Noon, I'd like to call the budget financial audit standing committee meeting of Wednesday, March 25th to order.

Will Madam Clerk please call the role.

Yes, good afternoon.

Councilmember Denzel Anton McCampbell.

Present.

Councilmember Letitia Johnson.

Present.

Councilmember Mary Waters.

Mr.

Chair, we have quorum.

Thank you, Madam Clerk.

And that'll move us on to approval the minutes, which um members of the committee should have received.

Is there a motion to approve?

Motion to approve.

Thank you so much.

Without any objections, the minister will stand approved.

I will uh pass on chair remarks today, just to please continue to tune in to our budget hearings um through the end of budget season on April 7th.

Um that will now move us on to public comment.

Uh request for public comment will close at 108.

Um please limit your remarks to one minute and 30 seconds.

We'll start with those in the room.

And for those participating remotely, please use the raise hand feature.

You'll be called in order.

Do we have um folks for public comment in the room?

All right, please come forward.

Good afternoon.

Um, if you can just press the button on the mic, state your name, and then you could proceed.

You have one minute and 30 seconds.

Good evening.

Uh good evening, good afternoon, we heard.

Okay.

Well, I'd like to tell you that I just was down at the Board of Zoning Appeals office.

I wanted to look at that nice shiny computer that was made in the presentation.

Except I wasn't allowed to look at it.

I was told I wasn't sure if it worked.

Then the lady called Mr.

Ribrine or Mr.

River and said to send them an email to ask for the stuff, some of which I've asked for before, but I was not allowed to get.

Um regarding speed humps.

I heard some people talk about speed humps last year.

We need to take away take out the speed humps that were put in against members' wishes, like what happened in front of my house.

I didn't know what they were doing because so much secretive stuff goes on in my neighborhood.

And then Cindy Dara pointed out that when they spray painted the pink line across the street, she goes, Oh, they're gonna put a speed hump in front of your house.

I'm like, wait, wait, wait, I don't want that.

I don't want that.

And then I saw the guy Justin from G S D or whatever, he was there, and he said, Well, talk to your district managers, which I did, and they installed it anyway.

And I have a flyer that says we only put speed humps with the consent of the residents.

And then I was told, well, if I get a majority of the residents on the block, that's I can pay to remove it.

Well, guess what?

I was the only full-time resident on the block at the time.

So I have to deal with the room room the all the the noise particle closing and all of that.

So if we can please do something about that and check into the BZA presentation was not all 100.

All right, thank you.

All right.

Anyone else in the room?

That'll take us on to folks joining us remotely.

How many folks do we have on Zoom?

Good afternoon, Mr.

Chair.

Uh, as of now, we have four hands raised.

All right, let's go with the first speaker, please.

Yep.

Our first caller is William M.

Davis.

Uh Commissioner Davis, good afternoon.

You have one minute and thirty seconds.

Uh good afternoon, happy heard.

Yes, you may.

Okay, first off, uh, looking at 6.6.

I think um when I was a commissioner, I I was able to do a couple of public service announcements.

I think it should be some public service announcements across all media.

Uh, looking at 6.7, uh, I'm mainly thinking about uh Thomas Edison Library Branch.

In so much that we are the third largest district, the second largest number of uh school age children.

I think our library, since we only have one for the time being, should be open seven days a week.

You know, like the main library and some other areas.

Also looking at 6.8 DWSD debt service.

Uh, we should also you should also be asking about how much debt was added to DWSD because of the bankruptcy because you know, uh frequently you have uh a bankruptcy, uh, you have the public utility within the system, you know, outstanding bonds are called, uh, which might have meant that we got some extra debt because of the bankruptcy.

And how is that adversely affecting our accounts and our balance?

Uh, because we should be reducing our debt, and we should not be paying for debt this was part placed on us because of that illegal bankruptcy.

I guess that's all I have for today.

Hopefully, you could look into these things and get some action on them.

Thank you.

Thank you.

Next speaker.

Our next speaker is Owner Papa.

Good afternoons, Miss Hughes.

You have one minute and 30 seconds.

Thank you, uh, Councilman.

May I be heard?

Yes, you may.

Thank you.

Um, yes, and I I uh this this uh 6.8, the uh Detroit water and sewage yet.

The Detroit water and sewage needs to be um we need to have a forensic audit on them.

Um they're tearing down trees or cutting down good trees up and down Oakman Boulevard.

I think I've mentioned this to you on more than one occasion.

I'm not sure who who is in charge of this or who ordered this, but the aesthetics of the entire neighborhood is changing, and I'm not sure if it's changing for the better.

I had a um a puddle, a a flood on my street that lasted a year and a half during the pandemic while they were building this so-called reservoir, and they said it went to nowhere.

I want to know why.

I don't know what kind of material was coming into my house, but the but the water department is coming around cutting down trees and building something that I don't think anybody uh actually asked for.

Uh and and and the questions that are asked by um the council members before you file them.

We should have answers to them because they were asked in public, and we should and the public should have access to the answers of them.

And the 7th district not having a recreation center to them.

I'm asking you to allocate some funds for those children in the 7th district to pay some special attention to them and give them bus service so that they can participate in the things that are going on at the other rec centers, but they need some resolution before summer comes.

These children are getting out of school soon.

Thank you.

Thank you, next speaker.

Our next speaker is Tyson Gersh.

Good afternoon, Mr.

Gersh.

You have one minute 30 seconds.

Thanks.

Um what was I gonna ask?

Oh, item 6.11 on the agenda, I think.

Yeah, um, the BZA questions kind of echoing the last caller's sentiments.

Um like these answers should just be submitted in writing and publicly available.

There's an ongoing issue of just not being able to see um how these departments are responding.

I know at the initial BZA budget hearing, Director Ribron presented a chart of the caseload um that I've asked every council member for, I've asked the city clerk for, and it is it was not linked on the agenda, and nobody seems to be willing to provide it.

But that is a public document that was part of a public hearing.

Like, why do I have to why is it so difficult to access public documents?

Um I also think this whole BZA computer thing is ridiculous.

Just put everything online.

I mean, even the Board of Police Commissioner meeting minutes are all available through the open data portal, but you can only view like a weird and inconsistent number of BZA minutes through the BZA website.

Like this whole BZA ongoing series of issues could just be solved with transparency and technology, and then you wouldn't have to be hearing from us all the time.

Um, it could be that simple.

Uh, I I'd love it if city council could ask more questions about revenue.

Thank you so much.

Um, before we go to the next speaker, the clerk would note that we've been joined by member waters.

Thank you.

Next speaker.

Our last speaker for public comment is Galaxy Tab A.

Good afternoon.

You have one minute 30 seconds.

Good afternoon.

Uh, I want to speak on the public library.

Uh um on it is closed because of uh the boilers down, and the only place we had that's closer to us is to go to Lasky's recreation, but they don't open until one o'clock.

So hopefully that they'll get um NAP Library fixed soon.

Because a lot of us don't have cars, so we have to walk up there, or let's say we have car cars, but our cars need to be repaired.

So maybe they can fix it where we can go up to Laskies and uh to be able to get on the computers to uh look up it, look up things, although I have tablets and stuff, but sometimes you want to get out of the house, come when you're in the house, you know, it's like uh it's day is daylight, but it's really dark because it's a shale.

And uh also I want to speak on um the trees.

I spoke on the trees earlier, uh, councilman McCamble.

The tree, like I said, I had two cut down around here.

Like I said, 2019 and one last year.

The other tree on Desner and Connie needs to come down before crashing on this lady's house.

Yes, on the bird.

This is the sidewalk.

Can you please?

I mean, I know uh councilman chate said that he would uh that yeah, y'all would respond after the meeting, but he didn't have to respond.

So can you please put that on your agenda to have that tree cut down on Conley and Daz?

Because it's terrible.

Thank you.

Um guess we will note uh area the area for the tree.

Thank you.

Um just to also um that it that does bring us to public into public comment.

Just for folks to know when you see a memo uh on the agenda um that is listed for those answers to be out publicly, and when we get their response back, it would be on the um agenda as well.

So just for folks to know when you think about when you want to see answers to those questions, um, but also we encourage folks to reach out to the office and if you have further uh questions that you want to ask.

Um just leave it there.

Um any other members have anything that they want to add.

All right.

That will move us along in the agenda.

And also want to mention for BZA, we did put that into the session, and we also submit a question, so hopefully we can have a further conversation on those happenings as well.

All right, thank you.

That move us on to um under new business from the office of the chief financial officer 6.1 a financial report for the seven months ending in January 31 2026.

Is there a motion motion to discuss a motion to discuss if the um folks on the OCFO can come forward?

Good afternoon, Mr.

Chair.

I am Donnie Johnson.

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

Good afternoon.

And I am Valeria Goalie, the acting treasurer, deputy CFO for the city.

Thank you so much for joining us.

The floor is yours.

Right.

Um, if I could be promoted to panelists and given the ability to share, I will share the presentation.

And with your indulgence, Mr.

Chair, I will move somewhat expeditiously, knowing that we do have a budget hearing starting up again at two, and I do need to prep for that.

Appreciate it.

Umbs of the committee.

Today we are here to discuss the uh financial report for the current fiscal year, fiscal year 26 for the seven months into January 31st, 2026, as submitted on March 16th of 2026.

Uh some of our executive highlights.

Um, on as you know, on March uh 9th, the mayor presented her proposed fiscal year 2026-2027 budget and fiscal years 27 through 2030.

Uh fiscal year fire four-year financial plan to the city council.

This is our 13th consecutive balance budget since exiting bankruptcy in 2014.

This proposed budget totals 1.55 billion in general fund activities and 3.05 billion across all funds for the coming fiscal year beginning July 1st.

City Council, uh, don't even tell you this, more for the public, uh, began its budget hearings um and deliberations on March 11th, and we'll vote on a final budget by April 7th.

The city will then transmit the approved four-year financial plan to the Financial Review Commission by April 30th.

For our year-to-date budget to actuals, um, as you can see, we are um on the starting at the top on the revenues, and obviously we'll get into more, you know, Treasurer Goalie will get into more details um uh when we get to the revenue slides, but just high level, we are continuing to run behind on income taxes.

Um we are running considerably ahead on uh wagering taxes.

That continues to be a very large pickup for us, which we are quite grateful for.

Um, and uh that leaves us with year to date, a surplus in our revenues of 23.9 million dollars.

On the expenditure side, um we are seeing underspend in our salaries and wages.

I know a question that came from LPD Mr.

Quarley last night was you know, do we think this is driven by the vacancies that we'll see on the position tab?

The answer is yes.

Um, I do believe that you know the primary driver of this is gonna be that vacancy rate.

Um that goes with the benefits account as well.

Professional contractual services, this continues to be a factor of timing.

Um, you know, invoicing happens sort of when it happens, um, and I believe that a lot of our professional and contractual services expenses are going to catch up in this second half of the fiscal year.

Um, as well as the overspends on year to date in some of these other categories, these are going to smooth out as we get through the year.

Um this is sort of the year to date budgeting.

Again, it's timing.

So I really don't think we have anything to worry about in that regard.

And that means that we are currently at an underspend on the expenditure side of 10.7 million, leaving us with a sort of operating surplus in the current fiscal year of 34.6 million dollars.

When we annualize the budget and do our projections, you can see that we are continuing to project a fit.

We now project a $56.9 million shortfall in our income tax revenues, um, as well as a $7.1 million dollar shortfall in our state revenue sharing.

Um, as this body knows, the state did cut revenue sharing in the state budget for the current fiscal year, um, which is unfortunate.

Um we are now seeing the effect of that in our revenues.

So this leaves us with a projected revenue shortfall of $13.8 million dollars for the current fiscal year.

However, on the expenditure side, we do project that once everything smooths out, timing is is worked out as we get to the end of the fiscal year.

We do believe we're going to be on track for about a $16 million underspend on our expenditures, again, primarily driven by vacancy rates across the city departments in the general fund.

Um if we take that together with the shortfall in the revenues, that still leaves us with an operating surplus of $2.2 million for the fiscal year, which is narrow but still positive, which is great news.

Um and that leaves us with a hope that by the time we close this fiscal year out, we may not have needed to dip into the 42 million dollar income tax reserve.

We are leaving that in reserve until we close the fiscal year because as we all know, anything can happen with the way the world is at this time.

Um for our amended budget reconciliation, we did make some adjustments to this slide based on some feedback from the Financial Review Commission, uh a member of the Financial Review Commission who asked that we kind of clarify how these two columns at that top box work.

And so what we did was we re we did a little crosswalk to show how the revenues and the expenses for the adopted or for the amended budget for fiscal year 26 are still balanced.

Um it's important to remember that our use of prior year surplus, what we call our fund balance or pay-go, um, pay-go capital when we talk about a capital, that is not a revenue in the sense of the other revenues.

It's not earned from outside the city via taxation or fees.

This is a use of an internal already owned resource, so to speak.

So that often doesn't show when you're looking at your revenues versus your expenses.

So what we've done here is we've built that back in to show how you build the amended budget back to show that it is still balanced, that we do maintain that balance even though sort of on the books, so to speak, with our revenue number, it does look lower than the adopted budget.

In terms of the continuing appropriations, we continue to spend down those appropriations, and there's really no major highlight here.

Yeah, no major highlights here.

It's it's pretty status quo.

In terms of our FTE count, our employee count monitoring, um, we did see month over month.

So remembering this is gonna be December to January, the month over month change.

We did see a pickup in police.

Police had some very successful recruitment month over month over that holiday season of 12.

Uh transportation, D dot has also had some success with both full-time TEOs or bus drivers, as we colloquially refer to them, um, as well as students, TEO students.

So a lot of students in the pipe, continue to be a lot of students in the pipe.

With the increased wages, we continue to be very optimistic that we're going to be really adequately staffed to run our services.

Um other than that, no real major shifts across the um across the board for positions.

It was a fairly status quo.

We don't see a lot of large changes during that sort of deep winter and holiday season.

Um, and so um, you know, pretty status quo from there.

So overall, citywide, we saw a net change of 19 FTEs added to the head count you know, in that around 10,365 employees total.

I'm gonna pass it over to my colleague and um we'll get into the revenues.

The next slide shows um income tax collections through January and compares it to the same time last year for withholding.

Um it's up about 10 million dollars compared to uh withholding at this point last year.

Um individual is pretty much the same.

Uh corporate is down by five million and partnerships are down by 1.2 million, which leaves us with an increase of 4.7 million more than how much we had collected at the same time last year.

As you know, people will be filing their individual taxes and corporations will be filing, and so beginning in January, February, March, April, we'll we'll see more movement.

Um for fiscal year 26 is 413 million.

So we still have a way to go.

The next slide is where we um provide our operating cash forecasts, something our team does to make sure that we have the cash available at the right time to be able to make payments.

Um and as you can see, our operating cash forecasts is holding steady, nothing very different compared to the report you saw last month.

And then finally, is the accounts payable and supplier payments.

Um if you go down on the bottom left-hand quarter corner, the AP aging, you can see for um in terms of timeliness, there are six invoices that were 31 to 60 days past current, and nine that were more than 61 days, and um for the ones that are 31 to 60 days, one invoice was awaiting a workflow approval, and that has been paid on was paid on February 20th.

Another one was entered after the due date, and that's been paid as well on February 6.

There were three invoices that were on hold, and those have all been paid.

Um for the nine that are over 61 days, um, there are two credit invoices that um AP is looking into two invoices that are on hold at the request of the law department.

Um four of those invoices were voided and reissued, and one um the last one was awaiting workflow approval, and that has since been paid.

And that concludes my remarks.

Thank you all so much.

So go to uh my colleagues on committee if you have any questions.

Thank you, Mr.

Chair, good afternoon.

Um thank you all for the update.

I am just going to ask one question.

Um when we looked at the year-to-date uh revenue and expenses.

Is there will there become a time?

Will there come a time when the advice is given to departments, particularly those that are not public-facing departments, to freeze hiring?

Because I hear you say that the uh vacancies are essentially what is helping us to stay balanced.

Um does that happen?

Could that happen?

Might that happen?

Um through the chair to council member Johnson.

At this time, I don't see that as being something that would happen or be necessary um in the current fiscal year or really the next fiscal year.

I think that we are still on track at the end of the at the end of the year, we still end up with a reasonable operating surplus, which indicates that we're still able to cover all of our expenses.

Um I think one of the things we have to remember is that it's unlikely the city will ever get to like a 100% employment rate, right?

Like, I mean, it's just we're a large organization, we know that this is how the nature of the beast.

So there's always going to be a little bit of that turnover savings in personnel.

So I think just looking at the numbers and thinking through how we see the year playing out and how I how we forecast our forecasting for next year.

I don't think that something like that would be necessary.

That would be a you know, that would be a stopgap measure we would use only if strictly necessary, and it's just it's just not.

Okay, follow-up question to that.

So, do you see that the fund balance or the surplus that we typically have comes from vacancies?

Uh through the chair.

Um it's our surpluses really come from two places.

One, it's it's gonna come from under spend on expenses, not solely driven by vacancies.

I think very important to note a lot of times our professional contractual services budget also ends up quite under budget, so to speak, um, because of timing.

Again, we think that certain services are going to be delivered in this fiscal year, they end up being in the next one.

We've budgeted for them.

We budget each year for what we believe is outstanding on particular contracts and purchase orders.

Um so um, and then we do overcollect in certain revenues.

So, you know, by the end of the year, I think that even if we do end up with a um, I I I'm optimistic that we are going to end up positive in our revenues by the end of this year.

Once everything is closed out and reconciled.

Um, so far that's still been the case, but our job as OCFO and and particularly Treasurer Goalie and her team, you know, our job is to be very conservative.

Our job is to assume, I don't say the worst, but assume two steps up from the worst, um, because that keeps us prepared for anything.

Um, but so far the trends have been that you know we do tend to outperform at the end of the day.

Do we still underperform generally from where we'd want to be, especially in something like income taxes?

Yes, that is not keeping up with where we want to go, but we can see that our like wagering taxes, it's doing gangbusters.

So, you know, that tends to even out as we get toward the end of the year and as we close out the year, and so our surpluses are generally driven by that sort of late breaking surplus on revenues and the final reconciliation of our expenditure budget to a positive, saying that we did not spend in our entire budget.

So it's not driven by any one of those factors, which is good because I I know I I get the core of what you're asking, um, and that is um so far there is nothing to worry about with how our surpluses are being generated.

All right, that's great to hear.

Um, and I do just want to say to Miss Agoli, I know you just report out and share the information, but it's good to see um AP at 99% um essentially paying our bills uh in a short time frame.

I'm really interested in knowing when the when the clock starts, though, right?

Um, because I know a lot of times we ask about work that should be, needs to be inspected, um, and all of that.

So just making sure that that process is followed, and then the invoice the clock starts ticking on when we actually pay those invoices just to make sure that the work is done properly, that it is good quality work.

Um, but it's just good to see the 99% um invoices being paid within that that 30-day period, especially as we are always trying to advocate and support small businesses.

Thank you.

Thank you, Mr.

Chair.

Thank you, Vice Chair Johnson member waters.

Thank you.

And let me just echo what my colleagues said for sure.

Because I've got to tell you, I mean, we couldn't throughout the years, in fact, you could barely go to the store with that people saying to you, well, you know, my invoice hasn't been paid.

I I remember back in the day when I sat on the charter revision commission when I first got elected.

I um I went because we wanted to be able to get like gambles and things like that, and we didn't have our budget money just yet.

Well, the guy was like, No, I'm not gonna give you anything until I get paid.

The city owes me money, you know.

He went on and on and on about it, and so finally I had to come back and have that conversation um with then Mayor Archer and some of his people, and I says, Listen, you got to get this gap paid so that we can we can you know conduct our business as Charter Revision Commission?

So it goes way back, and to have you to make such improvements, that's really that's really a great thing.

So thank you for that.

Um I'm tired of the state taking our revenue sharing.

My goodness, I mean, we we need our money, and the money they owe us too.

I I guess I can just sing it, it just won't seem to happen.

Um so why was the wagering uh tax significantly um why has it actually performed better than you know about 19 19.7 percent year to date, and how much of this growth is is uh specifically attributed to uh you know physical casino traffic versus digital online gaming market has the most traffic um so in terms of what is comprised uh of that the retail gaming is usually the the highest in terms of you know what generates revenue closely followed by internet gaming.

Okay.

versus digital online gaming market which one is has the most traffic um so in terms of what is comprised uh of that the retail gaming is usually the the highest in terms of you know what generates revenue closely followed by internet gaming okay um we estimated those for fiscal year twenty six to be about a hundred thirty eight million in the retail casino gaming and um about a hundred thirty two million in the internet gaming um and then there are additional payments that are required from the casinos to us um and and some depend on uh it once they hit a certain mark then they have to make additional payments um the internet sports betting is about five million and the retail sports betting is um estimated at about 700,000 so not a lot for um internet sports uh in terms of why it is higher than what we estimate I I do recognize that um we are usually conservative with um the wagering tax revenues it it's known to be a volatile revenue and so we don't want to rely on it heavily in our budget uh and um you know I keep thinking there has to be a saturation point um and it just doesn't happen it hasn't happened yet but but that's my expectation at some point everybody who I mean at some point I would think that it would level off so um so how these excess um wager and taxes revenues gonna be utilized and are you gonna be using them to offset the projected 56 point nine million shortfall the income tax uh through the chair in a sense yes in um we did set aside the municipal the income tax reserve but if other taxes overperform and kind of catch that shortfall then it means we don't have to tap the reserve so if we end up with surpluses in the revenues generally that's gonna be known after the year we've you know after j after june 30th so we can't really do anything with it other than let it go to the fund balance and it becomes part of that fund balance that we then talk about as a resource when we go into the next budget cycle so it sounds like we need more people working that's what it sounds like to me you know paying in to income tax and so forth is that correct I think in c through the chair I think income taxes are you know it's always you know I don't want to say preferred but you know income taxes um property taxes these are like Treasurer Goalie said uh wagering taxes there's no legal mandate to gamble right like there's no mandate to pay you know to that so but your property taxes your income tax these are things where you have an obligation to do it and so they're considered more stable reliable because there's always going to be a base of people doing it but our income tax is down collections are down so that means that we have fewer people working and contributing.

I believe I'm gonna have to give this treasurer goalie because I think she can give a better idea of the breakdown of how that income tax shortfall is is looking yeah it is primarily driven by the corporate income taxes as you saw you know um withholding actually is doing well and we gave that a small bump in the February estimates and then individual income tax is you know what you pay at the end of the year um is also holding steady so it's primarily the um corporate income tax and I'd have to talk to the team more but I I know that um we're also estimating refunds to be higher and that's just based on primarily you know what we see uh each month what's up with the corporate income tax being lower I mean what's up with that well that's the estimate I'm sorry I know I'm supposed to go through the chair so with your permission that's um that's the estimate that we in September uh at the revenue estimating conference that we um changed considerably and and lowered the estimated revenues by about 42 million um some of the drivers to that was first of all the fiscal year 26 budget was based on the revenue estimates um that were done in February of 2025 and so there was a lot that wasn't known in terms of the one big beautiful bill tariffs etc.

Additionally that original estimate was the one that was maybe a a little overly optimistic it was based on growth um of the estimate for FY25 and the FY25 estimate came in lower than we expected.

Corley also was asking about whether we believe that the 42 million corporate income tax reserve is still a realistic amount.

Um we did in the February revenue estimates increase um municipal income tax, and I think it's primarily from corporate income tax.

Um uh by about four million.

So we we did see um things looking perhaps a little bit better.

Uh you know, some of that was for withholding, just because we see more withholding dollars coming in.

So we felt that you know, and and we talked to the um university partners for the con consensus conference, and um we we did believe that corporate would come in a little better and withholding would come in a little bit better.

But still, as I mentioned earlier, um we know that most of the activity we've still got another 200 million, you know, until we get to our target and we know that most of the activity will be happening now that taxes are due.

Um we still have that caveat of the um filers that uh corporate filers that request extensions into October.

Last year we didn't see those come in like we thought.

Um we didn't see people uh corporations using what they had already um their carry forwards, what was already sitting with the city.

We saw them making payments, so that ended up going to fiscal year 26.

So I just want to give you an idea of all the kinds of things that go into this.

I'm sorry to talk so long.

Yeah, you're in pretty detail.

But thank you so much.

Helps me to understand.

Thank you.

Thank you, Mr.

Chairman.

Thank you, Member Waters.

I I had I did have an additional um thank you for going into the corporate income tax and and that I I had an additional question around um and you cover it um Mr.

Johnson Brown.

Um do we feel for the the reserve if that will uh do we feel that we would need to tap into that and you also manage that it would go back into the f general fund if not.

Um is there are we because I didn't see it in FY27 budget.

Are we thinking that we need another contingency plan around that going into FY27 or um we are not because the FY27 budget was based on updated revenues from the February forecast?

So we did take into consideration the impact of tariffs and the one big beautiful bill.

So thank you.

Thank you.

And uh also um I think this is not I think this is a wider conversation as we see withholding an individual um go up and corporate goes down.

I know there are other factors like you mentioned as tariffs and such and the one big beautiful bill.

Um also I know that we also have a a imbalance of jobs that are based here in Detroit that are going to Detroiters and and um and jobs that are outside the city that will um that are going to Detroit as well.

So I'm wondering if maybe that's an imbalance there of uh of corporations inside the city and corporations outside the city that are not subject to the corporate income tax um rate, if that makes sense.

I'm just and I think it's a wider aspect that I could follow up on you on, but um to see the withholding of individual go up but corporate goes down.

Um I'm trying I'm just trying to parse through what is maybe impacting corporations that are based in Detroit and corporations that are not based in Detroit.

Um but I can follow up with for on them more.

Um I think that's a more robust yes, absolutely yes.

Um for sure.

And then I just I did want to touch on a wager and tax because Mr.

Goalie, I agree with you that it is volatile, and I I I just I would think that at some point it would be saturated as well.

And also we know that um folks turn to whether it's online or the casinos when economic conditions are worse.

Um so I'm I'm concerned as I hope to see uh our economic outlook improve.

Um that then that would have a negative impact on wager and tax, and also as we like having our city budget based on our our city government operation based on that, it does give me pause.

I know that the administration along with city council is very interested in other revenue streams um to help lessen the impact on that.

But um I just wanted to name that because I am deeply concerned that uh wazer and tax were dependent on that so much here.

So just wanted to name that.

I don't know if you have any additional, it was more of a statement than a question, but I don't know if you have anything additional there.

All right.

Okay.

Uh Mr.

Corley, did you have anything?

Thank you, Mr.

Chair.

I do have a question about the overall uh general fund surplus.

I'm gonna wait until the non-departmental budget hearing later on.

And so I just um interest the time.

I wait until non-departmental.

Thank you.

Thank you.

Anything else from y'all?

No, sir.

All right.

Thank you so much.

Is there a motion to receive and file?

Motion.

There's been a motion to receive and file.

Seeing of objections, direction shall be taken.

Thank you all so much.

Thank you, Mr.

Members of the Committee.

All right.

Yes, yes.

And that moves us on under the office of City Clerk and City Planning Commission 6.2.

Um neighborhood enterprise zone certificate application for the rehabilitation of a single family house at 1806 Leverette in a Corktown neighborhood enterprise zone area.

Is there a motion to discuss?

Thank you.

Afternoon.

Good afternoon, Mr.

Chair.

Chris Gulag, City Planning Commission staff.

And the developer is Dylan Towler, who's also on the screen.

Good afternoon.

Uh Mr.

Gulart, I assume you have a presentation.

The floor is all yours.

Thank you, Mr.

Chair.

Um let's see if we can find it.

Thank you, Mr.

Chair.

Can you see my screen okay?

Yes.

Um the staff submitted a report and a resolution for your consideration.

This is a uh NAZ re certificate request for property on Leverette.

It's shown as the red dot here.

It's south of Michigan Avenue, east of Rosa Parks in the Corktown area.

Zooming in, it's at the northwest corner of 11th and Leverette.

Here's some images of this of the house.

This is in the Corktown NEZ, which really stretches from Rosa Parks all the way to the Lodge Service Drive.

It was created back in night.

It's one of the first ones created back in 1994 with about 50 acres.

And the petitioner is Towler Holdings, which is represented by Dylan Towler, who's on the screen.

So the property is a is a single family structure with two and a half stories.

It was built back in 1916.

This is in this is in the historic district.

The land is owned two family residential.

Mr.

Tyler purchased the house in December of 2025 for 350,000.

The petitioner indicates the estimated cost of rehab is between 100 and 120,000.

It's an older house.

It's in a historic district, so he does have to get um approvals, you know, for the windows and other things to the historic district commission.

So here's a cost breakdown in our report as well.

New windows 20,000, eight new HVAC 20,000, updated kitchen 20,000, updated bathroom 20,000.

Um so Mr.

Tower plans to so he purchased a home as an investment, and then he plans to live there and do most of the work himself and then sub out the rest of the work.

And then he hopes to put on the market um for about 650,000 to 750,000.

I guess in part because the Corktown area is really um going through the roof in terms of prices.

Um and so that the the purchaser, if he's able to sell for that the purchaser would would be able to reap the benefit of the NEZ because they that the new buyer would have a uh tax break for 17 years uh with the NEZ.

Um so this is just summarize it's in confirmed it's in the North Corktown NEZ zone.

Staff is recommended approval and a resolution is submitted for your consideration.

Thank you, Mr.

Chair.

Thank you, Mr.

Gulag.

Uh Mr.

Towler, do you have anything to add to that?

Uh no, sir.

All right.

Um members of the committee start with um Vice Chair Johnson.

Thank you, Mr.

Chair.

Um, Mr.

Towler, where do you curr currently live?

Uh Warren, Michigan.

Mr.

Gulak, did you indicate that this is in NEZ Homestead?

Um it appears it's in both.

It's it's it's in an NE Z.

Um sometimes there's overlap between the two districts, but this appears to be in both an NEZ and a homestead and Z.

You can only apply for one or the other.

And so the application before us is an NEZ homestead that we transfer to.

Um through the chair to through the chair.

No, this is um a request to receive an NEZ um certificate through the NEZ, not the homestead.

So the NEZ district that was created was for rehabilitation and or um new builds.

Yes, correct.

The NEZ Act uh is really yes, uh gives a tax break for new construction or rehab, and the uh homestead is a separate one that uh just gives a different tax break for uh existing houses as well.

Okay, thank you, Mr.

Chair.

Thank you, Mr.

Gulat.

Member Waters.

Okay, well, thank you.

So you're flipping the property?

Yes, ma'am.

Um what's the timeline for the temporary residency?

Uh we'd be starting about middle.

Uh we'd be starting around middle of next month and likely proceed uh through July would be the estimate.

Uh again, a lot of that depends on how fast the the home actually sells.

Um there specific historic preservation requirements for the home.

There are, yes.

Um mostly dealing with the exterior of the home.

Uh windows are included in that.

Um actually I just found out the other day they are denying the window replacement, uh, but have authorized the window repairs, uh, which is actually slightly more than the window replacement cost.

Uh so that will still be done.

It's a full uh restoration of those windows.

So in addition to say comps, how else are you justifying the projected sale value?

How's that determined?

Um it is based primarily off of the comps in the neighborhood going for similar prices or higher uh based off of uh restoration work that's been done on other homes.

Okay.

How does the age of the structure technically prevent accessibility features?

Number one, it says no accessibility features are being added in part due to the age of the structure, but it does not explain how the architecture or historic status creates these specific physical barriers.

Um I would have to get with the historical department on that to find out what's allowed, what's not allowed per their requirements.

Um I knew they pretty they're pretty strict as far as exterior improvements, uh changes to the existing deck, uh which is being uh repaired as well, and any changes to that at all.

They've they've pretty much said that the uh historic department takes precedence over certain areas, and I'm not sure whether that quali uh includes uh ADA uh requirements.

Um then I'll I'll have one more final question.

What type of uh work are you doing versus contracting out?

Uh myself personally, um I do a lot more of the finishing work, uh although I am the general contractor, so I do sub out most of the electrical and the plumbing.

Um, but primarily what I actually do myself is more the finishing type work, hanging cabinets, tiling, painting, that type of stuff.

Okay.

Thank you, Mr.

Chairman.

Thank you, Member Waters.

Uh Mr.

Toller, I I uh so you're flipping this property.

I um I'm just have have you had thought into I mean, this is all rear areas noted that there is a a lot of activity going on in Corktown.

There is a lot of interest around Corktown, um, and that those homes are going for that price.

Uh have you have you had thought around how you know applying this NEZ as well kind of adds to the affordability concerns that we've been talking about a lot here in Detroit?

Uh yes, I definitely think it does help uh to include many buyers into purchasing that home that might otherwise not be um considering that type of property, just because that would uh eliminate their or I shouldn't say eliminate, but it would lower their uh monthly um excuse me.

It would look would lower their uh yearly property tax on the home to make it more affordable.

Um and again, it would include a lot more people being able to purchase that home in that neighborhood.

No, I understand that makes it maybe it makes it more desirable for folks, but I know the NEZ was created to spur more activity in certain areas, so I uh understand that you are operating within the law and what we have available.

I'll also bring up again the need to really re-examine our existing NEZs, um, especially in areas that are seeing a lot of activity.

Um I do I will say if you can definitely check into uh with the uh historical uh folks to make sure that if there's anything you can do around accessibility that that is done.

Um want to make sure that our homes are accessible as possible for folks who are looking to buy homes as well.

Or it can I get a motion to send to formal without any recommendation.

Motion.

There's been a rec a motion to send to formal without any recommendation.

Any objections?

Seeing none, that action shall be taken.

Thank you, Mr.

Tyler.

Thank you, Mr.

Goular.

Thank you for your time.

That will move us on to under the legislative policy division.

This is a resolution in support of Michigan Senate bills 559 and 561 and House Bills 4211 and 4212.

I will actually ask for a motion to bring this back in four weeks.

I'm also trying to explore additional avenues that we can actually increase our revenue sharing.

There's been a motion.

Any objections?

The action shall be taken.

6.4 uh draft resolution urging the state to reduce fees and interest charge for delicate property taxes.

Um member Johnson.

Thank you, Mr.

Chair.

Move to send line item 6.4 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.

6.5 uh resolution draft resolution urging Wayne County Treasurer for moratorium on property tax foreclosure on the occupied homes.

So we took action on it.

Is there a do we need a motion to remove?

Motion.

Motion.

There's been a motion to remove 6.5 for the agenda.

See no objections, that action shall be taken.

Um for under miscellaneous uh 6.6 through 6.17 are various budget hearing related memos.

Um we've been asked to bring this back in one week.

Is there a motion?

Motion.

There's been a motion to bring back in one week.

Seeing uh seeing no objections, that action shall be taken.

And now to move us on to member reports.

Is there a motion to suspend member reports?

Motion.

There's been a motion to suspend member reports.

See no objections, that action shall be taken.

Seeing no further business before this committee, is there a motion to adjourn?

Motion to adjourn.

There's been a motion to adjourn.

See no objections.

This committee should stand adjourned.

Thank you.