2018 Page 3 Sterling Heights under a program which will include “day-lighting” portions of the drain, a common practice across the country where drain water is “day- lighted” and allowed to seep into the ground through a more natural process than the current system of draining through underground pipes out into lake areas, or in this case, Lake St. Clair. He explained the Macomb County Public Works office received approximately $1.8 million for these improvements. This will create the effect of a stream, and through natural vegetation, new trees, along with plants that absorb water, a more natural phenomenon occurs. This work is starting, and the first section will be from Dodge Park Road to Schoenherr, as well as in the other direction to Van Dyke, and there will be thousands of trees planted as part of this process, so this will result in a much- improved Sterling Relief Drain. Mr. Vanderpool highlighted a component of this project will be the improvement of some of the crossings at Schoenherr, Dodge Park, Mound, Ryan, and Ivy Street on the far west end. He showed a current photo of one of the crossings, noting it is unsightly, with a deteriorated fence with vines growing into it. They have come up with a new concept that will be part of this plan, which includes new fencing and respite areas, including benches and trash receptacles, installed at these crossings. He concluded his report by saying this work will be taking place over the next year and will be a great improvement for the City. Regular City Council Meeting Tuesday, December 4, 2018 Page 4 6. PRESENTATIONS A. Mayor Taylor stated there are three presentations this evening, and the first presentation is the fourteenth and fifteenth recipients of a Sterling Heights Fire Department’s Survival Coin. He invited Fire Chief Chris Martin to make the presentations. Fire Chief Martin credited teamwork has once again made this outcome such a success, from the 911 call to the dispatchers, to the Police Department, to the Fire Department, to the hospital until the time the patient went home after surviving a cardiac arrest. He relayed the details of an incident that occurred on August 15, 2018, where a 911 call came in from Mr. Karl DeLeeuw, who was talking to the dispatcher about his wife having difficulty breathing. His wife, Michele, then went unresponsive, most likely slipping into cardiac arrest. He credited the dispatcher for her phenomenal job talking Mr. DeLeeuw through getting his wife on the ground and starting CPR although he had never been trained in CPR. He also credited Engine 4, Squad 4 and Rescue 1 in their response, and they quickly took over treatment, performing several life-saving procedures to save her life. After her third defibrillation, her system was stabilized, and her heart started beating again, and she breathed on her own, although she remained unconscious. They turned over their care to St. John Macomb Hospital, where Ms. DeLeeuw remained for 31 days before being released. He invited Ms. DeLeeuw and Lt. Dan Zehnder to come up, and Lt. Zehnder presented Ms. DeLeeuw with the fourteenth Survival Coin. Regular City Council Meeting Tuesday, December 4, 2018 Page 5 Mr. Karl DeLeeuw explained some of the details, noting he was speaking to her in the chair on that day, and she “basically died”. He called 911 and stressed that the dispatcher was fantastic in helping him. He indicated his wife was unresponsive when the crews arrived, and they worked on her with great precision and teamwork. She was rushed to St. John Macomb Hospital and placed her on a ventilator in the intensive care unit. The ventilator kept her breathing and a hypothermia machine kept her cool. After six days, he explained a neurosurgeon talked to him and his family to advise she only had 5% brain function and was only using 25% of her heart. At that time, he indicated he made the most difficult decision of his life to take her off of life support and put her on comfort care. After two days, she opened her eyes, and as the days progressed, she continued to improve, both mentally and physically. Her heart catherization revealed three vein blockages ranging from 80% to 99% blocked. She had four- bypass open-heart surgery on October 19, and was released on October 25, which fell on their twenty-sixth wedding anniversary. He stressed there are not enough words or ways for him to say thanks, and without the help and dedication of the first responders, his wife would not be here today. He added they are special, noting what they do changes peoples’ lives, and on behalf of he and his family, he thanked them all for their dedication and help. Regular City Council Meeting Tuesday, December 4, 2018 Page 6 Chief Martin stated the next Survival Coin is number fifteen, and he relayed the details of the event that occurred on September 1, 2018, where a 911 call came in from the wife of Mr. Sabah Dardar. He invited up the dispatcher for that call, Melissa, and thanked and congratulated her, noting they are here today because of her. He also extended thanks to Police Officer Shawn Birch, who could not be here tonight, but he started CPR while Engine #2, Squad #2 and Rescue #1 were responding. Chief Martin explained that Mr. Dardar was found to be in asystole, which is a condition where a person is “flatlining” with no discernable heart activity, but after thirty minutes of medications, CPR and eight defibrillations, just before arriving at St. John Macomb Hospital, his heart responded, and his condition began to improve. Firefighter Matt Mardeusz presented Mr. Dardar with the fifteenth Survival Coin. Mr. Dardar’s two grandchildren, Isaac and Gabriella, thanked everyone who helped their grandpa in this situation, and added it is a miracle he survived. Mayor Taylor opened the floor for comments from Council. Mayor Pro-Tem Sierawski complimented Mr. Dardar on his beautiful grandchildren, and she commended the dispatcher on her wonderful job, noting the council members were able to listen to the 911 call. She stated as a former triage nurse, she understands the stress, and reiterated the dispatcher did an excellent job. She thanked the firefighters, stressing that the City’s firefighters are excellent and they “keep us alive.” Regular City Council Meeting Tuesday, December 4, 2018 Page 7 Councilwoman Ziarko commended Mr. DeLeeuw for his comments, noting it is a tribute to his family, and he is truly blessed. She indicated it is also a miracle for Mr. Dardar, and she felt these are testaments of how “our families help your families” and how they are committed to making sure Sterling Heights is one of the best places in the country to live. She thanked all who participated. Councilman Radtke congratulated Mr. Dardar and Ms. DeLeeuw, as well as all of the firefighters and first responders for their excellent job. He felt it shows their Advanced Life Support (ALS), and the teamwork involved, is working and helping the community. He thanked the Chief and his department, Macomb County, the Police Department, and the families who were here tonight to take part, noting it is a blessing to have these people still here in this Christmas season. Mayor Taylor stated the Council was provided the 911 tapes for both of these calls, and although the circumstances for both victims was similar, they were very different calls. He credited the dispatcher in both circumstances to be able to get the spouses to do what they needed to do before help arrived, which speaks to their training and professionalism as a dispatcher. He commented that it is often overlooked how much the Fire Department and Police Department do through reaching out to the community through training such as the Citizen’s Fire Academy, so that residents can help to save victims before the emergency responders arrive. He added that he does not believe there is a better team in the entire State of Michigan to handle these Regular City Council Meeting Tuesday, December 4, 2018 Page 8 emergencies, and they are fortunate to have great hospitals with dedicated staffs. He thanked all involved and congratulated Mr. Dardar and Ms. DeLeeuw. B. Mayor Taylor stated this presentation is a swearing-in ceremony for three new firefighters. He invited Chief Chris Martin to introduce the new firefighters and swear them in. Fire Chief Martin introduced Nicholas Serafin, John Farina and Michael Peterson, the three new firefighters being sworn in this evening, and provided information on their background. The three new firefighters were sworn in by Chief Martin, and the Mayor and City Council members proceeded to welcome and congratulate them. Each of the firefighters spoke, thanking the City and their families for their support, and are each looking forward to long careers with the City. Mayor Taylor commented the new firefighters can witness the type of community Sterling Heights is by seeing all who were involved in the incidents leading up to tonight’s Survival Coin presentations. He is confident they will be here for a long time and will find it is a destination city for firefighters. He assured that the residents of Sterling Heights stand behind their police and firefighters. He wished them the best in their new positions and thanked them for their service to the City. The meeting recessed at 7:30 p.m. and reconvened at 7:33 p.m. C. Mayor Taylor stated this presentation is to receive the Comprehensive Annual Financial Report for the Fiscal Year Ended June 30, 2018. He invited Ms. Regular City Council Meeting Tuesday, December 4, 2018 Page 9 Jennifer Varney, Finance & Budget Director, as well as representatives from Plante & Moran, PLLO, to give a presentation. Ms. Varney presented the results of the 2018 Financial Audit, and she thanked everyone who was involved, especially Mr. Nick Mackie and the entire finance team. She advised the full 150-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 $100.3 million, and General Fund Expenditures totaled $92.9 million, which enabled them to add $7.4 million to General Fund Reserves, bringing the total General Fund balance to $24.7 million, or 26.6% of expenses. In 2019 they are projected to add an additional $1.1 million to reserves; however, she indicated the fund balance percentage will decrease slightly because of higher expenses, primarily related to road construction. She noted they were able to add a significant amount to fund balance, helping them to reach their goal of 25% of expenditures earlier than planned; however, a large portion of the increase in reserves is due to two significant one-time variances. The first was an additional $2.7 million in extra personal property tax proration from the State of Michigan, which is over and above their calculated loss on property tax reimbursements, and it is unknown how long this payment will continue. The second was a $1.3 million personnel savings in the Police Department due to difficulty filling the police positions, creating a budget Regular City Council Meeting Tuesday, December 4, 2018 Page 10 variance to the positive. She added the Police Department is fully staffed at the present time, so they will not continue to realize those budgetary savings. Ms. Varney explained General Fund Revenues increased $5 million, or 5.3%, caused by a 2.4% increase in property taxes, increases in revenue-sharing and the personal property tax reimbursement, federal grant revenue from the SAFER grant, and a new revenue stream from ALS transport. She pointed out they were very close to budgeted amounts, slightly exceeding their revenue budget targets. She noted expenditures increased by $3.5 million, or 3.9%, which included increases in pension contributions, general liability insurance, vehicle parts and service, transfers to major roads and the Fire Department personnel for EMS. She added that total expenditures were lower than budgeted, and every department came within 0.8% of their amended budget. She reviewed activity in some of the other major funds, including the Capital Improvement Fund, with the original 2018 budget including $3.9 million plus a $2.2 million carry-forward from the prior year, for a total of $6.1 million. She advised $3.8 million of these purchases were completed in the current year, and $1.8 million will be carried forward into 2019. She informed the major purchases for 2018 included the continuation of the vehicle replacement plan, the replacement of the final four emergency warning sirens, the purchase of a tandem axle dump truck and an aerial sign truck, the implementation of the On-Base agenda management system and the replacement of their storage and controlling services. Regular City Council Meeting Tuesday, December 4, 2018 Page 11 Ms. Varney stated the Road Funds included this year’s neighborhood road projects totaled $7 million, which included an additional $1.3 million approved by Council on top of the original budget, which allowed for the reconstruction of four additional local streets. She noted 2019 will see a continuation of this investment, with a total local road construction budget of $4.2 million, over $3.3 million is a direct result of the Safe Streets Millage and will enable the reconstruction of 17 local roads. She indicated 2019 will be just as busy with multiple road projects planned. In addition to the increase in road funding from the State of Michigan, the City issued an $8.2 million road bond in 2017 to help fund these critical repairs. The 2019 budget included a one-time one-mill increase and additional funding from the General Fund to increase road investment even further. Ms. Varney reviewed the Parks & Recreation Fund and the highlights from 2018, including the opening of the skate park, the completion of the Dodge Park improvements and its grand re-opening, the groundbreaking of the Community Center and numerous other improvements at nearly every other park in the City. Ms. Varney explained the Water & Sewer Fund experienced a small operational loss in the current fiscal year primarily due to lower usage, which was 4.6% lower than estimated for the budget, and nearly 12% lower than the ten-year average. She added they have worked to minimize losses in the Water & Sewer Regular City Council Meeting Tuesday, December 4, 2018 Page 12 system in the past two years. The current year’s budget is projected to begin replenishing reserves. Ms. Varney provided an update on the City’s Retirement Funds, noting they have continued to prioritize funding of its three retirement plans, with the Retiree Medical Plan funding level increased by 4.2% over last year to 55.1% funded. The City remains committed to improve the funding level of this plan, which increased from 9% funded in 2008. The funding level of the General Employee Pension System decreased slightly to 77.3% funded, primarily due to an actual rate of return of 7.16% compared to the anticipated 7.5%. These two plans are both closed to new hires. The funding level of the Police & Fire Plan decreased to 62.9%, with the assumed rate of return decreased and mortality table was updated to account for longer life spans. These changes increased pension liability, but realistic assumptions will assure the long-term viability of the plan, noting this is the only plan open to new hires. Ms. Varney displayed a number of slides that benchmark Sterling Heights to other communities in the areas of tax rates, taxes per resident and general fund reserves per resident, all reflecting Sterling Heights is on the right path following their long-term plan. Ms. Varney concluded her report by indicating the budget continues to provide them with an accurate look at actual spending, and they are continuing to update their actuarial assumptions to increase funding in pension plans, continued to reinvestment in capital assets and make good progress in road Regular City Council Meeting Tuesday, December 4, 2018 Page 13 repairs, and all while keeping property taxes low, noting the average owner pays $88 per month for city taxes, and that is the lowest paid per resident out of the comparable communities. City revenue increases are capped by inflation, which is estimated to be 2.4% next year, but is anticipated to remain at 2% or lower over the next ten years. She introduced Mr. Dave Helisek, partner with Plante Moran, serving as their independent auditors, noting they have spent the last several months reviewing the financial records, and have issued an unmodified opinion on the Audited Financial Report, which is the highest rating possible. She added that Mr. Nick Mackie, City Controller, will follow and present the City Council with the GFOA Financial Awards received for both the City budget and financial reports. Mr. Dave Helisek, partner with Plante Moran, introduced Mr. Rumzei Abdallah, Senior Associate. Mr. Helisek addressed a couple of non- financial items, noting they have spent a lot of time addressing legacy costs. He informed that Michigan Public Act 202 of 2017 was passed in December of last year, which identifies trusts and pensions that are underfunded and addresses those at local units. He noted that the General Employees Retirement System funding level was at 77% as of June 2018, and Police and Fire was at 62.9%. Per Public Act 202, legislature deemed that anything under 60% funded would be considered underfunded, so he commended the City for the terrific job in making sure these systems are funded correctly. They are now Regular City Council Meeting Tuesday, December 4, 2018 Page 14 meeting the measurements passed by Treasury, and he explained what is involved for funds not meeting the minimum. He noted the Retiree Health Care fund was at 55% funded, and Public Act 202 deemed underfunding for this fund would be at anything less than 40%, so he again commended the City for being proactive in funding this benefit. He stated he has been in front of a number of communities over these two months, and he estimated he only had three that have not had to go through corrective action, with Sterling Heights being one of those three cities. Mr. Helisek addressed the controls that are put in place, and he assured that nothing came to their attention as a result of this year’s audit that would have resulted in an interior weakness or significant deficiency. The result is an “A” grade, and the assurance that the financial information provided throughout the year is reliable. He commended the Finance and Accounting staff on the excellent job they do throughout the year. He advised when a local unit has over $750,000 of federal expenditures incurred through any year, there is a separate Federal Awards audit required. He explained the City of Sterling Heights had over $4 million of federal expenditures this past year, so they determined the programs to test for compliance within the grant provisions of those major programs, and as a result of that audit, they found no weaknesses, no non-compliance items and they are giving the Federal Programs audit an “A” grade as well. Regular City Council Meeting Tuesday, December 4, 2018 Page 15 Mr. Rumzei Abdallah reviewed the Independent Audit Report, which gave an unmodified opinion, which means the financial statements in their opinion are free of material misstatement, and there were no required journal entries. He explained the rule change for GASB 75 (Governmental Accounting Standards Board), which requires the City to record the unfunded actuarial accrued liability for OPEB (Other Post- Employment Benefits), and indicated the City implemented that new rule. He reiterated the City received an unmodified opinion, which is the highest level possible for a set of financial statements. Mr. Nick Mackie stated the City of Sterling Heights has a long history of excellence in financial reporting, demonstrated by the 29 consecutive years they have received the Government Finance Officers Association (GFOA) Certificate of Excellence in Financial Reporting, as well as the 30 years they have received the Distinguished Budget Award from the same organization. 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 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. Regular City Council Meeting Tuesday, December 4, 2018 Page 16 Moved by Radtke, seconded by Taylor, RESOLVED, to receive and accept the Comprehensive Annual Financial Report for the fiscal year ended June 30, 2018. Councilman Radtke stated this is attributed to the great Budget and Finance Department they have and the hard work and dedication of the employees. Mayor Pro-Tem Sierawski noted the City has received the Government Finance Association award, and she pointed out they have received it since 2012, which she felt is a testament to their great city management, including Ms. Varney, and her predecessor, Mr. Brian Baker. She felt that is remarkable and is pleased to see how they have been doing such a good job taking care of the residents’ resources. Mayor Taylor thanked Ms. Varney, Mr. Mackie and Plante Moran for their hard work, with an end result that shows the City they can be proud of the work the Finance and Budget team and accountants do to provide Council with the reliable information they need to make their decisions. He added it is a great benefit for all of the residents of Sterling Heights. Yes: All. The motion carried. 7. ORDINANCE ADOPTIONS A. Mayor Taylor stated this is to consider adoption of an ordinance amending the City Code to prohibit recreational marihuana establishments within the City pursuant to the Michigan Regulation and Taxation of Marihuana Act of 2018. He opened the floor for comments from the audience. Regular City Council Meeting Tuesday, December 4, 2018 Page 17 • Mr. Nick Cavalli – opposed to ordinance; Council has duty to represent will of residents; fiscal mistake to turn down tax revenue; regulate locations; should have a “sunset clause”. • Ms. Sanaa Elias – in favor of ordinance; minimizes risks to City; should be rules in place first; opposed to comparison of this to ReCreating Recreation. • Lori (resident) – in favor of ordinance; has worked for 30 years with addicts and family members; marijuana is addictive and harmful. • Bill Yerabek – in favor of ordinance; effects of marijuana on workforce, traffic accidents and impacts on neighborhoods; submitted handouts for Council members. • Nathan (resident) – in favor of the ordinance until there are rules; voters passed Proposal 1, which also allows city to opt-out; not opposed to “sunset clause.” • Horace Johns – in favor of ordinance; questioned promotion of “family-friendly city;” do not have to allow marijuana businesses; concerned about increased traffic accidents. • William MacGregor – opposed to ordinance; home-grown marijuana is expensive; retail stores are better and safer; cited portions of the language in Proposal 1. • Jazmine Early – in favor of ordinance; concerned about safety; displayed article from SAM (Smart Approaches to Marijuana); tax revenue would be minimal compared to cost of additional police. • Charles Jefferson – would like this postponed until the State comes up with rules; people are already using and growing in their homes. • Gino Vitale – in favor of ordinance; concerned about children’s safety; lawmakers should be concerned about society; contributing to the delinquency of minors. • Paul (resident) – in favor of ordinance; opposed to allowing marijuana businesses in the City. • Heather Gould – opposed to ordinance; appearance of a marijuana establishment can be an unmarked building or warehouse; ordinance will not keep people from buying, will lose tax revenue. • Mr. Anthony Cavalli – opposed to ordinance; consider fiscal responsibility of getting tax revenue; police and fire will remain the same. • Paul Smith – in favor of ordinance; concerned about marijuana business becoming “grandfathered;” cited businesses where revenue-sharing was never realized; will not use passive sales tactics. • Matthew Smith – opposed to ordinance; Council allowing fear to rule over their judgment; no overdose of marijuana resulting in death; users are productive members of society. Regular City Council Meeting Tuesday, December 4, 2018 Page 18 • Moira Smith – in favor of ordinance; claimed incongruency with promoting marijuana sales and the image as “family-friendly;” governor of Colorado regrets marijuana was legalized in his state. Moved by Ziarko, seconded by Schmidt, RESOLVED, to adopt the ordinance amending the City Code to prohibit recreational marihuana establishments within the City pursuant to the Michigan Regulation and Taxation Marihuana Act of 2018. Councilwoman Ziarko stated she understands what was passed in the last election, and she assured it is not her job to tell people whether or not they should use it or grow it, or to judge them on their choices. She heard comments that by adopting this Ordinance, the Council is not acting according to the “will of the people”. She pointed out that the voters approved Proposal 1, and the language in that proposal, in addition to legalizing recreational marijuana, also included the right for municipalities to ban or restrict these establishments in their community. She stressed she is not here to represent only the people who voted yes or no on this issue, or those who did not vote at all or were too young to vote, but she represents everyone. She emphasized that her job, while sitting on Council, is to make sure Sterling Heights remains the safest city in the state. She needs to assure they are fiscally responsible and act in the best interest of all residents. She stressed she is not going to vote against the advice provided by City Administration, the City Attorney, the Michigan Municipal League, the Police Chief and the Fire Chief. She cautioned that she is not saying this will never come back, and she requested updates Regular City Council Meeting Tuesday, December 4, 2018 Page 19 periodically as to what changes are being made at the State level, as well as action the Michigan Municipal League is taking. She cited three citizens, namely Mr. Johns, Mr. Vitale and Mr. Paul Smith, who spoke this evening from experience and recalled what happened with the use of marijuana years and years ago. She admitted people have been using it for years, but now that it is legal, more people will be using it. She expressed concern about children who will experiment with it, similar to underaged drinking. She reminded how everyone needs to respect the ideas of others. She cited an example where she went on a trip recently and there were 5,000 people from 55 countries and more religions than she could count, but they were all there to have a good time. She reminded that everyone here comes from different backgrounds and different religions, but the goal is to make sure the City of Sterling Heights remains a safe place for everyone. She explained she is in support of the Ordinance, and they need to wait until the State of Michigan acts on this and decides what they are going to do. The State legislature is already talking about overturning the amount of tax revenue from this. She recalled it started at 10% or 15%, and it is proposed to be reduced to 3%, so she could not see how the City would make money on this. She talked with the Police Chief, who indicated they will need to hire more police officers to monitor this. She is therefore supporting the Ordinance to opt out of cannabis establishments in the City until they find out what they are doing and what the State is doing, but Regular City Council Meeting Tuesday, December 4, 2018 Page 20 she reminded that does not take away anyone’s rights to use it, buy it somewhere else or grow it. Councilwoman Schmidt stated she is very comfortable with the Ordinance as written. She referred to an earlier citizen comment, the will of the people, which voted in recreational marijuana, also voted in the option for municipalities to have this ordinance in place. She felt it would be irresponsible for them to put anything in place pertaining to something for which they know nothing about at this point. She pointed out the law is not legal until Thursday, and the State is already making changes on it, but she noted no one can stop anyone from using marijuana in the City. She emphasized the Council needs to protect the residents as well as businesses expressing concerns that they could be adjacent to potential dispensaries. She felt they need to find out the rules the State puts into place, although she could not promise this issue will not come back before this Council, adding she may or may not be here at that point. She noted medical marijuana took a long time to figure out, and it is still being tweaked. She questioned why they would want establishments to apply for licenses when they do not know what is behind it. She did not anticipate this will be a “cash grab” for any municipality, and now they are talking about reducing the tax from 12% to 3%, making it less profitable for communities. She questioned the anticipated tax revenue that residents seem to think they will be missing out on if they opt out. Regular City Council Meeting Tuesday, December 4, 2018 Page 21 Mr. Kaszubski replied there is a fund that is being created out of the 10% excise tax, and out of that, 15% is going to municipalities that have a marijuana facility in place. That 15% is estimated by 2019/2020 to be approximately $11 million to be split between those municipalities. The assumption is that approximately 500 would be open within the next two years, so they are looking at approximately $20,000 per establishment. It is not a huge amount of money compared to the enforcement that will likely be put into place for each unit. More units would bring in more revenue, and the State is anticipating that, by full implementation, cities and municipalities will be getting approximately $19 million in revenue. Out of that fund, they would look at 15% to be divided up; however, they can expect a decrease because they will have more units and lower pricing. He felt they will probably see less than what was originally anticipated. Councilwoman Schmidt believed the voters in this State have put the children in the position of getting access, but that is more through home-grow operations rather than through commercial establishments. She suspected that, although the kids did not vote it in, she anticipated they will want to try it out, which she felt is a huge issue. Councilman Radtke claimed that leadership is about taking a stand when trying to decide an issue for the residents. He pointed out that the Council members were elected to make the hard decisions. He receives letters from people in support as well as from people who are opposed. He explained it is not just the Regular City Council Meeting Tuesday, December 4, 2018 Page 22 excise tax they will be looking at, but also the business taxes and sales taxes that are shared with the City through revenue-sharing. He explained it is not just about dispensaries, but also testing facilities, transport facilities and grow operations. He noted that other cities have already opened the door to these facilities, and he felt they are turning down a future industry based upon fear of the unknown. He stressed that he does not use marijuana but reminded that it will be legal. He recalled the Police Chief and Fire Chief both expressing their concerns over home growing, and he felt having a safe legal place to buy marijuana that is tested will help prevent home-grows which are plaguing the community and causing fires, explosions and are abusing residents. While he agreed the law needs to be amended, he did not feel it will be done soon, so he suggested that Sterling Heights lead. He reminded that people across Sterling Heights and all across Michigan voted to legalize marijuana, and he stated they need to follow the will of the people. He questioned how more law enforcement officers will be needed when this is legal compared to the number needed when it was illegal. He emphasized that, while he is in favor of more police in Sterling Heights, he felt it is a fallacy and ill-conceived that they will need more. He concluded that he will be voting no on this ordinance. Councilwoman Koski stated they have a city attorney and it is his job to review legislation and make sure the Council is advised correctly to make their decisions while protecting the residents of the City. She pointed out it has been recommended by legal counsel to opt out because the State has not Regular City Council Meeting Tuesday, December 4, 2018 Page 23 decided the rules and regulations for this industry. She expressed concern that if someone purchases property and the City has not opted out, they could be grandfathered. She presented a hypothetical situation where someone could purchase a portion of Lakeside Mall for the purpose of having a marijuana grow, process and dispensary operation at that location, and make application to the State of Michigan for their license, only to be told by the State that the rules are not yet in place. She questioned whether the applicants could then claim to be grandfathered because they have already made the investment. She understood her example is farfetched but questioned what rights the City would have in such a situation. She added it may involve someone who purchases land adjacent to someone who does not want to be near it, or possibly near a school. She stated she felt the City needs to opt out, and she will be voting in favor of this ordinance. She admitted that she may not be here when this comes back for consideration in the future, but if she is, she assured she will still vote no. Mayor Pro-Tem Sierawski referred to Councilman Radtke’s statement about the responsibilities of leadership, and she stated that leadership is taking a stand. She commented that she has no personal stake in this matter, noting she has friends and family who smoke pot for medical reasons, and she does not have a problem with what they are doing. She emphasized this is not about personal preference, and she assured she is not trying to “demonize” this, but she reminded the law was passed in the State that legalizes marijuana. She has no Regular City Council Meeting Tuesday, December 4, 2018 Page 24 way to change that, but she noted they can protect their City with its ordinances. She pointed out it is legal to have guns and carry weapons, but it is not legal to shoot them in the City of Sterling Heights, and the safety of the public is the reason for that law. She stressed at this point, they have nothing to go on with regard to State laws governing the marijuana, and it is this Council’s duty to protect all residents. She concluded that she is in favor of this ordinance as presented, and she is not willing to take the risk of having something “grandfathered”. She felt the ordinance is in the best interest of all residents, regardless of how they voted on Proposal 1. Councilman Shannon asked if they can call a question. Mayor Taylor replied no. He stated he will be voting no on the proposed ordinance and explained his reasons. He stressed he is not voting no on the ordinance for the reason that the majority of people in Sterling Heights voted yes on Proposal 1, pointing out there is a difference between saying people voted in favor of Proposal 1 and saying that people voted in support of establishing marijuana facilities in Sterling Heights. He is not voting against the ordinance for the reason of protecting tax revenue for the City, because he does not believe this industry will have any serious impact on tax revenue He felt that, while proponents of this ordinance brought up some very good reasons to vote no on Proposal 1, they are not necessarily good reasons to ban marijuana establishments now that Proposal 1 has passed, and some of those reasons include the following: higher usage among the youth in states that Regular City Council Meeting Tuesday, December 4, 2018 Page 25 have already passed recreational marijuana laws; how allowance of marijuana facilities in the City projects their “family-friendly” image; the need for more police officers for enforcement, which he did not believe is true, because with the substance being legal, he felt fewer officers would be needed to enforce it; the likelihood of aggressive campaigns to get people to buy this product; more crime in the community; driving will become more dangerous; and problems with grow operations. He stressed that all of these are valid reasons for voting against legalizing recreational marijuana, but the voters passed it, so now they have to deal with the reality that it will be available for sale. He noted people are concerned that driving will be dangerous, and people will be driving with marijuana in their system. He pointed out that people can leave the City to get it, and that will increase the amount of traffic if they have to go to another community. He added it is the same with grow operations, but he explained they are trying to dissuade people from growing marijuana in their homes and turning residential homes into marijuana factories has become a major nuisance in neighborhoods. He recalled the Police Chief came in to testify that home grow operations are the big problem. Mayor Taylor recalled the only thing the Police Chief said about marijuana and driving is that it is hard to detect in their system. He pointed out that will be the case everywhere, and it does not change regardless of whether someone buys it from a commercial establishment or grows it in their own home. He recalled the Police Chief stating they can enforce the law, but it is much more difficult when the Regular City Council Meeting Tuesday, December 4, 2018 Page 26 growing takes place in residential homes because they have to obtain search warrants to do so. Mayor Taylor stated the main reason they have been advised to adopt an ordinance to “opt out” now is because there are no state rules promulgated and they do not know what the City will be able to do. He respectfully disagreed with the City Attorney and City Administration on this issue, and he referred to the language of the legislation that was passed, specifically Section 6.1(a) through (d), which allows the municipality to limit the type and number of licenses issued, signage, the time, place and manner of operations, the ability to designate specific areas, as well as designating penalties for violations. He also detailed Section 9.3(c), which specifies the location cannot be within 1,000 feet of a pre-existing public or private school, unless a municipality adopts an ordinance that reduces this distance requirement. He pointed out the City has the authority to reduce that distance. He felt to say the rules are not promulgated is a fallacy, because the rules they need to know in order to make a policy decision on whether marijuana establishments should be located in Sterling Heights are very clear and included in the legislation passed by the voters. He referred to Councilwoman Koski’s hypothetical example at Lakeside Mall, and she had admitted it would be farfetched. He agreed it is farfetched and would not occur. He commented that the reason given for opting out is to wait for the State’s rules and regulations; however, he noted they did not talk about what rules and regulations for which they are Regular City Council Meeting Tuesday, December 4, 2018 Page 27 waiting. He also indicated they can look for guidance at the rules and regulations promulgated under the Medical Marihuana Facilities Licensing Act (MMFLA), but he felt none of that will be helpful in developing the policy the Council creates, because it is all about what the State Licensing Department uses to determine whether or not a license application is valid, complies, and should or should not be issued. He felt they have all the information they need now to make a policy decision, and he could understand delaying it to study it and come up with a good ordinance. He felt not considering it because they do not have the procedural information they feel they need from the State of Michigan is a “cop-out” and “playing both sides of the fence”. He respects those who have said they do not want it, and they can discuss it and let the community weigh in. Councilwoman Ziarko did not disagree with Mayor Taylor that something could be put in place at this time; however, the State could come up with something and change it completely, and they supersede what the City would do. That could result in people starting to move forward, and they will be grandfathered in because the State has superseded all of the restrictions the City put in place. She clarified the cost of enforcement is not about the person using the marijuana, but it is monitoring the facilities that would be in the City after they are constructed. Mayor Taylor pointed out the Act specifically provides that if the City opts out, with 5% of the number of voters who voted in the last gubernatorial election, Regular City Council Meeting Tuesday, December 4, 2018 Page 28 the residents of Sterling Heights can create their own ordinance with their own regulations, including number of facilities they want. He stated there were approximately 50,000 people who voted in the last election in Sterling Heights, and 5% of that would be about 2,500 people. He explained that the seven City Council members obtained a combined total of 7,500 petition signatures last year. He felt two or three highly-motivated people could obtain 2,500 signatures without a lot of effort, and it could result in 25 marijuana establishments, or 50 establishments, or whatever those people come up with. He felt the better protective measure would not be to opt out, but they need to create a good restrictive ordinance that limits the numbers of these facilities, puts them only in places where they can be very sure residents are safe and protected, and they will be well-lit with limited hours of operation. He expressed concern that if these regulations are left up to residents to write the ordinance, they may not be happy with it. Mayor Taylor called for a roll call vote. Yes: Schmidt, Sierawski, Ziarko, Koski. No: Radtke, Shannon, Taylor. The motion carried. 8. CONSENT AGENDA Mayor Taylor indicated this item is consideration of the Consent Agenda, and he opened the floor to the public. • Paul Smith – regarding Item 8C; suggested the Warren Consolidated Schools Career Prep Center (Warren CPC) shop class students could construct a better shed for the money; good involvement for them. Regular City Council Meeting Tuesday, December 4, 2018 Page 29 Moved by Koski, seconded by Ziarko, RESOLVED, to approve the Consent Agenda as submitted: A. To approve the minutes of the Regular Meeting of November 20, 2018, as presented. B. To approve payment of the bills as presented: General Fund - $492,786.67, Water & Sewer Fund - $1,376,435.82, Other Funds - $1,435,072.62, Total Checks - $3,304,295.11. C. RESOLVED, to purchase the Sundance TR-800 Tuff Shed from Home Depot, 17197 N. Laurel Park Drive, Suite 400, Livonia, MI 48152, at pricing available through a MiDeal cooperative bid, contract #071B7700159, in the amount of $11,178.60 and authorize a budget amendment in the amount of $11,178.60 from Capital Projects Fund reserves. D. RESOLVED, to purchase one (1) 2019 Ford F-250 regular cab 4x4 pick-up truck with snowplow package and one (1) 2019 Ford Escape SE SUV, from Gorno Ford ELC, LLC, 22025 Allen Road, Woodhaven, MI 48183, through the State of Michigan cooperative bid, MiDeal contract #071B17700181, in the total amount of $61,943 and authorize a budget amendment in the amount of $31,943 from Capital Project Fund reserves. E. RESOLVED, to approve final payment to DiLisio Contracting, Inc., 23525 Lakepointe Dr., Clinton Township, MI 48036 in the amount of $222,241.72, plus interest on retainage, for the 2017 Local Road Concrete Reconstruction Program, City Project #17-293. F. RESOLVED, to reject all bids received for Delia Park Improvements, ITB- SH18-CP18-330, and authorize the Purchasing Manager to proceed with a re-bid. G. RESOLVED, to approve the agreement between the City of Sterling Heights and Gershenson Group, LLC for Economic Incentive Modeling and Analysis, approve a budget amendment of $60,000 to the Economic Development Fund, and authorize the City Manager to sign the agreement on behalf of the City. Yes: All. The motion carried. 9. CONSIDERATION A. Mayor Taylor stated this item is to consider appointments to City of Sterling Heights Boards and Commissions. He opened the floor to the public for comments or questions, but no one spoke on this matter. Regular City Council Meeting Tuesday, December 4, 2018 Page 30 Mayor Taylor stated this is to consider appointment to the Board of Review. Moved by Radtke, seconded by Taylor, RESOLVED, to appoint John Fenn to the Board of Review for a term ending June 30, 2020, subject to the appointee meeting the qualifications set forth in Charter §4.03 and taking the oath of office within two weeks. Yes: All. The motion carried. 10. COMMUNICATIONS FROM CITIZENS • Mr. Nick Cavalli – Sterling Christmas; appreciative of budget for Upton House. • Mr. Paul Smith – tax base for recreation initiative; Council vacancy. • Mr. William MacGregor – comments during ordinance discussion. • Ms. Jazmine Early – Sterling Christmas; Council vacancy. • Mr. Joe Judnick – ordinance adoption; status of repairs on Merrill. • Ms. Sanaa Elias – recommendation for Council vacancy. • Mr. Gino Vitale – recommendation for Council vacancy. • Mr. Bill Yerabek – recommendation for Council vacancy. 11. REPORTS FROM CITY ADMINISTRATION AND CITY COUNCIL Mr. Vanderpool addressed Mr. Smith’s suggestion to obtain the shed for the Police Department’s K-9 training facility located within the LW Baumgartner Major Park from Warren Consolidated Schools Career Prep Center rather than Home Depot, adding it is a good idea and he would like to look into it a little further before they proceed with the shed purchase from Home Depot (Item #8-C). He inquired as to whether there were any objections from Council for him to look into it further, and he received no objections. Mayor Taylor stated they will hold off on the purchase of the shed that was authorized this evening in the Consent Agenda. Mr. Kaszubski stated he has nothing to report this evening. Regular City Council Meeting Tuesday, December 4, 2018 Page 31 Councilman Radtke highly commended those who attended as well as those who volunteered to help at the Sterling Christmas event this past weekend, and he noted he is looking forward to that event again next year. He addressed some of the statistics brought forward by the City’s financial auditor regarding property tax revenue, specifically that taxable values have fallen by twenty- eight percent in Sterling Heights since 2008, and real property value is still nearly twenty percent lower than in 2008. This results in a cumulative $120.1 million loss in tax revenue growth during the same period, and taxable values in the City are not anticipated to reach the levels of 2008 again until 2026, so during those years, there is zero revenue growth in taxes in the City. He also pointed out that in 2017, the tax rate for the City of Sterling Heights was 6.4 mills below the average of all comparable cities in the County, and he felt this is something for which the City should be very proud. Councilwoman Koski questioned the earlier comment that, as a resident, she could write an ordinance creating whatever she was trying to do, and all it would require is a number of signatures equating to five percent of the number of voters in the last gubernatorial election. She asked for clarification. Mr. Kaszubski stated he can look into it more, but the Charter provides for a procedure if there is a ballot initiative that is not a referendum, which allows Council to review any ordinance that might come forward, and decide on whether to adopt it, and to amend it afterwards if it was adopted. He added it was only done in one circumstance that he could recall where there would be Regular City Council Meeting Tuesday, December 4, 2018 Page 32 no amendment without allowing it to go to a vote, and he recalled it was a referendum, but he would have to look at it. He indicated he can get back to Councilwoman Koski. Mayor Taylor clarified that in Section 6.1 of the Marihuana Act that was passed, it says “a municipality may completely prohibit or limit the number of marihuana establishments within its boundaries. Individuals may petition to initiate an ordinance to provide for the number of marihuana establishments allowed within a municipality or to completely prohibit marihuana establishments within a municipality, and such ordinance shall be submitted to the electors of the municipality at the next regular election when a petition is signed by qualified electors in the municipality in a number greater than 5% of the votes cast for governor by qualified electors in the municipality at the last gubernatorial election.” Councilwoman Koski inquired as to whether this applies only to the Marihuana Act. Mayor Taylor replied affirmatively. Councilwoman Koski inquired as to whether someone could get a petition signed by the required number of people, requesting, for example, allowance of twenty grow operations and thirty dispensaries, and submit it. Mayor Taylor replied that would then go on the ballot unless the Council adopts it as presented; however, the Council would not have the option to deny it. Regular City Council Meeting Tuesday, December 4, 2018 Page 33 Councilwoman Koski stated she brought it up because she was not familiar with it. Councilman Radtke questioned what would occur if there are competing proposals submitted by multiple groups. He questioned whether it would be the proposal with the highest vote total if they were all placed on the ballot. Mayor Taylor suggested they direct Mr. Kaszubski to do some research on the issue and report back to Council. There were no oppositions to the Mayor’s suggestion. Councilwoman Ziarko questioned when they have ever put an ordinance on the ballot for a vote. She pointed out if the ordinance ever needed to be adjusted or changed in the future, it would have to go back on the ballot. Mayor Taylor clarified this is not part of the City’s Charter, but it was created by the Marihuana Act, which provides this specific right and is different than anything they have had to deal with in the past. Councilman Radtke suspected if multiple proposals went in front of the voters, it would be the one with the highest number of votes that would win. He questioned, however, if the City receives multiple proposals presented to them, and the City Council adopts one, would that negate the other proposals, or would the remainder of them go on the ballot. Mr. Kaszubski assured these are all valid questions that he will look into and report back to Council. Regular City Council Meeting Tuesday, December 4, 2018 Page 34 Mayor Pro-Tem Sierawski requested to direct City Administration to provide a presentation and update City Council at a meeting within fifteen (15) days from the date that the State promulgates any rules for implementation of the Michigan Regulation and Taxation of Marihuana Act of 2018. Mayor Taylor inquired as to whether there are any objections to Mayor Pro-Tem Sierawski’s request. Councilwoman Ziarko stated she has no objection but stated she would like an addition to it, noting she does not want to wait until only the State makes any decisions. She stressed she would like periodic reports from Michigan Municipal League (MML) and the State. If they are aware the State legislature is doing something, they can call to find out what is going on. She stressed she does not want to see something come in fifteen days after they make up their minds. Councilman Radtke inquired as to how often Councilwoman Ziarko would like to see the periodic updates, and whether every six months would be fair. Councilwoman Ziarko replied she would like to see an update every time something comes up in session, so there would not be a timeline. Mayor Taylor suggested once a year, or whenever there is a significant change coming up in Lansing. Mayor Pro-Tem Sierawski agreed to that amendment to her request. There were no objections offered by the Council members. 12. UNFINISHED BUSINESS Regular City Council Meeting Tuesday, December 4, 2018 Page 35 There was no unfinished business. 13. NEW BUSINESS There was no new business. 14. CLOSED SESSION Mr. Kaszubski stated there were no items for Closed Session this evening. 15. ADJOURN Moved by Ziarko, seconded by Schmidt, to adjourn the meeting. Yes: All. The motion carried. The meeting adjourned at 9:53 p.m. MELANIE D. RYSKA, City Clerk