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.