Detroit City Council OKs 2021-22 budget, raises for city workers

Christine Ferretti
The Detroit News

Detroit — The City Council approved a $1.1 billion budget for the 2021-22 fiscal year that includes raises for city workers and funding to bolster skilled trades training for city residents.

The council voted 8-1 Wednesday in favor of the general fund spending plan, with Council Member Raquel Castaneda-Lopez casting the lone no vote, noting her disagreement with the prioritization of investing in the Detroit Police Department rather than "critical social services."

The budget approval comes as the city works to recover from a massive financial blow from the COVID-19 pandemic that cost Detroit more than $410 million in revenues over a 16-month span.

In presenting his plan last month for the fiscal year that begins July 1, Detroit Mayor Mike Duggan warned the budget would be "tight" but recommended more dollars for the city's elections office, police force and recreation department. 

Congress has since signed off on a COVID-19 relief package that will send an estimated $10 billion to Michigan, $879 million of which will go to Detroit.

The funding will help the city address its shortfalls prompted by mandatory state-imposed shutdowns. The first allocation — $440 million — is expected in May. The remaining $439 million is slated to arrive within a year, Detroit's council noted in a closing resolution. 

Detroit's Acting Chief Financial Officer Jay Rising said Thursday that the city is waiting on clear instructions from the federal government about how and when the money can be used.

Rising said there are four eligible categories: responding to public health emergencies with assistance to households, nonprofits and industries; premium pay; water and sewer infrastructure; and for governmental services to address Detroit's COVID-19-induced revenue reductions.

The money can't be used to bolster the city's pension funds. 

The cumulative impact of the pandemic into 2024 on the general fund, Rising said, could reach $600 million. 

"It's the evidence of what the effect of COVID was on the city both in terms of its residents as well as in terms of the city's finances," he said. "That's clearly the purpose of these funds. It's an opportunity to reverse the impact of COVID on the city and its residents."

The city's 2021-22 budget plan allocates more money for affordable housing, expungement programs and ensuring Detroiters get fair opportunities for recreational marijuana businesses.

It also calls for a one-time infusion to restore $50 million to the city's rainy-day fund and that a $30 million supplemental deposit be added to the scheduled $55 million in contributions to the Retiree Protection Fund. 

Last year, Duggan laid out aggressive budget cuts to stave off a $348 million shortfall from March 2020 to June of this year. In the fall, the economic downturn deepened as a spike in COVID-19 cases resulted in another $62 million in losses.

In a resolution, the council urged the administration to use some of the federal rescue money to help Detroit's Water and Sewerage Department fund repair and replacement of underground water infrastructure, a cost estimated at $4 million per year over the next decade. The panel also suggested the city use a portion of the funding to set up a low-income home energy assistance program to ensure water shutoffs in Detroit come to an end.

Other recommendations include directing $10 million in COVID-19 relief aid to supporting parks and outdoor recreation sites, $9.5 million for capital repairs at the city's public library branches and $5 million for a low-income bus fare pilot program. 

Rising said the administration will work with the council to identify the best use of the federal dollars. Council ultimately will have to sign off on the spending plan. 

"This money is meant to cure the economic hardships people have," he said. "We want to put it to work as quickly as possible."

Castaneda-Lopez noted Wednesday that she also voted against the city's 2018 budget plan when $10 million was directed to the city's Project Green Light crime-fighting initiative. That program includes the installation of highly visible green lights and signs on participating businesses to alert the public that each is equipped with high-definition cameras that feed into the Detroit Police Department's Real Time Crime Center. 

In recent weeks, the councilwoman proposed shifting nearly $40 million from the $327 million police budget and spending it on health and social service programs. 

"I hope that moving forward we'll see more of a shift to investing into those types of resources and programs," Castaneda-Lopez said prior to the vote. "While I recognize folks want safety and want officers, we also have heard from folks wanting additional resources that go into transit, to housing, to recreation."

The budget includes 2% raises for nonunion workers and a 2.5% bump for police officers and bus drivers. 

Council President Brenda Jones successfully lobbied for $1.47 million for a "Skilled Trades Readiness Fund" to cover basic skills testing and skilled trades training for residents, business development, targeted outreach and efforts to aid Detroit businesses in bidding on city contracts. 

Jones, in a statement, said the budget includes a continued commitment to the city's Community Outreach Ordinance, "guaranteeing transparency and accountability related to our Detroit dollars."

Jones also noted the creation of a working group to collaborate with City Council on how federal COVID-19 relief dollars should be spent. 

"As we continue to emerge from the disheartening financial impact of COVID-19, it is essential that we #InvestinDetroit by implementing policies and procedures that create systems that leverage City of Detroit contracts to the benefit of Detroit residents and businesses," Jones said in a statement. 

The city's overall proposed budget is $2.3 billion for 2021-22.