Detroit Budget Finance & Audit Committee Summary – October 1, 2025

The Budget, Finance, and Audit Standing Committee of the Detroit City Council met on October 1, 2025, to discuss multiple items, including a report on a potential local option admissions tax on sports and entertainment venues, new property tax transparency tools for homebuyers, financial reports, and several contract and fee schedule resolutions. The committee also established a $42 million corporate income tax reserve fund to backstop projected revenue shortfalls.

Consent Calendar

• Approval of the minutes from the previous meeting was moved and approved without objection.

Public Comments & Testimony

• No public comments were taken during this committee hearing, as they had already been conducted earlier.

Discussion Items

• Line Item 5.1 – Citizens Research Council Report on Local Option Admissions Tax:

  • Eric Lupher, President of the Citizens Research Council of Michigan (CRC), presented a report evaluating a local option admissions (amusement) tax on sports and entertainment venues in Detroit. The report analyzed rates from 3% to 10%, estimating potential annual revenue from $14 million to $47 million. The tax would target venues for major sports teams, concerts, theaters, and events, with exemptions for K-12 activities, nonprofits, government events, and events under $10. The report noted 34 states levy such taxes and recommend structuring it as an excise tax, not a sales tax, and dedicating revenues to public safety, recreation, or property tax relief.
  • Councilmember Durhal expressed opposition to the tax, arguing it would burden Detroit residents who already struggle with high ticket prices and that the projected property tax relief (e.g., $285 for a $100,000 home at a 10% rate) is insufficient. He questioned whether Detroit’s market is large enough to avoid a negative impact on attendance and noted that any enabling legislation from the state would limit local discretion.
  • Councilmember Santiago-Romero expressed support for the tax, stating it could fund public safety, violence intervention programs, and help diversify city revenue. She noted that while attending events is already expensive, taxing those who can afford tickets is a way to reinvest in the city. She asked about the steps required: state legislative authorization and a public vote.
  • Irv Corley of LPD argued the city needs diversified revenue given expiring federal funds and state uncertainties, and he advocated for pursuing state authorization.

• Line Item 5.2 – Fiscal Impact Analysis of the “Big Beautiful Bill”:

  • Councilmember Santiago-Romero requested additional time to review an updated memo from the assessor’s office regarding property tax implications for homebuyers. The item was postponed for one month by motion.

• Line Items 5.3 & 5.4 – Property Tax Rate Notice and Pamphlet for Homebuyers:

  • Deputy CFO and Assessor Alvin Horn presented two new tools: (1) a letter sent to all new property owners within 30 days of sale, explaining tax uncapping, appeal options, and available abatements (PRE, NEZ); (2) a one-page flyer, “5 Things to Know About Buying a Home in Detroit,” to be mailed to all properties annually. Additionally, an online property tax estimator tool is now live on the city’s website, allowing prospective buyers to enter an address and see estimated taxes for the next year.
  • Both councilmembers praised the flyer and the tool for improving transparency. The items were received and filed.

• Line Item 6.1 – Oracle Project Portfolio Management Module Contract:

  • A $449,396 contract with Vigilant Technologies LLC for Oracle PPM implementation (capital and grant project management) was discussed, moving to formal approval. Councilmember Santiago-Romero expressed concerns about Oracle’s recent controversies and requested a follow-up meeting with the ERP director, which was granted.

• Line Item 6.2 – Monthly Financial Report for July 2025:

  • Budget Director Donnie Johnson presented the first month of FY26, noting a $5.5 million period deficit driven by a corporate income tax shortfall and overspending in benefits (later reclassified to FY25). The city’s cash balance remains strong at $1.8 billion. Bond refinancing for the Public Lighting Authority yielded $7.45 million in present value savings and freed $10 million for lighting projects. Vacant positions helped maintain budget balance. The report was received and filed.

• Line Item 6.3 – Corporate Income Tax Reserve Fund:

  • A resolution to create a $42 million assigned fund balance reserve to backstop projected corporate income tax shortfalls in FY26 was approved unanimously. The reserve will revert to unassigned fund balance if not fully used. Councilmember Durhal and LPD supported the move as fiscally prudent given uncertain federal and state conditions.

• Line Item 6.4 – Neighborhood Enterprise Zone (NEZ) Certificates for 11 New Homes in East Village:

  • Greatwater Homes proposed building 11 single-family homes (1,000–1,850 sq. ft., sale price $350,000–$550,000) in the East Village NEZ area. Four customizable models with detached garages and ADA-accessible options were presented. CPC staff recommended approval; the item was sent to formal.

• Line Item 6.5 & 6.6 – Detroit Health Department Fee Schedule Increase and Disinterment Permits:

  • A proposed 10% fee increase for health department services (food sanitation, environmental health) – the first since 2015 – was approved to cover rising operational costs and align with peer counties. The health department also received authorization to issue disinterment permits for Detroit cemeteries, taking over from Wayne County, with a $10 fee. Both items were sent to formal.

• Line Item 6.7 – Parks and Recreation Fee Schedule Update:

  • A resolution to update fees at city parks and recreation facilities, including the Chandler Field House and Palmer Park Banshell, was approved. Fees for boxing training were increased to support a nationally competitive program. The item was sent to formal.

Key Outcomes

• Line Item 5.1: Received and filed. The report will inform potential future state legislative advocacy.
• Line Item 5.2: Postponed for one month.
• Line Items 5.3 & 5.4: Received and filed; the new property tax estimator and flyer are now operational.
• Line Item 6.1: Sent to formal session with recommendation to approve.
• Line Item 6.2: Received and filed.
• Line Item 6.3: Approved by motion; sent to formal session.
• Line Item 6.4: Sent to formal with recommendation to approve.
• Line Items 6.5 & 6.6: Sent to formal with recommendation to approve.
• Line Item 6.7: Sent to formal with recommendation to approve.
• Meeting adjourned at the call of the chair without objection.