May 24, 2021, City Council Meeting (held virtually)

Note: links to the video recording and the council packet can be found at the bottom of this post. Please note any errors or omissions in the comments. Anything noted between brackets was inserted by Clarkston Sunshine.

Meeting:

City Manager Jonathan Smith welcomed everyone to the meeting and reviewed the rules for virtual meetings as they were presented on screen.

Agenda item #1, Call to Order (Video time mark 0:01:34):

Eric Haven commented on extra sound coming from open microphones but did not formally call the meeting to order.

Agenda item #2, Pledge of Allegiance (Video time mark 0:01:48):

Pledge said.

Agenda item #3, Roll Call (Video time mark 0:02:10):

Eric Haven, Ed Bonser, Gary Casey, Jason Kniesc, Joe Luginski, and Sue Wylie were present in Clarkston, Michigan. Al Avery was absent.

Agenda item #4, Motion: Approval of Agenda (Video time mark 0:02:43):

Motion to approve agenda by Wylie; second by Casey.

No discussion.

Motion to approve the agenda passed unanimously.

Agenda Item #5, Public Comments (Video time mark 0:03:33):

Haven noted that there would be two public comment opportunities at the meeting. The first public comment opportunity is for things that aren’t on the agenda.

Chet Pardee:

Pardee thanked Smith for replacing the missing stop sign at Glenburnie and Miller and said that he expected the missing three-way signs for two of the three stop signs will be appearing soon.

Pardee expressed concern about the budget development process; specifically, that the finance committee reviewed one set of numbers on May 12 but the numbers used in tonight’s public hearing are far different. Haven, Avery, and Luginski are members of the finance committee with Smith and Greg Coté [Treasurer] providing support. The public is invited to finance committee meetings.

Smith copied Pardee on a May 20^th email sent to the city council and finance committee alerting everyone regarding the significant change. Pardee apologized for the concerns he expressed to the finance committee and Planning Commission (PC) that were based on the May 12^th finance committee meeting documents. Pardee’s concern was driven by a large fund balance and small capital spending on sidewalk and street repairs.  Apparently, the fund balance projection was in error.

In the latest version, the projected fund balance on July 1, 2021 was changed from $439,000 to $196,000, a reduction of $243,000.  Using the latest budget numbers, the fund balance is projected to be $125,000 instead of $335,000 on June 30, 2022, a reduction of $210,000.  Pardee felt strongly that the $200,000 difference should be spent on sidewalk and street repairs to catch up on needed repairs.

Pardee said that it is now clear that the city is in a precarious financial situation.  He said he would not read his June 22, 2020 comments again but noted that he’d said that if we spend the 2020-21 budget, there would be no funds for capital expenses for 2021-22. The city underspent the current budget, which leaves some money for the capital expenditures for 2021-22.  We are not maintaining the city’s streets and sidewalks.  We will need additional funds to support the Capital Improvement Plan (CIP).

The CIP is intended to alert us to our financial needs for the future and the city has ignored what the numbers tell us.

Pardee asked where the additional funds for the CIP come from. He noted that the council isn’t required to answer the question, but he asked them to consider his comments.

Wylie thanked Pardee for his attention to the details of what is going on with the finances of the city.

Smith said he would address some of Pardee’s concerns during the budget portion of the meeting.

No other public comments.

Agenda Item #6, FYI – Class of 2021 Commencement Cruise, Saturday June 5^th from 1-4 p.m. (Video time mark 0:07:56)

• • Class of 2021 Commencement Cruise Announcement (page 4/56 of the council packet)

Haven said he didn’t know how many had graduated from Clarkston High School, but this is the second year that there will be a commencement cruise rather than a commencement walk. This year it will be on Saturday, June 5^th, from 1:00-4:00 p.m., and everyone is asked to support the young adults who are going to be graduating from our high school. There are some specific recommendations in the packet regarding how individuals and businesses can support these young people as they cruise about our Village. We want to congratulate them on their graduation and wish them the best for their lives.

Smith asked if Mary Ellen Rowe [Clarkston Community Schools Marketing Director] was on the call, and she was. She thanked Haven for the great overview, and that was really all she wanted to say. All of the citizens and businesses in Clarkston are invited to paint the town blue and gold. We had so much fun doing this last year and it was very cool. Rowe wanted to thank everyone and the Village for allowing them to put up a banner on Main Street and put some Clarkston flags in town. They are really excited about the event on June 5^th from 1:00-4:00 p.m. Everyone at the school district wanted to thank everyone and the residents of Clarkston for all the support that they’ve given to these kids during their time as students in Clarkston.

Haven thanked Rowe for all that she was doing to support the kids, said that we echo those sentiments, and he thanked Rowe for being at the meeting. Rowe said it was her pleasure as an alumnus and a parent of a graduating senior this year. Haven congratulated Rowe.

Agenda Item #7, FYI – Public Notices, ZBA [Zoning Board of Appeals] Public Hearing for 29 S. Holcomb on 06-03-2021 (Video time mark 0:10:08)

• • Public Notice (page 5/56 of the council packet)

Haven said that the next item concerned a ZBA (Zoning Board of Appeals) meeting. These are somewhat rare, but we have one relating to a property at 29 S. Holcomb and it will be held on June 3^rd. It’s a public meeting, and anyone can attend. It will be virtual.

Kniesc asked if Smith could go over the issue. It’s Kniesc’s neighbor’s house, and he approached Kniesc. Kneisc is trying to figure out what happened and how we got to this point. It sounds like the neighbor may have done some things out of order. He had a building permit, and it seems like we shouldn’t have issued a building permit unless all of the requirements had been satisfied. Kniesc said we’d talked about this years ago and we owe our citizens better. He wanted to know what happened.

Smith said that the property required both a building permit review which the PC and our Building Department does, as well as a Historic District Commission (HDC) overview. The neighbor went to the HDC first, and they gave him approval to proceed. There was some confusion regarding what that approval meant. Smith wanted to be clear that Mr. Quisenberry(?) did nothing wrong, but there was some confusion over what the next step was, and we take responsibility for that. Unfortunately, when the Building Department reviewed this, they did not catch the fact that the front porch would be two feet closer to the sidewalk than is allowed by the current ordinance. It wasn’t until we started reviewing this with the PC to make sure everything was signed off that we realized that a variance would be needed. It was a little out of order, we know that we need to get our construction checklist in place, but with COVID, they’ve been buried in the city office. That checklist would have caught this kind of thing to make sure that all the boxes are checked before people are under the impression they can proceed. That didn’t happen here, unfortunately. It was a little out of order. As soon as we get the checklist done, it should address this need. Smith apologized to Mr. Quisenberry and thinks that we are on the right track now. Things just moved on a little out of the order in which they should have done.

Haven said we’ve needed a checklist for quite a while and Smith has been working on it with others. It’s been in process but isn’t complete at this time.

Kniesc said that he thought his neighbor’s porch was out of variance anyway, so he was going from an out of variance porch to out of variance porch. Smith said that his existing porch was one foot beyond where it should have been; now he will be two feet beyond where it should have been. It’s not a significant change, there are many other properties along Holcomb that are close to the road, so Smith thinks that there is a precedent for this but will leave it up to the ZBA to evaluate and decide.

Agenda Item #8, City Manager Report (Video time mark: 0:14:15; page 6/56 of the council packet):

Smith said that the city sign project is nearing completion. We still have a few things left to be done.

We are happy with the COVID report that effective June 1^st, outdoor events are uncapped. Indoor events are uncapped starting July 1^st. That is great news and dovetails very nicely with our plans at least for now to end the state of emergency for Clarkston effective June 30^th, so that’s a good changeover to live meetings starting on July 1^st.

The other thing Smith wanted to talk about that isn’t in the report is what has been going on in Depot Park recently. We have noticed a significant increase in the presence of kids in the park from 3:15 to 7:00-8:00 p.m. As a result, there has been an increase in vandalism, littering, and property damage. It’s nothing major, but there has been a lot of minor little property damage that has been adding up. There has been some playground equipment damage, damage to the gazebo, and most recently, damage to our new City Hall bathroom. On Saturday, after Smith had installed an electronic Wi-Fi lock so that he can control the lock from his phone wherever he is, it picked up on a number of entrances and exits out of the bathroom. Smith returned to the building only to see that the bathroom had been completely trashed on Saturday afternoon. There was extensive damage. It wasn’t permanent damage, just a lot of dirt and other things in the bathroom. It’s not something that our team should have to clean up. We did file a police report and are working with the Oakland County Sheriff to identify the kids involved in that. We estimate that there were about fifteen kids in the bathroom or involved in the bathroom. We have a video camera right outside of the bathroom so we will be able to easily identify these kids/perpetrators.

We need to change the trend here, which is very scary. There is increased activity in the park, and the damage seems to be getting worse every day. Smith had a good meeting with a detective this morning and we are going to start escalating the police presence in the park and if necessary, writing tickets. Smith said that he is going to try to work with the schools to identify the students involved in the bathroom damage and go from there and talk to the students.

Smith wasn’t sure if the woman posting her experience on Facebook today about the kids in Depot Park was a resident or not, but it was liked and commented on by many people who all said the same thing. They come to Depot Park to enjoy it with their family, or recently, to take pictures of their graduating student on the gazebo, only to be sworn at, yelled at, and told to get out by the kids commandeering the park.

It’s very frustrating that our beautiful public park is being taken over. We need to change this trend, so we hope to do that with the help of Lieutenant Hill and his team at the Sheriff’s office. If nothing changes, we may need to consider paid Oakland County Sheriff patrols, not just driving by it but sitting in the park. They are stepping up their game and increasing patrols in the area, but we may need someone to stay in the park. Whether that’s an Oakland County Sheriff or a private security firm remains to be seen, but we have reached a point where if we don’t protect our park, we are going to see more and more damage to the park. This is a very frustrating development, and it’s been increasing over the last two-three weeks. It’s important that council knows about this. If you want to see it for yourself, come down to the park between 3:15 and 8:00 and undoubtedly you will see something going on.

Haven said it’s exceedingly important and what was written on Facebook this afternoon was very disturbing. There was a personal confrontation and children were involved. There were threats in addition to the vandalism that you talked about. It’s very concerning.

Pardee asked if Smith was considering increasing video cameras in the park. Smith said that it made sense to him. It was in the budget this year and we didn’t do it amongst several capital improvement expenditures because we were watching all of our dollars in light of the lawsuit, so it did not get done but it still needs to be done. The sooner it is done, the better. You’ll see that there were a couple of areas in the budget that Smith carried over. One is security cameras and the other is enclosing the equipment behind the city hall building because kids are back there playing and throwing around the equipment, construction cones, and things that we store outside behind the building.

Pardee asked, if it’s a current budgeted expense, is there a reason not to spend in May what we intend to spend after the July 1^st? Smith said that spending it early would lower the fund balance earlier, but we won’t spend it later, so the net effect is zero. We could do that with council’s approval. Smith has the rear enclosure cost but needs to get updated costs for the security cameras in the park. It’s not a bad suggestion.

Haven said that Margaret Acosta is resigning from the ZBA and he wanted to thank her for her many years of service. She served with distinction. People who serve on these committees for years have a lot of knowledge and have helped our city a great deal. It helps our citizens as they go through these decisions that have to be made relative to their property which is important to them. Haven understands her reasons for stepping down and we honor that.

Haven also wanted to thank Toni Smith for planting flowers on the city’s front porch and around the gazebo. Jimi told Haven that she’d done that, and it’s appreciated.

Haven also thanked the Garden Club for keeping the downtown planters beautiful and watered, which is no small task.

Agenda Item #9, Motion: Acceptance of the Consent Agenda as Presented (Video time mark 0:24:57):

• • 04-26-2021 Final Minutes (page 8/56 of the council packet)
  • 05-10-2021 Draft Minutes (page 10/56 of the council packet)
  • 05-24-2021 Treasurer’s Report as of 04-30-2021 (page 12/56 of the council packet)
  • 05-12-2021 Revenue and Expenditure Report for the Period Ending 04-30-2021 (page 13/56 of the council packet)
  • Carlisle-Wortman April 2021 invoices (page 19/56 of the council packet)
  • Howard & Howard April 2021 invoice (page 21/56 of the council packet)

Haven explained the reason for the consent agenda.

Motion for acceptance of the consent agenda by Wylie; second by Bonser.

Pardee said that at the last council meeting, we talked about a Howard and Howard check that was written and then withdrawn on April 14^th. Pardee was sure we talked about a March invoice that came from Howard and Howard, but now it doesn’t seem like there is a large invoice anymore. Pardee wanted to know what happened to the March invoice. Smith said we received a very generous donation of around $10,000 to go toward our legal expenses. The check was issued to Howard and Howard and they removed that from the balance due. We knew that this was coming at the last meeting, but we didn’t have it. We retracted that invoice at the time and that completely wiped out the March bill and another $2,500 of the April bill. That’s great news for the city because we saved just about $10,000, so the balance due now is $1,855. Pardee said so the attorney will be paid, but not from city funds? Smith said it never passed through the city. It was an anonymous donor, and the donation was made on the condition that the donation would be kept anonymous.

Roll call: Kniesc, Wylie, Haven, Bonser, and Luginski voted yes. Casey’s microphone was on mute. City Attorney Tom Ryan suggested that they pass the matter and get him back on the line so that he can vote since he’s present for the meeting. Haven texted Casey about being muted.

Haven said that they would move along and assume that the consent agenda has been accepted as presented.

Agenda Item #10, Old Business:

Item 10a, Discussion/Motion to Access Middle Lake from White Lake Road (Video time mark 0:31:10)

• • Access to Middle Lake from White Lake Road (page 25/56 of the council packet)
  • Photos (page 26/56 of the council packet)

Haven said he was interpreting this as looking for guidance with some alternatives for handling the Middle Lake trespassing situation. Smith agreed and said that there are a few alternatives. He can come back with a detailed proposal and is looking for some general guidance tonight.

Smith read from the document, which concerned complaints from residents on Middle Lake about kids accessing the bridge on White Lake Road and using the access for swimming and drinking. Smith also discussed the photos to indicate the area of concern. There is no fence on the right (south) side of the bridge, but there is a fence on the left (north) side. The land and water parcels are owned by the city and are contiguous with Depot Park. Smith wanted to know if the council wanted to monitor the situation or take some action, such as erecting twenty feet of commercial fencing on the unfenced side for an estimated cost of $2,500. Smith said he would get bids on that if the council was interested in pursuing that option. We could also add signs, attached to a post or to the fence if we erect one, that could include “No Trespassing,” “No Swimming Allowed,” or “Swim At Your Own Risk, No Lifeguard On Duty.”

Wylie said this is in her neighborhood and has been an ongoing issue for as long as she’s lived here. It got bad last summer. The women who originally made the complaint thinks it’s gotten much worse, and it’s not just kids. It almost always involves coolers, chairs, and lots of drinking; Wylie said she worries about someone drowning out there because of the drinking. They leave their trash behind. At a neighborhood meeting last summer, people were very much in favor of anything to protect that area and keep people out. Wylie recalls that you can’t say “No Trespassing” because it’s public property, but anything that can be done to keep some of those people out would help a lot. Deer Lake Beach is across the road, so if they wanted to swim, they could just go over there. They are just looking for a private area where they can drink and do some other things that are X- and R-rated that Wylie has witnessed. It doesn’t belong there. People who live on the lake go down there, park their boats, and hang out there because it’s sandy and a nice place to swim. If it’s a family, they don’t want their kids witnessing all that. While the people who are hanging out there aren’t necessarily as rude as the people in Depot Park, they can make it uncomfortable for the residents to go down there.

Haven asked Ryan about the city’s ability to post “No Trespassing” signs on public property – can we do it? Ryan said it’s public property, but if we are concerned about health and safety, such as whether or not someone could drown or be injured, he doesn’t see why it can’t be posted; he thinks we need to restrict access as well. We should also talk to the insurance company and get some guidance from them as well because it’s city property. We would be covered for whatever happened there; hopefully, it would be nothing serious. Ryan didn’t think that the city would be precluded from posting a “No Trespassing” sign on a safety basis.

Pardee wanted to know how we would treat this issue if the behavior was going on in Depot Park. Haven said there is no drinking in Depot Park. Pardee asked if the behavior that Wylie and others have observed was going on in Depot Park, how would the city manage that? Ryan said that the Sheriff’s Department could issue a citation if there were underage drinking going on or something more untoward. Ryan said that it’s easier to catch people in Depot Park because it’s more open than this area.

Haven asked if we could issue tickets if it is posted, and Ryan said yes. Haven said that the Sheriff’s Department needs to help us.

Haven said that we aren’t going to solve this tonight, but he thinks it would be nice if the council could give Smith a sense of how they wished to proceed. We have some good suggestions already – post “No Trespassing” for health and safety reasons and consult with our insurance company for other considerations. Does anyone else have input?

Kniesc is at Deer Lake a lot and thinks that people take boats or rafts over. He doesn’t see a lot of people parking at Deer Lake beach, marching across the road with a bunch of coolers, and then going down the sidewalk. He thinks they are coming from the Deer Lake area, either walking through there or on a boat going under and through the road. Kniesc doesn’t think that putting up a fence is going to solve this. He thought it made sense to put up a sign, and it makes sense to apply the same concepts as you would in Depot Park.

Wylie said that they are very rarely coming from the Deer Lake beach side. They are parking in that parking lot, crossing the road, and coming down. You can see the pathway they’ve worn out. We paid for some repair work for the erosion, mostly from people walking through there. They aren’t coming through with boats. People occasionally kayak through from Deer Lake but they aren’t hanging out there. You can see people walking down, carrying their coolers and chairs, and they just sit along the stream and hang out there. It’s very secluded, and there aren’t any homes there because it’s surrounded by park land. A lot of times you don’t notice it until you get there on your boat. Some of the kids swim over there and then they come home and tell their mom that such-and-such is going on there. Wylie is in favor of a fence and as strong of a sign as we can post, such as “No Trespassing” or “No Trespassing, Swim At Your Own Risk.”

Casey said he finally managed to rejoin the conversation and wanted to vote yes on the consent agenda.

Bonser asked if the fence would deter people from getting into that area. Smith said that he thought they would just go around the end of the fence, no matter how long it is, if they want to get back there.

Bonser asked what the ground was like, is it a marsh or a swamp? Smith said that there definitely is some kind of marshy earth in the area. It wouldn’t be easy, but you could walk around it. Smith thought that the fence would definitely deter some people, and it would provide a good place to put up a sign.

Bonser thought that maybe we should pay for some extra Sheriff patrols for this issue and for the Depot Park issue. The problem is whether they are going to be able to walk through the marsh, or would they need a boat to get there. The timeframe is the summer for the park and this area. He didn’t know if we needed this year-round or just seasonally. If there were just enough patrols, it would deter people from going. Bonser said that it wasn’t one of the options, and he would hate to spend money on a fence that will get walked around anyway. A sign is a good idea to let people know we are aware of the situation and maybe deter them from acting inappropriately. He doesn’t know why someone couldn’t just go up there in a raft and enjoy themselves if they are complying with the law.

Smith said that enforcement is definitely a challenge because there is no easy way to get out to that space without walking through the waterway. That’s how the people who are going there get there. It’s only 3”-5” deep and it’s nice and sandy. It would be challenging for a police officer to do that unless s/he takes his/her shoes off.

Haven said that Smith had some things to work with and to come back to them. Smith said he heard that we want to do something. Smith heard pros on cons on doing the fence. On the signage, he heard people say the stronger the better. “No Trespassing” is the strongest version of it, so he can put together a proposal. The wording won’t change the cost of the sign. He will also get some quotes on the fence, and it might come in lower than he suggested. He will put a proposal together, bring it to a future council meeting, and council can choose ala carte.

Pardee said it may make sense to ask Lieutenant Hill to put his boots on and go down to the area and ask what he would recommend. Smith agreed and said that if we are going to be asking him to enforce something, it would only be fair to ask him for his input.

Item 10b, Motion: HDC Nomination, Nomination of Rob Hauxwell to finish out John Nantau’s term ending June 30, 2021 and continuing with the next 2-year term through June 30, 2023 (Video time mark 0:48:26)

• • 05-19-2021 Letter from Rob Hauxwell (page 28/56 of the council packet)

Haven said that John Nantau has asked to step down and be replaced as soon as possible. His term ends on June 30^th. In the meantime, we have been working to find a nominee. Rob Hauxwell’s letter of candidacy was in front of the council. He has some interesting experience and background. He’s been here over a year, which is what the Charter requirement is. He has a personal interest in this, and he didn’t make this decision glibly. He’s been watching the HDC and asking questions and even had an issue or two before them. He’s pretty well versed in this.

Haven said he was bringing Hauxwell’s name forward as a motion for nomination and asked if someone would second. Bonser seconded the nomination.

Wylie doesn’t know Hauxwell, but she liked what he said in his resume/letter about finding a way to disclose the historic district to home buyers. Haven said a lot of that is in the works right now. Hauxwell came from Charleston, South Carolina, and they have a very active historic district there. He also has experience as a realtor.

Ryan wanted to make sure that the starting and ending point of the term is placed on the record. Haven said he’s finishing out Nantau’s term, which is a two-year term. That would make his term from June 30, 2021 to June 30, 2023.

Jim Meloche [Historic District Commission Chair] said Hauxwell will be participating in the June meeting as well. It’s not June 30^th; he’s replacing Nantau for his last month as well. Haven said that’s the way the motion reads. Ryan said that was OK.

Haven said he’s thankful for citizens who want to serve on committees and commissions that are so important for our future, and he thanked Hauxwell for being willing to be a candidate.

The motion for Hauxwell’s nomination was approved unanimously.

Agenda Item #11, New Business

Item 11a – Resolution: Category B Road Grant FY 23, Category “B” Road Grant for use in FY 23 (Video time mark 0:53:25)

• • Resolution to Establish a Request for Funding, Designate an Agent, Attest to the Existence of Funds, and Commit to Implementing a Maintenance Program for Resurfacing of Miller Road Funded by the Transportation Economic Development Fund Category B Program (page 29/56 of the council packet)
  • Category B: Community Service Infrastructure Fund Application (page 30/56 of the council packet)
  • Photos (page 33/56 of the council packet)
  • Summary of costs from Hubbell, Roth & Clark (page 35/56 of the council packet)

Smith said that we applied for this State of Michigan grant last year for some work in the city and did not win it. Hubbell, Roth & Clark (HRC) prepared the application last time, notified Smith that the deadline for this was coming up again, and said that we could reapply again this year. It would be quick for them to do because they would just need to make a few changes from the last application.

We don’t have a lot of money to apply toward roads this year. Smith asked if we were to win this grant, could we hold off on the expenditure as late as July 1, 2022, and he was told “yes.” The money has to be spent no later than November 15, 2022. If we won the grant this year, we could wait until the next fiscal year starting July 1, 2022 to do the work. Even though we don’t have the budget this year, Smith is proposing that we apply for the grant. We don’t know if we will win the grant.

Smith is proposing that we would use this grant to complete the paving of Miller Road. We paved from Glenburnie to Main Street, but Glenburnie to Holcomb still needs to be done and that’s what is being proposed. In addition to the actual mill and fill of the roadway, there is a rather large culvert that goes under Miller Road from the upper Mill Pond to the lower Mill Pond. That culvert is collapsing. While we are doing the road, there is no better time to replace the culvert and that’s additional work. We also know that the sidewalk along Miller Road is in bad shape and we need to redo that. It’s been proposed that we use asphalt for that sidewalk, and it would be far more efficient and cost-effective. We would have to use some good lining and paint so that the drivers know that’s not roadway, but the thought is to replace the sidewalk at the same time that we replace the road.

HRC has put together an estimate and the total cost is $109,690. The storm drain will be $14,300 of that. This grant will not pay for the storm drain culvert replacement. When you back that out, that leaves $54,000 to be paid by each party – us and the State of Michigan. We would pay for the storm drain replacement of $14,300. Our cost would be just under $70,000 and the state would pay $54,000, adding up to a total of $109,000. There is a document in the packet that goes into great detail about what is involved in the bid, but it adds up to that same $109,000.

Smith said that the resolution asks council to authorize him to proceed in applying for a $54,000 grant through the Michigan Department of Transportation (MDOT) specifically for repaving the west end of Miller Road.

Bonser clarified that to get this grant, we are going to have to spend $70,000 of city money, and Smith agreed that we have to spend that to get the $54,000. Bonser confirmed that we couldn’t just get the $54,000 and make it last as long as we can on the project, that we have to see the whole project through to the end. Smith said that was correct.

Haven asked if this was project specific, not general. Smith said yes, it’s very specific to this road. The road was high on our list and HRC is aware of this. It was high on our list on the RAMP (Road Asset Management Plan) report. On the surface, you might say there are other roads in worse shape, but this road is between two waterways, so the subbase is at risk. When they did the RAMP report, they brought out a very sophisticated tool that allows them to essentially evaluate the substructure below the road. That came into play on this road and why it ranked as high as it did. The substructure is of concern.

Smith hopes that paid parking will be reactivated on July 1^st or around that time so we will have a year in our parking fund to build up the $69,000 that we would be on the hook for. We gross around $100,000 in that parking lot, but we net around $70,000. That’s a nice fit for what is being proposed in the grant application.

Wylie thanked Smith for making the presentation and for clarifying what’s going on.

Wylie made a motion to support the resolution as written; second by Kniesc.

Bonser asked if we applied for the grant and get it, can we tell them that we can’t afford the grant and give it back, or are we committed to doing the project? Smith said that he understood that we can always decline the grant if we don’t think we can fund it; that’s a legitimate claim and we can always do that. Smith said that he needs council approval just to apply for the grant; if for some reason between now and next July if we determine that we don’t have the funds to do this, then we can decline the grant at that time. They probably won’t be thrilled with us, but they won’t hold our feet to the fire to spend the money.

Pardee asked whether we are going to have to raise the road to put in the 36” pipe. Smith said he didn’t think so; he believed that they would excavate down and establish it at the same level as the old one. He hasn’t been told of a need to raise the road. Pardee didn’t know if anyone had seen the pipe, and he has been looking for it, but if it’s 36” in diameter, it should be visible. Smith said that there have been times when the upper Mill Pond has been nearly drained in the dry parts of summer, and you can see the top of the concrete pipe on the north side of the road.

Meloche said they are talking about his backyard. If Chet came over when the flood gates have been opened and the pond is low, you can walk on top of this caisson. It’s 12’-15’ wide and 75’ long. It’s concrete with multiple openings in it, and that’s what’s failing. It’s overdesigned for its use. Putting a single culvert in there, even if it involves raising the road, is a far better solution because it would restore the navigability of the Clinton River, which is the one thing that we don’t have right now.

Pardee wanted to know who would let the contract to do the work. Smith said that would be part of HRC’s role as part of the contract. Pardee asked if it would be a contract that someone would have with HRC? He saw that contract administration was 25%. Smith said presumably, that’s HRC doing that. Pardee asked if it would be a contract that the city would let? Smith said that we would ultimately select the contractor, but HRC would administer the project. Pardee asked if they would also do the RFP? Smith said that they would do it, and they do it all the time. The quote is based on current accepted prices for the various construction items. They already know the costs for this year, and that’s what this is based on.

Meloche said he would be glad to help Smith try to develop additional funding to do this the right way, and that involves the Natural Resources Commission as well as MDOT. Smith said that he was sure that the DNR (Department of Natural Resources) would be involved. This is why this is a lot more than Smith’s experience would allow. He thinks that we need someone like HRC to oversee this and work with DNR and MDOT, and maybe the Road Commission as well. Meloche said he would be glad to help out and has had a little bit of experience with this in northern Michigan. Smith said that it’s a year away, if we win the bid. We hope we do; we didn’t get it last time.

Wylie asked Meloche to explain his comment about how replacing the culvert would improve the navigability of the Clinton River. Meloche said that when the caisson was built, it was no longer possible to navigate the Clinton River in the Village of Clarkston. They created a barrier in order to have a road crossing in between the two ponds. What he’s talking about is a large enough culvert. If you’ve ever canoed through the bridge at Deer Lake, you have to duck your head so low that your head is between your knees so that you can get through it. If there was a way to do that in Clarkston, imagine how that would improve the usage of the two Mill ponds for everyone who lives here. It would have to be larger than 36”. Per Chet’s comment, that’s what would raise the road. When we got city water and they tore up Miller, it should have been dealt with back then, but it wasn’t. Now is maybe the next smartest time to take a look at it, and that’s all he’s suggesting.

Haven said that maybe we can think about some DNR grant money as well and exercise both of those options right now before the project, rather than getting one award and then starting the secondary process. Meloche wouldn’t put off what is being proposed right now, because that’s a really good step one.

Haven wanted to move on because they still needed to have a public hearing.

Resolution passed unanimously.

Item 11b – Resolution: Budget Amendment (Video time mark 1:10:14)

• • Resolution – Budget Amendment (page 37/56 of the council packet)

Haven said that this balances some things and asked Smith to explain. Smith said that when we get to this time of year in the final four to six weeks of the budget, it’s not uncommon for one of the accounts to be adjusted because of overruns. That’s what’s being proposed here. There are three accounts that need adjusting.

One of them is regarding our construction loan. The amount of the construction loan payment didn’t change one bit but part of the interest portion of the loan, which is exactly $3,000, wasn’t charged to the new lease base; it was charged to city hall interest expense budget. This is a simple correction of the way that the budget was structured.

We also had some additional DPW labor on the dump truck. This is largely because Jimi [Turner, DPW supervisor] did some work in-house on the dump truck so we had to realign some funds to pay for that work. That was largely in the winter months when we were having some issues with the belly blade, and Jimi did all that in-house – so that was a good thing as opposed to having to send that out for service. We did have to realign some of our budget to cover that.

Lastly, there was some winter maintenance for $100.

The total of those is $4,700, and Smith is asking for council’s approval to make that budget amendment.

Motion to adopt the resolution by Wylie; second by Bonser.

Motion passed unanimously.

Agenda Item #12, 2021/2022 FY Budget Public Hearing

Item 12a, Public Hearing, Call to Order (Video time mark 1:13:03)

Haven said we would now enter into the public hearing at 8:15 p.m., and he called the meeting to order.

Item 12b, Presentation of the Draft 2021/2022 FY Budget and CIP [Capital Improvement Plan] (Video time mark 1:13:16)

• • Presentation (page 39/56 of the council packet)

Haven said that the first item after the call to order is a presentation of the draft that they’ve seen that is in the packet. He asked if Smith wanted to walk everyone through it.

Smith thanked everyone for participating in the budget process this year. It’s always a challenging process to go through all aspects of the budget and to consider everything that’s going to be coming up in the future year and years. Smith said that he would get into the Capital Improvement Plan (CIP) that goes out another five years beyond our budget. He said it’s very important that we take the time and give consideration to all the things coming up on the horizon. Of equal importance is our current financial status, as you can imagine. So, if you are thinking in your own personal life of adding a bedroom onto your house, you would have to look at what are my expenditures and what are my revenues, do I have a job that will help pay for some of it – how will I pay for it? That’s not that different from what we do here. We have to look at our projected revenues and expenses for the next year. Smith said he would go through the budget tonight and we would look at those very things.

This is a public hearing. Smith said he will walk everyone through the budget as presented, and at the end of that, if you have questions, he would be happy to entertain them. The majority of the Finance Committee is on the call, Coté, our Treasurer from the city office, and Evelyn [Biehl, Administrative Assistant] from the city office is also on the call. We are well-poised to answer any questions that you may have relative to the budget.

Smith wanted to go back to Pardee’s question about why there was a big change. Coté and Smith have been working on the fund balance. That’s like your checking account balance in your home budget. You look at what’s in your checking account, and your savings account, and that is your fund balance. Coté and Smith have been doing that. It’s a little more complicated for the city, but it is something we spend a considerable amount of time going through to make sure what our starting point is – do we have the money in our checking and savings and the multiple accounts that have to come together. You also have to consider outgoing expenses that still have to come out and what revenue you expect to come in during the current fiscal year. There are a lot of moving pieces.

Going through the process, Coté did a deep dive into the fund balance and looked at things that were under in terms of revenue. COVID had a big impact on the city in many ways, and the budget was not exempt from that impact. We had to look at all things that were normally coming in but weren’t coming in this year because of COVID. Building permits, for example, are down considerably. People are working from home and doing things around their house, but they’re not taking on the big projects that they might have done in the past. Another thing is some of our court revenue is way down. There are less people out on the road and less traffic tickets; Smith said that he was talking about parking tickets, not speeding tickets. We get a portion of that. It’s down 88% this past year, largely because of COVID. Our equipment rental from the state is also down; those are funds that the state usually reimburses us. All in all, that’s about $26,000 that we didn’t get in this year. We also had to consider the Bisio lawsuit; what did that cost us? We had $35,000 as our portion of the settlement, but we also had legal fees. We paid about $22,750 in legal fees to Howard & Howard. The good news that Smith reported tonight is that it’s about $10,000 less than it would have been because of a charitable organization or business that contributed to that, so we’re fortunate in that way, but we still had about $57,000-$58,000 for those two expenses. That played into money coming out of our fund balance that wasn’t budgeted. The other thing that impacted our outlook on the future year was the lack of parking revenue. We have almost $100,000, $70,000 in net, under income on our parking kiosk. Those are all things that came into play, and when Coté rolled those in, we realized that our fund balance isn’t as rosy as we thought it was earlier in our budget process. Pardee is right; there was a significant adjustment needed just a couple of weeks ago. Developing a budget is an evolution, and there was a fairly significant change, but Smith is confident in the numbers that are being presented tonight.

Smith began going through the budget presentation. He likes to show a slide about where our tax dollars go, and only 46% goes to the city. A lot of it goes to schools, community college, and county operations. It’s important for people to know that it’s not all coming to the city.

The millage rates come to us from the County Assessor’s office. They tell us the maximum allowable that we can charge. In this case, the maximum millage rate that we can charge after the Headlee rollback is 12.1141. The milage rate is controlled by the Headlee Act that was passed many, many years ago; Smith thought it was around 18 years ago, but he wasn’t certain. The slide shows a continual rollback of the millage rates allowed. The gold bar shows the maximum rate allowed and the grey bar is what we could levy here in Clarkston. As you know, we’ve been removing the library millage of .691; we reduce what we charge in the millage rate by that .691, so we would charge 11.4231 millage for this coming year under this plan. That’s down from 11.6214. We are continually reducing the millage. Even though you don’t see it in your tax bill, Headlee is forcing the rate to drop every year, but if your home value is going up in value, they can offset each other or even go up. Your taxes can go up if your taxable value of your home has gone up enough that it completely wipes out the Headlee reduction and you could experience an increase. If times were not so good and property and taxable values were not increasing as they have for the last few years, if that was not occurring and Headlee kept reducing, you wouldn’t see a year over year increase and could actually see some reductions. There are reductions occurring; you may just not realize it when you get your tax bill because your taxable value may have gone up.

The other thing that comes into play is the taxable value. Proposal A limits how quickly your taxable value can go up. There are two things – the assessed value, which is one-half of the market value, and the taxable value, which trails behind the assessed value. It can never go higher than the assessed value, but it’s trailing behind. You can see in the graph that the gold bars are the assessed value and say that home values are doing amazingly well and continuing to climb. The Oakland County Assessor is definitely seeing that trend continue and even stepping up a bit year over year if you look at the trend line. But the taxable values cannot grow or appreciate because of Proposal A. It caps you at 5% or the rate of inflation, whichever is less. That’s why the grey bar is lagging more and more behind the gold bar. Right now, in the city, we have almost $72,000,000 in assessed values but because of Proposal A, our taxable values lag way behind and are just $48,000,000. It’s a nice year over year increase, but it’s still way behind the assessed values.

They are trying to calculate how much tax revenue the city can expect to get and roll it into our budget. They take the 11.4231 millage rate from the previous slide, multiply that times the taxable value of $48,628,000 that was given to us by the Oakland County Assessor, and that equates to an expected tax revenue of $555,000. We will see this in a minute on a future slide where that $555,494 rolls into the budget process. We backed off a little bit on the number and instead of using $555,000, we are using $554,000 to be a little conservative because it’s always possible that not all taxes are paid right away and you have to go through the foreclosure process or what have you.

That’s the process in which the taxable revenue is established.

Michigan is dead last of all the states in the country in terms of returning revenue to the local municipalities. This is no secret. The graph is showing year over year increases. Michigan is not only not returning it, but they are also actually taking money away from us.

The next slide shows that the State of Michigan’s revenue was up year over year by 29%, but their revenue given out was down 56%. This is frustrating for a lot of municipalities in Michigan because they are not getting a lot of help from the State of Michigan. This has been going on for a number of years. Since 2002, the City of Clarkston has cumulatively lost about $376,000 that we should have received. There’s nothing we can do about it, but it’s still painful and Smith likes to point that out.

Smith moved on to discussing the actual budget. He mentioned that we have anticipated revenue of $555,494 in tax revenue that we softened to a 2.5% year over year increase and set it at $554,000. The biggest source of revenue comes from property taxes, but we have other sources of revenue as shown on the chart. We will receive $83,594 from the State of Michigan. This is down from $85,428 that we received last year. It’s about $2,000 less year over year coming from the state so the bleeding continues. Equipment rental is something we get from the state and that is up slightly, so that’s good news. At the very bottom, Smith has a proposal to bring $70,000 in from the fund balance, which is down considerably from what we were going to bring in last year. In reality, we didn’t bring in that much because we were withholding spending in our CIP area, and we will talk about that in a minute. It does show $70,000 still being transferred in from the fund balance, which brings us to a total revenue of $813,000, down slightly year over year.

Smith moved on to expenditures and showed a slide that listed all of the appropriations where we will spend the $813,000. The number at the bottom is the same because this is a balanced budget. Here are the areas where we plan to spend the money – $12,000 for council and council-related expenses and $32,000 for a Clerk. A little later, there will be a separate slide on salaries and what we are doing to try to stay competitive, which is always a moving target.

We reduced the Treasurer’s salary as a result of some workload-shifting from the Treasurer to the Administrative Assistant, so there was a decrease in one and an increase in another. There are a couple things going on in Administrative. One is the increase that Smith just talked about with the Administrative Assistant, and the City Manager’s salary is going up slightly by $2,000.

Building and Grounds is a big-ticket item and went up $11,000. It actually went up $10,000, and that’s because of something called MS4 [Municipal Separate Storm Sewer System]. They are all basically waterway pipes that have to be inspected, especially the storm drains that, for example, feed water from our parking lot, meander through our storm drains, and end up in one of our lakes or into the Mill race. They have to be monitored, and every fifth year you have to do a complete analysis to look at the water quality coming out of those outlets. Let’s say they do that assessment and determine that there are a lot of chemicals in this. Then they will go back upstream and try to figure out where that stormwater came from and why is it so contaminated. Anything over a very small portion of chemicals have to be fully evaluated to determine where they are coming from. Are they coming from coal tar driveways or parking lots and draining into our waterways? Every fifth year, we pay HRC, our engineer, to do that assessment. They will physically come out to the city and take samples of water that is draining out of our storm drain and into our Mill race, Mill Pond, and Parke Lake. They do that analysis, it’s required by the state every fifth year, and there is a lot of cost to that. Every fifth year there is a spike in the billing for that and it goes up $10,000. It’s usually only $500-$1,000, but every fifth year it’s $10,000. That’s what’s going on with Buildings and Grounds.

Law Enforcement and Fire Protection is something we all agree we can’t live without and there is no alternative here. They do have largely union contracts that they have to stay competitive and current with. Those have cost of living increases baked into them. What’s shown here is a 5% increase. In the past, we’ve used 3% only to be caught off guard because they are on a calendar year and we are on a fiscal year. Because we have different timing, a 3% increase allowance doesn’t cut it. We always seem to fall short, so Coté and Smith made the decision to increase the budget by 5% so we will be sure to be covered.

Code Enforcement – We don’t have a code enforcement officer right now. The proposal is to hire a code enforcement officer. This is something that the council would like to see more effort on, and code enforcement is predominately things like ordinance violations, such as leaving your trash out in your yard, having a junk car in your front yard, having a lawn that hasn’t been mowed, or having a building that needs repair work. Those are the kinds of things that a code enforcement officer would look into. We are also considering using this officer for some HDC enforcement, so if there is a house that didn’t follow the HDC permitting process, the code enforcement officer could help with that as well. Carlisle-Wortman has a contract code enforcement officer in other municipalities, and we would piggyback on that person to be a part-time code enforcement officer. This would be a contract code enforcement officer, not a city employee. That’s a $7,000 increase and would carry forward year after year, but it’s something we determined is a priority for us. At one time, we talked about the City Manager taking a larger role in this, but it’s just not physically feasible for Smith to do this.

Street light costs continue to go up, so we are increasing that.

We are raising Planning and Engineering $2,000. The PC has some projects that they want to do next year that requires additional cost. Smith didn’t give them everything they asked for. They asked for around $5,000 more than they usually asked for, and Smith gave them $2,000. They aren’t going to be happy, but they have to try to make things meet.

That’s it for a lot of the expenses. One last thing is the transfer out. The city has to fund the Capital Improvement, or the 401 budget, out of its 101 budget. This $56,000, which is a huge reduction year over year, has to go out to the 401 Capital Improvement budget to balance that budget because it doesn’t have its own income source.

That’s the end of 101. Smith went on to 202 and 203. These are major streets and local streets and are largely funded by the state. We don’t have to supplement them. The 203 needs a little supplement, but 202 usually has excess and that’s what you see going on there. We are transferring from 202 into 203. $9,557 is coming out of one and going into the other. In general, 202 and 203 are largely self-funded and there are not a lot of changes to speak about.

Capital Improvement Project Fund – this is where we do our big capital improvements, infrastructure and other things needed in the city. This will tie into the CIP. We have $55,000 that we are transferring in from the general fund, funding the 401 from the 101.

On the expense side, we have $12,800 in Building and Grounds and that’s largely here and around the building in Depot Park. These were things that were budgeted for this past fiscal year and we didn’t spend it. In light of the lawsuit, we wanted to put things on hold wherever we could because we didn’t know what kind of expenses we would be facing on the lawsuit. We thought that was a good way to be fiscally responsible. This is Building and Grounds, which is two main things. One of them is the space behind the building which is a storage area for DPW equipment that isn’t going to be hurt by the weather, but we rely on that space behind the building and feel we need to enclose that. It was in the budget for last year, and we have to do that project in light of the increased vandalism. There is a camera on it, and we need to have it enclosed so that kids can’t play on it or be injured if they were moving some heavy piece of equipment around. From a safety and security standpoint, we need to enclose that. And, the city should act as a role model and do what we would want others to do. It does not look good that the city has an open area behind the building that looks crappy. We need to enclose that and provide our neighbors with a better view of the building.

Highway, Streets, and Bridges – we did some of this last year. We had to cut this way down because we don’t have the funds to do more on highway, streets, and bridges.

We are cutting professional and contract services back.

Last year, we had $76,000 in Roads, and that was made largely possible because of our parking fund. We don’t have a parking fund this year. It’s completely drained almost to zero; there is perhaps $1,000 related to recurring expenses relating to our kiosk. This coming year, we don’t have any parking fund, so any money that we spend on roads would have to come from the general fund, and this is the first time that we’ve had to do that in three years. It’s kind of a shock, and our general fund balance is down, so it’s kind of a double whammy. We did do North Holcomb last year and Smith thought it was a big success and a big improvement, but this coming year, we are going to have to keep that at $8,000.

The same goes for sidewalks. We didn’t do any sidewalks at all this past year. We know that there are some sidewalks that need leveling or replacement, and we want to do some of that this coming fiscal year.

Streetlight expansion – this is something we were going to study this past year. We’re not doing any of that. We didn’t do it last year and Smith doesn’t think we have the funds to do it this year. This will be put on the back burner.

Depot Park gazebo and pathways. We had plans to replace the gazebo and we put that on indefinite hold. We had some good volunteer work recently to make some repairs to the gazebo and we are going to try to live with that. We are going to do some painting and also try to make some improvements to pathways leading up to the gazebo from the playground side. The Friends of Depot Park (FoDP) have some additional charitable monies that they are going to throw at this, so our hope is that between the FoDP charitable funds and this $6,000, we can do a lot for improving the pathways in Depot Park.

Office furniture – we had $3,200 budgeted last year and we dropped that to $2,000 in hope of getting some computer improvement for the city hall conference room as we return to in-person meetings. We know that there is going to be an element of virtual meetings that will continue. That’s one of the things that will come out of COVID that may be a long-term change to the way we do business. Smith thinks that there is an aspect of virtual meetings that people like and we’ll be asked to continue on. But we need to make some improvements in technology in our conference room that weren’t envisioned when we built the conference room. It’s nothing that can’t be done, but we need a couple TVs on the wall in there and a little bit of hookup technology. That’s what the $2,000 is for.

Security cameras – this is for Depot Park. A year and a half or so ago, we brought forth a proposal to put cameras on the city hall building. They are there and they are great. Smith is consulting those cameras and capturing video as well as individual still pictures of some of the perpetrators of the bathroom damage because of that camera system. We need that same kind of camera system out in Depot Park. $6,800 is a lot of money, but we’ve been told if we try to do it with wireless connections from here to over to the gazebo and down the path in Depot Park, we are likely not going to have the control or clarity that we want on the video. They say we need to hardwire the connection to the other cameras, and a big chunk of the $6,800 is because we are hardwiring the cameras. It’s still a reduction from $8,500, and we are going to try to get the costs down and minimize where we can. $8,500 is what was previously budgeted, but we don’t have the money and Smith is going to try to find a way to do it for less.

The rest of the items are all zeros. They are some things that we talked about in previous years, but we just don’t have the funds or they don’t need to be done at this point in time.

That is the total budget. If you add 101, 202, 203, and 401, it comes up to a total if $980,000, which is exactly a 20% year over year reduction. We are being very fiscally responsible here and trying to put together a budget that works but also aligns with the fund balance estimate that Coté and Smith have been working on.

Smith moved to a slide titled “Key Changes in Sources & Uses.” In sources, we added $13,250 in tax revenue thanks to improved tax values in the city. This should say roughly $70,000 (not $73,807) that we are bringing in from the fund balance. On the use side, these are the big-ticket items. $8,000 for road resurfacing. This grant that we just approved earlier in the meeting is not in here. That’s going to be the next fiscal year, starting in July 2022. This is just for the fiscal year starting in July of 2021. $8,000 for sidewalks, $7,800 for enclosure of the rear storage area, $6,800 for security cameras, $6,000 for Depot Park gazebo and pathways, and $3,000 for crosswalk paint/tape. This isn’t everything, but these are the big proposals. It’s a very low, conservative plan.

Smith moved on to the fund balance. Last year at this time, we projected that we would be starting the year at $322,000. That didn’t materialize. We have an audited number of $288,000. Our projected revenue changed. We earned less revenue, largely due to COVID. Our expenditures look to be down, but this is just 101 expenditures. We know that we actually spent more when it comes to the lawsuit. That was something that wasn’t in the budget so that became a new expectation. When you roll all this in, with revenues and expenditures down, we come with what looks to be a fairly good fund balance of $196,000, which represents 24% of the 101 expenditures. If at all feasible, we are required to maintain a 16.6% coverage in our fund balance. That means that if the money were to stop immediately and we had no money coming in, the 16.6% represents exactly two months out of the year of our 101 expenditures, which is $809,000. We arrive at that amount by taking 2/12 of the $809,000 for the amount of money that we would have to always have, at a minimum, in the bank.

As we look at the new year, we start off with the $196,000 that we end the old year in, and how did we do? We have $742,000 in revenue, $813,000 in expenditures, including drawing $70,707 out of the fund balance. If all that comes to fruition, we will end the year at $125,000 fund balance, which is exactly 16.6%. That’s not an accident. Smith didn’t want to go below that, but he didn’t want to leave anything on the table either. We are in a very tight year, so Smith spent everything above 16.6% to get some of these capital improvements done, but he didn’t go below it either. He’s not proud of it, but he felt he had to take the fund balance down to 16.6%.

Smith said that we do continual studies on salaries to see how we are doing in comparison to other small communities in the state using the tax base of those other communities. The Michigan Municipal League (MML) does an annual salary study. It allows you to select titles, such as city manager or city treasurer, and it will show you what other municipalities are paying their employees. It’s all public information. What we found, for example, is city managers in municipalities in the state that are plus or minus $10,000,000 in terms of a tax base are paying a city manager $70,729. Smith’s current salary is $38,000, which is 53.7% of that $70,729. To try to move the needle toward a more competitive salary, Smith is proposing a $40,000 salary or a $2,000 increase. This gets us a little closer and is 56.6% of the $70,729 that the comparable salary study showed. Doing that similar analysis on all of our employees, the city treasurer is $39,962. We currently pay $30,000. With some workload readjustment, we are going to be at $25,000, which is reduced, but we are still at about 80% of the MML number. With the adjustment, the city clerk will be at 77% and that is a $2,000 increase. The administrative assistant increase is not so much for a pay increase as it is for more work, responsibilities, and hours; that goes from $12,000 to $15,000 per year and is 76.9% of the State of Michigan average. Our DPW supervisor is the highest paid employee in the city and well worth it. Smith said he couldn’t be happier with Jimi Turner. He is amazing, and Smith wants to keep him at all cost. If he leaves, we are going to be devastated, not just because he’s so talented, but because hiring anybody right now is a real difficult task. Honcho is having a job fair on Wednesday because they’re struggling to get enough employees to operate their business. Smith would be in the same boat if he lost Turner. Smith is proposing a $2,000 increase for Turner, a $1.00 an hour year over year, to keep him happy and keep him here. That gets him to 80%, which is our goal. We are too small of a community and have too tight of a budget to ever get to 100%, but if Smith can get close to 80%, that’s a good thing. Doing that for Turner and then giving his assistant [Carson Danis] a $.50 per hour increase will put him at 63.9% of the State of Michigan average.

Smith said that the next slide is a schedule that is required by the General Appropriations Act as part of the Uniform Budgeting Act that he’s not presenting tonight but will be part of our final budget approval in June. It recaps the previous slide. The city manager is going from $38,000 to $40,000 which is a 5.3% increase, and so on all the way down the line. In total, we are looking at a 2.8% increase overall for salaries year over year. Not all of it is pay increases; workload shift is driving some of these changes.

Capital Improvement Plan, first page – The PC owns the CIP. They own the out years and give Smith guidance with regard to what they would like with regard to the out years. They may still move things around because we won’t approve the budget for another month. This is the public hearing, but we aren’t approving anything tonight. We are looking at the proposal. If these wiggle around a little bit because of the PC changing priorities and how they would like to spend on these various projects, that’s their prerogative. City Hall/DPW Building was $7,800 this year and that was a number you saw earlier in the current proposed budget year. For the next five years, we aren’t planning on spending a penny on this building, at least not for the CIP. We will still do maintenance. The FoDP are getting $5,000 this year under the constrained budget; next year and years beyond, they will go back to $6,000. We usually try to do $2,000 a year in tree planting. The current year is $1,600. We are going to spend $2,800 this year on street signs and finishing up some secondary signposts, and the $1,000 in the years after that is largely just maintenance, cars hitting street poles, etc. Crosswalk tape is $3,000-$4,000 per year. Engineering for a board walk is admittedly kind of a larger scale project that is on hold and would have to be done largely through grants and donations as it shows on the right as the funding source. We are pushing that out a little bit for future years. Contractual services is for general infrastructure repairs. We typically put $5,000 in the budget every year, and that’s what’s in the CIP, but the current year is just $2,000. Roads is the big one and where you see a big hit – $8,000. And in the out years, you see some big numbers – $80,000 to $90,000 to almost $100,000. That’s what was recommended by the RAMP report. Do we want to spend that much money? You bet. We want to try to improve the overall condition of our roads and spend $80,000 to $90,000 to $94,000 every year to keep our roads in top notch condition. Are we doing it this year and in the current budget? No, because Smith doesn’t have any parking fund money, which is identified as the source. It was the parking fund that made the RAMP report even feasible to consider. The RAMP report is saying we need to spend some big money on roads, and we said let’s let the parking kiosk pay for that. That’s great news for taxpayers. We aren’t using taxpayer revenue for roads; we are using the free kiosk money to pay for it. Sidewalk replacement is a similar situation. We know we should be spending more than $8,000 this year, but we don’t have the money to do it because we don’t have the parking revenue. Resurface parking lots, ditto. We pushed these out. We know that both the Depot Road lot and the Washington and Main lot need some resurfacing because some of the surfaces are breaking up. We aren’t going to do anything this year, but we hope to get that going in the next couple of years. Street light expansion is something we’ve talked about and is on our wish list to do, but we had to slide that out a little bit. It’s desirable but not necessarily important.

Capital Improvement Plan, second page – We aren’t spending anything this year on computer upgrades. Every three to four years, you have to upgrade your computer hardware. We have a big $70,000 nut for DPW trucks. We are going to have to consider what we are going to do with the small truck. The dump truck is a big International Harvester truck with a lot of capability with very low mileage from driving around the city, and we’ve got a good investment there. The small truck is going to need replacement and we have $70,000 set aside in 2023-2024 for that. We talked about security cameras. We’ve talked about the East Alley storm drain several times this past year. Smith had replacing the East Alley storm drain in the budget earlier this budget season. It’s collapsing and in desperate need of improvement, but Smith doesn’t have the money to do it. Is it imminent that it will collapse tomorrow? No, but it’s something that we need to keep on our radar. We had to push that out of the current year and move it into the next year when hopefully things are looking a little better and we can take that on. That’s just the city’s portion of the East Alley storm drain. There are some privately owned business properties that would also have to weigh in on the expenses. Smith didn’t think that there were any major changes on the rest. The boardwalk is being pushed way out as a future project.

Bonser asked about revenue. Where would the parking revenue be at on this list? Is it not in there because we don’t have any for this year? Smith said that the parking fund has its own line item. It’s at zero right now so we didn’t show it on the report. Smith didn’t recall the line number, whether it’s 236 or 231, but it’s a separate fund all by itself. Bonser wanted to know how much it has historically generated. Smith said that between parking fees, which is people going into the lot and paying $1.00 per hour into the machine, and parking tickets, which is someone not paying and getting a $25.00 ticket, the two of those have grossed right around $100,000 per year. We have to pay parking attendants and the parking kiosk software company because they are maintaining all the transactions. When you net out those two costs it comes out to about $70,000 net.

Haven said that he is assuming that the number would be $200,000 if we added a lot. Smith said if we added the Depot Parking lot as a paid lot, in round numbers, he would expect it to double. There are times when the Depot Road lot is quite full when the Washington and Main road is not. During the day, we have a lot of businesspeople parking down here. On average, Smith would expect it to be about double.

Haven noted that Smith didn’t have any money from the feds on the compensation, the American Rescue Plan. Smith said that was $90,000 total or $45,000 per year. Smith thanked Haven for bringing that up and agreed that he did not put that in there in part because the guidelines from the federal treasury office are still coming out regarding how you may spend those monies. Smith thinks that it’s pretty much set in stone that we will get $90,000 over two years and he expects to get $45,000 in the August timeframe this year. We have up until 2024 to spend the money. There are strings attached to it. You can use it for infrastructure but not for roads or sidewalks. As we understand it, the only infrastructure you can use it for are sewers, waterlines, and broadband. Maybe we want to bring broadband in and make it available to everyone in the city who doesn’t have it. That’s something we could use it on, but we can’t use it for roads; we have to use it for something else. There are still some parameters around that money that tell you how you can and can’t use it, and until we understand the details, Smith thought that it was inappropriate to add it into this line of revenue. It will be good news when it hits, but Smith didn’t show it.

Pardee said that it sounds like the $45,000 a year doesn’t have a place in our budget. Smith said that it will come into our budget, and there is a line item called Miscellaneous Income. Barring anything else, it would drop right in there and add to our bottom line. If we don’t use it by the end of the year, it will roll into our fund balance. It will come in and be recognized, but we don’t have to spend it in this fiscal year. Pardee asked if we had any expenditures in the current proposed budget that the monies could be applied to. He heard Smith say sewers and water, and he didn’t think that those expenses were in the current budget. Smith said no. The water and sewer lines in the city are not bad. The Oakland-Macomb Interceptor costs aren’t in the city; that’s down in Detroit. Could one of those bad news stories hit us? Yes, but in the city our water and sewer lines are only about 20 years old and that’s nothing in the life of water and sewer lines. Smith said his personal opinion was that we didn’t need to spend money on water or sewer infrastructure in the city. If we get hit with another Oakland-Macomb Interceptor and we have monies in the bank because of the American Rescue Plan, great, we will use it for that. But that aside, it has to be used in one of these types of expenses. We could use it on some capital improvements, but it can’t be roads, sidewalks, or infrastructure like that. There are some places we can use it, and when those monies come in and we have the guidelines from the federal treasury to put side by side with that, we will put together a proposal and bring it to council at that time, say the good news is that $45,000 has just hit our bank account, here are some places we could spend it, or we could not spend it and let it sit in the fund balance. Smith didn’t think anyone wanted to do that. He thought that if we get some money, we should spend it on the community and get it out there. When we get close to that, we will bring something to council separate from the budget process for consideration.

Pardee said a couple numbers jump out. He was looking at fund 401 and comparing the proposed budget of $55,000 to the previous budget of $244,000 and wondering what council thinks is the message that comes with a comparison of those two numbers. How does council feel about the capital budget going from $244,000 to $55,000? Bonser said that this is an unprecedented year and we’ve just gone through a pandemic. We’ve had to adjust; that’s how he views it.

Pardee said to look at the CIP and the second page with the totals on it. Again, it has $55,000 in capital expenses that are in the proposed budget, and next year, the number goes to $213,000, then it goes to $318,000, $236,000, $617,000, and missing in the current revenue was $70,000 net parking revenue. If we add that to the $55,000, we are still $100,000 shy of the smallest CIP year. Smith agreed. Pardee has discussed this with Smith and Haven. It’s a public hearing, and Pardee’s concern is that we have a serious problem, and we are underspending the capital needs for sidewalks and roads. Haven sent Pardee a note about a week ago that said that it looked like our sidewalk expenditure needs are $60,000-$100,000. If we’re going to spend $8,000 a year, we’ll never catch up. It’s the same thing with roads. Gary Tressel (HRC) told us three years ago that in order to get the roads above 4 in one fell swoop we would need to spend $1,500,000. The $80,000-$90,000 on the capital plan didn’t move the judgment of the quality of the roads above what they were in 2018. Pardee has a different perspective than some people but he thinks his perspective is real, and his message is that he believes we have a serious revenue problem.

Smith said that there was no question that when it comes to roads, these are some very aggressive numbers. $92,000 and $94,000 are some very large numbers and aggressive. During the last two years, we repaved part of Miller and North Holcomb. Those were two large projects, two big improvements, and we did that on the back of the parking kiosk. If we can get the rest of Miller Road in July of next year, then we will have made some good progress. We need to turn our focus to the east side of M15 and start focusing on the roads back there – Church, Buffalo, and Washington. There’s definitely some work to be done. These are aggressive numbers that we put in place at the time as our goal to gradually improve our RAMP number. We haven’t redone the RAMP number since we did it in 2018 and it was filed in 2019. When it was developed in 2018, we put together a number on the condition of our roads and said let’s not get any worse. Smith thought it was 4.0 but couldn’t remember. Pardee agreed with that number. Smith said we didn’t want it to get it any worse and we would like to keep a spending level that will get us a little improvement year over year. That’s a very aggressive number. We put it in the plan, but we recognize that this is aggressive in light of everything else that comes up. We have several things that we want to do, that we need to do to keep our roads in good shape. Smith didn’t think that any of our roads were in horrible, horrible shape right now. He can name a half-dozen roads in other communities that are in way, way worse shape than ours, but that doesn’t mean that we should back off. We have to back off this year because it was such an unusual year. As Bonser said, COVID had a huge impact on us. We can’t go forward into a new budget year like nothing happened. Sh*t did happen, let’s face it. We’re feeling the pain of that right now as we try to do our new budget year. There’s just no avoiding that. We are not going to be able to stay in our plan. We would love to, we want to, and the CIP is very important. We keep the vision in front of us at all times, but at times, we may have to deviate from that plan.

Pardee said that he doesn’t debate that the budget that is proposed is what’s necessary based on available funds. It’s just that we are postponing the capital expenditures that we know need to occur. We have the capital expenditures shown in the CIP as important and it doesn’t appear that we have a way to fund those. We don’t have the $70,000 laid into the CIP that was talked about earlier in terms of the west end of Miller Road.

Smith said that he’s not in any way trying to say that the $55,000 gets us covered. That’s not good news and he wished he had better news to report. It’s not enough. We are just trying to keep operations going. In light of COVID and the lawsuit, we took a big hit. $55,000 is all we can afford to do right now. We hope to get going again and get back to the plan, but it’s been a tough year.

Pardee said he’s not debating the proposed budget. He’s just suggesting that we’re going to have a very difficult time a year from now establishing a budget with much more capital expense in it than the $70,000 that we’re expecting from the parking fund. Smith said he would agree.

Coté said he wanted to finish on a good note. You’ll remember the 2007 and 2012 general obligation bonds. You will recall these were financial instruments that we put into place to allow the city to improve the infrastructure. Most of those proceeds went for sewer repair and possible road fixtures after the underground work was complete. He did a quick calculation and the outstanding principal on the 2007 general obligation bond is approximately $77,000 and the outstanding principal on the 2012 is about $495,000. The 2007 obligation will be extinguished next year, and the 2012 obligation will be finished in 2024. These obligations were financed with a debt millage that appears on your summer tax statement. Last year’s mills were around 4.282, and this year’s will be approximately 4.9766 on your summer 2021 tax bill. If 2007 goes away after next year, and the 2012 goes away in 2024, that’s about $245,000 in revenue that we collect from our taxpayers to extinguish that debt. Smith said when that happens, our current tax revenue doesn’t go up, so our revenue stays the same, but the taxpayer’s annual tax bills will go down. Coté said that’s correct. Smith said right now, you are paying toward that debt, so that is great news for the taxpayers. It doesn’t bring more revenue in to the city.

Haven said it’s been a lull year and we are hoping that the economy is on rebound. That seems to be happening with pent up demand, and Pardee will remember that Haven suggested several places that more money can come in next year against that $90,000 investment in our infrastructure. Haven is an optimist in the sense of finding revenues that don’t require tax increases. Pardee talked about his perspective versus everyone else’s, and Haven thought he knew where Pardee was going with that. Pardee could be a poster child for that if he wanted to suggest some other revenue streams. Haven said that we all feel that Pardee carries the banner for infrastructure, and the citizenry will voice their perspective as to what is of value to them. That’s one of the advantages of being self-governing.

Haven wanted to take his hat off to Smith, Coté, and Biehl for a lot of hard work and a lot of honesty regarding where we are and hopefully, where we will ebb. It could always go lower, but hopefully, we’re in the process of bottoming out on this and headed in the other direction. He’s optimistic as a leader, and thinks that the council are optimistic as leaders, and Haven is thankful for the detailed approach to the budget that really shows us honestly where we are. It fosters future further discussion that Pardee has been advocating all along. It’s certainly being heard. After what Wylie said earlier, and Haven said in an earlier meeting, we’ve listened and take to heart some of Pardee’s ideas and views on the CIP and they have been very helpful to us. It’s somewhat disappointing that we can’t get to where the ideal is, but Haven doesn’t know anywhere in the world where we get to where the ideal is. We work with the real, but there are some real advantages given the value of this community, increasing property values on the one hand, pent up demand for the restaurant businesses that we have here, and the potential opening of new parking lots. There is a lot of real positive potential for us. Haven, like Coté, would like to close the budget hearing on a very positive note. There is a lot of hope here, even though we took a step back since the last finance committee meeting. Smith sharpened his pencil even more and tried to get us even more honest in bringing this fund balance down. He brought it to the minimum so we can work with what the minimum would give us. Let’s look to next year with good hope and look for exercising and finding those other revenue streams that can come hopefully without any referendum or tax increase.

Pardee said he agrees. If he has to make a point, the point is let’s understand where the revenue is coming from and let’s understand what expenses are in front of us. The value of the CIP is it lets you compare the revenue coming in with what we say we want to spend in the future, and if they don’t balance, then we have to do something different. Pardee’s concern is that we weren’t ready to acknowledge that we had this gap. It feels like the budget does acknowledge that we have this gap, and Pardee thanked Smith, Coté, and Biehl for the development.

Haven asked for any other comment from the council. We are at the end of the public hearing and public comment. If anyone has any more comments that they’d to make, this is the time to do it. If not, then the next item on our agenda is to close the public hearing and adjournment.

Haven asked for the dates for the adopting of the new budget. There are no changes now, and you would announce them if there were, but what is the calendar like now? When will be we vote to adopt this budget? Smith said it would be at the second meeting in June, which is June 21^st, about a month away. We will very quickly present the same file as well as, more importantly, the General Appropriations Act which is the legal document that is filed as required by the Uniform Budgeting Act.

Ryan said that Haven should say when you are closing the public hearing when you do that.

Item 12c, Public Comments

[This was not officially called out as an agenda item; the public discussion was interspersed with the council discussion.]

Item 12d, Close of Public Hearing (Video time mark 2:29:15)

Haven said if there are no other public comments, he will close the public hearing at 9:30.

Wylie asked Smith if they were going to vote on the budget on June 21^st, and Smith said that was correct. Smith confirmed an error – the date is actually June 28^th. Haven said it gives an extra week to find a lot more revenue.

Smith said that the last meeting of the fiscal year will be June 28^th and the council will vote on this at that time.

Haven said it was a great and honest review of where we are, and he thanked everyone who participated in this.

The public hearing was closed at 9:31.

Agenda Item #13, Adjourn (Video time mark 2:31:32):

Motion to adjourn by Bonser; second by Wylie.

No discussion.

Motion to adjourn was approved unanimously.

Resources:

• • Link to video recording – http://216.11.46.126/VOD/3463-CityCouncil-5-25-2021-v1/vod.mp4
  • 05-24-2021 – City Council packet