Loading...
Budget Hearings - DWSD, Office of Auditor General
Speaker 1
grass removed as is why not all right? Since 2010 That's right number 605 097 to provide Recreation and Park renovation at Dexter Elmhurst Community Center contractor apply plus Inc, located at 219 North Main Street, Ann Arbor, Michigan 4810 for a contract period upon city council approval through December 31 2020 for total contract amount $694,700 Is there a motion to move Lando? Six points in the formal session with recommendation for approval to be put on to new business?
Unknown Speaker
Discussion this guy should
Unknown Speaker
chair recognizes member callow vice chairwoman catalyst.
Speaker 2
Thank you. I'm sure this will get voted up but it's so unfortunate that we weren't able to find a local company. This is 690 $400,000 going to Ann Arbor using Arper dollars. And it's just so unfortunate every time I see this with these numbers of dollars going to suburban, Metro Detroit, it's just it's just disturbing to me so I know I'll be a no vote. On this. But there's no way you can't tell me that you could not find a company based in Detroit minority or women on to do this work because we've been seeing over and over again where these wrecks were these recreation department these parks and recreation facilities have had Detroit based companies work on them. And so this is the Dexter Elmhurst Community Center brand new build out and it's just concerning to me that we always seem to find ourselves going outside of the city to do work that I know we desperately need to keep in the city supporting minority and women owned businesses. But again, you know, it'll probably get approved without my support. Thank you, Mr. Chair.
Speaker 1
What was that was that was Gerald Stabler. Were you directing at anybody? Are you? Okay, that's interesting. Did you want to say something to that or
Speaker 3
do the chair I would just say that we only received to be it for this and this company based in Ann Arbor, came in at the lowest and most responsible and capable of doing the work. We have been working closely with OCP to diversify our vendors and condors rarely hosting events ourself amongst our team to help with vendor recruitment and things of that nature. And so we do understand that this is an ongoing issue and we definitely are attempting to prioritize different based businesses.
Speaker 1
You want to I was gonna ask you miss Henderson sees you it's see I'm seeing here you invited 64 suppliers do you have a percentage of how many those were Detroiters?
Speaker 3
May have to fire to OCP on that one. I do not have that information. Sure. Yes.
Speaker 1
We do have Eric Cooper is listed as Cooper II. Okay, Mr. Cooper floor is yours. And with the clerk note that we have been joined by member waters.
Unknown Speaker
The clerk window
Unknown Speaker
Thank you, Madam Clerk. What about you the big bucks.
Unknown Speaker
Good afternoon. As it relates to the question of the
Unknown Speaker
model. Mr. Cooper, can I see your face man?
Unknown Speaker
I'm sorry, please.
Unknown Speaker
Thank you, brother. Just kind of creeps me out. Go ahead.
Speaker 4
Go everyone. As it relates to the amount of Detroiters that were a part of the bid. That is some information I will forward to you that get that to you.
Speaker 1
Excellent. Appreciate it. To recognize the number cattle vice chairwoman Katelyn,
Speaker 2
Mr. Chair since we have him on the line is there any way some of this work could be subcontract subcontracted out to minority and women business contractors in the city of Detroit? These are 100% Awkward dollars that black folks qualify for the city to get. Can we get a little bit of it? It seems to always go outside of Detroit. We get a little bit. Can we get contractors,
Speaker 4
as Hindus as Natalia was reiterating a little earlier. We're definitely working on that and trying to provide opportunities where there's collaborations for those subcontractors.
Speaker 1
All right, thank you, sir. I appreciate it. Okay. Well, thank you man for that man. Thanks. Very Excuse me. Vice here. Good Lord. All right. Is there a motion to move line item six points in the formal said with recommendation for approval to be put on to new business are your judges here in line I know six point team will be moved on to formal session with recommendation for approval to be put on to new business will often line item six point 11 Contract Number 605 131 100%. capital funding to provide stoep old number one park improvements contractor Michigan recreational construction location 18631 Coney, detroit michigan 48234. contract period upon city council approval February 28 2020 for total contract amount of $500,000. Is there a motion to move line item six point 11 The formal session with recommendation for approval we put on to new business or any objections Hearing none line on six point 11 We put onto formal suit will move to formal session with recommendation for approval to be put onto new business line oh six point 12 Contract Number 605 135 pt per se bond 38 Proceed capital 12% grant funding to provide Irma Kinder seed Marina design engineering services contractor Smith Group Inc location five degrees Wall Street Suite 700 Detroit Michigan 48226 contract period upon city council approval through June 30 2020 for total contract amount $650,000. Is there a motion to move 906 points well the formal session with recommendation for approval to be put on to new business multidomain Are there any objections? Hearing none line on six point 12. We move to formal session with recommendation for approval to be put on to new business will the quarter please note that we've been joined by men and President Mary Sheffield
Unknown Speaker
The clerk will no
Speaker 1
lie no six point 13 Contract Number 605 130 100 Proceed capital funding to provide a new dog park at Palmer Park contractor Michigan recreational construction location 186 31 COVID Detroit Michigan 48234 contract period upon city council approval through February 28 2020. For total contract amount $500,000. Is there a motion to move line item six point 13 The formal session with recommendation for approval to be put on to new business? motion has been made. Are there any objections? Hearing none line oh six point 30 Who put on the formal session with recommendation for approval be put on to new business line item six point 14 The approval innovation to commit $150,000 To the city contribution to support the Detroit Wayne County Port Authority in the installation of an additional bollard along the Detroit Riverwalk. The General Services Department hereby requests the approval and authorization from your honorable body to commit $150,000 The city contribution to the Port Authority to construct an additional bollard servicing cruise ships that dock along the riverwalk the bollard the bollard will be installed in the portion of the riverwalk in front of the Renaissance Center. The primary purpose of the bollard project is to upgrade facilities in order to accommodate large cruise ships, particularly cruise chutes brought to Detroit Detroit by Viking Cruises which are 200 feet longer than any other cruise ship entering the Great Lakes. Now I think we have people who are on Is there a motion to discuss line or since 2014 motion I think we have missed the culture art for Freeman.
Unknown Speaker
Excuse me for interrupting.
Speaker 1
Go ahead, miss. Go ahead. Dr. Powell. I know you come in sooner or later.
Speaker 5
Well, I've been trying to give you a couple of minutes. President needs to call the two o'clock meeting and then so you're gonna have to, you know, wrap it up
Speaker 1
or wait, I know it was a borrowed time. I knew it. I knew it. I knew you were coming for me. It's okay. All good. So I'm just advising. I understand, just tell me what to do here.
Speaker 5
Well, at this point, you should at least recess to the call of the chair. Let the President call the two o'clock meeting and then go back into your meeting to wrap it up. Because it's already what 10 After the hour 11 after.
Speaker 1
Okay. So what you want to do, man president, we've probably reset that and you can finish your committee. Okay. The neighborhood committee services committee now students at recess is called
President Sheffield
Pocket worthy expanded budget financial party committee if a clerk will call the roll.
Unknown Speaker
Councilmember Scott Benson.
Unknown Speaker
Benson, aye.
Unknown Speaker
Councilmember Fred dr. Hall, the third present. Councilmember Leticia Johnson, Councilmember Gabriela Santiago Romero. Councilmember Mary waters. Councilmember Angela Whitfield Callaway present. Councilmember Coleman a young the second here, Councilman. I'm sorry, council president pro tem James che. Council President Mary scheffau. President. Madam President, you have a quorum.
President Sheffield
Thank you. Thank you. We will stand in recess. To the call of the chair.
Speaker 1
All right. Neighborhood certain neighborhood a community service Study Committee is now in starting with the clerk please call the roll. Am I doing that right that the powers okay.
Speaker 5
Yes, sir. You're back in session in the clerk will call the roll.
Speaker 1
Okay, he's looking at me. I just wanna make sure all right. I'm sorry. I was okay. I just I just wanna make sure you use give me their face and I make sure I'm doing it right. I won't be on the wrong side. All right. Thank you. Appreciate you love you. All right. Well, we do without you. All right, um, but we please call the roll.
Speaker 6
Councilmember Coleman again, the second councilmember Angela with Callaway.
Speaker 6
Councilmember Angela Whitfield Callaway present. Oh, good. Counsel, Mr. Robinson,
Unknown Speaker
I've been tonight.
Unknown Speaker
Mr. Clark, you I'm sorry, Mr. Chair. You have a quorum present.
Speaker 1
All right. Thank you, Madam Clerk. Appreciate you. Alright. We're at 614. Mr. Lockhart is the person that's here to speak to line item 614. Mr. Lockhart, sir.
Unknown Speaker
floor is yours. Motion to discuss.
Speaker 1
We've already made that motion. Yeah, when there was. Motion is mostly made or any objections? Motion is guest through the Chair. Mr. Lockhart my man. Go ahead.
Speaker 7
Hey, how's it going? On time, I'll just kind of give a quick overview. I know you already had mentioned yesterday requesting $150,000 from a city contribution to put together with Wayne County's $150,000 Another $50,000 coming in through the Port Authority Viking cruise and the pilot association to construct a bollard on the Detroit Riverwalk in front of the Renaissance building.
Speaker 1
Excellent Am I also any questions? Chair recognizes vice chairwoman Ken Oliver. Oh, no way he left. All right. Chair recognizes vice chairwoman Callaway.
Speaker 2
Thank you, Mr. Chair. Just a real quick question. Are the bollards going to be insured? just hypothetically If the cruise ships happened to damage the boilers who's responsible? Would it be Wayne County us? Or would the responsibility be on the cruise ship?
Speaker 7
Through the Chair, I'll have to follow up with that question. With law in the Port Authority I know we have Mark from the port authority on this call if we can add him to speak.
Unknown Speaker
All right, what was Mark last name?
Unknown Speaker
Trump sch Mr.
Speaker 1
Trump oh yeah mr. travel trip. Mr. shrub. floor is yours just have the need for speed sir. times of the Essence All right.
Speaker 8
I heard the question and liability for any damage that would be caused when a ship ties off on the bollard. We would have insurance. The port authorities insurance would cover our our own liability. We also have an engineer errors and omissions policy that would cover if if if the bollard was designed in properly or the contractor installed it properly we would have their insurance. General Motors is going to require all of that from the port authority because this bollard is going on to their property. And then if the if the ship company performs, operates the bollard improperly or doesn't tie off when they're pulling away. They would be liable to all parties as well.
Speaker 1
All right, but is that is as Okay, Chair recognizes member Benson. Alright.
Speaker 9
Thank you. And this is the question I had during the port authority budget hearing the other day. What's the ROI on this extraordinarily expensive bollard? What are we getting back and see the short I see that our contribution is $150,000. But what's coming back to the city as as a form of economic development, what do we get? Yeah.
Speaker 7
I can speak to it and Mark and I can jump in the anticipated economic growth were expected as around 12,000 passengers to climb into Detroit in 2023 in at least that number annually moving forward for the foreseeable future, with a center participating in around $125 of local spending per passenger, which amounts to around $1.5 million dollars per year in local impact. And I know Mark can speak more to it but they are commissioned in the economic impact study, which is apparently on his way.
Unknown Speaker
Okay, and so when is that study going to be completed?
Speaker 8
That should be done by mid summer. Where the the impact study will cover both our cruise dock as well as the cargo operations through the port of Detroit.
Speaker 9
Okay, good. I see that we have others who are matching and I'm not. I don't I do support this type of economic development. We want to make sure that we're getting a reasonable return on our investment. One thing I did not see was the source of funds for $130,000.
Speaker 7
Yeah, so I can speak through the source would come through GSD not from Parks but from facilities so similar to some of the precincts fire station service yards. This would not take away from any current facilities but this represents the excess of availability that the GSD department has to support this
Speaker 9
GSD had a budget surplus when it comes to facilities they have too much money to wrap this
Unknown Speaker
up, we can be on the clock.
Speaker 7
So this is what they suggested as a where we have money available to conduct this activity.
Speaker 9
Okay, so I was just about there being some type of opportunity costs. I mean, we can bring this back and
Speaker 1
keep trying to wrap it up. You got we gotta wrap back in the weeds. The last question we gotta go. Go ahead. Go ahead. Go ask the question. And we move on. Oh, go ahead.
Unknown Speaker
I'm sorry. I didn't hear another question.
Unknown Speaker
To ask it again,
Speaker 9
the opportunity costs so the $150,000 If there's no surplus in GSA mean, something's not going to get done or something's not going to get repaired unless we were just in the habit of putting an extra $150,000 into GSEs budget, but I don't think that we are.
Speaker 7
Understood, I would ask that we come back to that question. Unless we have someone from our CFO that can GSD that can not only provide clear more clarity on the $150,000
Unknown Speaker
Mr. chairs or time sensitivity to this request.
Speaker 1
Well, you know, I want to move this out. Now I see the economic development opportunities. But if you want to bring this back for a week we could do that. Motion. Is there is it I'm sorry, through Is there a time sensitivity.
Speaker 8
Viking is scheduled to arrive on May 1 And we've been working to try to one get a better price for three months now. And the sooner we can let this contract move forward. The sooner we can get this done if if the bollard isn't in place, Viking will be arriving at our cargo dock.
Speaker 1
I guarantee we will get this done is land this plane before that date. Yes, my promise.
Speaker 8
So no no, we need we need the contractor to get started. So it'll take probably the full two months to get the work done. Okay,
Speaker 2
Mr. Chair? Yes, I'm motion to bring this back in a week.
Speaker 1
Okay, motion has been made. Already. Objections. Objection. One, the as avid. We will bring this item back in one week. All right. Moving on to a walk on that has been brought before us. This is an authorization to submit a grant application to the Michigan Department of Natural Resources for fiscal year 2023 Trust Fund grant. The General Services Department is hereby requesting authorization from Detroit City Council to submit a grant application to the Michigan Department of Natural Resources for fiscal year 2023 Trust Fund grant for the Eliza Howe Park. The amount being sought is $300,000. The state share is 50% or $300,000 of the requested amount and there is a recap there is a required cash match of 50% or $300,000. total project cost is $600,000. The fiscal year 2023 Trust Fund grant first full year will enable the department to construct a new nature focused playground for Eliza Howe Park, which includes connecting the place base to the natural elements in the park. If the application is approved, a cash match will be provided from appropriation to 0507 we respectfully request your approval to submit the grant application by adopting the attached resolution is there any quick motion discuss most of these guys yeah motion Are you okay hearing Okay, Chair recognizes
Unknown Speaker
Excuse me, Mr. Chair.
Unknown Speaker
Dr. Brown what I do?
Speaker 5
I'm sorry, sir. But you need a motion to walk it on first and then you can discuss it.
Speaker 1
Excellent, my bad. Thank you. Is there a motion to walk? Most of them may or any objections? Hearing none. This will be walked on to the agenda. Chair recognize these wait Now is there a motion to discuss motion? There are no objections. We will now discuss this walk on Item chair recognizes vice chairwoman Callaway.
Speaker 2
Thank you so much Mr. Chair. We've maybe a week and a half to to do this. This application is now due April. The first so it always makes me nervous when we I'm not saying we did anything at the last minute but you'd have about a week and a half, maybe two weeks to get this application in so it just be nice to not always be behind the eight ball when we have these things come before the council. So I don't know how long you've known about the contract ma'am through the chair. But you have up until April 1 I know you know the hard deadlines to send that document but you know, I don't know why we don't want to stay wait to the last minute but why do we perhaps wait to the last minute
Unknown Speaker
Sanderson go ahead and
Speaker 3
do the chair. I will be brief. I would just say that this was held by counsel. Well, it was in discussion it should have been moved with the other grants that we had earlier in the agenda. They are very similar, but it was held by potentate just because we needed to do some community engagement beforehand. And at the time person paid did not believe that we had done sufficient community engagement. So we took that back to the community members for feedback. And so that is why it was being delayed.
Unknown Speaker
Thank you. Thank you Mr. Chair. Thank you, ma'am.
Speaker 1
Is there a motion to take up this walk on item? Any objections? Wait, hold on. I'm sorry. That's the proper vote. Is there a motion to move this walk on item to issue with recommendation for approval to be put on to new business? Or the objections? Hearing none. This walk on item will be moved to formal session with recommendation for approval to be put on to new now this is a matter granted because I like to talk but is there a motion to suspend the member reports most of the made our new judges? Wait. All right. Hearing none middle reports will be suspended. Without objection. This committee is now at whoa wait a minute. Okay. Right at the buzzer. Go ahead, sir.
Speaker 9
I was told there may be someone who GSD was able to answer a question. I understand that maybe somebody from GSD who's available to answer the question regarding the bollard and the $100,000 budget item.
Unknown Speaker
Mr. Washington oh wait, I'm sorry. I missed this. I spoke to some miss Henderson.
Speaker 3
Yeah, yes. The question I believe from earlier was about the funding and if there was a surplus, I cannot speak to the surplus in our budget. It is coming out of our capital funds. If we were to do a project would come out of our capital budget. So any other questions? I can submit a writing or I could submit responses in writing just so that we can get this moved along and not miss out on this opportunity or push this timeline.
Unknown Speaker
Alright, thank you for that. All right there Benson Does that satisfy you? We'll go ahead. We got to keep it moving. So I predict
Speaker 9
going reconsider the vote on the bottle I think is 614. That's 614. There's 14.
Speaker 1
Motion to reconsider. We weren't we already pretty bad for one week. reconsider that. You want to request. Oh, you're okay. Motion reconsider? Is there a motion as a multidomain are the objections? Hearing none, we will now reconsider line item six point 14. Is there a motion to move lotto six point 14 The formal session with rubbish?
Speaker 5
Excuse me, sir, what I do. Now you have to vote on whether or not to bring it back in one week, because that's the motion you're reconsidering. So you'll have you need a motion to bring it back in one week and then that motion would be voted down and then you would get the motion to send it to formal new business.
Speaker 1
Okay, thank you Dr. Powers. Yes, sir. Is there a motion to bring back line item six point 14 Well, we already have motion, right.
Unknown Speaker
Object right.
Speaker 1
Object. Okay, that fails. So now
Speaker 9
motion to settle item 614. To formal session, new business. The recommendation to approve.
Speaker 1
Both has been made or made any objections? Hearing ly no six point 14 will be moved to formal session with recommendation for approval to be put onto new business. Mr. Chair? Yes, because we moved to adjourn. Why
Speaker 9
it's critical that the administration and those who are asking for contracts will be approved be prepared to answer all questions and have the forethought to prepare for questions that they think may be answered. And as people like to say, this is not a rubber stamp. They have to do their jobs and we have to do our job as well. So please be prepared to answer questions when it comes to how we spend the people's money.
Speaker 1
I'll say sir, without objection neighborhoods to be started standing committee is now adjourned.
President Sheffield
All right. We're gonna call back to order the expanded budget Finance and Audit standing committee for the purposes of our fiscal year 24 budget hearings. Madam Clerk, if you can please call the roll.
Unknown Speaker
Councilmember Scott Benson. Councilmember Fred R Hall, the third present. Councilmember Leticia Johnson present councilmember Gabrielle Rivero present. Councilmember Mary waters resident councilmember excuse me, Councilmember Angela Whitfield Callaway, Councilmember Coleman, a young second. Council President Pro Tem James Tate. Council President Mary chef Phil, President. You have a car Madam President.
President Sheffield
Thank you there being a quorum. We are in session and we are going to proceed with our budget hearing for the Detroit water and sewage department. We have director brown with this other representatives you can join us at the table.
President Sheffield
Director brown whenever you are ready to proceed, the floor is yours.
Speaker 10
Oh, thank you. Thank you for the opportunity to proceed. To my left is Tiffany Jones. She has nothing to do with the budget. She is my diversity and inclusion officer. It's her job to find Detroit based businesses and get them under contract along with creating opportunity. When I came before you before I told you that we'd be hiring, as well as finding 40 or 50 new fsts to do lead service and it's our job to make sure that they're Detroiters. It's her job to make sure that the contractors when she goes out to check the jobs have Detroiters on those jobs. So I just wanted you to put a face with Miss Tiffany Jones, the new versity and inclusion director so that you know that we are are doing what we said we would do. I'll let my financial team introduce themselves and then I'll let you know who's on on the Zoom call today in case this question is for them.
Speaker 11
Good afternoon, council members. Good afternoon, Madam President. My name is Tucker Raman. I'm the Chief Financial Officer of DWSD.
Unknown Speaker
And here's Michelle Williamson, budget manager
Speaker 10
and I'm gonna make sure that my financial team use their their outdoor voices so that you can you can hear them loud and clear that their finance people get used to being in a room crunching numbers but they're gonna use the outside voice today. On on the line on on Zoom calls. We also have Sam Smalley. He's our Chief Operating Officer. We have Matt Phillips, our Chief of Staff, my chief of staff Deborah pi Spiess, General Counsel, as well as Lisa Wallach who's in charge of stormwater and permit the permit process, if any questions come up 
regarding those issues, we have them available. Okay, so budget considerations DWSD executive team considers these factors in developing the budget. Affordability, number one, everything that I do, I have to take into consideration how it's going to affect ratepayers and how affordable is it to do it? We want to keep rate rate increases below 4% and support water conservation initiatives. It's number one, secondly, compassionate and responsive customer service. Number three operations that support and preserve preserve public health, meet or exceed all federal, state and local regulations. Number four, employee and asset safety number five water and sewer upgrades including lead service line replacement and number five point number six, employee focus training, retention and recruitment. That's what I ask every member of my team to take into consideration when they're submitting their portion of the budget for consideration current budget environment this is extremely important. The proposed FY 2024 budget was developed in an inflationary environment with inflation rates at 6.4% for the 12 months ending January 2023, according to US labor department data, and you know, I'm happy to say that over the last eight years we've averaged rate increases of 2.84% well below the 4% and even below 3% And that's in a high inflationary environment. Even in this environment, the goal was to keep the rates affordable and at the same time not compromise on service level initiatives. The budget incorporates expenditures required to operate DWSD the water and sewer for fiscal year 2024. These expenditures become the basis for determining the revenue that are required to fund those expenditures and are termed as revenue requirements. The budget proposal proposes a 3.2 increase in rate revenue and overall revenue requirement decrease of 2% for the system as a whole. overall revenue requirement decrease is primarily due to savings of $35.4 million in pension costs due to expire the expiration of the pension agreement with the city of Detroit effect of fiscal year 24. The Rec Department expenses are projected to increase primarily due to increases in personnel cost for adding new positions to the budget necessary to support DWSD strategic initiatives. DWSD will begin average winner consumption methodology to cap sewer usage for residential customers starting in fiscal year 24. I'll let our CFO continue with the presentation.
+1
regarding those issues, we have them available. Okay, so budget considerations DWSD executive team considers these factors in developing the budget. Affordability, number one, everything that I do, I have to take into consideration how it's going to affect ratepayers and how affordable is it to do it? We want to keep rate rate increases below 4% and support water conservation initiatives. It's number one, secondly, compassionate and responsive customer service. Number three operations that support and preserve preserve public health, meet or exceed all federal, state and local regulations. Number four, employee and asset safety number five water and sewer upgrades including lead service line replacement and number five point number six, employee focus training, retention and recruitment. That's what I ask every member of my team to take into consideration when they're submitting their portion of the budget for consideration current budget environment this is extremely important. The proposed FY 2024 budget was developed in an inflationary environment with inflation rates at 6.4% for the 12 months ending January 2023, according to US labor department data, and you know, I'm happy to say that over the last eight years we've averaged rate increases of 2.84% well below the 4% and even below 3% And that's in a high inflationary environment. Even in this environment, the goal was to keep the rates affordable and at the same time not compromise on service level initiatives. The budget incorporates expenditures required to operate DWSD the water and sewer for fiscal year 2024. These expenditures become the basis for determining the revenue that are required to fund those expenditures and are termed as revenue requirements. The budget proposal proposes a 3.2 increase in rate revenue and overall revenue requirement decrease of 2% for the system as a whole. overall revenue requirement decrease is primarily due to savings of $35.4 million in pension costs due to expire the expiration of the pension agreement with the city of Detroit effect of fiscal year 24. The Rec Department expenses are projected to increase primarily due to increases in personnel cost for adding new positions to the budget necessary to support DWSD strategic initiatives. DWSD will begin average winner consumption methodology to cap sewer usage for residential customers starting in fiscal year 24. I'll let our CFO continue with the presentation. Speaker 11
Thank you, Gary. And so I'm going to be brief, giving you an overview of our financing structure, how we come up with the budget. As Gary mentioned, there's this concept of revenue requirements. That's all the revenues that we need to sustain and operate our systems. And really, what does it cost to operate and sustain our system? primarily made of three different components. The first one is called departmental expense. We also call it direct expenses. The second component is non departmental. We termed it as indirect costs. And the third component is revenue finance capital. Now, if you look at the slide, which is slide four, you'll see departmental or direct expenses have increased 6.7% whereas non departmental expenses have decreased by 2.6%. And I'll explain that a little bit later. Revenue finance capital also decreased by 76.5%. The revenue requirement is also broken down on this slide between water and sewer funds. So you can see the water fund revenue requirement is decreasing by 2.9%. Whereas the sewer revenue requirement decreased by 1.6% when we compare it to fy 23. The next slide is just a graphical presentation of what really makes up our revenue requirement is 
obvious from this chart, the departmental expenses make up only 22% of our overall expense structure. Departmental expenses, as I mentioned is direct expenses. These are expenses over which DWSD has some as control in terms of increasing decreasing and managing it and that represents $103 million. The big orange chunk you see here, here is the non departmental expense. These are indirect expenses, over which DWSD has very little or no control and I will go through the what makes up those non departmental expenses later a little bit later in this presentation. The chart here is important to show you how much of the overall revenue requirement is what we control. So the slide here is the first component of our cost structure has departmental or direct expenses. And you can see here these are natural classification of expenses, salaries, wages, benefits, contractual services, and so on so forth. And it's, it can see that personal costs making up salaries and wages and employee benefits make up 55% of the total $6.5 million increase here. And then a $5.2 million increase in personal costs represents 81% of the total increase. It also represents 16.8% increase over fy 23. This increase is mainly due to increase in projected FTEs for FY 24. Majority of the projected FTE increases are in our operations cost center. And that's in order to address our strategic initiatives to improve our service levels as well as to address backlog in service deliverables. The next slide the non departmental or indirect cost, where I said that we have little or no control. These are the components that make up the non departmental charges. You look at wholesale charges which is controlled by GL WA, B bifurcation that that that existed before we bifurcated into two different organizations. Post bifurcation that would be debt that we incurred after we separated then it also include bad debts and some other costs such as BNC notes and IWC replica contribution. So on this slide, you'll see that there's a decrease of $10.2 million and this decrease as Gary mentioned earlier, is mainly due to the 35 and a half million dollars, decrease in pension costs. And just to give you a brief background here, when we bifurcated from the bifurcated between GL WB and as GL WA, which is a Great Lakes Water Authority DWSD and the city of Detroit Retirement System entered into an agreement where we were required to contribute $45.4 million to the pension system for our employees. Now here, our share was $13.5 million out of this 45.4 and GL wsa was 31.9. This agreement is ending on June 30. Of this year, and starting with July 1 of 2023 and for next fiscal year and future years, the liability the pension liability will be determined by actuarial valuation and not just an agreement. So for 24 We don't have that previous agreement agreed upon obligation, but we have included $10 million in our in our budget for FY 24. Again, as I said, GL who has the major share in this they share 70% of this so they will be contributing $7 million and we DWSD will contribute $3 million to this part. Other increases and on the chart is a wholesale charges which is increasing again due to DWSD is sharing GL ws revenue requirements. And it's all based on calculation of water demand, including volumes and peak period demands, as well as some buffer that GL wa incorporates into the calculation. The new calculation gives us a share of 12.39% versus 11.9888%. And in the past, overall GL ws increase in revenue requirement resulted in a 6.2% wholesale charge increases and then the sewer fund increased by two point the third big component of this non departmental increase is post verification that that relates to that that we issued after bifurcation. You'll see it this big increase because in FY 23 This course was included in our improvement and extension fund. Which is also known as the ISP plan. Starting with fy 24. We have moved this cost to the O nm cost structure so that's that's why you'll see zero 
in 23 but 17.4 $8,000,000.24. moving on quickly here again a chart will show you that the wholesale charges make up the bulk of our cost structure followed by pre bifurcation and post bifurcation there. Again, these are costs over which DWSD has very little, little or no control. How do we find our revenue requirement? We have rate revenue or also as non rate revenue that makes up our retail revenue structure. And then we also have non retail revenue. The charges gives you an idea of how much rate how much of the cost that we need to operate wouldn't be covered to rate revenue, non rate revenue as well as non retail revenue. So the question that that comes up in the front is why is there a decrease in revenue requirements but increasing rate revenue is the bottom part of the chart explains that so we take our entire rate revenue requirement, and then cert and non retail revenue needs to be backed out from a rate revenue in order to arrive at rate revenue requirements. That's why you will see revenue requirement as a whole has decreased by 2%. But our rate revenue has increased by 
3.2%. Components of rate revenue what makes up our rate revenue structure is commodity sales which is a volume volumetric sale for water sewer. And then we have service charges and then to other components in terms of wireline charges in our water fun and drainage charges in our sewer fund. As you will see this estimated read rate revenue increases 3.2% for both the proposed rate structure is on the slide here. We are keeping our rates at three less than 3.5% definitely less than 4%. You will see the water volumetric rate is 3.3% for both the tiers as we implemented an inclining block rate starting in FY 23 and our service rate is at 3.3. Similarly for our sewer our volume rate is capped at 3.1%. And our service rate at 3.1%. Range charges is even below that we're targeting 2.5% increase in our drainage charges. The next two slides I don't think I want to go through this just a backup of how we come up with the revenues and what water expenses are in. At the bottom of that you will see the difference which is called Total Revenue finance cash flow. I just want to go to the last slide here. Give you a sense of our FTAs as I'm as we mentioned earlier, we have are increasing our FTE there are 58 new positions we we are targeting for FY 24 And mainly all in operations with the sole objective of improving our service levels as well as to reduce our backlog and service deliverables. That kind of concludes my presentation. We'll be more than happy to answer your questions.
+1
obvious from this chart, the departmental expenses make up only 22% of our overall expense structure. Departmental expenses, as I mentioned is direct expenses. These are expenses over which DWSD has some as control in terms of increasing decreasing and managing it and that represents $103 million. The big orange chunk you see here, here is the non departmental expense. These are indirect expenses, over which DWSD has very little or no control and I will go through the what makes up those non departmental expenses later a little bit later in this presentation. The chart here is important to show you how much of the overall revenue requirement is what we control. So the slide here is the first component of our cost structure has departmental or direct expenses. And you can see here these are natural classification of expenses, salaries, wages, benefits, contractual services, and so on so forth. And it's, it can see that personal costs making up salaries and wages and employee benefits make up 55% of the total $6.5 million increase here. And then a $5.2 million increase in personal costs represents 81% of the total increase. It also represents 16.8% increase over fy 23. This increase is mainly due to increase in projected FTEs for FY 24. Majority of the projected FTE increases are in our operations cost center. And that's in order to address our strategic initiatives to improve our service levels as well as to address backlog in service deliverables. The next slide the non departmental or indirect cost, where I said that we have little or no control. These are the components that make up the non departmental charges. You look at wholesale charges which is controlled by GL WA, B bifurcation that that that existed before we bifurcated into two different organizations. Post bifurcation that would be debt that we incurred after we separated then it also include bad debts and some other costs such as BNC notes and IWC replica contribution. So on this slide, you'll see that there's a decrease of $10.2 million and this decrease as Gary mentioned earlier, is mainly due to the 35 and a half million dollars, decrease in pension costs. And just to give you a brief background here, when we bifurcated from the bifurcated between GL WB and as GL WA, which is a Great Lakes Water Authority DWSD and the city of Detroit Retirement System entered into an agreement where we were required to contribute $45.4 million to the pension system for our employees. Now here, our share was $13.5 million out of this 45.4 and GL wsa was 31.9. This agreement is ending on June 30. Of this year, and starting with July 1 of 2023 and for next fiscal year and future years, the liability the pension liability will be determined by actuarial valuation and not just an agreement. So for 24 We don't have that previous agreement agreed upon obligation, but we have included $10 million in our in our budget for FY 24. Again, as I said, GL who has the major share in this they share 70% of this so they will be contributing $7 million and we DWSD will contribute $3 million to this part. Other increases and on the chart is a wholesale charges which is increasing again due to DWSD is sharing GL ws revenue requirements. And it's all based on calculation of water demand, including volumes and peak period demands, as well as some buffer that GL wa incorporates into the calculation. The new calculation gives us a share of 12.39% versus 11.9888%. And in the past, overall GL ws increase in revenue requirement resulted in a 6.2% wholesale charge increases and then the sewer fund increased by two point the third big component of this non departmental increase is post verification that that relates to that that we issued after bifurcation. You'll see it this big increase because in FY 23 This course was included in our improvement and extension fund. Which is also known as the ISP plan. Starting with fy 24. We have moved this cost to the O nm cost structure so that's that's why you'll see zero +1
in 23 but 17.4 $8,000,000.24. moving on quickly here again a chart will show you that the wholesale charges make up the bulk of our cost structure followed by pre bifurcation and post bifurcation there. Again, these are costs over which DWSD has very little, little or no control. How do we find our revenue requirement? We have rate revenue or also as non rate revenue that makes up our retail revenue structure. And then we also have non retail revenue. The charges gives you an idea of how much rate how much of the cost that we need to operate wouldn't be covered to rate revenue, non rate revenue as well as non retail revenue. So the question that that comes up in the front is why is there a decrease in revenue requirements but increasing rate revenue is the bottom part of the chart explains that so we take our entire rate revenue requirement, and then cert and non retail revenue needs to be backed out from a rate revenue in order to arrive at rate revenue requirements. That's why you will see revenue requirement as a whole has decreased by 2%. But our rate revenue has increased by +2
3.2%. Components of rate revenue what makes up our rate revenue structure is commodity sales which is a volume volumetric sale for water sewer. And then we have service charges and then to other components in terms of wireline charges in our water fun and drainage charges in our sewer fund. As you will see this estimated read rate revenue increases 3.2% for both the proposed rate structure is on the slide here. We are keeping our rates at three less than 3.5% definitely less than 4%. You will see the water volumetric rate is 3.3% for both the tiers as we implemented an inclining block rate starting in FY 23 and our service rate is at 3.3. Similarly for our sewer our volume rate is capped at 3.1%. And our service rate at 3.1%. Range charges is even below that we're targeting 2.5% increase in our drainage charges. The next two slides I don't think I want to go through this just a backup of how we come up with the revenues and what water expenses are in. At the bottom of that you will see the difference which is called Total Revenue finance cash flow. I just want to go to the last slide here. Give you a sense of our FTAs as I'm as we mentioned earlier, we have are increasing our FTE there are 58 new positions we we are targeting for FY 24 And mainly all in operations with the sole objective of improving our service levels as well as to reduce our backlog and service deliverables. That kind of concludes my presentation. We'll be more than happy to answer your questions. Speaker 10
Directly well I just want to point out that going through two years of COVID had a devastating effect on everybody will glow international pandemic and DWSD in order to stay within budget did not replace a lot of employees that retired. Deferred a lot of work that should have gone on but now that our we're out of the COVID situation. We have our finances in order. The only concern I have is the bad debt as you see $60 million in bad debt and 23 $60 million in 24. That's because of the moratorium. We were collecting it 94% of what we build prior to the moratorium. And so we're confident that with the new Lifeline program in place and with the governor signing a supplemental budget agreement for $25 million, in which DWSD is confident we're going to try to capture the lion's share of that the governor also put in the new budget for this starts in October, another $45 million, which total $65 million to fund the Lifeline program at least in play for DWSD. We've gone to all of our legislators and the governor's office and said basically, if you We appreciate the 45 million but if you make that 75 million plus the 25 supplemental budget that's 100. And we won't need to come back and ask for any additional funds for the four years that you're in office. And so that was favorably received. We're hoping that you'd support that and also express that interest to our state legislators that when the state's budget gets approved, if we could move from 45 million to 75 million that would secure the funding source for lifeline for the next four years. And with that said I can address any issues with regards to lifeline or any other questions that you might have.
President Sheffield
Thank you so much director Brown in actually was one that particular program but you just addressed the sustainable or the sustainability of the program. With funding. So I will hold that question. And I want to talk a little bit about the water basement backup program. From my understanding that is through ARPA, I understand it's not in the budget but as to ARPA funding. I'm just curious as the rollout for other neighborhoods to be included. I know that we have phase one and phase two, we identified 11 neighborhoods. I'm just curious as the overall need in general city wide for the program, and I know different areas experienced more flooding than others. But I think that there are still other pockets of the city that had issues with water and flooding and so can you just speak to the overall vision of how we plan to properly fund with ARPA funding this particular program which is very popular, and the overall money that is going to be set aside for it.
Speaker 10
I'll be glad to thank you, man. I've received the text since I've been been sitting here there's $800,000. That's on an open PIO, currently that we're going to be able to utilize and within the next couple of days, put the plumbers to work on approximately 133 homes all in the Jefferson Chalmers area that will in the dollars that were made available for the pilot program. We certainly learned a lot in that program. Originally we did not allow the plumbers to do work on the outside of the house. They only could do it on the inside the scope of service we've since been told that the CFO of the city is going to move $4 million into the basement backup program. And so you're going to be asked I believe I'm asking the law department to make it an emergency to bring new contracts that will change the scope of work and give the customer the option. If they don't want their basement torn up. They can do this work outside. That would be one of the changes and we will also implement some of the things that we learned during this process. So we have $4 million to continue the basement backup program. As you will recall, the program only allocated work to be done in 11 neighborhoods and there's certainly a lot more neighborhoods around the city that need that that work done. I'm expecting within the next 60 days to be notified by FEMA that they will contribute a another $4 million on top of the forming dollars of ARPA money to be utilized. And so we're hoping to be able to finish the commitment of the 11 neighborhoods. And then as we keep coming with all of our projects to look for additional funding, we would like to expand it throughout the city to other areas that weren't initially but right now what I have in hand is or what what's what's coming in the next couple of days the contracts is $4 million. Barbara money. And then i i I'm not even cautiously optimistic. I've we've been made aware from FEMA that it's just a matter of time, but we'll get another $4 million for the program. I can tell you that it's extremely successful. One of the things that we learned in the program is that a third of the basement that we put a camera in before we put the backwater valve on the lateral sewer line has separated from and so we are also cautiously optimistic that we're going to be awarded $47 million to do lateral sewer lines. And so instead of telling the customer as we are now that we can't move forward because your line has fallen off, the $47 million will be used for a lateral sewer line program, both inside the basement backup program and customers that are not receiving backflow preventers, but just need a need to have their line reconnected to the system. There's $7 million that should be made available for that. So you should once that money arrives we'll try to get the those contracts won't be hard to put to put together we'll we'll put them together. Similar to the basement backup program where we're using Detroit based plumbers, we may need to go out and try to find some larger companies to be able to go faster because the seven or eight now are small companies and we need to the one thing that we learned is we're going to need at least two larger companies that can take 100 homes at a time and be able to move a lot faster because for sure it will start raining in the spring and people will have problems and we want to get as many of these these homes done as we can
President Sheffield
additional 4 million that is coming in arpa. Is that within the 11 already identify neighborhoods or is it going to be able to be extended outside of that
Speaker 10
we have 2000 customers in the love it neighborhoods, okay and the total of the money we've spent now and the 4 million plus the four from FEMA would not cover all of its simple math. Six $6,000 per home, divided into $4,000,000.02 and we have 2000 homes to do so that won't even get us halfway
President Sheffield
Why is the goal not then if it's simple math to add more ARPA funds to address the outstanding issues of the resident, the 2000 that we've identified that need the
Speaker 10
help. Oh, I'll be I asked was much much.
President Sheffield
Simpler. It seems very simple. Yes, yeah. Yeah. Yeah, I'm glad so I definitely want to make sure we put that into the Executive Session, because I know, the mayor has indicated that the ARPA amendment will be coming with the budget so we can talk about both of these issues at the same time. And so is there a motion to add that to Executive Session motion? All right, Hearing no objections, we will add that and then my last question, because I know I'll submit the rest of the writing page six. It says that the majority of the projected FTE are in the operations cost center to help improve service levels as well as to address backlog in service deliverables. Yeah, what what are your major backlogs? Right now?
Speaker 10
Restorations Okay. Restoration one we're gonna talk over the last two years during COVID When we were losing people and trying to stay within budget and not we didn't want to lay anyone off, but we certainly weren't replacing people. We got behind in restorations. You know, I'm happy to report that I don't think anywhere in the country, as a city put 6000 new meters on homes that have come online. A lot of them are land bank properties that are coming online and that's that's a really good thing, but we need more people to be able to do our that type. of work.
President Sheffield
Okay, so how many FTEs then are going to be hired and this is just for restoration of property that was damaged.
Speaker 10
It's 24, I believe, and this is for field service technicians they can work in and what we call our maintenance and repair sections, if you call them and have a hydrant that's an issue, this team that we also calls sinkholes. We also will be getting contractors on board to help get caught up on the sinkholes as well as the restorations but the 24 fsts are for maintenance and repair along with meter operations. And then we're going to be hiring another 40 fsts that we won't be using rate dollars or budgeted dollars that you're approving a day but we've been approved by what source of funding is that? We've been approved by $5 million from what's the source of funding for the the FST that we're hiring for the letters. Yes. Yeah, we got we got almost $90 million. We committed to this body that we would take fighters that's not coming out of the budget dollars. But is Tucker has authorized HR to begin the hiring those 42 letters line work. And I'm sorry, it's our goal to be able to get them to do the work cheaper than contractors and then force the price down from contractors.
President Sheffield
All right. Thank you. We have several questions. We'll put them in writing. And looking forward to your response. President Pro Tem things
Speaker 12
like Madam President, there we go. Thank you, Director brown being here. You and your team. Appreciate you always being responsive. We'll see you this Saturday as well at the Dima muffling meeting with folks who learn about 10 o'clock. A whole host of things. Yes, sir. 10 o'clock regarding DWSD. So appreciate that. Madam president hit the question. I was going to ask about the restoration. So thank you for that. So I'll just be brief with this other question that we learned about during the Department of Administrative Hearings, budget hearing and they indicated that the billing disputes are no longer being held at D H. They were now back with you all are with the waterboard, what was the rationale for moving them from waterboard to gauge and then moving them from d h back to Waterloo? That's always a question folks. Like, Hey, hold on, you got one telling me basically adjudicating their own bills and their own disputes.
Speaker 10
Yeah, it did. It was it was my idea to move it out from under DWSD and get some independent magistrates, if you will, the same people that do the administrative hearings, to to hear those cases and hopefully be more transparent about how, how they were being handled. I'm gonna have to get back to you on it, you know, and I can do it in writing as to why we moved it back. But I know that there was a backlog and some other issues that went on where they weren't being done timely. I certainly don't want to indicate that that was on administrative hearings. I really believe it was on my team side of of the ledger, but I can get back to you in writing on what the rationale was for bringing it back and and if we can work out something that can make it more independent on I think I'm with you on being transparent and having an independent magistrate look at look at these cases as opposed DWSD hate hearing officers, if you will. But that sounds like my general counsel who
Speaker 13
filled the chair. We we made the decision to but actually the most common reason for billing disputes is unusually high usage on a bill. And what we did was we we met with constituents we met with the DH at length. What we determined was, a lot of times people have a leak in their home and they have an unusually high bill and they dispute the bill saying that the meter must have broke, but we can see from their usage that there was some sort of leak and we can tell that by during the midnight to 3am hours, there's water running, which indicates a leaky toilet. So what we did was we implemented two new policies, the leak adjustment policy, which allows the customer to come in and say you know, there's there's a leak in my house, diagnose the leak, and we will give them they don't need to dispute there. They can seek and it's been repaired. We will count there will Seward's charge is reduced. Yes they use the water but if it just if it just ran flee, they will receive a discount because it was not so that has to be treated. It was just clean water. If they had a leak perhaps on the outside of their home, a spigot and the water just ran into the grass, they will get an even greater adjustment on their bill. So it was a more customer friendly way of not making them have to file a dispute and go through the DH we just handle it on the front end with the customer, which has been utilized many times by customers. They've been very we've gotten a lot of good feedback on that. The other thing we've enacted was a meter accuracy dispute policy. If you think there was no leak, and you think there was something wrong with our meter, then we can have the meter tested. And if the meter shows some sort of defect then they will their bill will be adjusted based on prior usage. And we will install a new meter. If the meter is found not to be defective. Then you know we will let the customer enter to payment plan. We'll also work with them to double check if there were any leaks in the home. So it was it was twofold. It was to be more customer centric and try to work with the customer on the front end so they didn't need to go through the DH for dispute plus the DH charges $50 To hear every dispute and oftentimes the disputes were for less than $50. So we will work with customers and maybe adjust their bill. If you know we can't determine what it was but it's certainly less than the $50 administrative fee. So sorry for the long answer, but the intent was to be transparent and more customer centric with this policy change.
Speaker 12
I appreciate that. I mean it's good information. The transparency part still though is is something that's always caught called into question when the department that you're having a dispute with is the one who's actually adjudicate the dispute as well. So I appreciate though the dispute the media accuracy, dispute policy, as well as the discounts offered very worthy products that you have. But again, we're hearing just from folks on the other end and you know, maybe it's oversized complaints about it, but you know, just from the outside looking in, it makes sense to have a third party who would even outside of those disputes that you all are able to address right then and there. There are probably other types of different disputes that would benefit I think from a level of transparency and a third party so
Speaker 13
I'm buds bins office is always a recourse. For someone who feels like they have not received fair treatment from the water department. And the ombudsman's office, you know will work with them. They'll act as a as a neutral arbitrator for any disputes as well.
Speaker 12
You said that the majority of the disputes are less than $50
Speaker 13
that I'm saying quite often they were less than $50. So it wasn't worth paying the $50 to the DH to to arbitrate something. But for things that were larger, we found it was primarily due to leaks that occurred in the home.
Speaker 12
You have no right to have more conversation. Yeah, thank you. Again, I'm Martin garden restoration and we have others that we might ask as well. In the interest of time, I'll yield the floor. Thank you.
Unknown Speaker
Thank you Thank you. Councilmember waters. Thank you.
Unknown Speaker
I am Good afternoon.
Speaker 14
I really don't have that much Madam President that acts all of the questions. Okay, anyway. I just
Speaker 15
want to inquire about your, your federal grant process. You pretty aggressive going after the federal grants for water infrastructure and so forth.
Speaker 10
I was on a federal call with Health and Human Services at noon today. Regarding going after additional dollars for our lifeline plan, we've received $100 million for from the federal government for LED service line replacement and we are aggressively reaching out to state and federal sources along with grants from foundations to improve our system. So we are extremely aggressive. We have a team of of people that work on that, Dan. All right.
Unknown Speaker
Well, thank you. Thank you, Madam President. Thank you so much member waters, and member Doha.
Speaker 16
Thank you, Madam President. Good afternoon. I have a couple of questions. One of my questions already asked by council president as well, relative to the basement backup protection plan, which is something that's in district seven and District Four. remember walking out there with you with Michael Regan from the EPA and it was just a program where parts of residence at Aviation subdivision we're really excited about you have you and I've had multiple discussions on how we expand that we do with that. And so it's been getting rave and hopefully we'll see this summer. How much of the flooding will be made as well. But again, thank you for that and for the discussions on that and ways that we can expand it. One of the questions I have is something that people call in about all the time, which is stormwater or drainage fees, right. And there's also always some questions because folks don't understand how that works. Why am I getting charged for that? Why, you know, so my question is kind of twofold. One, what are we doing to try to work and help educate better or educate our residents better on why they're draining this fees? are high. And this is not just residential, this is commercials as well we get calls from churches. And the second thing is, what can we look at? Where are some ideas? We can look at the Hellgate that yeah, and maybe you know, obviously some of it and you and I have discusses infrastructure right and not just infrastructure underneath the ground or bus or on our on our part should I say, but infrastructure relative to driveways and sidewalks that may belong to private residence or private commercial businesses or driveways that may be there was really a resonance. What's that educational component look like? And how are we going to work to try to mitigate that or just provide more information on how residents themselves can mitigate that to brain drainage fees down I mean, the
Unknown Speaker
dura ux by for question.
Unknown Speaker
But, but it's all wrapped in well,
President Sheffield
I hear you I know I just want to make sure we are we're behind so we can everyone. Okay, thank you. And
Speaker 10
so I won't. I can spend an hour talking about how we got to the drainage rate methodology that we have, but let me just say that is Tucker hired a company called Stantec to do a rate study. And the study came back and basically said we were charging too much of our services on the sewer side of the house as opposed to water side of the house. So we moved, I believe $20 million last year from sewer which sewer the sewer charges are half times the rate of water. So when you move $20 million out of sewer into water you're automatically reducing overall rates for residential customers especially. And then we change the complete way in which we do our rates to an inclining block rate methodology, meaning the customers that use the least amount of water residents on average, three to 4000 gallons a month. On average. They pay less and the customers like Marathon Oil or some of the big industrial customers that use a lot of water, pay more and that was a way to make sure that we were being sensitive to our residential customers that are we're struggling to pay the bills. And so a lot of what we what we have done to reduce rates didn't go directly toward the drainage charge, but we reduced charges on water and sewer to reduce the overall bill. So you know, we're sensitive to the fact that we have a $680 Approximately drainage charge per acre. And we're, we're also the I don't think I mentioned it earlier, but for many years prior to the bifurcation DWSD had double rate increases, sometimes as high as 17%. A year. That's unsustainable for residential customers. As you heard me say, the last eight years we've averaged 2.8 less than 3%. And so I you know, that's what I tried to tell our customers that we're doing everything that we can to reduce your cost and of course, whenever you do that, there are winners and losers and the high water users are feel like they're losers and I have a meeting next week with some of the industrial customers that are saying the residents aren't paying enough. They paid more we paid less and of course, you know how you know where that conversation is going. It's it will have it, respect their opinion, but we're going to try to do everything we can to reduce costs for residential customers within legal bounds without being sued and and that's what we're doing.
Speaker 16
Okay, my second question, I'll be very quick. I know we had a hearing at 3pm. We're about 11 minutes behind relative to Rouge Park and those projects that are happening. I was happy to stand with you. We are now 75 million. Just want a quick update on that. Yeah, and where that is rerouting that water to the roof
Speaker 10
and we're ahead of schedule. You know, we said that was going to be a four year project. The contractor came and I you know, I went out and promised the residents that every year we would clean up we would we would not leave an open street similar to what happened in Rosedale was that the grief? The grief I received there, rightfully so. We learned our lesson so I put it in the contract. If you open up the street at the end of the year, if you don't finish you have to and the contractor came back to us in this case in the far west project and said if you let me work through the winter, I'll finish this project in three years because of escalating inflationary cost. He was going to see a great amount of savings. So we're well ahead of schedule and I'd be glad to send you have Lisa Wallach send you an update on the progress. We just had a meeting I think last week my team met with we were started Mr. Ed wasn't there we always look forward to seeing him at that particular meeting. But we're well ahead of schedule now. And the complaints are way down from the project. I did in Roseville. Well, I'm sorry, apologizing for that. We're gonna go back and he's gonna have me at a meeting on Saturday.
Speaker 16
For folks who have told me about the project priority.
Speaker 10
Yes, that's the thing about going first, you know, we did one project on the west side, one project on the east side, we learned a lot. But we got we got things wrong that we corrected, going forward. So we apologize, but we're going to try to do better as we as we know better.
Speaker 16
We appreciate that. Obviously, I have more questions. I know we have restraints and time. This is one of the most important departments that residents call about every single day. But I will submit the rest of my questions after this, so thank you very much, Madam
President Sheffield
Thank you. And just to be clear, too, we can still move the entire budget into the executive session and we can have the director come back address any outstanding questions or concerns that are raised at this table. We just do have another department that is waiting after. However, if there are urgent questions that we want to as a body address now, we can do that. I'm just trying to make sure that we stick within our one hour is not to be mean or to come across in any way. I just want to make sure we are sticking within our within our one hour budget hearings. So member Johnson.
Speaker 17
Thank you Madam President. And good afternoon. Good afternoon. So I want to ask a question relative to something that you brought up that you mentioned the bad debt expense, roughly $60 million. Is all of that from residential customers. None from commercial.
Speaker 10
The majority of it is yes. From residential. Yeah, I mean, they're they're, you know 240,000 Roughly residential customers, the 22,000 commercial customers and for the most part, they are we sue them when they don't pay their bills. We don't sue residential customers. We have a lot more tools and handles to collect. So yes, but I can assure you that the Lifeline program is going to quickly get us back into the, you know, into the 93 94% collection rate,
Speaker 17
if you could put it into percentages because certainly the amount of a resident residential customer is drastically lower than a commercial customer. percentage wise, what percentage of the 60 million would you say is for residential? Unpaid meals versus commercial?
Speaker 11
Yeah, I don't know. CFO. Bad debt is a result of non collection, the historical perspective. So our downcomer are non residential, which is commercial in industrial we have a 90% or plus collection rate. So, but the resident collection rate has fallen, you know, below 75. So, we've been since the moratorium started. We've been averaging between 70 to 73% in collection, so I would say more than 25% non collection was is pushing this amount up I would say about 80% of this is residential customers.
Speaker 17
Thank you. And my other question, and I have others that will be emailed over. My second question is relative to our last meeting. I had requested and I'm still waiting to receive a plan that addresses everything that DWSD in the Great Lakes Water Authority is doing in District Four. I know we talked about that in our in our meeting I have yet to receive it but want to know if you can give me some idea of how much maybe not necessarily how much of the proposed budget is going to address backup issues in Jefferson Chalmers. But can you just briefly talk about the various activities that are happening in that community to address backup and flooding issues?
Speaker 10
Yeah, sure. And I do have a flood mitigation effort for the for the city and I'll make sure that everyone gets a copy of that. I bought it in place. Questions. Were asking me there is some good news. I mean, I found out today, in another meeting out in later village that we've been awarded a contract with the US Army Corps that only five of them were awarded around the country, two of them in Michigan, one in Midland, and one for Jefferson Chalmers where the US Army Corps is coming in to spend $2.5 million on a study to come up with a plan to mitigate flooding in that particular area. So that's going to be huge because you know, we have to get the plan approved by the federal government as well as equal and to have the US Army Corps take the lead on doing the study and the plan will almost assure us that we'll get when we apply for funding that will be successful in getting not only a plan develop, but getting it engineered, designed and implemented at the same time. So that's good news. Obviously, you know about the $350 million state program where they're going to take storm water off of I 94. And we're going to start near Jefferson Chalmers up close to Connors that's where the program starts. That starts the spring. That's going to be huge and taking hundreds of millions of gallons of water out of the system that goes right through Jefferson, Jefferson Chalmers, there are there others the 375 is going to be helpful in taking stormwater out of the system because the real effort here is to reduce the amount of flow that's getting into the system. We've been in Geoff Chalmers twice now and cleaned out the sewers to build capacity when we get large rainstorms. Certainly the pumps that the Great Lakes Water Authority have they've spent 10s of millions of dollars in getting a redundant electrical power grid in order to get the pump started. So all all of that is in this mitigation, flood effort that I have in front of me. I'll make sure that everybody gets a copy but the most exciting news is that the only five in the country two of them in Michigan, one in Midland wanted in Jeff Chalmers, the US Army Corps coming in to help work with DWSD and more importantly, the Great Lakes Water Authority to create a solution that will at least mitigate flooding in that area. Long term.
Speaker 17
Excellent. Thank you so much for that my last comment is, so when the mayor came before us, I talked to him about a disaster mitigation plan, particularly for the Jefferson Chalmers community. How are we as the city responding to disasters, and we'd love to have someone from your office collaborate with us to pull that together. Be glad to do it. Thank you. Thank you, Madam President.
President Sheffield
Thank you, Councilmember Johnson, Councilmember Santiago Romero. Thank you, Madam
Speaker 18
President. Good afternoon. Good to see you all. So I also have a number of questions but I will focus on concerns I'm hearing from residents. So I was told by small landlords about this new tier two tiered system, where a lot of them are now being charged at a higher rates if they utilize a higher percentage, or if it goes beyond this point six, I believe, usage and they're letting me know that what ends up happening is that they have to charge residents more because of the higher rate so I'm wondering, is this a part of the proposed rate structure? It they're letting us know that this has happened now for a few months? So just want to get a better sense of why we're doing this now? And what we're going to do, knowing that what ends up happening is that the cost is then given to their, their their renters, due to the higher water rates.
Speaker 10
We'd like to, if we could just see some of these addresses in these bills so that we could address it directly and put it in writing but you know, if it's if it's a two family flat, and they're just families in those homes, we know what the average amount of water should be either. We may need to ask that landlord to make sure that the plumbing leaks are taken care of, or we allow the tenants to apply if they financially are unable to do it themselves. But even if they were using twice as much as the 60 see if they were using 12 Their bills would just barely be above you know the average bill so we need to take a look at you know why landlords feel they need to to charge more.
Unknown Speaker
Okay. Not sure if your staff member wants to add something else she's
Speaker 13
joined us Yeah, just just a quick note is that we've revised the policy so that households with occupants higher than four have a higher level of usage that's allowed at the base tear rate. So for example, if there's six people in the home, they can use eight, eight or nine CCF before there's an additional charge if there's seven eight people in the home. We've We've raised tiers of usage so that there's not an additional charge on top of the base rate. So that has that will be helpful to families and that may be what's an issue because if it's not a leak, then it just means it's a higher number of occupants in the household and we've accommodated that and if it is a leak, then we will come in there and we have dollars to help repair the plumbing issues.
Speaker 18
Okay, thank you through the chair. I would like to connect with you with the small business organizations that have let me know about this concern. My next question is around another concern that I got this times from Claire's. I was notified that this Wednesday, there seems to have been a water main break and nobody was notified about the issue and we had machetes and batch brewing with yellow water. And they were concerned about washing dishes serving tap water. And their one ask is if it's possible for the water department. To use the alert systems that we currently already have. So if there is a water main break, maybe it's a 360 system where you let folks know we're we're working on this water main break if you see any changes in your water pressure if it changes colors just because we're working on it. But is that something that you'll be able to do?
Speaker 10
Yes, it that's feasible. Let me say that that water main break was at Michigan Wabash just right in front of a Irish cup, and it was St Patrick's Day and to shut the water off when in fact the pub was completely filled up with people on the busiest day of the year. I made the decision to turn the water down and make the repair. The next morning, I did personally talk to people that identified themselves as leaders in the community to let them know that this was going to take until the next day to do it. But we made sure people were not out of water. Our biggest challenge is understanding very quickly, who's being affected by that particular break it takes some time to figure that out. But once we get it figured out, we certainly could use the system to alert people and we will make every effort to do that.
Speaker 18
Please. I have another question that's focused on customer service, I believe we have already moved the full budget to Executive Session. Have we moved it okay, because I would like to do
President Sheffield
actually we only move our book portion. Okay.
Speaker 18
i In that case, we'd be happy to move the full budget to executive session to discuss customer service and hearing the office is still closed. There have been issues with people calling and not receiving any kind of support to to ask their questions and share their concerns. So I would like to continue that conversation there and would like to add to the closing resolution, that DWSD work with our alert systems to let our businesses and residents know if there is any issues moving forward so that they better communicate with that. Thank you, Madam President. That is a motion to have those motions Correct. Dr. Powers sorry. The first motion is
President Sheffield
moving to Executive Session. Yes, ma'am. Okay. Motion has been made to move the department to Executive Session, Hearing no objections that action will be taken. And then the second motion for the closing resolution.
Speaker 18
Yes to to urge DWSD to work with our alert systems. For better communication with the public.
President Sheffield
Okay. Motion has been made no objections that action will be taken.
Unknown Speaker
Thank you, Madam President.
President Sheffield
Thank you. Thank you, council member council member Young.
Speaker 1
Thank you. Good. My husband, John. And well sorry about that. Um, my requests I want to ask you first of all is I want to ask you one. What are we doing in terms of building infrastructure out per 100 Year 300 year flood
Speaker 10
that's a you know, a a two or $3 billion
Speaker 1
I was wondering looking at the capital of prayer was it and sees all the wonders that something's gonna happen but okay, I
Speaker 10
I'd love to maybe come in and and talk about our capital plan, our five and 10 year capital plan as well as the Great Lakes water authorities. Five and 10 year capital plan. There are still billions of dollars in those plans and we can we can walk you through exactly what's planned over the next five to 10 years.
Speaker 1
Okay, excellent. And then my second and final question is going to be what has the Lifeline program done in terms of reducing water shutoffs Have you seen because we're now we are starting to come back with water shutoffs. But we have this Lifeline program, you're signing people up? And we've seen a reduction in water shut offs, and we're not seeing any change in water shut offs. And how many water shut offs do we have per house? Is it one out of 10 homes? One out of one out of 8151? Under 20? What's that number?
Speaker 10
Yeah, first of all, there have been no, no water shutoffs that's not our focus. Our focus is going door to door to get as many people registered into this program so that they will see no service interruption and the numbers that I'm looking at today are 20,001 20,016 people that are either in the lifeline plan or the 10 3050 plan. So right now, we're not shutting anyone off. We are going door to door. We know the customers that are behind in their bills. You know, I had a I was just speaking in Lakewood Village and trying to make the point that, you know, this this, there's a misconception that everybody in the city of Detroit is poor. And we know that prior to COVID we had 93 94% of our customers paying their bill, say it's 10% of our customer base. And that's roughly 20,000 customers. We we've reached them and now the calls are starting to dwindle and not come in as briskly as they did when we announced the plan. So we're getting we think we're getting to the end but our focus right now is not shut off. Our focus is we have the dollars available. But what what sense does it make for me to have $20 million sitting in a fund that I can only get access to the dollars get their bills if they apply to get the bill paid. And so it costs me money. To shut people off. We're trying to grow our customer base. And so right now, that's not our focus. I'm not saying at some point that we might not have to revisit the tool. But today it's not. There have been no shut offs and we're not shutting off until we're absolutely sure we've reached out and touched every customer that needs help and get them enrolled so that we can utilize the dollars that are now available. 100 million dollars is what we're asking for in the state's new budget. So
Speaker 1
let me just say this game just for clarification, you were telling me as of now, you are not shutting anybody's water off.
Speaker 10
I'm not sure all I'm not shutting off any water for non payment
Unknown Speaker
or no okay.
Unknown Speaker
Just want to clarify for residential customers. Yeah,
Speaker 1
that Beretta you're not talking about commercial for residential customers. That's what I'm talking about.
Speaker 10
had a meeting yesterday on this very subject with everybody on my staff. And I made it perfectly clear that right now we are not shutting off we're going door to door. And we don't I mean, the object is not to see how to shut people off the object is get them into a plan. So we can get the money out of the fund that's available.
Speaker 1
That's that's the goal. We'll make sure we speak the same language. Okay, I'm not
Speaker 10
saying it's if if you I will commit that you will know before we have to use that tool will because we got to reach out to each customer and make sure that they understand that help is available.
Speaker 1
I appreciate and go in my constituency. Again my pay is blown out because you shut no water not not knowing about I appreciate you telling me a price. Thank you because I don't like surprises. It was my birthday. All right. Thank you. Appreciate you, sir. That's it, man. Well done. Thank you, Manager.
President Sheffield
Were there any additional questions that council members would like to ask that they did not get a chance to ask just want to open up the floor one more time for any additional questions that maybe they wanted to ask that didn't get a chance to ask. I was gonna say member quarterly. Always do that, Mr. Quarterly and not come back to council members again.
Speaker 19
Amen. President so just to let the council know. The Aberdeen budget has been approved by the Board of Water commissioners. Fact they approved it on March the 17th. In the past the Board of Water commissioners were approved the budget after councils are actually on a budget but they did it before. So the numbers that you see in the mayor's proposed budget has been approved. So therefore if you approve the budget, then there will be no more iterations of their budget. So that you know
President Sheffield
thank you thank you, Mr. Coralee. All right, anything additional. Right. We will submit everything else in writing and we do have this budget and executive session as well. Thank you for thank you so much. Thank you. Thank you all right, we will now proceed to our next budget. Hearing the Office of the Auditor General
Unknown Speaker
But.
Unknown Speaker
Um, let's see here. Yes.
President Sheffield
Miss Goodspeed, are you going to do have a presentation? Yes. Okay. Just let us know if you need any help with getting it on. The screen.
Unknown Speaker
Ready to go.
Speaker 15
Yeah, good afternoon. Good afternoon, honorable council members. My name is Laura Goodspeed, I'm the Deputy Auditor General of the Office of the Auditor General. I have with me Mr. MC with full card audit afford the Office of the Auditor General. And I thank you for this opportunity to present our fiscal year 2024 budget
Speaker 15
there's 
a look briefly who we are and what we do for the benefit of the public. We are the Office of the Auditor General in the Detroit city charter section 7.5105 This briefly to talk about our powers and duties. The Auditor General shall make audits of financial transactions, performance and operations of city agencies based on an annual risk based audit plan prepared by the Auditor General. I want to point out here is that prior to the 2012, Detroit city charter, this line this section read that we were to make audits of every train every department every two years to financial transactions, the previous Auditor General Mark Lockridge. introduced this language in 2012 in 2012, so that our audits are more based on risk assessing the risk in the city and assessing the risks of the agencies. We are to make a full report of those audits to city council and file a copy with the mayor after the close of each fiscal year, we make a report to the financial position of the city. And this report is known as the annual comprehensive financial report. We settle all disputes claims in favor or against the city to the extent in in the manner provided by ordinance. And what this does for the public. Is they given them an opportunity to request a hearing before the auditor general for any claims that may be denied that they bring against the city but may be denied by the law department. We perform
+1
a look briefly who we are and what we do for the benefit of the public. We are the Office of the Auditor General in the Detroit city charter section 7.5105 This briefly to talk about our powers and duties. The Auditor General shall make audits of financial transactions, performance and operations of city agencies based on an annual risk based audit plan prepared by the Auditor General. I want to point out here is that prior to the 2012, Detroit city charter, this line this section read that we were to make audits of every train every department every two years to financial transactions, the previous Auditor General Mark Lockridge. introduced this language in 2012 in 2012, so that our audits are more based on risk assessing the risk in the city and assessing the risks of the agencies. We are to make a full report of those audits to city council and file a copy with the mayor after the close of each fiscal year, we make a report to the financial position of the city. And this report is known as the annual comprehensive financial report. We settle all disputes claims in favor or against the city to the extent in in the manner provided by ordinance. And what this does for the public. Is they given them an opportunity to request a hearing before the auditor general for any claims that may be denied that they bring against the city but may be denied by the law department. We perform Speaker 15
we perform internal auditing and internal auditing is an independent objective assurance and consulting activity. My favorite two words as you've heard me say over and over again, is value add. That's what we want to do. We're here to be a value add to this honorable body to the citizens of Detroit and to the agencies and to the administration. We bring a systematic and disciplined approach to evaluate and improve the effectiveness of the operations and this governance. Internal auditing provides an assurance that internal controls in place are adequate to mitigate risk. But it's important to note that 
we don't own those systems of internal control. The systems of internal controls are owned by management. But what we do is go in and we look and we want to provide some assurance that those internal controls are adequate to mitigate the risk. We provide some assurance that governance processes are effective and efficient, and that organizations can meet the goals and objectives that they set for themselves. Again, our audit plan is a risk based audit plan that focuses on high risk agencies and all processes identified through our during our annual city wide risk assessment. And our risk assessment we assigned a seven metric seven scores to each of the agencies. We look at the number of revenues, so the amount of revenues, so the higher the revenues, the higher that agency will be scored. We look at the amount of expenditures, the number of staff, whether it's a general fund agency or a special funding agency we look at the source of the audit request. Many of our audit requests are based again on our annual plan. But as you're aware, many of our audit requests come as a request from City Council direct. We look at the date of last audit and emerging issues. This is those things that we concern ourselves with regarding issues that may the city may be facing. A good point is ARPA funds. We know that the city has received a huge amount of dollars from the opera American rescue rescue plan. So that's an emergent emerging issue. And that's something that we would rate an agency higher
+1
we don't own those systems of internal control. The systems of internal controls are owned by management. But what we do is go in and we look and we want to provide some assurance that those internal controls are adequate to mitigate the risk. We provide some assurance that governance processes are effective and efficient, and that organizations can meet the goals and objectives that they set for themselves. Again, our audit plan is a risk based audit plan that focuses on high risk agencies and all processes identified through our during our annual city wide risk assessment. And our risk assessment we assigned a seven metric seven scores to each of the agencies. We look at the number of revenues, so the amount of revenues, so the higher the revenues, the higher that agency will be scored. We look at the amount of expenditures, the number of staff, whether it's a general fund agency or a special funding agency we look at the source of the audit request. Many of our audit requests are based again on our annual plan. But as you're aware, many of our audit requests come as a request from City Council direct. We look at the date of last audit and emerging issues. This is those things that we concern ourselves with regarding issues that may the city may be facing. A good point is ARPA funds. We know that the city has received a huge amount of dollars from the opera American rescue rescue plan. So that's an emergent emerging issue. And that's something that we would rate an agency higher Speaker 15
just to cover our audits in process. We have several in process. And I just want to say that we're always auditing. Our auditors are involved in many other activities. But there's always an audit going on. We either starting one in the middle of one or exiting an audit for your compliance fees. We started this audit back in January actually of 2019. So it's been going on for a while. We've published two reports. The first report was on prio banking activities and operations. Most of those findings were focused on findings against the Office of the Chief Financial Officer. That report was published in December of 2020. Our second report focused on the Detroit economic solutions corporations and their use of the compliance fee funds that report was published in May of 2021. We are finishing this audit. And our third report target is actually due early next month. Property tax assessments forensic audit, we were asked by this honorable body to do a forensic audit of our property tax assessments. That audit started in December of 2021. We've published one report in partnership with our partners out Rhesus Ross that report was published actually in December of 21. And we expect to publish a second report in May of this year. We have been auditing the opera. Our first audit for APA funds is a renewed Detroit program. We started this in we have an entrance conference in September of 2022. And we expect to publish our first report in July of 2023. A note about the opera audits, they are different in nature. than our usual artists. Typically our artists are historical, and we try to bring them current so you'll find that we may have a two to three year audit period, but they're still typically historical in nature. auditing the opera programs and programs and agencies that are receiving opera funds is a little bit different for us because we are auditing as those programs are being executed. And so we have to be aware of the burden or the extra work. We're asking of these agencies. So it may take a little more time to get through them. But we we plan to audit more of the ARPA programs and I'll have a slide on that shortly.
Speaker 15
Continue continuing with our audits and process. We just watched the head on insurance conference for the board of police commissioners, and that was in September of 2022. This was an audit that was requested by a former council member. And so over two years ago, but due to our other activities and our limited resources. We're just now getting to this audit. We expect though to have our first report in this audit in October of 2023. You Human Resources Employee Services. We have just launched that audit. And I want to point out that this is a pickup of the Human Resources audit that was started in 22,015. We were asked by the administration at that time to pause that audit. It was during bankruptcy and it was prior to the implementation of our new payroll system. And so we were asked to pause that audit. We did publish one memorandum, the human resources, the labor characteristics of the city of Detroit, that was in October 2015. So this is a pickup of that audit given now that ulti pro our new payroll system is fully installed. We expect to have a first integrated report next year in February of 2024. We just had our insurance conference on this audit in I believe in January.
Speaker 15
Upcoming audits in this calendar year 23 And into 24. We will be launching in April next early next week early next month. The Detroit Police Department drug law enforcement fun audit. This is a required audit by city charter we are required to audit the DLF every two years. We have not conducted this audit in well well. A long time. Again, just due to limited resources. But we will start this audit in April. We also will conduct the DPD audit of the Special Operations fund or this known as the Secret Service one. These are the only two audits that we are required to do by charter on and on an ongoing basis. The SS the Special Operations funds we are required to audit that annually. We expect to start that in June as some of the auditors rolled off and close off our other audits. The second part of the HR audit that we pause is a payroll audit. We are looking to outsource this. We are in the process of completing our RFP. We hope to start this audit in June but we are looking to completely outsource this bottom
Speaker 15
just want to talk a little bit about our audits through again through using ARPA funds and also to assist us in auditing other programs. Our agency is one of the only agencies that I'm aware of they cannot hire temporary employees. The charter requires us to hire employees that are subject to bargaining in the labor unions. All of our auditors, auditors, two three and fours are part of the s AAA unions or either the APA unions and so we cannot hire test people to help us use some of the apple funds and to help expand our capacity. So we plan to outsource high risk ARPA related performance art projects. We brought this issue to council last year in our budget hearing and this honorable body did put a closing resolution urging the administration to allow us to use $800,000 of ARPA funds to outsource additional contracts. We worked with the administration and found out that that was just encouraging and so we have come back to this body and council president has allowed us to LPD has given us the go ahead to utilize some of the funding that was set aside for city council we have had initial conversations with Joe Robinson and the old CFO in terms of how we use that money. We do plan to move forward with being able to contract and and use that money to again help us outsource some opera related kind of contracts, audits. I do thank you all for giving us that opportunity where we can utilize those funds again, to audit some of the opposite funds. I'm excited to share this next screen. We are looking forward and we'll pause and poised and we are set to go with the first ever peer review in the history of the Office of the Auditor General. I believe it was councilmember Benson that mentioned in one of our budget hearings last year or a year ago, he asked whether we'd had a peer review and the answer was no. And for the benefit of the public a peer review is just what we do to other agencies. There will be auditors coming in to audit us. They will look at our system of quality control they will look at our our operations to determine if we are meeting the gaggan standards. gag is stands for generally accepted government auditing standards. We are a gaggle shop we follow those standards. We up and up and so now we've had to put a disclaimer in our reports that says we follow these standards with the exception of a peer review. So we're hoping after July of this year, that we no longer have to disclaim that the peer review again it's a requirement that audit shops such as ours have an external independent review every three years. The purpose is again to look at our system of quality control to make sure it's suitably designed to make sure that with this quality control system, that we have reasonable assurance that you have reasonable assurance that we are performing and reporting out in conformity with those professional standards and any other applicable legal and regulatory requirements in all material respects. Our audit period will be from July 120 21 Through June 30 2023. And we expect the peer review team to be on site in July of 2023. And just a little bit more of what they will be looking at. We it's a peer review we have other auditors there will be a team or two to three other auditors from around the country that will come in they will look at our organizational policies and procedures. They will look at audit reports our supporting working papers, documents relating to non audit services and our non audit services. Think I missed a slide are the services that we provide to LPD in terms of helping them with the budget dailies. We also are key participants in the Revenue Estimating conferences that take place every three times a year. We also hear claims from the public. So they will look at all of our activities, not just our audit reports. They will look at any other correspondence or reports that they deem pertinent for them to render a review and it's either a pass or fail and we are confident that we will pass this peer review. They also will carefully look at our documentation to evaluate our staff competency. We are required to our auditors are required to have a minimum of 40 hours of continuing professional education also known as CPE. And so they will look at that they will look at the nature of those trainings, though. CPE is the proof that they were the training was provided by reputable and credible organizations. And so we we have been working very hard to make sure that we are ready to pass our peer review. I also want to point out that we have done a overhaul of our policies and procedures and we are pleased to launch standard operations. standard operating policies using technology and manuals will be online. I've been working in the Office of the Auditor General for 15 years. And this is the first major and comprehensive overhaul of our policies and procedures. So I'm excited about that as well. Here again just generally our other activities I did mention that we participate in the Revenue Estimating conferences and that's three times a year and these are other activities that our auditors are required to do. We rotate a team of three to four auditors to participate in the Revenue Estimating conferences. It is a two year rotation because we want them to get to understand what it is they're looking at and to really be a value add to the Office of Budget as well as to LPD as we estimate those revenues. It is key that we have a voice in this process so that our budget and our revenues are adequately for forecasting. We also assist LPD with budget dailies is what you have now. The Auditor General is the chairperson of the towing weight commission in the AG is a member of the Risk Management Council, the police cost recovery Review Committee and the fire cost recovery review committee. And again I mentioned earlier that our auditors have a mandatory 40 hours of CPE annually
Speaker 15
the mayor's Oh ag fiscal year proposed budget in summary the mirror our fiscal year approved budget was $4.4 million. The mayor has approved or proposed $4.4 million slight increase of $62,000. And I want to point out here that it's really not an increase. As many of you know the mayor originally, I say arbitrarily reduced budgets by two and a half percent. So this is a restoration of that two and a half percent. So it's really a misnomer to say that there is an increase. There is no change from the mirror in our proposed FTE. And again, 
the breakdown in terms of personnel costs. Most of that as you can see the 62k 2k increase is in salaries. That really is just a two and a half percent general wage increase there is a slight increase in non personnel cause mostly in other expenses in training and development. Want to just note that the no increase of no change in the cost of the ACT. ACT for but that it does represent 40 40% 41% of our proposed budget. And again, you can see that the 62 increase most of that is in auditing operations relating to the general wage increase. And that's really all I have to say about the mayor's proposed budget. This next section I do want is to present to you a request from the Office of the Auditor General or additional funding so that we can better serve this body better serve the citizens and better serve the governance of the city of Detroit. These are our 2024 performance metrics. Our city related income is all related. What we do is are related to effective governance and improving the governance of the city of Detroit. So our strategic goals is to complete an absent optimal 
number of audits, investigations and special projects. Improve the quality and timeliness of all external as well as internal reporting. We've heard it several times from this honorable body. Why does it take so long to complete an audit? I haven't seen audits and so we hope to improve the quality and timeliness of those audits. Improve the auditing and consulting capabilities of our oil ag staff. We want to identify and report opportunities for expense savings and revenue increases. We want to promote an atmosphere of mutual trust, honesty and integrity among the staff and constituents. And we want to expand our activities to include enterprise wide risk management. Currently our work is focused on we I mentioned risk based audits at the department and for the agencies. But we want to begin to look at risk on an enterprise wide level. What are those threats that the city faced and how can we help to give recommendations that might help the city mitigate those risks? With that being said we are requesting in asking this honorable body to consider granting us an additional funding request of 444,000. Most of that is to add additional three additional FTE in 
the supervisory and management capacities. Along with that would be a slight increase in software. Maintenance, training and development and other expenses are primarily related to the addition of three FTEs. These staff and I'll show you the positions we're asking for the reason we need these additional FTE is one to increase our supervisory capacity. I want to thank this honorable body for last year for giving us additional FTE as one was the addition of the Chief Auditor. It has done a tremendous it has been a tremendous benefit for us and helping to manage the auditors and manage our audit teams. We're asking for three additional supervisors. One is an auditor manager three. This is a new position. That would be a new position for us. It's not a new position in the old CFO but it would be a new supervisory position for us that sits between underneath the Chief Auditor, but a little bit higher than our current managers. And again, it's to help level out that supervisory activity we're asking for another auditor for which is the supervisory level position for us in an auditor three, which is a highly skilled auditor. The amounts here are at the maximum range for those for those auditors. Well not really the maximum range but a competitive requests for those positions. Having these three auditors with these three FTAs will also allow us to have capacity to handle additional outsource RFPs if we're going to outsource our phone related RFPs we need staff, supervisory staff that can work with those contractors to affect those audits. So we and that's one of the reasons we did not really go after outsourcing opera contracts. This year in fiscal year 23. Is because we really just didn't have the capacity to handle supervising those audits. So it kind of goes hand in hand with us to have these other auditors. FTE is I do have a line to restore the overtime pay for 32,000. This was suggested to us by the old CFO and Office of Budget to restore overtime pay for two years now for a couple of years I've been asking the city in the old CFO and the Office of Budget. Were they going to restore compensation time or overtime? For our auditors they are union and so if they work overtime, we have to pay them overtime. I don't know if this body knew it but the city decided at some point that a compensation time or time off in lieu of overtime dollars was not implemented back in when they implemented ulti pro and a couple of years back that the Office of Budget decided that they were not going to allow us to have overtime at all. So this is a recommendation from the OCR poll to actually restore that overtime. And our auditors do work overtime. They work overtime to meet our demands to meet budget deadlines to meet audit report deadlines. And again because they are unionized, we need to have the ability to compensate them for that overtime. And with that being said I want to thank this honorable body for allowing us for allowing me to make this presentation. And I thank you in advance for your consideration of our budget requests.
+1
the breakdown in terms of personnel costs. Most of that as you can see the 62k 2k increase is in salaries. That really is just a two and a half percent general wage increase there is a slight increase in non personnel cause mostly in other expenses in training and development. Want to just note that the no increase of no change in the cost of the ACT. ACT for but that it does represent 40 40% 41% of our proposed budget. And again, you can see that the 62 increase most of that is in auditing operations relating to the general wage increase. And that's really all I have to say about the mayor's proposed budget. This next section I do want is to present to you a request from the Office of the Auditor General or additional funding so that we can better serve this body better serve the citizens and better serve the governance of the city of Detroit. These are our 2024 performance metrics. Our city related income is all related. What we do is are related to effective governance and improving the governance of the city of Detroit. So our strategic goals is to complete an absent optimal +1
number of audits, investigations and special projects. Improve the quality and timeliness of all external as well as internal reporting. We've heard it several times from this honorable body. Why does it take so long to complete an audit? I haven't seen audits and so we hope to improve the quality and timeliness of those audits. Improve the auditing and consulting capabilities of our oil ag staff. We want to identify and report opportunities for expense savings and revenue increases. We want to promote an atmosphere of mutual trust, honesty and integrity among the staff and constituents. And we want to expand our activities to include enterprise wide risk management. Currently our work is focused on we I mentioned risk based audits at the department and for the agencies. But we want to begin to look at risk on an enterprise wide level. What are those threats that the city faced and how can we help to give recommendations that might help the city mitigate those risks? With that being said we are requesting in asking this honorable body to consider granting us an additional funding request of 444,000. Most of that is to add additional three additional FTE in +1
the supervisory and management capacities. Along with that would be a slight increase in software. Maintenance, training and development and other expenses are primarily related to the addition of three FTEs. These staff and I'll show you the positions we're asking for the reason we need these additional FTE is one to increase our supervisory capacity. I want to thank this honorable body for last year for giving us additional FTE as one was the addition of the Chief Auditor. It has done a tremendous it has been a tremendous benefit for us and helping to manage the auditors and manage our audit teams. We're asking for three additional supervisors. One is an auditor manager three. This is a new position. That would be a new position for us. It's not a new position in the old CFO but it would be a new supervisory position for us that sits between underneath the Chief Auditor, but a little bit higher than our current managers. And again, it's to help level out that supervisory activity we're asking for another auditor for which is the supervisory level position for us in an auditor three, which is a highly skilled auditor. The amounts here are at the maximum range for those for those auditors. Well not really the maximum range but a competitive requests for those positions. Having these three auditors with these three FTAs will also allow us to have capacity to handle additional outsource RFPs if we're going to outsource our phone related RFPs we need staff, supervisory staff that can work with those contractors to affect those audits. So we and that's one of the reasons we did not really go after outsourcing opera contracts. This year in fiscal year 23. Is because we really just didn't have the capacity to handle supervising those audits. So it kind of goes hand in hand with us to have these other auditors. FTE is I do have a line to restore the overtime pay for 32,000. This was suggested to us by the old CFO and Office of Budget to restore overtime pay for two years now for a couple of years I've been asking the city in the old CFO and the Office of Budget. Were they going to restore compensation time or overtime? For our auditors they are union and so if they work overtime, we have to pay them overtime. I don't know if this body knew it but the city decided at some point that a compensation time or time off in lieu of overtime dollars was not implemented back in when they implemented ulti pro and a couple of years back that the Office of Budget decided that they were not going to allow us to have overtime at all. So this is a recommendation from the OCR poll to actually restore that overtime. And our auditors do work overtime. They work overtime to meet our demands to meet budget deadlines to meet audit report deadlines. And again because they are unionized, we need to have the ability to compensate them for that overtime. And with that being said I want to thank this honorable body for allowing us for allowing me to make this presentation. And I thank you in advance for your consideration of our budget requests. President Sheffield
All right, thank you. Thank you for that thorough presentation. A lot discussed. Definitely support the request that is being made. And so I'm sure we'll have more discussions in the executive session about your funding request. And appreciate the work that you do. I have several questions that we will submit in writing. But if we could remember Yeah, make a motion to send the funding requests for the Inspector General's office to Executive Session. Motion. Hearing no. General excuse me, Hearing no objections that will be that motion is approved. So remember, yeah.
Speaker 1
I have no questions. Just want to say you out there killing the game in that pink suit. Appreciate this. Excellent presentation. Thank you so much. And I appreciate y'all. If I do your questions, I'll submit to you write it. Thank you.
Unknown Speaker
Thank you, Councilmember Yang,
Unknown Speaker
Councilmember waters.
Unknown Speaker
Thank you, Madam President. No questions. Thank you.
Unknown Speaker
She was so thorough.
President Sheffield
Thank you member waters. Council Member Santiago Ramiro. Thank you, Madam President.
Speaker 18
I too have no questions I respect and thoroughly thank you for all the work that you do. And happy that we moved the your budget requests over to Executive Session for us to figure out what we can do for you. Thank you, Madam President. Thank you.
Unknown Speaker
Thank you, Councilmember. Councilmember Johnson.
Speaker 17
Thank you, Madam President. And thank you for everything that you do all of the hard work, and keeping us on task and sharing, you know, doing the all of the deep dives to provide information to us. I do have a question. I'll just ask you one and then I have a couple of others that I will send via memo. So you indicated that one of your goals is to expand activities to include enterprise wide risk management. What does this entail and how is it different from what you're currently doing?
Speaker 15
Well, I can say that we are really poised to do this. We let me start back. We implemented We upgraded our audit technology, audit management technology. And we actually have two modules. One is ABS audit, which is our audits and tax audits. The other one is a risk oversight module. And so if you you recognize that one of the things the Office of Budget and the city has moved to is this outcome budgeting where all of the agencies are required to fit into one of the I think five categories like we are affected governance. Another one may be neighborhood and so we want to begin to look at the risk or look at the city at that level, not just a particular agency, but look at all the agencies that go into effective governance, all the agencies that go into the other five categories. We have had conversations with the office of the budget that we will bring into this budget information into our auditing software. We configured it to handle this so that's what I mean by enterprise with management will begin to look at it at that level, as opposed to just at the department level. We are poised to do that. We're excited as well.
Speaker 17
Awesome. I appreciate that and look forward to it. Thank you so much. Thank you, Madam President.
Unknown Speaker
Thank you, member Johnson member Doha.
Speaker 16
Thank you, Madam President. And good afternoon. I will be very quick, as we see a lot of you in the western finance artists and a lot more than I am sure I am sure we're looking forward to it. So again, my one question will be very brief, but again, just wanted to thank you for the work that you as auditor general Lockridge, you know I have done in the past very comprehensive audits, gets to the bottom of some real questions and also helps just us not members of the committee but members of the council, find out information about certain departments and helps us to try to work on those solutions to resolve and make sure they're running efficiently, efficiently. Should I say and so I want to thank you publicly for that. Second, or the question I have, I'm sorry, is is really quick is about priority and just the process how does that Oh, ag prioritize their audits and investigations. In The turn was city departments and programs are selected for the audits?
Speaker 15
Very good question. Thank you. We again at the beginning of the year or we actually developed a two year audit plan. And I go back to that slide where we rank all of the we score each department based on a revenue within those seven metrics. So the higher the score, lets us know those are our higher risk. You know, departments that we're going to audit. Of course, if we get a request from City Council we would prioritize that accordingly. But it's basically that it's saying, you know, based on how many dollars is going through there, when was our last audit, emerging issues. So we might have audited a activity two years ago, but if there's a big emerging issue that's going to add to their score, and it's going to push them up in the ranking.
Speaker 16
So I thank you for going on the record saying that again, I appreciate that. We also have a couple other questions, but we see so much more I had opportunity to ask you those questions. So thank you so much. Thank you, Madam President. Thank
Unknown Speaker
you Thank you remember
President Sheffield
Dr. Hall. All right. That is all the members Santiago. She went already. Okay. Yes, Mr. Corley.
Speaker 19
Amen. Because I just want to thank Miss Christine and her staff, sitting this Yes. And preparing the budget analysis. We do 47 Right. Yeah. And they hit produced about 14 and 15. Great questions. them. So I just want to thank thank inbound publishing. Thank you.
Speaker 15
Thank you, thank you. It's a great and we use it as a great learning tool for our new auditors. They come in and they jump right in and they we had two new auditors working on it this year. So it's a great opportunity. We did provide you in your package with our responses to a written responses to LPD questions as well. Thank you. Thank you.
President Sheffield
Appreciate you and looking forward to the continued work. Thank you. All right. Thank you that will conclude our public budget hearing. And we will now turn to public comment. How many callers do we have? Madam President, we have six callers online. All right, and we have Ms. dhara with us if you want to join us at the table, Mr. For your public comment. All right, as Darren prepares to come up, we'll go to our first virtual public comment. Our first caller is Reuben J. Crowley Jr. All right. Mr. Kelly's already here you have two minutes.
Speaker 20
Okay, well, to start it off, first of all, you came behind my comment talking about you're going to clear the record straight. Maybe Sheffield, you'll be asked is over with everybody up there that city council? No
President Sheffield
Excuse me, Mr. Crowley, we're not but we're not going to do is be disrespectful with language, even if it's abbreviations of it. And so you can make a comment, but we're not going to allow that. So continue because you're not going to abbreviate any. Take my time. We will take your time back to two minutes, but I'm just letting you know it's not going to continue to go right ahead. And if you continue, you will not be allowed to make public comment. Go right ahead.
Speaker 20
So would you use your office to censor me not? I didn't say nothing. That was vulgar. I didn't say nothing about the other things I could say about what I said was you weren't behind my comment. You said he was gonna set the record straight. Like I'm saying some that's not true. That you use in your office right now. And all these kinds of people up there Oh, eight of them. No, you ain't never call for no vote to place a contract with an authority on a ballot or call to referendum publishing notice. The city clerk has never received that from your office in your office solely. You fall squarely on your head and shoulders. The administrative functions of the Detroit City Council. Now Brandon Jones did the same thing because I'm looking deep, and get doing a deep dive. She ain't never call for one either. That's why it ain't no publishing them. Notice for any contracts with any authorities nowhere. You know that to be true. Don't come behind me trying to use your bully pulpit to try to make it seem like I'm also be asked by you Kara what was wrong? What was wrong? I don't think so. I don't know what you think you
President Sheffield
do. Okay, you can we can in the car. We can end the call. I'm not going to allow that. You can say whatever you want about me or counselor, whatever your comedy is, but we're not going to allow profanity, vulgar language at all. Our next caller please. The next caller is William M. Davis. Mr. Davis Good afternoon the floor is yours.
Unknown Speaker
Good afternoon. Can you hear me?
Unknown Speaker
Yes we can.
Speaker 21
Okay, I like to start off by saying there's relates to the water and sewage department. The city council in the water department needs to be aggressively pursuing that 8317 split because at one time when that was putting in place, you know, back in the 60s, early 70s. Detroit controlled the combined sewer overflows Detroit controlled everything. And we ended up paying the vast majority of the costs which which people see in the drainage fees. So right now, Detroit doesn't control anything which is maddening for first on the system. You know, so the water department and the city of Detroit should aggressively renegotiate that split. It should be no more than 5050 In fact, it really should be anything 17 with Detroit is paying 17 because as it stands right now, they control the system so they can end up flooding our basements at will, you know and the city of Detroit should get a list every day of the available equipment that Great Lakes Water Authority is controlling that we all when I used to manage the wastewater treatment plant I did a director's report every day that showed the availability of equipment that can and should be able to be done. You know we have fresh water proper stations that we have no idea of the availability of the equipment. We have no idea of the Bellabeat if we're going to be notified when we got contaminated water, you know, it needs to be more checks and balances on the water department. And I also I think that sanity check retirees shouldn't be paying no more than $18 a month for the water sewage bill, especially in so much debt. All of our pension obligations was paid throughout, you know and continued to be paid. But yet we don't want still don't have a penny back. Thank you. All right. Thank you, Mr. Davis. Our next caller is phone number ending in 124.
Unknown Speaker
Or 124. Good afternoon.
Speaker 22
Yes. Hello, council president Sheffield you may get upset by word you find disrespectful. Well, a lot of your residents are upset by your actions which are disrespectful like not meeting in person with all of the impact residents have the footprint of this secretly planned and very neighborhood divisive north and landing yet you met with a few of them but not the rest of us. It's also disrespectful when your office doesn't answer my phone calls or respond to my emails even though your voicemail says you for a quick reply, send an email now with the infrastructure money that's coming through I agree wholeheartedly with Cindy Dara, we should do it right and plan for seven generations out not let some people get a quick buck and do it wrong. I also would like to know if we have the Inspector General's Office overseeing our funds. Why did the mayor say if I understood correctly that the company AECOM, a e c o m, which moved into Midtown that they're overseeing the use of the ARPA funds? I think that that needs to be looked into. And also I learned something at a meeting last night at the Detroit brownfield Development Authority. A gentleman told me that this nor fair lending project was planned a long time ago. I said what do you mean like to what's a long time? Two or three years? He said No, like 15 years. So it seems like these planning processes are actually a sham, and absolute sham and who's behind all of this. I was also told the mayor did a handshake deal. So this is extremely disrespectful to the people who live right here, who should have been included in it fully included in a planning study. And it was also disrespectful in the net call on me the last two public comments when I had my hand raised as well. And I have to send emails to let you know I have my hand raised and I have a witness here who knows my hand was raised. So somebody really needs to look into the hand flooring and it really needs to stop.
Speaker 14
Thank you, Miss White. Our next caller please. Our next caller is Betty a Varner. All right. Good afternoon, Miss Varner. Good afternoon. First of all, I want to say I thank you, all council members and Honorable President for taking the consideration to at least have a discussion regarding helping people with disabilities and seniors with the challenge that we have. As far as standing in our homes. We need our home to be handicap accessible and you are only hearing my voice but if you take the time and you talk to seniors and people with disabilities in your district, you will find that there are a lot of seniors and people with disabilities that need this help. There. We appreciate what is offered now, but the reality is we need more. And you the city of Detroit have a high percentage of population of seniors and we need help. So I thank y'all for hearing my voice. I'm going to continue God willing to speak and advocate for the seniors and people with disabilities. And I appreciate all of you and the work that you do. Thank you for the time.
President Sheffield
All right. Thank you Miss Varner. We appreciate you as well. Our next caller is Karen Winston. Good afternoon, Miss Winston. You have two minutes. Yes, good afternoon.
Speaker 23
Yeah, good afternoon. I'm here. Stratton DWSD. My hurt Mr. Brown say he was going to hire 24 new people to work on led service lines and 40 more four times something or another. But I'm wondering if he's has anybody checking posts, post them free stormwater management, you know, because we have a lot of vacant lots and these lots tend to puddle which causes you know, on Russia of the water, when it rains, especially when it rains intensely. I think they said we hit Like what 60 or 70,000 I don't know how many we have left. But in any event that's worth looking into to make sure these are not puddling you know, and make sure they're draining properly. You know, that's one thing. Another thing is I want to make sure we're not hiring contractors. That was one of the issues with the court. You know, before when DWSD was under federal oversight was we didn't have enough workers and we didn't have enough skilled workers. So trained and skilled so we need to get you know, full time city employees back into the mix, like Mr. Brown said it is cheaper, is much cheaper and then you have more control over your project. Other thing auditor general Auditor General's office, I'm wondering if they audit the pension funds as well, because we need to have you know, inside look on those pension plans, make sure they're going right. The cost revision committee never heard of it. Never saw it meet they don't know when or where it makes revenue estimate conference Misko Gatsby said that. It was three times a year. Mr. Corley said it was twice a year. What is it? Two and a half? I'm not sure I'd like to know which one is correct. When the emergency manager was here, he had ag and iG do a report on the pension funds and on other funds. They never finished the report where can I find it? Can you please help me? It hurt me?
Unknown Speaker
All right. Thank you Miss Wednesday.
Speaker 24
Madam President, our last caller for the day is Detroit affordable housing and homeless Task Force. Okay. Good afternoon. I know you're tired. I'll be real brief. for two minutes. I think we need the Auditor General to audit the home repairs revitalization. We need them to audit the poor closures the illegal foreclosures. We need them to audit all we want you to find those people you illegally foreclose find them and make them home and people who are overtaxed. We want you to find them and make them home. We want the Auditor General to audit those departments. We want a better system of auditing when we come to you and asked you for a hearing. We want one right away. We don't need to have to wait all this time. We want to have a noose we want to have abatement with tax dollar abatement, property tax abatements Like you given the images we want to have that we also want to know who has received these abatements thus far and who okayed it relative to the bond issue that Mr. Shelton and others have brought in and Ramon Jackson has brought up to you. We also want the child to have more input on the hearings. We get. I know you given us two minutes now. Mary Sheffield we and council president we appreciate that. But when you have the people there that we can talk to and they can hear our concerns. That's when we need to make our comment. We you know the comment is one minute and you've got three hearings. That's not fair because that's not even a minute per hearing. So I would like for you to change the method of how you're accepting comments. Also want to know if you can audit what's happening with the progress fund, the mayor secret fund. Thank you.
President Sheffield
Thank you. That will conclude our public hearing and two Oh, I'm sorry, Ms. Dora, you can come up to ms. Winston. The public act 182 requires at the city hall two revenue estimating conferences annually. One is done in February and the second one is done in September. Just to respond to her question. Yes, Ms. Daraa. Go right ahead. You have two minutes for public comment.
Speaker 25
Thank you. I want to talk to our auditor general. She said that they cannot it without being told to by your any mayor or anything. But I when I void stuff during the bankruptcy about the arena proposal, people stuck in this 2007 audit and it'll be archived. It's in a book about half inch thick eight and a half by 11. And that was where they audited, Joe Louis Arena that they actually audited the parking authority because that was who was supposed to oversee, give oversight to what was happening there was that there was we were supposed to get 10% I think of the beer, the food and the tickets and the parking and actually we didn't get that completely in 2007. They entered the audit said we better re audit this next year to make sure the parking authority is doing better on their oversight of the Joe Louis Arena revenues. So I would like you to go look at that. That was the LH when we actually were making money off and Joe Louis Arena. Now take a look at that. And Oh good. I got some more time this is great. But also, I worry about fudging even though if we're giving people tax breaks, I don't think we have the ability to or that time or money to audit all those people and make sure they're really giving honest figures on all their construction but like for instance if they can get 30% tax credit in historical building, they may be cheating on some of that stuff. And so I'd like to have us reserved and Nez for that neighborhood and not use it for big developers. And I'd like for you to think about how you're going to do the stormwater. Thank you. You welcome. Thank
President Sheffield
you. All right, that will conclude our public comments for today. Good to see you. Mr. Watson joining us and we'll be seeing you more starting next week with the executive sessions. Our first budget hearing will be tomorrow at 10am. And so if there's nothing else to come before us, this meeting will stand adjourned.