Detroit FRC Meeting Minutes April 26, 2021

Detroit Financial Review Commission

CITY REGULAR MEETING

Monday, April 26, 2021 at 1:00 p.m.

Remotely Using Microsoft Teams

MINUTES

Approved: May 24, 2021

  1. Call to Order

Chairperson, Rachael Eubanks called the meeting to order 1:00 p.m.

  1. Roll Call

Members Present -10

  • Dr. Barnwell
  • Rachael Eubanks
  • Dave Massaron
  • David Nicholson
  • Brenda Jones
  • Angelique Peterson-Mayberry (non-voting on city matters)
  • Jay Rising
  • Ron Rose
  • Jeremy Vidito (non-voting on city matters)
  • John Walsh

Let the record show that eight (8) Commission members eligible to vote were present, A quorum was present.

  1. Approval of the Proposed Minutes from the March 29, 2021 Regular City Meeting
    1. Motion made by Commissioner Massaron and supported by Commissioner Nicholson to approve the draft minutes of the Commission's March 29, 2021 City meeting as presented. The Commission unanimously approved the minutes as presented.
  2. Executive Director's Report
    1. Patrick Dostine, Executive Director, informed the meeting that in reviewing the City's monthly report, ending February 28, 2021, the city continues to pay its debt and pension obligations, remains in compliance with all statute relevant to the waiver, and there is no reason to consider rescinding the waiver at this time.
  3. Old Business
    1. None
  4. New Business
    1. City's Presentation - financial impacts from Charter proposal
      1. Tanya Stoudemire, Chief Deputy Financial Officer, and Steve Watson, Budget Director, gave a detailed presentation on the fiscal impact of the Draft Revised Charter (DRC) proposed by the 2018 Detroit Charter Revision Commission. 
      2. The presentation included a background of the charter commission; it was noted that the commission submitted its Draft Revised Charter to the Governor's office on March 5, 2021.  They explained the details of the Draft Revised Charter and the impact it will have on the city's budget. During the presentation, the city's representatives stated that if this charter is approved it would: pose imminent fiscal crisis for the city, noting that staff and services would be cut in half; elected officials will be forced to impose predetermined annual budget requirements; and financial and service insolvency would result, leading Detroit to a second bankruptcy.  It was recommended that the FRC form a subcommittee to review the DRC and "… take actions necessary in preparation of and upon replication of the city's year-four waiver requests".
      3. After the presentation, questions were directed at the Office of Chief Financial Officer (OCFO) staff. Chair Eubanks said a lot of work was done to quantify some of the financial impacts the charter proposal would have on the city and asked if more details could be provided on how they came up with the cost estimates. 
      4. In response, the city's budget director stated they went through the provisions line by line and looked at some of the larger ones, he continued to say that one of the biggest provisions in the draft revised charter is creating additional elected officials and independence from the city's administration, therefore one of the largest costs will be the duplication of administrative capacity and service across city government.  Similarly, there are several contracting requirements that are imbedded into the DRC that would push up the procurement costs with the city's suppliers. A review of the contract costs across the city's budget was completed and a 10% premium was added to reach this cost.
      5. Chair Eubanks invited the FRC commissioners to raise questions as it relates to the city's presentation.
      6. The FRC commissioners raised many questions, which included: Are there any proposals in the charter that would provide opportunity for more revenue or drive savings to taxpayers? In response, the meeting was informed that there are no provisions in the charter that would save on costs or grow revenues.
      7. Another commissioner asked whose responsibility was it to mandate a balanced budget and to negotiate with the Charter Revision Commission? - OCFO staff said the city is required to present a balance budget and if the CFO is unable to certify a balance budget, it would put the city back under active FRC oversight.
      8. Another commissioner asked if a thorough review was done, to determine what the costs would be to implement the proposed charter? -  FRC Chair Eubanks said both entities (city of Detroit and the Charter Revision Commission) were invited to make presentations to the FRC so that a determination can be made.  The Charter Revision Commission is expected to make their presentation at the May 24, 2021 FRC monthly meeting.
  5. Public Comment
    1. Helen Moore
    2. Joanna Underwood, Detroit Revision Charter Commission
    3. William Davis
    4. Tracy Peters, Detroit Revision Charter Commission
    5. Richard Mack, Detroit Revision Charter Commission
    6. Michelle George
    7. Lamon Satchel, Detroit Revision Charter Commission
    8. Angelique Peterson-Mayberry
  6. Next Meeting Date
    1. City Regular Meeting: Monday, May 24, 2021 at 1:00 pm, remotely via Microsoft Teams.
  7. Adjournment
    1. Motion made by Commissioner Rose and supported by Commissioner Jones to adjourn. The Commission approved the motion to adjourn.
    2. There being no further business, the meeting adjourned at 1:51 p.m.