Right?

We don't like seeing you.

Right.

Right, absolutely.

Absolutely.

Flattery will get you everywhere.

As we transition.

Welcome, Mr.

Nagley.

Yes.

Um good afternoon, uh, Mr.

Chair and other council members.

Good afternoon.

You have another PowerPoint or you got you.

Okay, ready for me to proceed?

No, sure, sure.

You may proceed.

Thank you.

Introduce yourself and your team and you may proceed.

Um so my name is John Naglik.

I'm Chief Deputy CFO finance director and controller for the city.

Regina Greer, Chief Deputy CFO.

Donnie Johnson, Deputy CFO and Budget Director.

Okay.

Thank you.

Uh Mr.

Chair, may I proceed?

Yes, absolutely.

Um, thank you.

Yeah, so I'll start with um our our first slide.

Um, in alignment with um Mayor Sheffield's Rise Higher Vision, the Office of the Chief Financial Officer through its non departmental agency, uh, will continue its strategic management of surplus funds from various revenue sources to benefit the administration's key priorities.

The agency will also advance an administrative priority to provide Detroit legacy pensioners supplemental pension support or prorated thirteenth check, subject to available resources.

Uh this is support for those most impacted by the city's historical bankruptcy.

And additionally, under its management of debt service, the agency will continue to implement debt servicing strategies to lower the city's obligation and in alignment with the mayor's platform support property tax relief to Detroit homeowners by reducing the debt mileage where fiscally responsible.

Um there's two departments that make up non department non departmental, uh Department 18 and Department 35.

Uh Department 18 is the debt service and legacy pension.

Uh it's overseen by the Office of the Chief Financial Officer.

Uh the debt service and legacy pension section includes revenues and expenditures to support certain long term obligations of the city, including bonded debt and the unfunded actuarial accrued liability for pension benefits earned prior to July one, twenty fourteen, which were modified, closed, and frozen per the bankruptcy plan of adjustment.

The legacy pension obligations are also referred to as the component two of the general retirement system and police and fire retirement system.

Funding for the contributions to the hybrid pension plans, the component one for current active employees appears in the respective departments' budgets and employee benefits.

So while while those two new pension plans that started July one, twenty fourteenth aren't part of non departmental, I wanted uh you all to be aware of the um significant obligation that those uh put on the city as well.

Um the city contributes to the open pension plan, so all of us are in the general retirement system component one plan, all of you and all of us sitting at this table.

Um the actuary determines what percentage of our pay needs to be contributed to the pension plan, so there'll be enough in that fund to pay our pension benefits when we ultimately retire.

And that rate for fiscal twenty-seven is four point zero six percent for the general retirement system.

Uh and that'll and that's about 15.8 million dollars.

So again, the focus when people talk about the city's pension is frequently talking about the legacy pensions, but it's important to know that these um new plans, which are which are doing a great job of staying fully funded and not repeating the um sins of the past, uh, do require that contribution.

And that money um w when um we all get four percent taken out of our paycheck, the city is matching four point um oh six percent, and that's sent over to the retirement systems every single payroll period, so there's no deferred payment of that.

We're doing it, we're keeping current.

On the police and fire side, because as as you all know, police and firefighters in our city don't participate in Social Security, they get a incrementally better pension benefit than those of us in the general retirement system, and thirteen point one percent of their pay is contributed every pay period, and that's thirty-three million dollars.

Uh so again, what we're proud of is you know, we're 12 years post bankruptcy.

Uh those these new plans were designed to stay fully funded, and they're achieving their goal.

Our our general retirement system component one plan, the one all of us active employees in are in, it's 99.75% funded, and the police and fire uh plan is ninety-two point eight percent funded.

And the police and fire plan is 92.8% funded.

The only reason theirs isn't at 100% is as council will remember, they had some collective bargaining increases to their pensions that put them a little bit below 100%, but through this contribution of the 13.1%, they'll catch up.

I think council always recognizes just what a you know huge part of the city's budget non-departmental is, Department 35.

It provides funds for activities which are not the responsibility of any one single agency.

Non-departmental is also the depository agency for general fund contributions for enterprise activities and for a wide variety of general fund revenues, including four of the five major revenues, casino revenues and wagering taxes, income taxes, property taxes, and state revenue sharing.

And this non-departmental also captures revenues from reimbursements from enterprise or non-general fund agencies of personal service costs, transfers from other city funds, and use of prior surplus.

So we're gonna I know there were questions during the OCFO budget with Mr.

Johnson's help.

We're gonna walk you through where what how those pieces appear in the non-departmental budget.

This agency also records the salaries and benefits of the mayor, city clerk, city council members, and and that's in the elected officials compensation cost center.

So moving to our first slide with numbers on it, uh let's start with the revenues.

So in Department 18, uh we wanted to show you where revenues come from in Department 18.

Um as CFO Stademeyer uh indicated, we set aside the retired protection fund, which I'll talk about in a few more slides, and we're now pulling money out of that.

So in the fiscal year 27 budget, we propose to take 65.6 million out of the retired protection fund, and it comes in as a revenue to the non-departmental.

Um we also are entitled to 18.7 million a year through through the year fiscal through the fiscal year 2034, um, which is the so-called grand bargain contribution.

So everyone will recall that during the bankruptcy, the foundations, the Detroit Institute of Arts came together and made a commitment.

It is a contractual grant agreement.

I know one of the questions we've gotten from council members is how certain we are that we'll continue to receive that $18.7 million.

It doesn't just come in automatically.

There is a uh a strong contract that was written.

It requires the city to do certain things, like for instance, we can't decide to take the art back, we can't cut you know uh various DIA programs or put special taxes on them.

Um we have to maintain the governance of the pension funds since that's what they're contributing towards.

And we we produce two very lengthy uh grant compliance agreements each year, and then the OCFO also, along with members of the mayor's team, make a presentation to the foundation for the future board uh and and that results every year in June of them saying, yes, you're compliant, you're gonna get your 18.7 million dollars again.

And I think all of you know the foundation for Detroit's future is made up of a number of the big name foundations in our in our city that are also contributing to the city in other ways and grants that um you know Ms.

Daniels administers, but they come together in this board called the Foundation for Detroit's Future.

They certify that our reports show we're compliant, and then we get our 18.7 million.

We've we've never missed it, they've never been late with the payment, and we fully intend that we'll stay compliant through the year fiscal uh 34 when it ends.

We also pull in and we'll talk more about UTGO debt.

The debt millage is a restricted revenue source.

When we put that on the property tax bills and we collect it, we have to take that money and we don't commingle it.

We put it in a dedicated escrow account.

It can only be used to pay debt service on the UTGO debt.

So that amount from the debt millage and other sources that go into that fund is 53.5 million in this budget.

And then lastly, you'll remember that council authorized these installment purchase agreements in the last couple of fiscal years.

Um there are non-general fund agencies, DDOT would be an example that are getting some of the vehicles paid for with the IPAs, so that fund has to pay the general fund back for their portion of that debt service.

So that's the 2.3 million.

So in fund 18, we bring in, or the budget proposes to bring in a total of 140.1 million.

Now, Department 35, this is where all of our major revenues get recorded into the city's budget.

So the first line major uh taxes and other revenues, 1.2 billion.

That's as we all know, coming from the revenue estimating conference.

We also have, and Mr.

Corley did a great job of breaking it down in the last budget hearing, uh, have in this year's budget that we would pull in 49.5 million of prior year surplus, 2.9 million of cable franchise fees, uh, 100,000 media services, 700,000 of debt repayment, and that again is an example of some of the city's debts were incurred by some of our other agencies.

The library would be an example, DWSD would be an example.

They have to pay the general fund back for that portion of the debt service that we are going to pay, and that's 700,000.

And then there's revenue from other funds, which we footnote, and that's exactly what Mr.

Corley walked you through when he was getting to this 120 million dollar number is you know, adding up the use of prior surplus and this use of surplus that comes from other funds.

So, as you all focused on in the last budget hearing, this is where that money comes into the budget as revenue.

Excuse me.

Um the next page we then go through the expenditures for these departments.

Um Department 18 and our debt service and legacy pension, um, and we'll talk more about legacy pension.

That payment for fiscal year 27 determined by the actuary is 162, 161.2 million.

So that is one of our key expenditures.

Uh, the mayor has again proposed a prorated 13th check for uh retirees of the legacy pension plans and put another 10 million in the budget.

Council will recall that we've done that twice before.

This would be the third time.

Uh if if this um you know um ultimately is in the budget you adopt.

What we'll do when the new fiscal year starts is we'll come back to city council for you to authorize that money being transferred over to the retirement systems, and we would hope to make that distribution to the retirees before the um before Christmas time again, as we did last year.

And just to let you know how much it was, or for anyone that's listening, um there are last time we did it, there were 10,504 general retirement system retirees and beneficiaries, and they each got a check of 476 dollars.

There are 7,564 police and fire retirees and beneficiaries, and they each got a check of $661.

We also have our LTGO debt service, so we'll talk more about that in another slide.

But the the debt service that's paid out of the general fund, the amount due this year is $86.1 million.

We we know all of that because all of our debt is at fixed rates, so we know that the amount that comes due is $86.1 million, and then again, you're gonna see that familiar number.

We pulled in $53.5 million from debt millage, and now here we have to pay out the $53.5 million as the debt service on our UTGO debt.

So that's all of the expenditures going through Department 18.

Uh Department 35.

Um again, the proposed budget has 97.3 million of transportation services report.

That would be what the general fund subsidizes to DDOT, the Detroit Transportation Corporation or the People Mover, the Airport, the Port Authority.

That that in the budget is 97.3 million.

There's also 53.6 million of citywide overhead.

Uh that includes utilities on our buildings, it does include the 12 million that was um is budgeted for the risk management fund, uh 1.8 million for the Detroit Building Authority, um, and um some other small items that when you know, through questions that I know you'll want to ask Mr.

Johnson exactly what makes up that uh city overhead, and he he knows every number that makes it up.

There's also uh support for the solid waste services fund of 9.8 million.

So again, we were all proud of the fact that we could give our senior residents a break on their solid waste fee, um, but that has to that money has to come from somewhere, and and where it's coming from is this Department 35.

We're contributing 9.8 million or proposing to in the budget to support the solid waste fund.

There's 7.7 million for the cultural institutions that I know have all already presented to city council.

There's uh other general fund expenditures of 16.7 million, and uh the special revenue fund, which is uh the peg fees of 1.7 million.

So there's 186.8 million of expenditures that are proposed to come out of Department 35.

Next, I want to go back to the retirement protection fund, and I I want to just review history.

It was obviously a painful period for all of us here at the city, but we you'll all recall that the bankruptcy was filed in July of 2013.

Um filing a bankruptcy in the state of Michigan for a local unit of government requires the governor to authorize it.

Obviously, Governor Schneider authorized it.

He wouldn't have picked an emergency manager who was a bankruptcy lawyer if he wasn't thinking that.

But the first step was for the governor to allow the case to be filed.

Then, if you recall, I know we all read the stories in the paper when this was unfolding.

The first challenge then in bankruptcy is to prove you're eligible for bankruptcy.

The creditors don't want the entity to declare bankruptcy.

They want to get all their money.

So the first set of budget the uh hearings in front of the court is to prove that you're eligible for the bankruptcy.

So the first goal is to say we got into bankruptcy, and then you spend a very long time trying to get out of bankruptcy.

Um I know counsel knows because you see our ongoing legal expenses, but most people probably don't realize the bankruptcy case is still open with the federal judge.

It's now a different federal judge, it's now Judge Tucker because Judge Rhodes retired, and the judge has asked for a report next month, which I've talked to our lawyers at Miller Canfield.

Um we believe we're ready to suggest to the judge and or ask the judge next month to actually close the case.

So we finally have gotten to the to the point, but you know, to me it's just staggering that something that started in 2013 took 13 years to get to case closure.

So certainly bankruptcy is not a quick solution to anyone's problems.

Um the retired protection fund, though, I think it's important to remember where it came from.

One of the things Judge Rhodes required was that Mayor Duggan, who was newly elected, you'll all recall, he started in January of 2014, so he had nothing to do with the bankruptcy case being filed.

That was decided by you know the state of Michigan and their emergency manager.

But then the judge said, Mayor Duggan, I want to know that you and city administration is committed to this plan of adjustment.

And he required Mayor Duggan to testify as to the feasibility of the plan of adjustment.

And in a bankruptcy court in chapter 9's, feasibility is defined as that the plan you can survive for 10 years.

You know, and I remember Mayor Duggan had to, you know, you you know you all know him, before he would testify, he studied the plan to make sure that he was comfortable that it really could work.

And he was uh really amazed that it was really only certifying for 10 years, and so his logical question was what happens in year 11?

And and they said, Well, that's not what you're testifying to, you're just testifying to the first 10.

So what happened was, and he quickly realized that yes, for the first 10 years, they had engineered a bankruptcy plan of adjustment that he could confidently say that he felt was feasible, but then in part of studying it, he looked at things that they backloaded to year 11.

So the people that created the plan of adjustment purposely did some things to delay expenditures until year 11.

And the theory was after 10 years of having a pension funding holiday and getting relief from our debts, that the city would just be in such wonderful shape that anything would be possible in year 11.

And as we all know, those years went quickly, and I think Mayor Duggan quickly realized that year 11 would roll around, and you know, there was a big problem staring us in the face.

And the big problem that was staring us in the face was the fact that the legacy pension plans were modified, reduced.

I mean, the retirees, you've heard me say this, you know, gave up more than anyone in this bankruptcy.

Their benefits were cut, but then the plan of adjustment said, well, for the first 10 years, the only new money was going to come from the state contribution agreement, the foundation for Detroit's future DIA, the water fund, because they could charge the ratepayers, but the city wouldn't contribute it, you know, virtually anything until year 11.

And so a number of people, when we were under active Financial Review Commission oversight at that time, said, boy, this looks like a default scenario.

You know, in year 11, you're gonna go from zero to a hundred and sixty million.

Where's that money come from?

So we worked on what ideas that could, you know, could alleviate that concern.

And the idea was let's set money aside in a retirement protection fund.

Um we were fortunate because a lot of businesses had come to the city in the first 10 years post-bankruptcy, Stellantis is a great example, and generated a lot more income tax for us.

So rather than spend that income tax money, um the mayor and city council decided, let's set aside that money in a side fund and a retire protection fund that could only be used to fund pension.

So call it the retired protection fund because without it, retirees would have the very real real concern that in a year 11 are you gonna come back to me and now try to cut my pension one more time?

So this was a way to um you know set money aside.

And so through fiscal 23, we built it up to 455 million, and now what we've been doing is um slowly spending that money down.

And I think I can show you that on the next um chart.

So this chart shows how the city plans to meet the significant um obligation.

Um if I describe the chart for those that aren't familiar with it, what we're showing you is 30 years that began 10 years after the bankruptcy, so beginning in fiscal 24 and going for 30 years through fiscal 53, how would we pay off this liability?

And the liability we're paying off, it's it's big.

It's like as of the end of last fiscal year, we still owe we the city 1.6 billion dollars to be funded to the retirement system.

And so what this chart is showing is how are we going to pay off 1.6 billion dollars.

Um there's an old saying that's um largely attributed to Desmond Tutu, uh, which was how do you eat an elephant?

And his response was you eat it one bite at a time.

And and this is that example, you got to break something up into small pieces in order to you know make it happen.

So this is that strategy saying how are we going to pay off 1.6 billion without creating a huge problem to the general fund.

So the budget you're of course entertaining is fiscal 27.

You can see that the actuary says we've got to contribute 161 million dollars this coming fiscal year.

18.7 million rounding to 19 comes from the Foundation for Detroit's future.

We're we're proposing to pull 66 million out of the retired protection fund, and the general fund will have has 77 million dollars uh coming instead of 161.

So you can all imagine as you agonize over the budget and try to find money for other very important priorities.

If we had 161 in the general fund, it would be a lot tougher than what you're already wrestling with.

Um the idea was that we wouldn't spend all the retired protection fund money in one year, we would slowly spend it down, and the idea which we called building budget capacity was our general fund should grow every year, hopefully with inflation, hopefully with new revenue sources that you all are entertaining.

And so the general fund has a slow growth in their contribution to pension as we take less and less each year out of retired protection fund, and then when we get to the year fiscal thirty-seven, the entire contribution, which is forecasted to be 124 million, will come out of the general fund.

Um it's important just to I think put put it in context, like you know how big these funds are.

Um our two legacy pension plans have 3.6 billion dollars invested in the market, so there's a substantial amount of assets there.

Um, but the liability that the actuary calculates is 1.6 billion greater than that.

So if the when the actuary calculates, because this is a frozen benefit, we know every person, if you were working here up till June 30th of 2014, you're gonna get paid part of your pension benefit out of that legacy plan.

Um so I'm a great example.

I started in October of 2013.

The legacy plan got closed in June 30th of 2014.

I've got eight months of my pension that's gonna come out of the legacy plan.

But for all the people that were retired prior to that point, it's where 100% of their pension money is gonna come from.

So there are 23,934 retirees and beneficiaries that are paid out of it.

I used to put it in context, I think about Little Caesars Arena, and I think this population of retirees and benefits would fill little Caesar's arena.

So it's obviously something we all take very seriously.

This is a huge number of people that are counting on us.

It's a group of people that got hurt badly during the bankruptcy.

And and so our promise to them is they're not gonna ever, if we have anything to say about it, look ever have to look at another cut.

We want to make sure that we're gonna fund this and get this plan to 100% funded.

So this is our plan to do it.

Uh, again, you've seen the numbers in the budget a couple of different places, but uh this year 77 million coming out of the general fund and pulling 66 million out of the retired production fund.

Uh going to another long-term obligation, um, our UTGO debt.

So, again, you know it stands for unlimited tax general obligation bonds.

Um, it's done all across the state of Michigan, all across the country.

Uh voters go to the ballot, and typically there's something on the ballot that says, do you want to improve the athletic facilities at your school district?

And the ballot proposal says we want to raise X million of dollars, and this would put X number of mills on your property tax bill.

So when voters approve a ballot issue, they are proving that we are allowed to tax them to pay back that debt.

In the state of Michigan, authorizations by voters never expire.

And so the city, prior to any of us getting here, I think any of you including any of you, the city way before the bankruptcy would typically have these ballot initiatives and would get approved.

And but then the city, as it got closer to the financial crisis that ended in 2013, didn't have the ability, no one would loan us money anymore.

So the ballot authorizations were out there, but the debt never got issued.

So what we did once we started, the the only part of our uh UTGO debt that predates us is in 2010.

The city borrowed money, and it and this is what funded Detroit Public Safety Headquarters.

So our our large beautiful public safety facility was funded, you know, with a bond issue in 2010.

That was the last time the city issued bonds that were UTGO until until after the bankruptcy.

And then following the bankruptcy, we use these prior voter authorizations, and you'll all remember because a number of you were you know key a key part of this initiative.

We we put proper proposal in on the ballot, and we we got voter approval to issue 250 million dollars of bonds that would be used for the for the demolition program.

So that was a new ballot authorization, but for the most part, we were issuing bonds with with um the former author a prior authorization of voters.

And in the chart at the bottom, we show you just this debt millage, and and it's debt millage is an interesting thing.

Bondholders love it because they know that they're gonna get paid back, or they think they know they're gonna get paid back because there's a dedicated revenue source to pay back the bondholder.

But the treasurer is responsible each year to set the debt millage at the level it would take to make sure that you can meet debt service.

And so uh you as you know, because you've participated in this over the time you've all been here, we've been taking it down.

We were we were, you know, the city we show you even going back to 2012, but you know, in more recent years, we were at nine mills on the tax bills for 2020, 21, 22, 23, and then we took it down to eight mils, then we took it down to seven mils and twenty-five, we took it down to four mills last year, and this year, and one of the things council will entertain and pass as part of your closing resolution is the tax statement that instructs the treasurer to put that three mills on the property tax bills.

So we are we've you know, we we have a very sophisticated model that looks at how much money we need to bring in.

We've done a very good job of setting up this debt to be paid down over time, and we're very confident that we only need to assess three mills to the uh property taxpayers.

So again, we're proud of the fact that we're delivering, albeit small, at least you know, um, a move in the right direction to lower property taxes on on Detroiters.

Uh and the next chart we actually show you how how this debt stacks up and how we plan to pay it down.

And again, it says it's a projection, but all of our debt is fixed rate debt.

So these are actual future obligations.

We know every debt that we have to pay by year, and you can see you know, in 26 we're near 60 million, and it'll continue to go down.

So again, each year we have to recalculate how much that millage is, but you can see, unless you know the administration with council's approval would go back to the voters for new authorization, we should be coming to you with reductions in future years because we're gonna pay down our UTGO debt.

We don't have to tax the people to pay it back.

So this is just a great visual.

Again, it's coming from a dedicated millage that's outside the general fund.

Then there's our limited tax general obligation debt and installment purchase agreements.

Um this is an interesting category of debt.

It's again a significant long-term obligation.

The city has 955 million dollars of LTGO debt outstanding as of December 31st, 25.

And most of this is pre-bankruptcy obligations.

Um what the mayor and councils were doing prior to the bankruptcy when when times got tough and they were running deficits, they would borrow money to plug the hole in the budget.

And when they borrowed that money, they secured it by pledging distributable state aid, you know, typically.

So that was debt that even though there was a bankruptcy, the emergency manager couldn't get it discharged because it was it's it was secured debt.

So it's like any of us, if we borrow uh money and we secure it with some other asset and we don't pay it back, that lender can take take that asset.

So that debt could not get discharged in the bankruptcy, as I indicated.

Most of this is from pre-bankcy.

The only two new things we've done since bankruptcy, the only new money has been in 2019, we borrowed 10 million from the Michigan Strategic Fund to demolish Joe Lewis Arena.

You'll all remember that Little Caesars Arena got built, the state had a big part in negotiating that, and and and the city asked for help to take down Joe Lewis Arena because we weren't allowed to keep it and run it as an arena and compete with Little Caesars Arena.

And so we borrowed 10 million from the Michigan Strategic Fund.

Um obviously that was a uh transaction that we all think worked out great.

You know, um Mr.

Torgo and the Sterling Group bought that property from us, actually is reimbursing us for the debt service.

He put up that beautiful apartment building at Water Square, and now we've got the JW Marriott going on that site.

So uh it was a great use of of a borrowing from the state to you know free up something so we weren't looking at an eyesore on the river for you know for for a decade.

And then, as you all know, um we we uh entered into these installment purchase agreements, which council authorized in the last um two years.

So this is showing how the general fund will pay off our LTGO debt and installment purchase agreement by um by year, and you can see the exact amount that we've got in the fiscal 27 budget that we have to fund.

Um there was an interesting article in Bridge magazine not long ago by the um by the writer Steven Henderson, who who many of us know well.

And he he I don't know if you you're all so busy with um budget hearings.

I don't know if you read all the uh reports on on our budget, we all do.

And um Mr.

Henderson, you know, he pulled charts right out of all these charts that I'm showing you, they come out of uh our published long-term forecast report.

At the end of next month, every year we publish to city council our long-term obligations.

So you're seeing this today, but you also see us publish this long-term obligation report that that is public a public document.

And what Mr.

Henderson did is he pulled those pages and he said, you know, his analysis was hey, this is good.

The pension obligation is gonna be going up, but the LTGO debt is gonna be going down.

But he kind of posited that, but boy, you know, is this a problem for going to be a problem for the city that their LTGO debt's coming down, but then the general fund's gonna have to be contributing more.

The thing he failed to do, which is in our report, is put the two things together.

And so what this chart does is it shows the items that are going to come out of the general fund are gonna be us paying out the not the general fund portion that goes to the legacy pension and the general fund pension that goes to LTGO debt.

So, yes, our general fund debt service will go up slightly each year, but but again, we've this isn't just happenstance.

We engineered all the debts we issued to make sure that we had a comfortable rise working with Office of Budget.

The idea is always that a budget can always take on some incremental things if we do it a bite at a time, but going from a small number to a very large number in one year really upsets how how you all want to debate the budget and and find out how to fund your priorities.

So while this does show increasing debt service that goes up through the fiscal year 36, after that point it starts to go down, and then once our LTGO debt is paid off, we don't have anything that extends out past fiscal 44.

We'll just be paying off the remaining pension.

So again, if we all live long enough, eventually there'll be less and less of uh of a burden from the general fund that has you know and that then you could program for all the valuable things that you know that you're you know you're desirous of on on the part of our residents.

So we we think this is a very important chart.

And then lastly, um the uh the OCFO also um works very hard on our credit rating.

Um we uh we have chosen to get rated by the two pre preeminent rating agencies, Moody's and SP.

Um you've seen this chart before.

Um we we show you that back in 98, so the city was investment was investment grade in 1998, so the city wasn't always in tough financial shape.

Um and and then and then you all know because you've lived through this, you know, some even say that the state cutting revenue sharing caused a lot of the city's problems.

So as those things became clear, the rating agencies started decreasing our rating, and then certainly the bottom of this chart is when you file bankruptcy, you get your credit your credit rating as the worst it can be.

It gets gets you know pulled.

Like no one will lend you money uh you know when you're in bankruptcy unless someone, you know, you promise someone you're gonna pay them back with another revenue source.

But ever since then, every year we meet with the rating agencies, they're they're we uh they're required to rate us once a year, and we've slowly marched up, and as you know, because you saw us uh announce it, um we we know we've gotten back to investment grade, we're uh following budget, preparing to meet with Moody's and SP again, working with May Mary Sheffield's team to and her people to show how her priorities are going to help make the the city better and argue for you know increasing our credit rating further.

And where this will benefit us, it's it's not only reputation for our city, but if council ever just does decide to go back to voters for an authorization for you know for bonds for a capital purpose, uh we'll get the lowest borrowing cost because we have a high credit rating.

So this is something that's not just it's a point of pride that we we saw what the bankruptcy did to the city, and we we needed to rebuild our credibility, but it'll also have a payback for us.

So I'd like to thank you.

That's our presentation.

We know you'll probably have a number of questions, and I'll I'll need um Mr.

Johnson's help with some of the some of the line items.

Thank you so much.

Um, but also some good info that we need to have moving forward.

I'm gonna start off with uh member waters.

All right, thank you, Mr.

President, Ms.

Neglett.

You know you're just a wealth of historical information indeed.

Um I'm gonna go to the general retirement race for a moment.

Um I know that there are more of them than um police and fire.

So um I guess you've kind of explained that part of it.

So what I want to do, um Mr.

Um Mr.

President, is make a motion to um increase um general retirees payment by two million dollars.

That will give them the additional bump they're asking for.

They are talking about the fact that um police and fire, who are less, I get it than they are, but they would like to see a bump in the in their checks as well.

That's my motion.

Okay, colleagues, there's a motion on the floor.

Any objections?

Hearing none, good action shall be taken.

Mr.

Waters?

All right.

Um I'm also looking forward to us opening it up again so people retirees can take advantage of the payoff uh as well.

Um I want you to talk about uh GLIWA and their contributions to the pension uh pension fund, and um, because I know that they are they're asking for the next 10 years for a reduction, right?

In terms of what they contribute.

Could you explain that to us?

Yes, thank you through through the chair.

Um so yes, what you're recalling, and I really appreciate them, and I think you all know this.

Member Waters is now serving you know with us on the general retirement system board, so and and member young uh serves on police and fire.

So it is always great on those pension boards to have you know the council support.

So we we we really uh appreciate that.

Um you know, I indicated that when the when the bankruptcy happened and they um through negotiations cut the retire, froze the the legacy plan, closed it to new benefit accruals, and then said the city needs some time to get back on its feet before it contributes.

How would new money come in?

So what they engineered was the grand bargain, which was the contribution of uh from the state of Michigan, uh from the DIA from the foundation for Detroit's future.

So that was one element of new money that didn't have to come from the city's general fund.

But then the idea was also because Great Lakes Water Authority was formed as a result of the bankruptcy, that because the all of us rate payers that consume water and sewerage services from GLIWA and DWSD, um, our rates cover the pension obligation for people that work on the water and sewer system.

So what was engineered in the bankruptcy was that for the first 10 years, they would make an accelerated contribution.

So they made for the first 10 years post-bankruptcy, and it was of course DWSD GLIWA employees are only in the general retirement system, not police and fire.

So this 45 million a year came in to pay off their liability.

And the actuary designed it so that it would be paid off.

And what um through the chair, what member waters has you know heard the actuary talk about at the board meeting is that it didn't quite work out.

Um now one of the things they studied was that 45 million got split between DWSD and GLIWA.

So they actually did an analysis at the time of the bankruptcy to figure out how many of the DWSD retirees worked on what would have been the suburban system, the water filtration and the sewage treatment plants, as opposed to DWSD employees that worked within the 139 square miles of the city.

And that turned out to be a 70%, 30% split.

So 30% of the DWSD retirees were deemed to have worked on the system in our 139 square miles, and 70% of the retirees for the suburban system.

So they got to the end of 10 years, and there's still a remaining tail liability.

When that was negotiated, there was a man at the time who many of you will remember who was the Oakland County CFO, Mr.

Bob Daddo, and he he wanted GLIWA to have nothing to do with pensions after 10 years.

So he said, if at the end of 10 years we're not fully paid off, I want then GLIWA to not spread it over 30 years like the city's gonna do, they gotta pay it off quicker, five or no more than 10.

So it was an unusually written contract that said they'd pay off their remaining liability over no no um less than five but no more than 10.

And so um through the chair, what member waters heard the actuary talk about is GLIWA asked for that relief to spread it over 10 years, which the general resistance system board did.

Um so I think Member Waters, that's the story you wanted me to tell.

Yeah, the board did agree.

So there, so where we're we're paying off over now, we've got 26 years left to go.

They're gonna pay off theirs over 10.

Um I'll have to look up the exact number.

It's not a lot because the 45 million did largely do what it was supposed to do.

It put new money into that uh that system, but that yeah, it's an important story to to get out there.

And then it's important to know.

I mean, we all work for a city that believes in defined benefit pension plans.

Uh Gliwand Gliwa does not.

So anyone that left DWSD and went to work for GLIWA, they get like a 401k plan, like you know, like for-profit employers have.

It's only uh uh and our DWSD employees, the 30% that stayed with uh DWSD to run our our local system, they are in our general retirement system component one.

So GLIWA did accomplish their goal of largely getting out of the pension business.

Um, and you know, but I just wanted to editorialize that they they view pensions different than we all do.

Yeah.

All right.

Well, thank you.

I wanted you to make sure that you share that with uh with our colleagues.

Um so I I have just have a couple of motions um, Mr.

President.

Um my first most motion is to establish um a capital improvement fund.

I'm not sure whether they're gonna go or anything, for historical districts and the surrounding areas.

And I want to start that uh put it in executive session for the total of um six million dollars.

Okay.

There's a motion on the floor, colleagues.

Any objection?

See none, that action shall be taken.

Then my second motion is this is based on a budget request uh that we received from received from the historic um Boston Edison and um for repairs and development for 2.5 mil.

I'd also like to add that to executive session, Mr.

President.

There's a motion on the floor discussion with discussion, uh Pro Tim Young.

I would like to join you on that, Member Waters.

All right, you may saw motion on the floor.

Any objections?

See none that action shall be taken, noting that uh Pro Tim Young is looking to join uh member waters on that item.

Okay, thank you, Mr.

President.

All right, pro Tim Young.

Thank you.

I appreciate that.

Um thank you, Ms.

Nicklix, sir.

Always good to work with you.

You are wealth of knowledge, you are the best, the best.

I you're one of those people I always feel like I've learned more leaving from, you know, some people feel like they've taken away from me.

You know, yeah, too.

So I appreciate that.

Um I just wanted to add really quickly, because you were talking about a lot of costs from the state, and I was just saying that I ran a little bit of numbers here, and I was saying it's a third it was 30 to 80 million dollars in tax that it cost us from the auto and auto insurance rates.

It was also um 25 to 30 million dollars at the residency repeal cost.

This is the direct tax revenue.

And then if you add the tax leakage money to spent outside the city, that's 225 million dollars.

And then if you add the and I'm I um I um rounded down the money that we lost from the uh revenue sharing, it's about 535 million dollars that's leaving the city of Detroit that we should be receiving.

And then people wonder why we had the bankruptcy.

So I think that was a real good point.

Is wanted to kind of add some numbers and figures there.

But uh now to my question.

Um I wanted to ask you about uh investment returns.

And I want it, and I wanted to say first and foremost, we have lost control of the investment portfolio due to the bankruptcy, right?

And it's about for the numbers that I see here is about 50 to 150 million year in foregone gains that we've lost, and it's uh actually the debt burden is 100 to 300 million dollars annually in required payments.

Could you kind of talk to that a little bit?

Are do you think those numbers are right, wrong, and what exactly are are we experiencing economically and fiscally, the burden because we've lost control of that.

Yeah, uh so through the chair, yeah.

I think thank you for that question because it'll let me talk about another element of the bankruptcy that was important.

As I indicated, that grand bargain has compliance requirements.

Right.

One of them is that we the city had to agree during the bankruptcy to have independent investment committee.

So as you know, because you sit on the police and fire system and member Waters sits on the general retirement system.

We don't have anything to do with what investments are three point, you know, again, three point six billion dollars that we have invested in the market.

They're managed by professional investment committees.

Um they've largely done a at least the last couple of years, uh, a good job.

They've done what you know what I would say as a finance professional you would expect professionals to do, which is if you've got 3.6 billion, you should definitely not put it all in one stock, and then something happens to that CEO and you lose all your money.

So they have diversified their money.

Uh both of them have um investment consultants that help them.

Um the general retirement system uses New England pension consultants.

Um the police and fire um use Wilshire.

Um and again, as you know, n none of us, there's not one appointee or or elected official of the city that can sit on that investment committee.

Uh that's but that's only a 20-year, not only, but it's a 20-year restriction, and we're 12 years into it.

So in eight years, if we're all still here, if we're on those boards, we could take back um you know control of the investments.

But right now it's out of our hands.

Um, if we did try to take it back, it would violate that grand bargain agreement and we would lose that 18.7 million unless we negotiated something with them.

Um but I I I wrote it down because I think that it they had, you know, we've all had a good last two years in the market.

The lately the stock market's been incredibly volatile as a result of you know the president's actions.

But um the general retirement system earned last year 9.43%, the year before 9.28.

Uh the police and fire last year earned 10.36%.

The year before that, 9.85.

So decent returns, and you know, so I I'm I I'm I'm I may one to say that I view that the investment committee members have been responsible people.

Uh they they serve without compensation.

Obviously, it's a good resume builder for people that are on those things, so they're not doing it totally out of the goodness of their heart, but but they're take their jobs seriously.

They've you know they've invested our money.

Uh, the other place where we invest that you know you've all seen in our monthly um FRC reports that we present to the um budget finance and audit committee.

Um the city also invests its excess funds.

Um we though are limited, so in the state of Michigan, um there's a very old public act that limits what a treasurer can invest in.

And the idea is that the treasurer is in charge of funds that are collected from taxpayers, and so the state doesn't want that treasurer gambling with that money.

So we're restricted to only a certain category of investments, you know, certificates of deposit, investment grade bonds, and and you've seen that.

So I think there's two elements to your question.

It's what have we in the city done to maximize, and I think we've done a good job.

Our yeah, our cash balances are coming down.

I mean, obviously, we we talked in your or you talked in the last budget hearing about uh the ARPA money needing to get out the door by the end of 26.

So as we've had less investable funds, we've had you know less investment returns.

Uh the retirement protection fund on purpose, we invested very conservatively.

We we viewed it as precious dollars that you know we didn't want to gamble it and then have to come back before you and say, well, the money you set aside, we you know we lost it in the market.

So we put all of that retire protection fund money and super safe investments, um, large investment grade um um securities.

Um so I don't know through the chair, I I that's what you wanted me to get out, but but but uh but to put a number on it, it's eight, you know, it's a 20 years of uh independent investment committees before the city could take control back of its uh pension funds.

No, no, listen, I think that's great.

And I understand that because part of the bankruptcy agreement.

I I and and this probably won't apply because it because the city went bankrupt, but I just figured that's a whole lot of money that the city is losing, and that is under a mandate for the state to be able to have this structure that way.

I would think naturally legally that would potentially be a violation constitutionally.

I don't see how that is not a violation of Article 9 Section 29, which is walking about unfunded mandates.

Yeah, through that's what that is.

Yeah, through the chair, I think one thing you've seen is you know, probably if we were in charge of our own investments, um, again, I think we would still diversify the portfolio.

We all the racial taking a finance class that says if you got a lot of money, divide it up so that no one thing can kill you.

Um but but the one thing that went away with these professional investment committees is they don't look with a lens towards how could we invest in Detroit in a way that might help the city.

And so a lot of times, you know, in and I know member waters participated in the last police and fire investment committee and heard how they did their business.

But when they get pitches, the people that are pitching them on investing in real estate, it's never Detroit real estate.

It's always, well, there's better markets, there's better there's places in the country that are growing that's not Detroit.

So I think all of us, elected officials and appointees, we would have more of an eye towards look, you know, if it's our money that's invested, why shouldn't we be able to look at things that you know we know are existing and and you know, where we know people that run good funds in in Detroit.

We I think we would do more of that.

No, I no, I totally agree.

I mean, I think that that's something that's uh a huge problem.

I mean, I'm not I'm not saying there's anything wrong with having a diverse portfolio and investing in other things that are successful, but I think, like you said, the fact that we don't have people who have an understanding of the Detroit and the assets we have here, they're not investing in that because they're not providing that to them, that opportunity.

So I agree with you.

Uh I I just wanted to just say to you just finally, and then I'll wrap it up that um I don't know what you've done or what you well well, hold on.

Well, let me ask you this what are you doing evolving artificial intelligence at all, implementing that within your department.

Yeah, uh thanks.

Yeah, and we've we've certainly seen you ask everyone this question.

So now m more of us are prepared than when you first started asking.

Thank you.

But but as Ms.

Stademeyer indicated, the OCFO really has embraced it.

Um, you know, you know, our first CFO was just a wonderful man, John Hill.

Uh John Hill was, you know, one of the first African American CPAs in the country.

Uh he was the head of government consulting for Arthur Anderson.

He he ran the Washington, D.C.

control board.

And um it was his belief, him and and Beth Niblock, who was our first chief information officer, that the city needed to have leading edge software systems.

So they picked you know Oracle for our ERP system, which again, we all the whole city doesn't run without Oracle now, and then UKG on our payroll side.

And those systems, because Mr.

Hill guided us to invest in those, those are the leading edge players that are Oracle ERP.

Every quarter we get new releases, and uh and we have a team that's part of OCFO, uh Mr.

Nadim Zeta is the head of it.

Um he goes to the Oracle conferences, um, he looks at what's coming down the pike, and there's a lot of AI.

So you heard Ms.

Stademeyer talk about it at the OCFO hearing.

Um the auto agents for procurement.

So you want to do business with the city, and you know, it's again, as you know, it's there's bureaucracy involved.

So the auto agent helps you.

You're a new supplier, you want to set it up, it walks you through doing that.

So we're doing he's done a lot with procurement.

Um we all know procurement has a heavy burden with the amount of procurements that they have to get done.

So uh he's really leaned into how we can help them.

On the controller side, you know, one of the things the group I supervise is keeping the books in records.

Um we use an AI system called Mindbridge, where um it's set up to look for unusual journal entry.

So all of us accountants know.

I guess I'm you know with my colleagues here.

Um the easiest transactions are ones that involve cash, because you're giving up cash, that's one side of the entry, and then you have to book an entry, so cash receipt or disbursement.

But there's a lot of journal entries that have nothing to do with cash.

And so Mindbridge actually looks for what if somebody in one of our departments posts a crazy journal entry that makes no sense.

Like we don't have to wait for the auditors to come in and find it.

The auto agent, or not the auto agent in this case, the AI actually finds and flags for us those unusual uh journal entries.

Um we also have, and you know, our former treasurers have done a great job of cutting down the number of bank accounts we have, but we still have a few hundred bank accounts, and every one of them we have to reconcile those bank accounts uh every month.

Uh we use AI to do uh bank reconciliations.

Um so I would say with us, it's um it's mainly being used in our our general ledger and bookkeeping where AI can make us smarter and flag things that aren't right before we have to pay auditors to find it.

And then a lot with with procurement again, they had a huge need.

Um, but it's you know, one of the other great things that that we got out of being on these systems that other cities use is when you know Mr.

Hill would always say, whatever problem you're experiencing in Detroit, somebody else has wrestled with it.

You need to look for the you would always guide us to look for the best practice.

So we had a thorny um you know payroll issue that we're you know dealing with in terms of that software, and Mr.

Zeta set up a meeting with the people from Atlanta, and we you know, we got an up, they were in the middle of their budget season, so they didn't have a whole lot of time for us, but they you know, we've now met other people that we you know, we we wanted to talk about our problem, and it was just was a wonderful day for me personally because oh my gosh, when we're talking to our colleagues in Atlanta, it's like they're not that different than us.

It's about the same size city in terms of number of employees.

That they could guide us with you know what they did and how you know they they do things differently.

So it is something that we're not just making up a story to satisfy you, it's it's something that all of our people are pushing for, and my people in the controller shop, they always want to do demos.

Uh we are super careful though about not violating our procurement policy.

Like I you can imagine I get a ton of cold calls that someone wants to pitch me on, let me show you something, and I say to them, I'm sorry, I don't operate that way.

The way our city operates is you know, register on our website when there's an RFP, we do it.

We don't like our people doing demos and falling in love with something, and then you know, Sandra Stahl's been wonderful at enforcing discipline of no, you're not gonna backdoor me and do something because some salesman convinced you that theirs are the best.

If we're gonna do it, let's do a search, let's find out who's the right party.

So I think we're doing it the right way.

Yeah, and that's how investigation start as well.

So I I really I really appreciate you uh taking that heat.

Uh normally I will go through the process of why you should do this, but it kind of seems like you're already on that track.

Thank you so much for that wonderful comprehensive answer.

I appreciate as always, Mr.

Uh President.

That's all the questions I have.

Thank you, sir.

So much, Member Santiago Romero.

We I forgot if I if I may not want to make a motion.

We go to Member Santiago Romero.

So I just want to make a motion real quick.

I want to make a motion to uh put into closing resolution um the city of Detroit being able to receive the power and control over its investment committee again.

Colleagues, there's a motion on the floor.

Any objections?

Um please restate the motion.

Yeah, the motion was I just wanted to make a it put the close of resolution of the city of Detroit gaining power and control over its investment committee again.

Yeah.

There's a motion on the floor, colleagues.

Any objection.

Seeing none, that action shall be taken.

Remember Santiago Romero.

Thank you, Mr.

Presidents.

Uh good afternoon.

I am appreciative of everything that you're sharing right now.

Um, quite frankly.

Um as a bankruptcy kid, the someone that grew up during the bankruptcy, I never want to go back.

Um, and you know, grown up in a city with very little street lights, no parks, um, police never really showing up.

I don't want to go back to that.

So a question that I've always had is how do we make sure that it doesn't happen again?

But it's a very big problem.

Um we lost a ton of residents, the state stopped funding us, uh, we kept incurring debts.

So I'm just taking notes of what to flag for um to make sure that we um seal the issues early um and appreciate you talking about the the long-term debt that we still have in the plans to pay that down uh while we work on more revenue to make sure um that we have a healthy and sustainable budget moving forward.

Um because that was not a good time.

And and really uh Detroiters deserve the very best.

Um want to continue these conversations um as as we do our work together.

Um but for for my two questions in in this hearing, um looking at the budget.

I did see that project clean slates.

We saw Project Clean States um is under um non-departmental, correct?

If that's the case, uh why?

And can this be moved to human health services?

Does it make more sense?

I think to move the project clean slate under human health and family services.

Yeah, through the chair, I'd like Mr.

Johnson to answer that question, but I just wanted to comment um, you know, because one of the reasons we got back to investment grade is the rating agencies also had to be convinced that we weren't on a path back to bankruptcy.

We wouldn't be investment grade if we were.

And again, I'm not just saying this to be kind to all of you because you know we report to you.

Um what you all have done is is the greatest governance.

Having a revenue estimating conference that sets the revenues.

There's no element of any of you that ever say, hey, CFO Stademeyer, just put more money on the revenue line and we can fund something that we want.

You know, we start with a very honest assessment of our revenues, and then this debate that you all have where you know I've watched it year after year.

Um the spirited debate on what you see as the priorities that might differ from the administrations, and and then you keep, you know, we have a legislative policy division that's like a super well-educated group that keeps a spreadsheet, and you're you're keeping a balanced budget and and you're doing a four-year financial plan.

So a key thing that makes me feel like we'll never go back to those dark days of bankruptcy is that we're gonna we're gonna keep up the structure, and we've now got the institutional knowledge and the muscle memory of how you all do this.

Uh, you know, every year we see the budget gets agonized over until the last possible minute, but that's actually very good government, and that's what keeps us from you know starting to run deficits and then you know putting pressure on the finance person to oh go go borrow some money to plug the hole.

That's where the problem would would start.

But I I'll defer to Mr.

Johnson on um the clean slate.

Uh through the chair to Councilmember Santiago Romero.

Um I think that we can absolutely I can absolutely go back and have a conversation um with my colleagues.

Uh the location of it is is uh more of a policy decision um than a budgetary decision.

Um and so I would need to go back and talk to the sort of leads and the policy groups and and make sure that I understand why this was a decision that was made.

Um if they're open to it.

I mean, I from a budgetary standpoint, it's sort of six of one half it is the other.

As long as it's in the budget, then I'm happy.

Where it is in the budget, I can always find it.

Um and so I'm more than happy to go back and have a conversation with my colleagues and and determine what the rationale was and if that's something that maybe there's some flexibility on.

The chair, thank you for that.

Um and I know you can fund the money, I can't always, so it's helpful to make sure that all of the things that we're looking for are going to be things that we think they'll be under Lake Health and Human Services.

So thank you for looking into that.

That would be helpful as we're trying to just again find where everything is.

Um the next question that I'll ask is around um, I have so many questions.

I'm gonna, Mr.

President, I'm gonna ask this next question.

They have a very short one.

Um but this next question is regarding cultural institution institutions.

We're cutting our um investment into these in half after 2027, just wondering why, and if we have plans to add additional money to that moving forward.

Uh through the chair, um excellent question.

Um what we did in the current fiscal year is we bifurcated the contributions to the cultural institutions.

Half are coming from the recurring budget, half is coming from the one-time budget.

That was really a function of that reduction in our general fund recurring revenue.

Um so, in order to make sure that we did not shortchange the cultural institutions this year, um, we split it amongst the two sides of the funding coin, so to speak.

Um so because it's one-time dollars, that automatically drops out in the budgeting system that we use because it's one time, it's not considered to carry forward.

It's not our intention for that to be the case.

It is it is definitely our intention to continue to fund them at this level.

Um the hope is that our revenues will continue to recover and we'll be in a much better recurring revenue place when we start to prepare the 28 budget, and that goes back to being normal.

Um, but there's absolutely no intention to cut them moving forward.

It's just a function of that one time versus recurring split.

Thank you.

Thank you for that.

Um that makes sense.

Um, Mr.

President, one final question that I have is just on what was discussed earlier, and it's a quick one.

Wondering if the investment portfolio is available to the public.

Do you know if that's the case?

Um it is.

So um you you'll recall because it gets uh presented each um each uh month that we produce, we produce it with um um uh councilmember McCampbell's um committee.

Um so uh at um at each quarter end, we show the entire investment portfolio, what the rates of return are, and then we also show all of these debt details are in there each quarter as well.

So, yes, very very public and um you know part of our month our monthly report that we deliver to um city council and the Financial Review Commission.

Okay, thank you for that.

I was a part of BFA last term.

I remember seeing debts, I remember seeing a lot of what we're spending, all of that.

I just don't remember actually seeing the investments, so we can go back, try to find it to make sure that we know where it's at.

Um so thank you for that.

Uh thank you, Mr.

President.

Thank you.

Uh member Callaway.

Oh, I'm sorry.

Uh member Johnson.

I'm a pre-like my list already going.

Good afternoon, everyone, and thank you, Mr.

Chair.

Um, Mr.

Naglik, thank you for the putting everything together because sometimes you hear bits and pieces of what happened in Detroit's financial history.

Naglik thank you for the putting everything together because sometimes you hear bits and pieces of what happened in Detroit's financial history um but thank you for sharing the greater details uh I do want to ask um since the city's bond rating is improving can you talk about the last time the city restructured debt for savings or to utilize the dollars elsewhere yes um I can think thank you through the through the chair um we have done it a number of times um you know again right now um interest rates have gone up not down again the you know without being you know editorializing too much you know the the current president's you know um agenda has really roiled the markets and and that's and again you've seen him try to apply pressure to the Federal Reserve to lower interest rates but our federal government only sets short term rates the market sets long term rates so interest rates have actually gone up but we're always looking for where we could save and if you remember when I showed the LTGO slide I indicated that the only new money since the bankruptcy was the Joe Lewis arena demo loan and the installment purchase agreements but we had a number of bond issues that when interest rates were lower we would refinance for savings.

One of the other things that caused a financial cliff was not only the pensions coming back but one of the big securities that they created in the bankruptcy was this thing called the B note of it went to the city's VIBA trusts but then a big chunk of it went to the bond insurers and it's a tradable security and so it um it also for the first 10 years had no principal amortization and then year 11 the city was going to have to start making those payments too so one of the things we did in the last several years is we we refinanced a big chunk of those um we're yeah I think we're fortunate I mean we're a big enough city where our investment banks are always you know we take calls with them they come in many of you know Suzanne Shanks firm there they're one of our very routine uh bond underwriters um when you saw the PLA do their right refinancing and again it was right for them to present it to you we were on all those calls and so we we helped as did you know Siebert Shank firm uh with with that refinancing so we've we've definitely done refinancing of LTGO bonds um one of the things and we put it on the UTGO slide um uh number eight on purpose is unlike a mortgage where pretty much any of us could always refinance our mortgage if interest rates went down these kind of bond issues have typically a call date so people don't want to go through all these millions of dollars to issue bonds only to have you refinance it six months later so we put down when the call option is and so we've we've really refinanced everything on the table that we could refinance and especially right now with interest rates going against us there's one 2016 bond that's gonna be callable at you know October of 2016 but there's only 10 million of outstanding so there's not a lot of possibility on the UTGO side on the LTGO side um there's potentially something we we could do if interest rates do come back down with the B notes where we could get more savings but that's definitely something and you're asking through the chair you know you're asking a great question I mean what a finance director is supposed to do is always look for is there a way to refinance the debt and and um get lower rates and and and we don't do it on our own we have um a municipal advisor which again we we learned from city council that the right way to do stuff is to do an RFP and find out who the best out there is and so we hired a firm that was not operating in Michigan public resources advisory group they're our municipal advisor um and they do city of Chicago state of Illinois New York City transit Pennsylvania Turnpike they are absolute pros it's not just us with our own staff looking at whether something's refinance refinanceable we have our municipal advisor and then the banks you know as you can imagine they want to make money on a refinancing so they'll they call on us and they and we so we always talk it but so there's nothing nothing right now but again if you know things settle down in the world we hope I'll hope they do and interest rates do come down over time then you know we will be back before you and again in our world any refinancing that we do has to come before city council to be authorized.

Thank you for that um can I just ask a follow-up question so in the more recent past when you have refinanced are the dollars used for to to drive down um what's owed anything outstanding is it has it been utilized for city services um Mr.

Um Mr.

Johnson can help me with this.

I mean mainly in a you know, and I showed you those pretty charts on how we've got these nice level, like reducing debt.

A lot of what we've done is concentrated on how can we make sure the city's not going to have big spikes in any one year.

So we've kind of used the savings a lot of times to then smooth out the debt service and and make it an easier path so that we're not creating a problem for the uh budget department.

Um so I I would say that's primarily what our our goals have been.

Yeah, through the chair.

So it depends on which type of debt we're refinancing.

So if we're refinancing, obviously, I'm always a big fan of refinancing the LTGO debt because we pay that out of just our general fund.

It's not from the debt millage.

And so any time we have the ability when we lowered the cost of the B notes, that was a huge boon to my team in in the OCFO because when we had to go to prepare the budget for that next fiscal year, we had a lot more, not a lot.

Well, we had a decent amount of breathing room back in the general fund resource pool for that year because I didn't have to immediately set aside this amount for this is large amount for the B notes.

So LTGO debt, that's always I'm always thrilled when when Mr.

Naglett comes and says, I think we can do something here, wonderful, because that's really is the services budget.

UTGO, when we refinance UTGO, really what that goes back into is lowering the debt millage.

You know, if we don't need to levy as much, then it's just tax relief for Detroiters.

Yeah.

All right, excellent.

Thank you.

And my other question, and Mr.

Naglik, I need you to help me with this one.

I believe in BFNA, um, during one of your presentations, you indicated that the guaranteed um rate of return for the pension was 6.75%.

Correct.

Is it legal allowable for any greater return to be provided, not all of it, but maybe a percentage of it for to the um general fund retirees.

Um yeah, I know the question you're asking.

So, yes, so through the chair, um, what you're bringing up is when the actuary calculates what our payment is going to be for the next 26 years, they have to do an assumed rate of return.

And and the assumed rate of return is 6.75 percent.

But the last two years we've earned over 9 percent.

So that actually helps the fund because now um part of what that take it where the relief comes from, it does create relief, but it creates relief to the general fund, and that's the reason on our chart that the um the pension contribution actually went down in this fiscal year, is we're getting the benefit of it.

So when there is that benefit, we've used it to reduce the city's obligation.

But your point is a good one.

Um you probably heard me say this.

In the state of Michigan, uh pension plans can a public pension plan can only it's a mandatory subject to collective bargaining.

So when there are savings or there is money in the budget, like you know, you'll recall in the last council's you know, last council term, we did this with police and fire.

They negotiated changes to their pension plan, and and then they they knew then they brought up hey, we we've been doing better on investments.

Can we put some of that money into more benefits?

And so that's very possible, but then so the mechanism is first it's got to be done through collective bargaining, it's a mandatory subject to collective bargaining, and then in our state, um you can only change a public pension plan if the governing body um agrees to it, which you all have in the past, and you need then an actuarial cost study to show you that it's responsible to do.

The state makes you have that document that you're not just reacting to our police and firefighters and doing what they want, you get an actual report that shows you know that where the money's coming from.

So there is a mechanism to do it, and it's a bit bureaucratic, but it's it's done through state law to kind of protect public pension plans that you know we can't just do something without without a collective you know, bargaining.

But but but and so no, it's a long answer to your question, but very much so.

When you when you have better performance than the actuary was counting on, clearly there's a choice then to use it in collective bargaining to help improve a benefit, or as we did this year, use it to give the general fund some relief.

Well that through the chair, would that also apply to the general retiree um protection fund or whatever it's called?

Um because not all general retirees are part of a union, so I'm not sure about the collective bargaining piece.

Yeah, so um so because all of our all of us are in the general retirement system, we all get the same benefit, whether we're a non-union employee or whether we're represented by a union.

But because it's a mandatory subject to collective bargaining, the people that bargain for those rates are the city's unions, and then when they when they negotiate a better benefit, then we all get the benefit of it.

Like, so again, we're non-union, so we don't have someone that bargains for us, but we get the benefit of the collective bargaining, you know, work that they did to improve benefits for their members, and then we share in those.

Okay, thank you.

Um, and through you, Mr.

Chair to member waters, that was one of my thoughts on providing additional support to the retirees.

So perhaps we can work on uh that together and see what that would look like.

Right.

Thank you.

Thank you, Mr.

Chair.

Thank you.

Um member Benson.

All right, thank you.

Uh thank you both for being here today, all of you for being here today.

There's a couple of items.

Wanted to talk about the solid waste portion of the budget.

Looking on page Bravo 35 tax 17.

We're looking at uh 17 million dollars of support in fiscal year 26, and then proposed 9.8 million dollars in fiscal year 27.

There was a very robust conversation last year about how we would fund the solid waste.

We increased the level of services.

Uh the residents indicated they were prepared, and they did uh increase their level of support for solid waste, but there was also an underappreciation for how much it actually costs us to provide that service, so we needed to do additional general fund support.

Now I'm seeing a almost 50% reduction in that support.

Just give me an understanding of what's going on, how we're doing this.

And I wasn't able to find the revenues that come from residents in our budget.

So just kind of walk me through what's going on with solid waste and how these two numbers comport with our current level of service and future level.

Uh through the chair to council member Benson, so we were able to make that reduction for a few reasons.

So there were a couple the stars aligned fortuitously for us for the 27 budget.

So the first was that we did not spend as much in fiscal 25 as we had thought we would.

So when we closed the books on 25, the solid waste fund had a had a fund balance where we had originally thought it would not.

So that left a little bit more in the tank, so to speak, for us to allocate to the to the budget process.

Um we had um better than expected revenues on the delinquent collections for um the solid waste fee.

So when we when the county remits back to us the delinquent um property taxes um that they've been able to successfully able to collect, um part of that each the tax bill is the solid waste fee.

So we then get that component that gets diverted into the solid waste fund.

So we'd had a run of a few years where that those delinquent returns to us were not very strong.

It just was better than expected.

I wouldn't say it was amazing, I would just say it was better than expected.

And so, in in sort of bits and pieces by having a slightly higher fund balance, slightly lower than expected expenses, we were able to piece together a lower subsidy.

The biggest piece came when we went through, because of the converse extensive and let's say robust conversations we had about the solid waste fund.

We went through a big analysis, and I do want to credit um uh my uh analyst, uh principal analyst and assistant budget director, Steven Colbertson, um, who really just went down the rabbit hole with DPW and analyzed the solid waste fund staff and all of the operations that were currently operating the solid waste fund, and we realized that there were a number of operations that really were more proper to be in the street fund that had been in the solid waste fund for really before longer than I've been with the city.

So we finally got through and had that conversation.

Um, and you know, uh Director Brundage was in agreement that you know what these folks really do more properly belong in this in the street fund.

So by moving those people out and some of those costs out, that also lowered the expense need for the solid waste fund because we're we're doing okay in the street fund side of things.

So that really worked out well for us.

Um we were looking for any way to alleviate that pressure on the general fund to subsidize it.

Does it eliminate it perfectly?

No, because we see that there's still a subsidy, the 9.8.

Um, so you know, conversations will need to continue on you know what is our long-term plan.

Those conversations are happening right now and what that looks like.

Okay, and I'm hoping that we're going to be keeping city council abreast of those conversations because that that's a serious cost.

And this was a very serious conversation that we had between the legislative bodies well as the administrative body, and then the residents they weighed in and said we do want this level of service and we're willing to pay more.

So I really want us to keep track of that and just remember how serious those conversations were.

And then with that, it sounds to me as if we've now shifted the cost liability over to the street fund, which is great.

But now what are we foregoing if we're shifting what seems to be about nine million dollars over to street fund that was once being supported by solid waste?

Now I'm not going to ask that question, but I will put that into a memo, just wondering what the opportunity cost is with that type of transition of obligations to the street fund.

Um I do have a motion.

Uh my motion will be around escrow for property taxes.

And I know that you all have had a well, the treasurer's office has played a very large role in the conversations around supporting escrow for property taxes.

I don't believe we do that now.

I know that that would be a great way to help people stay out of foreclosure for those who can at least afford it.

And that is a number of our residents, but budgeting at times becomes a problem.

So having the opportunity for residents to pay into an escrow account that will be managed by the city of Detroit, which would allow residents to stay out of the foreclosure process because they're making monthly incremental payments towards their escrow.

I know that's a heavy lift, and there would be a lot of work and brain damage involved here, but I want us at least have those conversations and start talking to the philanthropic community that really has an interest in seeing us implement that as a tool against foreclosure.

So my motion is to add to the closing resolution and strongly encouraging the treasurer's office to work on implementation of an escrow account for property taxes within the city of Detroit.

All right, colleagues, there's a motion on the floor.

Any objections?

I'd like to be on it seeing none, that action shall be taken.

Mr.

Corley, if you can note that uh member waters would like to join us, well, Mr.

Nick.

Mr.

Chair, I just wanted to uh make counsel aware.

So there is a treasury program that does that.

It's called Plan Ahead.

Um I was the internal treasurer for a while.

I'm not not currently, so um, Valerie Golia is our treasurer, so we can respond to you.

But Treasury does run a program called Plan Ahead because you know what we realize in our treasury operation is if we were a suburban treasury department, most of your property taxes is paid by people's escrow accounts.

They've got they're they're making a mortgage payment that includes their property tax, and and we certainly get a number of our tax bills paid that way.

But we, as we all know, we have a number of people that are in a legacy family home where there is no mortgage, and that having to save up that money was just a burden.

So Treasury has implemented a program called Plan Ahead, and it lets them do exactly that.

It's like a Christmas club where you know you you you make an election, you set it up, and then they sweep that money to pay the property bill.

So we we can tell you more about that program.

And the other thing, just bragging about the treasury group they've done to help our seniors is that um the solid waste discount, the 50% that a senior qualifies for, um, it would it would go on their summer property tax bill, then they'd get approved, and then we'd have to send them a refund, and the city you know was way behind on refunds.

They've totally caught up on that.

But now they run an early period where before like right now, if you're a senior and you get your solid waste discount approved, then it won't be on your property tax bill, and you don't have to pay it and then get refunded.

So we we can definitely send you a memo.

Um, this plan ahead program though, I mean where it's a little bit clunky is the BSNA system that we're all required to use because it's the only one authorized by the state.

It doesn't allow for a monthly payment plan, so they had to kind of engineer this thing, and it's it's it's done through you know one of our banking partners, so you know it it's actually you know you know being administered.

So we can we can tell you more about it, but there is a program and a number of people do participate.

Okay, so thank you, then um I'll continue to place that into the closing resolutions.

My understanding was like you said it's a bit clunky and maybe a bit shaky and not sustainable.

So still want to put that into the closing resolution and then put into the executive session the what is you calling the plan ahead program.

We really want to see that become more robust and heavily used by those who are having challenges.

All right.

Colleagues, is a motion on the floor.

That one too.

Any objections?

See none, that action shall be taken.

I got you.

So Mr.

Corley, if you Mr.

Corey, if you can note that uh member waters would also like to join Member Benson on that motion.

Mr.

Chair, I just want to say you all do a great job as well, and the ability to keep us what I like to say is on the cutting edge when it comes to how we manage our finances and our debt and how forward thinking we are, the retiree protection program.

This is something that we've been talking about when John Hill was here, and just to see if having been here 12 years, the forward thinking and the fiscal discipline, how it has come to play out, and just your last page with the Detroit ratings history when it comes to our debt rating.

I mean, that's huge.

We were default at one time, and then within 12 years or 12 years to come back to be close to A minus rating with our debt.

I mean that that's huge.

I'm not sure how many municipalities having come from where we have been can speak to having the rating.

I mean, that trajectory is just a huge uh incline.

And so that trend line is fantastic.

That's a direct result of what you all do, and then what we approve at this table.

So I just want to acknowledge that what you guys have done.

It's fantastic, and deserves a huge level of acknowledgement.

Kudos.

Um Mr.

President, I did there's something I left out of the Solid Waste Fund.

Um, I completely forgot, and I want to thank uh Chief Deputy CFO Greer for reminding me.

Um the Solid Waste Fund finally did finally receive a six million dollar reimbursement from FEMA for flooding that had occurred in the past that we were owed from uh FEMA.

So this has been the year of finally receiving FEMA reimbursements, and we're very grateful for it.

So that really helped alleviate the pressure on the Solid Waste Fund as well.

Obviously, it's not a recurring solution, but it it it buys us time to keep having the conversation we need to have.

Fiscal discipline matters.

Thank you.

Member McCampbell.

Thank you, Mr.

Chair.

Um, and thank you all for all the information.

I learned a few things as well.

It also took me back to my finance class also.

Uh so and and also want to just say um amazing work on I agree with seeing the credit rating and just seeing the things that have been put in place um and agree with my colleague definitely.

I graduated once I graduated the year that we filed bankruptcy and um wanted to uh the intention to come back to Detroit um and to see from that place and where we are now.

So I appreciate all the work around that.

Uh I have a question about the um D dot the transportation contribution.

Um I'm seeing that our the contribution from the general fund has been reduced by 13.7 million the current budget.

Um and I know overall the DDOT budget um increases 29 million, all being funded from outsized sources.

So just wondering um where that extra 42 um million comes from that covers that reduction 13.7 additional 29.

I know Director Kramer has said 24 million comes from the new state funding, um, but I think that leaves up 18 million unaccounted for.

Uh, through the chair, um, yes.

So the additional funding comes from the street fund.

So state law um the Act 51, um, which created the Michigan Transportation Fund was amended a number of years ago now to authorize a city with a population larger than 600,000 and a transit system that runs 10 million pre rides or more per year, meaning Detroit, um, could take 20 percent of their annual allocation of Act 51 dollars, so what we usually call the road road dollars or street fund, we are allowed, we are we Detroit are allowed to transfer 20 percent up to 20 percent of that each year over to transportation, and so in order to again alleviate that pressure on the general fund that we were feeling from that lowering of our uh recurring general fund revenues, we were able to exercise that option for the 27 budget.

So there is a contribution coming into the transportation fund from the street fund um under that statutory authorization.

It's the first time we've ever done it as a city.

Um, it was at the prior administration um under Mayor Duggan, Mayor Duggan did ask us to begin looking into that possibility, knowing that we might you know we might be seeing lower than than hoped for revenues at the upcoming February revenue conference after he left office.

And then once uh Mayor Sheffield came in and we apprised her of the situation and and the and and the idea, she she was very supportive of that as well, and and said absolutely if it if it reduces the pressure on the general fund and it doesn't overly um impair the road plan, which it doesn't, um then we should move forward with it.

And so that's what we decided to do.

Appreciate that um explanation and the answer to that, and just as a follow-up, um is are there plans understanding the pressure on the general fund and and needing to cover a lot of things in this?

Are there plans to start to not depend on like to start to actually get back to us um using some uh aspects of the general fund to fund transportation?

I say that because as we had the conversation around D dot, um we know that there's a lot needed um around transportation, and I don't want us to start to kind of backfill some of that of our contributions to improving transportation um by lessening the need for a general fund.

So just wanted to get any thought process on that moving forward.

Uh through the chair, I think that um this administration is is deeply committed to transportation and transportation improvements.

Um and so I don't foresee a scenario where we would continue to backtrack on things.

Um but the general fund contribution is absolutely gonna have to move.

I mean, the the real finance office answer is the con general fund contribution is gonna have to move with the way that our revenues move with without then having to make other difficult operational decisions.

And so, you know, if we start to see our revenues improve, then yeah, absolutely, it's a conversation we would have about do we can do we continue to add more on top of what we've done.

I will say that um director Kramer has has been pretty straightforward about the fact that where we are in his funding levels is pretty much what they can deploy at this stage.

So I think we're at a very good sort of plateau with DDOT's funding.

I know there's a desire in the community and on this body, and and frankly, in the administration and my bosses, um, to continue that increase.

But right now, I think Director Kramer has the resources he can feasibly deploy in one year at the current capacity that they're operating.

As they build that capacity, we would continue to have that conversation, and hopefully that's where we it's also trending with our revenues upwards.

And then we can continue to say, sure, we might continue our street fund contribution to keep plusing it up, but we would add more into our general fund contribution.

But that's entirely going to be a function of what resources are available per the revenue conference.

Thank you so much.

I I do have a motion on this because I also, as we know that there will be a countywide RTA, uh not RTA, sorry, a smart, a county-wide smart uh millage uh that also may bring in uh additional outside sources that um so I just want to make sure that we are doing as much as we can to add to transportation.

So there's a motion um for the closing resolution to urge the administration as we continue on with budgeting um as uh feasible with the general fund that we add to uh the transportation budget.

There's a motion on the floor, colleagues any objection.

See none, that action shall be taken.

Thank you, Mr.

Chair.

And then um my second overall question, um my colleague member Santiago Romero brought this up as well around the non-departmental uh positions, but also saying that there are uh FTEs and the overassessment program, the Board of Police Commissioners, Media Services, Border Ethics, and as mentioned was special services.

Um I understand what you said about as long as in the budget is there, but also share um on the transparency and accountability side.

So just moving forward, uh are you all as much as possible that it makes sense in the departments?

Are you is there plans around making that in the department so folks can easily see where those positions are and what they're related to?

Uh through the chair, um short answer no, but only because the groups that are in non-D are what's left after a few years of rationalization of of the non-department.

Sorry, I said non-D, non-departmental.

Um we call it non-D on the ball on the in the finance group.

Um when we go through that, this is what's left, and these groups are there because they don't belong to any one department.

They serve the whole the city as a whole without any particular departmental affiliation.

So something like media services, their media services for every department, every branch of government that you know they're doing all of that.

And so non-departmental is where they ended up because they don't really report to a departmental director, they have their own directors often, um, but they aren't large enough um to set up as a full standalone department.

The charter does limit the number of departments the city is allowed to establish, and so we try to be very, very judicious in that.

And so the non-departmental is where these things often sit because they are it it literally is they literally are non-departmental.

They don't they don't belong to any one department, they're sort of operating independently for the benefit of the whole city.

Absolutely got you there.

And I know there's some explanation of that in the uh budget for non-departmental.

I and we can uh I don't have a motion on it, but maybe we can work further just to if there's any any parts of the other budget that may be uh related to, for example, transportation that we can refer folks to that if that's not if that's not there.

But thank you so much.

Thank you, Mr.

Chair.

Uh, and again, thank you all for all you do.

Sorry, thank you.

And if there's anyone who would like to provide comment public comment, please raise your hand now online and in person.

If there's anyone who would like to provide public comment, please raise your hand now.

Going once, going twice, going three times.

Collection of public comments have now concluded.

Colleagues, any additional motions?

Member Santiago Romero.

Thank you, Mr.

President.

Less of a motion, more of a of an ask.

Um, we I did uh look at the investment portfolio and the reports, and I say expected isn't show us what we're investing in.

So that's what I'm asking.

If if we can know that information, if you can be shared with us, please.

Um, because that's really what I'm trying to find.

And we don't see what that is in these um reports.

Thank you.

Thank you.

Thank you, Mr.

President.

All right, thank you.

Give you a chance for close.

You have a motion.

No.

Okay.

Um, give you an opportunity for closing remarks.

No, thank thank you very much.

I mean, you can tell we agonize over the stuff, you know.

If now it's you know going on 12-13 years, and it's good to be able to share the story and and and we really appreciate all your all your support that's gotten us to this point.

When again, what makes the rating agency thing work is that we have now a very functional government.

We have a you know spirited debate on the budget.

You all meet your deadlines.

We we have a legal budget that then we you know we we work to manage to, and again, with I I hope you see with rare exception.

We don't do things unless they're authorized by by the city council.

So we really appreciate the support.

All right, thank you.

Um pro two.

I do I do have a motion.

Um I want to make a motion to put into closing resolution smart bonding.

All right, there's a motion on the floor, colleagues.

Any objections?

See none, that action shall be taken.

And I want to make a correction, it's not total production factor, it's total factor production.

That was the key performance indicated.

I was trying to relay while talking to the OCF out just wanting that correction.

Thank you.

Thank you.

Thank you all.

We appreciate it.

Uh look forward to uh continuing the budget process.

All right, we shall now transition to our public comments.

I'm gonna put one minute on the clock as I mentioned uh for the duration of our budget hearings.

We will be having uh abbreviated public comments.

Right.

Noting that on March 30th, there will be a public hearing that will allow for full public comment starting at 5 p.m.

We've got two individuals here, one Jadante Smith, the other Reuben James Crowley Jr.

Coming up to the mics, please.

You may present.

I was gonna say the EPU member to my right, Mr.

Slate, I believe it is, used some expletive towards Ruben Crowley, so that's low even for him.

I want to also say that uh I have my son in the room with me, but I have the charter here, which is a very important document that is uh being ignored by you all.

So uh Ms.

Johnson, in your district, there was a lady who came yesterday who asked for roof repair.

Uh people who are willing to repair that roof at no cost.

I heard what you said, but they refuse you're gonna take a long time to repair that roof because you have to go through a very strenuous process.

I like I'm just gonna call it out.

James Tate, uh, you're not gonna become mayor anytime, so you're not gonna get married Mary Chef without office, and we're gonna make sure that you you stay where you're at and you facilitate this meeting because you can't even get people to get public comment correctly, and you take in money from Maroon Family, as five of you have up here.

Anybody up here can down zone the Maroons Chronos operation facility at 3405 Gay Lord.

That's my biggest my biggest uh thing to do this year.

I've been offered 35,000.

I've been pseudo-offered a hundred thousand.

I am not for a sale.

You can't afford to buy young N I G G A like me.

Y'all can't afford it.

Y'all ain't never seen nobody like me.

And I'm not going away, not going nowhere.

And my son is gonna take over the mantle, both of them.

Thank you.

I just hope you're never going away.

Hope you mature, young man.

We're here to try to help.

I got every fact.

You you may you you may leave.

You don't have the mic anymore.

Thank you.

Uh Mr.

Crowley, your seat.

Come on.

Your time will begin.

I've told you, giving you your opportunity.

The officer asked you to sit down as well.

You may proceed.

His time shall now begin.

Thank you.

Hey man, it ain't gonna take me a minute to call you a sucker, a liar, a cheat, a thief, and disrespecting the black kids in the city of Detroit.

James E.

Tate Jr.

And that liar over there, Gabriela Santiago Romero, the liar.

You know she lied, but you won't say nothing about it.

You keep your mouth shut.

Angela Whitfield Callaway in here, brother Tish Johnson.

Brother Tisha Johnson, you know she lied.

You ain't had that pineies on the allegations of the boat of pro you too, Coleman.

And your dad knew I was a took stand-up dude 100 from young when I was 16.

Yo Daddy knew me.

James E.

Tate, you're a fraud when you was a Benedictine.

I know more than you think I know.

I'm motor city roof for real, James.

And you shouldn't have never called into that ivory and said I wasn't the right representative of my embarrass you.

Sucker.

I'm the real.

I am who I am, man.

You are we shall now transition to our online callers.

Who's our first caller, please?

Good afternoon, Council President.

We have three callers online.

Our first caller is owner Papa.

All right, caller.

The floor is yours.

You have one minute general public comment.

Oh, it's almost evening.

Uh to the chair, may I be heard.

The floor is yours.

Okay, thank you.

Um, Miss Perkins from the um other um public hearing said that that they were three vendors that was providing fuel.

And then the people who handle the money came back and said uh she didn't know if that was true or not.

I can remember contracts going out for multi-years for fuel.

Um, you should you all should check into it.

Um the the lawsuits, maybe not maybe.

We absolutely should reduce that from their amount of money in their budget.

Whatever we have to increase our risk management fee by should come out of those departments.

Uh it was so many things, and a minute is not enough time, but it just shows you know the disrespect you have for the general population and what they have to say about their money.

Thank you.

You still have time left.

The next caller, please.

Our next caller is Betty A.

Varner.

Miss Betty A.

Varner, the floor is yours.

You have a minute.

General public comment.

Miss Betty A.

Varner, are you there?

Let's put Miss Verner at the end of the queue and go to the next caller, please.

Our next caller is William M.

Davis.

Mr.

William M.

Davis.

The floor is yours.

You have one minute, General Public Comment.

Good evening.

Can I be heard?

Yes, sir.

Okay, I like to say starting off with uh with the first uh one you just had after lunch.

That uh, you know, you know, I was in the water department.

At one point, we had almost 3,000 employees, and we have one deputy and a like three assistant uh deputies.

You know, so I think uh the chief of natural office is like say heavy, you know, is uh a little bit top heavy.

Uh also as relates to uh the other one, I think some discussion should also be had about ways that the city could help reduce the uh our you know our recruitment because our recruitment is high.

Um, I think it would be good if somebody could uh retroactively eliminate or reduce the interest that we're paying on that because we basically paying, you know, the whole thing over again, we you know, paying twice what they originally said.

We oh, thank you.

Thank you.

Next caller, please.

Council President, we are now going back to Betty A.

Varner, noting that a hand was raised after public comment closed.

All right, thank you so much.

Ms.

Betty A.

Varner, the floor is yours.

You have one minute.

General public comment.

Hello.

Yes, ma'am.

Hi.

Yeah, this is Betty A.

Varner, president of DeSoda Elsewhere Black Association.

Just again asking that the council please consider uh allocating money to help uh organizations and black clubs pay that land use hearing fee for projects that they want to do in their community.

Also allocate monies for a program to help uh neighborhood corridors who have not been blessed with uh help to redevelop their corridors to clean up their corridors and do the work that is needed to bring new businesses to their area.

Thank you for this time.

Thank you.

Thank you.

And that takes us to the end of our public comments, Mr.

Corley.

Anything you want to add before we wrap up this morning, this afternoon.

Mr.

Chair, uh member uh Johnson.

Thank you, Mr.

Chair.

I just wanted to say thank you to Jadante Smith for the offer.

Yesterday he presented that offer to the resident in District 4, and she declined.

Um, and so I will certainly move forward and provide the assistance to her, but appreciate the offer.

Thank you, Mr.

Chair.

All right, thank you.

Colleagues, if there's no objection, this meeting shall stand adjourned.

This meeting is adjourned.