BFA: Office of the CFO / Non-Departmmental, Captial Budget, Debt Service

    8:51PM Mar 26, 2025

    Speakers:

    Keywords:

    budget

    finance

    audit

    debt service

    property taxes

    income taxes

    ARPA funds

    procurement

    revenue streams

    local option sales tax

    land value tax

    participatory budgeting

    financial management

    procurement process

    economic development.

    Budget hearing

    debt service

    property tax

    overassessment

    ARPA funds

    revenue estimating

    legacy pension plans

    income tax

    solid waste support

    cultural institutions

    retiree protection fund

    installment purchase agreements

    non-departmental budget

    financial stability

    legislative changes.

    Debt service

    debt millage

    credit rating

    bankruptcy exit

    limited tax General Obligation debt

    property taxes

    bond issuance

    public safety vehicles

    installment purchase agreements

    blight remediation

    general fund surplus

    retiree pensions

    community projects

    tax foreclosures

    sales tax.

    Good afternoon, everyone. We will call back to order the expanded budget, Finance and Audit standing committee, Good afternoon, Madam Clerk, please call

    the roll. Council member Scott Benson aye. Council member the third present council member Letitia Johnson, present council member Gabrielle Santiago Romero, Council Member Mary waters, present council member Angela Whitfield Callaway council member Coleman Young the second council president pro tem James Tate. Council President, Mary Sheffield, present, Madam President, you have a quorum. All

    right, there being a quorum present. We are in session, and we will start off with the Office of the Chief Financial Officer. And if you all can, please join us at the table. You

    Thank you. Madam Chair,

    Jay rising, Chief Financial Officer, and had all the CFO before I start, I will say I will just turn over to Tanya Sotomayor. Most of the presentation will bring up different divisions as they speak about their own divisions. But before I can lead off, I'd like to say it's been a privilege. If you have known I decided to retire at the end of the month, and it's been a privilege to work for the city and with council. While we may have disagreed on certain matters as we went along, I've always respected and continually been impressed by how Council's passion and for the city and for their jobs and for the work they're doing. So I just offer my appreciation for everything you've done. So in the first slide, I just want to do what we usually do is remind Council of structure CFO. It's an outgrowth of the Bank of bankruptcy in CFOs position stat surely created and oversees the assessor of the budget, the OCP, the contractor procurement functions, the controllers, office, odfs, development grants and Treasury. So as a as a byproduct of bankruptcy, what ocfo, what's been done is, is that the structure of CFO is has taken all the disparate financial activities of the city and put them under single authority. It didn't automatically happen when bankruptcy was over, and it's been a continual progression to consolidate financial functions, and it's still progressing. In doing that, we've accomplished a single payroll system for police and the rest of the city now, where, before I came it was two separate payroll functions where we had the police writing their own checks and the city raised all checks. We've integrated banking functions throughout the city and investment functions. We've created an independent procurement function and tried to integrate all procurement under a single independent function, rather than having departments procure their own net their contracts. And we tried to coordinate and supervise fund managements, whether federal funds or or or General Fund monies. The purpose of this has been to uniformly improve the accuracy and of the financial management and of our report so that the public and the credit rate agencies and the council can understand really where we are financially at any point in time. It also has an opportunity value of reducing the risk of fraud, having one set of financial statements or one set of financial management doesn't have the ability of any particular agency who has control of money, and literally, they were cash in people's drawers during the prior week of bankruptcy, to stop that from happening, and it gives more accurate and timely reporting, letting departments manage their budgets and reduce the risk of deficits. There's kind of a heightened, in my view, a heightened importance of O CFO during certain periods of the city. One was obviously during financial crisis. It's a company COVID, the ability to work of Council and have integrate that decision making process and financial matters at that time in one place was important, I think especially also it's in periods of transition. The mayoral transition, upcoming this year, will be the first time since bankruptcy there's been a transition, and this is especially important, as the transfer transition was persons who weren't as familiar as members of councils may be with with the financial and operations of the city. So as I said, we've been created under normal city act. We supervise all financial budget activities of the city. We have to certify at the end of the budget process, of the budget adopted by council actually is balanced. And if we can't certify that, as we were at risk of becoming under Financial Management, but this by the state again and and the CFO has that exclusive authority to do that, and we also try to actually obligated to provide counsel and the departments with financial impact statements on the effect of proposed policies and budgetary decisions with that background, I'll turn it over to Stoudemire to talk about what we could be able to accomplish in the last year and what we hope to do next year.

    Oh, good afternoon. I'm Tanya stodmeyer, Chief Deputy CFO and interim Budget Director. Thank you, Mr. Rising. So a few of our accomplishments over the last year, including a lot of these things you actually really already know about. But last year, Moody's upgraded the city's bond rating two notches, as did S and P. We completed our audit on time, which was the seventh year in a row of doing that, pre bankruptcy. That was an issue for us, but we are back on track, and we're actually getting awards that recognizes our achievements. We also finished the year with a balanced budget, and we had our 10th surplus in a row since bankruptcy with arpa. We fully obligated the ARPA dollars by the December 31 2024 deadline, and we have currently spent 64% of the funds. And keep in mind, all of those funds have to be spent by December, 31 2026 we also have seen significant growth in our income taxes, and a lot of that is because of the many construction jobs that are currently in the city, and I know prior to the state being our partner with income taxes, there was always this concern that we weren't getting those income taxes related to the construction activity. We are getting those revenues now. And in addition to that, once those structures are completed, there are going to be hundreds of additional employees in the city, and none of that upside in our revenue is captured in the of our forecast. So that's all going to be a significant bump for the city as well. So, and I think the mayor kind of touched a little bit on that last night at his State of the City address, every hope application was timely, received and fully completed. Last month, Council adopted the purchase order ordinance amendment, which will definitely improve our procurement process. And what we are currently working on and we should complete next month is the final phase of DPD non sworn being fully implemented into ulti Pro. So right now, what they are doing is virtually manual. A lot of their time keeping is done manually. So we want to get them into ulti Pro. So right now we're starting off with a non sworn, and one of our goals for next year is to also do the same with the uniform. So the next slide goes into our priorities for fiscal year 26 we will make sure that we're maintaining a structurally balanced budget. We will continue to utilize the retiree Protection Fund for our retirees. The Office of assessor is implementing changes to their valuation model. You'll hear later from Mr. Horn. Treasury is making payment process improvements. Mr. Patel can go into more detail later, as it relates to our audit findings, we're continuing to reduce our audit findings every year. We will also be providing support to city council as you all make a determination as to how you want to spend the funds that are in the new ARPA appropriation. So as you know, we started off with the $9.5 million we hope to have another $5 million identified by the end of this week. So we'd like to send you all next week the list of potential projects where you all might want to add additional ARPA funding. We I think I already mentioned the DPD smart Next slide. So if you look at our general fund budget, you'll see that it's actually up 4.3% year over year, and this includes the 2% general wage increase, which is also the cost of living allowance, which is throughout the city budget. On the next page, you will see our positions. We are requesting a net increase five positions. The majority of those positions are in the Controllers Office and in Treasury for the Controllers Office. Those positions are tied directly to the OT pro implementation for DPD and for Treasury, we have been doing some restructuring in Treasury, so these positions are there to kind of help us with the backlog that we've had in the past as it relates to refunds.

    On the next slide.

    So our positions from 2020, through 2026, are projected to decline by 20% where our budget is only growing 11% over that same period. So and I mentioned briefly the audit trend, so I will turn it over to John naglett to go into more detail on slide nine and the audit trends.

    Thank you. Tanya. Good afternoon. Council. My name is John naglett. I'm Chief Deputy CFO finance director and controller, and so one of my key responsibilities is getting the city's external audit done on time. I think Council will recall that every year the auditors do two presentations to the budget finance, not a committee. Before the year starts, they come in and make a presentation to the budget Finance and Audit Committee on what their intended scope is of their audit, ask if there's anything that council in particular wants to have them look into. And then at the end of the audit, they meet with the BFA committee again to review the number of audit findings we have. I was reflecting on the fact that I've been a CPA for 45 years, and I started out doing audits, you know, for Price Waterhouse here in Detroit, and 45 years ago, the auditors would come in and we'd fix everything, and there was no report to those charged with governance on what we might have found. You know, it was a friendly relationship with the client. Auditing standards have changed, and auditors now are required to communicate to those charged with governance what findings they find. So if they come in and have to make even one journal entry to fix something, they're required to report that. So one of the key things that gets reported out is the number of audit findings, as Tonya indicated earlier, the ocfo has produced the acfr on time for the last seven years. The five years prior to that, we were not, those were the bankruptcy years and had all kinds of complications. And also reflecting on the fact that council would typically ask us during that time why consultants were running the city and not not members of the of this, of the city itself. And so, you know, I think you've seen with our CFO now we're self performing this work. And so again, you know, very proud of the fact that for seven years in a row, we've got it done on time. And the top panel in this chart shows how we've reduced the number of audit findings over time. One of the processes that Tanya described that we work on is called afcap, or audit finding corrective action plan. So at the end of the audit, we certainly report to the BFA committee on what findings the auditors found and what we plan to do about it. But we don't stop there. We actually then get together with our CFO divisions and work on improving the processes so that we don't repeat findings. So we were down to one finding last year. So we've we've made tremendous progress. The bottom panel shows a second audit that I don't think is common knowledge that governments are required to do. Federal law says that any entity that gets more than $750,000 in federal awards must get what's called a single audit. It's called that because the auditors come in and they audit all of your federal programs, regardless of what federal agency granted those funds. And then at the end that audit is uploaded. The single audit is uploaded to something called the Federal Audit clearing house, and those federal agencies all look at the audits. They're allowed to come in and do their own audit if they choose. You know, everyone will recall that HRD has had cud come in separately and do federal audits as well. So it doesn't preclude a Federal Audit Agency for coming in and doing their own work, but they tend to rely on the single audit. So this is also a very important deliverable, especially as I know Council knows, the significant amount of federal awards that we've enjoyed has really helped us do a lot here in the city, and we've become very good stewards of meeting, making sure that we comply with all the grant conditions you you see that, you know, up to and including our CFO ARPA funds were viewed as very precious and high risk dollars, and so we put a number of control systems in place to make sure that we weren't going to violate those federal federal rules. So afcap process is extended to single audit as well. And so we did have findings. We had five findings in 24 but again, the chart will indicate that we've made substantial progress in decreasing those findings, and our Grants Management Group has done a phenomenal job at complying with a very complex set of regulations over a number of different federal agencies. So with that tiny I'll turn it back to you.

    And only thing I wanted to add that there were zero ARPA findings, so we're also very proud of that as well.

    Next, Nikhil is going to

    go through slides nine, slide nine, and answer any other questions you may have about some of the other accomplishments we've had.

    Good afternoon through the Chair. My name is Nikhil Patel, Deputy CFO treasurer. So on this slide is a summary of a few of the operational workflows we have within the Treasury Department. The top left is a summary of our collections rates over time for current year property taxes. So you'll see started in fiscal year 2015, at 74% and have seen a 10 percentage point increase since that time. While I am moderately happy with the 85% that we're receiving, we feel good about the fact that it's resilient. And as Miss Stoudemire mentioned, we are putting in place payment platform improvements to accelerate the growth of that current year, property tax collection, doing things to make it more efficient, getting Bill adjustments more transparently out to customers faster and collect sooner in the current year, the plan ahead program, as a reminder, this is the program, though, that allows primarily residents to pay ahead of their property tax bill coming out July 1, so individuals can put payment into their plan ahead account, and then when the bill comes due, July one, we within the Treasury Department will take those funds and apply it towards their property tax bills. You've seen a growth since the program was initiated, growing up to 20 in about 10,000 parcels in 2022 jumped up to 12,000 the following year and then back down to 10. The main delta between the reason behind why that decrease is twofold. One, we did a little bit of cleanup on past parcels that were simply inactive, and we also made a focus effort to make this program available primarily for residents. There were parcels there for commercial entities that we wanted to take out for business reasons. There's not necessarily a need for those bigger payers to pay early versus focusing the effort on residents. Lastly, on the right hand side of the page, you see a breakdown of clearances. So within treasury, one of our functions and responsibilities is to provide Treasury clearances, ensuring that individuals who are doing business in the city or contracting with the city have a clearance on any accounts receivable items, so basically, things that they may owe or liabilities to the city, and that they are current on their income tax filings and payments. And so the purple line you see here is the 2024 values, and clearly you see a growth in the number of clearances. So the team is processing more clearances. That's been driven by a few factors. One, increasing business activity, driving the need for more entities to be cleared. And more recently, we've had an uptick in individual clearances, led by growth in clearances for parking valets, individuals who are working in certain entertainment businesses where DPD requires them to have a clearance to provide better public safety, and so they go through a clearance process. So we've seen an uptick in the individual clearances. And so what we expect this this to reach a steady state over the next 12 to 14 months. So all in all, you know, the Treasury functions are improving on an annual basis, and I think our team is doing a good job towards those ends. I'll turn it over to Mr. Horn to discuss the assessor's office.

    Good afternoon, members of council, Alvin horn, Deputy CFO and assessor, what you see before you is a representation of the site visits that the assessor's office conducted in 2024 this is a direct result of the council ordinance, which requires the assessor's office to field review 20% of all homes in the city of Detroit. It's a breakdown of the seven districts. It breaks it down between whether our office conducted an actual site visit, as opposed to a desktop review, as you can see in the court off to the right, it shows a breakdown by districts, districts one, two and three. Half of the site visits were done by a person. We sent to AC. We sent a person to the property. And we did that because in Detroit, the average age of a home was about 93 years old. We were looking for conditions, looking for a reason to determine if the condition needed to be changed by changing condition, it would better reflect the assessed value of the property. The condition the property is a direct consequence of depreciation of the effective age, all of which goes into the calculation of the assessed value. So we did significant site visits last year. We actually did more than 20% of the city districts, one, two and three were, as most of you know, they were ones most affected by the recession. There were significant changes in home ownership and in the increases of land bank properties over there. But in the last several years, there's also been significant development and increases in in value, in the property values. So it was necessary to send staff to those districts to understand what was happening in the neighborhoods. District Six is among the most stable in the city, so most of those reviews were done by desktops. District five, that's where most of the condos were. So that was basically new construction. It was easier to look at those through a desktop review. Next year, this will probably reverse itself. We've already planned to spend most of our time in District Six and seven next year. So we'll you'll see far more site visits, people actually on the ground trying to determine what's going on. As I said, the purpose of this is to determine the condition of the property. The average age of a single family home in Detroit is 93 years old. It is, by definition, in fair or average condition. The difference can be significant when it comes to assess value of the property. So it's an attempt to align the actual value of the property against what the selling price is. Today, we're living in a time where everything's selling for six figures. That's not necessarily what's worth. And our job is to determine what the property is actually worth, not necessarily what sales for. So that is one of the primary tools that we use to determine the conditions, not just the property, but the neighborhood as well. So that is basically what I want to talk about. This page. Page 11, it is where we spend most of our time doing site visits. Page 12, the next slide, it talks a little bit about the exemption process in the assessor's office. As you know, the the assessor's office is required by both state statute and see ordinance to provide whatever technical and material support that the board review needs. The board review is, is required under state law, responsible for for making exemptions part of the exemptions to hope application, but the assessor's office is required to provide the material support that does that enables that declarable support. All of that support is through the assessor's office. Rather, it's processing help applications that come through the portals or hope application paper, applications that walk through the door. All that's processed by the assessor's office. Today, the board reviews in session, handling the marsh board review. Most all, all of the support staff is from assessors that's helping them support to do that. So this just is a breakdown of the applications, both the hope applications and the appeals that have been heard over the last several years. As you can see, the hope applications have increased substantially. And I would point out that this is just new applications each year. There are about 6200 rollovers every year, people who have been approved in prior years for Hope application, and they do not need to reapply. So the actual number of Hope applications approved each year is substantially higher than these numbers, these as I point I just want to emphasize our new applications each year. The other numbers closer to the center of the page are a number of appeals heard at both the assessors of March board review. They have they were consistent through 24 currently we have seen a significant increase for 2025 it will be several weeks before we understand why we seen such an increase. Once it is, we'll report it back to this honorable body. So thank you.

    I believe the next presentation is with contracting procurement.

    Good afternoon through the Chair. My name is Sandra Stahl, chief procurement officer in FY 24 we processed over 6000 requisitions, and we are on track to go a little higher this fiscal year, with almost 5000 requisitions processed. So far last year, we awarded $1.54 billion in contracts with 39% to Detroit based businesses and 24% to Detroit headquarter businesses. We're holding that with 39% awarded to Detroit based businesses, and a little bit higher, with 26% awarded to Detroit headquarter businesses. This year, we also were part of the team that helped ensure that 100% of our ARPA funds were fully obligated by the December 2024 deadline. And then again, a huge thanks to city council in your support for passing the procurement ordinance with unanimous support that has already seen the streamlining of our smallest purchases and will incentivize competition and local participation. Next slide, this is a little bit more breakdown in the dollars that have been awarded to businesses of our different certifications, and this is a picture of our Meet the buyer event OCP facilitated 19 outreaches in calendar year 2024, with over 600 in attendance, which led to 384 new suppliers registered and 293 awards to new suppliers. Some of our special outreaches included outreaches for the recreation department and a lot of those new suppliers to awarded were driven by very small recreation program providers providing all kinds of programming throughout our recreation centers. We also reorganized our teams to provide more close communication and collaboration with the Office of Financial departmental services and the department heads, and that has led to some great achievements, such as fewer contract lapses, contracts being rebid earlier, and one that I'm particularly proud of is the how hard our team worked with HRD to ensure that the CDBG public service agreements and homeless service agreements began on time. I think even before I started the city, I often heard about how very delayed those agreements tended to be. And so that was when I came to OCP, one of the nuts I really want to crack, and I feel very proud of that accomplishment.

    Happy to answer any questions. Okay,

    all right, thank you all for the presentation, and thank you all for the work that you all do. And just the clerk will know everyone is present. I think some members came in after the roll call, and we will start with council member Young.

    Thank you, Madam President.

    Hello, all. I can see everybody here. Appreciate you guys. Um, I just wanted to ask you really quickly, and

    I wanted you to really kind of

    spare no detail, but this is in a hypothetical sense. But I just wanted to ask you, do you know what our revenues would be if we were to actually implement the land value tax,

    and how that would compare to where we are now?

    And spare no detail. I mean, really, you know, go ballistic here. It's selling. Why we should have this.

    Thank you for that question.

    It's a little it may be a little out of date, but the structure of the land bank, that proposal, which we have made to in terms of legislation would have been initially to as a revenue neutral than the ad form tax system and our specific tax system of the plant value tax, that the land value tax mills would be set an amount to receive in that year, the same amount we would have received if all property was taxed at the same rate. What really changed is really how it progressed on future years, because that rate would not increase on the on the land, but so we would be foregoing some increases you would see from new improvements. What we thought would be making up that, and probably exceeding that, is the fact that the incentive provided by reducing the tax and capital, which is the capital improvements, would incentivize more more activity in the city, and thereby incentive, I think, more income tax so it was really a trade for lower property tax revenues in the future or higher income tax revenues.

    Right? And we have that analysis of how much more income could we're because we're not just talking about lower, we're not just talking about from from a residential side of it, you know, but you're also talking about from a business side of it's a little bit less. I think the residential was 17% but their business about 5% but, but, or do, do you have, like a number at all? Or is that something? It's been sometimes, just like looked at the numbers, you might want to send me something later on, I would just ask it out of curiosity, because I think that's a great thing, and we never really got to explore what that would mean in terms of revenues, how it means businesses and economic climate. My second question I wanted to ask you was so from 2017 to 2023 we've had about 171 economic projects. Okay? And it's about 842 million to 842.7 $843 million in tax. It's, or excuse,

    okay, um,

    it's created about, it's about $7.5 billion in investments. It's 24,000 permanent jobs, about 35,000 construction jobs, um, and those are good numbers, but it's also $142,000

    no 100, excuse me, $145,000

    per job. Okay, and it's about,

    it's about $31 per person.

    Um, is, do we know, or is there any sort of plans that we have available to be able to lower that at all to what the region, or the region of this, the Midwest region, is, is about $10 maybe a little bit more per person.

    Thank you for the question through the chair.

    I understand all the numbers, right. Again, this is something that jet team may be better than I just discussed, but I think he has to put in the context of this. You initially said this was a discount being offered for the development of the property, right? You can look at this as opportunity loss or opportunity gained. This is a really, I argue, but for test if, but for the fact that we provide the discount for the development of the property, there would be no revenues lost, right? So that, I'm trying to understand this as in terms of as compared to the rest of the area, two things could be happening. One is, first of all, our taxes, our tax rates are higher, so the loss, loss or gain for gone roof is is greater, and our development has been more significant, so we've had more opportunities, and development has progressed faster than our surrounding areas. So both those reasons, I think it, have made that number seem larger. But again, this is a number of that we would not have be thinking of, but for the fact that we got the jobs, which are really coming, in some ways, at no cost to the city.

    No, listen, I'm not trying to say that that's not a good thing. I'm a supportive I'm not trying to get you to the numbers. I was trying to say, you know, that's why I brought the land value tax first, because that was what we could do to lower the taxes, then to be at a lower per person. But in spite of us not having that, obviously, is there any other proposals that you would think that we can look for towards doing that that would be viable, or was that really the only viable tax change that we can make in order to be more in line with the rest of the region? Because I'm not saying, I'm not saying it's not necessary. But you know, some people would look at 145 if you didn't look at anything else, you just looked at the citizens research, council analysis, where I get this from, you saw $145,000 per job. Some would say that's expensive. It's always wondered, Is there anything else that we could do other than what you propose with the well, not the land, the split, the land value, touch with the split rate, tax, to be able to achieve that in or is that the only proposal that we

    have? I think through the chair again, we have proposed as part of the budget of a tax rate cut to and this has been really driven property tax cuts, driven largely through the fact that values in the city have increased dramatically. As far as our tax bases. It has been able to increase. So I think you know, careful management of the city so that the expenses, sort of allowing property taxes not to increase and decrease, and growing our tax base so the all that decreases is another ongoing opportunity.

    And then my final question, I just want to ask you, do we know what the gross domestic products for the city Detroit is versus our debt, and how much of our debt makes up of that?

    Yeah, I not sure. I've ever seen a gross domestic product as percentage of debt number, but we can check and send that

    tape. We get that from I appreciate that. Um, that's it, Madam President, I would like to make a motion to put the land value tax or split rate tax in closing resolution. Okay,

    any objections

    object. It's coming. I knew it was coming. Water.

    This a joke, right? Okay, okay,

    Hearing no objections, we will add that to our Executive Session for closing resolution. All

    right, dumb, remember, yes, yeah, I'm done. Thank you. Thank you everyone. I'm done. Okay, um, wanted

    you all to talk a little bit about how we are looking to diversify our revenue streams in Detroit, and so I know we rely heavily on our four major ones, which is income tax, property taxes, utility users, tax and casino wagering. But in light of what's happening at the federal level and lack of funding, just haven't really heard much about your position, Administration's position, and attempt to go after additional revenue streams for Detroit to fund various initiatives, infrastructure, transit, etc. I know that a local sales option tax has been talked about, whether it be entertainment or other, and I oftentimes hear some pushback from the administration. And I don't think it's just one tool. I think we're going to use various methods to address it. But I'm curious, where is your thought, your position on what we need to do to create additional streams for Detroit? I mean, at some point we have to diversify our revenue. It can't just be on the major for that I listed federal grants, state grants and revenue sharing, we have to figure out how we can bring more revenue into Detroit. And of course, we want more population here which will contribute to our tax base and our income, but I still think we're lacking another major stream of income that can fund these numerous infrastructure concerns we have in Detroit transit and other neighborhood revitalization and more. So just wanted to hear more about what you all are doing with that, and have you all taken a position on what that should be? I hear a lot of pushback on what we shouldn't do, but I haven't really heard more about what is the solution, or what you all believe the solution is. And

    I'll leave with this.

    I'm sure it's easy for me to talk, since I'm walking on the door, what I think you should do. So my principal thought, Look what I think about this. And consultant about in the past has been to first look for a tax system that provides some equity to taxpayers by income. So it's not a progressive system to provide taxes. Look for taxes that could export some of the tax base away from the residences of Detroit and and then to look for things which are ranked more easily feasible than not. And the last respect, most with respect, most major cities in the country have some sort of sales excised or excise tax. Now, the Constitution limits the ability to legislature to give communities of power to levy sales taxes intangible personal property, so purchases of clothing or whatever, cars, whatever, not we can't do without constitutional amendment, but we think we probably can do with legislative authorization and voter approval, would be taxes on an excise tax on more called services or entertainment activities, restaurant bills. I think that is possible and possible, and it may be better feasible than a certain area of commercial activity, a high commercial activity, destroying export residents, residents who are don't live in the city, so that we can export some of the tax base. I know the Captial the treasurer is is in the process of doing a study, just at least identifying what potential revenue may be gained our sales tax and smaller sales tax. The data is hard to come by state level. They contain all the data. And most larger businesses report their taxes, sales taxes, for example, on a single source basis. So if they have a headquarters in in Novi, they report for the whole state out of Novi. So you don't know how much is coming from Detroit versus someplace else, but you can use some mathematical models that could make an estimate of this. And I think that's what he'll try to do, and try to try to cut that in a way that looks at if the Constitution was changed, here's how good you could be if the Constitution was not changed, and then legislature just looked to do some type of excise tax to say, here's how much it could be on certain things. I think that's the most feasible thing to do, just because of the under the constitutional structure, taxes in the state, and you know, that's been the typical thing most communities in the large cities in the country, too. Okay,

    all right, thank you. That's good to hear. I've never really heard that position stated, so I would love to actually get that in writing from you, Mr. Rising, the actual that position and that route that you just laid out, and so I can put the question in writing, just to make sure we actually get that that in writing. And if we can add this to the executive session, just so I can track it to make sure I get it before the end of our budget season. And I see Mr. Corley, you had your hand raised, amen,

    President, so Mr. Rising, when do you think your study would be completed? Would be before? You know, in so many new year, July, 1, when is your timetable? Yeah,

    early, not before I leave,

    before I leave, like before Tuesday? Oh, wow.

    Unlikely. Unlikely before Tuesday. Okay, I thought she said, like, okay, unlikely before Tuesday, but you don't have a timeline as to when it will or I see Mr. Patel.

    I'll just lean in over here if the question was related to the local option sales tax analysis. If that was the question we're targeting towards the end of April, we have a team member who's working on it. Once we get through these budget questions and go through that whole analysis, well, that's our goal, so, but definitely before the end of the fiscal year, for sure, and I know there'll be some iterations based on follow up questions.

    Okay, alright. Thank you so much. Was that it? Mister Corley,

    yes. Mister Whitaker, probably excise tax for entertainment that

    you just mentioned. Would it cover that as well? The excise tax for entertainment,

    but yes, yes, it will cover that. Well, we're going to try. We can't

    hear you. Your mic isn't on. Yep, just give me one. I was getting ready to go to that. Yep, we're right

    ahead. Yes, yes, it will cover that. We are also going to look at what it would mean for that tax, a sales tax within the city limits, within the central business district, what kind of exportability effects it would have a people may be purchasing elsewhere based on what academic research indicates on lost revenue from that. And then we'll also go through what this current state statute applies a sales tax to, and then basically say, Well, if you added it just to this piece, what the impact would be. If you took this out, what the impact would be. So just to sort of give us a high level range of the potential impact and downside risk of also doing that. Okay,

    madam president, well, I know the focus is on Detroit and and and its metro area, but we also, because you're going to have to sell it to exactly the legislature. So will it cover the state as well or not? So

    the focus of this study is focused on Detroit, and it wouldn't even the focus wasn't going to be outside of Detroit. One of the key limitations is sales data at that granular level, city even county level, that even the state doesn't have. So we have to triangulate it based on other proxies, but absolutely it's important to recognize none of this is possible without change in state statute. Yeah,

    and I think that's very clear every time it comes up. I think we always mention that it takes two steps to do it, but I don't think that that should stop us from starting to have these conversations, because it's a real thing that I think we've been talking about and we need to explore, so we're not going to let the challenge ahead of us stop us from the work that needs to be done. I think it was the same thing. I think that was mentioned with the land value tax. They would have took it, taken two steps. I know it didn't pass, but at least the effort started. And I think that's what has to happen with diversifying our incomes, our revenue streams, I should say in Detroit, because I do think, with in light of all that's happening in the growth in Detroit, we are not benefiting from the economic activity that is taking place in our city. And so thank you for mentioning that. That's very important. And also on that that note, as relates to income taxes, wondering, I met with a few people who talked about how working from home, and the income tax that we're missing from individuals that are working from home, and there may be some possibility to change, and I know this is an appeal battle as well, but change state law that would allow, for example, if a business is headquartered or located here, even though their employees are working from home, we can still get the income tax. I'm not sure if that has been a conversation, or if there's any revenue that we're missing there, or is it even worth trying to discuss

    that actually is a topic which I explored during the pandemic. There was some action which cities in Ohio were authorized to do this, and then they were sued. And so I'm not quite sure the outcome of that lawsuit, but there were lawyers that I had been consulting with who believed there was some legal ability to do this. It's practically really hard, because Michigan allows certain cities to have income taxes, and working from home may be taxable one city in Pontiac, for example. Well, the person is working for a company. It was actually in Detroit, too, and that company may have office locations in multiple cities. And so trying to figure out exactly what, how do you apportion income in that fashion when someone's working is a challenge. It's and this goes to your point on dealing with the legislature and any of these things, proposals which negatively affect residents of areas which do not have an income tax become a harder appeal battle in Lansing than A tax which is specifically related to an individual municipality,

    okay, okay,

    just wanted to talk about it came up in a couple of conversations that I've been having, and just wanted to raise that. And then lastly, my last question is the amount of interest that we've received on ARPA funding, and what restrictions if any, do we have in respect to expending those funds? Yes, Madam

    Chair, this is good. Questions come up quite a bit lately. We've answered in writing, I think, to council member Tate's recently. So the interest earnings on ARPA proceeds, Grant proceeds that we received are allowed by state or by federal law and rules to be retained to the general fund. And they have been retained to the general fund every year since our started. And they're going down as our proceeds go down. So they in accruing to the general fund. Like any other revenue, they become fun part of our our year end, unrestricted unassigned fund balance. That unrestricted unassigned fund balance, just like for 26 we have it in our budget proposal to be spent all but about $12 million of as part of the 26 budget. So it's not identifiable. It's not in a separate account. It's part of the general fund, and it's a very small portion of all the revenues raised during the year. You know, you know, if it was $50 million on 1,000,000,005 revenues, it's about 3% of the revenues at that level. So you could look at it as if I had $100 million surplus at the end of the year. I'm saying surplus, 3% of that could be related to proportionately related to the ARPA interest. So we don't treat it separately. There's no restrictions on what we can have we can spend it for under other than general state law. Restrictions we what the city can spend money on. There's no limitation on the date we had to spend it. You don't even track it as ARPA money once it gets in the general

    fund. And I'm sorry I didn't miss, what was the amount again? Oh, I'm kind of made that up, but

    it's through the chair. It's 52 point 3 million total, total for the years from fiscal year 22 to what we expect through it

    would have been good to track that to ensure that it was being spent really consistent with the intent of the ARPA funding. And so now it sounds like it just went back to the general fund and kind of went throughout various

    it went whatever council wanted to put budget in. It was part of our budget proposal. And as the budget proposal increased with Council action, it was part of that too. I just is is English indistinguishable to any other general fund revenue source.

    Okay, definitely have a follow up. I don't want to hold too long, but on that as well, some questions and concerns we have with that as well. And then just want to add to the closing to the executive session last year, we did put money into the budget for not proportional funding, but for participatory budgeting. And that money was allocated, I thought, for participatory budget for each district to have a certain amount of money for community to be a part of the budgeting process. And I'm not sure what happened. And so if we can add that back to Executive Session, Mr. Corley, there's a motion. So moved. President, okay, Hearing no objections that will be added. Yes. Member, young, yeah.

    Man, President, you good thing. Man, President, I wanted to ask you this, you know, just a suggestion, because you were talking about the the local sales tax option, and, from my understanding, the city, the article nine, 631, the Constitution bars localities from being able to issue it. The article seven, section two of the Constitution, allows the counties to be able to levy that, to levy local sales, says, I'll just all this has to go to the people. I just want to know. It seems like there's some murkiness there. To me, in the law. I didn't know if there want to be potential lawsuits files in order to clear up that murkiness, because that's how it was explained to me, is that the counties can can levy local sales tax, and they go through a different process, where, if the cities were to be able to do this, we have to not only amend the Constitution, we had to get a statewide vote, whereas the counties Get all the gate would have to get Cal vote within that county, because the way they're set up in the Constitution alone, I know it's kind of technical

    to the chair. This is a really interesting question, only because I was part of litigation one time making that same argument. I lost county charter county constitutional language has some cause that it seems to imply that the court did not feel that's true, cities and counties are treated exactly the same under Constitution Article Nine, six, Section 31 requires a vote of any tax increase and that supplies to counties or cities whatever the powers of Article Seven for charter counties and cities, language is a little bit different, which led me to an argument, but,

    but that's what? But that's that's why I thought it might be. I didn't know that the President was interested in going to the law department and appropriating some money to be able to file a suit or or asking the the attorney general for an opinion. But I I just feel that that that that kind of explains why counties are able to do that, and why they could just go to the state vote, whereas, compared to cities, if they did that, not only would they have to go through the legislative process, they would actually have to have a statewide vote. I don't think it's true. You're saying that. Yeah, that's why I was asking to offer you don't have to. It's just something I'll think on top of my head, if you want to do that, because to do that, because it seems that there's some ambiguity there in terms of how you can do that, the powers that exist, but just the food for thought, I'm done. Thank you.

    And then on that point, and I want to

    keep going, Yeah, on that point, because I know you, and I know you and I are working on the entertainment and amusement tax, because I remember having a resolution to that point in 2023 2024 on, just looking into and we're working with Senator Mallory McMorrow and Sarah Anthony in Lansing. And I know Sylvia Santana had two bills that failed, so we're working with her as well. But my question is, I'm looking at Whitmer signs bill allowing county and city to raise lodging taxes for large entertainment venues in Kent County and Grand Rapids, they went from five to 8% and it says in this article, she signed the bill. It's in effect January 120, 25 and it says the city of Grand Rapids to potentially generate millions of dollars in public funding for major economic development projects including the proposed amphitheater and soccer stadium. So we should do the same. Their their hotel taxes. Now it was raised by 3% it was 5% and now it's 8% and so that's about $303.62 per night, in addition to what they were already paying, like an average of $120 per night. So I'm hoping that we, together on this council, can should do no less. It passed in Grand Rapids in Kent County, and I know we can do the same thing here in Detroit and Wayne County. So do you know anything about those taxes or that that tax increase in Kent County, through the chair to Mr. Rising your chair

    member, Callaway, I am familiar with the with the legislation, and that there's numerous statutes involving taxation of accommodations. There's one related into Wayne County also was separate, so the Kent County, one that had been used in the tax imposed by Wayne County for, I'm going to get this wrong, either it was for COVID expansion or for Tiger Stadium, Comerica Park. I can't remember which one we used it for, but So Wayne County does levy this tax. There's also things which aren't technically taxes, but sure look like them, which are hotel, motel, convention, Bureau, debt assessments, which they are allowed through a process to impose upon themselves. But for the, for the for the hotel guests, it feels the same. It still comes as a percentage of tax bill, of the bill, but that that revenues is dedicated solely for the convention Bureau, but there are monies in Wayne County imposed for economic development purposes. Okay,

    okay. Thank you. Thank you Madam

    Chair. Thank you council member, Santiago Ramiro,

    thank you, Madam President. Through you to our O CFO office. Good afternoon. Thank you all so much for the work that you do. And would like to first touch on the Office of the assessor. We know there's a lot of work that is done, and we have heard in the past of limited capacity. So just wondering, are you fully staffed now? Do you need any FTEs to make sure that we are addressing the issues

    through the Chair? Thank you for the question. Ma'am. For the last two years, the office the assessor, has seen the increases in overall compliment thanks to the CFO and members of council, we're working on the evaluation model. We're the second year into what's called a proof of concept in which we move away from foot soldiers, people going up and down the streets rely more on statistical analysis and pulling information from our sister agencies, BC, DPW, Detroit water and sewage department, is to create a more effective and reflective picture of what's actually going on the city. And as we go through this process, we're still trying to find that the balancing act between the number of people we actually need, but more importantly, the type of employees we need. One thing we did in this budget year is we gave up some positions to get other positions. We have fewer appraisers, but we have more analysts. And we're doing that so that we can move toward that, an analytical model. So I'm not trying to avoid the question. I don't know the answer yet. As we go through this new process and as we try to determine the proper balance of statisticians and analysts, first clerks and appraisers, I think it would be like any director in the city. I would love to have as many people as possible. But from a practical standpoint, what the what the number is, is still, I think, up in the air. I think we're moving toward it. I think the number, based on this year's budget, if it's adopted by this honorable by is 75 and that's actually a number. A conversation I have with the chief deputy CFO a couple years ago, she asked the exact question, what is the right number? And I told her, then somewhere around 73 so we're where I think we need to be, but the truth is, the truth the mayor will be. Once we've gone through this process, we'll have a far better idea of what that number needs to look like. So thank you for the question now, thank

    you. I appreciate those insights, and we can stay in communication to see how things are going and what need we might need in the future, for support in conversation around property values. And last night that the mayor State of the City address talking about how we are raising property values, the excitements, the the the wealth that we're generating for Detroiters, this is more of of a seed to be planted, a conversation that we can have as we continue to grow as a city, but I have concerns. Tracy Condon is one of the neighborhoods that was highlighted as as raised in property taxes. I grew up in that neighborhood. I grew up in as a kid during the bankruptcy, homes on fire every other day as the city was burning, as people many rumors where people would burn their homes, get their insurance and leave the city. Many of us stuck through and and I've asked many neighbors when I was elected to stay, to stick around. And we are seeing property values go up, and we are seeing sales of homes, but I'm seeing now some consequences of what's going on in my neighborhood, the house that I grew up in, I believe my mom bought it for about 40,000 sold it for 150 amazing. But then she left, and that is because of how high taxes are here still in the city, and my concern is that we're building beautiful sand castles that are going to just wash away if people can't afford to pay their taxes. I myself bought a house a year later, taxing out on caps. Had to run for the Naz because I couldn't afford it, and I'm still getting emails of people who are moving in because they're excited about the city of Detroit, but the taxes are still so high for property owners. I don't know the answer to this question, but have we thought about how we can support residents who are moving into the city, who want to be here, but then quickly realize that they can't afford it? What are we doing to make sure that we can continue to invest in our neighborhoods and our homes property values, but be able to sustain and to be able to stay we having any of these conversations, if not, would love to begin to have these conversations with our residents and with the CFOs office with the state. What do we have to do? Because this, to me, right now, seems unsustainable, and it's not necessarily even from my personal experience in benefiting Detroiters who are leaving and the new Detroiters who are coming in are quickly turning around as well.

    Chair, I I think you know that we share your concern, and the mayor has had exactly these discussions, and you had shared yours the exact same concerns, and when he came up with the land value tax idea, it may not have been the perfect solution. It clearly wasn't, but some combination of lowering the tax on investment in your property and taxing higher amounts for vacant and and unused land, I think it's part of the answer. It may be that another tax source to lower the property taxes on land would be important also. And if I could just mention council member Callaway has asked an interesting question about what Windsor is doing with vacant home taxes and and my response will be that this is another form of a land value tax in the way. This is a way to, you know, lower the taxes on productive use of property and increase the taxes on non productive use of property, because we don't want speculation. We don't want we want our values. Our homes come from because we have a housing stock was affordable for people, and people moving into the city for the suburbs, because they get a better deal in Detroit than they do in Ferndale or Oak Park or something. And that's kind of my tax policy speech for the day. So how to how do we design tax system that rewards entry to the city, not discourages entry into the city, and

    through the chair, grateful that council president asked around revenue sources. This is a question that I've asked as well, because we need to lower taxes for Detroiters and increase our tax revenue so that we're able to continue to provide services. So just to note, the state of Michigan, we have a flat tax. The riches amongst us are not paying their first share of taxes. This is something that the state should be pushing for so that we can get more revenue, so that we're able to provide more services, so that it's worth staying in the city, because you have excellent services, and you're living in a beautiful city as well. So these, to me, seem to be top priorities for the city. We are in a really beautiful place right now where we are investing in our downtown, investing in our neighborhoods, bettering our services, but I don't want these to be sand castles. I need this to be sustained. So appreciate that we're all thinking about this and we will continue to try to find these solutions regarding property taxes and the program, the plan ahead program, briefly had no idea it existed. Can we please promote it more? And is there possible to get this is just a might be a dumb question. Can you get savings if you sign up for this plan ahead program, many other programs, if you sign up for automatic payment or something, you'll get some kind of discounts. Is it possible for Detroiters to learn more about this option and to maybe get a discount on their taxes? Because we know that we're going to ensure payments of taxes sure through the chair.

    I'll take the

    the first part I'll address is around the program itself and marketing it absolutely we can do even more. We will. What we do currently is we go out to the neighborhoods when we have sessions, for example, at the Northwest Activity Center, our DTSC team will be out there educating individuals of the program. We can additionally do more social media pushes and communication within our property tax delivery, when we deliver the bills, we can consider communication around that program too. I will also say our external partners within the city who are working on providing improved access to affordable housing and reducing the tax burden, they actively know about the program as well, and so they're promoting it too. But we can definitely double down on those efforts in terms of savings without any certain change to statute that wouldn't be possible. It's a lien against the property and their tax bill. One thing I'll note is when this program was created, I think it was in the middle midst of the pandemic era, the team here recognized the need, and I'm sure from council as well, of providing citizens an option. So our payment platform provider div dad, actually structured something that's very customized for the city of Detroit. It's operationally it's a burden to manage. And so what we'd like to do is, as we explore a new payment platform, improve the efficiency of that program. And another restriction is it's a the bill that people are paying towards on their plan had program is towards an estimated bill. We can't have a true final bill until July one, when the taxes Levy. Thank

    you through the Chair. Thank you. That's helpful to understand better what is possible. I again, there's so much preemption through the states that needs to be addressed to be able to give us more power, and we need to look how we can lower our taxes for residents so grateful that we're on the same page here and trying to figure out those solutions, I would like to ask for closing for Executive Session council president. Thank you for moving potentially budgeting over. This is something that you and I both moved over last year, we are working with the coalition right now of residents that are pushing for this work and looking to work with us. Once this is passed, I'm not sure if you put any monies into the program. If not, I would like to for for the closing or for the Executive Session. Move $2 million for a pilot of three budgeting, that's my motion, okay? And you say for the closing resolution, this is for Executive Session, 2 million for the pilots of the story budgeting program. And

    if we can, if we can join each other on that one, okay, so if you can note Mr. Corley or the participatory budget that I added, it can just be jointly for $2 million and is there any objections to that hearing? None that action will be taken. Council member, thank you,

    Madam President, those are all of my questions. Feel like we should get coffee or something, to share the stories and to hear more, to learn more, because I'm very, very interested in getting down to the solutions and to our state representatives. There's so much work to do with the state right now, so just really asking that, that we get that work done at the state level. Thank you, Madam President,

    okay, thank you so much. And member Johnson, thank Thank

    you,

    Madam President.

    I first want to start off addressing the local option sales tax study that last year I had a conversation with Mr. J rising about in collaboration with Brad dick and Steve Watson, and the discussion was relative to moving the study forward, which did not happen, but I'm glad Mr. Patel has been in communication with our office around the information that you're pulling together. The local option sales tax study came out of the equitable development task force that member Santiago Romero and I co chair. So I'm looking forward to the information that you provide, but also looking forward to a greater study that we've been in communication with LPD about as it relates to understanding this, the only ask understanding how much revenue could be generated if we did a thing. We know there are multiple steps to addressing it, to implementing it, but the question is, just before us, how much revenue could we generate? Because we can address a variety of things within city services, property taxes, what have you, long term, if we get to the point where the state allows it, the residents support it, to actually implement. My team has worked on this for some time and has done a lot of work around it, so I feel some kind of way about it being part of this discussion and omitting the fact that we've been doing this work. But just wanted to say thank you to all of you for now moving it forward so that we can hopefully start to address some of the challenges that we see in our city, and really to help us grow as a city. Because the the ultimate goal is to increase our population that can help to generate additional tax revenue for this city, whether it is property tax revenue, income tax revenue, what have you. So I wanted to just share that. The other thing is, last year, Mr. Rising during our budget hearings, I believe there was a conversation relative to prepaid income tax, income taxes and the system communicating with the treasurers system, because I had a resident who identified that she had prepaid her income taxes, but then she had received a bill and received fees on top of her bill for income taxes that she owed to the city. And it was said that the two systems were not in communication. So I'm wondering if that has been rectified, and I believe it was income tax, income taxes, and not property taxes. And the reason I'm asking the question is just to make sure that the plan ahead program sees and recognizes dollars that are put into the program to address an individual's property tax bill.

    So on the plan ahead piece, absolutely. So plan ahead. Plan ahead is structured for the current year property tax bill. So the city of Detroit property tax team is the team that actually creates the plan ahead parcel. So when you go to div dad, even now, you should be able to go to div dad, and even on your parcel, you'll have the option to pay into plan ahead if you wanted to, and then the team, on a monthly or BI monthly basis, reconciles whatever cash is there. We sweep it into the account to apply toward the property tax bill. So effectively, it is managed by the same team, in conjunction with our banking partners at Chase. So those two shouldn't be in a separate bubble. To address your first point, I don't explicitly know which taxpayer issue related income tax happy to help work on that. I'll make the caveat that even as treasurer as the state administers our income tax, I'm not allowed to go into someone's individual file and look that up, but we can definitely connect the individual to the right entity. My first question that comes to mind is the state's tax system. It would have been part of one system. The city doesn't have a separate system for income tax that's directly administered by the state. So would have be happy to try to dig into what that discrepancy

    was. So I believe that individuals situation has been rectified, but I guess the overall question and concern is just making sure that the systems are communicating so that residents don't receive fines and fees added to their tax bill if the dollars were already there to address it, because if not, then that means someone would have to reach out to one of us and identify that this is an issue, and we'd always have to come to you to address it,

    understood through the chair absolutely hear you. We have improved the processes on the property tax side to ensure we don't have those kind of issues, the team has made some changes to the process where we have more clarity on which parcels are in plan ahead and which need to be applied. And that's part of what Miss Stoudemire alluded to around improving our payment platform. So the payment platform that we're hoping to roll out in July, but then even moving forward, making continuous improvements, providing residents, taxpayers, transparency of what is my business status or my personal status for this payment at the city, where's the history, where's the refund, where is it tracking how quickly I can get it. We want to provide more of that transparency, and we're working on it. And I'll re emphasize an income tax they should be connected, because the city doesn't have a direct link to the state's income tax system, and so there shouldn't be two separate systems. But happy to dive into that further as necessary. Okay,

    thank you. And then my next question is to Mr. Horn, I didn't actually hear a summation of District Four when you identify the districts on the map. So I'm just curious to like I see the percentages here that you have of primarily doing annual desk doing an annual desktop review of properties in District Four, in comparison to the field review. But can you share? Is there anything that you can share for District Four, specifically

    through the Chair? Thank you for the question, ma'am,

    the matter in which we selected which properties would be field review, where person would actually go to the property, as opposed to a desktop review, when staff would review the aerial imagery. It was based on the condition to property and whether there was a number of complaints or requests for appeals in a particular district. The majority of the appeals in the 2024 tax year assessment cycle actually occurred in districts one, two and three. So based on that pattern, and based on some other parameters that we looked at the number of sales, The sharp increase between 2019 and 2024, and those sales values, it was determined that we needed to actually send people, not just to look at the properties themselves, but to look at the neighborhoods, to try to understand what was happening in those particular neighborhoods, District Four, District Six and district two will see a significant increase in actual field visits in this calendar year that's already been projected, in part because we want to make sure that What we believe is happening in District Four is actually happening in District Four. District Four, historically, is the one of the more stable areas of the city, and we want to make sure that that's actually what's happening is actually stable. And we we're just not going on it used to be stable, and we think it's still stable. We want to put up, put boots on the ground to make sure it's still that way.

    Okay, great. Thank you, because I do see the one area where it's saying, it says poor, it's in red, and so for me, I feel like that's a call to action for us to kind of assess that area and understand the conditions of the properties in that

    area. Agree now that is exactly what we're trying to do. Okay? Thank you for the question.

    And lastly, if I may, we were just provided a memo, is there anyone who can share with us the difference between a local option sales tax and an amusement tax or an entertainment tax.

    Good chair, I can give you my interpretation of the local option sales tax are generally referred to as broad base sales tax on all sales of property which would be taxable at the state also like tangible personal property, excluding groceries, excluding drugs, but and including if the statute was written, the same with state statute, including private sales of of automobiles and and also electricity and utility services. So that would be a local option, sales tax, to be able to take the state tax and just increase the rate and say this part of the rate goes to to the community. Excise tax is really the tax on, arguably, technically, the excise of certain value from the property, or more, like a use tax, where I'm taxing the use of the property, like taxing taxing a ticket the use or a or you can call it exercise or hotel rooms exercise taxes or restaurant taxes, exercise taxes or rental car taxes. Any statute which taxes those in their state law. Usually it's called excise tax and outside the constitutional limitations on tax, taxes on potential personal property.

    Thank you. Thank you, Madam President,

    right? Thank you. Member Johnson, member dorja, thank you,

    and good afternoon to you all. Riveting discussion on taxes and the tax class we're having here, right here. So I appreciate that. Mr. Rising first, let me say thank you. I think it is. Well, I'll say, I know it's been an honor to serve and have discussions with you as we chair budget, Finance and Audit. I talk to you and your team frequently, but even offline discussions on direction of the city. And this city has come a long way. From 10 years ago or more, when we were in bankruptcy, have furlough days. Folks weren't getting paid. And I think a lot of times people forget that. People forget here in this city, financially, we were in a very difficult situation, and we have went to the we've gone from the red to the black, triple credit rating upgrades, as you mentioned, and we're on the path to financial stability and continuing that path, but self determination as well. And you've done an amazing job. And I just want to give you your flowers while you're here and ask you that this is not my question accounting, but I'm wondering now you're going to be gone. Who's going to tell me no when I asked for all these great things in the budget?

    Jerry, I hope I've trained people well.

    I'm sure Tonya will have no problem, or whoever. But as we're talking about this discussion with taxes, and I'll leave with this before I get to my question. You know, I often disagree with imposing new taxes for our residents in a situation here in the city where we hear it all the time that either taxes are too high or with tax burden here for residents, oftentimes we talk about new ways to be able to generate revenue, which is good, and I'm definitely in agreement that the city needs that. But I think oftentimes we forget that that tax and those and that liability is going to fall on the actual consumer, which the majority of those residents, they live here. But what I would state is moving forward, if we find a plan that is revenue neutral first, to be able to lower the taxes that already exist and the burden that exists, such as our property taxes, that's amazing when we talk about property taxes here in the in the city of Detroit, it's not just the city of Detroit problems. The state of Michigan problem as well. Our state has become and built to become reliant on property tax revenue here in this state, as opposed to some other states. And so ever since 1994 for those who know our history, we've become more reliant each year on that property tax. And what we've seen is that our base is not growing. We've actually lost population in this state. By the way, our base is not growing, but the values are growing because we still try to get a residents, a great neighborhoods, great parks, right, great commercial corridors. So I think that is going to be the next fight in the next decade or so, and looking forward to even talking to you about some comprehensive plans and things that I'm thinking about pushing forward,

    my question

    really would would be not more so your opinion, per se, As we look and we are going now into the next four to five years, we talk we heard the mirror allude to it last night when we were talking about our growth here, some of these projects that are getting ready and these abatements that are going to expire, and we'll be able to capture a lot of those tax dollars again. What would you say going forward? As we looking at our revenues, they kind of trend a little bit down, you know, hopefully they remain flat, hopefully they go they're going back up once those expire. But what would you say are some of our most difficult challenges ahead within the next four years?

    Through chair? I think we've tried to think of them and start addressing them, even this year was, you know, there's been we've been unbelievably fortunate throughout the pandemic to get the Cares Act and then arpa. It's increased our spending base dramatically for things we thought were would help us recover from the ARPA,

    from the from the COVID pandemic.

    That's obligated. Now, a little bit can be re obligated, reassigned, but for the most part, is being spent down or 500 some million dollars have spent already. We only have two to $300 million left to go, so there will be that transition and deciding what programs under our but really provided value to the city and its residents, and some of that value may be we're doing things differently and populously cheaper than we did in the past. CVI is one of my best examples. I think CVI is a policing function that is that is able to be provided with greater benefits then that would cost us to hire more more patrolmen and cars and captible for for the police. So coupling this may reduce the increase of costs in the police department, because it's a way to a cheaper and better way to do it. I think we just have to look at all of our perspective, what, what? What provides us value for the city, and it saves, saves us money, but we're going to have to make those hard choices of what should we continue? Because the budget is not growing fast enough to cover increases to pension costs, debt service costs, which are going down to help that but and labor, labor costs, which are major contracts are up for renewal the next in the next year, and those contracts will really have to be scrutinized and negotiated in a way to make sure the city really solvent. And

    I joke with you when I said no, because I remember us having having conversations, and I never get mad when you say no. We try to find a happy medium, but as we look at our future, we're going to have to say no. Sometimes we're going to have to have folks in our spots and our positions at the council table or otherwise that are going to have to say no. And it's not going to necessarily be popular to do so. But when we talk about the future of the city, and we're talking about continuing to remain financially stable so we don't go back into the old days, I think that that path is going to really be important. But I was interested to hear you say and just share your thoughts, because you're on the way out the door, as you would, state of what you think our challenges are, and it is my hope that even from this table, that we continue to push priorities forward that will keep us stable. Next question I want to ask, because we hear this on public public comment all the time as well. Folks talk about that. Folks are still being over accessed, over assessed here in the city of Detroit. Can we chime in on that? Do we have some numbers where we find out that if this is occurring, or if it has occurred for some whatever reason? How many people that? Maybe

    I'll let Calvin follow up on this, but I will predict that the next month will be Council will be immersed in this discussion as the I double A report comes out, we've been waiting for that anxiously, their final version of this, and we hope, hopefully will be in the next week. I think you're going to see that report. Ace, a really good discussion of assessment practices and what the Michigan law requires and how it well, keeps us uniform within the law, and that we're not over assessing the city, but because of the way the state law is administered, it has discrepancy between value of homes, and I think that's something that Council, as well as Mr. Horn, all agree on, and wells agree with the coalition that that this needs to be addressed. The only issue is it's not something we can do independently,

    through the chair. And add a little further into what the CFO just said, we are we are following Michigan law. I can say that unequivocally we are following Michigan law. Detroit uses a mass appraisal approach, just like every other jurisdiction in this state, we use the mass appraisal approach to valuation. We don't look at individual houses, we look at neighborhoods, and we try to determine, based on the sales and the condition of that neighborhood, what the median price should be in each one of those neighborhoods. We Is it right for every single house in that neighborhood? No, that's why we have a three month appeals period to allow taxpayers the opportunity to confront the city and say, This is wrong. I don't agree with this. And we will go out there and we will look at that individual help, and if we need to make a change, we will make a change. Is it 100% perfect system? No, it's not. There isn't 100% perfect system, but we're taking steps based on what the CFO indicate directed us to do, based on what this honorable body has directed us to do, to refine our practices so that they are better representative of the neighborhoods and the conditions and the sales and what's going on in the city. Detroit is very unique. It's a beautiful city. Some of these homes are comparable to anything in the Tri County area. Others aren't, and we have to value all of them, and we have to value all of them fairly. It's a challenge. It alludes to the question that member Santiago Romero asked me earlier, do I have enough people? We need to do a better job, and we need to use technology to do that job. I told the CFO a couple of months ago, if he tripled the number of appraisers on our staff, we still wouldn't have enough people to go up and down the street to the city. It just is impossible. There's 400,000 parcels in this city, 218,000 houses. We have to be smarter on how we deploy staff, and we have to look at better tools, which we've been doing for the last two years that will allow us to do a better job evaluation. I don't mean to avoid the question, because I know it was a very direct question, are we over assessing properties or not? No, we are not. There is no systemic over assessment issue in the city. And I believe the IO report, which will i am waiting eerily for it, just like Council President, everyone else is, I think it will prove that there's no systemic over assessment issue in this city. But as the CFO point out, we have to follow Michigan law and how we value properties. Last two years, there were 63,000 transfers of sales in this city. We only use 14,000 of them, not because we didn't want to use the rest of them, because we have to file Michigan law. And what an arms length transaction is. When you cut out almost 80% of the transfers in your city, you are missing a lot of stuff. We try to rectify that by by using our ECS and by using our residential neighborhoods, and I think we do a good job at that, but I think the report will paint a very clear picture of what's happening in the city, what we do well and what we actually control, many things that people are concerned about, that they want to see change. The City of Detroit can't change. It will require, and you've heard this before in other parts of this conversation, it will require a legislative fix, and until that happens, we have to work within the system that we have and be as fair and as accurate as we can. I hope that answers the question, sir. Thank you. Kinda

    what is stating is we need to wait on an IA report. But you know, my question is just more posed, because I also think a component that is attached to that is narrative, is the educational component of how these things work, which is why we spent a lot of time sitting at this table talking about going through, talking about taxes and how these things work, you know, and I'm not going to, you know, beat up the point on that. We'll wait to see the report, but I anticipate when, or I hope, let me say, I hope that when we put that report out, and those numbers are reflected, we are also working to change that narrative that exists and show that within law, and what we're doing within law, we are compliant, I will finally say, because throughout this entire conversation is we talk about taxes or we talk about legislative changes that need to have happen on the state level. Besides myself, only two other members of this body have sat there when you sit up there every day and there's nothing new under the sun. So we've seen entertainment tax come. We've seen hotel tax come. We've seen proposals or legislation introduced for excise tax. We've seen assessment legislation come through. It is a very difficult environment to make those changes, because I think often times, what we fail to realize, although we are the largest city in the state with the most representatives and state senators up there, is that there are about 82 other counties. There are multiple cities, multiple other representatives and communities that face different challenges than we face. So when that legislation comes up there, a lot of it becomes dead on arrival, unless you are able to show how that can comprehensively address issues in other communities. So it but it is my hope when that, when that discussion happens, as we talk further about taxes as well, that is great again. It is great for us to have a dream, and it's great for us to push forward. It's great for us to fight for these things, but reality is a important piece of that as well, and develop in a plan of really how to move and get initiatives across the finish line, and we've seen that with many even the land value tax, right. But again, it takes, it takes more than just us and our desire. It takes really convincing, as we used to say on the legislative on the floor, you got to convince 55 other people that is a good idea. So I appreciate you all, and I appreciate your commentary today as well, and look forward to having further conversations with all of you offline. Thank you.

    Thank you. Member proton tape, thank

    you, Madam President. Good afternoon. Thank you all for being here. Appreciate the work that you and the team do on a regular basis, daily basis, not easy work, as I always got to give kudos to everyone, whether we agree on things or not, this is not easy, the stuff that we do. So thank you. Wanted to dive just a little bit back into the ARPA interest funds. I know it was indicated that they are now back into the general fund. Was that? Was it 50, 52, million over three years? Yep. So they've been woven into over over time. How much is is currently?

    Think the last in the 24

    interesting from ARPA are

    24 was about 9.5 was well, 24 was 26.2 and then fiscal year, 25 is expected to be about 9.5

    okay, so how much, technically would that still be available, just being the chair, and this is part of the challenge that we're having, like to really tell the story about ARPA

    fully. It, it's a conceptual question for me, for the chair, we had $109,000,000.24

    on restricted fund balance.

    We spent everything else of 1,000,000,005 of revenues, including these revenues. Were these the first dollars spent, the last dollar spent? Or were they proportionally spent? I view them proportionally, thinking they have this big lump of money for the year. And this is how much came in. And I I spent all but $109 million I spent. And I spent proportionally about 3% of what I what I spent was our purchase earnings, and 3% of the unrestricted surpluses are benches earnings. I can look at just the opposite and say I never spent the upper interest earnings. And $23 million $23 million of of the 109 is ARPA, or look at it the other way, and say, I spent that first. And that's right, it's fungible. The ARPA interest earnings weren't segregated like any other interest earnings with general fund just went into the the fund and we estimated in the revenue conference and said, This is how much money we have to spend.

    So, so right now we don't technically have what we spent the interest on. No, is it just, it's

    just woven into everything council approved for spending.

    And, yeah, I it's

    almost like the casino money, right? When we were receiving the casino money, just dump it all into the general fund. And it really doesn't give us an opportunity to really tout the true benefit of the casinos being here. I mean, we we know it helps our general fund, but really, for the average Detroiter, they don't read this stuff. They don't know how to go through these budgets and line items. So it's again to echo council president is unfortunate that we did not take that route, at least from our standpoint, to have a better understanding. But yeah, not you said 9.5 million it's currently still available. That's what we're anticipating in the in the general form,

    as part of the supplemental resolution passed last week, I believe we did a transfer of 9.5 into the new appropriation for our reassignment. It's Mister Mayor indicated we're working this week to come up with another five to increase that appeal or budget. Final Executive Session discussions. Okay,

    looking forward to that document. I know we've been talking offline as well, so I won't be labor any of the other questions. Looking forward to the responses from lpds questions, for certain, but I know last thing for me, CFO rising in it again. Thank you for your service here, as you transition out of the city of Detroit, last year, you mentioned that there was going to be some you're going to work to simplify your tax bills. The tax bill. Has that taken place? If not, when is that anticipated for even your predecessor? If so, how has that occurred? The simplification, if you will.

    I will let Mr. Patel talk a little bit about that. We both worked on the assessment notice as well as the tax bill. So I think the tax bills are infinitely but better understood than the assessment notices, which are now up to four pages long.

    And then, and then I guess, if you can add on to that, the cost, you know, was there a cost associated what was the cost associated with

    the simplification, if you will?

    So I'll address the property tax bill piece first. There we go. Can you hear me now? All right, I will address the property tax piece first, so we haven't made wholesale changes yet to the property tax bill that since I started last year or a year and a half ago, on it, what we have done is simplified two items on it, first is added a flyer to really provide in depth information on the ways individuals can pay that property tax bill, and we've also clarified a few things going back to council member Johnson's question, my deputy treasurer reminded me what we did last year is added a section on the property tax bill that informs individuals, in red text, that if you made payments to plan ahead, that's not reflected on the bill that you get in the mail, just because the systems don't talk to each other. So she reminded me of that, and that's what we're in the process of changing. What is in our roadmap, which is dependent on the partially dependent on the updated payment platform being implemented is, once we have a more digital way of serving out that information, we can more readily make digital changes to how the property tax bill looks

    and to the cost point.

    That is something we can do in house without extra funds. It's a matter of designing what we want the tax bill to look like and what changes may be necessary. Our property tax manager team at the time, what we did is we looked at tax bills from Ann Arbor, Farmington, hills, Livonia, what pieces that we liked about them, and we integrated that on the backside, and then the flyer that we attached to our property tax bills.

    So do you believe that we're at the end of that particular process and those changes are, there's there's no sounds like there's more through the check timeline,

    through the chair. I would like to make more. I think I don't want to commit yet to a full timeline, but we'll continue reviewing the property tax bill and see if there's incremental changes we should or can make for the up the next year's tax bill. As we continue getting feedback on how that bill could be changed,

    look forward to us being made aware continue continuously as this process works itself out. Was there a second part to this response. CFO rising, you wanted to provide. All right again, look forward to the responses to the questions. Thank you. Thank you, Madam President,

    okay, thank you. Pro Tem member waters,

    so good afternoon.

    All right, so, um, well, first of all, I want to thank you for listing your accomplishments, because, of course, that helps, helps us to better project what your budgetary needs are for the next fiscal year. So we appreciate that. I wish everybody would come to the table like that. Say, here's what we accomplished in the previous year. That helps a great deal. I want to, and I heard you say we don't want speculation, and we do and we don't, but it kind of works both ways, right? Because you can give a definitive response to what was going to happen with LVT. LVT, you know, after the first second year, it was just, you know, we don't know. It's undetermined. You can't determine that. And that makes some people very uncomfortable. I mean, that's, that's a comment from me. Member Santiago Romero talked about the valuation of property. So I'm not going to ask a question, but I do want to say that I hope that the assessor's office can work with the county treasurers often. I know that you guys have a relationship, because some of the things that are happening is that they are auctioning off blocks and blocks and a whole bunch of properties. I'm give you an example today, the board at the Board of Review, you had about 164 properties that were purchased from two investors. They walk into the Board of Review saying, well, we want some property tax cut, however, they are evicting at least 130 of those people. Now I can tell you that many of those people probably did not understand that if you had a previous owner who are not paying their property tax, and you live there paying rent, that you can make it your home. People don't know. We have got to turn it up so that all of these people, they are not to be auctioning off occupied homes. And that's where you all come in, working with the treasurer's office to check and see if, in fact, those properties are occupied. Because now that's adding to our homelessness as of today and and that's pretty, pretty sad. So I wanted to say that, and I want to encourage you to please identify a way to to help with that. You know that relationship with the county treasurer to to make sure that when they when they buy those large bonders of properties like that, let's find a way to make sure that they're not occupied, and then say to the people, okay, if you want an opportunity to make this property your own, your own home. You can do that. We're just not doing a good enough job with those kinds of things, um. So I, I'm going to ask my two questions now, not an offender rambling, um, but listen, you know, we're having a increase in short term rentals in Detroit, and this is growing a lot downtown Midtown, there's a high demand in certain areas. So have you considered implementing a short term rental tax similar to the one that they have in San Francisco? I

    this year, I am not familiar with that.

    Again, any any epitax like that. We can't allow the authority to do it ourselves, but something Lansing could could approve, and

    maybe state legislature there gave them a permission, but we can certainly request it if, in fact, because it is certainly we are getting more and more of a demand for short term rentals, and we need to figure out how, how we, how we benefit from it. And

    so but

    just something you're looking to we're going to have several questions that we're going to send to you. We'll send that one too, just so you have it. The other thing I wanted to say, some cities have adopted performance based budgeting to improve spending efficiency has the O. CFO studied models from places like Seattle or Boston, where budget allocations are tied directly to measure performance outcomes.

    So through the chair, we have looked at outcome budgeting. We actually previously had a deputy CFO who was from Boston, so a lot of the changes that we made a few years ago were modeled after what they do in Boston. So we do incorporate outcome budgeting currently in our budget, but we can look more into the performance based budgeting to see if there's a way we can enhance it further.

    Okay, all right. Well, thank you.

    I'll just leave you all with this. We'll send over the questions, but I want us to consider what, what in the world are the other people getting from from those high valuations. I mean, what? What are they gaining if they try to sell their property today, we're gonna get what you say is worth. Nobody's willing to pay that kind of money for it. So I just want us to keep that in mind. You know, just so many things to keep in mind when we are making those types of of decisions. And I heard the assessor say, well, we look at communities. I mean, I get it, but, but I still want to know how the people benefit when, when you do things like that. And right now, I don't, I don't see any benefits from it. Maybe you can tell me something later. But thank you, Madam President,

    member Benson,

    thank you. Thank you all for being here. Mr. Rising, thank you for your service to the city. So much appreciated. And it's it's been it you can see it, the representation of your office, of the effectiveness. You can see it so you've got a good staff, and so I believe that your legacy will transcend you just on an effective and well run operation in the finance department, looking at revenue, and this has been a I'm glad people really thinking ahead when it comes to our revenues, looking at the plan ahead slide that we had earlier, and then just hearing that a program, that program run in house, and this is just my interpretation of the conversation, it may be better run somewhere else. It sounds like it's more of a we say it's a utility that we're providing to our residents, and it takes a level of resources from our office that aren't being compensated and maybe be more efficiently run outside, although not having to pay for that service. If I were using it, I would like that fee. But as the person who's responsible for ensuring that resources are properly allocated for the city of Detroit. I'm not so sure. I don't like the fact that people don't pay for that resource, that service, and that we're providing it. So hopefully those conversations are being had, and maybe we can get somebody with them opportunity to be willing to underwrite or support that program in the future. And that wasn't unless you had something to respond to that

    through the Chair, I don't, but I understand what you're saying, because I know right now the way we're doing it, it is more internal, and we're kind of learning as we go, but we really do think that if we can use technology and implement a system that's doing it, that it will be improved, and I think we can manage it internally, but we can have further conversations. And I think Mr.

    Patel may have had some thoughts, yes, through

    the chair, absolutely, we're we've engaged external stakeholders to understand if there's an external partner that could potentially help us fund the service that plan ahead provides effectively. What I want to do is, I want to reduce the administrative burden, and therefore the cost and risk that the city takes on to manage what effectively is what you're if you have a mortgage on your home and you pay the monthly mortgage and escrow company holds on to that money, it's not exactly the same, but it's similar. And if we had a financial player who is providing that service, and then they have the responsibility that when the tax bill is due, they automatically make the transfer. They take on the responsibility to do the refunds outside of the tax season. That would work a lot better, because it's important to note, this is again, unique to Detroit. As far as I know, no other city in the state of Michigan does it. So it's a valuable service, but if we could automate it more through a FinTech player, I think that would be valuable, and could have the other use cases that could be deployed across city, across the city. All

    right, thank you. So I'm glad to see here that you are looking into that, including the thought necessary into how we can be more efficient with that program, and then looking at revenues as well, we spend a lot of time supporting, getting keeping people out of foreclosure once they get to the county, they're collecting our taxes after they're delinquent. Have we thought about putting more energy and effort and investment into getting people to pay the taxes before they go delinquent, and so we don't have to engage the county in that collection. So we don't have to pay them a collection fee or a management for your administrative fee for collecting those tax and then sending us sending them back, and then having the situation we have this year where our revenues were reduced based on the collections the the uncoble fees from property taxes in the past, and so we have the request for 10s of millions of dollars in our solid waste fee, because our revenues were not what we thought they would be. What have we talked about more investment in the front end to get people to pay who can, versus relying on collections to get those dollars back.

    So through the Chair, I'm glad you brought up that question. One of the pain points or opportunities that Treasury has in the city, has in general, is to increase that 84% that you saw on one of our slides, and to get that up higher, if you look at what happens in a normal state, current state is once the county provides us their funds through their revolving fund, we get up to 98 99% but what I want to be able to do is get that 84% up higher in current year and other places have higher collections rates for a variety of reasons, socioeconomic primarily, but a improved payment platform where we can proactively reach out to customers. Today, the only way we reach out to customers for their property tax bill is a mailing that, here's your bill, and they get it, they might lose it. What I want to be able to do is what other cities around the state of Michigan do is we can text people. Hey, it's due in 60 months. Hey, it's due in 30 months. Here's you can pay with Apple, Pay, Google, pay. You can set up a payment plan within the deadline to pay. Go take this bar code to Walmart and pay your property tax in cash. Don't worry if you don't have a bank account. Those are the features that we will be able to turn on this upcoming tax season. And those are the ways we can push out to people. And through that, we can also educate them. We can once we have, once they set up an account, we have their phone number, their email, we can tell them, here's plan ahead, here's the hope exemption, here's a solid waste fee opportunity if you're a senior. Here are the programs that apply. We can selectively do that, and that's not a capability have today, but I'm hoping before, definitely before the end of this calendar year, but this tax season coming up in July, we'll have the foundation in place to do that. Then as a city team, we'll have to get better at actually executing that and getting people's contact and pushing out those messages, but that's exactly what we're building towards with the new

    payment platform. Alright, thank you. And then additionally, when it comes to exemption of revenues, and then this is to the assessors department, the role of the assessor and the Board of Review when it comes to authorizing the exemptions, where do you play the role on the assessors team? I know those go through the Board of Review. They're authorized there, but do you play an authorizing role there as

    well? Through the Chair? Michigan law makes that exclusive province of the board review. Okay, we are required by both state statue and state statue and say ordinance to provide administrative support, but that's their decision.

    Okay? And then I'll take that up with the Board of Review. But I'm hoping we can start to look at how we can also better leverage the information that we have those who are having difficult time paying or can't pay their property taxes on how to get them to a point where they can if we know that there are residents and families who need these services. We use wraparounds, who can use job services, who can use healthcare services, maybe we can help them get into a position they can pay. And so we're seeing 10,000 applications a year, 16,000 applications a year, if you could just get, say, half or 30% of those to a point where they could pay. I think that can make a significant difference in making them far more productive when it comes to paying income taxes, when it comes to paying property taxes, when it comes to paying utility taxes, than what we're seeing now, I think that would be also a great way to look at how to increase revenues and then help our residents at the same time, I believe a person who's able, who wants to pay for pay their utilities, pay for their property taxes, pay for a mortgage, buy a new car, will be far more likely to be a happy have an improved quality of life in the city of Detroit, and I think we have that data, then are we using it and I'm hoping that we can have those conversations to help increase our revenue collections as well. That's something I'll be working with the board of reviews. I want to make sure that if we're not doing it, that we at least have the conversation, maybe a pilot program to implement. What would it look like to actually start leaning in to getting those residents into a position where they can pay full freight on their property taxes, full freight on the new car, full freight for a roof of their home and other things that help with quality of

    life. Thank you. Thank you.

    Member, Benson, did you want to respond? Or that was a statement? That was more

    of a statement, is a response.

    No response. Okay,

    Mr. Patel, what were you going to say

    all through the chair? I was I agree. Those are the data inputs that we can use to increase collections rates. And we definitely want to keep having that conversation.

    And so I do, I'm gonna what would it cost?

    And this is a loaded question, what would it cost to implement a pilot program to see if we can actually move the needle and help because I will, I would see that you would need to partner with Detroit at work, we need to partner with a number of other social service organizations to actually look at how we move people out of that poverty situation into more middle income situation where they're more stable, out of stability where they can afford to pay for these items

    through the Chair? Yes, it is a loaded question. I don't know what it would cost, but maybe I can answer in a qualitative way. I think it would take at least, you know, maybe a handful of individuals to actually go out and interact with those organizations. Where we would start is we would interact with those organizations, find out what the needs are, what pain points we would need to solve to get access to that data and figure out a road map to actually get to the solution. I think that'd be the first piece to solve the how much it would cost

    if we hired one person to go out and set the lay the groundwork, start having the conversations, find the philanthropic organizations who will be willing to pay for something like that, because return on investment will be high. Could we do that for, or in a year, for $150,000 to pay somebody to put that type of rain damage into the problem,

    through the Chair,

    I think so. The only hesitation I have is, I believe, through HRD, this team and their efforts, there might already be resources that are better positioned to already do a lot of the similar work I know Chelsea now is split in team works closely with coalitions throughout the city of Detroit, with Wayne County to effectively address that very piece of how do we help move people into situations where they can pay their property tax bills, or if they are not able to get payment plans through other funders?

    That could definitely be a possibility.

    Okay, motion to put $250,000

    into the Executive Session, into the O CFO office for a pilot program to move people out of poverty via with the information regarding the hope applications, into a situation that can pay their property taxes. And make that a closing resolution as well. Let them come back and say they can do it in house, if not, they don't need the money, that's great.

    Motion. All right, Hearing no objections, that action will be taken. Thank you. Member Benson, member Calloway,

    thank you. A lot of the questions have been asked that I was going to ask, so that's good. Save us some time. But I want to take this opportunity to thank you, Mr. Rising, for your service. Thank you to you and your team. The three meal reduction of the debt service will property tax is a real accomplishment, and I know we're going to even do more in 2026 I'm very, very hopeful. We've come a long way with reducing the property tax the meal. And I'm very, very pleased with that. And I know we say, I've heard here five times from mister, from our assessor, Mister horn, we have to follow the Michigan law. And I'm just still concerned about the $600 million over taxation of residents are from 2009 to 2016 2017 roughly. And people still are hurting, and we can't cover that up. We I don't know how to address it, but everywhere I go, people are still talking about it. People are still hurting. They have not been healed. They have not been whole, made whole, and they have not received any relief. We can do Motor City match. We can do all these grants, all we want to. We can do home owner assistance, all we want to. But there is a population of folks who were impacted by the $600 million over taxation, and I don't believe anywhere else in the world, I'm going to go beyond United States, this would have been allowed with no redress. We have just I'm not saying overlook it. I know a couple of council people, because I was following before I joined the Council. I know a couple, just two, who President Sheffield, for one, she fought. She fought. Came what came up with about three or four programs to make people whole again, but you can't make people whole again until you put them back into properties. We do a lot of demolishing homes, but we don't build up homes for families. We got so many vacant properties down here. We have vacant office spaces, and we're continuing to build studios when we over assessed family owned properties, single family homes, we didn't. We did not over assessed studios downtown. We over assessed single family homes, majority and so until we do right by the people that this city hurt intentionally or not, we are never going to prosper as a city, because that's a hole in the heart of the city. And now we still have people taking advantage of homeowners taxpayers in this city, according to what through the chair member waters just said, 100 people. And then we have people coming in here using crypto currency, buying up properties. 100 people own one house, a portion of it. We can't even wrap our heads around that. So people are coming into the city taking advantage of the least of us and God, God tells us we need to take care of the least of us, our children and our widowers, and we're not doing a good job of it when we know that we have a homeless issue here, but we're steadily building studios, studios that are beyond affordability. So I needed to say that, because people are still asking about relief and still asking about a remedy for the over taxation of not 60,000 $600 million 600 million, and it's just it hasn't been swept under the rug. It just has not been addressed. So I needed to say that, because that still bothers me and still bothers a lot of people who were directly impacted by that over assessment. So I don't know if we necessarily follow the law. We I don't believe we did in that instance. And if we, when we did over assess, where's that? 600 million? Did that go into the general fund? Like the like the interest that was earned on the ARPA dollars that went into the general fund? So I have a question, and that was just my statement. After I showed some appreciation, it said a heartfelt thank you. Would it have been a wiser idea to put the ARPA dollars in a separate account so we could track the interest? Why would we put it all in one account? Was there not a requirement to have a separate account? Probably not, because she didn't do it in a separate account, so we could track those interest dollars and not commingle it with our general fund. Because that's what we've done through the chair to to to Mr. Rising

    through the chair.

    It was a unique part of federal law which gave cities this bonus of bonus revenue. Federal law did not treat this as our proceeds, and the city didn't either. We treated it just like the federal law said we should treat it, which is just general fund assets. You know, in retrospect, we could have done that, but, but we identified this as in our revenue conferences, excess revenues we one time that we were getting each year as is part of the revenues we are able to budget.

    Thank you, and I wish that we had we knew the interest was fair, because Pro Tem had asked about the interest being earned on the opera dollars, and it was put into the general fund and just used like regular general fund dollars, no distinction. And so that's just, to me, that's just, you know, problematic, but it's nothing we can do about it, I suppose. But you said that we had, you said 5 million. She said 4 million. We had $9 million in ARPA funds for use. And then you said five. And you said, four? Is it another nine? Because you said four earlier, I put it here

    through the chair. So we initially put in about 9.5 million, we're trying to identify an additional 5 million to add to that appropriation. Okay,

    I don't have any other questions. I will get these questions to you in writing, but I am hoping that whatever is less than the interest we'll have an opportunity to to use it, because we have folks who still have trees disease and damaged trees and dangerous trees, and we were told that that money is going to come to to an end, and my constituents are calling about dangerous, damaged and diseased trees, and we need money to be to put in that pot. They're still calling. My senior citizens are still calling. They're still calling. And we need resources to continue that very, very helpful program. We got to continue the programs that have a waiting list. We got to continue those programs which means they're popular, which means people are interested in those programs, if we have a waiting list, and I heard today from director Perkins, that particular program has a waiting list, so I'm hoping that we can find the resources. I'm not going to put in an executive session. I'm just going to we have our conversations next week. I'll bring it up again then. But unfortunately, things weren't handled differently with the ARPA dollars, and I know we're not going to send any anything back, because I know they've been encumbered. But um, I thank you for all that you've done, and I will get my questions to you later. Thank you and happy retirement if you are planning to retire, thank you. Thank you. Thank

    you. Member Calloway, yes, um, member

    president, I try to be really brief, thank you, Mr. Rising, been wonderful working with you, your professionalism, your hard work. It's been it's been wonderful.

    I have a suggestion for Executive Session,

    a better monitoring of City Council's monetary changes to the budget. This is the issue that council member Callaway has brought up in the past, and talking with Mr. I'm sorry, with MS stottmeier Yesterday, it appears that the O CFO is willing to assign a project number to councils changes so we can better monitor what goes on during the year and to make sure that those dollars are spent and hopefully do not go into the June of fund surplus. So if you can put that set of session, we really appreciate that, Madam

    Chair, thank you through the chair to you. Mister Cooley, thank you. That has been a pet peeve of mine since I've been on the complex track. Everything that I put into executive session with your help in the closing session and quite a few of my Ask, we're just not honored. And so my staff member calls it a ghost veto. Is that what you call it a phantom veto? He explained that to me, I'm like, there's a lot of Phantom, Phantom vetoing going on around here. So thank you very much. Mr. Corley, I track and I know what, what went into executive session that did not get honored. So I thank you for that. And is that, is that a motion I need to make? Yes. Madam Chair, yes. So, Mr. Cool. If you could repeat it, then I'll turn to a motion through the chair. Or Madam Chair, did

    you we want to repeat it? We just need someone to motion it. Go ahead. Mr. Poorly, a better monetary

    system, yeah. Of Council's monetary changes to the proposed budget motion.

    Madam Chair, okay, Hearing no objections that will be added to our Executive Session. All right, see two hands. Member young, followed by, go ahead. Sorry, Mr. Forley, go ahead.

    Apologize. Couple other things for the closing resolution. I suggest that council consider preparing an ordinance that will continue the monitoring that the Detroit Financial Review Commission now undertakes to ensure that the city does not go back into, you know, poor financial management, and there was a resolution that was passed by the FRC 2018 2018 20 something, something like that, that required the city to provide certain, you know, documentation to them monthly and yearly. And so hopefully, you know, the city will continue to have surplus adjourned from surplus for the next four years, which means that FRC will completely and permanently go away, but we want to institute at the city level, and I'm thinking via through ordinance, that we continue much of the monitoring requirements that the FRC now undertake, so that the City on its own, once we reach that level of total self determination that we can do. So okay,

    all right, so is there a motion to add that as well to our executive session motion? Madam Chair, okay, Hearing no objections that action will be taken.

    And lastly, Madam Chair, I know miss out of my indicated that they're going to provide City Council a true figure on the opera dollars that council maybe can use to put more money into. And I think she mentioned next week, and I'm hoping she can do that sooner than because we're going into executive session starting next Wednesday. And you know, we're going to prepare a, um, a draft of what's going into Executive Session, probably Tuesday, thereabouts. And we would like to, you know, figure out how much sources of monies that we would need to come up with right to address your changes. So the sooner we can get that, you know, from the of CFO be the better. So just would appreciate that, and that's it.

    Through the Chair. We actually have that drafted. So the latest you'll get it is Monday. We can try to get it to by Friday, because we know that we need to leverage ARPA in order to address your priorities. We don't otherwise have enough recurring dollars available in the budget, so we need to make sure that we're leveraging every pot of money that we have available to us. Okay,

    thank you. All right. Thank you. Member Calloway,

    yeah. Lastly, thank you, Madam Chair, through the chair to miss out. A Meyer, you said that 64% has been spent of ARPA dollars, and there's 36% that still needs to be spent, and it will be spent by December 2026. Have those? Has that 36% been encumbered or earmarked

    through the Chair? Yes, the 36 million, I'm I'm sorry, the 36% has been fully obligated.

    Okay, thank you Madam Chair. Thank you mister mark. Okay. Thank you council member Young. Thank

    you Madam President. Thank you for your patience. Um, I just wanted to ask you, we talked about $600 million and the over taxation, has there been a discussion all about using crypto currency to be able to build that process of paying people back? Because some of those currencies have like, a 60% conversion. Percent conversion rate into cash. I wouldn't say you would buy it all up front, but you know, over time, you could be able to do that depending on what coin you used

    through the chair. I can say we have not discussed that.

    Okay, is that something you plan on discussing in the future or? No, why not? You better understand. So I refuse to accept that you're leaving. Yeah, I always want to borrow the doors right now so you can't go anywhere. I encourage you talk

    to the Treasurer, who's an expert in cryptocurrency.

    So through the chair could Is it okay, if you repeated the question, please? Yeah, sure.

    I just want to know, has there been a discussion about using cryptocurrency in order to pay people back for the $600 million in over taxation? Has that? Has that? Has that been a discussion? So not all the coins, but some of them have a conversion rate you can convert them into cash, about 60%

    sure. So through the chair. I'll answer the question that. I won't make a comment on the underlying premise of the question. On the over taxation piece, but if we were to pay back anyone, my strong recommendation would be, we stick with dollars. US dollars, the cryptocurrency piece. Frankly, I will say the benefits that are touted by it aren't necessarily a use case for us and our residents, getting payments faster within seconds versus a day, and that's the difference. Isn't really real. We should pay individuals back in cash so that way there's no volatility risk in between them getting that cash either. I

    understand. I agree with the I just, if I can't just do a little caveat here, I would also say that one, you're right this about the stability part. That's part of the reason why it's limited. It's so much the currency itself. But secondly, there are stable coins and things that are attached to actual monetary value assets that would be more stable for that person. If we're talking about like, like, like, I said, depends on the coin that you use, sure, but, and I'm not talking about, we start our own coin, like Miami, I'm not saying that, but I'm saying that over a period of time that they could take, that they could then convert into cash, sure. I just thought that was something that was absolutely

    yeah through the chair, even that just something to look at. Yeah, we can definitely explore it. I would say even then, the stable coin is a pretty much what it does. It allows you to convert between, let's say, Bitcoin to something else, and the stable coin is backed by hard money. Well, fiat money, the dollars matching up to the reserves for the stable coin. But I would push back or

    assets. I wouldn't, I wouldn't necessarily say sure,

    it could be sure it could be hard money. Maybe it's gold assets that's just,

    you know, with the government issues, agree, saying, Yeah, but I

    would still argue the dollar would be still more stable. You're right. I

    just want to make sure I just got that that definition, sure, that clarity. And my final question, another round. Now I just wanted to act there was, there was, there was some conversation out here. I might as well just jump off the roof. Listen, there was a conversation about the land value tax. I just wanted to ask you about there not being clarity in the following years of what the revenue would be. Last time I checked, there was some clarity in the analysis that was put forth in the Lincoln Policy Institute report. Is that accurate? Yeah,

    and thank you for the chair opportunity to respond to that question. There is clearly we were clear about projection of revenues and savings people would receive as land value tax. It's what we didn't project, it's the increased income tax for Australia associated with it, but it, you know, homeowners in the city would have received a 14% cut. Maybe it was,

    I'm done. Thank you. Okay.

    Member waters, okay, so first one is just a statement. I would be curious about the over assessments for both the residents along with the businesses. I mean, you should share that with us, because I know that a couple of businesses did sue us, and I don't know if any of the others did, but maybe you can share all of that with us. That would be nice. I just want to, you know, the investors that I mentioned earlier about purchasing all those properties, you know, they have, like, several different LLCs, and so we can't, we can't track them. So I did ask that the Michigan Legislature do something about it. We need to force these LLCs to register, reveal themselves so so that we know who they are, where they are. I understand that these guys are not in the country. Um, but is there something, anything at all that we can do at the local level to have them reveal themselves, and we can do anything about these LLCs. Anything

    through the Chair. Thank you for the question. Ma'am. There are steps are being taken at the local and county level to try to identify who actually owns LLCs. You're correct. It has been a problem. Most of the body property, most of the property that's gone in foreclosure these last few years. A significant, I don't wanna say, majority of a significant number of them have been owned by investors through LLCs. And we are doing everything we can to identify the county, for example, no longer allows LLCs to have lost property and foreclosure, to buy anything else in foreclosure. We're taking steps to force them to put to identify themselves, so we can put them on the tax roll, so that we actually know who owns the property. So we share your concern. We know it's a problem. We're doing what we can at the local county level to address it.

    Well, I certainly am going to keep pushing the state on both sides of the aisle, because we do need their help. And Mr. Rising, thank you so much for your service. Thank you. Thank you. Thank you, Madam President,

    thank you. Member waters, member Johnson, thank you, Madam President, so now to member waters question. Mister horn, did the city make the decision to ensure that LLCs cannot be, cannot have a 100% p r e,

    yes, ma'am. You brought that up two years ago. You put on the table. You forced us to maybe force isn't the word, but you made us look at a problem we had we weren't aware of. So the CFO direction. A few years ago, we removed the p r e from every LLC and sent them a letter saying, if they wanted back, they had to identify themselves, they had to prove that they were actually owning the property, and if they occupied it less than we took off, over 6300 less than 100 reapplied to get the P, R, E, back, and almost all those were denied. Oh, wow. Okay,

    all right, thank you. That actually wasn't my question, though.

    It was just a follow up to what member Waters had brought up. So Madam President, yes, ma'am, I know we have non departmental here. Are they doing a presentation on non departmental as well, just talking

    about that. That is our next hearing. I know sometimes though we do just add the entire thing into executive sessions, right? It's going to be the preference of colleagues, so

    it's up to the body, but I do have a question about it. Okay? I just want to ask relative to the mayor's presentation that was provided to us for fiscal year 26 there is a reduction in debt service of 12 point 4 million, and then subsequent years, we are back at the same level as we were as we are now. So I'm trying to understand the reduction to debt service and the impact that that'll have on us in the future. So

    if you would look at that presentation, I'm sorry if we don't have it ready to go up, there's two different slides. There's one on unlimited tax, General Obligation debt with the TGO, and another one on LT geo debt and the IPA, the millage, the debt. Millage supports the unlimited tax geo debt service. You can see that that service ladder is falling down dramatically in the next few years. It's one of the reasons why that increased property values. But we'll be able to lower debt Mills consistently unless the voters approve additional debt to capital which which would be possible. The ltgo debt and the IPA is supported by the budget. So that level is really going up only because of the IPA levels, which we dedicated revenues for. Them do vehicle purchases, printer purchases for the like,

    Okay, Mr. Rasen, I couldn't follow anything you said, because I don't have the TGO and ltgo information,

    eight, nine of the

    on page eight util debt service is the tax supported debt service. We're obligated to levy taxes at whatever rate necessary, together with other funds we have available from state shared revenue, state revenues and and and reserves to be able to fund that debt level, debt service. And you see, 25 is over $70,000,000.26 drops to 6027, drops to 55. Goes down to about $45 million level, 2029 all that requires less debt to less Millers should pay for it unless, of course, we increased that debt, because we both the next page, it's a budget supported debt which is limited, because it's limited to our budget asset budget. We can't let you do taxes for that.

    All right, thank you. I will follow up, follow up with you. Mr. Patel, thank you. Thank you, Madam President. All

    right. Thank you so much.

    And so that will conclude the O CFO budget hearing and colleagues, I'm not sure if you all would like to move non departmental into Executive Session. Motions. You up

    any objections on moving our non departmental to Executive Session? Hearing none that actually will be taken. Yes. Mister Corley, thank you,

    Madam President. So

    we all know there's a lot in non departmental, and we raise a lot of questions about non departmental, as well as the agency 18, which is the debt service and the legacy pension budgeting. And so we would ask for the CFO to respond to our questions. It's a lot there, and I want to give them kudos again, working with agencies to respond to councils overall budget questions. And our questions. Really appreciate it. Thank you,

    and you guys will get those responses for us. Okay? And then there was one item, though, within non departmental I would like to add to Executive Session, which is the goal line Detroit program. I think there was a $500,000 decrease in that program. And so I went to add the additional $500,000 back to to that program,

    madam chair that is in my district. May I join you on it? Most

    certainly, and I just want to state I have the opportunity to go by and do a tour, and number one advocate now for that program to see what they're doing and how they want to expand their they're definitely struggling for support. So to see a reduction, I know would definitely impact them.

    And then while you're visiting, I invite you to go and see rack it up. Yep, I know they presented because they don't need some money too. Thank you. Thank you, Madam Chair,

    so if there's no objections, we will add that as well to the Executive Session. All right. Thank you all so much for being here. Any motion? Motions? Member,

    duha, thank you. I want a motion to add the Eastern Market back to executive session as well. We noticed $250,000 reduction in the eastern market as well. So that is my motion,

    madam chair member, Durkheim, may I join you on that? The more the mirror, absolutely. Thank you. Thank you. Hearing no

    objections. You had a yes on that, and me as well. Okay, and I guess I'll join as well as my district wide as well in the name of the council.

    I'm not sure you took up the vote for the full non departmental.

    Finish the vote. Okay, so let's finish the vote that before depart, non departmental will go into Executive Session, Hearing no objections, that action will be taken, and then the motion for the Eastern Market as well, and that was adding the additional funding that was not in the in the budget, carry no objections that action will be taken. I have one more motion for me, and that is under the Office of Sustainability for a pilot senior food access program, bridging the gap between local farms and senior tables, and this will be $250,000

    for this pilot program.

    Okay, Hearing no objections that action will be taken this wonderful discussion.

    Yes. Thank you, Madam President. Just for

    clarity, removing non departmental to Executive Session. Will we still be able to have them answer questions? Can we go through their presentation during Executive Session, or are we simply going to wait for the responses to memos and ask questions? Or will we use executive session time to go through their budget hearing.

    So if council wants a full presentation, I think we should do that now, if not once, responses come back. If there's additional, specific questions that need to be asked, we can do that as well during Executive Session. Got it okay,

    like Mr. Corley, there's so much, but we already made the motion. I know we are at the end of the day, so I guess I'll review, since we've already passed on, the hearing itself, but there is just so much that is under the non deformmental And I was hoping that we could have discussion, if not today, we have so much time during the executive session, I just wonder if we can bring them back and essentially utilize that time for a hearing, but, you know, for a presentation, but utilizing executive session time,

    yeah. I mean, I'm open. I just know that our executive session time also gets very overwhelmed as we go through each line item. And so, yeah, you know, I think we could kind of, you know, again, if there's questions that need to be asked, we can see if they can come back for sure, or we can do it now.

    Okay, discussion, yeah. I mean, would it be beneficial at least just to hear the presentation and then not ask questions, and that way you can formulate those questions, but at least we can hear the presentation, or we can do the whole thing, but I rather just do a presentation and then sure formulate questions.

    I would appreciate that, President, thank You. Thank you. So sorry. Presentation,

    moment,

    Madam President, I have rejoined the zoom. So if whoever's running the zoom, he's right

    there. Sorry, no worries.

    Should be good now you

    Mr. Nacklet Just make sure your microphone is on. Yep, there you go.

    Ready first to go. Yeah. Thank Thank you, Madam Chair. I know the hours late, and I'll try to run through this but, but give you enough detail. As as council recognized, there's substantial amount of the budget of the city that sits in non departmental because it's not associated with a department. So a couple of things get appropriated there. First, we reflect the revenues, and on page two of the presentation, what, what, what we put up is to showed you in in department 18, what are those revenues? So we're budgeting for the use of 72 point 4 million of the retired protection funds. So that's budgeted as a revenue in department 18, we still receive 18 point 7 million a year for 10 more years from the foundation for Detroit's future and the Detroit Institute of Arts. The CFO has substantial compliance that isn't just money that comes in every year. We have to provide a couple of lengthy reports to them, we have to make a presentation to them. So I don't want to take take it for granted, but we're obviously going to enjoy 18 point 7 million for 10 more years from and this was the so called Grand Bargain money that's still coming in. And then lastly, as Mr. Rising indicated, when voters approve bond issues. They're called unlimited tax the general obligation bonds. They're called that because we are responsible to levy whatever millage is necessary to pay off those bonds. So we show that there's 59 point 9 million of revenue that's coming from the debt millage, or as Mr. Rising indicated, other sources. The other thing you see in non departmental and department 35 is you see the budgeting of the city's revenue. So as council recognized in earlier conversations, we have a very robust revenue estimating conference that estimates all of the significant general fund revenues, and it was a significant feature of state law after the bankruptcy, is that we did have revenue estimating where we start the budget every year with agreeing on what those revenues are. And then, you know, as you recognize, it's not something that council changes at the table, we can't say, well, we'd like to spend more. Let's increase the revenue so the revenues are already set. These come right out of the revenue estimating conference. On the next page, we go into what are the expenditures in non departmental and so I'll talk more about it later, but in this presentation. But one of our big expenditures in non departmental is we are now funding our legacy pension plans. The first 10 years post bankruptcy, the city had a so called funding holiday let us have time to get on our feet after the bankruptcy. But starting in 2024 we started to have to make our our required contribution to those pension plans. So for fiscal 26 that's 172 point 6 million that comes from the general fund. The mayor indicated in his budget presentation that he has submitted in this budget another 10 million in one time checks for retirees and beneficiaries. The 10 million for fiscal 25 As I reported at the retiree task force meeting, is on track to be distributed to retirees on their may 1 pension check. So everyone that is receiving a benefit on April one qualifies. So the retirement systems, once they run the April 1 payroll, they'll know the exact number of retirees and beneficiaries for each system. They'll take the 5 million for each system, divide it by the number of retirees and beneficiaries and on the May 1 check, retirees and beneficiaries will get that added on to their direct deposit. But this is an incremental 10 million for fiscal 26 that is in our submitted budget. And then, as Mr. Rising indicated, there's two forms of debt that we're responsible for paying. One is our ltgo debt, limited tax, General Obligation debt. This is debt that's backed by the full faith and credit of the city. So the voters didn't authorize it. So the voters don't pay for it. We pay for it out of the general fund. The you TGO debt is indicated previously paid for with with our debt, millage. The other thing that's in non departmental and which is the subject of many of your questions, which we are already working on, is our subsidies to other entities. We all know that a number of our departments, like DDOT or component units like DTC and the Port Authority and others, they receive contributions, and this is where that is included in the budget, 94 point 8 million for city overhead the solid waste support. I know you've had extensive discussions in the supplemental budget about solid waste and and just where that fund stands. The cultural institution support is its own line item, and there's 50 million of other but again, we've gotten questions on those, and we're, digging into those questions and formulating responses on the next page, something we've talked about a lot, and something that we're very proud of, is that in 2017 the mayor and city council established by ordinance, a retired Protection Fund. It was a dedicated fund to make sure that after the 10 year funding. Holiday was over that the city would have the resource, some of the resources set aside to help make that payment. The concern was, if we went from zero in the city budget to 172 million in one year. As you all know, it's hard to find $172 million in this budget. It's hard to find even smaller amounts in this budget. So the idea was build up a side fund. We knew that income tax was outperforming two reasons. One is the mayor indicated last night substantial new jobs that came into the city that were courtesy of what he and the economic development team did. Another thing that I would say had a significant effect is using the state of Michigan is our administrator of the taxes had substantial benefits. You don't hear the complaints you used to hear about people not being able to get a refund. Everything's electronic. They've really stepped up enforcement. Every employer in the city that withholds taxes is now required to submit it monthly to the state. The state has offset powers where if someone is even entitled to a federal or a state refund and they owe the city money, the state can trap that money, and that comes to us. So for those reasons, and mainly economic development, income tax was running substantially ahead of what the plan of adjustment said and the in the proposal by the mayor to city council, which agreed at that time, was, rather than spend that money, let's set some of it aside, so that when the pension Cliff hits, when we had to start making these payments, we had the money. So the reason you see this chart increase to 455 million through fiscal 23 is we were building it up every year. Members that were on council know this. Every year they would council would approach, would appropriate money to go into the retired Protection Fund. So starting in 24 we started using it. So in 24 we use 79 million. In in fiscal 25 we use 73 million. So while the fund has gone down, it's not gone down by 79 million or 73 million because we earned interest on those funds. We always knew that these were precious dollars, so we invested them very carefully. They weren't in any speculative investments. We put them in investment grade bond portfolio. So we knew the money would be there. We knew that anything we could gain by being speculative of this money would be more than offset if there was some big market correction and we lost this money, so it's performed exactly as we planned. We're now, we're now using the fund. So that's the important part of that slide. On the next slide, this is also a very important slide to look at, as I indicated, we had a 10 year funding holiday. And Mr. Rising said it earlier, once the 10 year funding holiday was over, the city was committed to pay off the remaining liability of the legacy pension plans over a 30 year closed period. So fiscal 26 now there's only 28 years left, and I thought you'd appreciate the numbers. Just in a big picture,

    the retirement systems

    have substantial assets. So we have plan assets between the two legacy pension plans of $3.7 billion so that's substantial assets, but when the actuary calculates for all those retirees and beneficiaries, what the liability would be, it would need to be $5.4 billion so basically, what we're doing on page five is showing you how We're going to pay off $1.7 billion over now 28 years, and so in this year's budget, that's why you see a non departmental the 172.6 we show that 82 million will come from the general fund. We show that 72 million will be drawn from the retired Protection Fund, and we'll get the 19 million, we hope, but we plan to fully comply with those grant conditions, the 19 million from grants. So we're showing you how we're going to make that up. Another technical detail of the funding policy that the retirement systems adopted is something called level principal amortization, meaning the actuary takes that liability, that 1.7 billion, and it says you'll pay that off equally over the remaining 28 years, and you'll pay interest on the balance. So this is like a mortgage where you decide to make extra payments to pay your balance down quicker. So we're we're doing that. So the reason you see this go down over time is that the level principal method of amortization should produce that you also see, and I hope, appreciate that what the CFO has done with submitting the budget to council is recognize that it's very hard to find incremental dollars in the general fund because of the needs of the city are so significant. So we've tried to build a ramp where every year the General Fund has to give a little bit more and a little bit more, until you get to the year 2036 when we've used up all of our retiree Production Fund and we're up to 130 million, if we're all still here, that has to come out of the general fund that year, but then it should start To decline. I think it's also important to remember that these are only, this is only the legacy pension plans. The city also has two plans for active employees, the general Retirement System, component one, or hybrid plan that we're all members of. The City makes a contribution to that, and that's about 14 point 4 million a year that's actually not showing a non departmental because it's set up as a fringe factor. So as all of you see in your paychecks, we all have a mandatory deduction of 4% that comes out of our check, and then the city is required to match that at 4% so every pay period after we run payroll, we remit the four percents that were taken out of our check, and we remit the city's money at the same time. And if anyone's interested in seeing that, we at every quarter end in our CFO monthly report that we published to city council, we show the pension payments. So for 14 point 4 million would be the estimate for the current fiscal year. On the police and fire side, it's larger. Again, our police and firefighters don't participate in social security, so their pension benefits are incrementally better. The city contributes about $31 million to the police and fire open plan. So when everyone always talks to us and when we meet with rating agencies, people are focused on how we're paying off our legacy plan liability, but it's important to remember that we also have those two active plans. So going to the next page plan debt issuances, as I think Mr. Rising or Mr. Meyer indicated earlier, we've now issued all of the voter authorized you TGO debt, so we're just spending those proceeds. So any money that we got from issuing that utgo debt, they're restricted dollars. They can only be used in accordance with what the voters authorized. And every week, when we run accounts payable, we draw those funds as necessary to reimburse the general fund for spending that should be spent from the you TGO.

    You TGO the debt.

    We also don't have any and so, and it's also been indicated, there are no plans from the current administration to go back to the voters, which, of course, could only be done with councils approval, to ask for additional you TGO authorizations, it would be something for the next mayor to consider, is that that is an option, and it's a very good option that governments around the state and around the country use to fund their capital projects. And voters usually vote yes, and we think it's because voters recognize that if I'm living in a city, yes, that debt, millage is on my residential tax bill, but all the commercial establishments that have substantial value in these buildings, they're paying towards it too, and they're enjoying the same city services that residents are they should pay. So we think that most voters tend to go for UT geo bond issues, because they recognize that that debt millage is being spread across the entire tax base, which, you know, which is a substantial tax base for the city, but for this budget that we're presenting to you, the only planned ltgo use would be these installment purchase agreements that council approved last year, and I believe, one supplemental this year. So you all have authorized this, to enter into 57 million of installment purchase agreements, and we've used up about half that money so far. We draw it as as needed. So anyway, that that's the only new debt that we would plan to issue at this time is to close on our on our additional IPA authority that you've given us just real quickly on page seven, I think it's always important to look at how much you TGO debt we have outstanding. We show you all 11 series, really, only one series predates our time here at the city in 2010 the city issued you TGO bonds to finance our beautiful public safety headquarters. Ever since then, these were our utgo issues that we've done for for the purposes that the voters Authorize. So again, voters authorize the debt. Voters are responsible for paying for the debt through a debt millage, as Mr. Rising indicated, one of the things we're really happy about is that we can lower the debt millage, or we propose to city council to lower the debt millage to four mills and the reason we can do that, as Mr. Rising indicated, one, we've been paying down our you. Tgo.so, we've issued all that we can issue. It's on the decline now we're starting to pay it down, since it's assessed across all the property values in the city and our property values have risen that that also takes pressure off of individual homeowners, because it's spread over a larger tax base. We also get some other revenues. The state, you remember, abolished personal property taxes or significantly limited them in prior years, they had a program to reimburse us. We get that the 2010 bonds actually have a rebate from the federal government that we have to fight with them to get, but we get and any delinquent debt, millage that's turned over to the Wayne County Treasurer, they collect also comes back into this fund. So we've heavily analyzed what we can do, and we're quite comfortable that we can lower to four Mills, which is again, substantial tax relief for the city's tax.

    Did a good credit rating. When we go to the market to sell these bonds, you get a better interest rate if you have a better credit rating. And so every time we've issued these we've taken advantage of our rising credit rating to to lower our interest cost on this debt. So very important thing financing technique for us. On the next page, we show you the separate category of debt called ltgo debt, again, debt paid from the general fund. You know the I want to point out because, you know, I've heard public commenters talk about the fact that we're not transparent every quarter. Every quarter end in the O CFO report that's submitted and reviewed on the record with budget, Finance and Audit has the complete details of every element of the city's debt. We have about 1 billion of limited tax General Obligation debt, most of it was issued a bankruptcy exit. So our predecessors, when, when they couldn't balance budgets, what they were doing, which is not a great technique, is they were borrowing using ltgo debt to balance the city's budget. That debt was not all forgiven. Far from at bankruptcy exit. We had to make good on that promise, and we all that are running it today, have to pay off that $1 billion over time, and that's what we're showing you in this chart. Is how we're going to pay this down. I say most of that debt was bankruptcy exit, and council will remember the things that we did borrow money for. We borrowed money from the Michigan Strategic Fund for the demolition of Joe Louis Arena, which obviously was a very, you know, great project for the city, because now we have that beautiful Convention Center rising on that on that site. So it was a good use of the city to borrow that money. Actually, the Sterling group, Mr. Torgos company, reimburses us for the cost of that.so part of what was negotiated when, when he bought that land from the city, was to cover that demolition cost. So it's in the general fund. But we also, we collect that debt service from from them. You'll also recall not all council members, but those who were here. We when the gas tax went up in the state of Michigan, we issued money through the Michigan Transportation fund to fund infrastructures improvements in the strategic neighborhood. So the reason that we see a lot of the development in the commercial corridors use that, that debt and then the installment purchase agreements, which is something that Mr. Rising made us aware of, that the state used quite heavily, that the city didn't, also became a financing technique so we could keep up with the capital replacement of our public safety and general service, you know, division vehicles, and pay for it like, you know, like a person typically would, you don't not many people buy their car with cash and then drive it for three years and then have to come up with cash again. We spread out the payments over the useful life of the vehicle. So we, we believe that the installment purchase agreements are fantastic financing technique, which is why you've done it. But this chart is really showing you how the debt service will increase. And as Mr. Rising said, The only reason it's higher in those years 27 to 30 is we've now got the IPA debt that we project to spend. And lastly, just ending with our credit rating, this is an interesting chart, because it shows you that the city was investment grade up through 2008 and 2008 was five years before the city's bankruptcy, the rating agency started recognizing the struggles that were happening here. You know, when you meet with rating agencies and they see that you're borrowing money to balance your budget, they start to decrease your credit rating, much like any of us that have a FICO score and we get two or three new credit cards, we notice our FICO score drops because we took on more debt. We're riskier and and certainly the devastating filing of the bankruptcy in 2013 just you know, put us into a terrible situation. I personally, was sued by the bondholders that said, even though Mr. Orr told you you couldn't make the debt payments you're obligated to. The city ultimately settled that lawsuit, you know, through the bankruptcy, but that's the reason we had to make arrangements to pay some of those creditors back, the bond insurers and other people that lost money. And ever since then, the last 1112, years, we've been working our way up notch by notch. We're due to meet with the rating agencies again soon. We they have us on an annual surveillance and we're, you know, we've we got to investment grade last year, which we're super proud of, and we're always looking to increase our credit rating and show that we're, you know, we deserve it because we're

    doing responsible things. So with that said, that's our that's our that's our non departmental presentation.

    Thank you so much. Mr. Niagara, Yes, Mister poorly, one more thing about Thank you, Madam President, about non department mental so we all know that the city ended up with $109 million general fund surplus as of June 32,024 to me, mirror has chosen to use about 96 million of that, and in this presentation, about 60 million was presented. The other 41 million or so is also non departmental, but it's in the blight remediation fund, and when you see how that money is used, is primarily used for the mayor's recommendation to use about 12 million or so for alley cleanup, quarter cleanup, freeway cleanup, and then I think the mayor is suggesting that 25 million be used towards black

    remediation. So I just want to let you all know that that's also a non Department. Thank

    you. Thank you so much.

    Mr. Corley, all right, any questions from

    my colleagues?

    Okay, hearing

    so we okay. So no, we're not going to, yeah, we're not going to do questions right now, I think everything, everyone is all to say goodbye to mister rising, okay,

    I got to say that goodbye. Congratulations. Miss Don Thank you. Thank you all for the presentation again. Thank you Jay rising for your work and looking forward to working with you as well. Miss data Meyer, thank you guys for being here. Appreciate you. Okay, we'll go now to public comment. Yvonne, I will let you proceed with that.

    We have one person here in person, Miss Ruby Riley, and then we have some online as well. You to me,

    madam president, just thank you to you and colleagues. I just, it's important for me to hear as I'm learning and innovate the public to hear as well. So just, thank you. Thanks. I enjoyed the presentation actually, so I'm glad we did it. It's actually really good.

    Yeah, yeah,

    okay, yes. Two minutes.

    Miss Ruby Riley, go right ahead. The floor is yours. Good afternoon, city council. I just happen to be downtown taking care of some business, and I said, let me stop in here at city council and see what they doing. But what I would like to do, I would like to have a copy of those presentations that they had, if it's not a problem.

    Yes, we was over text, man, was $1,202

    and yes, I would like to have my money back so I can use it with something else. Plus I had to get a loan on that over text, money. I still have my receipt for my financial institution, what I had to borrow. So I'm sure a lot of people that was over text, because I was one of them that, yes, I was down here in city council. I mean, the building at COVID Young's building, when we did the protest downstairs about the overtax money. We said we wanted to get paid, and I feel that we should. Number two, I have a friend of mine. I have been telling him about it. He owns a bill. He had owned a business at the time he was overtaxed, so they end up closing on him. And he would like, right now is up for sale, and he would like to have his property back. He was in there for years. Matter of fact, he stayed there also because it was like a mechanical shop. Black owned mechanical shop. So I told him I would talk to you all to see what you all say. He lives in Highland Park now, but he still be in Detroit, because his daughter lives here, and he still comes to Detroit, so he would like to have his building back. Is vacant. He shouldn't have to pay for it, because he spent a whole life history there. So if you all can give me some information, I would let him know. I would relay it to him. And it was a very interesting meeting. You see, I've been down here for a while because it was interesting, and I like to have find out more about the budget, how's it going on? Because I'm getting ready to run for a couple of offices. One I'm not going to, I'm not running from already in it. I just got to get it certified. Okay, so I'm going to

    my district. I'm going to run for, okay, our office, but it's not a mayor,

    it's not a council.

    Okay. Well, thank you so much, Miss Riley for coming down. Thank you. Thank you for your comments.

    Alright, we have nine callers online,

    and our first caller is we see you. We see you. Good. Good evening,

    good afternoon. I thought we were supposed to have two minutes. Thank you.

    Yes, it was very interesting. It was interesting that no one had any questions about you TGO bonds, even though we've had Mr. Shelton, who come down several times and asked you to address how the funds are being spent, I noticed you had no questions for him. Mr. Hornsby. Mr. Hornsby, we complain about illegal or assessments that are been being done improperly. And he changes the system. Are we not going to have assessors? We're going to have people to analyze? I don't think people in these departments have any right, any right to just arbitrarily change your system. How we do things without coming to the people first, I see a lot of problems with this council and how they conduct themselves. It's, it's it's improper. People are up and down. People are going in and out. We don't know whether or not they're going in and out because they they are compromised. But this is a meeting, and it should be conducted as a medium. This is, this is very important to the people in the city of Detroit. And what I didn't hear, what I heard a lot of, is a lot of things for employees, employees. That's all I hear about employees. And we're going to pay the biggest amount of money for this pension and that pension, I don't hear anything, any conversation about neighborhoods. You have to look at the people in the neighborhoods and and address what they're telling you. Joy road looks a mess. I saw no I see no. Daffo deals up and down Joy road. What I do see are a bunch of parking, used car lots and other mechanical shops that see we don't we don't have any sit down restaurants. We don't have anything in our area that would attract people to stay

    in the aviation subdivision. And trust me, I remember when

    you guys are doing a horrible job. You

    our next caller is William M Davis, good

    evening. Mr. Davis, good afternoon. Could that be heard? Yes, you can. I like to start off by saying that I think that there will be more economic vitality in the city if seniors, 65 and older, did not have to pay property tax that way. That would encourage more of us to stay in the city. I've stayed in the city longer than some of y'all been living. But you know that would help to keep our dollars turning over more also, I think, in procurement, because previously, I met with mister Jackson when he was in charge of procurement, and like, say, we was trying to encourage more of our dollars, like in some, most places, most municipalities, they got like 80% of that dollar stay within the municipality. Our dollars go any and everywhere they should be staying in Detroit. We should be growing and developing Detroit businesses, not giving people like these demolition guys 100 or 200 houses to tear down. We should break this down to, like, maybe 10 houses, a contract for some people, also as relates to the non as relates to the 5 million or the ten million for retirees, for a potential partial 13 check, I think the an additional million dollars should be added for the general fund retirees and so much you know, the police need to everything the police and fire. They need, what they what they should be getting. They need that. But also, you have to take account the fact that just the general fund retirees that took a pension cut, took a car, lost all of their cost of living, and took annuity clawback. So I think I could at least give an extra million dollars to this policy, amount that the mayor is proposing. I think we need to be doing more to help people. You know, the average city, Detroit general fund retiree only makes like $20,000 a year. You know, the average police and fire retired makes like 30,000 a year. You know, the mayor makes over 200,000 so he makes like over 10 times what the average general fund

    retiree makes. So

    I think we need to be more money for retirees. Thank you.

    Okay, thank you.

    Our next caller is Mr. Ronald Foster.

    Ronald Foster, good evening. You.

    Ronald Foster, good evening.

    Okay, let's come back to him, please. All right, our next caller is

    Lucinda. J Dara,

    all right, Miss Dara,

    okay, I've got

    a minute. Let me turn all the Okay, I'm here. Can you hear me? Yes, we can hear you. I don't know which one you're hearing me from, but okay, I am a retiree,

    and can you hear me?

    Yes, we can hear you. You

    can't hear me. We can hear you. Mr. Go right ahead. We can hear you.

    See, I am muted on my computer. Wait,

    let me turn this up now, can you hear me? Yes, yes, ma'am, okay. Now, can you hear me? Okay, that's the computer. Okay. I miss most of it. I've been working on trying to get my phones and stuff to work. They're not working, right? I came on and probably come it already started about two minutes. You must have closed it immediately at nine o'clock, because when I got on about five after it was already closed. But anyway, what I wanted to tell you is that I tried. I was interested in paying back the rest of the claw back, but they made some kind of rule that you can't pay it back. If you don't pay it back within three months or something. Then all of a sudden

    they say, Well, so,

    so are you

    listening to me? Can I hear you? Yes. Ma'am, we can hear you. Ms. Dara, anyway, so I can't pay that back because they've got a rule that it can't now they're charging us about six and six point, I don't know, 9% or something on the claw back that's still owed. Each one of these retirees are paying a high interest rate, and I want to know how much interest rate are you? Are you paying back on the on the $1 billion that got stolen? And I guess what I heard, it wasn't even with the bondholders. Somebody stole all that money that we we borrowed

    to make the pension fund whole, which

    I that's something new. I just

    All right, thank you, Miss Darren. Our next caller is Betty a Varner. Miss Varner, good evening. Good afternoon. Yes, good evening. This is Betty a barn and president of DeSoto Ellsworth black Association, asking that you please allow monies in the budget for the Detroit home accessibility program for seniors and people with disabilities. And please we lacks the requirement to be eligible for this program. Make it so more people, more seniors and people with disabilities will be eligible for the program. Also allow monies for the seniors and disabled accessibility home repair program, including the walk in showers. Please allow funding to assist associations and black clubs to improve their neighborhood parks. If they have created a park in their neighborhood, we need help, just like the work and that is being done for the city parks. Just because we have created parks in our neighborhood does not mean that we don't need to help, so please show us some love and allow monies for our projects, for our parks. Also, please allow monies for associations and black clubs to improve their community neighborhood projects. We are they are organization who are working on projects to improve their community, and they need monies, and we need funding for our corridors, so please allow monies to assist us with our corridors. There are a lot of corridors that are need attention in the city allow monies to assist black clubs to become a 501, c3

    helping them to pay their fees.

    Thank you for

    Okay. Thank you.

    Our next caller is torpedo. Alright? Good afternoon. Excuse me. Good evening. Good evening. It ain't nothing good about this evening. Mary. Now listen up and play close attention. Scott Benson, why don't you ask some intelligent questions about Kenisha Coleman's murder, and ask how Charmaine McLeod was at that McDonald's and no Kenisha was shot. Get her answer too. Angela Whitfield Callaway, jump up on your soap box and grandstand on the fact that Mimi's mama, her mama, was shot and killed, and she didn't do it. She didn't commit suicide, and why is the Detroit Police Department at her labeled classified designated falsely, erroneously and bogus as a suicide and then check Marco prest and former nob now commander Derek McKay. Over Derek may over at the second precinct. And then Fred Doha, we know you cheated in so you don't say nothing. You stay out of it. And Gabriella, Santiago Romero, you don't seem to care about the blacks. You only care about the Latinos. So you stay out of it too. And then married you the council president. Now how to demonstrate it to y'all, and Kenisha didn't shoot herself, so you do what you got to do to get that tag up off, up off. NiNis, mom, her mother. She asked for some help, and I didn't demonstrate it to y'all. I didn't even found the killer that girl was at McDonald's. Ain't, no way she knew Kenisha was shot unless, well, she didn't get no phone call or no incoming text, and ain't nobody said, I'm lying. What did I tell y'all? Y'all are intelligent enough to know comrade mallet,

    Mike Duggan and Dante Goss on straight BS.

    Next we have phone number ending in 270

    evening. Caller, 270

    yes, good evening. This is yours truly, Malik Shelton,

    well, I wish I had more time anyway,

    coming out of the bankruptcy

    the the O CFO issued hundreds of millions of dollars in uh ltgo bonds without following state law pertaining to public notice, public meetings and referendums, and it issued bonds that even veteran bond attorneys confessed. They confessed that they had never seen any such bond like these in their lives. Some of them had been bond attorneys for 3040, years, and never seen anything like it, these issuances was a clear and flagrant violation of Michigan State law. Why? Because federal bankruptcy court does not have the authority to violate state law, not according to Monique Shelton, but according to the 10th Amendment to the United States Constitution. Also,

    and reply to John negli

    if the rating agencies are giving Detroit such a marvelous credit credit rating, such a great credit rating, then why are they continuing? Or why have they continued to issue you TGO bonds as well as ltgo bonds, at the same

    interest rate, approximately 5% or 5.5%

    that's a high interest rate for

    a city that's supposed to have such a marvelous Credit rating. You know I'm saying, and why is it? Octa oils office issuing all these bonds under negotiated sales instead of competitive sales. That's another reason why we got high interest rates

    all these bond issuances under negotiated sales, it should be issued

    under competitive sales. So

    our next caller is Rhonda Adams

    Good evening.

    Rhonda Evans, Adams, Rhonda Adams, good evening. Yes, hi, hi, I, uh, I am calling and saying to you all that I know it's a lot of nuances to these things that you're dealing with, but I know that you can handle it. I'm rooting my concern now in reference to

    you know, I'm working with

    the public service project, and primarily, can you hear me?

    Yes, ma'am, we can.

    Yes, ma'am, we can hear you

    with Detroit Justice Center and outlier media. In regards to the past tax foreclosures for Detroit Detroiters. Now I hear that only 1/3 of those funds were really prospect to be given back, in retrospect, to the residents because of the time frame that those funds well, two thirds will go back to this OCF bank for this billion dollar tax debt, and what we need to do is see how we can reallocate those funds to the community. And it's very necessary also to apply a larger inflation or corporate tax to to the the corporate tax situations is very, very dire. Straight for one, Amazon, do not play sales tax to the city of Detroit and they from their vendors. They need to, we need to find a way to collect sales tax from all corporate industries in our community, and when it comes down to the housing and the homelessness, the Blight money need to now be repurposed to do more than just collect blight.

    It needs to be repurposed to continue on

    up skilling you. Madam

    President, that was our final caller. So

    we will go back to Ronald Foster and see if his phone is working. All right, Ronald Foster, good evening, good afternoon, rather, just a couple things I heard that was very important

    one time audits

    the integrity of the individuals that's doing them. No, Mr. Foster, just really come now, I'm not trying to be extortionable, or or any of those other things. I just simply added to be included. And if I was ever included in anything, then I can no longer speak from the outside perspective, but when it comes down to civil rights violations, the key elements in it is knowingly and willingly deprive someone of something. And I think that this has been a pretty good pattern of behavior, a lot of testimony, publicly given, a lot of emails, that's given as far as grievances and things that can clearly show that government is knowingly and willingly depriving citizens of his inclusion and other things within the system. With that said, I did want to say that I think that this council have done a good job. I've always said I believe they've done a great job, a much better job than any other councils. I see a lot of development in these last five years, which are good. I see a lot of the ties with the mayors. At the end of the day. Don't none of that stuff mean anything. You don't include the community. If you can't mirror any of those highlights with anything you've done in the community. What value have you done to show any equality when you say that you come in here to these sides

    lately? Where's the master plan or direction or four year plan?

    Alright? Thank you. Mister Foster, that will conclude all of our public comments for this evening, and if there is nothing else to come before us is there a

    motion to adjourn. All right, this meeting will stand adjourned and we will resume tomorrow at 10am.