Councilmember Gabriel Santiago Romero.

Mr.

Chair, there is no quorum.

Thank you.

And seeing no quorum, we can go directly into public comment.

Each member of the public will have two minutes for public comment.

We ask folks to state their name for the record and then proceed.

Uh seeing that we have no folks joining us here or no residents joining us here in the committee of the whole, we'll go directly to online public comment.

If you wish to participate on online public comment again, uh indicate so by raising your hand via the zoom feature, and you will have two minutes to participate in public comment.

We're getting ready to close public comment.

Public comment going once.

Public comment going twice.

Public comment going three times.

Public comment is now closed.

Uh good afternoon, Mr.

Payne.

How many callers do we have today?

Good afternoon, Mr.

Chair.

We have four callers today.

Okay.

Who is our first caller?

Excuse me, Mr.

Chair.

We have five callers.

Our first caller is phone number ending in one six nine.

Phone number ending in one six nine.

You have two minutes for public comment.

Please state your name for the record and proceed.

Caller, are you there?

Phone number ending in one six nine.

Hello, can you guys can you guys hear me?

Hello?

Yes, sir.

I can't hear you.

Okay, great.

Um, my name is Rick, and I just want to say um thank you for praying for Brother Cunningham.

Thank you for my time.

Thank you.

Next caller, please.

Our next caller is Owner Papa.

Owner Papa, you have two minutes for public comment.

Please state your name for the record and proceed.

Ms.

Hughes, are you there?

Okay, going once.

Going twice.

Going three times.

Mr.

Payne, why don't you stick her to the end of the queue, please?

All right.

Our next caller is iPhone.

iPhone, you have two minutes for public comment.

Please state your name for the record and proceed.

Uh good afternoon.

This is Betty A.

Barner, president of DeSoda Elsworth Block Association, advocating for my community and for seniors and disabled folk.

Uh first of all, I want to say if you would like to donate to the goals and missions for DeSoda Elsewhere Block Association, please go to Zale and put in D as in Dog E B as in Boy A W E B as in Boy E L at Gmail.com.

Again, that's uh D as in dog, E B as and Boy.

A W E B as in Boy E L at Gmail.com.

If you know my phone number, you can also go to Zale and donate.

I mean and donate by uh using my telephone number.

If there are uh seniors or if you know of seniors, disabled people who need help in their home.

If you're normally not eligible for Medicaid, this might be the program for you through DAA.

There's a program called My MI Choice Waiver Program.

It's a federal government program that is set up to uh help seniors and people who are disabled, uh stay in their home peacefully and safely and not be in a nursing home.

And what's wonderful about this particular program, if you're normally not eligible for Medicaid, you can earn up to 2900 a month and be eligible and get into this program.

Also, DAA have other programs if your income is over 2900.

So please share this information.

Make the call, uh ask for the application or assistance for the My Choice Waiver program.

It is a very good program.

I'm using it, and I want other seniors to be able to take advantage.

Thank you for this time.

Thank you, Ms.

Verner.

Thank you.

The clerk shall note we've been joined by Member Santiago Romero.

Good afternoon, ma'am.

Clerk.

Thank you, Mr.

Clerk.

Next caller, please.

Mr.

Chair, our next caller is Tyson Gerth.

Tyson Gersh, you have two minutes for public comment.

Please state your name for the record and proceed.

Hi, uh Tyson Gersh.

Um I guess I don't know.

It just feels like a bit of a lost cause sometimes to try and bring things before council's attention.

But um, as it relates to the BZA transcript fee debacle, um, just you know, as a tax-paying citizen.

I don't get why we have created this insanely expensive like paywall through a third-party court reporter.

Um this there's nothing in the state law that would require BZA transcripts to come from a third-party vendor or be certified by a court reporter.

Um we're like the only place in the state, as far as I can tell, that even attempts to do that.

Most municipalities, and I've spoken directly with the city clerks, zoning boards, and even many of the law departments.

I don't know, across 20 municipalities in the state of Michigan.

And um none of them, none of them are doing anything like what we do.

They just uh for the ones that do have transcripts, they just transcribe them in house.

They just set a staff member, record the audio, upload it to Otter AI, and then export it and then tweak it to make sure it's all accurate.

Um, and then that's just attached to the minutes.

Um I don't see why we're not doing that.

There's no reason to be spending hundreds of thousands of dollars on court reporter certified transcripts or placing that attempting to place that cost uh as a wall to obstruct somebody's ability to appeal, like we should just have a staff member doing it in-house.

Um it it would be way cheaper, way easier, and spare everybody a lot of grief.

That's all.

Thank you.

Next caller, please.

Mr.

Chair, our last caller is owner Papa.

Back to Owner Papa.

You have two minutes for public comment.

Please state your name for the record and proceed.

Good afternoon.

May I be heard to the chair?

You may, ma'am.

Uh yes, Carolyn Hughes, as you know.

Um the report that you have for the economic outlook for Detroit is an absolute lie.

We've already heard that the Detroit dropped from one from one stashed statue to a lower statue.

I think it went from 18th largest to 26th, but you're touting an increase.

Well, it doesn't jive with what the national people are saying.

So I don't know.

You guys use voodoo everything.

The young man that just called in is telling you that what you're doing is you're putting undual restress on the citizens to take care of vital processes that they need.

Um all I can say, Mr.

Durh, is that I'm glad that you're leaving from the 7th district.

I really am.

You have not done anything to enhance our lives.

I see people moving in all over my community, a predominantly black community that don't look like me, don't have the same culture as myself.

And I don't I see this as a gentrification for others, not even um considering that we have a right to live in the aviation subdivision without you and the manager uh doing things like uh now we've changing Oakman Boulevard and we're putting in something that we didn't ask for, but the water department doesn't even know what kind of material is going to our our our um homes.

This is this is a waste of money, just as your proposal 16.2 is illegal and immoral for you to take our surplus dollars and cover the holes of decisions that this body has made.

We heard District Detroit is a joke, according to uh someone from the the Brownfield.

But but you all keep voting for these things as if you're living without information.

We have information, and so do you.

Well, Ms.

Hughes, I'm sad to hear you say that because I'm surely gonna miss hearing your voice every single day in committee.

Uh is our last caller, Mr.

Payne.

Yes, Mr.

Chair, that's our last caller.

All right.

So we will now move to approval of the minutes.

Members have been provided the minutes from last meeting.

Is there a motion to do so?

Motion hearing no objections, that action shall be taken.

Next, we'll move into unfinished business.

We have not.

We'll move directly to new business.

Mr.

Chair.

Chair Chair recognizes member vice chair Young, and if the clerk should oh no, he we've been joined by member vice chair.

I don't know if I said that.

I just want to say I'll miss you as well, Ms.

Chair.

I'm gonna miss you two man.

I you know, can't make everybody happy all the time.

Or some of the time.

Um we'll move directly into new business.

Uh line item 6.1 under the office of the contracting and procurement.

Uh line item 6.1 submitting a resolution of authorization for contract number 600 3071-a1 100% city funding, amendment one to provide an extension of time and an increase of funds for facility management services for the Detroit Public Safety Headquarters.

Contractor Jones Lang Lasau America's total contract amount 240.

I'm sorry, total contract amount 5 million uh 39,859 dollars.

The contract increase amount is 240,000, and this is for the office of the CFO.

Motion to discuss line item 6.1.

Motion.

Thank you, member vice chair.

Joining us, we should have Miss Lankows or Crystal Perkins or Arnita Clark.

Good afternoon through the chair.

This is Arnita Clark for the Office of Contract and Procurement.

And this is a um contract administrative DBA.

So Mr.

Roger Short for the DBA is also on the line.

Okay.

Uh Mr.

Payne, we can promote Mr.

Short.

Mr.

Chair, Mr.

Short has been promoted.

Mr.

Short.

Good afternoon.

Thank you.

If you could turn your camera on, sir.

Oh sure.

No problem.

Thank you.

Good afternoon, sir.

Please state your name for the record.

Okay.

My name is Roger Short.

I work for the Detroit Building Authority.

Thank you.

And if you could please tell us a little bit about this contract and the need for extension and the time increase.

Yes.

Yes, Mr.

Chairman.

Again, this is uh for Jones Lang LaSalle.

They manage the public safety facility.

They've had uh they've been managing this for almost uh six years.

Um we are in the process of uh preparing a new contract and an interim.

We just wanted to extend this uh contract for three months, I believe, uh through December to allow for uh uh us to complete the work on the uh new contract.

Uh there's been no dollar amount change here, Mr.

Chair is just simply uh extending the existing contract for three months.

Uh at which time we'll bring forth a new contract.

Okay, I guess that was my key to be quiet.

Thank you.

Uh any questions from members.

Okay, seeing none, is there a motion to send line item 6.1 to formal with the recommendation to approve?

Motion.

Hearing no objections, that action shall be taken.

Thank you very much, Mr.

Short.

Ms.

Clark as well.

Thank you, Mr.

Chair.

Next under the Office of the Chief Financial Officer Line Item 6.2, submitting a report relative to the September 25, 2025 revenue estimating conference report.

Motion to discuss line item 6.2.

Motion.

Thank you, member vice chair.

Hearing no objections, that action shall be taken.

We have Miss Valeria Gali joining us.

Uh if we could promote her, Mr.

Payne.

Good afternoon.

Good afternoon.

Please state your name for the record.

I'm Valeria Goli, acting deputy CFO and treasurer within the office of the Chief Financial Officer, City of Detroit.

Okay.

And do you need sharing capabilities granted for the report?

Um for the revenue estimating.

Correct.

Yeah, we're going to have Sean Tobin.

Um join and Erica Mooney.

And so Sean Tobin will need um sharing rights.

I just wanted to start by letting everybody know that the um September Revenue Estimating Conference was held on September 22nd.

The revenue estimates include the current fiscal year 26 and estimates for the next four fiscal years through fiscal year 30.

Um, the principals of the revenue estimating conference, which include our CFO, Tanya Stademeyer, Dr.

George Fulton with the University of Michigan Department of Economics.

George Fulton with the University of Michigan Department of Economics, and Eric Bustis, who is the chief economist with the Michigan Department of Treasury, approved the city's uh official economic and revenue forecasts at that time.

Today we have Sean Tobin, who is Treasury's Deputy Director of Strategic Finance and Analytics, and Erica Moody, who's Treasury's economist here to make a short presentation.

I also wanted to mention that details about the forecast and the estimates, including a video recording recording of the conference, can be found on the city's website in the OCFO section.

And you can just Google OCFO financial reports and click on the green box called revenue and economic reports.

So with that, I'd like to turn it over to Sean and Erica.

Okay, well, hello.

Yes.

Ah, okay.

Excellent.

Thank you.

Let me go ahead and share my screen.

Okay, and if we can just stage your name for the record as well.

Yeah, absolutely.

My name is Sean Tobin.

Um, I am the deputy director of strategic finance and analytics at the Department of Treasury.

And excellent.

Uh what can you see the presentation all right?

We are still waiting for it to load.

There it is.

Excellent.

Hi.

Yeah, no, as I said, uh my name is Sean Tobin, um, direct deputy director of strategic finance and analytics.

Um, and we are here to make a report on the revenue estimation conference that we uh did last uh September 22nd.

Um I'm joined here today by Erica Mooney, our economist, and I will start this presentation and she will take over about halfway through.

Um this slide here uh basically reviews a lot of the information that uh Valerie uh went over.

Um information about why we do the uh revenue estimation conference, we do it twice a year, and who are our principals.

Okay.

And oop, sorry, go back.

That's not looking correct.

Um the uh numbers aren't appearing appropriately on this presentation, uh, but I've got them in front of me so I can I can speak through the different things so everyone here uh can understand this chart.

Um, as mentioned, this uh conference uh started the process for adopting the uh fiscal year 2027 budget.

Um it's basically round one.

We're going to continue revising this and keeping track of different economic indicators between now and February.

Um in February, these estimates will be revised again and then finalized for the next revenue estimation conference.

Um these uh estimates that we make in February will form the basis for the uh budget revenue that they will use uh to finalize the budget for fiscal year 2027.

Um now to describe this chart uh and again apologies.

There's a couple items that don't seem to be appearing on my end.

Um if I can be allowed um share screen.

I have it up on my end if that would make it easier.

Yeah, let's go ahead and give that a go.

Apologies to everyone.

I'm gonna stop sharing.

Okay, just to confirm, can you all see the screen?

Yes.

Yes.

We can.

Thank you, Sean.

All right, yeah, thank you, Erica.

Um, so as this chart describes, we're uh estimating uh roughly 2.66 billion overall uh for funds in 2027.

Um the majority of that is compromised by 1.4 billion coming from the general fund, um, and then 739 million from water and sewage, and then other revenues are going to come uh prize further 500.5 million.

Uh and these other revenues include things such as the street funds, public library, and UTGO debt service.

Um if you could go to the next slide, please, Erica.

Okay.

So what has changed since February?

Um a couple things have changed, most notably some federal policies have been affecting a lot of the macroeconomic environment.

Most notably, some federal policies have been affecting a lot of the macroeconomic environment.

Top of mind is the One Big Beautiful Bill Act signed July 4th, 2025.

We'll speak more about that when we get to the income tax revenue estimates in a moment.

But also affecting things are the tariffs that were introduced starting in April 2025.

Of particular interest are the one are the tariffs on steel and aluminum.

As an upside, we did have internet gaming activity jumping in the first half of calendar year 2025.

So that's a bit of a counterpoint there.

And another counterpoint is that the federal open market committee most recently cut is its effective tax rate by 25 basis points.

So going from a range of 4.25% to 4.5% to 4% to 4.25%.

All in all, what we're noting for a lot of people within the studying the macroeconomic environment is that there's a high rate of uncertainty for both consumers and businesses.

So it's something that we're paying very close attention to.

Next slide, please.

Okay.

So this chart shows basically compares our last revenue estimates, the current in an aggregate amount form.

You'll notice that there was a revision down, a general revision down across all years between our February revenue estimations and the current.

A lot of that is going to be driven by some actual changes that we saw, as well as anticipated changes from the One Big Beautiful Bill Act, mostly circling around corporate income tax revenue.

And once again, I will have more to say on that in just a moment.

But as a brief overview, we're looking at growth rates of about 1.6 to 2.8% year over year from fiscal years 25 to 29.

And you'll notice that we don't have a lot of non-recurring revenue forecasted.

Those are things that we realize as come through.

So you'll notice those numbers are quite small in the out years.

If you could go to the next slide, please.

Okay.

So here's where a lot of information is going to be talked through.

And once again, as Valerie called out, if you want more detail on this information, we do have the full recording and report and some other information out on the website.

You can find that at DetroitMI.gov slash budget under the revenue and economic reports link.

Okay.

So what this chart shows is that the detail of all of our major revenues, major recurring revenues.

I'll cover the income tax and property tax portions, and then I'll kick it over to Erica.

So for income tax, we have as subgroups, we have withholding, corporate income tax, individual and partnerships.

So what I want to talk through are some of the risks that we're paying attention to forming these estimates.

From an industry standpoint, one of the risks that we're noting, as mentioned earlier, is tariffs.

The big players here include Stillantis and to a lesser extent GM.

The dynamics around these will have some effect on the corporate income tax revenues, as well as potentially in the future, the withholding.

So that's something that we're paying attention there.

As an upside, another industrial thing that we're keeping an eye on are the interest rates as mentioned at the top.

That's going to play into major employers here in the city, such as Rocket.

And that will affect withholding.

So the linkage there is understood to be if Rocket does well, then more of their they'll hire more employees, and then we'll see more revenues from that.

And then lastly, from an industry standpoint, we're seeing some changes to university and healthcare funding coming from changes at the federal level.

And this may indirectly affect some of the it'll directly affect some of the employers, such as Wayne State, the Detroit Medical Center, Henry Ford Health and Ascension, Michigan.

And those may uh come into indirectly affecting our revenues.

So it's something that we're paying attention to there.

So I had mentioned earlier that there is a pretty big effect to corporate income tax via the One Big Beautiful Bill Act.

Basically, the mechanics of how that works is the One Big Beautiful Bill Act changed how corporations calculate their taxable income.

And effectively they uh created, they extended some of the things from Tax Cut Act from 2017 and increased them to some extent.

Uh, basically changing things, changing rules around items like bonus depreciation, um, qualified personal property um exemptions and uh research and development payment exemptions.

Um expensing.

I'm sorry.

Uh I misspoke their expensing.

Um the way we did this research is uh we utilized some numbers published by the joint committee on taxation, and then we walked that we walked their federal level estimates down to the local level uh based off of um local employment and items like GDP ratios.

Um that's how we got to uh measure the amounts affecting us here.

Um that's kind of a broad thing of everything that we're looking like uh looking at uh coming into the income tax um revenues for property tax, property tax collections luckily are uh doing well.

Um they are increasing year on year, uh, mainly due to higher build amounts and consistent um consistent collection rates.

Um what we've seen noting uh fiscal year 2026 so far is that we are higher on the dollar by dollar for dollar rate um than we were uh last year at the same time.

Uh so with that, I'll kick it over to Erica and she will take over for the remaining majors.

Good afternoon.

My name is Eric Mooney, and I'm the economist um within the Treasury Department.

I'm on Sean's team.

Uh thank you for having us today to talk about the uh revenue estimates.

Um I'm excited to get to talk to you again um this year.

Uh I get to see you uh twice a year.

So it's always it's always great.

So thank you for having us.

Um my portion is going to start with the wagering tax, uh, which is in the blue section that you can see on this chart.

Um you'll see we had a nice increase between fiscal year 24 and 25, as Sean mentioned earlier, due to a jump in uh internet gaming.

So the new data that we got since February uh was between uh December and then July of this year to inform our forecast.

Um we just as a note, we don't expect the same growth trend to continue.

So for example, if we've seen historically a 20, 30, 40% annual increase in activity, we don't expect that going forward.

Um in the forecast, we build in about a 1% annual growth rate.

Um so we're we're sure to see some upside there come February.

Um again, the wagering tax is the tax on the three casinos in the city, um, and it's taxed on the adjusted gross receipts that are published by the Michigan Gaming Control Board.

And those are publicly available.

Um next, I'll move on to state revenue sharing.

Uh, state revenue sharing is composed of two parts, a statutory and constitutional.

Statutory is the portion from the state, as much as they have to a lot, they will uh break that out between the municipalities, and they say you'll get a certain percent of what you got last year.

Uh constitutional is based on sales tax and is uh distributed based on a population basis.

Um on the one hand, they've lowered their sales tax outlook um since February.

Um, but we do see some positive uh population news in the RSQE uh forecast that's attached to our report.

They did have a section on population that is looking positive for the city.

Uh so that's great news.

Um with the with the constitutional formula, however, it is only refreshed after every 10 years.

Um that population growth will have to continue into 2030 for that formula to give us a positive effect on our revenues.

Uh moving on to the gray bar on this chart here, the utility users tax is the 5% tax on consumption of electricity and natural gas.

Um for this forecast, we mostly use the actual data that comes in every month provided to us by the um distributor of that revenue.

Um but this is informed by things like weather trends or things such as the CPI for electricity and natural gas, um, which are both things that we look at before we make our final recommendation for this forecast.

Okay.

So those are all of the the five what we call major revenues for the recurring portion.

I will go to the next slide.

Um on this chart are what we call recurring other revenues for the general fund.

So the general fund receives revenues uh in addition to the major revenues.

And these are also really important to talk about.

We work with the budget team on a lot of these items.

So thank you to them for all of their work on updating these forecasts.

I'll shout out a couple on here.

And again, if you if we need more detail, we can go into those.

Large one here is a casino municipal service fee that we'll track with the overall wagering tax forecast.

We have EMS fees, licenses, state shared marijuana tax revenue, court fees, and then a group called all other, which includes things like IABs, earnings on investment, and then operational fees.

Let me go to the next slide here.

So together, major revenues are in the green bar here, and then the other revenues are in the blue bar, just to give us an idea of the scale.

And looking overall at the general fund revenue, we're forecasting about a 2% growth rate year over year for the recurring portion of our general fund revenues.

And fiscal year 25 on this chart, it will say pre-audited actual.

So these are numbers as of the end of August.

So these are revenue that's in the system, but these are likely to change as we go into the audit in these last couple months of the calendar year.

On this slide, we show our non-general fund revenues.

So, you know, large additional revenues for the city, but are not necessarily part of our general fund.

And so we see things like water and sewerage, grants, major streets, transportation, solid waste management, and debt service.

And grants and all other, all other would include things like other grants or CVG, anything like that.

Okay.

I will go on to the next slide.

This is our slide that we like to show for budget reserve.

We show this every round.

And just to remind everybody, by state law, the city is required to keep a 5% ready date fund.

And so as you can see, the the yellow line there is the 5% minimum requirement.

And then the green bar is the budget reserve balance.

It currently stands at about 150 million.

So to wrap up, I just want to, you know, reiterate some downside risks that we're considering, especially as we start our preparation process for the February conference in the next couple of weeks.

So I'll highlight, you know, two of these.

Um, but this is on the on the website, and we can also go into any more of these in detail if we need to.

So on the left here, when we're talking about downside risks, I think this is a huge one, um, uncertainty and unpredictability to employment from federal trade and fiscal policy.

Um, we have, you know, we're we're reading the same headlines that you guys are reading.

Um news continues to come out, I think every week.

Um, I think I personally get about three breaking news emails uh almost every day.

So that is stuff that we are tracking and making sure that we have a good understanding on before we build it into the forecast uh to change these revenues.

Um, you know, even things that are affecting the labor force are continuing to come out uh after the September conference.

Um we're keeping and tracking, keeping an eye on and tracking that as as best we can.

Um the other the other one that I will highlight is this last one here, the shift in wagering tax behavior pattern from historically positive trend.

It has been historically positive.

Um, and the forecast does assume a 1% growth rate.

I will note here that even though we included it in a downside risk here because of the volatility, um, the there will be some upside as the casinos are able to claim less uh free play in the next couple of years.

Um on the upside potential, I would also like to highlight the first note incremental employment from economic development initiatives.

Um so any project that has yet to start has not been included in things like the withholding forecast where we would see a bump in employment.

Um then the other one that I would like to highlight is the increase in property property sales, excuse me, uh leading to uncapping.

So that is not something that we consider in our property tax forecast.

So as taxable values uh increase or uh properties change hands, um that will give us additional upside in the property tax forecast.

Um thing that's not on here, but Sean did mention earlier that I wanted to reiterate uh before we conclude our presentation today is uh the news on interest rates.

So we've seen the uh payroll employment in the finance industry uh on its way up.

I know a couple of rounds ago I presented that that was a downside risk.

Um, but that's turned around.

So happy to report on that.

Um I think that that concludes our presentation for today.

So we just want to say thank you for for your time listening to um what can what is you know very interesting topics for us.

Um so thank you so much for your time today, and I will turn it back over to Sean.

Yeah, thank you, Erica.

I think we should actually turn it back over to Valerie or the uh committee.

Um thank you, everyone.

Thank you all for that presentation.

Uh we will now go to questions from members.

Chair recognizes member Santiago Romero.

Thank you, Mr.

Chair, through you to our presenters.

Good afternoon, and thank you for uh sharing this with us.

I have brief questions uh mainly regarding population growth.

Um it was noted that Detroit has the highest number of residents under 17 compared to other major cities.

Are those major cities in the state of Michigan or in the Midwest?

Um those are across the Midwest.

Um if you look at the RSQE report, they actually have a very interesting uh map that shows which cities that they are working with.

Um I'm a big fan of maps, uh, so I was really happy to see that included in their report.

Okay.

Um and then it also noted that Detroit's um the median age is 35 years old, but that was in 2023.

Are we assuming roughly the same amount for now?

Are that same age now?

Yeah, the the median age that they report here is gonna be the most up-to-date information.

Uh so that is the best estimate that we have now.

Yes.

Okay.

Because I'm trying to figure out um what this information is telling us and what we should be doing as a city.

Um we have a lot of children.

Um the unemployment rate um is not at its worst, but can definitely um we we need support for our families.

We just all saw the news how child's poverty has grown.

Quite frankly, that means that we have more impoverished families um that are taking care of their children.

Um and it's noted here that blue-collar jobs currently have the highest employment in our city compared to higher ed services, correct?

Yes, ma'am.

Okay.

Um for me, it just sounds like we need to be investing in transportation to get people to the jobs.

Um, if if we are providing good union jobs to folks and child care, which we keep talking about often.

Um, but thinking, I'm just trying to figure out what the data is telling us and what we should be doing uh to better support our residents.

Uh thank you.

Thank you, Mr.

Chair.

Thank you, Member Santiago Romero.

Uh wanted to ask a question just in regards to employment count uh and employment rates.

Uh definitely know how that works.

Uh, but oftentimes some of the data that is utilized uh when we talk about the rate of unemployment is based off of folks who have filed uh unemployment.

The issue with that is uh when they fall off that roles or those roles and we stop counting them, uh that doesn't mean they got employment, but they're considered displaced workers.

Uh through your studies and your research, do you guys do anything relative to workers who may have been displaced for a certain amount of time beyond that period that they fall into the unemployment rate uh and and track uh if they have found jobs uh in this data that you have or any data that you may have?

I'm not aware of that.

Um Erica, are you aware of whether RSQE tracks that metric?

Um no, not at this time.

Thank you.

Okay.

Um and did want to uh did want to kind of just touch on as we talk about population growth.

I know member Santiago Romero touched on that just a a tad bit uh when we look at the median age.

Um from and obviously we can only see what we see here in the Midwest, but just curious if you had any other data from other cities that may be closer uh regarding um, you know, besides the besides some of the ones that are listed that have kind of some of the same factors as uh Detroit.

So for instance, we look at uh Columbus, uh looks like the high percentages their their medium age falls kind of in the 30s and upper 30s as well.

Uh are we finding trends uh relative to because this this is around the time some folks say that you start a family or uh you're a professional, you're coming out, you're in the the height of your career.

Um do we know what kind of contributes to that specifically for our city per se, with the you know, compar in comparison with the number of jobs or housing opportunities or what uh what may have you?

As per driving the composition of different ages, um I'm not sure if I can speak to what's driving that particularly, but the the knock-on effects of what that might mean for the broader economy.

Um has to do with um it's a very good question.

Um basically what you want is you want um a good spread of different ages um to have a healthy economy and uh good opportunities.

Um sorry, I'm having uh trouble starting uh responding to your answer, Erica.

Do you think you can take over for me, please?

Uh yeah, no problem.

Yeah, no, I I think it's a great question also.

I know when RSQE looks at their report, they do their best to find cities that are quite comparable to Detroit.

Um and these ones just you know, they're close geographically as well as in some other metrics.

Um, but in the report, you know, they always they do mention um investments in education.

I think that that has been proven time and time again to to lead to great jobs, great paying jobs, um, which you know we all want for Detroit residents.

Um so you know, part of the the great news about this, and it's in our forecast report too, or conference report, excuse me, is that resident employment is high.

2024 and 2025 has seen great levels of resident employment, and I think you know, investing in in the education of of folks this age and younger is critical.

Absolutely.

And I ask that because as you look at as you look at the trends, uh, and and these numbers are um you know, begs the question that to ask deeper questions, which I know uh you can't totally answer uh beyond that.

But um, you know, I'll give you an example in your chart.

I'm looking at Madison, Wisconsin.

So the type of talent that we're trying to retain here and or attract here, they're attracting or retaining twice the amount that we are in Madison, Wisconsin.

So, you know, that that begs the question of what's that catalyst uh that's attracting folks to either uh come there or retaining the talent that they have for folks who may go to uh college there.

Uh same trend when you look at uh Pittsburgh, um uh and and I think those were the two that stood out because they're close to twice as much uh as then what what we have here uh you know begs the question of you know again what what attracts or retains uh that that demographic uh or that age demographic uh in their uh states.

Um but other than that, that concludes my questions.

I don't know, member vice chair, if you had any questions you want to chime in on chair recognizes member vice chair, yeah.

Yes, thank you.

Um I was looking at the municipal income tax, and you were talking about how we are seeing a reduction based on the one big beautiful bill.

Um and uh you were saying that I I just want to make sure that I got the understanding of that.

Are you saying that the reason why we're not gonna be able to receive the revenues that we're receiving one is because we're relying on the federal government uh income tax part and the and the deductions that are in that bill?

Is it the cuts that are in that bill?

I also just wanted to I just wanted to ask you, this is not about um the income tax, but just as a whole, from my understanding, according to Studies Research Council, because of this legislation, uh it's gonna be like a 40% cut to Michigan's budget.

I think about a billion dollars, so give us take.

So when I just want to know, do we have an understanding of how that impacts Detroit specifically from that standpoint as well?

So can you just explain to me the income tax portion?

How are we gonna be affected by that, and then just the overall impact that we have from that legislation locally?

Yeah, 100%.

Thank you for that question.

Um, so that CRC report that you're referencing is actually uh where I started.

I came across that report looking for you know any um other research that people were doing on how federal legislation might be affecting our economy locally.

Um and I reached out to the people who were working on that, and I got directed to some folks at the House Fiscal Agency.

Um that's actually where we formed the basis of our analysis.

Uh looking at the income tax portion, um, effectively what's happening is the One Big Beautiful Bill Act changed how um corporations can measure their federal taxable income.

And um the city of Detroit basically shares that same definition.

Um if you look at the statute, it says um uh using the definition from IRC, I believe it's section 63.

Yeah.

Um, exactly.

And um basically using that definition, um, we start the um we start the calculation of what the tax liability is here.

Um if you look at the federal federal filing uh forms, there's gonna be a series of steps before you get to that line, um, which could change how much that federal taxable income is.

Um and we identified five different things that were changed by the one big beautiful bill act uh that would effectively reduce the amount of taxable income due to the city of Detroit because we share that same line item from the federal form uh before apportionment.

So uh those the those five items are uh bonus depreciation, um research and experimental expenditures expensing, qualified production property expensing, uh business interest limitations, and section 179 expenses of certain uh depreciable business assets.

Um those were all identified via um some estimates made by the joint committee on taxation, and like I said in the uh presentation earlier, we walked that down to the local level using um an economic formula, and a lot of these hits are gonna be front loaded, but effectively what we're estimating is roughly 16 million for uh fiscal years 26 and 27, and then ramping down from there uh by fiscal year 2030, we're estimating that to be just under 8 million.

It's in terms of the reduction that we're gonna have.

Uh reduction in corporate income tax revenue.

Will that potentially I mean I I I hate to say this, uh and I'm not prognosticating here, but because we're so reliant upon our income tax over other cities, um, could that potentially put us in a recession?

Um does would that would that would they also would that also have an impact on the income tax the whole the rest of the income tax collections?

And then could we potentially be in a recession?

I mean, that's still that I mean that may not be necessarily a lot of money, but that is I'm looking at this percentage number that I saw for the income tax, and it says 41.5% reduction in corporate income growth.

That's a precipitous fall.

So I just want to know is there is uh I guess what's the word called contagion with that?

Does that does that hurt the rest of the income tax?

And then does that potentially put us in economic well, well, maybe not maybe I shouldn't say recession, but does it put us economic harm or do we have exposure to economic decline?

Um so that the that percent decrease, I believe what you're referencing is actually a composite.

It's both this one big beautiful bill act effect as well as in fiscal year 25, we saw um a slowing of corporate income tax revenues compared to the trend we had been seeing in prior years.

Okay.

Um so that would um the composite effect there is one uh one part or one big beautiful bill act, and another part uh slowing of corporate income tax revenues that we believe is tied to um uncertainty, uh business and consumer uncertainty, as well as um planning for the tariffs.

Um that took up that were implemented in April.

Okay.

Well, uh and let me make sure I appreciate that, and this is gonna be my final question.

I want to make sure I get this clear here.

I'm looking at this, I'm looking at this proposal, and I and for and I'm not asking you to tell me what to do.

I just want to know what the climate is going to be.

And the reason why I'm asking that is because I have to decide as a decision maker, do I need to start making start talking about counter-cyclical budgeting?

Do I need to start talking about performance budgeting?

Do I need to start talking about um zero-based budgeting?

Do we start implementing staff to um manager ratios here?

Do I do I do we need to start your engaging austerity measures?

Or are you saying that based on this, we would have enough money for your, I just want to know from your understanding, based on these projections, would that be an overreaction?

Because even though our corporate income tax would be hit, we still would make so much money from our individual and our partnership that we would be okay.

Sean, may I um address this question through the chair?

Thank you.

Um that's a very good question, and we do know because of the revenue estimate forecast for fiscal year 26 and our team's um forecast on the impact of the one big beautiful bill that Sean talked about, as well as lower profitability among our corporate companies.

Uh we do know that that was one of the reasons why the CFO recommended and the city council approved the corporate income tax reserve to use um a portion of the expected fiscal year 25 surplus, um, which won't be finalized until the end of December when the audit is finalized.

But the expectation is that that surplus will be at least 60 million.

And so one of the things that the city council we know approved this week to um to buffer against that is using 42 million of that fiscal year 25 surplus anticipated um to set aside in a reserve as we carefully watch corporate income tax at the city level, those revenues come in for fiscal year 26.

Um so that is one huge step that we think has been taken.

And then as Sean and Erica talked about the um estimates for fiscal year 27, which we you know they started that now, the revenue estimates, and we know um in the February update, that will be the amount, those revenues against which the city council and the administration will develop the fiscal year 2627 budget.

Um, that those are the kinds of things that we need to do as a city to make sure that we're short up against any um any reductions.

And so that's why we think looking at this so far ahead, and that's why it's it's um so prudent that the city does its revenue estimates, as I said, you know, for the current fiscal year and the next four fiscal years, that puts us in a much better position to look at um at expenditures and um uh you know, handle anything that comes before us.

And it's part of the reason why we're having this income tax fund that you want to create is so that we don't have to dip into a rainy day fund because I'm because I'm looking at it, I think it's got like 160 million dollars in it, but I know that's one time.

And so I think that if if you if you collect it the way you're collecting it now, you don't have to constantly dip in that because you have funds that are readily available.

Am I correct on that?

Yes, the ready day fund it's 150 million.

150 excuse.

Um and no, that's it.

That's fine.

And um, that is something, you know, we we the CFO could speak to it more directly, of course.

Um, but I I know that is something that she doesn't want to touch.

Um, we are anticipating these revenue reductions in our city income tax revenues.

Um, so we have time right now to address it and and not have to go into the rainy day fund.

Okay, okay.

And and and then this is my this uh I know I've been saying this, but uh I just wanted to ask you as well.

Do we have uh I'm looking at this, I haven't read through it, so forgive me if I um if I forgot about this, but do we have an analysis of how much this revenue that we're generating would have in terms of how much of an analysis of how much this would be able to reduce um the debt that we have in the city and not just as a whole, but also per person?

I mean, I I I looked in truth and accounting, it says we have like $1,600 per person in terms of debt.

Uh would this reduce do you think that this budget would go towards us reducing that further?

Would that be neutral or would that increase because of the lack of money that we're receiving, potentially could be losing from the corporate income tax side?

Um so right now with the city's outstanding debt, we have debt service schedules um that are set when the um money is borrowed, and um we are definitely budgeted to make all of those debt service payments.

Um, if there are opportunities in the future, and I don't believe there are any currently with our outstanding debt to refund it and have a present value savings to change the debt service schedule, we would consider that, but the city does not have any variable rate outstanding, so all of our debt is fixed rate.

But the city does not have any variable rate outstanding.

So all of our debt is fixed rate.

We know in advance every single dollar that we'll owe every fiscal year.

Okay.

Thank you.

I appreciate it.

Thank you, Ms.

Chair.

Thank you, O Doug.

Thank you.

Member Vice Chair.

Before I go to you, Mr.

Corley, just a really quick question.

And noticing again in the report, when we talk about income tax collection slowing down, we do know that there was an anticipated 3% decrease every year, noting how the state helped us collect you know a lot of these as well.

And so we expected to see a decrease.

But my question is in the report, what I found interesting, it was a mention of we're starting to see that we work remote work has slowed down.

And I was just curious to know if we checked trends and surrounding areas as well, uh, relative to remote work and to be able to quantify that uh in surrounding areas as well.

I think that one is best suited for you.

Yes, great question.

Um so we do still have uh remote work uh refund estimate included in our income tax estimates for fiscal year 26.

It's about um 24 million, I want to say.

Um, but yeah, I I definitely think that remote work has stabilized.

So I think you know, going forward, I think we're going to see this level of refund, this about 60 million a year as our new normal.

Um, but you know, we we're still hearing stories about companies bringing their workers back to Detroit or back in person, excuse me, but for Detroit specifically, you know, I haven't heard any major changes over you know the months between the February and the September conference.

Um, some you know close to Detroit, but not necessarily within the Detroit borders.

Um but yes, I think that the 60 million total refunds is is our new normal level of activity.

And then I found it interesting in that same paragraph you mentioned um how future tax growth it will be dependent on the raising of wages um for jobs as they become obviously more competitive, but better paying jobs for residents equal obviously more revenue we're able to generate an income tax.

Um are we seeing some of the same trends even as we talk about wages?

And I'll give you an example.

Um, you know, certain in this region particularly, uh, wages may not be as competitive as a New York, or they may not be as competitive as a California or Miami, Florida, things of that nature.

Um where are we standing with that trend, knowing that as to your point, remote work is starting to become a little bit more stable uh or or steady, should I say, um, do we anticipate that we're going to see even a higher surge as folks are coming back into off or come back coming back to the office?

Are these jobs going to become more competitive in our city or in this region?

Yeah, great question.

Um yeah, I think it it depends on a couple of things.

I think the the answer, if I asked the RSQE team, I think they would say the same thing.

I think they would say it would depend on on the type of jobs.

Um I know I can speak for our withholding base.

Um there will be an increase in withholding revenue um if there is an increase in either employment or wages.

Um, so if we're seeing, you know, not necessarily any changes on the employment side, but we are seeing good changes on the good increases on the wage side, then we would see higher revenue.

Um then on the flip side, if you know, if wages are starting to plateau, but we're seeing increases in employment, that's also going to give us a bump in withholding.

Um, but overall, um, the between February and September um payroll wages are um expected to stay steady.

Um, some industries are expected to do better than others.

Um, so for example, for professional and business services are expected um to have increased wages across the forecasts.

Um then if if 2024 data came in weaker than expected, so some of those industries are are coming down.

Um, but I I think it would you know be a discussion of is the industry first you know eligible for remote work?

Um, and then what percent of our payroll uh as part of withholding, you know, uh is uh positions that are eligible for remote work in the first place.

So yeah, I think there's a a couple of points to your question.

That's a great question.

Okay, thank you.

Uh Mr.

Corley.

Thank you, Mr.

Chair.

I just a few comments.

Um first, I just want to continue to applaud the Office of Budget and the Office of Treasury in their hard work in putting together these um revenue estimates.

As you know, they meet with the um the general's office as well as LPD fiscal before they go before the revenue conference board, so we appreciate the details that we do get from them.

Um and we are you know generally in concurrence with these revenue estimates.

Um we're hopeful that the general fund surplus as of June 30, 2025 will be higher than 60 million dollars.

Uh Ms.

Dademeyer has alluded to that in some of her comments um previously and fairly recently.

Um I will say though, in terms of total net general fund revenue, the September conference reflected a 31 to 48 million dollar shortfall in revenue over the forecast period.

And that's the lowest amount of revenue that we've seen since the pandemic, not as dramatic as the pandemic impact, but that's the most we've seen in terms of overall decline, which means that the fact that we're we're no longer gonna have ARPA dollars, as we all know, in a cup in a year or two, um, and less federal dollars.

We have to rely the city of Detroit more on the general fund revenue that it has.

Um hopefully in f in February, there will be some increase in the overall general fund revenue.

Usually there's an uptick from September to February, so hopefully that trend will continue, but um we have to really take a close look at the corporate income tax uh revenue um as we discussed earlier.

Um in terms of Detroit's population, and I know Councilmember Santico Romero alluded to this.

What we notice is that the prime working adults, which is between 18 years old and 54 years old, is lower compared to other comparable cities in City of Detroit.

So hopefully the current administration, current council, as well as the new administration and the next council will have policies to somehow increase the availability of individuals between 18 and 54 to have a better chance of getting a job, and hopefully a higher paying job.

Um we know that workforce development is extremely important, training is extremely important, and encouraging individuals to get um as much college education as possible.

Also, what was noted was that the average wage per capita in the city of Detroit is about half of the state's average.

I'm sorry, it's about half of the overall payroll average in City Detroit.

So there's there's a uh measure of the total amount of people that work in the city of Detroit that's includes suburban nights, of course, and then just looking at Detroit residents.

And so when you compare the average wage per capita for the residents, it's about half the size of the overall payroll per capita in C Detroit.

So that's something else that we need to try to improve moving forward.

We talked about the impact of the uh big beautiful bill um on particularly on on uh corporate income taxes, and it was um wonderful that city council approved the 42 million dollar you know corporate income tax reserve fund this past um uh Tuesday, well, yesterday actually.

Now on the positive note, excuse me, there is uh uh a sizable expected increase in internet gaming, and that seems to continue.

So um that's that's a positive thing.

Also with the property tax values continuing to grow, we're seeing an increase in property tax uh revenue, which is good.

Now, state revenue sharing, but what I can see coming out of the budget that's that was just passed at the state level, there could be about a seven million dollar drop in state revenue sharing um based on the change of the impact of the budget on the constitutional portion of state revenue sharing.

So we have to look out for that.

And I talked about the resilience.

I talked about the resilience of the city of Detroit and the fact that you know we're still doing, I think, a good job in monitoring these revenues, um, making the necessary adjustments moving forward.

But again, um we also have to make sure that if there are any shortfalls that's coming up in expand in expenditures that the administration will be working feverishly to keep those in line.

And I do know that the Office of Budget meet with the departments on a monthly basis.

So the hope is that any um mid-year budget amendments they that would possibly come to city council would be smaller in size, you know, you know, with the hope of their monitoring those expenditure levels.

So moving forward, we believe that um the city is gonna it's gonna do well, you know, but it's gonna be tighter.

And with the um the corporate income tax reserve fund, hopefully that's gonna guarantee that we'll end up again with a surplus at the end of June 30, 2026.

And I always like to remind the council, and this is my last comment, we got four years to receive down this budgets.

If we do that, we cut we come up from under the financial review commission, and that would bring wonderful news worldwide, and I believe the new administration and the new council is gonna do it.

So thank you so much.

Thank you, Mr.

Corley.

Chair recognizes member vice chair, general.

Thank you so much.

I appreciate that.

Uh Mr.

Corley, I just wanted to say I was just looking at the um some analysis, and it was saying that we probably have about like one job per or roughly one job per two residents in the city of Detroit.

I just want to know if we continue to go, maybe this is not to you, maybe this is to the economic beauty of the analysis, but if we continue to go on this route with the budget revenues that we have now, the economy that we have now, do we see that increasing over time, or do we see that decreasing?

And then you said something about uh wages, because I'm I'm looking here at this report, and it says that for Detroit residents, uh we see uh a stronger average wage growth of 7.8, and they expect wages to grow at a moderate but steadier pace through 2030.

And so I just want to know do we continue to think that that's going to happen throughout this year if we keep the budget basically the way that it is, where we where we keep things on target like you were saying earlier, in terms of getting under the Financial Review Commission and things of that nature, do we see those things staying consistent?

Or are we gonna have to make decisions?

One to get the budget under control, so cuts or reforms, and then secondly, just because of the uncertainty that we have with one beautiful bill and tariffs, is there no way we really can predict that wages will continue to grow at the way that they are?

Yeah, Mr.

Chair, I think right now it looks consistent, but it's very is really contingent on the impact of terrorists moving forward.

Right now, corporations in Michigan are absorbing the cost of the terrorists.

But if it gets to the point where the terrorists are too onerous on their bottom line, they may need to share jobs.

And so that's hope that the tariffs, you know, uh policies will stabilize to the point where they're not so onerous on the businesses, and they and they would not need to, you know, uh cut as many jobs.

But right now, it looks it looks fairly consistent.

Okay.

And I just want to ask, um recently they uh just implemented, I think it's about like a 24% tax on uh marijuana businesses within this within the state of Michigan.

I just want to know do we know what sort of impact that has in the city of Detroit?

From what I understand, I think that's like 46,000 jobs or something of that nature.

That's the anybody from the uh apologies.

Um Eric, I see you coming off mute.

Um if you can answer that, thank you.

Yeah.

Um, yes, I saw the same thing.

Um, so that is something that we will definitely be keeping an eye on.

Um, as for the revenue that the city receives, um, I still have yet to kind of establish that link.

Um, but this the revenue that the city receives is more based on the number of uh active licenses uh and relative to the state.

So the number of licenses in the city relative to the state, um, as well as the overall uh number of sales tax that is available.

Um so I still have to look into the details of that of what the terms are gonna be in regards to adding to the overall you know, quote unquote bucket of revenue that's going to be available to be distributed amongst municipalities.

Um so that update is uh to be determined.

Yeah, because I I I know I I think it's like per person, like from the state, I think it's like 58,200.

Like per business, excuse me.

I think so somewhere so somewhere somewhere in that number.

I I I forgot what the exact number is that we received from that, but I know like part of the business that we have, we receive that.

And I wasn't there that's a good point where you're talking about in terms of revenue.

Uh in terms of I I just want to know just economically speaking, just from the the the and I guess we'll have to wait till the report comes out, but just the jobs standpoint, just in terms of what does that mean for Detroiters, the average wages, because a lot I I just know this this is not scientific though, but I just know a lot of people that got their first jobs based on these marijuana businesses.

And so I think for that to start closing up, I think it might have a uh effect on the economy that we don't want.

And so I just want to make that point clear.

Thank you, Mr.

Chair.

I'm done.

Thank you, member vice chair.

All right, seeing no further questions.

Is there a motion to receive a file line item 6.2?

Uh exit job, everybody, by the way.

Motion.

Here are no objections.

That action shall be taken.

And thank you all.

And again, uh, as member young just indicated.

Great job on this report.

Uh, thank you for answering our questions uh as well.

Uh so thank you so much.

And thank you to you, Mr.

Corley, as well, for your questions.

Next, we will move to line item 6.3 under the office of the city clerkslash city planning commission submitting a resolution of authorization for line item 6.3, the neighborhood enterprise zone certificate application for the rehabilitation of a house at 264 Watson and the Crosswinds Woodward Place Neighborhood Enterprise Zone Area.

This has been recommended for approval by the CPC.

Motion to discuss line item 6.3.

Motion.

No objections.

That action shall be taken.

Joining us, we have Mr.

Gulach.

Good afternoon, sir.

If you can introduce yourself and then have the petitioner introduce themselves.

Good afternoon, Mr.

Chair.

Chris Gulak with the CPC staff.

And hello, my name is uh Steven Peter Basile.

I'm the petitioner and uh homeowner.

Mr.

Chair, I have a brief uh slideshow.

Would you like me to go through that?

Yes, sir.

Thank you.

Thank you, committee.

Uh, this is at 264 Watson.

Um next slide, please.

This is located in uh brush park on the south side of Watson Street between Brush and John R.

You can see the red dot on the screen.

Next slide, please.

This looks at the house that's um uh on the south side of Watson.

I think they've currently built a park just to the um west side of this house, and uh there's other development going on as folks know in the brush park area.

But this shows the front of the house.

Next slide, please.

And we confirm this is in the crosswinds north woodward any established by city council back in 1996.

Uh the petitioner is with us, uh Peter Basil Basile.

Uh Brush Park is a historic neighborhood.

This house goes dates back to 1883.

I understand it's been vacant for a number of years.

Uh Mr.

Basile purchased the house and is proposing to renovate it for his family.

Next slide, please.

The house is has about 2500 square feet.

Um it's been as I said, it's been vacant for a number of years.

Uh Mr.

Basil purchased it for his family, like to move into the house after the renovation is completed.

Uh they're proposing about 1.4 million in restoration to bring the house up to code and restore it.

But they do have a general contract whole cum construction.

Next slide, please.

So is the basic site plan side and front elevation of the proposed renovations.

Next slide, please.

So in conclusion, staff has confirmed it is in the uh Woodward Crossman's NEZ staff was recommended approval and we submitted a um resolution for your consideration.

Thank you, Mr.

Chair.

I can answer any questions or turn it over to the petitioner.

Thank you.

Thank you to the petitioner okay.

Hey, uh just want to give a little maybe uh additional information on this project.

Um I can share my screen if it's helpful as well, just to provide um a bit more uh context to the project.

So if that's possible.

Okay, we're gonna grant you sharing capabilities.

Okay.

So uh just have a couple mock-ups of the property uh and our proposal here.

So we purchased this home last year.

Uh as was just mentioned, it was built in 1883 and has been uh vacant for we believe at least 20 years.

Uh the interior of the home is in very poor, poor condition, and the exterior of the house, as you saw in some of the other images um has been left to disrepair.

Mr.

Basil.

So the plan um very quickly, Mr.

Basil, I don't know if you think you're sharing your screen.

We can't see it.

Oh, how about now?

There you go.

There we go.

Thank you.

Uh so here's just a rendering of the proposed, you know, the final colors and everything.

Obviously, is pending um, you know, approvals from historic.

We do have a uh a permit uh under review right now.

Uh but yes, as I was mentioning, um, this home is quite dilapidated, uh, but does uh sit right next to the new uh Watson.

I think it's they're in the process of naming it right now, but the new park that they just put in Brush Park.

Uh and so we're residents in the brush park neighborhood right now.

My wife uh we're we're expecting a child uh in April of next year.

But my wife and and dog and I are living in the brush park neighborhood right now on Adelaide.

Walked by this house uh for the last four or five years and uh had heard that uh the current owner wanted to sell it, so we decided to dive in.

Uh and we've been taking the last uh year to work with architects.

Uh our architect is uh man by the name of John Bigger, and we're also working with interior designers to put together a full build plan, which we completed and then did bids for a general contractor.

Um, and we've identified whole contracting as mentioned.

I just I just want to point out the scope and scale of this project.

So maybe a little hard to see, but um, we're doing a true comprehensive remodel of this home to bring it um you know back to its its former glory.

So every floor of this home, including the basement, is um gonna be getting a full comprehensive uh rebuild by keeping all the historic elements, interior uh and exterior, uh, so we can um you know keep keep the history in mind, but uh we're looking to uh completely rebuild the first floor and and put in a gorgeous kitchen, second floor, um the primary suite and and kids' room, third floor extending to a roof deck, uh adding multiple bathrooms and even uh turning the basement, which has exterior access, which is a bit unique, uh, to a full finished basement.

So um, you know, we're really we're really committing to the brush park community.

We uh very much enjoy living downtown.

We moved back from California around uh four and a half years ago, and we want to set up our roots here.

So um, you know, we're we're excited to get the project started, and it's gonna be a significant investment.

And obviously, um we are looking for this abatement to ease the financial burden on us for the for the project, but um you know we're we're committed to this neighborhood and want to continue to help build the community and and provide um you know economic stimulation to to the growing neighborhood.

So um I'll stop sharing my screen and kick it back.

But uh if you guys have any any questions on the project or proposals or timelines, um happy to field any animal questions.

Okay, thank you, Mr.

Basil.

Just very quick question.

Um parking is a bit contentious uh in that area.

So we hear uh what is parking look like for you and your family?

Are you gonna have your car on the street?

You plan to try to build a garage garage or something on that nature.

Absolutely.

So it's it's gonna be a bit of a transition.

Um so that the first piece of the project is just the rehabilitation of the structure.

Um we still we own our townhouse now.

Our plan is to rent this out.

Um, and so as part of the transition, we may try to utilize the garage here.

There also isn't street parking, but we do plan um potentially a year in or after the completion of the main rehabilitation to build a carriage house uh on the property for parking.

In the short term, we may put uh um just a concrete pad in the back lot as there's a quite a nice backyard.

Uh but as uh as time goes on, we do plan to build a carriage house with two parking spaces on the property.

But right now, given the scope and scale of the project already, we're not gonna do that tomorrow.

That may happen um in a year or two.

But it is it is considered as part of the bill because yeah, we do know brush park.

Uh the parking is difficult.

And right now, my wife and I um just have one car that we own, so the burden on parking uh isn't isn't too bad.

Okay, thank you.

Any questions?

All right, seeing none.

Uh, is there a motion to send line item 6.3 to former with the recommendation to approve?

Oh, here are no objections.

That action shall be taken.

Thank you very much to the petitioner, Mr.

Basill.

Also, thank you very much, Mr.

Gulat.

Have good afternoon.

Thank you.

Next, under the legislative policy division line item 6.4 submitting a report relative to neighborhood improvement plan bonds proposal and funds status as of March 31st, 2025.

And members, if we can also take up line item, or if we can take up line items 6.4, 6.5, 6.6 together.

Is there a motion to do so?

Motion.

Thank you.

And just for transparency's sake, 6.4 is the fund status as of March 31st.

6.5 is the fund status of June 30th, and 6.6 is the fund status as of December 31st, 2025.

But I'm assuming that's supposed to be 2024.

We haven't made it there yet.

Uh, so that may be a scrivener's error if the clerk shall note.

Thank you, Mr.

Clerk.

Uh, and we're here to discuss all of these to you, Mr.

Corley.

Yeah, Mr.

Chair.

City Council again.

Um, I believe Mr.

Payne is going to help with the um presentation.

So the first one is so Mr.

Chair, if it's okay, we'll start with line item 6.6 because that is the December 31st, 2024 status report.

And starting at uh slide one.

This quarterly report is to give council the status of the proposal in neighborhood improvement bonds as of December 31st, 2024.

As a reminder, on November the 3rd, 2020, the citizens of the city of Detroit approved a bond authorization to issue a total of 250 million dollars in unlimited tax obligation bonds for the purpose of paying the cost of neighborhood improvements in the city through property rehabilitation, demolition, and blight remediation.

The city of Detroit's construction and demolition department is responsible for using the proposal and bonds to demolish um up to 8,000 blighted homes and preserve 6,000 homes for future renovation and sale to improve the safety value and health of the neighborhoods in the city.

Slide two.

Next slide.

Thank you.

Okay.

Thank you.

Um this slide shows that under the 250 million dollar bond authorization, the city had two prop and bond sales.

The first one was in February 2021, when the city issued 205.7 million dollars in bonds.

Appropriation 2103, uh, which is called the neighborhood improvement bonds, contains these bond proceeds.

The second bond sale was in July 2023 for 78 million dollars in bonds, and that's housed in appropriation 2104.

Both bond sales were very successful because there was a lot of demand for these bonds in the bond market.

As a result of the two proposal and bond sales, the city trade has a total of 283.7 million dollars in bond proceeds for the purpose of property rehabilitation, demolition, and other blight remediation activities.

This slide also shows the total bond of the total bond proceeds or 283.7 million.

The bond proceeds were spent over the course of five fiscal years from fiscal 2021 through fiscal 2025.

And as of December 31st, 2000 2024, about 15 million dollars was available to be spent.

Next slide, please.

This slide shows that of the 209 million dollars that was spent as of December 31st, 2024, about $208 million was spent on demolition contracts and about 12 million spent on payroll costs for city employees that are performing the demolition related work.

Next slide, please.

And this slide shows that of the 219 million that was spent through December 31st, 2024, that represents about 77% of the total bond proceeds.

Now we're gonna go to line item 6.4, which is the March 31st, 2025 status report.

Yeah, worse, first okay, slide one slide before that.

Okay.

Okay, thank you, Mr.

Payne.

Um this is the quarterly report uh to give council status of the proposal in neighborhood improvement bonds as of March 31st, 2025.

Next slide, please.

Other total bonds proceeds of 283.7 million, the city encumbered about 46 million, and spent about 305 million.

I'm sorry, 235 million of the bond proceeds as of March 31st, 2025.

Again, the bonds bonds were spent over the course of five fiscal years, and it's about three million dollars available as of March 31st, 2025.

Next slide, please.

Other 235 million dollars that was spent, about 222 million was spent on demolition contracts and about 13 million spent on payroll costs for city employees that are performing the demolition related work.

Next slide, please.

And on this slide, we show we note that of the 235 million spent through March 31st, 2025, about 83 percent of the total bond proceeds were spent.

16 percent encumbered, which means um that's about one percent available for future um demolitions and stabilizations.

So we're gonna now go to the last line item 6.5, which is the June 30, 2025 status report.

Great.

Thank you.

So um this is the quarterly report to give council status of the proposal and neighborhood improvement bonds as of June 30, 2025.

Next slide, please.

Other total bonds proceeds about 283.7 million.

The city spent about 246 million of the bond proceeds as of June 30, 2025, uh, and again over the course of five fiscal years.

Now we do not discuss the number of encumbrances in June because those are carried over in the next fiscal year.

So we'll take those up again in the end of September 30th, 2025 quarterly report.

Next slide, please.

So I just focused on expenditures.

So this slide shows that of the 246 million spent as of June 30, 2025.

232 million was spent on demolition contracts and about 14 million spent on payroll costs for city employees that are performing demolition related work.

Next slide, please.

Again, just focusing on expenditures.

So just a few notes.

Again, the city's goal was to demolish about 8,000 residential homes using the prop end um buying proceeds and have about 6,000 stabilizations.

Well, today, the construction and demolition departments website reports there were 8,000 and about 200, so about 8200 residential demolition demolitions that were performed, which is exceeds the goal.

However, the website reports about 27 homes were saved for stabilization.

And counselor should note that I reached out to the Detroit Land Bank Authority last week and last Friday.

They informed me that of these 2700 plus stabilized homes, about 2400 of them have been sold.

I'm going to reach out to the construction demolition department to see why there's such a gap between the actual stabilizations and the goal of 6,000.

Finally, it's important to remind the council and the public that prop in neighborhood improvement bonds funds are used just for residential demolitions.

And the ARPA or the American Rescue Plan dollars I use for commercial and industrial demolition.

So thank you.

And uh I'll take any questions.

Thank you, Mr.

Courtley.

Any questions?

Thank you for your very thorough report as always, Mr.

Corley.

Appreciate you so much.

Uh seeing no questions from members, is there a motion to receive a file line items of 6.4 through 6.6?

Motion.

There are no objections.

That action shall be taken.

And I believe that brings us to the end of our agenda.

Member reports.

Chair recognizes Member Santiago Romero.

No report.

Thank you, Member Santiago Romero.

Chair recognizes member vice chair Young for your member report, sir.

Um yes.

Um first thing I wanted to do is I wanted, as we all know, um the giant kind of, or if you don't know, a giant passed away yesterday.

Carolyn Cheese Kilpatrick passed away.

And uh this is somebody who was absolutely vital in terms of she was really good friends with my father and really good friends with my family.

And so I just wondered if we could take a moment of signs for her for all the great things she's done for the city of Detroit.

Sure.

We will take a moment of silence uh for the honorable Carolyn Cheeks Kilpatrick.

Thank you.

Thank you, and that's it.

That's all I have.

Thank you.

Sure.

Thank you, Member Vice Chair Young.

And on that note, uh the Honorable Carol Chiefs Kilpatrick, who's a congresswoman uh here, former state legislator uh as well, uh, was a uh wealth of knowledge, wealth of institutional knowledge, uh as well as someone who delivered a lot for our people here in the city of Detroit.

Our thoughts and prayers go out to her uh and her family.

Uh as for my member report, uh we invite everyone to please join us for our 29 policy session on October 27th from 6 p.m.

to 7 30 p.m.

at the Edison Library branch.

Uh 1840 Joy Road.

We will be discussing why voting is important.

Part two.

Again, join us October 27th from 6 p.m.

to 7 30 p.m.

at the Edison Library, located at $1840, Joy Road to discuss the importance of voting for this policy session.

This is our 29th policy session.

We're looking forward to having all of our residents there and also having the opportunity to learn alongside fellow residents.

So please join us.

We hope to see you there.

Uh that concludes my member report.

I will go back now to member vice chair.

Chair recognizes you, sir.

Oh, sorry, Mr.

Chair.

I forgot uh really quickly to promote these things.

I have two things.

One tomorrow, Thursday, October 9th, 2025 at 4 to 7 p.m.

Butzel Family Center.

We are 7737 Kirchhoffville.

You get RSCP at 313 5745449.

That's this Thursday.

That's October 9th, 2025, 4 to 7 p.m.

Butzel Family Center, 7737 Kirchville, RSPP.

313 574 5449.

That's 313 574 5449.

You can also email Zena.johnson at Detroit MI.gov.

That's Zeta.

Johnson at Detroit MI.gov.

That's Zena.gov.

So this Thursday, October 9th, 2025, 4 to 7 p.m., Butzel Family Center.

We're going to celebrate my birthday early at 7737 Kergeville, 313 574 5449.

313 574 5449.

And then I have a Hope Program Virtual Meeting.

This is the Hope Program being the Home Olders Property Exhibition Program.

Then we can help help people get property tax relief in the city of Detroit.

It will be with Eric Sabrie, Wayne County Treasurer, and Willie Donwell, Director Board of Tax Review.

That will be Wednesday, October 22nd, 5 6 p.m.

So that's Wednesday, October 22nd, 5 6 p.m.

So that's Eric Sabre, Wayne County Treasurer, Willie Donwell, Director of Board of Tax Review.

Wednesday, October 22nd, 5 to 6 p.m.

You can call 31324248.

That's 31324248.

That's 313-224-4248 for the COVID A of the second Cal Smith Large number one Hope Program Virtual Meeting with Eric Sabris, Willie Donwell, October 22nd, 5 p.m.

to 6 p.m.

And the Hope deadline is November the 7th.

And that is my report.

Thank you, Mr.

Chair.

Thank you, Member Vice Chair.

And in that same spirit, I just like to take the opportunity to get a chance to do it yesterday because we had to leave session a little bit early.

But this past Sunday was my chief of staff, Mark Payne's birthday.

So I want to take the opportunity to wish a happy birthday to him, even though we're a few days late.

So thank you so much.

Happy birthday to you.

Happy birthday.

Seeing no other business to come, uh the budget finance and audit standing committee will stand adjourned without objection at the call of the chair.