Good afternoon.

I'd like to call the budget financial order standing committee meeting of Wednesday, March 11th, 2026 to order.

Where the clerk please call the roll.

Councilmember Denzel Anton Campbell.

Present.

Councilmember Lucicia Johnson, present.

Councilmember Mary Waters.

Present.

Mr.

Chair, you have a quorum.

Thank you so much, Madam Clerk.

And I'll move us on to approval of minutes.

Motion.

Seeing no objections, the minister and approve.

Um we will I do not have any chair.

Well just say please tune in to our various uh budget hearings that we will have them throughout the days and throughout the day.

All right.

Um that'll move us on to public comment.

Request for public comment will close at 120.

Um, please limit your remote.

We will start with those in the room.

Do you have anyone public comment in the room?

CNN, we'll move on to Zoom.

Um if you're participating remotely, please use your raised hand function.

Do we have folks on Zoom?

Good afternoon, Mr.

Chair.

As of now, we have five hands raised on Zoom.

All right.

Let's go with the first person.

Um who's the first person?

Our first caller is owner Papa.

Good afternoon, Miss Hughes.

Um, you have one minute.

Miss Hughes, are you there?

Hughes through the chair.

May I be heard?

Yes, you may.

Good afternoon.

Good afternoon.

Yes, I do plan to give you a call, and uh, we do need to have a conversation.

But I'm interested in um this 6.4 about what is needed to amend the interest rates and fees charged for delinquent taxes.

I'm wondering what that's what's what that's all about.

Delinquent taxes for home citizens.

Um I'm also wondering um why we're requesting about uh the debt for DPS.

I didn't I thought they were two different entities, and um what do you have to do with DPS debt?

Um I'm also interested in um the five dot one, which is of the same memorandum about uh delinquent taxes and fees and charges, and uh I'm not sure.

Hopefully, you all aren't thinking about raising anything on the citizens.

You you have turmoil going on and all these other places where you could be receiving money, so maybe that's where you should look to increase your revenue.

Thank you.

Thank you.

Next person.

Our next caller is Betty A.

Varner.

Miss Varner, good afternoon.

You have one minute.

Uh good afternoon.

I'm Betty A.

Varner, the president of the Soda Ellsborough Black Association.

Now I want to uh complete my thought.

I'm asking the council to please allocate money in the budget to make sure that the people who were on who are on that um walk-in shower list that honorable uh Mary Waters uh has in her office the list that the people have been on that list for three years, and to help us get these walk-in showers that's needed.

It is a uh safety issue trying to get in and out of the bathtub.

Also, it's uh a problem for uh seniors and people who are disabled.

We need those walk-in showers, and we and the reason that we did not get them was because administration said they weren't gonna spend the money on them, and so some of the people, including myself, we got other work done because we said those walk-in showers were not going to be eligible, and this is not fair.

Thank you.

Next person, our next caller is iPhone.

Good afternoon.

Call um caller, the name iPhone.

You have one minute.

Yeah, uh I I uh just want to say that I when I was a lifeguard, or suddenly or I when it was raining, I went door to door and my neighborhood around Cron Cole to tell the pass out fires I made myself on a little machine or something to let people know what we had that we could teach their kids how to swim and come on over and we have a swim team and everything.

But the point is uh right now I need help on my building.

They I went they've torn down in the last three months, two downspouts, and then I had some grates made for the back that when it's supposed to breathe in the summer where I take the plastic out and then cover the back to uh windows of the crawl space so that they can't go into the crawl space.

Well, they've tried to wreck those, and they brought the plastic and one and stuff around, and now I've got to go tell the people to put it all the way through the next speaker.

Our next caller is William M.

Davis.

Commissioner Davis, good afternoon.

You have one minute.

Uh good afternoon.

Can I be heard?

Yes, you may.

I think more assistance is needed for residents that are behind on their taxes and have to pay exceptional, which should be illegal fees.

You know, I I can see maybe the six percent that some people have to pay sometime, but 18% and more.

That should be illegal.

I think more needs to be done to help the people who live in the city, and not necessarily helping people who do not live in the city who have groups of properties, you know.

Uh so the assistance should be for residents and you know, uh owner occupied dwellings.

Thank you.

Thank you.

Um, with that, the request for public comment would be cut off.

Well, the next speaker, please.

Yep, and our last caller is Samsung SMG991U.

Samsung SMG199U.

Um, you have one minute.

Good afternoon.

Can I be heard?

Yes, you may.

Good afternoon.

Okay, I wanted to respond to Councilwoman Callaway when she was talking about my friend.

It's not my friend, first of all.

It's a C that has to go grocery shopping.

You when you go grocery shopping and you take the cart over there.

Listen, people get paid at Myers for collecting carts, cars be everywhere.

They'd be all the way down to the next down to the end of the almost the eight mile, or let's say almost to Woodward.

So this lady don't have transportation, and it's not like she has clothes in the bag, she has food in her bag.

That's how she's shot because she catches the bus.

So the card being in there while she go to the bathroom shouldn't be a problem.

You saying use it at the she said use it at Myers.

Well, the reason why she didn't use it at Myron's because she don't want to miss her bus.

First of all, because she don't know what time the bus is gonna take off.

So she wanna be there when the bugs get there.

So she runs in there to use the bathroom real fast and come out, but still they should be allowed to go in there because they're not they get paid, they get paid to bring those parts back.

Thank you.

That brings us to the end of public comment.

I would just say, ma'am, if you um remember Calloway is not at the table right now, so if you want a further conversation with her, it may be best to reach out to her office.

Um and for the folks who gave their budget priorities, I did mark them down here as well.

Thank you all so much.

That'll move us on to unfinished business under 5.1.

Um status uh submit a memorandum requesting the legislative policy division to provide evaluation regarding amendments to interest and fees charged on dough and good taxes.

Um I'll turn it over.

If is there a motion on this, or I'll turn it over to Vice Chair Johnson.

Thank you, Mr.

Chair.

I was looking for um the response.

So um I'd actually like to make a motion to um request that you just combine 5.1 and 6.4.

There's been a motion to combine 5.1 and 6.4.

See no objections.

Um we will combine 5.1 and 6.4.

Is there a motion to discuss?

Discussion.

Thank you, Mr.

Chair.

Just want to um remind everyone that this was um requested by a resident who came before this body uh to speak about the exorbitant uh fees that are charged by the county, uh, noting that it is state law that dictates what the fees are.

Um, and so this was the beginning of advocating for a reduction in the fees.

Uh, and so we will take this information and um continue to proceed.

Uh, we'll we'll send a memo over to the legislative policy division just asking for uh a reduction or for the state to review the fees that are being charged, recognizing um the the cost that it adds to uh particularly to residents and their property tax bills.

Um and with that, I just I will just go ahead and make the motion uh to LPD uh to draft the resolution asking for the state to um reconsider the the fees and a reduction in the fees, noting how insurmountable it becomes for residents when they continue to accumulate.

Thank you, Mr.

Chair.

Thank you, Vice Chair Johnson.

There's a motion on the floor.

Any objections?

Seeing none that actually shall be taken.

And thank you so much, Vice Chair Johnson.

We've heard from quite a few folks that you know, as you mentioned on the presentation, but also other folks uh seeing that those fees are become cumbersome as folks try to get current on our taxes.

So thank you for your advocacy on this.

Thank you.

And with that, Mr.

Chair, I'd like to uh make a motion to receive and file line items 5.1 and 6.4.

There's been a motion to receive and file line items 5.1 to 6.4.

So no objections, that action shall be taken.

Thank you so much.

That will move us on to 5.2.

But before we do that, is there a motion to combine?

Oh no, actually, nope, or okay.

Uh move us on to 5.2 and audit of the American Rescue Plan Act Neighborhood Beautification Initiative Program and Operation.

Is there a motion to discuss?

Motion.

There's been a motion to discuss, and just for folks to know, we have allocated 15 minutes for this presentation, 10 minutes for the presentation, and five minutes for questions that members may have.

Um, for the folks that are here to present, you can now come to the table.

Good afternoon.

I know we also have the auditor general joining us virtually as well, so if folks can um introduce yourself for the record.

Good afternoon, honorable council members.

I'm Laura Goodspeed, Auditor General, City of Detroit.

Thank you.

Good afternoon.

I'm Mark Lockridge, Deputy Auditor General.

Good afternoon.

I'm Kevin Asadi, Chief Auditor with the Office of the Auditor General.

Thank you so much.

Good afternoon.

The floor is yours.

All right.

The floor is actually up.

Ms.

Audit Madam Auditor General, the floor is yours.

Yes, thank you so much.

And in look in recognition of the time, first of all, we thank you for giving us this time to present uh audit of the American Rescue Plan Act, the neighborhood beautification initiative.

I will just note for the public that this is our second report of opera funding for the city of Detroit.

The first one was related to the renewed Detroit Home Repair Program, and that report was released in October of 2023.

I will now turn it like to turn it over to Kevin Nassadi, our chief auditor, to present um the summary of this particular audit report.

Thank you.

Thank you, Laura.

And again, good afternoon.

Um through this report, we're gonna go through the presentation.

Um as Laura mentioned, this is the audit of the American Rescue Plan Act, Neighborhood Beautification Initiative.

And we will start with our audit requests and the scope.

So this audit came about as it was a OAG uh annual risk-based audit plan.

Um we are as uh Ms.

Goodspeed mentioned uh doing continuous ARPA auditing, and this was a limited scope performance audit, and then noted that this is an audit of a program in process versus a typical historical audit.

So you will see the scope that is July 1st of 2021 through December 31st, 2026, um, and just the importance of that date on December 31st, 2026, as this is the date for ARPA to money to be spent.

Uh next slide, please.

The next couple slides are gonna talk about the overall audit objectives for ARPA.

And so our audit objectives are to determine whether internal controls were sufficient to mitigate the risk of waste fraud and abuse.

Also to determine whether funds are distributed timely, fair, and in a reasonable manner, and also that the recipients and uses of the funds are transparent and the public benefit is reported clearly, accurately, and timely.

Uh continued on those audit objectives for ARPA.

It's also determined whether the funds are used for authorized purposes, any unnecessary delays and cost overruns are minimized, and that program goals were achieved and assessed program outputs and outcomes as compared to economic indicators.

So the audit objectives specifically related to the neighborhood beautification uh audit were to assess internal controls related to grant applications, grant eligibility, contracts, and financial transactions.

Also to determine compliance with ARPA related policies, plans, procedures, laws, regulations, and overall audit objectives.

Also to evaluate the effectiveness and efficiency of core operations.

The next slide talks about the neighborhood beautification initiative mission, and that mission was to provide targeted beautification of city neighborhoods for vacant property cleanouts and alley activation.

This initiative targeted 10 projects that were aimed to enhance neighborhood livability, economic vitality, and visual appeal.

In detailing the neighborhood beautification budget and actual spending, the neighborhood beautification initiative had a total appropriation of 25, I'm sorry, 28.5 million.

During our audit, we noted that as of November 30th, 2025, cumulative spending was 25.8 million, which was reported by the Office of the Chief Financial Officer.

This slide here gives you a breakdown of those projects as noted in the neighborhood beautification initiative.

You'll see in the first column, it identifies the project name.

And then also the next column talks about the purpose, and this is in alignment with the ARPA purposes, as noted on the ARPA dashboard on the city's website.

And then also the budget amount that was for each project listed.

There were 10 projects total.

You can see we'll go through them in detail with some breakdown, but you'll notice the first project was the Eighth Arts Alley, that was for neighborhoods for 5.4 million.

Also, there was the affordable housing development at 5800 Michigan Avenue, that was for affordable housing for 300,000.

Blight to Beauty Corridors, which is related to the neighborhood for for neighborhoods for 6.1 million.

Blight to Beauty Trees project, which was also for neighborhoods, which had about a 3.79 million budget.

The gray box program, which was for economic development at about 1.5 million.

Project oversight, which was related to neighborhoods purpose, and that was for 300,000.

The seed program, which we'll talk later, which was for economic development for 5 million, slow streets improvements, which was for economic development for 1.4 million, vacant lot activation and beautification for the neighborhoods purpose for 1.6 million, and then lastly, uh War and Av improvements for economic development for 1.2.

Central Services is noted, that is an allocation that is general for ARPA funds, and that is for the administration of ARPA dollars, and that's at 1.7 million.

The next approximately 10 slides will go through just the highlight the project objectives within the neighborhood beautiful initiative.

The first one noted is the ACE Arts Alley, and this is for the Office of Arts Cultural and Entrepreneurship Arts Alley project, which was to revitalize nine alleys by upgrading services, enhancing landscapes, uh implementing stormwater management strategies, and adding pedestrian and community amenities.

Our auditors uh concluded uh based on the work that was done for each project and based on the project of I'm sorry, and based on the audit that was conducted on the review of those project operations, our office concluded that the project team achieved its project goals and objectives as stipulated in the project plan.

The next slide uh for project uh objective is for the affordable housing development, and this was for the 5800 Michigan Avenue project, which is a new constructive initiative aimed at addressing the need for permanent supportive housing in the community.

Uh as part of this project, there was a development will feature 40 residential units designed to accommodate a range of household uh sizes, which the options include one, two, and three bedroom apartments.

Uh for our conclusion on this, we did note that because a limited amount of the dollars was used in this from ARPA dollars, so we noted that due to the 300,000 in ARPA uh funding representing only a small portion of the 18.7 million in project funding.

Our office did not review the project operations and did not draw any conclusions regarding its implementation on this project specifically.

On the next slide.

So the objective of the Blight to Beauty Corridors uh project plan is their goal was to reduce visible blight, including the cleanup of vacant lots and removing trees and right-of-way areas on 18 commercial corridors throughout the city.

Uh, based on the work that was conducted by our office, our office concluded that the project uh was implemented in accordance with the project plan.

And we had no further uh conclusions recommendations.

The next slide talks about the project objectives for the Blight to Beauty Trees.

This project, the Blight Beauty Drees Project, the plan goal focused on enhancing neighborhood aesthetics and promoting public safety by the removal of hazardous and unsightly legacy trees.

Our office concluded that the project was achieved as intended in accordance with the project plan.

Just to note that the goal originally was 1,250 trees, and for this project, they did exceed that total, which was a total of 1,348 trees.

The next slide talks about the project objective for the gray box project.

The gray job box project will stabilize structures, which may otherwise need to be demolished without intervention.

Gray boxing is a commercial construction term, referring to an unfinished space that requires interior completion by a tenant.

Our auditors did do on site visual inspections, and they concluded that the project is continuing to progress towards achieving its goal and objectives to the gray box sites.

The next slide is related to project for the ARPA project oversight.

The allocated $300,000 budget for this project funds, it funds the portfolio manager's salary over the three years of the MBI implementation.

We do want to note that the GSD ARPA oversight project funding was redirected from GSD to the Office of the Mobility Innovation.

The next slide focuses on the supporting equitable economic development, referred to as seed.

So seed is an incentive project to deploy 5 million in ARPA funding to provide eligible beneficiaries with access to real estate gap financing for real estate rehabilitation and development.

The program is administered administrated through a designated program administrator, which is the Detroit Economic Growth Association.

In our conclusion, we will talk later, but OEG's review indicated that the project is progressing towards its stated goals and objectives.

However, instances of DEGA's noncompliance with the ARPA sub recipient agreement were noted.

These details are provided in the observations section of this presentation, which we will get to.

Enhancements include pavement markings, way find wayfinding signs, speed humps, traffic circles, and curb extensions.

Based on the work that our orders conducted, we concluded that the project is progressing towards achieving its goals and objectives.

So we noted that GSD parks and recreation division identified two neighborhood projects which were selected to restore neighborhoods by removing blighted fencing, trash, visual obstructions, and replacing and/or repairing benches, picnic tables, shade structures, and other amenities.

Sites include Old Redford, that's the Link Alley vacant lot activation, and the Dexter Elmhurst Alley activation and lot beautification.

Again, our auditors conducted work and concluded that the project is progressing towards achieving its goals and objectives.

Our last slide related to the projects listed for the end neighborhood beautiful initiative is related to the Warren Avenue improvements.

Warren Avenue improvements projects include streetscape improvements along the West Warren Avenue.

The project aims to address safety traffic issues, create a safe multimodal connection to the Joe Lewis Greenway Warrant Trailhead, and provide an inviting environment for neighbors and other roadway users.

Our auditors conducted work and concluded that the project is progressing towards achieving its goals and objectives as stated in the project plan.

So those slides provide a background of the various projects that were part of neighborhood beautification initiative.

Our next slides will focus on the OEG observations and recommendations that were noted during the audit.

Our first observation, we noted that the C project has not achieved its performance schedules required by the subrecipient agreement.

In accordance with the requirements outlined in the Detroit Economic Growth Association subrecipient agreement, the following key compliance milestones have not been met.

So in our table here, we illustrate the key compliance milestone, which is noted on the left, and then on the right, you'll see the months between the required completion date and then the actual completion date.

So for underwriting, we noted approximately five months between the time that the required date was noted to the time that was actually completed.

Again, for the submission of the potential project roster to the city, it was just over six months.

Finalization of beneficiaries was over 13 and a half months.

Establishment of the beneficiary payment process was approximately seven months.

Assignment of project code for disbursement was just over nine months.

The award process was 13 and a half months continuing, and then also dispersing of funds.

You can see you know details that are noted in our actual audit report that was submitted.

The next slide is a higher level.

It's a continuation of the first slide, but you'll see this breaks down the performance obligation.

It's a comprehensive list.

Also includes the performance schedules of items that were you know 30, 60, or 90 day targets.

We noted uh performance that was complete as of September 2024, and then we also looked at for performance completed at another point in time in June of 2025.

And then our last column just knows the comp uh the comments, which identifies noncompliance with performance schedules.

So we noted items where they're either compliant or late.

Um, and you'll let you see the detail on that slide.

Uh, in regards to the recommendation related to our first observation for the MBIC program.

We noted that they should conduct a joint review with the Detroit Economic Growth Association to assess the underlying causes of delays and identify systemic improvements to prevent a recurrence in the delay of compliance to target dates as stated in the contract terms.

Also, our recommendation was to ensure strict adherence and compliance with contract terms with effective oversight to ensure the project milestones are completed on time.

Observation B was related to project contract amendment amount discrepancy in Oracle.

We noted that there was an original contract for Blight DeButy Trees project for the vendor who was approved for one point for 1,512,000, and that was the Limwalker Tree and Snow.

Uh was noted during the course of our audit that 512,000 was reallocated from Limbwalker Tree and Snow and was reallocated to Detroit grounds crew due to performance.

We noted that the performance, I'm sorry, that the purchase order was reduced to 1 million for Limwalker Tree and Snow.

However, we noted that the city's Oracle Enterprise Resource Planning System reflected uh the original contract value of 1 million five hundred and twelve thousand.

The next slide talks about our recommendation for the Office of the Chief Financial Officer.

And so our recommendations on the second observation were to update Oracle's ERP system to accurately reflect all contract amendments, including the revised contract amount of one million for Limwalker to prevent overpayments.

And also a recommendation was to perform periodic reconciliations between the ERP records and actual amended agreements to identify and resolve any discrepancies.

This will help ensure that all data accurately represents the current financial obligations.

During our testing, we noted that 11 of 16 of the invoices sampled were paid beyond those payment threshold terms as noted.

We noted that a review of legislative policy division reported the following three cost centers for the ACE Arts Alley project, which included uh 4 through 3120, which cost center for the arts cultural and entrepreneurship, 47012, which was for park development, 4720, which was for recreation operations.

The cost centers 47012 and 4720 were determined to be outdated for use by ACE Arts Alley, and as of April 2025, we noted all three cost centers were still in use with budget encumbrances and actual actuals being reported.

Based on observation, the next slide talks about our recommendation for the Office of Chief Financial Officer, which was one first to discontinue use of outdated cost centers for ACEM uh project-related transactions.

Also use current cost center to record all ACE project transactions, complete adjusting entries to transfer all appropriate amounts from the outdated cost center to the correct cost center.

Also to establish and disseminate a formal written policy that outlines the criteria and procedures for using multiple cost centers for a single project.

The protocol for cost center reassignment when a project shifts departments, then also policy outlines when required steps to ensure proper financial closeout of obsolete cost centers.

Just so we can get to the sure.

Yep, I'll be quick on this one.

So we did uh didn't not receive a formal agency response um in regards to uh this audit that was issued uh as noted in the slides here.

Uh we sent out on January 14th.

Uh our office sent out the draft report and had to request a due date of January 29th, and we did not receive a response to this audit.

Thank you.

You're welcome.

Thank you.

We thank you, honorable council city members uh for the budget finance and audit standing committee for the opportunity to discuss this audit.

Absolutely, and thank you for all the work that went into this audit, especially as we continue to have conversation around ARPA, but also as we are now in budget season to see what programs that we can continue and and how effective they were, um, especially in the carrying out of the so thank you so much.

I will open to questions from my colleagues beginning with Vice Chair Johnson.

Thank you, Mr.

Chair.

Um, good afternoon.

Thank you for the presentation.

Um I would like to ask first where residents can find the full audit report.

Yeah, they can find the the full room report on our website on the Office of the Autor General's website.

So if they go to Detroit MI.gov uh go under government, you will look under Office of the Auditor General, and in the document section at the bottom of our website, you will see this report has been posted to our website.

Thank you.

Through the through the chair, the report was also attached to the um uh city council agenda as well as the budget finance audit standing committee agenda when we first published it.

Excellent, thank you.

Um can you all verify whether or not the uh vacant lot activation and beautification was that the um neighborhood beautification program as well is that something separate?

Oh, that's actually separate thro through the chair, sorry.

Uh that is a we initially when we conducted our entrance conference, we were looking at the neighborhood beautification program, and then we determined based on our conversation with uh the department that we met with that this initiative and the program were actually separate.

Okay.

All right, thank you.

And the reason I ask is because I've had a resident asking specifically about the neighborhood beautification uh program and the dispensing of funds and and making sure that they are timely.

Um so duly note it.

Um I did lastly want to ask if you all know what's being done to get the seed program back on track.

I guess we can ask the Detroit Economic Growth Corporation when they come before us during budget, but just curious to know if you all have any uh additional information since the report was done.

Uh, through the chair.

Uh you know, as we we issued the report at that point in time.

That's about the information we had.

There were we have some details in our report that you can see kind of some additional details in there.

Um, but I don't have any update information as of today on how that's progressing.

We do know that four of the five beneficiaries were identified.

Um it's been a little bit of time since we kind of noted from this report.

So there might be some updates that may be worth asking.

All right, thank you.

Thank you, Mr.

Chair.

Thank you, Vice Chair Johnson.

Member Waters.

Thank you.

And so good afternoon.

Um, I just want to ask you a couple a couple of quick questions.

What's gonna be um be done if um they're not in still not in compliant?

How are you gonna handle that?

At this point in time, I would request that that question be posed to the opera team and or the office of the chief financial offices.

The C program was directly administrated by the mayor's office.

And again, as council member Johnson said, those questions should be uh opposed to uh those particular persons.

We are not planning to conduct a follow-up at this point on this particular project.

And if I oh okay.

Member Waters, I believe before uh you go.

I believe we have folks on from the OCFO's office, is that correct?

Um if we could have a few questions for them as well.

We can't um make them panelists as well.

Okay.

Mr.

Chair, we have a few people on, so whoever is supposed to answer, could they raise their hand?

If you're on from the OCFO's office related to this report, please use the raise hand function.

I'll just ask the other one.

Yes, they may or may not be able to answer it.

So we don't want to return any money.

Do we have plans to uh redistribute money that that is not spent for programs that are not working well?

Again, I I think that would okay, all right.

Well, okay, well, there you have it.

Mr.

Washington, are you on or Miss Sullivan?

No, for an administration as well.

Okay.

Okay.

All right.

Uh if there it before I make my motion, um, Mr.

Cor, do you have any?

I know your questions for the LCFO.

Okay.

All right.

Um, and all of my questions are for the OCFO's office as well.

I again I appreciate the work that went on into this audit.

Mr.

Corley, I just want to make sure do you have any thing from LPD?

Okay.

Um, I will make uh if there is a mo if I can make a motion that we can't make the motion, but if there is somebody can make a motion that we have um that we have the OCFO's office um come before us next week on this.

Okay, motion Mr.

Can we if uh motion to bring this item back uh in one week to uh request that the OCFO's office and any other entity uh is present to answer questions.

Thank you.

Uh there's been a motion.

Uh any objections?

Seeing no objections that action shall be taken.

Thank you all so much.

Um we will have follow-up on this.

Thank you.

Thank you very much.

Thank you, Mr.

Chair.

Okay.

That will bring us on to new business under new business 6.1.

A um from the office of City Clerk and City Planning Commission, a neighborhood enterprise zone certificate application for the rehabilitation of a house at 3302 Harrison in the North Corktown neighborhood enterprise zone area.

Is there a motion to discuss?

Motion.

Um there's been a motion to discuss.

Thank you.

Uh Mr.

Gulag, good afternoon.

Good afternoon, Mr.

Chair Chris Kulak, uh CPC staff.

We're also joined by the petitioner uh Lucas Bondi.

Thank you.

The floor is yours.

I have a brief uh slideshow.

Do you see my screen?

Yes, we do.

This is uh NZ certificate requests.

Uh staff submitted a memorandum and a resolution for your consideration.

It's on Harrison.

It's in the um North Corktown area shown on the red dot here.

It's on the uh northeast corner of Harrison and Ash, south of Martin Luther King Jr.

Boulevard.

Zooming in closer, it's an existing house at a small ranch shown here.

This is a 3D view of the ranch.

And on the left here is uh how it used to look.

Um, and then uh Mr.

Bondy, who owns uh Don D construction, uh purchased the home, I believe, from the land bank, and then rented as spent quite a bit of money renovating the house, shown on the right.

Uh so this is we verified this is in the North Corktown NEZ, which was established by city council back in 2003.

It's a large area, about 39 acres.

Over the years, there have been various rehabs and new houses built in this area.

Um the petitioner is um an LLC, but it's Lucas Bondi of Lucas Bondi Construction, who's done quite a bit of rehab and new construction work in the area.

The property is quite old, it dates back to 1885.

It's a one-story house with two bedrooms and approximately 1,300 square feet.

City records show the house was sold in April 2022.

From the land bank for 44,000 to Mr.

Bondi.

And he's been renovating it over the past several years.

So the assessed value is about uh 38,000.

Taxable value is about 32,000.

So Mr.

Uh Bonnie is is working to finish this house, and then it would be a rental property.

Um he has a major final piece that he'd like to uh finish is is replacing the slab beneath the building, which is about 14,000.

Um regarding parking, there's a space in the back to park off the rear alley.

Uh regarding accessibility, there are no accessibility features.

How however they could be added if a renter needs that um so this is confirmed as in the it's in the North North Corktown NEZ established recommended approval.

Uh and a resolution is submitted for your consideration.

Thank you, Mr.

Chair.

Thank you, Mr.

Gulag.

Mr.

Bondi, do you have anything to uh um no nothing to add?

He covered it pretty well.

Thank you.

Um questions from our colleagues.

Member Wars?

Yeah.

Okay.

All right.

So first thing is um how do we uh decide on $2,400 uh as a rent estimate?

And how many other rental properties uh do you own in the city?

Um are they all occupied uh at this time?

So those are and then I'll have a couple more after that.

Yeah, um so start with the first one.

Uh $2,400 is is just an estimate.

Um it's not based off of like an actual lease agreement right now.

Um, but it's based off an estimate.

And so how many rental units do I own in the city?

I'm gonna guess on this, uh probably about 10 or so.

Um, maybe up to 12, but uh all of them are either listed for rent currently or occupied.

Um yeah.

So there are no um currently no accessibility features.

Uh you've noted that it would be um accommodated if needed.

So what modifications are you willing to make?

Uh you know, ramps, rails, uh, etc.

And how's the park?

Um pad assessed and secured, and why is the condition um of the alley?

Is there sufficient lighting?

Yeah, that's a great question.

So I would add a ramp, uh, potentially if we had uh somebody who requested it uh specifically in the front uh to gain access in railings as well.

And the parking pad is off the alley.

Yeah, it's two cars wide, um, you know, 22 feet deep.

I actually replaced that alley uh with concrete uh four years ago or so, three years ago or so.

And there is a street light right there at that alley, um ash street intersection.

So it's uh well illuminated, uh, as well as we have two exterior lights on the house front and uh rear as well.

Oh, okay.

Well, well, that's good to know.

How soon are you gonna make the uh adjustments with the um you know accessibility?

You says only if needed, so I just kind of want to get an idea.

You said you would be willing to do it, but somebody might apply next week.

I mean, we don't know.

Yeah, yeah, yes.

So if we had somebody, it's it's honestly like it's pretty rare.

I've had like I think one person um asking about it in the last year, yeah, uh, about a ramp at a different property outside of uh Detroit, and uh when we did that, but um basically like if we get a person who you know has to get a wheelchair up or uh into the house and there's three or four steps, uh we would install a ramp.

And so we'd only do it, of course, if we if we have somebody approach us with that.

Um yeah.

I I'm I'm gonna say this, and I guess I'll I'll just kind of read now.

Sometimes you know you have people that are visiting who need that type of access uh as well.

Um not always for the person that's living there, although that's probably true as well.

But what what if they had a a family member who needed that type of access?

So I you know, I just kind of want you to consider those kinds of things as well.

Yeah, no, that's honestly a great point.

I appreciate you bringing that up.

You appreciate it.

I appreciate it.

The thoughtfulness.

Okay, all right.

Well enough to do what?

What are you gonna do?

Um, we could we can look into getting a uh an estimate to get a ramp installed.

All right, thank you.

Thank you, Mr.

Chairman.

Thank you, Melbourne.

Thank you, Mr.

Chair.

Um the one thing I wanted to point out was um the numbers that Mr.

Gulag shared, the assessed value of 38,000 and the taxable value of 32,682 dollars.

Um, because of the conversations that have taken place over the last few years about assessments and um the taxes um on properties, I think we should point out um, I believe if this is correct, that the taxable value is based on the state equalized value.

Um, and it may be different from the assessed value for this particular property.

The thing that's interesting to me though is that the assessed value, and I know this is from 2025, not really sure when the petitioner purchased the property, but he purchased the property for 44,500, which is greater than the assessed value that's been noted.

Any um response thoughts, and I this this may take for the assessor's office to opine on this.

Mr.

Gulach, do you have anything on that?

Oh, I could jump in a little bit.

Um, I know the the true cash value, I think is the market value.

And I and I I don't have that listed, but the assessed value is 50% of the true cash value.

So the assessed value was 38,000, which is half of the uh market value.

So that means the market value would probably be 72,000.

The taxable value is usually the assessed value, but it's frozen by the Headley amendment, so it can't go up as it can't go up as high as the state equalized the SEV state equalized value.

Does that make sense?

So uh those are the current numbers we got off the uh Wayne County record.

So I think he bought it for 44,000 in 2022.

I assume the assessed value at that time is about 78, 72,000 or 80,000.

Well, but the uh assessed value is half of the true cash value or market value, and then the taxable value is uh usually the assessed value, but but it it's restricted by the rate of inflation, as you know, or the um uh by the headly amendment.

But Mr.

Bon, so Mr.

Bonnie probably should have applied for this, you know, two or three years ago.

He'd get a much better, I think you get a better value.

But now he still has some major investments to for the property.

Um but Mr.

Bonnie might have more details to share as well.

Yeah, that's accurate.

Um, you guys want me to chime in a little bit I can on that as well.

Go ahead.

Um, so yeah, we purchased it from uh land bank.

Um I don't remember the exact year, but Mr.

Gulag provided it, and we renovated it quite extensively over like the following 15 months or so, uh, got it occupied.

We never did anything, it's a partial basement and a partial crawl space.

We never did anything with the basement portion of it.

Uh the crawl space doesn't have a slab under it, but the basement does.

But over the last uh couple years, it's um essentially like whenever it rains because the the slab is never placed, we don't have a sump pump down there.

The basement actually floods, and that's where the the furnace is at.

So we're looking to remove the furnace, uh, pull the slab out and replace it.

Um, you know, obviously it's gonna require um a decent amount of yeah, work to do so.

But um, yeah, so we did buy it for 40 something thousand.

It was an extreme disrepair, and uh you know it's a beautiful house with uh a flooding basement, so we're trying to crack correct that part of it.

Thank you for that.

And um, Mr.

Gulag, I because this is in a historic district, I it probably doesn't really matter if um he applied for the NEZ prior to now, he will still benefit from the freeze.

Well, through the chair, I'm not sure if North Corktown is a historic district.

I know the lower Corktown, you know, South of Michigan Avenue is, but I'm not I don't think the North Corktown is designated yet.

Okay.

All right.

Uh thank you for that.

Mr.

Bonnie, are you do you know whether or not it is because at this point um it is oh it's not, it's so it's not a historic district.

It is a um an N R N E Z, uh, but it's not historic.

Interesting.

All right.

So um, yeah, that that now begs the question around why you had not applied for it before now because I'm wondering how much of a benefit the NEZ will be to you.

Yeah, um, and so that's a great question.

I didn't apply for initially.

Um I don't I honestly I don't know why, I don't have a reason.

Uh the assessed value when I bought it, uh at least from what I remember, it was super low.

It was near zero dollars.

Uh the reason I'm doing this now is just because we have another extensive renovation that we're uh preparing to do and we're trying to lock in uh the benefits of the RNEZ uh going forward.

Okay, thank you.

I would encourage you to have a conversation with the assessor's office um to even understand the benefit um in applying for this NEZ.

Um all right, thank you.

Thank you, Mr.

Chair.

Thank you, Vice Chair.

Uh I just have a I will say I know rent sarco.

I I was just looking at the available rent in the area.

Um it's a slightly smaller home, but it's around 1250.

So I know I know you said the rent isn't locked in place, but would encourage you to look at making that as affordable as possible.

Um and one to echo the sentiments from member waters.

You know, oftentimes when we talk about accessibility, um while it may be true that folks have not reached out, uh it probably is that you is that they just see that this is not a house fit for them.

Um so as we're thinking about rehab and such, and I will say this to everyone who's listening.

If if you could be proactive and making it accessible for folks, that actually would help um folks with disabilities to see that this this is a house that they could potentially live in or visit as well.

So I just want to uh put a plus one on that.

Um and uh folks have answer or asked all the questions that I have.

So is there a motion on line 906.1 motion to approve.

There's been a motion to um send to formal with a recommendation to approve any objections.

See no objections that action shall be taken.

Thank you, Mr.

Bondi.

Thank you so much, everybody.

That'll move us on to 6.2.

Uh neighborhood enterprise zone certificate application for the rehabilitation of a house at 740 pingry in a central Detroit Christian neighborhood enterprise zone.

Is there a motion to discuss?

Motion to discuss any objections, Mr.

Gulag.

Well thank you, Mr.

Chair Chris Gulach of the CPC staff.

I think we're joined by the homeowner Miles Tryon Pettit.

Yes, that is correct.

And my wife may be online too, but I know she had to go to work.

So I am here.

All right.

The floor is yours, Mr.

Guloch.

Uh thank you, Mr.

Chair.

I have a brief slideshow.

This is uh uh set at 740 Pingree, which is uh north of New Center.

It's shown here just east of the lodge on ping on the north side of Pingree, just east of third.

Um there's a couple are the petitioner, homeowners who recently bought the house that's shown here on the north side of Pingree in the red dot, east of third.

It shows a 3D view of the of the property.

It's one and a half stories high.

We confirm this is in the central Detroit Christian NEZ, which council established approved back in January 2010.

It's shown as the blue box here, uh basically bound by Woodward on the east, 3rd Street on the west.

And uh that was originally had about 91 acres, and I believe the group Central Detroit Christian, I think they're still around, was a nonprofit doing rehab, mostly rehab and some new construction in this area.

Um so the petitioners are uh listed on the screen.

Um they uh they plan to renovate the house as their primary residence uh with a one and a half story house built back in 1909.

It has about 1800 square feet.

It's zoned R5 medium density residential.

So the record show the house was purchased um in January 2026 from some longtime home homeowners that have been there previously, about 20 years.

And so it was bought for 170,000.

Um so the tax city records show that in 2025 the assessed value, um which is half the market value is about 45,000, and the taxable value is about 7,000, so quite low.

Um and then the petitioner um selected a local contractor, Marcus Hardeman, and they're proposing to do about $60,000 worth of renovations.

That's why they're applying for the NEZ.

Uh this includes a list of things listed in our report, uh brick repair, rehab the garage, gutters, roof repair, uh vinyl siding, plumbing, uh electrical and HVAC.

Uh so in conclusion, um the staff is it's confirmed being in the central Detroit Christian NEZ.

It's the staff's recommended approval and a resolution is submitted for your consideration.

Thank you, Mr.

Chair.

Thank you, Mr.

Gulach.

Um if I pronounce it wrong, please forgive me.

Uh Mr.

Triumph Pedric, is that hopefully I was close.

Uh do you have anything to add to that?

Um, no, I do not.

Uh Mr.

Great Job and no worries on my name.

It's been a lifetime of carrying it around.

Oh, I got you.

I got you.

Well, thank you for that.

Thank you for the grace.

Uh, any questions from members on the committee?

Oh, just a member orders.

Okay.

So you've you've lived in the area for about what how long.

Um Councilman or Councilwoman Waters, sorry, I'm a little nervous.

It's been a while since I've been in a meeting with Robert's rules.

Um I have lived here for a year.

My wife has lived here for the better part of 10 years.

Um, and we currently live in an apartment, and we're very excited to get this home and put some love and care into it in the neighborhood.

Um, but uh a year here for myself in Detroit.

And are you planning to live there long term?

Yes.

Okay.

Um timeline for renovations.

You have uh we are doing sorry to cut you off.

We're we're doing this through the bank.

Uh, and so we have until June to complete the renovations with our contractor of this year, June of 2026.

And so just the 12k uh you know, take care of the entire uh floor roof replacement.

Does it of the roof for the garage and for the home?

Yes.

Oh, okay.

12k takes care of all of that.

The current home roof um has some issues that prevent the gutters for the storm gutters from getting in well, and we we have some concerns about water infiltration to the basement, but the roof otherwise is in okay shape, if that makes sense.

Um so our contractor gave us the the grace of just being willing to help um iron out the some of the issues with the home roof, and then the garage roof is the one that that is in disrepair.

It has a very large hole in it along with some other issues.

All right then, all right.

Thank you, Mr.

Chairman.

Thank you, Member Waters vice Chair Johnson.

Thank you, Mr.

Chair.

Just um clarifying, do you currently live in this neighborhood?

We are in the process of moving.

We will live in this neighborhood this month.

Um so we're we're in the process of moving.

We're we're hoping to get the large uh interior renovations, the plumbing and the electrical work done as we're getting our stuff over there.

Um, but yes, it is our primary residence.

We're there every day.

Um right now I put my head down in an apartment, but I look forward to doing that in our home.

So um just for clarity, so the apartment complex is or is not in this neighborhood.

It is.

It is not.

Um, but the home is yes, that yes, that I understand.

Um where is the apartment complex where you are moving from?

It's in midtown um on Woodward and Charlotte.

Got it.

Okay, okay, thank you for that.

Um, and you purchase the property from a private seller.

Yes.

Yes, the former homeowner.

Okay, all right.

Thank you.

I have nothing further.

Thank you, Mr.

Chair.

Thank you, Vice Chair Johnson.

Um, I do not have any just trying to make sure here.

Mr.

Gulag, I know you remind me every time and I ask about it because this is a renovation.

Can you just go through what happens with the taxable or what happens with the taxes when an NEZ of this nature is approved?

To the chair, uh yes, what happens through the NEZ Act allows encourage wants to encourage new construction and rehab, but for rehab, it would freeze the um the assess value uh to before they did the renovation.

So um, so the uh this if you approve this, it has to go to the state uh tax commission.

They have to sign assign off.

So it freeze the um assessed value at the pre-rehab value.

I think it's up to the state and the city assessors to determine what that that assessed value is frozen at.

Is it frozen at you know, 2024 or 2025?

Um, so that's that's how the NEZ works.

Thank you so much, Mr.

Good Luck.

Okay, that answers my questions.

There are motion on 6.2.

Motion to send line item 6.2 to formal with the recommendation to approve.

There's been a motion to send to formal with a recommendation to approve.

Any objections?

Seeing none, that action shall be taken.

Thank you both.

Thank you.

Thank you all for your time.

Thank you.

That moves us on to 6.3, a request for report on DPS debt.

Uh is there a motion to receive and file?

Motion.

There's been a motion to receive and file 6.3.

Any objections?

Seeing none, that action shall be taken.

We took previous action on 6.4.

That brings us to the end to member reports.

Is there a motion to suspend member reports?

Motion.

There's been a motion to assist.

There's been objections.

And and I don't want seniors everywhere getting a bit riled up about it.

So they can go and apply with the Detroit Home Repair Programs.

And Ms.

Verner, that is not the program that I started.

At the time when I started the program, Mr.

Chairman, with the ARPA dollars, um, I requested walk-in showers, but the administration says, well, you know, we don't have enough, and so they start to uh installing kits.

This is a different program now that people are receiving walk-in showers.

The assessments still have to be done, but that's what they should do.

Call 866-313-2520, or go online and apply as well.

And and so I hope that explains it for Ms.

Verner and and others.

Thank you, Mr.

Chairman.

Thank you, Member Warders, for that clarification and information.

Um I do not have any member reports.

So with that, seeing no further business before this committee, is there a motion to adjourn?

Motion.

Uh without any objections, this committee stands adjourned.

Thank you.