CITY OF DETROITRevenue Estimating Conference
September 10, 20201:00 PM
Broadcast from Remote Location in Accordance with State Executive Order 2020-154
Topic Participant(s)
1. Introductions
• David P. Massaron, Chief Financial Officer, City of Detroit
• Eric Bussis, Chief Economist, Director, Office of Revenue and Tax Analysis, Michigan Department of Treasury
• George A. Fulton, PhD, Director Emeritus, Research Professor Emeritus, Research Seminar in Quantitative Economics (RSQE), Department of Economics, University of Michigan
2. Opening Remarks • Eric Bussis (Conference Chair)
3. Old Business• Approval of Proposed Minutes for the February 2020
Revenue Estimating Conference
4. Presentation of Detroit Economic Forecast• Gabriel M. Ehrlich, PhD, Director, RSQE, Department
of Economics, University of Michigan
5. Context for the Economic and Revenue Forecasts and Remarks
• David P. Massaron• Eric Bussis• George A. Fulton, PhD
6. Presentation of Proposed Revenue Estimates
• Tanya Stoudemire, Deputy CFO/Budget Director, City of Detroit
o Major Revenueso Departmental and Other Revenueso Other City Funds
7. Remarks• Irvin Corley, Jr., Executive Policy Manager, Legislative
Policy Division, Detroit City Council• Mark Lockridge, Auditor General, City of Detroit
8. Public Comment
9. Vote • September 2020 Economic and Revenue Forecasts
10. Closing
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CITY OF DETROIT Revenue Estimating Conference
Wednesday, February 19, 2020 at 2:00 p.m.
Coleman A. Young Municipal Center
Erma L. Henderson Auditorium 2 Woodward Avenue, 13th Floor
Detroit, MI 48226
PROPOSED MINUTES
Call to Order Mr. Fulton called the meeting to order. Roll Call / Introductions Conference Principals Present
• David P. Massaron, Chief Financial Officer, City of Detroit • Eric Bussis, Chief Economist and Director, Office of Revenue and Tax Analysis, Michigan
Department of Treasury • George Fulton, PhD, Director Emeritus, Research Professor Emeritus, Research Seminar
in Quantitative Economics (RSQE), Department of Economics, University of Michigan Others Present
• Tanya Stoudemire, J.D., Deputy CFO/Budget Director, City of Detroit • Irvin Corley, Jr., Legislative Policy Division, Detroit City Council • Mark Lockridge, Auditor General, City of Detroit
Opening Remarks Mr. Fulton stated that Public Act 182 (PA 182) requires the City to hold two revenue estimating conferences annually (one in February and another in September) to set the City’s official economic and revenue forecasts. The principals of the conference must be the Chief Financial Officer for the City of Detroit (David P. Massaron); the State Treasurer or his or her designee (Eric Bussis); and a third person affiliated with a public entity with experience in economic forecasting and revenue projection (George Fulton).
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He noted the revenue estimates approved today will set the revenues for the City’s FY 2021 budget and FY 2021–2024 Four Year-Financial Plan. Election of a New Chair Mr. Fulton stated that under PA 182, the Conference must elect a new chair for a one-year term. Motion to elect Eric Bussis as the new chair of the Revenue Estimating Conference. Motion moved and supported. The Conference approved Mr. Bussis as the new chair. Mr. Bussis took over as chair. Old Business Approval of Proposed Minutes from the September 2019 Revenue Estimating Conference Motion made to approve the proposed minutes of the September 2019 Revenue Estimating Conference as presented. Motion moved and supported, the Conference approved the minutes of the September 2019 Revenue Estimating Conference as presented. Presentations
1. Gabriel Ehrlich, Director of the Research Seminar in Quantitative Economics, University of Michigan, presented Detroit’s first local economic forecast
2. Mr. Massaron, Mr. Bussis, and Mr. Fulton provided an overview of the local, state, and national context for the economic and revenue forecast.
3. Ms. Stoudemire presented the City’s proposed February 2020 revenue estimates. 4. The Conference principals made additional comments, and Ms. Stoudemire responded
to their questions on the revenue forecast. Steven Watson (Deputy Budget Director, Office of Budget, City of Detroit), and Evan Cunningham (Economist, Office of Budget, City of Detroit) responded to additional questions and comments.
5. Mr. Corley and Mr. Lockridge provided additional remarks. Public Comment None Approval of the City’s February 2020 Economic and Revenue Forecast Motion made to approve the City’s economic and revenue forecast for February 2020, as presented. Motion moved and supported. The Conference unanimously approved the City’s economic and revenue forecast for February 2020.
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Adjournment Mr. Bussis stated the forecast will be distributed to the Mayor, City Council, and the Financial Review Commission. He also stated the forecast report will be published on the City’s website after the City incorporates any additional information from today’s Conference. There being no further business, the meeting was adjourned.
City of Detroit-University Economic Analysis PartnershipDetroit Consensus Revenue Estimating Conference, Sept. 10, 2020
RSQE: September 2020
New data source: Detroit-specific establishment job counts and wages
• Produced by the Michigan Bureau of Labor Market Information and Strategic Initiatives
• Comparable to the Quarterly Census of Employment and Wages (QCEW) statistics published by the Bureau of Labor Statistics (BLS)
American Community Survey (ACS): annual survey conducted by the Census Bureau, ~1% of U.S. population, available at city level
Provides “household” job counts for Detroit residents, not jobs located in the city
Local Area Unemployment Statistics (LAUS): monthly statistics published by the BLS
About the Data
RSQE: September 2020
Annual and Quarterly forecast of Detroit economy, 2019–2024
• Still have incomplete data for 2019
Forecasting model follows jobs by major industry both on a payroll basis and a household basis
• Wage bill and average wage by major industry is only available on a payroll basis
Due to data lags, we will not have data on COVID-19’s impact on payroll jobs until early 2021
About the Forecast
RSQE: September 2020
The Economic Outlook for Detroit
Number of New Confirmed Cases of COVID-19 in the City of Detroit
RSQE: September 2020
Monthly Employment Count, City of Detroit, 2010–2020
RSQE: September 2020
Monthly Unemployment Count,City of Detroit, 2010–2020
RSQE: September 2020
Quarterly Average Payroll Employment,City of Detroit and Michigan, 2007–2024
RSQE: September 2020
Annual Wage and Salary Income per Worker,City of Detroit and Michigan, 2007–2024
RSQE: September 2020
Annual Wage and Salary Income per Worker by Industry Groupings,City of Detroit, 2007–2024
RSQE: September 2020
Annual Income Growth,City of Detroit and Michigan, 2011–2024
RSQE: September 2020
Detroit Annual Wage and Non-Wage Income Growth, 2011–2024
RSQE: September 2020
Annual Unemployment Rates,City of Detroit and Michigan, 2010–2024
RSQE: September 2020
COVID-19 pandemic will reduce payroll jobs by approximately 11 percent in 2020
• Detroit’s overall payroll jobs count recovers to 2019q4 level by 2022q3
• Household employment follows a similar path
Detroit’s unemployment rate jumps from 8.8 percent in 2019 to 23.8 percent in 2020
• Declines to 11.8 percent by 2024
Expanded unemployment insurance and other stimulus protects overall incomes in 2020
Summary of the Forecast
RSQE: September 2020
OCFO – Office of BudgetSeptember 2020 Revenue Estimating Conference
Revenue Estimating ConferenceSeptember 10, 2020
Office of the Chief Financial OfficerOffice of Budget
OCFO – Office of BudgetSeptember 2020 Revenue Estimating Conference
Overview● Michigan PA 279 of 1909, Section 117.4t(1)(d), as amended by PA 182 of 2014, states the City of Detroit
shall hold independent biannual revenue estimating conferences (in September and February) that
establish the official economic forecast and forecast of anticipated City revenues.
● Revenue estimates must be approved by the voting principals:
• David P. Massaron: Chief Financial Officer, City of Detroit
• Eric Bussis: Chief Economist and Director, Office of Revenue and Tax Analysis, Michigan
Department of Treasury
• George Fulton, PhD: Director Emeritus, Research Professor Emeritus, Research Seminar In
Quantitative Economics (RSQE), Department of Economics, University of Michigan
● The estimates include the current fiscal year (FY 2021) and the next four years (FY 2022–FY 2025).
● They set the revenues the City uses to begin developing the FY 2022 budget and FY 2022–FY 2025
Four Year-Financial Plan.
2
OCFO – Office of BudgetSeptember 2020 Revenue Estimating Conference
$1,076.9$938.9 $931.2
$98.0
$82.0 $86.3
$1,174.9
$1,020.9 $1,017.5
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
Feb 2020 April 2020 Sept 2020
FY 2020 General Fund / GF-Impact Revenues($ in millions)
General Fund GF-Impact Funds
Changes Since February 2020 Estimates
$1,084.8$906.7 $840.7
$98.9
$82.9$86.9
$1,183.7
$989.6 $927.6
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
Feb 2020 April 2020 Sept 2020
FY 2021 General Fund / GF-Impact Revenues($ in millions)
General Fund GF-Impact Funds
($194.1) ($256.1)Shortfall
3
($154.0) ($157.4)
Note: GF-Impact Funds includes funds that may require additional General Fund contributions to offset revenue shortfalls (Construction Code, Transportation, and Airport Funds).
Shortfall
OCFO – Office of BudgetSeptember 2020 Revenue Estimating Conference
Changes Since February 2020 Estimates● In April 2020, the Office of Budget projected revenue shortfalls of $154M in FY2020 and $194M in
FY2021 due to the Coronavirus Disease 2019 (COVID-19) pandemic
● The Mayor presented his recommended changes to maintain a balanced budget in April 2020
● The City Council approved the FY 2021 Budget with those changes on May 5, 2020 and approved the
changes to the FY 2020 Budget on June 30, 2020
● We now project FY 2020 ended with an additional $3.4M (0.3%) revenue loss vs. April 2020, which was
offset by additional underspending
● We now project FY 2021 will have an additional $62M (6.3%) revenue loss vs. April 2020, driven by:
○ Additional gaming losses from casinos reopening later and more gradually
○ Additional income tax refunds from nonresidents working remotely longer
○ Both of these impacts peak in FY 2021 with smaller ongoing impacts in future years
4
OCFO – Office of BudgetSeptember 2020 Revenue Estimating Conference
FY 2021 Revenue Summary, All Funds
5
$840.7 , 44%
$624.8 , 33%
$63.2 , 3%
$100.2 , 5%
$67.7 , 4%$198.9 , 11%
FY 2021 September 2020 Estimates(in millions)
General FundDWSDTransportationMajor StreetDebt ServiceOther Non-General Fund
Total: $1.9 billion
OCFO – Office of BudgetSeptember 2020 Revenue Estimating Conference
Revenue Summary, General Fund
6
Proj. Actual Adopted
FY20 FY21 FY21 Change FY22 Change FY23 Change FY24 Change FY25 Change Major Taxes
Income Tax 283.1$ 239.4$ 227.4$ -19.7% 319.7$ 40.6% 337.8$ 5.7% 355.7$ 5.3% 366.4$ 3.0%Recurring 286.6 239.4 227.4 -20.7% 319.7 40.6% 337.8 5.7% 355.7 5.3% 366.4 3.0%Non-recurring (3.5) - - -100.0% - - - -
State Revenue Sharing 181.7 190.5 201.4 10.8% 201.3 0.0% 202.5 0.6% 203.6 0.5% 204.8 0.6%
Wagering Tax 132.3 135.3 86.6 -34.5% 182.9 111.2% 186.7 2.1% 188.6 1.0% 190.5 1.0%
Property Tax 120.2 111.9 116.3 -3.2% 118.6 2.0% 117.4 -1.0% 117.8 0.3% 119.6 1.5%
Utility Users Tax 26.4 28.5 28.3 7.2% 28.5 0.7% 28.7 0.7% 28.9 0.7% 29.1 0.7%
Subtotal, Major Taxes 743.7$ 705.6$ 660.0$ -11.3% 851.0$ 28.9% 873.1$ 2.6% 894.6$ 2.5% 910.4$ 1.8%
Major Taxes (Recurring Only) 747.2$ 705.6$ 660.0$ -11.7% 851.0$ 28.9% 873.1$ 2.6% 894.6$ 2.5% 910.4$ 1.8%
Other Revenues 187.5$ 201.1$ 180.7$ -3.6% 193.7$ 7.2% 197.5$ 2.0% 198.6$ 0.6% 199.7$ 0.6%
Recurring 171.9 201.1 180.7 5.1% 193.7 7.2% 197.5 2.0% 198.6 0.6% 199.7 0.6%
Non-recurring 15.6 - - -100.0% - - - -
Grand Total, General Fund 931.2$ 906.7$ 840.7$ -9.7% 1,044.7$ 24.3% 1,070.6$ 2.5% 1,093.2$ 2.1% 1,110.1$ 1.5%
General Fund, Recurring Only 919.1$ 906.7$ 840.7$ -8.5% 1,044.7$ 24.3% 1,070.6$ 2.5% 1,093.2$ 2.1% 1,110.1$ 1.5%
General Fund Revenue Estimates - Summary, FY 2021 - FY 2025$ in millions
September 2020 Estimates and Year-Over-Year Change
OCFO – Office of BudgetSeptember 2020 Revenue Estimating Conference
$747.2 $660.0
$851.0 $873.1 $894.6 $910.4
$171.9 $180.7
$193.7 $197.5 $198.6 $199.7
$919.1 $840.7 $1,044.7 $1,070.6 $1,093.2 $1,110.1
$-
$200.0
$400.0
$600.0
$800.0
$1,000.0
$1,200.0
FY20Proj. Actual
FY21Est
FY22Est
FY23Est
FY24Est
FY25Est
Recurring General Fund Revenue: FY 2020 - FY 2025(in millions)
GF - Departmental/Other
GF - Major Revenue
(8.5%)
General Fund Revenues
Approx. 80%
Comes from the
5 Major Revenues
7
24.3% 2.5% 2.1% 1.5%
OCFO – Office of BudgetSeptember 2020 Revenue Estimating Conference
$329.1 $286.6 $227.4
$319.7 $337.8 $355.7 $366.4
$202.6 $181.7
$201.4
$201.3 $202.5 $203.6 $204.8
$183.8
$132.3 $86.6
$182.9 $186.7 $188.6 $190.5
$119.5
$120.2
$116.3
$118.6 $117.4 $117.8 $119.6 $28.4
$26.4
$28.3
$28.5 $28.7 $28.9 $29.1
$863.4 $747.2 $660.0 $851.0 $873.1 $894.6 $910.4
$-
$200.0
$400.0
$600.0
$800.0
$1,000.0
FY19Actual
FY20Proj. Actual
FY21Est
FY22Est
FY23Est
FY24Est
FY25Est
Recurring Major Tax Revenue History and Projection: FY 2019 - FY 2025(in millions)
Utility Users Tax
Property Tax
Wagering Tax
State Revenue Sharing
Municipal Income Tax
2.6% 2.5% 1.8%
Major Revenues
8
(13.5%) (11.7%) 28.9%
OCFO – Office of BudgetSeptember 2020 Revenue Estimating Conference
Income Tax
9
$284.3 $260.6 $206.3
$298.0 $316.1 $334.0 $344.7
$40.1
$23.0
$20.1
$21.7 $21.7
$21.7 $21.7 $4.7
$3.0
$1.0
$329.1 $286.6 $227.4 $319.7 $337.8 $355.7 $366.4
$-
$100.0
$200.0
$300.0
$400.0
FY19Actual
FY20Proj. Actual
FY21Est
FY22Est
FY23Est
FY24Est
FY25 Est
Recurring Municipal Income Tax(in millions)
Assessments
Corporate /PartnershipsIndividual
40.6% 5.7% 5.3% 3.0%(20.7%)(12.9%)
FY19 Actual excludes $23m one-time corporate collections, $2m one-time partnership collections, and $6.9m prior-year adjustments.
OCFO – Office of BudgetSeptember 2020 Revenue Estimating Conference
Income Tax HighlightsTax Structure
● 2.4% Resident individuals working in and outside the city (excludes unemployment compensation)
● 1.2% Nonresident individuals working in the city (excludes remote work outside the city)
● 2.0% Corporations and Partnerships
Forecast Assumptions
● Driven by movements in employment and wages forecasted by the Summer 2020 Detroit Economic
Outlook prepared by the University Economic Analysis Partnership.
● Additional remote work refund liability assumed to peak in FY 2021 and continue at 10% of nonresident
withholding from FY 2022 and onward
● Expected decrease in corporate tax collections in FY 2020, no growth expectations in the out years.
● Does not include potential upside from new development projects.
● Does not include potential upside from improved compliance efforts.
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OCFO – Office of BudgetSeptember 2020 Revenue Estimating Conference
State Revenue Sharing
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$141.0 $120.2
$144.3 $144.3 $144.3 $144.3 $144.3
$61.6
$61.5
$57.1 $57.0 $58.2 $59.3 $60.5
$202.6 $181.7 $201.4 $201.3 $202.5 $203.6 $204.8
$-
$50
$100
$150
$200
$250
FY19Actual
FY20Proj. Actual
FY21Est
FY22Est
FY23Est
FY24Est
FY25Est
State Revenue Sharing(in millions)
Constitutional
Statutory
0.0% 0.6% 0.5% 0.6%(10.3%) 10.8%
OCFO – Office of BudgetSeptember 2020 Revenue Estimating Conference
State Revenue Sharing HighlightsTax Structure
● Constitutional share (30%): State sales tax collections (15% of 4% portion)
● Statutory share (70%): Set annually via State budget.
Forecast Assumptions
● No changes assumed for annual State statutory share.
● FY 2021 constitutional share declines assuming 2020 Census population decreases vs. 2010 Census.
● Forecast is based on State’s August 2020 Consensus Revenue Estimating Conference
● Does not include 2.5% statutory share increase in the Governor’s proposed FY 2021 budget from
February (pre-COVID).
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OCFO – Office of BudgetSeptember 2020 Revenue Estimating Conference
Wagering Tax
13
$183.8 $132.3 $86.6 $182.9 $186.7 $188.6 $190.5
$-
$50.0
$100.0
$150.0
$200.0
$250.0
FY19Actual
FY20Proj. Actual
FY21Est
FY22Est
FY23Est
FY24Est
FY25Est
Wagering Tax(in millions)
112.2% 2.1% 1.0% 1.0%(28.0%) (34.5%)
OCFO – Office of BudgetSeptember 2020 Revenue Estimating Conference
Wagering Tax HighlightsTax Structure
● Tax on adjusted growth receipts applied to the three casinos operating in Detroit.
● 11.9% tax rate (10.9% State law, 1% per casinos development agreements).
● Supplemental 1% tax if a casino’s gross receipts exceed $400 million.
● Municipal service fee 1.25% of gross receipts or $4 million, whichever is greater (included separately in
“Other Revenues”)
Forecast Assumptions
● FY21 and FY22 assumes reduced collections due to August 5, 2020 reopening and gradual phase-in to
full capacity.
● Ranges from 20% of normal revenue at reopening to 95% by FY22.
● 1% annual growth rate from FY 2023 – FY 2025.
● Does not include potential upside from internet gaming and sports betting pending implementation.
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OCFO – Office of BudgetSeptember 2020 Revenue Estimating Conference
Property Tax
15
$82.9 $85.8 $89.4 $88.4 $88.5 $89.7 $91.5
$34.1 $31.5 $24.1 $27.4 $26.0 $25.1 $25.1
$2.5 $2.9 $2.8 $2.8 $2.9 $3.0 $3.0
$119.5 $120.2 $116.3 $118.6 $117.4 $117.8 $119.6
$-
$50.0
$100.0
$150.0
FY19Actual
FY20Proj. Actual
FY21Est
FY22Est
FY23Est
FY24Est
FY25Est
Property Tax(in millions)
Special Acts
Delinquent Collections
Current Year Collections
0.3% 1.5%0.6% (3.2%) 2.0% (1.0%)
OCFO – Office of BudgetSeptember 2020 Revenue Estimating Conference
Property Tax HighlightsTax Structure
● Ad valorem taxes on real and personal property at 19.952 mills
● Comprised of current year and prior-year delinquent taxes less tax increment capture distributions.
Forecast Assumptions
● Taxable value growth is based on tax year 2020 values, U.S. CPI inflation (Proposal A tax limitation),
and industrial personal property phase-out per State law.
● FY 2020 collection rate (84%) is held constant throughout the forecast.
● Forecast does not include additions to the tax base or uncapping of taxable value.
● Delinquent tax revenue comes from Wayne County Delinquent Tax Revolving Fund and monthly
payment plans, less exclusions and chargebacks
16
OCFO – Office of BudgetSeptember 2020 Revenue Estimating Conference
Utility Users Tax
17
$28.4 $26.4 $28.3 $28.5 $28.7 $28.9 $29.1
$-
$5.0
$10.0
$15.0
$20.0
$25.0
$30.0
$35.0
FY19Actual
FY20Proj. Actual
FY21Est
FY22Est
FY23Est
FY24Est
FY25Est
Utility Users Tax(in millions)
General Fund Share
0.7% 0.7% 0.7% 0.7%7.2%(7.0%)
OCFO – Office of BudgetSeptember 2020 Revenue Estimating Conference
Utility Users Tax HighlightsTax Structure
● 5% tax on consumption of electricity, gas, steam, and telephone services.
Forecast Assumptions
● Revenue in FY 2021 is expected to shrink due to lower natural gas and electricity consumption and
lower energy prices.
● Growth rate in FY 2022 – FY 2025 held constant at 0.5% household growth rate to mitigate impact of
future volatility.
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OCFO – Office of BudgetSeptember 2020 Revenue Estimating Conference
Departmental & Other Revenues
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$109.7 $118.8 $122.5 $123.5 $124.5
$23.4 $23.0 $22.5 $21.9 $21.3 $15.6 $20.6 $20.6 $20.6 $20.6 $11.4 $12.4 $12.5 $12.6 $12.7 $20.6 $18.9 $19.4 $20.0 $20.6
$180.7 $193.7 $197.5 $198.6 $199.7
$-
$50.0
$100.0
$150.0
$200.0
$250.0
FY21 Est
FY22Est
FY23Est
FY24Est
FY25Est
Recurring Departmental/Other General Fund Revenues(in millions)
Other (Below $10m)
Licenses, Permits and InspectionChargesFines, Forfeits and Penalties
Other Taxes, Assessments, andInterestSales & Charges for Services
7.2% 2.0% 0.6% 0.6%
OCFO – Office of BudgetSeptember 2020 Revenue Estimating Conference
Departmental & Other Revenue HighlightsSignificant Departmental Revenues
● License, Permits and Inspection Charges: BSEED (Business Licenses), Public Works (Street Use
Permits and Construction Inspection Charges), Fire Department (Safety Inspection Charges)
● Fines, Forfeits and Penalties: Parking fines and 36th District Court
● Sales & Charges for Services: Fire (EMS Service Fee), Parking fees, Health (Inspection Charges), BSEED
and Administrative Hearing (Blight Tickets), Court fees, casino municipal service fees
Forecast Assumptions
● Sales & Charges for Services: Reduced Parking fee activity and casino municipal service fees
● Fines, Forfeits and Penalties: Reduced Parking fine revenues due to assumed reduction in overall
parking activity
● Other: Reduced earnings on investments
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OCFO – Office of BudgetSeptember 2020 Revenue Estimating Conference
$624.8 $637.3 $650.0 $663.0 $676.3
$153.2 $158.2 $161.8 $165.5 $169.0 $63.2 $73.7 $74.1 $74.5 $75.0 $100.2 $104.7 $105.4 $105.6 $105.8 $45.7
$47.4 $47.7 $47.9 $48.2 $67.7 $52.8 $49.0 $45.5 $42.4 $1,054.8 $1,074.1 $1,088.0 $1,102.0 $1,116.7
$-
$200.0
$400.0
$600.0
$800.0
$1,000.0
$1,200.0
FY21Est
FY22Est
FY23Est
FY24Est
FY25Est
Non-General Fund Revenue Estimates: FY 2021 - FY 2025(in millions)
Debt Service
Solid Waste Management
Major Street
Transportation
Other Non-General Funds
DWSD
Non-General Fund Revenues
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* Transportation amount does not include the General Fund’s contribution since it is a budget transfer rather than a revenue.
OCFO – Office of BudgetSeptember 2020 Revenue Estimating Conference
Non-General Fund Revenues HighlightsNon-General Fund Categories
● Debt Service: Ad valorem taxes on real and personal property at 9 mills dedicated for debt service
● Solid Waste Management: Garbage collection fees charged to property owners
● Major Street: City’s share of State gas and weight taxes for roads
● Transportation: DDOT bus fares, State transit funding, and grants
● Other Non-General Funds: Construction Code fees, Library property tax, and other restricted revenue
● DWSD: Water and sewer fees charged to property owners
Major Forecast Assumptions
● Solid Waste Management: Revised downward due to updated customer count and elimination of
monthly payment plans (PAYS plan forgives delinquent solid waste fees moving forward)
● Major Street: Reduced forecast based on projected State fuel tax losses
● Transportation: FY21 assumes DDOT fares remain suspended through December 2020
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OCFO – Office of BudgetSeptember 2020 Revenue Estimating Conference
Budget Reserve (Rainy Day Fund)● State law requires the City of Detroit to maintain
a General Fund reserve of no less than 5% of the
projected expenditures for the fiscal year.
● The FY 2020 Adopted Budget provided for an
ending reserve balance of $107.3M, or nearly 10%
of projected expenditures.
● The FY 2021 Adopted Budget assumes the City
will draw down only $50M to help address
COVID-19 revenue shortfalls, keeping the
balance above 5%.
23
$62.3
$107.3
$57.3
$-
$20.0
$40.0
$60.0
$80.0
$100.0
$120.0
FY19 FY20 FY21
Budget Reservein millions
Minimum Reserve Requirement
OCFO – Office of BudgetSeptember 2020 Revenue Estimating Conference
Risks & Potential UpsideRisks
● Second wave of COVID-19 and another round of mandatory closures
● Extended and more severe COVID-19 economic recession
● Federal and state budget pressures
● Worse than expected remote work refund liability and casino capacity limitations
● Permanent reductions in economic activity due to capacity limits and behavior changes (e.g., office work,
restaurants, hotels, entertainment)
● Negative COVID impact on commercial property values and collection rates
Potential Upside
● Additional federal fiscal relief and economic stimulus
● New and ongoing development projects throughout the city
● Expiring tax abatements and taxable values uncapping from property sales
● Internet gaming and sports betting implementation
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