City Council Minutes

PRESIDING OFFICER:           MAYOR JOHN C.M. DAVIS
OPENING PRAYER:              CITY MANAGER GREGG G. GUETSCHOW
PLEDGE OF ALLEGIANCE:   CITY MANAGER GREGG G. GUETSCHOW

PRESENT:                              Mayor John C. M. Davis, Mayor Pro-Tem Susan J. Osika, Councilpersons Joane E. Ford, Justin R. Horvath, Mark D. Owen, Linda L. Robertson, and Charles J. Sumrack.

ABSENT:                                 None.

APPROVE AGENDA   

Motion by Mayor Pro-Tem Osika to approve the Agenda as presented with the addition of a Special Presentation by City Manager Gregg G. Guetschow and Building Official John F. Archer.  Motion supported by Councilperson Robertson and concurred in by unanimous vote.

APPROVE MINUTES – REGULAR MEETING OF MAY 17, 2004

Motion by Councilperson Ford to approve the Minutes of the Regular Meeting of May 17, 2004 as presented.  Motion supported by Mayor Pro-Tem Osika and concurred in by unanimous vote.

PROCLAMATIONS / SPECIAL PRESENTATIONS

Presentation-New Council Table:  City Manager Gregg G. Guetschow introduced Building Official John F. Archer.  Mr. Archer explained the background related to the construction of the new council table.  He explained that the wood had come from a dead red oak tree at Emerson Grove and that he milled it himself and constructed the table. Mr. Archer formally presented the council table to the Council and thanked the City of Owosso for his childhood, his children’s childhood and for just the pleasure of living in this town.

Presentation-Police Department Report:  Director of Public Safety Michael T. Compeau addressed the City Council regarding accomplishments in the Police Department during his first year as Police Chief.  Director Compeau also publicly thanked all the Police Officers and Deputy Police Chief Rau for the department coverage during the Curwood Festival this past weekend.  He also invited everyone to visit the department to view the changes. 

MAYOR DAVIS READ THE RULES FOR ADDRESSING THE CITY COUNCIL.

CITIZEN COMMENTS

Shelva Cebulski, 1243 Marion Street, commented regarding Director Compeau’s comments regarding the courtesy card program and the taser gun program.

Lori Kimble, 1105 Meadow Drive, introduced herself as a candidate for Shiawassee County Register of Deeds.

Betty Coon, 1204 Palmer Street, thanked Building Official John Archer for the gift of the lovely council table.  Mrs. Coon also commented regarding the Cool Cities application, SATA funding, and concerns about the costs involved with the Mayor Exchange activities.

Councilperson Owen commented that the Adams Street Park needed maintenance attention.

City Manager Guetschow responded to Mrs. Coon’s questions regarding SATA funding.  He also responded to her concerns about Mayor Exchange Day activities.

CONSENT AGENDA

Motion by Councilperson Robertson to approve the Consent Agenda as follows:

Contract Payment.  Authorized Progress Payment No. 2 to Perrin Construction, Inc. in the amount of $47,423.05 for work done to date on the Michigan Avenue Reconstruction Project.

Change Order.  Authorized Change Order to the Gould Engineering Services Contract in the amount of $1,003.87 for added services at Osburn Lakes Site Condominium.

Bid Award.  Accepted low bid of Spartan Asphalt for the Skate Park Asphalt Pad in the amount of $5,978.35.

Bid Award.  Accepted low bid of Highway Maintenance and Construction Company for the 2004 Seal Coat Program in the amount of $54,719.55.

Boards and Commissions Appointment.  Approved Mayoral appointment of Philip D. Heavilin to the Owosso Historical Commission for a term expiring December 31, 2006.

Warrant No. 294.  Accepted Warrant No. 294 as follows:

Motion supported by Councilperson Ford.

ROLL CALL VOTE.

AYES:               Mayor Pro-Tem Osika, Councilpersons Ford, Horvath, Owen, Robertson, Sumrack and Mayor Davis.

NAYS:              None.

ITEMS OF BUSINESS

CONTRACT AGREEMENT

MICHIGAN DEPARTMENT OF TRANSPORTATION – M-21 AND CHESTNUT STREET

Motion by Mayor Pro-Tem Osika to authorize the following Contract Agreement with the Michigan Department of Transportation for the City share of intersection improvements including the placement of a new traffic signal at the intersection of M-21 and Chestnut Street together with necessary related work and to further authorize the Mayor and City Clerk to execute the appropriate documents:

SPECIAL TRUNKL1NE                                    DAB
NON-ACT-51                                                   Control Section          BI04 76061
ADDED WORK                                               Job Number                75196
                                                                      Contract                      04-5127

THIS CONTRACT is made and entered into this date of ______________________, by and between the MICHIGAN DEPARTMENT OF TRANSPORTATION, hereinafter referred to as the “DEPARTMENT”; and the CITY OF OWOSSO, a Michigan municipal corporation, hereinafter referred to as the “CITY”; for the purpose of fixing the rights and obligations of the parties in agreeing to construction improvements in conjunction with the DEPARTMENT’S construction on Highway M-21, within the corporate limits of the CITY.

WITNESSETH:

WHEREAS, the DEPARTMENT is planning resurfacing work on Highway M-21 from Delaney Road to Chestnut Road; and

WHEREAS, the CITY has requested additional work in connection with the Highway M­21 construction, which additional work is hereinafter referred to as the “PROJECT” and is located and described as follows:

Intersection improvements including the placement of a new traffic signal at the intersection of Highway M-21 and Chestnut Street; together with necessary related work, located within the corporate limits of the CITY and also within Owosso Township, Shiawassee County; and 

WHEREAS, the DEPARTMENT presently estimates the PROJECT COST as hereinafter defined in Section 1 to be: $226,300; and

WHEREAS, the parties hereto have reached an understanding with each other regarding the performance of the PROJECT work and desire to set forth this understanding in the form of a written agreement.

NOW, THEREFORE, in consideration of the premises and of the mutual undertakings of the parties and in conformity with applicable law, it is agreed:

1. The parties shall undertake and complete the construction of the PROJECT in accordance with this contract. The term “PROJECT COST”, as herein used, is hereby defined as the cost of construction or reconstruction of the PROJECT including the costs of preliminary engineering, plans and specifications; acquisition costs of the property for rights of way, including interest on awards, attorney fees and court costs; physical construction necessary for the completion of the PROJECT as determined by the DEPARTMENT; and engineering, legal, appraisal, financing, and any and all other expenses in connection with any of the above.

2. The cost of alteration, reconstruction and relocation, including plans thereof, of certain publicly owned facilities and utilities which may be required for the construction of the PROJECT, shall be included in the PROJECT COST; provided, however, that any part of such cost determined by the DEPARTMENT, prior to the commencement of the work, to constitute a betterment to such facility or utility, shall be borne wholly by the owner thereof.

3. The CITY will approve the design of the PROJECT and shall accept full responsibility for the design with respect to the PROJECT functioning as a part of the CITY’S facilities. Any approvals by the DEPARTMENT are for its own purposes and are not to nor do they relieve the CITY of liability for any claims, causes of action or judgments arising out of the design of the PROJECT.

4. The DEPARTMENT will administer all phases of the PROJECT and will cause to be performed all the PROJECT work. 

Any items of PROJECT COST incurred by the DEPARTMENT may be charged to the PROJECT.

5. The PROJECT COST shall be charged to the CITY 100 percent and paid in the manner and at the times hereinafter set forth. Such cost is estimated to be as follows:

PROJECT COST - $226,300 

The engineering costs chargeable to the DEPARTMENT and the CITY will be established in the same ratio as the actual direct construction costs.

6. The DEPARTMENT shall maintain and keep accurate records and accounts relative to the cost of the PROJECT. The DEPARTMENT may submit progress billings to the CITY on a monthly basis for the CITY’S share of the cost of work performed to date, less all payments previously made by the CITY. No monthly billings of a lesser amount than $1,000 shall be made unless it is a final or end of fiscal year billing. All billings will be labeled either “Progress Bill Number __________“, or “Final Billing”. Upon completion of the PROJECT, payment of all items of PROJECT COST and receipt of all Federal Aid, the DEPARTMENT shall make a final billing and accounting to the CITY. 

7. Pursuant to the authority granted by law, the CITY hereby irrevocably pledges a sufficient amount of funds received by it from the Michigan Transportation Fund to meet its obligations as specified herein. If the CITY shall fail to make any of its required payments when due, as specified herein, the DEPARTMENT shall immediately notify the CITY and the State Treasurer of the State of Michigan or such other state officer or agency having charge and control over disbursement of the Michigan Transportation Fund, pursuant to law, of the fact of such default and the amount thereof, and, if such default is not cured by payment within ten (10) days, said State Treasurer or other state officer or agency is then authorized and directed to withhold from the first of such monies thereafter allocated by law to the CITY from the Michigan Transportation Fund sufficient monies to remove the default, and to credit the CITY with payment thereof, and to notify the CITY in writing of such fact. 

8. Upon completion of construction, the facilities being constructed as the PROJECT under the jurisdiction of the DEPARTMENT shall be operated and maintained by the DEPARTMENT at DEPARTMENT cost and all other PROJECT facilities shall be operated and maintained by the CITY at no cost to the DEPARTMENT. 

9. Any and all approvals of, reviews of, and recommendations regarding contracts, agreements, permits, plans, specifications, or documents, of any nature, or any inspections of work by the DEPARTMENT pursuant to the terms of this contract are done to assist the CITY. Such approvals, reviews, inspections and recommendations by the DEPARTMENT shall not relieve the CITY of its ultimate control and shall not be construed as a warranty of their propriety or that the DEPARTMENT is assuming any liability, control or jurisdiction. 

The providing of recommendations or advice by the DEPARTMENT does not relieve the CITY of its exclusive jurisdiction of the highway and responsibility under MCL 691.1402, MSA 3.996(102).

When providing approvals, reviews and recommendations under this contract, the DEPARTMENT is performing a governmental function, as that term is defined in MCL 691.1401; MSA 3.996(101), which is incidental to the completion of the PROJECT. 

The DEPARTMENT, by executing this contract, and rendering services pursuant to this contract, has not and does not assume jurisdiction of the highway, described as the PROJECT for purposes of MCL 691.1402; MSA 3.996(102). Exclusive jurisdiction of such highway for the purposes of MCL 691.1402; MSA 3.996(102) rest with the CITY. 

10. In connection with the performance of PROJECT work under this contract the parties hereto (hereinafter in Appendix “A” referred to as the “contractor”) agree to comply with the State of Michigan provisions for “Prohibition of Discrimination in State Contracts”, as set forth in Appendix “A”, attached hereto and made a part hereof. The parties further covenant that they will comply with the Civil Rights Acts of 1964, being P.L. 88-352, 78 Stat. 241, as amended, being Title 42 U.S.C. Sections 1971, 1975a-1975d and 2000a - 2000h-6 and the Regulations of the Department of Transportation (49 C.F.R. Part 21) issued pursuant to said Act, including Appendix “B” attached hereto and made a part hereof, and will require similar covenants on the part of contractor or subcontractor employed in the performance of this contract.

11. This contract shall become binding on the parties hereto and of full force and effect upon the signing thereof by the duly authorized officials for the CITY and for the DEPARTMENT; upon the adoption of a resolution approving said contract and authorizing the signatures thereto of the respective officials of the CITY, a certified copy of which resolution shall be attached to this contract; and with approval by the State Administrative Board.

IN WITNESS WHEREOF, the parties hereto have caused this contract to be executed the day and year first above written.

CITY OF OWOSSO   
MICHIGAN DEPARTMENT
TRANSPORTATION

By:  Mayor John C.M. Davis                                                   By:  Department Director MDOT

By:  City Clerk Gail L. Schultz

Motion supported by Councilperson Sumrack.

ROLL CALL VOTE.

AYES:               Mayor Pro-Tem Osika, Councilpersons Ford, Horvath, Owen, Robertson, Sumrack and Mayor Davis.

NAYS:              None.

BID AWARD/CONTRACT AGREEMENT

Motion by Councilperson Ford to accept the low bid of Sascon, Inc. in the amount of $72,925 to install an elevator at 104-108 North Washington Street and to further authorize a companion development agreement with the Developer to assure their funds are on deposit with the City when the Notice to Proceed is issued and to include the following substantive issues:

Issue                                       Standards/Provisions

A.      Financial Issues:

1)   Financial Advances          Rock Solid shall deposit with the City the cost of the elevator that is not funded through the State of Michigan.  Based on the revised Sascon Proposal of 6/2/04 that amount shall be $18,925.  The time of the deposit shall coincide with the Notice to Proceed.  The funds on deposit may be drawn as monies “first-in” to the extent they are needed to pay contractor invoices while reimbursement from the State is in process.  Developer shall be reimbursed without interest if the final project cost tally is below the bid amount (there may be a credit on the engineering plans).

2)  Assurances                        Rock Solid shall hold the City harmless for the clause in the grant agreement that requires repayment of the grant amount if the project does not achieve a job creation level satisfactory to the State of Michigan.

3)  Added Expense                   Rock Solid shall hold the City harmless for unforeseen expenses to the elevator project and as a guaranty for reimbursement to the city, Rock Solid accepts the provision that the occupancy of the apartments shall not be granted until the full costs of the project are funded.

B.  Project Standards:

1)  Apartment Plans                Rock Solid shall supply sealed prints of the apartments before the elevator installation takes place or receive Building Official approval for the concept plans for the placement of the elevator and fire safety related code standards.  Sealed plans are required prior to construction of the apartments.

2)  Elevator Access                  Rock Solid shall submit for a first floor access from the rear of the building to the elevator for the apartment residents.

3) Basic Apartment

Features                           The basic apartment features shall include, as a minimum, air conditioning, laundry hookups, dishwasher, microwave, “smart wiring” and basement storage.

4) Enhanced Apartment         Balconies

Features (at least             Jacuzzi Bath

Two); To be                        Covered Parking

Completed within             Skylight Window

Five years                         Rooftop Gardens

                                          Indoor Stove Top Grill

                                          Hardwood Floors

                                          Walk-in Closets

                                          Open Floor Loft Design

                                          Brick Walls

Motion supported by Councilperson Robertson.

ROLL CALL VOTE.

AYES:               Mayor Pro-Tem Osika, Councilpersons Ford, Horvath, Owen, Robertson, Sumrack and Mayor Davis.

NAYS:              None.

CONTRACT AMENDMENT – GOULD ENGINEERING

Motion by Councilperson Ford to authorize an amendment to contract with Gould Engineering for construction related engineering services at a not-to-exceed figure of $8,500 and for construction inspection services for sewer and water installation at the hourly rate of a field technician and other support services for the inspections.

Motion supported by Mayor Pro-Tem Osika.

ROLL CALL VOTE.

AYES:               Mayor Pro-Tem Osika, Councilpersons Ford, Horvath, Owen, Robertson, Sumrack and Mayor Davis.

NAYS:              None.

PROPERTY SALE – OSBURN LAKES

Philip Hathaway, Director of Community Development, commented regarding the posting.  He commented that language changes will be introduced at a future meeting of the council.  This is a new agreement and further details will be presented at July 6th meeting.

Councilperson Owen questioned why we had abandoned the old agreement.  Staff reported that the special assessment language was a major stumbling block for the purchaser.

Motion by Mayor Pro-Tem Osika to receive Second Purchase Agreement with Woodside West, LLC for fifty-three (53) acre parcel at Osburn Lakes in the amount of $166,000 plus other considerations and file with the City Clerk until the meeting of July 6, 2004 as follows:

SECOND PURCHASE AGREEMENT

THIS AGREEMENT is made this ____ day of ______, 2004, between the City of Owosso, a Michigan municipal corporation at 301 West Main Street, Owosso, Michigan 48867, as “City” and Woodside West, L.L.C., at 5232 South Morrish Road, Swartz Creek, Michigan 48473, as “Developer”.

WHEREAS, City has a fee simple interest in the property commonly known as Osburn Lakes, Owosso, Michigan, 48867 and legally described in Exhibit A-1 and City and Developer have agreed to enter into an option for Developer to purchase lots in said parcel.

WHEREAS, City and Developer previously entered into a Purchase Agreement dated January 30, 2004, which expired by the passage of time and the parties wish to acknowledge termination of the previous Purchase Agreement and enter into a new agreement memorialized herein.

WHEREAS, City and Developer have obtained engineering plans from Gould Engineering, Inc., entitled “Osburn Lakes Site Condominium of October 10, 2003” (hereinafter referred to as “Gould Plans”), which describes two parcels, the first of which is the parcel labeled as Exhibit A-1 and the remaining property is described as future development more particularly described in Exhibit A-2, hereinafter referred to as Phase 1 and Phase 2 respectively, Phase 1 being the property to be optioned pursuant to the section entitled “Option for Phase 1” below and Phase 2 to be subject to an option described in the section entitled “Option for Phase 2” below.

WHEREAS, City supports a single-family housing development on the property to expand its population and tax base, and Developer will develop the property for single-family dwellings;

WHEREAS, City prepared a concept plan for the single-family project for the property and said concept plan being accepted by the Developer;

WHEREAS, the parties wish to enter into this Purchase Agreement so that Developer and City may define development standards and declare their respective responsibilities for the development;

NOW THEREFORE, IN CONSIDERATION OF THE MUTUAL COVENANTS CONTAINED HEREIN IT IS THEREFORE AGREED AS FOLLOWS:

Option for Phase 1

1.    City hereby agrees to grant Developer an exclusive option to purchase lots in the parcel described on Exhibit A-1. The term of the option shall be four (4) years from the date of the closing. In consideration for said option, Developer shall pay City $166,000.00 due in cash at closing.

2.    City agrees to contract with third parties for construction of infrastructure improvements as specified in the Gould Plans.

3.    Developer will prepare and record a Master Deed within three (3) months of closing. The Master Deed will contain architectural requirements in conformance with those stated in the Development Agreement attached as Exhibit B. This City will be exempt from any responsibilities of a lot owner including payment of dues as required in the Master Deed.

4.    Developer has previously deposited Five Thousand and No/100 ($5,000.00) Dollars with City evidencing Developer’s good faith. Said amount is to be credited at closing. If the Developer defaults, City may keep the deposit. Developer shall not be in default if its lender refuses to fund Phase 1 due to the reason of lack of confidence in the regional housing market. If the City defaults, Developer is entitled to a refund of the deposit. No interest shall accrue if a refund is made to Developer.

5.    At City’s expense the City shall obtain a title insurance policy insuring the Developer in the amount of the purchase price of $166,000.00 effective at the date of closing and shall provide Developer with a commitment for the policy within thirty (30) days after the date of this Agreement. If Developer notifies City of any easement, restriction, reservation or encumbrance disclosed in the commitment for the policy that is unacceptable to Developer (“Title Defect”), City shall have thirty (30) days from the date of Developer’s notice to remove the Title Defect. If City does not remove the Title Defect, Developer, in its discretion, may either: (I) waive such defect and proceed with the closing; or (ii) terminate this Agreement whereupon all liability under this Agreement shall terminate and the deposit shall be returned to Developer.

6.    Seller represents that there are no other interests in the lots other than those listed on Exhibit C.

7.    The closing shall occur within 45 days of the date of this Agreement. This deadline may only be extended by mutual written agreement of the parties. At the closing, the City shall execute and deliver to the Developer an option in recordable form in exchange for payment of $166,000.00 less the deposit.

8.    Developer shall accept the lots and improvements on an “AS IS” basis. City makes no representations as to Developer’s ability to use the lots for their intended use. It is further understood and agreed by and between the parties that except as expressly set forth herein, City makes no representations or warranties with respect to the physical condition of the lots.

9.    Developer, at its sole expense, may conduct environmental site assessments and if applicable, a Baseline Environmental Assessment pursuant to Part 201 of the Michigan Natural Resources and Environmental Protection Act as it deems necessary to assure its intended uses for the Property are permissible and feasible. If Developer in its sole discretion determines the environmental condition of the property unacceptable it may rescind this Agreement by written notice to the other party prior to closing. In which case the City may retain the deposit.

10.  City offers a land survey in Exhibit D designed to accurately describe the Property and determine valid boundaries. If Developer in its sole discretion determines the survey unacceptable, it may conduct its own survey at its expense.

11.  Developer will build three (3) model or “spec” homes in the front of the development, being lots 1-17 or 73-83, within two (2) years of the closing unless such homes are built for third party Buyers.

12.  Developer shall exercise the option to purchase any lot in Phase 1 by notifying City in writing at least ten (10) days before the intended closing to the City Manager, City of Owosso, 301 West Main Street, Owosso, Michigan 48867. When Developer exercises the option to purchase a lot, the following provisions apply:

a. The purchase prices that Developer would pay the City for individual lots are listed on Exhibit E. These purchase prices have been calculated on the basis of City costs for infrastructure design and installation, associated engineering services and incidental expenses that are direct costs plus actual interest. City shall provide full disclosure of these costs and interest charges.

b. The retail purchase price Developer would charge for the lots would be no greater than an increase of ten (10%) percent of its cost from the City, plus actual interest, unless the provisions of Sections B.4.a. and B.5. of the Development Agreement regarding required sales to other realtors and builders applies.

c. At closing, City shall deliver to Developer’s title company a Warranty Deed in exchange for payment of the lot purchase price.

d. All deeds from the City to Developer would have a reversionary clause requiring the completion of the foundation walls for a residential structure within eighteen (18) months. If the reversionary clause is implemented, the City shall refund a retail buyer ninety (90%) percent of the amount the City received from the lot less any unpaid homeowner’s association dues, taxes and assessments.

e. City shall be responsible for State of Michigan transfer taxes assessed on the sale of lots from City to Developer. Developer shall be responsible for survey costs, recording fees and any other normal real estate transaction costs. City would have no responsibility for closing costs when Developer sells the lots to a retail buyer.

f.  Developer would be required to disclose to the City the sales prices of a lot prior to closing with a retail buyer.

g. The cost of all taxes, assessments and utilities attributed to the lots shall be pro-rated as of the date of closing as though paid in advance.

13.      The common area in Phase 1 shall be conveyed to the homeowner’s association that will be formed by Developer at such time as the association becomes functional pursuant to the terms of the Master Deed.

Option for Phase 2

14.  If Developer successfully completes its obligations in Phase 1, it shall be granted an exclusive option to purchase the remaining balance of the property described in Phase 2 of the Gould Plans and more particularly described in Exhibit A-2. Developer must notify City in writing within forty-two (42) months of the closing for Phase 1, that it intends to enter into an option for Phase 2. The parties shall negotiate in good faith an option for Phase 2 that shall have the following elements:

a. The purchase price shall be Two Thousand and No/100 ($2,000.00) Dollars per lot plus six (6%) percent annual appreciation calculated from the date of this Purchase Agreement to the date of closing. See Exhibit F for a calculation of this provision;

b. City reserves the right to determine the size of Phase 2 based upon real estate market conditions and to create additional phases within the property described on Exhibit A-2.

c. The Option may only be assigned with written consent of City to entities with a majority ownership in common with Developer.

d. Any notices sent to the City must be directed to the City Manager, City of Owosso, at 301 West Main Street, Owosso, Michigan 48867.

e. City, at its expense, shall obtain title insurance insuring the Developer in the amount of the purchase price of individual.

f.  The retail sale price of the lots will include the same amount for the lift station and walking trail costs as Phase 1. Inasmuch as it is anticipated that the sale of lots in Phase 1 will recoup the total of costs of the lift station and walking trail, such amounts charged to Phase 2 lots shall be paid over to the Homeowner’s Association.

g. The parties agree that Phase 1 and Phase 2 shall be compatible in architecture, design and restrictions.

General Provisions Applicable

to Phase 1 and Phase 2

15.              The original Purchase Agreement dated January 30, 2004, is terminated with the deposit transferred to this Second Purchase Agreement as described above.

16.  The Purchase Agreement incorporates the Development Agreement attached as Exhibit B. The Development Agreement establishes the phases of development, mutual understandings between the parties on responsibilities and minimum development standards for the construction of an approximately 83-unit single-family housing project.

17.  The Purchase Agreement may be rescinded if the City of Owosso does not authorize a zoning amendment to the property or any other authorization required by local, state or Federal government for Developer’s intended use of the property is not granted and the deposit shall be returned to Developer.

18.  Developer shall defend and indemnify City from all claims or causes of action arising from its activities arising from this agreement.

19.  City shall provide a corporate resolution authorizing all conveyances to the Developer.

20.  All of the terms and conditions stated in this Purchase Agreement shall survive delivery of all Deeds and options.

21.  The individual signing this Purchase Agreement on behalf of the Developer hereby represents that he or she has authority to do so.

22.  This Purchase Agreement, Exhibits A-F and the Gould Engineering plans and specifications referenced herein contain the entire agreement of the parties. There are no other terms or representations oral or otherwise that are part of the understandings and agreements between the parties.

23.  A party may only assign this Purchase Agreement with written permission of the other party.

24.  This Purchase Agreement shall be governed by the laws of the State of Michigan.

IN WITNESS WHEREOF the parties have hereunto set their hands and seals on

this Second Purchase Agreement the day and year first above written.

EXHIBIT A-1

Legal Description of “Osburn Lakes” -- Phase I.

PART OF THE NORTHEAST 1/4 OF SECTION 18 AND ALSO PART OF THE SOUTHEAST 1/4 OF SECTION 7, T7N-R3E, CITY OF OWOSSO, SHIAWASSEE COUNTY, MICHIGAN DESCRIBED AS FOLLOWS: BEGINNING AT A POINT ON THE NORTH AND SOUTH 1/4 LINE OF SAID SECTION 18, WHICH IS S 01°03’40” W 574.96 FEET FROM THE NORTH 1/4 CORNER OF SAID SECTION 18; THENCE S 89°01’21” E 870.02 FEET; THENCE N 00°25’59” W 625.15 FEET; THENCE N 89°01’21” W 100.03 FEET; THENCE N 00°25’59” W 383.70 FEET; THENCE S 89°12’5O” E 1231.17 FEET; THENCE S 00°30’20” E 437.83 FEET; THENCE S 01°17’56” W 1098.05 FEET; THENCE S 81°30’Ol” W 836.77 FEET; THENCE N 90°O0’OO” W 167.13 FEET; THENCE N 01°03’40” E 313.94 FEET; THENCE N 88°56’20” W 125.00 FEET; THENCE S 01°03’40” W 25.00 FEET; THENCE N 88°56’20” W 60.00 FEET; THENCE N 01°03’40” E 44.41 FEET; THENCE N 88°56’20” W 24O.OO FEET; THENCE S 01°03’40” W 35.00 FEET; THENCE N 88°56’20” W 60.00 FEET; THENCE N 01°03’40” E 25.00 FEET; THENCE N 88°56’20” W 120.00 FEET; THENCE S 01°03’40” W 450.00 FEET; THENCE N 88°56’20” W 120.00 FEET; THENCE S 01°03’40” W 48.46 FEET; THENCE N 88°56’20” W 60.00 FEET; THENCE N 01°03’40” E 25.00 FEET; THENCE N 88°56’20” W 205.00 FEET TO SAID NORTH AND SOUTH 1/4 LINE OF SECTION 18; THENCE N 01°03’40” E, ALONG SAID NORTH AND SOUTH 1/4 LINE, 812.36 FEET TO THE PLACE OF BEGINNING, CONTAINING 52.72 GROSS ACRES OF LAND, MORE OR LESS, BEING SUBJECT TO THAT PART NOW USED AS GOULD STREET, SO-CALLED, AND ALSO BEING SUBJECT TO ANY RECORDED OR UNRECORDED EASEMENTS OF BENEFIT OR BURDEN.

ALSO EXCEPT THAT AREA INDICATED ON THE FINAL SITE PLAN FOR PHASE I THAT INDICATES AREAS FOR RIGHT-OF-WAY.

EXHIBIT A-2

DESCRIPTION OF PHASE II OPTION AREA

PARCEL 1 — The West 1/2 of the Northeast ¼ and the West 1/2 of the East 1/2 of the Northeast 1/4 of Section 18, Township 7 North, Range 3 East, Caledonia Township, Shiawassee County, Michigan.

PARCEL 2 — The South 1/6 of the West 1/2 of the Southeast ¼ of Section 7, and the South 1/6 of the West 1/2 of the East 1/2 of the Southeast 1/4 of Section 7, all in Township 7 North, Range 3 East, Township of Caledonia, Shiawassee County, Michigan.

EXCEPT lands conveyed to Shiawassee County Road Commission for highway purposes.

ALSO EXCEPT lands conveyed under Deed recorded at Page 256 of Liber 661 of the records in the Offices of the Register of Deeds of Shiawassee County, Michigan, more particularly described as follows: That part of the West 1/2 of the Southeast 1/4 of Section 7, Township 7 North, Range 3 East, Caledonia Township, Shiawassee County, Michigan, described as: Beginning at a point on the North-South ¼ line distant North 01°03’30” West 50.01 feet from the South ¼ corner of said Section 7; thence continuing North 01°03’30” West 381.28 feet along said North-South ¼ line; thence South 89°06’11” East 755.00 feet along the North line of the South 1/6 of said West 1/2 of the Southeast ¼, thence South 01°02’41” East 383.83 feet; thence North 88°54’34” West 755.00 feet parallel with and distant 50.00 feet from the South line of said Section 7 to the point of beginning. Said parcel having rights of ingress and egress across adjoining property by means of a 100 foot wide easement described below as 100 foot Wide Access Easement.

ALSO EXCEPT that part of the West 1/2 of the Southeast ¼ of Section 7, Township 7 North, Range 3 East, Caledonia Township, Shiawassee County, Michigan, beginning at a point on the North-South ¼ line distant North 01°03’30” West 50.01 feet from the South 1/4 corner of said Section 7; thence South 88°54’34” East 370.00 feet; thence South 01°03’30” East 100.02 feet parallel with said North-South 1/4 line; thence North 88°54’04” West 370.00 feet; thence North 01°03’30” West 50.01 feet to the point of beginning.

ALSO EXCEPT that part of the Northeast 1/4 of Section 18 and the Southeast 1/4 of Section 7, T7N-R3E, City of Owosso, Shiawassee County, Michigan, described as follows:

Beginning at a point on the North and South 1/4 line of said Section 18 which is S 01°03’40” W 50.00 feet from the North 1/4 Corner of said Section 18; thence S 89°01’21” parallel with and 50.00 feet South of the North Line of said Section 18, a distance of 371.3l feet; thence N 00°26’31” W Parallel with the North and South 1/4 Line of said Section 7, a distance of 100.02 feet; thence S 89°01’21” E Parallel with and 50.00 feet North of the North Line of said Section 18, a distance of 485.03 feet; thence S 00°25’59” E 625.15 feet; thence N 89°01’21” W Parallel with the North Line of said Section 18, a distance of 870.02 feet to the North and South 1/4 line of said Section 18; thence N 01°03’40” E, along said North and South 1/4 line, 524.96 feet to the place of beginning, containing 11.52 gross acres of land, more or less, being subject to that part now used as Gould Street, so-called, and being subject to any recorded or unrecorded easements of benefit or burden.

EXHIBIT B

DEVELOPMENT AGREEMENT

THIS DEVELOPMENT AGREEMENT is entered into the ___ day of ______________ 2004, between The City of Owosso of 301 West Main Street, Owosso, Michigan 48867 (“City”) and Woodside West, L.L.C., of 5232 South Morrish Road, Swartz Creek, Michigan 48473 (“Developer”).

WHEREAS, The City has a fee simple interest in the property commonly known as Osburn Lakes, Owosso, Michigan, 48867 and legally described in Exhibit A of the Purchase Agreement between Developer and City of even date (“the property”);

WHEREAS, the City supports a single-family housing development on the property and Developer will develop the property for single-family dwellings;

WHEREAS, the City prepared a concept plan for the single-family project and has completed the development of a final site plan for a site condominium for the property and said concept plan being accepted by the developer; and

WHEREAS, the parties wish to enter this Development Agreement so that Developer and City may define development standards and declare their respective responsibilities for the development,

NOW THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:

A.    In furtherance of the development, City agrees to:

1. For the development area described in Exhibit A, calculate individual site condominium units (lots), create a computer generated unit control plan according to normal requirements of Act 59 of 1978. Supply a final site plan that is City Council approved. Any Developer alterations to the final site plan that are Developer initiated shall be at Developer expense. The City Council must review and approve the alterations to the site plan as prescribed under City Ordinance.

2. Contract with third parties for construction of infrastructure improvements as specified in the Gould Plans.

3. At the time of construction of the curb for Jackson Drive, construct an 8-foot sidewalk along the length of Gould Street adjoining the described property from the north line of the parcel to 25 feet south of the Moore Avenue entranceway and establish the grass area between sidewalk and curb.

4. Subject to the provisions of City’s construction contracts for infrastructure improvements, provide Developer access to the lots for construction purposes on July 31, 2004.

5. Construct a trail section on the property no later than the conveyance of the common areas to the homeowner’s association. The trail shall be developed in sufficient approximation to the location indicated on the final site plan provided that the trail width does not exceed 5 feet and the trail material, where needed, is no more expensive than crushed limestone. Because of the sensitivity of many areas of the landscape, a well-maintained footpath at 3-foot width is a more appropriate treatment of the open space areas.

  6. City shall construct the wastewater lift station as described in the Gould Plans. City shall reserve an easement for the operation and maintenance of a lift station at a mutually agreeable location on the site.

B.  Developer agrees to:

1.   Construct 83-unit single-family structures on site condominium units described in Gould Plans as Phase I.

2.   Maintain the 8’ sidewalk along Gould Street and open space areas through a homeowner’s association.

3.   Prepare a master deed within ninety (90) days of closing, subject to the City approval that contain the following principles:

a.   The minimum size of a dwelling unit shall be 1078 square feet, except that unit size for Lots 24 through 55 shall be a minimum of 1500 square feet.

b.   The minimum roof pitch shall be 7/12.

c.   The architectural concept of the homes shall be described in Exhibit B-1 to this development agreement and shall reflect the features of homes that are characteristic of Owosso’s historic neighborhoods or the concept demonstrated in Developer’s Heritage Village project at Bristol Road in Swartz Creek.

d.   Every dwelling unit shall have a usable front porch with a minimum square footage of 96 square feet.

e.   Within Developer’s architectural guidelines outdoor lighting on private lots shall be shielded and avoid direct or indirectly reflected light visible from beyond the boundary of a residential lot. This provision shall not apply to lamps less than 1200 lumens or flood lights less than 900 lumens provided that the floodlight does not provide direct glare to traffic or is not directly aimed at adjoining residential buildings.

f.    The homeowner’s association shall assume responsibilities within the Association documents at such time the Developer elects to do so. Prior to that assumption Developer shall be responsible for the terms of this agreement referencing responsibilities of the homeowner’s association.

g.   Developer shall provide for mutual easement provisions for the walking trail as mapped with the condominium unit adjoining the property on the north side. The trail location and construction plans are subject to State of Michigan wetlands permit.

h.   Unless specified in the construction plans at 15 feet, underground gas and/or electric utilities easements shall be permitted within a 10-foot zone adjacent to the street right-of-ways.

i.    Lakefront/wetland units are to maintain a 25-foot setback from the wetland boundary subject to the terms of the MDEQ wetlands permit.

j.    From the date of excavation of a dwelling unit, the structure and landscaping must be completed within 12 months according to the approved building plans.

k.   Except for a one-week driveway permit from the homeowner’s association for recreational vehicles, no recreational vehicles or trailers are to be stored outdoors either in the yard areas or driveways.

1.   Developer shall make the maximum feasible effort to arrange for front door delivery of mail.

m.  The development of individual lots shall preserve to the maximum feasible extent landmark hardwood trees that are 8” in diameter or greater as measured 4’ off the ground.

n.   Developer agrees to contract with a third party land manager for the areas defined in a conservation easement zone for the benefit of the occupants of the site condominium and duplex condominium development adjoining the north line of the site condominium. With exception to the trail development to be constructed and maintained by either the Developer or the homeowner’s association, the purpose of the third party agreement is to preserve and improve the natural character of the conservation zone, to decide on proposed alterations to those areas and to protect native plant and animal species. The third party manager shall be a non-profit corporation organized under the laws of the State of Michigan and established for the purpose of conservation land management. The City of Owosso shall retain the right of review and approval of the selected land management firm, or their successors from time to time, to assure the above standard is achieved.

o.   Refuse collection shall be restricted to one refuse company serving the development on one day per week designated under City ordinance. Developer or the homeowner’s association shall have the authority to select the service provider, level of service and the term of service.

p.   A 15’ preserve for a wildlife corridor shall be established for Lots 36 through 48. Except for plantings of local vegetation species suitable for a nature area, this corridor cannot be occupied for yard use and must remain without obstructions such as fences or walls.

4.   Beginning January 1, 2005, and to secure City’s interest in meeting financing obligations for the funds advanced to the project, Developer shall offer certain lots for sale at Developer’s lot costs plus a 10% sales commission under the following conditions:

a.   Developer shall sell an average of 10 lots per year. Under this provision, pre-sold lots, that is lots sold through December 31, 2004, shall act as a cumulative credit to the subsequent years’ sales targets. After January 1, 2005, if Developer does not sell 10 lots per calendar year, as might be adjusted for pre-2005 sales credits, Developer shall offer to other builders and realtors lots at developer’s cost plus 10% plus 6% plus any actual interest until enough lots are sold to achieve an average sale of lots at 10 per year. All such sales shall be arms length transactions to third parties not affiliated with Developer.

5.   Sell a minimum of eight (8) lots of Lots 24 through 67 and eight (8) lots of Lots 1-23 and 68-83 in Phase I of the final site plan to other realtors and builders whose place of business lies within Shiawassee County. The lot sale price shall be 10% plus 6% over City’s cost plus any actual interest. Developer shall maintain control of the development standards imposed on Developer lots and shall retain all other rights reserved for the subdivision development. In the absence of a demand for the lots over the initial four-year period of open site advertisement for public availability for lot purchase, Developer may reclaim those lots for his own home construction business. “Open site advertisement” shall mean information posted on the site sales sign, and 8 quarterly mailings to the office of the Shiawassee Board of Realtors and the Shiawassee Homebuilder’s Association, If the quota is achieved prior to the end of two years the open advertisement obligation is satisfied.

6.   Maintain and require that the homeowner’s association subsequently maintain as a common area the land contiguous to the lift station.

C. Developer shall not be restricted from the establishment of minimum standards greater than those outlined above or from the development of other standards, not otherwise prohibited by law, that are not addressed within this agreement.

D. This Development Agreement shall not be assigned without the written consent of both parties.

E. The provisions of this Development Agreement shall survive the closing of the transaction and the delivery of the warranty deed.

F. If either party defaults in any of the terms of this Development Agreement, the other party shall give the defaulting party written notice of the default and the action necessary to cure the default. If the default is not cured within thirty (30) days of the mailing of the notice of default, the non-defaulting party may demand arbitration of the dispute. Such arbitration shall be conducted according to the rules of the American Arbitration Association then in effect and shall be concluded within one hundred twenty (120) days of the demand for arbitration. Arbitration remedies may include monetary damages and/or termination of this Development Agreement and conveyance of the real property.

IN WITNESS WHEREOF the parties have hereunto set their hands and seals the day and year first above written.

EXHIBIT B-1

Architectural Concepts for Single-Family Homes

(incomplete)

EXHIBIT C

List of Leases, Easements or Other Interest in the Property

All City interests stated in the terms of the Purchase Agreement and Development Agreement of even date.

The right-of way area defined in the site plan for roadways and in the engineering plans with respect to wastewater lift station.

Easements as shown on the site plan and engineering plans for utilities and storm water management facilities; also including a 20 foot easement adjacent and parallel to the north 1231.17’ for future utility installation.

The reservation of an undivided 100% interest in mineral rights to the City of Owosso for the purpose of development and operation of water supply wells, together with the right and privilege of entering upon said property to establish and maintain water wells, water mains and other appurtenances as may be necessary to develop and operate a municipal water well supply. Such facilities and means for ingress and egress are to be located on common areas and utility easements of the property. Developer retains the right to use the surface of the property, except such portion thereof required for the security of the actual well facilities, and except for use limitations as may be required under state regulation for an isolation area around a municipal well (currently a circle with 200 foot radius centered on the well). It is understood that stormwater retention (in accordance with the developed stormwater management plan) and walking trails will be allowed in such isolation zones.

EXHIBIT D

(SURVEY AND DRAWING ON FILE CITY CLERK’S OFFICE)

EXHIBIT E

PURCHASE PRICE OF LOTS

(incomplete)

EXHIBIT F

PHASE 2- EIGHT YEAR PURCHASE OPTION SCHEDULE

ON A PARCEL BASIS FOR AN ESTIMATED 92 UNITS

ON A PER UNIT BASIS

Motion supported by Councilperson Robertson.

ROLL CALL VOTE.

AYES:               Mayor Pro-Tem Osika, Councilpersons Ford, Horvath, Owen, Robertson, Sumrack and Mayor Davis.

NAYS:              None.

DISCUSSION-ROLL CALL VOTING

There was general Council discussion related to the methods used for roll call voting.

Motion by Councilperson Ford to implement random roll call voting with the Mayor voting last.

Motion supported by Councilperson Sumrack.

ROLL CALL VOTE.

AYES:               Mayor Pro-Tem Osika, Councilpersons Ford, Horvath, Owen, Robertson, Sumrack and Mayor Davis.

NAYS:              None.

PAYMENT AUTHORIZATION

There were Council questions related to budget concerns and the timing of the fee.

Motion by Councilperson Ford to authorize payment to the State of Michigan for Annual Wastewater Plant (NPDES) Discharge Fee in the amount of $5,500.00.

Motion supported by Councilperson Owen.

ROLL CALL VOTE.

AYES:               Mayor Pro-Tem Osika, Councilpersons Ford, Horvath, Owen, Robertson, Sumrack and Mayor Davis.

NAYS:              None.

COMMUNICATIONS

Michael T. Compeau, Director of Public Safety.  May 2004 Fire Department Report.
Owosso Planning Commission.  Minutes of Meeting of May 24, 2004.
Owosso Zoning Board of Appeals.  Minutes of Meeting of May 18, 2004.
Owosso Historical Commission.  Minutes of Meeting of May 18, 2004.

Mayor Davis commented that Corunna Mayor Steve Corey had invited all local official to gather at noon on Friday at the County Courthouse for special observation of the passing of President Reagan.

City Manager Gregg Guetschow announced that the Michigan Avenue brick installation was scheduled for next Monday.

CITIZEN COMMENTS

Betty Coon, 1204 Palmer Street, wanted to take a special moment to remember President Reagan.

Councilperson Sumrack asked to revisit the burning issue one more time and asked that it be placed on the next council agenda.

ADJOURNMENT

Motion by Councilperson Owen for adjournment at 8:36 p.m., supported by Councilperson Sumrack and concurred in by unanimous vote.

John C.M. Davis, Mayor

Gail L. Schultz, City Clerk