City Commission Minutes 10-25-2011

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     CITY OF MUSKEGON
       CITY COMMISSION MEETING
                     OCTOBER 25, 2011
    CITY COMMISSION CHAMBERS @ 5:30 P.M.
                                MINUTES
   The Regular Commission Meeting of the City of Muskegon was held at City
Hall, 933 Terrace Street, Muskegon, Michigan at 5:30 p.m., Tuesday, October 25,
2011.
   Mayor Warmington opened the meeting with a prayer from Pastor Tim Cross
from the Living Word Church of Muskegon after which the Commission and
public recited the Pledge of Allegiance to the Flag.
ROLL CALL FOR THE REGULAR COMMISSION MEETING:
  Present: Mayor Stephen Warmington, Vice Mayor Stephen Gawron,
Commissioners Clara Shepherd, Lawrence Spataro, Sue Wierengo, and Chris
Carter, City Manager Bryon Mazade, City Attorney John Schrier, and City Clerk
Ann Marie Cummings.
   Absent: Commissioner Steve Wisneski (excused)
2011-77 HONORS AND AWARDS:
      A. 2011 Employee Service Awards.
Mayor Warmington introduced the City employees.              The Mayor and
Commissioners thanked them for their years of service.
2011-78 CONSENT AGENDA:
      A. Approval of Minutes. CITY CLERK
SUMMARY OF REQUEST: To approve minutes of the October 10th Commission
Worksession Meeting and the October 11th City Commission Meeting.
FINANCIAL IMPACT: None.
BUDGET ACTION REQUIRED: None.
STAFF RECOMMENDATION: Approval of the minutes.
      B. Change in the Income Guidelines for CDBG Emergency Repair and
         HOME Weatherization. COMMUNITY & NEIGHBORHOOD SERVICES
SUMMARY OF REQUEST: To approve Community & Neighborhood Services to
change the Income Guidelines for all CDBG programs and HOME
Weatherization programs to 60% Area Median Income (AMI).


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CDBG and HOME Weatherization programs are similar in regard to repairs
provided with grant funds. It will benefit if staff provides a uniform income
calculation range for each of our programs: Emergency Repair, Weatherization
and Vinyl Siding.
FINANCIAL IMPACT: We have moved all senior head of households to the
Weatherization program in order to accommodate any additional families
between 50-60% AMI.
BUDGET ACTION REQUIRED: None at this time.
STAFF RECOMMENDATION: To approve the request.
COMMITTEE RECOMMENDATION: The proposal has already been approved by
the Citizen’s District Council at their October 4, 2011, meeting.
        C. To Impose an Upfront Fee for the CDBG Emergency Repair Program.
           COMMUNITY & NEIGHBORHOOD SERVICES
SUMMARY OF REQUEST: To approve Community and Neighborhood Services to
charge an upfront fee of $250 for all Emergency Repair Program recipients
who’s Area Median Income (AMI) is above 50% up to and including 60% AMI.
We can assist our underserved families in need of assistance if we increase the
income requirement to 60% AMI. The additional number of families that we
service between 50-60% AMI will contribute to our funding pot by $250 per
family.
FINANCIAL IMPACT: This will produce program income for the CDBG Emergency
Repair program.
BUDGET ACTION REQUIRED: None at this time.
STAFF RECOMMENDATION: To approve the request.
COMMITTEE RECOMMENDATION: The proposal has already been approved by
the Citizen’s District Council at their October 4, 2011, meeting.
        D. Moratorium on Fees for 2012 Vacant Buildings.          PLANNING &
           ECONOMIC DEVELOPMENT
SUMMARY OF REQUEST: Request to approve a moratorium on fees charged to
owners of vacant buildings that are entering their fourth year billing cycle in
2012. Eligibility requirements for the moratorium of fees charged are proposed
with some minor changes to criteria three, but intended to apply only to
buildings in their fourth year billing cycle. Waivers would be determined based
on the criteria included on the staff memo.
FINANCIAL IMPACT: Exact amount unknown but should be minimal.
BUDGET ACTION REQUIRED: None.
STAFF     RECOMMENDATION:         Staff recommends     approval    of   a   fee

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moratorium for vacant building invoices meeting the approved criteria.
      E. Donation Programs for 2011 Individual Income Tax Returns. INCOME
         TAX
SUMMARY OF REQUEST: Approval of multiple donations programs for the 2011
income tax returns. Every year our goal is to increase the number of refunds
donated to our designated programs. Last year, 480 taxpayers donated their
refunds to our donation programs for a grand total of $2,696.
For 2010 the three donation programs are Lakeshore Trail Improvements,
Muskegon Recreational Center, and the Downtown Main Street.
FINANCIAL IMPACT: The average amount collected each year is $2,100. Each
donated refund saves the City approximately $1.25 in checks, fees and
postage.
BUDGET ACTION REQUIRED: None.
STAFF RECOMMENDATION: Approval recommended.
      F. Extension of Temporary Employment Services Agreement.            CITY
         MANAGER
SUMMARY OF REQUEST: To approve a one-year contract extension with Beacon
Services, Inc. for temporary employment services. The current agreement
expires at the end of the year and has an option for a one-year extension.
FINANCIAL IMPACT: Costs for services are budgeted by individual departments.
BUDGET ACTION REQUIRED: None.
STAFF RECOMMENDATION: To approve the agreement with Beacon Services,
Inc. and authorize the City Manager and City Clerk to execute it.
      G. Payrolling Services Agreement. CITY MANAGER
SUMMARY OF REQUEST: To approve an agreement for Beacon Services, Inc. to
provide payrolling services to the City. This enables Beacon to be the employer
of record for employees assigned to the City.
FINANCIAL IMPACT: Costs are budgeted by individual departments.
BUDGET ACTION REQUIRED: None.
STAFF RECOMMENDATION: To approve the agreement with Beacon Services,
Inc. and authorize the City Manager to execute it.
Motion by Vice Mayor Gawron, second by Commissioner Shepherd to approve
the Consent Agenda as presented.
ROLL VOTE: Ayes:   Spataro, Warmington, Wierengo, Carter, Gawron, and
           Shepherd



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            Nays: None
MOTION PASSES
2011-79 NEW BUSINESS:
      A. Approval of Sale of City-Owned Home at 1201 Ransom. COMMUNITY &
         NEIGHBORHOOD SERVICES
SUMMARY OF REQUEST: To approve the resolution and instruct the Community
and Neighborhood Services department to complete the sales transaction
between Mr. Andre Coffee for the totally rehabilitated home at 1201 Ransom
Street, which is part of the City’s Neighborhood Stabilization Program through
the Michigan State Housing Development Authority Office of Community
Development. Mr. Coffee’s purchase price is $61,000. This historic three-
bedroom, 2-1/2 bath home was previously foreclosed.
FINANCIAL IMPACT: The proceeds from the sale will be used to continue the
rehabilitation of vacant houses through NSP to sustain our current investments to
stabilize and revitalize neighborhoods.
BUDGET ACTION REQUIRED: None.
STAFF RECOMMENDATION: To approve the resolution and direct the CNS staff to
complete the sale.
Motion by Commissioner Spataro, second by Vice Mayor Gawron to approve
the sale of the City-owned home at 1201 Ransom to Mr. Andre Coffee.
ROLL VOTE: Ayes: Warmington, Wierengo, Carter, Gawron, Shepherd, and
           Spataro
            Nays: None
MOTION PASSES
      B. Approval of Sale of City Owned Home at 1581 Division. COMMUNITY &
         NEIGHBORHOOD SERVICES
SUMMARY OF REQUEST: To approve the resolution and instruct the Community
and Neighborhood Services department to complete the sales transaction
between Mr. Robert A. Mathis for the totally rehabilitated home at 1581 Division
Street, which is part of the City’s HOME Infill Program through the U. S.
Department of Housing and Urban Development. Mr. Mathis’ purchase price is
$62,700. This beautiful four-bedroom, 3-bath home was bought through HUD’s
$1 program.
FINANCIAL IMPACT: The proceeds from the sale will be used to continue the
rehabilitation of vacant houses through the HOME program to sustain our
current investments to stabilize and revitalize neighborhoods.
BUDGET ACTION REQUIRED: None.


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STAFF RECOMMENDATION: To approve the resolution and direct the CNS staff to
complete the sale.
Motion by Vice Mayor Gawron, second by Commissioner Wierengo to approve
the sale of the City-owned home at 1581 Division to Robert A. Mathis.
ROLL VOTE: Ayes:   Wierengo,      Carter,   Gawron,   Shepherd,   Spataro,   and
           Warmington
            Nays: None
MOTION PASSES
      C. Vacant Building Registration Ordinance Amendment.         PLANNING &
         ECONOMIC DEVELOPMENT
SUMMARY OF REQUEST: Request to amend the Code of Ordinances Chapter 10,
Section 107, Annual Registration of Vacant Buildings and Registration Fees, for
the purposes of adding a two-year waiver for properties that are in probate,
being actively rehabbed so it may be occupied, or while a home appears to be
occupied but is vacant by definition with proof of each being supplied by the
property owner and the property may not be cited by any City department and
all fees owed to the City are paid.
FINANCIAL IMPACT: None.
BUDGET ACTION REQUIRED: None.
STAFF RECOMMENDATION: Staff recommends amendment of Chapter 10,
Section 107, Annual Registration of Vacant Buildings and Registration Fees, for
the purposes stated.
Motion by Commissioner Carter, second by Commissioner Wierengo to approve
the vacant building registration ordinance amendment.
ROLL VOTE: Ayes:   Carter, Gawron, Shepherd, Spataro, Warmington, and
           Wierengo
            Nays: None
MOTION PASSES (REQUIRES SECOND READING)
      D. Transmittal of 6/30/11 Comprehensive Annual Financial Report.
         FINANCE
SUMMARY OF REQUEST: The City’s June 30, 2011 Comprehensive Annual
Financial Report (CAFR) has previously been distributed to City Commissioners
via both email and hard copy. The CAFR is also available on the City’s website
at www.shorelinecity.com. This audit covers the first full twelve-month fiscal
period since the City changed its fiscal year from a 12/31 to a 6/30 end date. At
this time the CAFR is being formally transmitted to the Commission in
accordance with state law. The CAFR has been prepared in accordance


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with GASB accounting standards. The CAFR also includes the single-audit of
federal grants received by the City.
FINANCIAL IMPACT: The CAFR report summarizes the City’s financial activities for
the year and includes the independent auditor’s unqualified opinion on the
City’s financial statements.
BUDGET ACTION REQUIRED: None.
STAFF RECOMMENDATION:        Acceptance of the CAFR for the period ended
6/30/11.
Motion by Vice Mayor Gawron, second by Commissioner Carter to accept the
Comprehensive Annual Financial Report for the period ended June 30, 2011.
ROLL VOTE: Ayes:   Carter, Gawron, Shepherd, Spataro, Warmington, and
           Wierengo
            Nays: None
MOTION PASSES
      E. First Quarter 2011-12 Budget Reforecast. FINANCE
SUMMARY OF REQUEST: At this time staff is transmitting the First Quarter 2011-12
Budget Reforecast which outlines proposed changes to the original budget that
have come about as result of changes in revenue projections, policy priorities,
labor contracts, updated economic conditions, or other factors.
FINANCIAL IMPACT: Specific proposed changes to the budget include:
   • The beginning fund balance for the General Fund is $4,511,382 (as
     audited) up from $4,187,864 estimated at the time the budget was
     prepared;
   • Overall the general fund revenue reforecast is 2% higher than originally
     budgeted. The increase is mostly attributable to the following changes:
     * Increase in estimated income tax revenues from $6.5 to $6.6 million
        based on recent collection figures and trends;
     * Increase in state shared revenue estimate from $3.05 million to $3.425
        million based on the City’s expected compliance with the EVIP
        program and the most current revenue projection data available from
        the state;
   • Expenditures at this point are generally on target with original budget
     projections. However, two notable changes are proposed:
     * The Assessing Services budget is recommended to increase $50,000 to
        cover costs for outside expertise and assistance with complex, high
        value tax appeals;
     * An unbudgeted transfer of $75,000 to the Engineering Services fund is
        recommended to erase a fund deficit that has now persisted for
        several years.


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BUDGET ACTION REQUIRED: Self-explanatory.
STAFF RECOMMENDATION: Approval.
Motion by Commissioner Spataro, second by Vice Mayor Gawron to approve
the First Quarter 2011-12 Budget Reforecast.
ROLL VOTE: Ayes: Gawron, Shepherd, Spataro, Warmington, Wierengo, and
           Carter
            Nays: None
MOTION PASSES
      F. Consideration of 2012 COLA for Retirees. FINANCE
SUMMARY OF REQUEST: It is time to consider whether an annual cost of living
adjustment (COLA) should be awarded to city retirees. Under the City’s COLA
program, permanent cost of living increases are made to pensioners retired five
years or more. COLA payments are capped at 75% of the CPI and are payable
only when investment performance exceeds estimates and the COLA is
deemed affordable. The last COLA increase was in 2009, when a 0.50% COLA
was granted.
The actuary has computed the cost of a 1% COLA adjustment as follows:
          Group                       Cost
          Eligible General Retirees   $21,456
          Eligible P&F Retirees       $53,280


The City’s retirement system remains financially sound but continues to feel the
impact of the collapse of the financial markets in late 2008. The most recent
annual actuarial valuation contains this important warning:
“The actuarial value of assets (funding value), used to determine both your
funded status and your required employer contribution, is based on a 10-year
smoothed value of assets. Only a portion (three-tenths, for 2008, 2009, and 2010)
of the 2008 investment market losses were recognized in this actuarial valuation
report. This reduces the volatility of the valuation results, which affects your
required employer contribution and actuarial funded percentage.
As of December 31, 2010 the actuarial value of assets is 116% of market value
(down from 125% in 2009). This means that meeting the actuarial assumption in
the next few years will require average annual market returns that exceed the
8% investment return assumption. If the December 31, 2010 valuation results
were based on market value on that date instead of 10-year smoothed funding
value: i) the funded percent of your entire municipality would be 86%

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(instead of 100%); and ii) your total employer contribution requirement for the
fiscal year starting July 1, 2012 would be $3,629,328 (instead of $1,012,440). If the
investment markets do not fully make-up for the 2008 losses, employer
contribution requirements may rise. ”
Given the above and the numerous other financial challenges facing the City,
staff does not believe it is prudent to commit to an additional long-term cost at
this time. Therefore, it is recommended no retiree COLA be awarded for the
year beginning January 1, 2012.
FINANCIAL IMPACT: None.
BUDGET ACTION REQUIRED: None at this time.
STAFF RECOMMENDATION: Commission action affirming staff’s recommendation
that no retiree COLA increase be granted for 2012.
Motion by Vice Mayor Gawron, second by Commissioner Carter to affirm staff’s
recommendation that no retiree COLA increase be granted for 2012.
ROLL VOTE: Ayes: Shepherd, Spataro, Warmington, Wierengo, Carter, and
           Gawron
             Nays: None
MOTION PASSES
ANY OTHER BUSINESS: Mayor Warmington introduced County Commissioner Ben
Cross who stated the proposed lease agreement that could eventually lead to
construction of a wind farm on Muskegon County’s wastewater site was
approved.
Mayor Warmington recognized and thanked Finance Director Tim Paul for 26
years of dedicated service to the City of Muskegon.
PUBLIC PARTICIPATION: Public comments received.
ADJOURNMENT: The City Commission Meeting adjourned at 6:15 p.m.


                                             Respectfully submitted,




                                             Ann Marie Cummings, MMC
                                             City Clerk




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