Councilmember Fred Durhall.

Present.

Councilmember Coleman Young.

Councilmember Gabriela Santiago Romero.

Present.

Mr.

Chair, we have quorum.

Thank you, Madam Clerk, and good afternoon to you.

Next, we will move to approval of the minutes.

Members have been provided the minutes from last meeting.

Is there a motion to do so?

Motion.

Here, no objections.

That action shall be taken.

We'll go directly into public comment.

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

We ask that you state your name for the record, then proceed.

Seeing no members of the community here in the committee of the whole, we'll go directly to virtual public comment.

Good afternoon.

Mr.

Payne, how many callers do we have today?

Good afternoon, Mr.

Chair and Honorable Committee members.

We have four hands raised.

Okay, and we are getting ready to close off public comments.

So again, if you wish to participate uh on public comment uh virtually via the Zoom feature, please raise your hand now.

Public comment is getting ready to close.

Public comment going once, public comment going twice, public comment going three times.

Public comment is now closed.

Who is our first caller, Mr.

Payne?

Mr.

Chair, our first caller is William M.

Davis.

Mr.

William M.

Davis, you have two minutes for public comment.

Please state your name for the record and proceed.

Mr.

Davis, are you there?

Okay, I just got unmuted.

Can I be heard?

You may, sir.

Okay.

Um, I think it should be a greater effort uh to make sure city retirees are eligible for any and every type of program that's available.

And also city retirees that live inside the city of Detroit should get extra um allowance as it relates to paying our property taxes.

Uh also I think a greater effort needs to be made to make sure everybody is aware of the hope, hope exemptions and know-how and what hope is all about.

And um that's it for the day.

Thank you.

Thank you, Mr.

Davis.

Next caller, please.

Our next caller is Transparency Matters.

Transparency Matters.

You have two minutes for public comment.

Please state your name for the record and proceed.

Transparency matters.

Yes, good afternoon.

Can you hear me?

I can hear you, Miss Warwick.

Good morning to you.

All right, good morning, good afternoon.

Good afternoon.

Good afternoon, absolutely.

Right.

Yeah.

Yeah.

So once again, uh I'd like to ask a question of you all.

Have you all read all these uh massive zoning change proposals?

Um, and and uh have you read them yourself personally?

Because uh some of the Don managers doing these presentations, it doesn't appear they have read them because I asked them personally had they done so and they didn't.

So if people who work for the government get paid to read this stuff haven't read it, imagine what it's like for a busy resident who doesn't get paid to serve the public like you do.

So please don't do a rush job in this, and why do you have to rush this before the election?

Why can't you like put it up on a web page for a long time and get left give people the opportunity to review it and make sure people actually know about it?

Also, I had the pleasure of visiting the land bank board meeting yesterday.

I'm sure they missed me.

What you why do you not require them to record their Zoom meetings and then have it available to the public?

Because not everybody can attend these their business meetings during business hours.

So if you truly care about transparency and transparency should matter, and serving the public should matter, since you're giving away your power under charter section 4-112, which says that the council is supposed to make the decisions about the disposition of property and by allowing the land bank to occur or keep operating, you're basically giving the power back to the mayor, which he controls it through the economic development policy.

So please answer my questions.

Have you read these massive zoning changes that should not be rushed on the people before the election at all?

And also, why will you not require the land bank to record its meetings and put it up on their own website so people can view them?

Please answer my questions.

Thank you.

Thank you, Miss Warwick.

Next caller, please.

Guest.

iPhone, you have two minutes for public comment.

Please state your name for the record and proceed.

Good afternoon.

This is Betty A.

Barner, president of the Soda Ells World Block Association, and proud resident of the city of Detroit, born and raised.

Here again, advocating for seniors and disabled and for whoever can use this information.

Please share it.

I've been blessed to uh find out about another program.

Uh it's a program that will uh help caregivers and for people who need the services of a caregiver.

It's a uh respond program.

And what it does, it provides different services.

This particular organization has provides different services.

Some you need medic be a uh have Medicare, Medicaid.

Some you is based on your income, and some of the programs aren't.

So that's what makes it a unique program.

The director of Mrs.

Deborah A.

Roy is waiting on your call.

You would call 313 484 3808.

Again, 313 484 3808.

They provide uh house tours, they do food prep or light cooking.

They even have a um service with uh, I guess they're part owners of a construction company where they do light construction work as far as like they do things like putting in uh digital digital uh thermostat and different things like that.

Call her and let her know what your needs are and see how she can help you.

I want to give kudos to Mrs.

Lockett.

She heard this information, called, and I got a call for the executive director thanking me for sharing this information.

Thank you.

Thank you, Ms.

Verner.

Uh, if the clerk shall note, we've been joined by member vice chair young.

Good afternoon, sir.

Good afternoon, the clerk will note.

Thank you, and thank you, madam clerk.

Next caller, please.

Mr.

Chair, last caller before you cut off public comment is phone number ending in one two four.

Phone number ending in one two four.

You have two minutes for public comment, please station for the record and proceed.

Thank you.

I already spoke, but it'd be nice if you'd answer my question, sir.

Thank you, Miss Warwick.

Uh we will not go back and forth, but your questions are duly noted.

Uh, does that conclude public comment then, Mr.

Payne?

Um we have one more caller ending in phone number 482.

Phone number ending at 482.

You have two minutes for public comment.

Please state your name for the record and proceed.

Hey, Freddie D.

Fred, you are all the third.

Yo, guys, Steve Wasco over there on Chicago, 1932.

Then in this year, another court case.

Now, the veterans housing facility is open.

25 veterans living in there now.

They're not going nowhere.

And you busted.

You a TV man public official.

Now, my word is vibe.

Over in District 7, I'm considered what they call a Detroit legend.

A legendary.

They, you know, I'm Drake Road Rule, 6 Mile Rule, 7 Mile Rule, East Side Rule, Downtown Rule, West Side Rule, and now Mr.

Rue.

Nini won't what the F she won't, Fred.

Y'all play games with her.

Now I'm gonna play games with y'all.

These Mary Sheffield is engaged to get married.

She had an engagement party.

About a month ago, one of my friends' friends was one of the tenants.

And today I heard daddy was on a new 247, and he seated me out of 2500.

So now I'm getting ready to turn it all the way up to a thousand on all y'all.

All y'all cheated in the board of police commissioners, the mayor, the city council, and the school board.

And I'm Mr.

Rue.

And that's my word.

Okay.

Are you done with your public comment, sir?

All right, go on once.

Go on twice.

All right.

Kind of unusual, not for you not to take the whole two minutes.

Appreciate your call, though.

Uh that concludes public comment, correct, Mr.

Payne.

Yes, Mr.

Chair, that concludes public comment.

All right, great.

We will move into unfinished business line item 5.1 status of the city clerks slash city city planning commission submitting a neighborhood enterprise zone certificate applications for 96 new built uh newly built condominium units within the new Hudson's Tower within the Roscoe Development Company LLC Neighborhood Enterprise Zone.

Uh motion to briefly discuss line item 5.1.

Here no objections that action shall be taken.

Members, if you were remember, we have sent that we have sent this back to committee as of yesterday because we're going to have a presentation from Bedrock on this.

Hearing no objections, that action shall be taken.

On the new business.

Under the law department, line item 6.1, submitting a report and proposed ordinance to amend chapter 17 of the 2019 Detroit City Code Finance Article 2 Budget Division 1 allocation by adding section 17-2-30 reservation of budget allocation for elected office holders in certain years to ensure half of the fiscal year budget allocation be reserved for incoming elected office holders.

Motion to discuss line item 6.1.

Motion.

Hearing no objections, that action shall be taken.

Members, if you were remember, uh this is something we discussed a few weeks back.

This is just the ordinance form that needs to go uh to formal uh so it can be uh so we can set a public hearing for that uh ordinance.

Uh and so uh we went in pretty much uh length of detail for line item six point one uh and I'd be asking today if we can just send this out to formal for the introduction and setting of a public hearing.

Is there a motion to send line item 6.1 to formal for the introduction and setting of a public hearing?

Motion here, no objections, that action shall be taken.

Next under the board of review, line item 6.2 submitting a resolution of authorization for the 2025 homeowners property exemption amendment.

Motion to discuss line item 6.2.

Motion.

Hear no objections, that action shall be taken.

We'll have Mr.

Dowell join us.

Always a pleasure.

Uh noting that this amendment uh uh is a change in state statute that now allows local municipalities to review a prior year's poverty exemption app uh poverty exemption application in accordance with MCL 211.7U, provided the homeowner has not previously filed and was denied.

Uh good afternoon, Mr.

Donwell.

Please state your name for the record, sir, and tell us about the change in state statute and this amendment that we are looking to push forward.

Uh good afternoon, Willie Donwell, director of Detroit's property assessment board of review.

Uh so there was a change uh in 2023 under public act 191 that now allows for local municipality by resolution through the local governing body to adopt a process that allows the local board to approve or deny an application for the immediately preceding year, provided that the person did not submit during that year.

Uh it's a great opportunity for those who uh missed filing the prior year to still submit that application.

So this also um brings us to why uh this honorable body supported our earlier deadline of so while we use the first Friday in November now, because those that miss filing this year still will have an opportunity to file the upcoming year.

So we now have worked out the process in which we can a person can submit an application, receive a decision, the border of you can do its work and not run past that December border review deadline and having homeowners in fear of not having submitted that application in all the necessary documentation in a timely manner.

We always appreciate your foresight.

Uh Mr.

Downwell, great thing that we did uh in changing that timeline uh as well.

Uh this is pretty straightforward for me.

Uh any questions from members.

So through through the chair, if I may.

So uh on this N63, I do uh have one request.

Uh there's a couple of grammarical things that we want to clarify.

And so I would simply like to, if you would still approve it, I'll have the amended version to the full council uh before Tuesday, probably by Friday, uh, with what those changes were.

Okay.

Uh and Mr.

Dowell, are these changes substantive in nature, or would you consider them a scrivener's error?

Scrivener's error.

Okay, so it we we'll we'll be fine.

The clerk shall note uh line items 6.2 and 6.3 contain scriveners errors.

Chair recognizes member vice chair young.

Uh I just wanted to say hello, sir, and I look forward to seeing you today on our virtual call.

At uh five to six.

Thank you, sir.

All right.

Seeing no further questions, there are a motion to send line item 6.2 to formal with a recommendation to approve.

Hearing no objections, that action shall be taken.

Uh line item 6.3 submitting a resolution of authorization for the 2026 homeowner property exemption hope policy and guidelines in accordance with MCL 211.7U.

Uh, this is again as amended and signed into law in March of 2020, the pay as you stay pays program administered by uh administered by the Wayne County Treasurer.

Um again, motion to discuss 6.3 uh has been given.

Uh Mr.

Down will just give us a brief overview of 6.3 as well.

I know we're doing this in court in accordance with the change of law as well.

Uh it's just through the chair.

So uh we are now also asking you to approve by resolution the 2026 application, which is required again by state statute.

Uh doing it now again allows us the time to actually prepare and make sure that we have an application and process available come January 1, uh, which means that those uh homeowners that need to apply, we can be ahead of that curve when it comes to the March border review uh and try to get as many people processed through the March uh board as possible.

Okay.

Any questions from members?

Good thing, good program.

Help a lot of our folks stay in their homes.

So a motion to send line item 6.3 to formal with a recommendation to approve.

Oh shit.

And those are through before we put it, it's the same thing, so the same areas exist in this one as well.

Mr.

Yep, the clerk has noted Mr.

Down.

Well, thank you so much.

There's motion to line item 6.3 to formal with a recommendation to approve, hearing no objections, and that action shall be taken.

Thank you, sir.

As always, we appreciate all the work you do.

Always good seeing you.

Always welcome in here, Mr.

Can I share this before I go?

Absolutely.

So on uh today I'll be on uh virtual meeting with uh Councilmember Coleman Young the second.

Tomorrow I will be with Councilmember uh uh Santiago Ramiro in District 6.

Friday we'll be at uh we will be at on Myers at uh Northwest Activity Center from 10 to 3.

Saturday we'll be at Perfecting Church from 10 to 3.

So we are doing everything we can to make sure that everyone has access to the process on both the Friday and Saturday.

Folks can actually come out and get assistance with the application without an appointment.

Okay.

Thank you for your work as always, Mr.

Dowell.

We appreciate you.

Thank you.

Thank you, sir.

Uh next we will go under the office of the chief financial officer, line item 6.4, submitting a report relative to the financial report for the two months ended August 31st, 2025.

Uh, is there a motion to discuss line item 6.4?

Motion.

No objections, that action shall be taken.

Joining us, we have Mr.

Donnie Johnson.

Good afternoon, sir.

Please state your name for the record and proceed.

Good afternoon, Mr.

Chair and members of the committee.

I am Donnie Johnson.

I am the acting deputy chief financial officer and budget director for the city.

Uh I do believe I am also joined by Valerie Agoy, um, acting treasurer for the city.

Um, if Mr.

Payne wouldn't mind promoting her if she's in the room.

Okay, thank you, Ms.

Payne.

If we can promote Ms.

Gowie.

And while we're doing that, I will prepare to share my file.

And I think in our last report, Mr.

Johnson, you weren't here.

I just want you to know your team did an amazing job without you.

I'm you know.

Well, you know, uh it's always good to hear that, but it also is like oh, you didn't need me.

Sir, uh we we didn't that day.

Uh they they did a really good job, but you are always needed.

You are with with whatever you do, Mr.

Johnson.

We appreciate your service.

You are too kind, Mr.

Chair.

All right, I am going to chair the report right now.

There we go.

So we are looking today.

We are going to be reviewing the uh financial report for the two months ended August 31st of 2025.

So the first two months of the fiscal year.

Uh highlight from this uh in October 7th, 2025, the city council did approve the establishment of the corporate income tax reserve fund.

This reserve uh has assigned 42 million of the FY25, the year that we are um have we have ended and are closing up now.

Unassigned fund balance to provide security against corporate income tax revenue uncertainty pertaining to the current economic and trade conditions.

Any balances that are not needed in the current fiscal year will return to that unassigned fund balance.

This reserve will not balance forward.

We would have this conversation at the end of the fiscal year if we think one is necessary for fiscal 27.

I think it's also important to note I have heard tell that there is some misunderstanding in some parts of the community, perhaps that this reserve was established using the retiree protection fund funding, and that is not true.

The retiree protection fund is not related to this at all.

Those funds are untouched.

They remain in place doing what they do to help with our pension payments.

This reserve was funded strictly from the unassigned fund balance of the general fund for the fiscal year ending 25 that we are closing now.

So just want to make sure that's very clear for the viewing public and for this body that the retiree protection fund is not implicated in any way by this reserve.

So in the budget versus actuals report, um we do see so far we're on relatively positive track in the first two months of the year on our revenues and in expenditures, we do have a pretty substantial underspend for the first two months.

However, as I always do early in a fiscal year when I present these reports to this body, I note that two months into a fiscal year is still very early.

We do not have a good sense of trends.

We do not have a lot of data to work off of.

And so, you know, one of the questions that I received from Mr.

Corley, which was a good question, um, was about the amount of the municipal income tax collections and things like that.

Um, again, two months into the fiscal year is very early.

Um, we know what our data and what our um projections are for the full year, and we'll talk about that on the next slide.

Um, but right now for the budget to actuals, I'd say the first two months is just not yet indicative of our what's going to be our lived experience in this fiscal year.

Um the next slide, uh, as I noted, when we look at what our forecasts are really showing, we do continue to project a shortfall in the municipal income tax of the 61.1 million dollars.

Um, however, we are expecting to see a pretty sizable um overperformance in wagering taxes with smaller overperformances in property and utility users.

So on the whole, we do continue to project that our revenues will be about 32.2 million dollars lower than we budgeted for fiscal year uh 26.

However, if all of our expenditures go as planned, which this early in the fiscal year, as you know, we do project a 100% spend, right?

A perfect spend of all of the budget.

We know as we get later into the year, that is really not our lived experience in a fiscal year.

Certain funds things lag, right?

Things take time and we will underspend in certain categories, and that will also help alleviate the shortfall in the revenues.

But as you can see at the bottom of the slide, um, in that variance column, you can see that the corporate income tax reserve fund is doing what it was programmed to do.

Um, it is backstopping those shortfalls in the revenue driven by that corporate income tax, and it is leaving us still with a net positive for the fiscal year.

Um, as the year progresses, ideally what we will see is expenditures will come under budget in a lot of categories as we move to the fiscal year, and the draw on the reserve will likely get smaller if our lived experience is any indication.

Um that always comes with the caveat that we don't know what will happen in the world of revenues, right?

And and and treasurer goalie will obviously talk a little bit more about that when we get to the revenue slides, but we all know that things are still a little unpredictable, and we are sort of taking it day by day, month by month as we get the data.

We add it into our models and we keep an eye on these things.

But for now, we think that things can have started out in this fiscal year, playing out generally along the path that we expected them to as of this time.

Um, for continuing appropriations, no major changes here from the last monthly report.

Um, balance forwards are mostly completed for all of these items.

So these items are now settled into the new the current fiscal year budget and spend is continuing.

Some of these smaller dollar items likely will spend out in this fiscal year.

So when we move into fiscal year 27, a number of these continuing appropriations, probably two or three, may likely drop off entirely.

And then onto our employee count monitoring report.

Um, as you can see, we have generally um month over month, we have seen a pretty sizable downward trend in our positions.

Um we've seen a large departure of members of the police department.

Um, a number of folks went into decided to go to retirement, and we've also had a number of separations related to transfers out to other jurisdictions.

Fire department, um, mostly driven by, I believe this is going to be driven by a few firefighters that have left that did separate from the city.

I believe there are a couple of these are also firefighter students who um left uh training, left the class.

Um other highlights in this are going to be, you know, continuing to see that decrease in our seasonals over on the far right side of things, um, GSD's seasonal head count as we wind down our grounds maintenance operations.

Um, that's where we're going to see a number of decreases there.

Um, but overall, um, we are we did see a pretty sizable month over month change overall for the city of 260 FTEs that departed um from July to August.

And now on to income tax and Treasurer Goliath.

Good afternoon.

Um Valerie Agoli, acting treasurer, deputy CFO with the City of Detroit.

This page um shows our income tax collections to date.

As Donnie Johnson said earlier, um we do not think that the first two months of collections uh gives us the ability to um find any trends in the data at this point.

Uh we do see that withholding is higher and individual tax collections is lower.

Uh, we we think that the withholding is just um withholding, getting more aligned with what uh people think the tax liabilities will be.

Um, and that's our guess of why it might be higher than uh year to date as of August 2024.

Um corporate income tax, we do see it's uh just under a million dollars lower.

Again, this is the first two um months only, but this is an area that we are paying very close attention to.

Um the next page is cash position.

Uh just to point out, I think this is the first month where we added that last column for variance.

Um, just to make it easier, I would usually say what the variance is and give highlights.

Um there's really nothing unusual.

It's uh the the same kinds of things that I say each time, the difference um, for example, in the quality of life, I'm sorry, in the um retiree protection trust fund uh is due to the payments made.

Um I don't think there's really anything unusual.

Something new that we have if you look at fiduciary funds under other, that's a decrease from um the same time last year, and that's due to the uh bankruptcy class nine and 14 disbursements that have been made.

Um and this is the slide on operating cash activity.

There's really very little change from what you saw last month.

And um, I even though uh accounts payable is not under treasury, I do present it.

Uh and so the the one thing that we noted um that you might see that's a little different on the top right hand table or graph um for August, there's 46.7 million dollars on hold.

Um, that's relatively high.

So the team did look into that, and it's um because there were some large invoices, the um large dollar amounts for the invoices that are on hold, but the number of invoices is not unusual.

So I just wanted to point that out.

And that concludes my presentation.

So we'll uh turn it back over to you, Mr.

Chair, and um we're available for questions and discussion.

Thank you so much, Mr.

Johnson.

Uh as well as to our treasurer, thank you so much.

Uh I want to ask a quick question uh just regarding uh the Detroit detention facility.

I know we have not done a lot of contract and we have not seen any come in front of us yet.

What are we looking at uh as far as uh services or estimated amounts of of contracts that may come to come through and how may they affect our budget?

Uh so we are expecting that what we budgeted in the current fiscal year for the um contract, the the lease agreement that we had with the state prior to taking over, uh taking uh ownership of the DDC.

We do not expect to spend excuse me, Mr.

Chair.

We do not expect to spend more than that amount.

So right now, the amount that we had already budgeted in 26 should cover all of the operations for the DDC, including you know new contracts and things like that.

Um of the questions that uh Mr.

Corley asked um actually was related to um the Detroit extension facility.

Um I I would note his question was about you know were there any estimated amounts that had not been recorded yet?

And the answer to that is no.

Everything that should be recorded is recorded for the DDC.

Um, but what we haven't done yet, and and will look a little bit different in this monthly report when we do finally recognize the change in the report is to spread the budget differently.

So right now the budget is all in professional and contractual services because that's where the funding was for the contract with the state to operate the DDC.

Now that it's come back to the city, that budget will be moved out into like um, you know, salaries and wages, operating supplies, operating services, and professional contractual services and employee benefits.

So that number will kind of go down in professional contractual services.

It'll go up in the other categories where those funds are being moved out to match up with the new operating reality.

So that would be a change related to the DDC that we'd be seeing in the budget.

It's not really one related to expenditures, it's more the budget itself and how the budget is laid out.

Okay.

Um makes sense on that one.

I I'll have some follow-up, some follow-up questions with that, not today, but there are a couple of things that uh I was taking a look at just uh in regards from the transfer and uh just a couple of concerns that we may have had.

Um second question I gotta ask you, knowing obviously the state budget is passed.

Uh, we are seeming from what I've uh calculated in my numbers to be about $500,000 short in revenue sharing.

Um that has come.

Uh as far as cuts, there were cuts kind of across the board.

Can we talk a little bit about how that budget that has passed is affecting our revenue sharing?

Uh and don't quote me on the 500k, but I do believe that's that's about it.

Um so to you, Mr.

Johnson.

Yes, Mr.

Chair.

So we do expect um reductions in our in what we would call the base of revenue sharing, so our standard statutory and constitutional revenue sharing.

Um it's the state has, I think Orta is planning to publish the new revenue sharing, like the official revenue sharing schedule for all municipalities and and and recipient jurisdictions this week.

Um, as of today, they have not yet posted it.

So we are kind of refreshing the Orta website on our every hour on the hour to make sure to make sure we catch it as soon as it comes in.

Um so yes, we do expect to take a hit in that in that regard.

Um the new public safety funding, and we do have an item on the agenda later that that this to which this is relevant, is um that is also considered part of revenue sharing, um, but it is not exactly the same revenue stream as revenue sharing.

I know that doesn't make a lot of sense.

Um the way they structured it, they're treating it like revenue sharing, um, but it's really functioning more just like a grant of resources for public safety purposes, but it is funded by specifically earmarked tax revenue streams.

Um, but in terms of our baseline statutory and constitutional revenue sharing, yes, we are expecting a reduction um in those.

The the size of that reduction, really don't want to say until we see what the state's calculations have come up with.

Um I think at this point we may be estimating a little bit higher than your half a million dollar number between the two.

Um, but I kind of want to not commit to a number until we really see what the state's calculations show um publicly.

Thank you.

Uh and again, uh that that is not quoting me on that.

That's just being a guy who's been on the other side of that coin uh that follows what passes uh very very closely, uh, noting that there are some changes in excise tax and a couple other things uh that affect revenue streams here uh in the city.

But it'd be interesting in our next meeting to see really where we land.

And and I do want I do want to know because that'll probably be our last committee meeting as far as the report is concerned for this council session.

Uh, probably I will probably be asking you uh a lot of questions, Mr.

Johnson, just uh so we can go over that and hopefully we have those numbers.

But I've just been combing through the budget myself, uh still combing through some items uh that were changed and even processes that have kind of been differed over the years relative to uh revenue sharing kind of reminds me uh a sense of of the EVIP back in the day as far as competitive grants and and programs that go towards cities that technically fall under what statutory or constitutional revenue sharing should be for, but grants are provided directly to the city uh with some of those services.

AKA will, I'm sure we'll discuss that with the public safety trust fund as well.

Um, but uh without rocking everybody to sleep on my budget stuff.

Uh but I I'd be I'd be interested to hear that as well.

Finally, um just touch on just a little bit more uh about income tax collections, uh, just for the public to note so we can reiterate that.

Uh we had, I think last week or the week before we went over the revenue estimating conference and had a brief discussion on what income tax revenues look like as they have dropped, but seemed that they will remain flat.

You also mentioned the surge and wagering taxes.

Can we just talk specifically about trends and why we're seeing that right now?

Uh even on the the wagering tax, we've seen that increase.

Do we hope that it will level it off to a bit that it will kind of fill the gap of where we have lost uh income tax revenue collection?

I'm going to pass that over to Treasurer Goley, but I will say out the top before uh before that, um, I would say we cannot hang our hat on wagering to fill the gap completely.

Um it is it is a it is a very welcome revenue stream.

We love when it's up, it's really great, but we you really can't consider wagering taxes to be equivalent to something like income taxes.

They, you know, one, I don't think that it would get high enough to fully offset any losses in income tax.

Um, and two, there isn't a necessary we have to build in a certain level of um volatility or expectation that something could change in the gaming industry, or people might slow down on their gambling, or you know, that sort of thing.

So um I would caution that we not um try to fill the gap with gaming.

Um, but um Treasurer Golley can speak a lot more eloquently about both of those taxes than I can.

And before the treasurer weighs in, you know me very well, Mr.

Johnson.

You know what road I was leading you down by asking you that question.

Uh but I totally agree that wagering tax is an unpredictable uh source of revenue and dependent on a lot of economic factors uh uh here.

Uh to you, Madam Treasurer.

Okay, first I'll start with wagering tax.

Um, you know, we are pretty confident uh the wagering tax revenues continue to grow.

You know, we we do wonder if there's a saturation point, but we haven't seen that yet.

Um but as Mr.

Johnson said, uh we we can't rely on that to fill the gap um for the expected reduction in corporate income tax revenues.

So um I will just briefly go back to the September revenue estimating conference.

Um at that time we adjusted, and and this is a conference that is held twice a year.

Um it is with the city of Detroit, the state of Michigan's Treasury Department through their Office of Revenue and Tax Analysis as well as the University of Michigan.

Um there's uh uh professor and economist that uh participates in this.

And and that's the time when everybody agrees on the revenue estimates for the city of Detroit.

So what the fiscal year 26 budget was based on um was uh the February 2025 estimate.

And at that time when that estimate was made, um there was still a lot of unknown information and regarding corporate income taxes.

Um we didn't have the information on the big beautiful bill.

We didn't have the information on tariffs.

Um, and then by September, uh we we had historical data on the actual FY25 revenues that were coming in, as well as working with our university partners, an idea of what to expect.

So um originally the expectation was that uh corporate income tax revenues would come in at um approximately 70 million.

Our team looked at what our expectations were regarding lower profitability and the big beautiful bill, which um specifically the impacts on um federal uh federal tax law.

So um when we looked at that, you know, the the way this corporate the city corporate income tax uh works is we start with the federal taxable income.

So any changes that are made at the federal level regarding deductions or depreciation and what corporations can do to get to the amount that we can tax on, that's all um uh result of federal tax law.

And uh that so what we did was we calculated the impact of that and the lower um expectations in terms of the revenues that uh profits that we think corporations um that pay city corporate tax will receive, and we lowered the um estimate for corporate income tax revenues from the 70 million that I said to about 28 million.

Um, and that left us with fiscal year 26, which is the fiscal year that we're in now, a shortfall expectation of 42.5 percent.

I'm sorry, and 42.5 million dollars.

So that's kind of just an explanation of how that came about.

And um, and and then on the first slide though, Mr.

Johnson talked about that uh the expectation that we would use that for any shortfall in corporate income tax.

We'll watch it closely.

Um, and if there's anything remaining, um you said any balance is not needed for fiscal year 26.

We'll return to the city's unassigned fund balance at year end.

Yeah.

So hopefully, is that a decent explanation?

It is, it is.

Um, without going into Uber depth, uh, and and I could talk about this all day, but I I I really appreciate that explanation.

I really do.

Uh I will turn it over to colleagues.

Uh chair recognizes Member Santiago Romero.

Thank you, Mr.

Chair.

Through you uh to the OCFO's office.

I just have one brief question.

In the presentation uh under the employee count monitoring, is there a reason why we don't have D Dot on here?

Or am I missing it?

Uh D dot is in the light green.

So you'll see transportation.

I definitely did.

Okay.

Thank you.

And um just for as a follow-up regarding transportation, it looks like we are also um losing students, losing employees.

Uh I believe that the 16, if I remember correctly, the 16 was uh a mix.

There were some students that you know did not complete the program of training to be a driver, and then we did lose some drivers.

Um we are in the process of you know, um finalizing uh negotiations with the with the drivers.

Um, and so we expect to be bringing a contract to um to this to this body and to the full council soon.

Um, and we believe that that's really going to move the needle um on our uh staffing and up.

Through the chair soon, meaning before the end of this year.

Yes, yes.

And um another just quick comments.

Not sure if this has already been looked at, but there were some recommendations uh in order for us to retain drivers.

I don't know if we already do this, but similarly to how we are asking for our money back from police and fire that go through our academies and our trainings and decide to leave the city for another municipality.

Have we considered doing the same thing with our drivers?

Um I was reading something, I don't know where it came from.

I was trying to figure out if it was from the city or somebody else um giving us suggestions, um, but that suggestion was made that we require drivers to stay with the city for two years max and if they decide to leave, I think that they give us some portion of their uh funding back because we're we're we're paying folks, and then to leave, um it really is a waste of our money.

Has that been considered?

Uh uh through the chair.

I I am not aware of any of those discussions.

So I I would not have been part of those discussions around um those sorts of labor policies.

Um, so I'm not aware of that conversation happening.

Uh, you know, I can certainly go and ask and find out.

Um it, you know, it would certainly be a policy consistent with other areas um in the city, um, but I am not aware of that being um part of the discussion at this time.

Well, through the chair, I if we all begin to sing the same notes, things happen.

Um just wanted to share that, plant that seed and see if we could consider it um as as the administration and city council.

Uh, but those are my only questions and comments.

Thank you, Mr.

Chair.

Thank you, Member Santiago Romero, Chair recognizes member vice chair.

Yeah.

Thank you, Mr.

Chair.

Uh hello, everybody.

Good to see you guys as always.

Um, I just wanted to ask you really quickly.

I'm looking at some of these things.

I'm looking at the retiree protection trust fund.

And I'm seeing that from the prior year 2024 to August total of this year, that we are uh there's a reduction in funds.

And I'm also seeing um even uh well, I'm seeing two things.

One, there's reduction in money in terms of capital projects, and there's also reduction in funds in terms of enterprise funds, even though we don't control enterprise funds.

I just want to make sure there's a reduction that goes into my questions for capital projects and enterprise funds.

Does that mean that there will be less spending on asset management?

Does that mean that in terms of the water department potentially that we might have to be able to raise water rates because there's less money available for enterprise funds?

And the reason why I'm saying this because we all know about the water main break that took place in Southwest Detroit.

We all know about stormwater management that we need in terms of the floods that we've had, whether it's detention basins, retention bases, whether it's expanding the pipe, I guess the uh we call compaction, but expanding the pipe, whether it's um purple concrete or bioswales or wetlands or et cetera, it is is all of that going to that we need to implement.

Is that all going to be in jeopardy because we are losing funds here?

And are we gonna have to take more of a conservative austerity, you know, you know, um austerity posture in terms of our budget.

Even though, like you said, it's early.

I'm looking at these things, I'm looking at the individual taxes.

That has fallen off a cliff.

And so I just want to know, even though we're making it up in withholding, I just want to know it seems to me that we're kind of losing funds.

Are we gonna have to start talking about cuts?

We're gonna start talking about reductions in spending, or even with the pressures that we have, if we continue to go down the path that we're going, we should be okay.

So through the chair, um, to Vice Chair Young, uh, the short answer to your question is no, we are not at any risk of of sort of those adverse outcomes.

So what the slide you're referring to is the cash position slide.

And a really important thing to note is cash position does not necessarily equate to the operating resources for for an entity.

And so something like the retiree protection fund, we expect that.

That's normal.

We would want to see that go down because it means that we're drawing it and making our payments.

So that's it's it's a really a positive thing.

Same with the capital resources.

So it goes down because it's being spent on the thing that it needs to be spent on.

So you know, in a certain sense, you could almost say the spend is good because it means that we are making the investments that we need to be making into our infrastructure, into the pension and those things.

So these were funds that are set aside to do those things.

And if we see the spend happening, it means that we're actually following through on parks improvements, fleet replacements, um, you know, water main work, all of those things are being taken care of.

So it's it's actually a good thing um to be seeing these uh these dollar values go down in a lot of these cases.

Okay.

Okay, no, no, and I understand with you.

And if we were like in a normal economic climate, I would totally agree with you.

I just think with the tariffs, with potential, so people are talking about recession around the corner with even though this is nationally, but you're seeing African American unemployment rate go up.

I I'm thinking with the with with with more money that we're spending for police officers, more money that we're spending for bus drivers, and rightfully so.

I'm not knocking that.

I'm just saying with the spending pressures that we have and with the economics, looking like we're starting to go a little bit in recession here.

I just want to make sure in these types of it really tie in terms of uncertainty.

You know, GM was talking about, you know, we've seen all of talking about making layoffs.

Uh, we're seeing, you know, Amazon talking about turning a lot of the um, I think it's like 60,000 employees, talking about going, you know, using all um artificial intelligence or automating those jobs.

I'm just saying in that type of environment and the spending pressures that we have, you're saying that with the cash position that we have and the spending that we have with the budget, we still should be okay.

This is not the time to start talking about um performance budgets or uh performance-based budgets or um zero-based budgeting or you know, contingency contracts to save money, you know, or in a countercyclical time, I understand, but you you're saying that we're okay in that environment.

Through the chair to member young, yes.

So at this time, we do not foresee that we need to move to any form of extreme austerity measures.

Um it's it's no secret that we will be taking a much more conservative fiscal approach to the fiscal 27 budget process.

Um, you know, and and with the you know, when the mayor elect, when we have our those sorts of conversations with the mayor elect and have a conversation about the resources that are available, obviously, with you know income taxes being down the way they are, we are being cautious and proof.

So we are absolutely keeping an eye on this, and yes, we will tighten our belts a little bit because that's well, it's my job, right?

It's to say, hey, let's be a little, let's let's be cautious, let's be conservative.

Um, and you know, we'll continue to take that stance through this.

But at this time, you know, no, I do not foresee things like layoffs or reduction of services.

There's no anticipation that that will be necessary.

We have the resources on hand because of the work of you know this committee and and and the entire council and the mayor um and my team and and and and Tani Stademeyer and the team in the OCFO broadly.

We've worked really hard over this last decade to make sure that we have the reserves and to make sure that we have all of the safeguards in place so that if we do see a little bit of a tight spot in the revenues, that doesn't, you know, it doesn't take us down.

Uh, we are we are we are prepared for pretty bad scenarios.

We are prepared for uh what may come our way.

And at this time, I just do not see a necessity for any kind of drastic austerity measures.

Um, you know, I can't make promises.

I don't think anyone in this room could.

Um, but at this time, I just don't foresee that being necessary.

No, excellent.

Um, and my and my final question is about ARPA funds.

I'm looking at the money and it's going from 455 million to 202 million.

I just want to say, is that part of that ramp up?

And if we continue to keep going the way that we're going, do you think that we'll be able to spend all that money before the next year's uh December 31st deadline?

Yes, sir.

So we are on track to have all of the ARPA dollars spent um, you know, under the legal requirements by December 31st of next year.

So you see that big year over year drop in the remaining ARPA balance because we've really been pushing hard on on a lot of the users of ARPA, a lot of the programs and a lot of the purchases, expenditures, capital investments.

We've really ramped up the pressure to keep them moving, get things going.

Um, so yes, we are absolutely confident we are definitely going to meet our spend downline.

We do not intend to return a single cent uh to the federal treasury.

Excellent.

Thank you, sir.

I appreciate it.

Thank you, everybody.

Thank you, Mr.

Chair.

Thank you, Member Vice Chair.

Uh, any further questions?

Mr.

Chi I'm coming right to you, Mr.

Corley.

Um, seeing that, Mr.

Corley, floor is yours.

Thank you.

Thank you, Mr.

Chair.

Actually, uh, just had one question.

Um, they answered questions.

Um my questions during their discussions that Mr.

Chair, you asked some questions that I had as well.

So I thank you for that.

So, really, just one quick question on page five of the report.

I will I will reshare my screen, Mr.

Corley, so that's up on the screen for everybody.

Okay, and um, under the definitions on the right side, when we talk about budget, you said budget count reflects budget amendments approved by city council through August 2025.

So you're talking about all of the actions that council took up to that date.

So the last budget amendments that council approved were um back in April.

Right.

So I think that that's sort of uh through sorry, through the chair uh to Mr.

Corley.

Um that language is sort of boilerplate language.

I think we just kind of update it with the month in there.

The reality is there have been no budget amendments since July 1st.

We have not amended the budget since July 1st through August.

Let me put it that way, through August.

We did amend the budget to create the reserve.

Um, and then obviously we have uh a budget amendment on the on the agenda for this committee today about the CVI funding from the state.

But through the period of this report, July and August, we had no budget amendments.

So I we should probably make it a little bit less automated that we populate a month into there and make it clear that there have been no budget amendments when there haven't been any.

So there have been none.

Okay.

Okay, thank you.

That's it, Mr.

Chair.

Thank you, Mr.

Corley.

All right.

Uh seeing no other questions.

Is there a motion to receive and file line item 6.4?

Motion.

Hearing no objections, that action shall be taken.

Thank you very much.

Uh and members, uh, just very quickly.

Why I got Mr.

Johnson on the screen, I know we've got to do 6.5, but if we can just jump to line item 6.6 really quickly under the office of the chief financial officerslash office of budget line item 6.6 submitting a resolution of authorization for the supplemental public safety funding for community violence intervention motion to discuss line item 6.6.

Motion.

Here, no objections.

That action shall be taken.

Mr.

Johnson.

Uh please give us a brief rundown.

And if the clerk shall note, the same presenter is joining us.

Thank you, Mr.

Chair.

Yes.

So this resolution, um, well, let me back it up.

So as you've noted, as we all know, the state has adopted a budget, and that budget did contain some supplemental funding for public safety use.

Um Detroit's allocation is uh approximately, I know I have a very uh specific number in here.

It looks like we are getting 10 million six hundred and forty thousand five hundred and ninety-two dollars.

Obviously, we'll get a final sheet from the state at some point.

It may be give or take on that, but that does look like what the current um number from the state is.

Of that, um, the statute, the newly adopted state budget and the statute enabling the public safety allocation does provide that 25% of the um total amount allocated can um can be used for what we call non-law enforcement um public safety expenditures.

So these are gonna be community violence intervention.

I mean, that is what this was intended to do.

So 25% of that 10.6 million um we can put directly to CVI, and that is our intention.

So um we are proposing that we appropriate the 2.6 million right now that will allow us to put that into the CVI budgets.

If you'll recall when we did the budget for the current fiscal year, we did we could not fully fund all of the um performance payments that would go to these organizations.

Um we did a smaller version of what we call the baseline um costs for CVI.

And we noted at that time that we would need the state to provide additional funding in order to truly fully fund uh the CVI program.

These are those funds.

Um, you know, we would have hoped for a public, a full public safety trust.

Um, you know, but you know, half a loaf is better than no loaf.

And so, you know, with this, we can ensure that our CVI teams um are um fully funded in the current fiscal year.

So the proposal would be that we appropriate 25% of this allocation from the state.

Um the other, the remaining 75% um at this time we are not proposing to appropriate it.

Uh further conversations are gonna be needed um internally um to figure out uh what the right deployment of those dollars would be and what the sort of final rules are around the use of the funds.

Um we do know that the state eliminated the non-supplantation language, meaning that you know, prior, the prior language around public safety trust and public safety funding said that you could not supplant your existing budget with the new funds from the state.

That language has been removed um from the law.

And so uh we can supplant and whether that what that means and and how we would best utilize it is still under discussion.

But we know that the 25% for CVI is needed right now.

We know the CVI groups are doing amazing work, um, including the two new CVI groups that you know council um facilitated uh stiff standing up.

So um at this time we would like to move forward with that portion of the allocation, and we would have to come back later for further conversations about the remainder.

Okay.

Uh I don't want to get too specific because I know there's some things that are in the there are some wheels that are turning and some things that are working.

Um, you know, unfortunately, you know, just 25% being earmarked is kind of not what we hope for uh in CVI as we talk about creating a level of sustainable funding.

That also noting that um possible uh initiatives such as the Office of Violence Prevention under would also fall under that limitation based off of what the boilerplate language that uh that has come from Lansing.

Um I'm gonna reserve my comments, Mr.

Johnson.

That's what that that is what I will do uh for this particular thing.

But what I but or this item, but what I will say, um, you know, even as we look at uh what we anticipated to be allocated for public safety trust fund dollars, uh they are not reoccurring uh from my understanding that these they're one-time funding.

Uh and so there would be a need to go back to the state next year uh or or in the supplemental or next budget for the state's budget to be able to try to secure that funding again.

Is that correct, sir?

Yes, uh a portion of it we believe may actually be recurring, but it's a fairly small portion.

Um, yes, for the most part, the public safety funding is gonna be dependent on the state budget process each year, which is you know, obviously why we had hoped for a full proper public safety trust that would provide longer term security um in this space.

So we're the reason that I say we have to have conversations about the other 75% is because we want to make sure that we don't utilize those funds toward what we would call recurring expenses, right?

Like I don't want to pay for you know 10 new police officers with these dollars because I'm not guaranteed that they're going to continue at that rate.

So we want to make sure that what we use them for is something that still is very impactful, makes a lot of uh, you know, uh a difference to both our budget and you know residents' experience of public safety, but that doesn't put us as um over let's just call it over leveraged on our operating expenses because of dollars that may not be recurring.

So that's why that conversation is still ongoing to figure out how do we make the maximum impact with dollars that may not may not come again.

They might.

I mean, you they very well might.

We may we may be very fortunate in the next few budgets, but we can't we can't um hang our hat on that.

Yeah, I'm an optimistic guy uh as well, Mr.

Johnson.

Uh just know how politics work.

Uh chair recognizes Member Santiago Romero.

Thank you, Mr.

Chair, through you too, Mr.

Donnie.

So does that mean 75 must be used on law enforcement through the chair to member Santiago Romero?

Yes.

So these dollars are restricted to use for um public safety purposes.

We're still analyzing exactly how that term is defined, but um we know that the the distinction of law enforcement versus non-law enforcement, they did define that, and non-law enforcement would be something like community violence intervention.

The rest would be going to more policing functions.

And then I can't recall if you mentioned this already, but could we use the seven million for policing free up seven million for community investments?

Uh are we able to move money around in a way that we're able to expand more investment in community interventions in an office of violence prevention, et cetera.

Through the chair, that is a great question.

And that is the question that we are digging into to determine exactly what the bounds might be and what we might be able to do, you know, with with that additional that that seven million um portion of it.

So we're we're kind of analyzing that question and ask asking some questions back to the to the state about you know, talk to us more about what the intent was for this or or that sort of thing.

So we are actively looking into that very question.

Okay, because that would be really wonderful, although we no longer have ARPA money to be creative with for services.

If we use the seven for policing, free up seven, free up four for shelters, three for more CVIs or et cetera, et cetera, to be able to meet the needs um that we know really spear crime.

Um I then we would be working towards the same goal in in different ways.

Um so just the thought in questions and um yeah, I will share more as as I as I think of it, but um don't want to think that if we have the additional seven million that we will just add it to police and and just continue to grow our police budget when we've seen success in investing in housing um in transits, in in people.

Thank you, Mr.

Chair.

Thank you, Member Santiago Romero.

And to that point, Mr.

Johnson, um we won't have an answer within the next few weeks, I'm sure.

Uh hope hoped hoping to have some clarity, but uh again, uh as member Santiago Romero articulated that it that is a concern.

Uh noting how budget or boilerplate language works, uh, if it is specifically saying that we cannot use this to fill gaps or use this uh or shuffle uh without using that term uh loosely, but shuffle line items in our own budget around to be able to use those funds that that's a pretty huge restriction um uh on those on the utilization uh of those funds.

Uh and so be looking forward to that clarity.

Uh chair recognizes member vice chair.

Thank you, Mr.

Chair.

Uh Mr.

Johnson, uh, did you remember to eat today?

Because I know how you are, man, and I don't want you falling out on me.

Did you remember to eat today?

I I should have known you were gonna ask me this question.

Yeah, uh, through the chair to member young.

No, I did forget to use it.

See, that's unacceptable, man.

I don't want you falling out when you're doing this work.

This is hard stuff.

I appreciate it.

I appreciate your concern and your care.

I know you're one of the hardest working people here.

You gotta take care of yourself.

Come on now.

I appreciate that.

All right, all right.

Next time, don't make that mistake again.

Okay.

Listen, the reason why um I wanted to ask this question is because we have an analysis in terms of how much money these programs actually save, because you're talking about less people that would otherwise be going to prison, less people that otherwise be in their jails.

We're talking about less homicide reduction.

And so do we have a in terms of how much money that saves the city, it saves the county, saves the state.

I know Forest Detroit had a report, but it was a long time ago.

So with inflationary costs, I don't think you could use that.

And um, do we also have uh analysis of how many lives have been saved because of these programs, and do we have that broken down based on the areas where they're implemented versus where they're not, and do we have that broken down demographically?

Uh through the chair to member young, those are uh fantastic questions.

Um I know my team is not currently working on a costing, you know, on a um uh I guess you would say a savings model um to determine that, but it's something we probably could work on.

Um it that it's the data's there, you know.

We we can kind of quantify certain some parts of it, it's gonna take a little bit of a guess, uh a little bit of an educated guess on on how something might be valued.

But I think we could probably work on analysis like that.

I would be I would be very interested in working on analysis like that.

Um I do not have before me a numbers on like the number of lives saved and sort of things like that.

The difficulty with that is that you're kind of trying to prove a negative.

You're sort of trying to like I don't it's hard to say how many people his lives were saved because I don't know for certain that a life might have been lost in a situation where there was intervention.

Um and so it's it's hard to know um what may have happened, but I think that talking to the CVI groups themselves and and and the leaders in those groups, I think that would give us a great way of sort of gauging their view on that.

You know, they're very close to this, they know this, they know these situations, they know these communities, they often know these individuals who they're working with um often more than once um in these interventions, and um they might be able to provide a you know a reasonable sort of conversation around you know what they think they what they think they've succeeded in diverting from, whether it's lives saved or property crimes avoided.

I mean, all of these things are things that can ultimately benefit from this sort of um community violence intervention model.

Um, you know, it yes, it does drop homicides, and that's always our number one concern, right?

Human life is the most important um thing in in the world.

But CBI also prevents a lot of other knock-on effects and other crimes that can result from you know, folks who are just in bad behaviors, bad practices.

So it can really divert people from a lot of different um pipelines of activity.

And so I'd be very curious to to dig into this question.

So I again sorry, the short answer is I don't really have that information right now, but the longer answer that I just gave is that I would like to get it, and I would like to look into that.

No, I appreciate that.

And those are and those are really good points that you made.

I did I didn't think of it like that.

So I I definitely make sure next time I phrase it differently.

I'll probably just talk about just the reduction of homicides instead, so we don't have to make you prove that because I don't because that's not my intention.

And also I think you know, what you're talking about in terms of reduction of crime, I also think it'd be interesting to see in terms of property value increase as well in a lot of these neighborhoods, because part of that reason was the crime was the property infected property values.

So I think the reason why I'm doing this, one is so people understand the benefits overall, that it's not just from a crime perspective, which is the number one reason, but also economically why this is, and secondly, it allows the city council, it allows the administration, we're making decisions to understand that we're investing this amount of money in this, but we're saving so much more money because we have these programs.

Otherwise, the amount of money that we're gonna spend, the budget pressure that we're gonna have without these programs would be significantly greater, and this is the reason why.

So I appreciate that.

Thank you, sir.

Thank you, Mr.

Chair.

I'm done.

Thank you, Member Vice Chair.

Hey, seeing no further questions, Mr.

Corley.

Thank you, Mr.

Chair.

Um, just remind the council in the current fiscal year 2026, the mayor proposed to add 4.4 million to the CBI um program, and council agreed to add another three million to um allow for another CBI CBI group.

So that's great.

Um so the fiscal 2026 budget ended up being about 8.4 million.

If council approves this uh budget amendment that's before you, the 2.7 million, that would bring the total to 11 million for CBI uh groups.

And so Mr.

Johnson alluded to two new groups.

So would the 11 million fund a total of seven groups?

What is what is that number looking like?

Uh through the chair, Mr.

Corley.

Yes.

So so currently the CVI deployment is a total of seven uh CVI groups uh working in the communities.

We had the mayor's proposed budget um was to fund five CBI groups, and the council's um addition of funding allowed us to stand up to additional to get us to the total of seven.

So these funds would go to continue to support the full costs of all seven um teams working around the clock like they do um through the full fiscal year.

Okay.

And just like the public safety trust fund, uh the majority of the dollars seem to be one time, likewise the same thing with the city's budget.

You know, um we're up to 8.4 million.

You approved this as 11 million, but next year we'd back down to a million.

So that's gonna be, you know, a challenge for um upcoming uh administration and council.

Um I I and I had some historical data in here.

Just a quick question, Mr.

Johnson.

Do you know, you know, this the council agreed to spend 10 million dollars of opera dollars on a CBI program?

Was all of that spent?

Uh through the chair to Mr.

Corley, it is not all spent yet, but it is encumbered onto the contracts for the groups, and so how these funding, how this funding works is the ARPA component is completing and it's gonna complete in the next couple months, and then these general fund dollars, that's what steps in when the ARP when the ARPA runs out, the general fund steps in and picks it up from there.

So that's we're in those sort of waning days of the ARPA dollars.

Um, and um that's what these funds are also gonna help with that transition over to it being a fully general fund expense.

Great.

And then lastly, um so about 800 million 800,000, I'm sorry, was uh budgeted using general fund dollars in 2024 for the CBI program, about a million in fiscal 2025.

Council did approve um a budget amendment adding 900,000 to that.

So we had about 1.9 million in fiscal 2025.

Um I'm assuming those dollars have been spent, and that was primarily for administrative purposes related to the CBI program.

Uh through the chair, Mr.

Corley, that is correct.

So, yes, those dollars did spend.

Um, I will note that the 2024 dollars, that money, I know it was in appropriation 21245, but that appropriation also covers the ceasefire group, which is actually separate from CVI.

And in 2024, that 775, that was covering the ceasefire group.

CVI had not yet um, there was really no CVI component yet on the general fund.

It was still fully ARPA.

But yes, in 25 we began covering the administration certain administrative components, um, the city staff that support on the back end um and go from there.

But yes, it does spend every year.

There really there's no balance forward of these dollars.

So they spend out every year, and each year is sort of its own bucket.

Thank you, Mr.

Chair, appreciate it.

Thank you.

And to your point, Mr.

Corley, I hate when I'm right on certain things.

Um, we were having that discussion during the budget cycle.

Uh, and we put that line item in for additional three million at the time.

I know there was some discussion that we were already been funding that and where it was possible we were gonna get the public safety trust fund.

Um, but again, I I know Lancy.

Uh and uh to see this come out like that, draw some interesting concerns.

You know, you have some very great questions as well.

Uh CVI, we have the ability to fund it for a full year, all seven groups.

Uh the 11 million will allow us if uh to to do the bonuses that fall under those contracts because we must remember that if we establish and move that forward as well, the performance incentive to uh incentives excuse me that are attached to that.

Um, but but again, when you look at uh possibly what could be the shortfall, it's it's it's very daunting.

And so um, you know, I will not be on the council next year.

Um, but it you know, it's it's my it's I don't know.

I'm gonna miss you too, member vice chair.

Uh, but it is my hope that you know there's going to be some priority taken into that budget because uh council as well as the next administration is gonna have to make some tough decisions relative to the general fund and then go back to Lansing again and continue to fight for these for these dollars, right?

Um we're really just hearing about it now because and this is not normally how it is because we're past October.

Generally, in October is when the checks are being written from the legislature because they passed the budget earlier than that because we're in the new fiscal year, but that's gonna roll right back around come March, April.

That discussion has to start up, you know, immediately, even in Lansing, and hopefully they pass a budget before October then.

But but it it is it is a concern uh for a program that has proved to be very successful here in the city of Detroit uh and has become part of our core when we talk uh uh when we're talking about public safety.

Uh chair recognizes member vice chair young.

Thank you.

I appreciate that, Mr.

Chair.

Um I also just wanted to ask you really quickly, sir.

Um, for my understanding, the um Trump administration has a CVI grant program that's available.

I think that they put out are you working with the grant department at all to be able to provide more money from the federal government in that way?

Uh through the chair to member young, I am I'm not personally aware of of a Trump administration um funding mechanism for CVI.

Um if one exists, I assure you we would pursue it.

I mean, you know, we would definitely pursue it.

If someone wants to give us money, I will I will take it.

Um but I've not I've not seen one, but I can I will go talk with grants and say have we scrubbed everything?

Are we sure there isn't something that we haven't gone through?

But I will say our grants team is pretty thorough in finding if their dollars out there, they will sniff them out.

So um, but I'll we'll double check.

We'll absolutely double check because if it's there, we want to try for it.

I agree.

I I appreciate it.

Also just want to ask, is there any sort of uh opportunities for public private partnerships at all?

Well, I think the chair member young.

I mean, CVI is, I mean, this technically is a public private partnership, right?

Like, so we are you know, we are ourselves not running CVI.

Um, these groups are running the CVI programs on our behalf.

Are there other private entities that could help fund it?

Yeah, probably.

I think probably I think um that is something that we are absolutely looking into is you know, as as you know, well, you um uh Mr.

Chair, Mr.

Corley, as as myself, we've all been noting, you know, we are gonna have to make some difficult decisions as as resources are tighter in this current time.

Right.

And you know, CVI is likely, I think I think we all know CVI is likely going to be a higher priority for folks.

It it works really well.

It people it really resonates with people.

Um, but we do need to make sure that we have our ducks in a row and that we have the resources lined up.

And so we won't be having those conversations with really anyone who's interested in helping fund you know this sort of program.

So, you know, certain philanthropic foundations, um, businesses, you know, whoever might be willing to help contribute into a fund that you know um enables this.

We'll have those conversations.

I don't know what the final result will be, but we will we'll speak with anybody who may be interested in helping, you know, continue a program like CVI, which is so um important and is making a huge difference in our neighborhoods.

Um, you know, I think that would be something we would continue to discuss.

Is social bonding a possibility?

It is not something it is not something that we have discussed um very um seriously we we've never bonded for something like that, and I'm not aware of jurisdictions that have bonded because it's it it's considered more of an operational expense, and so when you bond for something like that, we would it would likely be something we would need voter authorization for, and then we would need to determine if that's the sort of bond that could even be how it would work, but it's definitely again anything's on the table.

Ideas are great ideas.

Let's look at them.

Let's examine them, let's poke them and see if they work, and if they do, and it seems good for the city and and and good for residents.

You know, why not?

I guess is the is the answer.

Thank you, sir.

Appreciate it.

Thank you, Chairman.

Of course.

Thank you, Member Vice Chair.

Okay, colleagues.

Uh, with that, is there a motion to send line item 6.6 to formal with a recommendation to approve?

Motion.

Hearing no objections, that action shall be taken.

Thank you very much, Mr.

Johnson.

We appreciate you.

Line item 6.5 submitting a resolution of authorization for a request to hold a hearing before the budget finance and audit standing committee to consider the expansion of the Bagley Neighborhood Enterprise Zone Homestead Area NEZ.

Motion to discuss line item 6.5.

Motion.

Hearing no objections, that action shall be taken.

We have our assessor joining us.

Mr.

Alvin Horn, thank you for your patience, uh, Mr.

Horn, Mr.

Assessor.

Uh please uh state your name for the record and then tell us a little bit about this request uh for a public hearing regarding expansion for the Bagley NEZ.

Thank you, Mr.

Chair.

Alvin Horn, Deputy CFO and Assessor for the City of Detroit.

Good afternoon, commendments to committee.

Uh the office of the assessor was approached by Member Callaway's staff to consider the possibilities to explore the possibilities of expanding the backley NEZ area.

Uh we restricted ourselves to two questions.

The decision to do so, of course, remains with this honorable body.

Uh those two questions were the City Council have the authority to expand an EZ area.

And would expanding this NEZ take us beyond the 15 percent limit in public act 147 of 1992.

The question, the first answer the answer to the first question is yes.

City council does have the authority under the gener the Neighborhood Enterprise Zone Act to expand NEZ.

City Council has the sole authority to do so.

This is a legislative prerogative.

Uh the second um the second question, the answer is no, it will not exceed the 15 percent limit that the state uh signifies.

Right now, as of 2024, we were at 13.78.

This expansion won't take us to 13.95.

Uh when council redid the NEZs in 2020, they gave themselves to leeway to do just this, to possibly consider expanding NEZs or create new ones.

Uh this there are right now there are 1,412 parcels in the Bagley NEZ area.

This would add a total of 499 additional ones.

Of those 499, we believe 255 would possibly qualify for an EZ homestead.

Okay.

Okay.

And I'm sorry, were you done?

I was, sir.

Yes, sir.

So through you, um uh let me just say on the record, I don't have a problem.

Uh for me expanding, I know it will go through PED uh as far as expanding the zone.

Question I have uh we're talking the additional 409 parcels.

You say 200 and some I will qualify.

What's the occupancy rate in these in these new areas?

Do we have uh actually in Bagley it's fairly high compared to most neighborhoods?

Uh a little over 1,800 parcels in the area.

61 percent of them are PREs.

So 61% of those properties are owner occupants, and another 42 bought their property after December 31st, 1996, which would qualify potentially qualify them for the NEZ uh exemption.

Yeah, and this is uh, you know, obviously I'm very familiar with the area.

Uh this is uh uh always had looked at when we talked about NEZs in that area, you go past the first few streets and then you hit the NEZ area.

Uh and there are some challenges on those first two, three, four blocks.

Uh but I I am under the uh impression that some of them face those challenges due to the fact of not uh being able to qualify for uh certain exemptions and and having the ability to get tax breaks or property taxes being high at the time.

Some folks lost their homes through 2008.

I remember that area being very uh vibrant from liver noise to Wyoming.

Um but I think this is a good start.

Uh and particularly you said of 209 folks qualifying, we're able to get them some sort of relief uh establish the zone as well to help uh create and push that forward and a revitalization or stabilization of that neighborhood even more.

I think it's a great thing.

Uh like to add one thing, Mr.

Chair.

Um the City Clerk believes that only one public hearing is necessary.

Uh we asked that it occur before this committee because this is the committee that has legislative oversight of the assessor's office.

We were the lead agency in developing NEZs back in 2020.

We're the ones that were asked by member Callaway to to review this.

That's why it's before your committee, sir.

Thank you.

And to you.

I'm sorry, my mic.

Uh to you, Mr.

Horn, I have no problem holding the public hearing here.

Um I I sit on both committees, though, and I know generally the establishment of a NEZ zone goes through PED.

Um so I but I if if we are able to do that here in this committee, I I have no problem with doing it.

I know generally we are more certificate based to hear uh in this committee.

Um, but I don't have a problem holding the hearing.

My question becomes does it become difficult to take action because it did not go through PED uh as well.

Uh through the chair, the the considered opinion is no.

Uh and I would remind the committee, this is not establishing an AC.

This is modifying the boundaries of an existing one.

So it's a little different in circumstance.

Thank you.

Uh I just want to get that on the on the record too, and make so folks don't think we're stepping on toes.

Um questions from the committee.

Okay.

Uh and this is just a request.

Uh I am going to be uh uh to you.

Does this require will this requ require or trigger um any necessary like the introduction of the public hearing that needs to come or here?

I know that's probably more of a law question.

Through the chair, that is a question for the law and possibly the city clerk's office.

And the reason why I ask, you know, we're running out of Wednesdays here.

Yes.

So uh and to get my team together and for us to understand we're running out of Tuesdays as well.

We got a couple Tuesdays coming up, we won't be here.

Uh and if it needs to go through the body to come back and be referred back to this committee that we are in a proper place.

Uh, will we have anybody from law?

I know we normally have um Mr.

Anderson here, but he is not here.

Um and so if we were to push this resolution of authorization forward, let me ask you this, Mr.

Uh Horn.

The next steps would be what?

Through the chair.

The office of the assessor would provide the city clerk with a mailing list of everyone in the potential expansion area.

We would also provide the the notice of a public hearing.

Um that would occur once this committee set that date.

Uh we would the clerk's office would do the mailing, it would have to go through the clerk.

Public will be notified.

Correct.

I and and and I'm with you.

I want to set the date, but I want to make sure that we're doing it in a proper order.

I think Mr.

Anderson is coming.

Uh just to make sure that it does not have to reach the table to be referred and then sent back for the introduction and setting of a public hearing to come back to the committee.

As is generally done with public hearings here.

Um going through the legislative process.

Uh I think we have Mr.

Anderson who is coming uh here that could possibly provide a level of clarity.

Uh any questions before that members?

Chair recognizes Member Santiago Romero.

Thank you, Mr.

Chair.

Through you to Director Horn, good afternoon.

Um just wondering currently the Bagley uneasy zone.

I guess the my only question or line of questions in my head right now are is this relatively bigger than the others?

Is this roughly the same size?

Will this be much larger than the other zones?

Just trying to think of with the amount of space that we have left to expand, um if it's if we're being equitable here for being fair.

Uh through the chair.

Uh member um Santiago Romero backley is actually one of the smaller zones.

Okay.

Okay.

Okay, that's helpful.

Thank you.

That was my only uh question, Mr.

Chair.

Thank you.

Thank you, Member Santiago Romero.

Uh is Mr.

Anderson arrived yet.

Okay.

Chair recognizes member vice chair young do we have a number of how much savings the uh citizens will be able to receive from this?

Through the chair.

That number will be provided to this committee in the next few days.

Okay.

Look forward to it.

Okay.

Thank you, Member Vice Chair.

Uh just like the matrix, Mr.

Anderson.

We are waiting on you, sir.

Uh our question to you, um, noting that if we move this resolution forward, next steps obviously would be the steps to trigger what a public hearing is.

Can we set that date here or will that need to be would would that need to be referred after this resolution is passed?

Would that need to be referred through the table to come back here to this committee for the introduction and setting of a public hearing and then go back and set the date for the public hearing then go back.

I know that's generally done with ordinances, but of this nature.

Um in the correct way of possibly setting a public hearing without having the referral process.

Through through the chair, I don't see uh Grand Anderson Law Department.

I don't see any problem for setting the hearing earlier today here.

You know, if anything, the the the purpose of giving these notices is to inform the public of the time and place of when there will be these hearings.

Giving advanced time is is never a problem.

The issue is when you know we're trying to shorten that clock.

Okay.

Um so with that members, uh I'm going to noting our calendar and what we have and what is expected to come on to these agendas.

Um and I'm very familiar with the establishment of any Z zone sitting on the other committee.

Are we under a specific timeline that we need to work with this?

Uh Mr.

Horn.

I know generally there's a some sometimes a 60-day period, but go correct me if I'm wrong.

Are we fine timeline-wise if we're just expanding?

Through the chair, I believe so.

I do not I have not read anything in the city ordinance or state legislation that would require a time limit or a you have to do it within so many days.

Okay.

All right.

So I think we will be looking at our next date to be with a we well, we we want to have five days.

We want to have ample time for folks to respond as well.

Um, members, first we need to take action on this actual request.

Is there a motion to send line item 6.5 to formal with a recommendation to approve?

Or actually, this would be a receive and file if I'm not mistaken.

Is that correct, Mr.

Anderson?

6.5, because it is a request, not necessarily a resolution of authorization, even though it's listed as a resolution of authorization.

Through the chair, I believe we're sending this to formal.

Okay.

So is there a motion to send line item 6.5 to formal with a recommendation to approve?

Motion.

Hearing no objections, that action shall be taken.

Uh and now, members, is there a motion to set a public hearing uh for the expansion of the Bagley Neighborhood Enterprise Zone Area Homestead NEZ for a date of November the 5th.

Is there a motion to do so?

November the fifth, ain't that the day after that?

The day after the election.

You want to hear this day after okay.

Uh give us a moment.

Motion.

Okay.

Hearing no objections, that action shall be taken.

Thank you.

Thank you, Mr.

Chair.

And just for the public to know, one of the reasons why we're trying to get it on the fifth two member vice chair, uh, if that public hearing is to take place, then that still will have to come between another four come in front of the formal session after the public hearing for the actual establishment for the entire body, and we're we're simply running out of Tuesdays here.

Okay.

Uh okay.

Thank you very much, Mr.

Horn.

Thank you very much, Mr.

Anderson.

All right.

Finally, we'll move under the housing and revitalization department line item 6.7, submitting a resolution of authorization for Willis Street Apartments payment in lieu of taxes pilot.

Uh Willis Street Department's LLC is the owner uh and have they have applied for a pilot uh under this a 15-year pilot.

Is there a motion to discuss line item 6.7?

Motion.

Here are no objections that action shall be taken taken.

We are joined by Miss Oberholser, who is here in the committee of the whole.

And I don't know if Mr.

Cook is joining us online or if you're taking the flying the entire plan, Miss Oberholser.

Your your mic.

Yeah.

Good afternoon, Michelle Oberholzer Zimmerman with HRD.

And Justice Cook is online.

Um he can answer questions, but I've prepared to speak on behalf of HRD.

Okay.

Thank you.

And do we have a presentation as well that we'll be putting on on the screen or nothing on the screen?

I do have some handouts and uh for each of you.

Okay.

Thank you.

And just for transparency, say can this be found online after today's committee?

To the chair, no, I don't have it online.

This is a summary of the resolution.

Okay.

Um we can make it available uh if need be.

Okay.

Uh we try to provide it, not trying to take you guys to rig regular road.

Is it is it possible you can share your screen with this document that we have right here?

Yes.

Could either of you please share it?

And if you both can slide five.

Yep, and if you both can announce your name uh for the record, Miss Labov and Mr.

Cook.

Thank you.

Justice Cook, Housing and Revitalization Department, Deputy Director of Tax Incentive.

And this um document was provided online through the clerk's office, so you can access it through the agenda.

Just FYI, so it is online, but we can share it on the screen as well.

Thank you, sir.

I appreciate you for that.

And Miss Lebov, if you can state your name for the record, ma'am.

Rebecca Labove, housing and revitalization.

Thank you, Mr.

Payne.

If you can grant them shape sharing capabilities just so we can have it easy for members of the public to be able to follow this document.

It's pretty simple, straightforward, but I still want to give folks the ability to see it.

Thank you very much.

Um Mrs.

Overholser, Zimmerman, please uh proceed.

Thank you to the chair and to the committee.

So Willis Street Apartments LLC is the owner of the development known as Willis Street Apartments, located at 68 East Willis Street, 48201, that's in D5.

The development has applied for the City of Detroit's expanded payment in lieu of taxes pilot program.

And this development is a fast track housing project as defined by the pilot ordinance, meaning that it can be administratively approved without council action.

However, because this project is currently subject to an abatement resulting from city council resolution, the pilot cannot go into effect without council's further action to revoke that abatement.

So the abatement for this project is neighborhood enterprise zone NEZ.

It was issued December 17th, 2024, and it currently set to expire December 31st, 2038.

The project includes 10 residential units.

Under the current NEZ, 80% or eight of those units are market rate, and only two of those units are rent restricted at a value of 80% of the area median income.

Under the pilot, all 10 units would be restricted units subject to rent and income restrictions, averaging at 80% AMI.

And the property does have a certificate of compliance.

Actually, this is the next slide here.

So if you can go to the next slide, please.

Yeah.

So as it pertains to the program requirements for pilot, the project does have a certificate of compliance.

It has received a blight clearance from the Department of Administrative Hearings.

It has well exceeded the investment threshold required by the administrative rules for pilot, which state that for a vacant rehab, they must invest 15,000 per unit, which in this case would be 150,000.

They have invested close to half a million.

And this application has been administratively approved by HRD.

This was done back in August, in fact.

And uh we have not gone before council yet because we wanted to make sure that they were going to complete all the requirements to have the pilot go into effect in 2026.

We would not want to revoke one abatement if the pilot were not able to go into effect, but they have received their mission certification of exemption.

They have submitted the packet to the assessor to initiate the pilot.

And so what remains is uh for council action to decide if you wish to revoke the abatement.

The last slide here just shares some comparative values.

So under the current NEZ, we could project that their property tax liability for 2026 would be approximately 20,000.

Under the pilot, based on the 4% pilot rate and based on an estimated annual rental revenue of approximately 200,000, their property tax bill would be approximately $8,000.

And uh, if you have any questions, we are happy to take them.

Thank you.

Uh pretty good pilot uh from my understanding, pretty good project.

Also designed what it is uh doing what it is set out to do.

Um and uh creating diversity in the development uh as well.

I think a minority developer is uh developing this specific project as well.

So good to see things working.

Uh I'm comfortable with this read in that resolution, the revocation of the NEZ uh as a test to the pilot.

So uh everything is checked out on that on my end.

Are there any questions from the committee?

No, seeing none.

Is there a motion?

Mr.

Corley.

Thank you.

I just had a question reading through the um documentation.

I was just curious.

It looks like Wayne County does have the option to opt out of the pilot exemption.

I'm assuming they have not chosen to do so thus far.

Through the chair.

Uh Mr.

Corley, that action has not been taken yet.

What happens procedurally is that when the applicant submits their mistress certification of exemption to the assessor, the assessor then passes that on to the county.

The county has 45 days to decide to take an action.

We expect that they will opt out, but we do not yet have a determination for this particular project, nor for any others.

Thank you.

Uh and and that's generally what we see in most of the pilots that go through the county always has the option to do that.

Uh I don't think we've seen one yet where they have not opted out uh in any of the pilots even prior to us uh with changing uh the ordinance.

So um but hope you didn't jinx it, Mr.

Corley.

I hope you didn't jinx it by any stretch of the imagination.

Uh members, is there a motion to send line item 6.7 or formal with a recommendation to approve?

Motion.

Hearing no objections, that action shall be taken.

Thank you very much.

Uh Mrs.

Oberhoser, uh Ms.

LeBo, Mr.

Cook.

Uh as always, a pleasure.

Uh thank you.

Members, that brings us to the end of our agenda today.

Member reports, chair recognizes member Santiago Romero.

Thank you, Mr.

Chair.

I once again welcome everyone to join us tomorrow at from 5 30 to 7 30 to learn more about the hope application with Mr.

Donwell.

Hope to see folks there.

Thank you, Mr.

Chair.

Thank you.

Thank you, Member Santiago Mero.

Sorry.

Chair recognizes member vice chair young.

And thank you for that as well.

Um virtual meeting is today.

So that's Coleman Young the Second, Councilman Large Hope Program Virtual Meeting.

That's the homeowner's property tax exemption with Eric Sabrie, Wayne County Treasurer, and Willie Donwell, Director Board of Tax Review is Wednesday today, October 22nd, 5 to 6 p.m.

That's today from 5 to 6 p.m.

Uh today, 5 to 6 p.m.

You can call in 313-224-4248.

That's 313-224-4248.

That's 313-224-4248.

Or you can go on our website, Coleman.yo at Detroit Mi.gov.

That's Coleman.yo at Detroit Mi.gov.

That's Coleman.yo at Detroit MI.gov.

So we are going to have a virtual program with me, Coleman Alexander Young the second, and with Eric Sabrie, Wayne County Treasurer, and Willie Donwell involving the Hope Program, the homeowner's property exemption program.

That's today from 5 to 6 p.m.

The Hope Deadline is November the 7th.

Please call 313-224-4248 or register online.

Coleman.yo at Detroit Mi.gov.

Thank you, Mr.

Chair.

Thank you, Member Vice Chair.

And we're reminding folks to join us for our 29th policy session taking place Monday, October the 27th from 6 p.m.

to 7 30 p.m.

at the Edison Branch Library, located at 1840 Joy Road.

Again, this is taking place uh on October the 27th.

That's this upcoming Monday from 6 p.m.

to 7 30 p.m.

at the Edison Library Branch located on 1840 Joy Row.

Uh we will be discussing part two of the importance of voting.

So we are hoping folks come out, join us for part two.

This is right before the election.

Uh so the timing is right.

Uh we are hoping folks get out and vote.

Uh, but again, we are discussing the importance of voting, why voting is uh important, and this is our 29th policy session.

Uh we'll have refreshments.

We hope to see you there.

Great opportunity to learn alongside fellow residents and get the information that you need.

We will also uh show you how to find your polling place if you do not know how to do that.

So there's information that we will provide you with for third-party sites that help you find your polling place.

Uh with that, that concludes my member report.

Uh seeing no other business to come before this committee, the budget finance and audit standing committee will stand adjourned at the call of the chair without objection.