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Detroit City Council OKs 2022-23 budget, revenue to 'bounce back from pandemic'

Detroit — At the proverbial 11th hour, the Detroit City Council late Thursday night approved Mayor Mike Duggan's $2.4 billion budget for the 2022-23 fiscal year that includes improvements to transit services and bolsters the city's workforce, which was cut during the pandemic.

"We have a quorum at almost 11 o'clock this evening," said Mary Sheffield, who represents District 5 and serves as council president. 

After hours of negotiations Thursday, the City Council voted without objection in favor of the general fund spending plan. Thus ended a weeks-long process that entailed 46 budget hearings and executive sessions, by Sheffield's count.

"I do believe this budget is good," said Fred Durhal III, who represents District 7. "But I do believe it will need more work."

"We may not have all the dollars we wanted," Sheffield admitted, as the vote neared. "City Council's closing resolution shows our commitment and our intent to continue to listen to our constituents."

Midnight was the council's deadline to pass a budget. The budget will officially be presented to Duggan on Monday, and he has through Thursday to issue a veto.

Overall, the $2.45 billion budget for 2023 is an increase of 5%, up from $2.33 billion in 2022.

Duggan presented his "post-crisis" budget proposal to the City Council last month. The budget assumes that city revenues will return to pre-pandemic levels.

Aside from transit and restoring the city's workforce, Duggan said he's prioritizing retiree pension contributions, removing blight, neighborhood improvements and beautification. 

Duggan stressed as he detailed his $1.2 billion general fund spending plan that the city regained local control of its finances four years ago when it emerged from the strict oversight of the Financial Review Commission put in place as a condition of Detroit's bankruptcy. 

The spending plan for the fiscal year that begins July 1 comes after Detroit cut $400 million from its budget two years ago due to COVID-related revenue losses.

It will be the eighth-straight balanced budget, "Something that didn't seem possible, not too many years ago," Duggan previously told the council.

The budget supports operations of the city through June 30, 2023, including salaries, wages, pension requirements, other employee benefits, debt service and other expenses.

Steven Watson, the city's deputy chief financial officer, updated the budget to reflect nearly $13 million in changes featuring the council's amendments Tuesday.

The Office of the Chief Financial Officer could not detail what amendments had been made by the council.

“We won’t have the final budget for at least a couple weeks. Even after today, the mayor has time to veto if he chooses, then council would need to respond,” said CFO spokeswoman Stephanie Davis.

The city had $130 million remaining from fiscal year 2020 that Duggan suggested be appropriated in one-time allocations.

To better position the city, he proposed a one-time payment of $30.7 million to the city's rainy day fund, which would increase the balance to $138 million. Another $5 million recurring increase to scheduled contributions to the Retiree Protection Fund and a $30 million one-time deposit to the fund.

So far, the city has set aside $370 million in the Retiree Protection Fund, which is obligated to start paying out to retirees in 2024. In the proposed budget, Duggan said they have increased their initial contributions so that the city's total contribution reaches $460 million by 2024. 

Another $17 million will be allocated for blight funds and $50 million in one-time capital would be used for maintaining buildings, parks, neighborhood planning studies and contributions to the city airport and museums. 

About $72.3 million in the city's general fund will support improvements to DDOT transit service and the People Mover. It includes a $5.8 million increase to improve paratransit services and vehicle operations.

An additional $2 million is proposed for the elections department with a mid-term election set for this fall, Duggan said.

Riders told The Detroit News last year that they had waited hours for pick-ups and were sometimes dropped off at the wrong addresses. Detroit officials are taking more oversight from the French transportation provider, Transdev, which riders have been advocating for.

Congress has also signed off on a COVID-19 relief package that will send an estimated $10 billion to Michigan, $826 million of which will go to Detroit. The funding will help the city address its shortfalls prompted by mandatory state-imposed shutdowns.

The council has begun appropriating the funds, which Duggan outlined over eight categories to address intergenerational poverty. He dubbed the spending plan the "Detroit Future Fund."

Of the allocation, Duggan has proposed $250 million for city services, $95 million to address blight, $50 million for neighborhood investment, $67 million in housing initiatives, $105 million for job creation, $50 million to improve public safety, $53 million for beautification and recreation improvements, $40 million to help small businesses and $45 million to enhance digital services.

The budget is the fifth in a 10-year period of passive oversight from the state. If the budget is balanced again in the coming year, "we're halfway of having the state gone for good," Duggan said last month.

Twitter: @SarahRahal_