Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the City Finance Quarterly topic
No spam. Unsubscribe anytime.
Detroit budget office reports early surplus, but flags potential income-tax shortfall
Summary
City budget staff told the Budget, Finance and Audit committee that first-quarter numbers show a year-to-date surplus and a $10 million allocation for a supplemental retiree payment, but officials cautioned an annualized municipal income-tax shortfall could be substantial and that it is too early to draw firm conclusions.
Detroit budget officials presented the city’s financial report for the three months ended Sept. 30, 2025, saying year-to-date figures show a positive surplus but urging caution about revenue projections.
Budget director Donnie Johnson told the Budget, Finance and Audit committee that the city has allocated $10 million in the FY26 budget for a supplemental retiree payment commonly referred to as a "thirteenth check," and that distributions for eligible retirees and beneficiaries are expected to begin Dec. 1. Johnson said the administration currently projects a sizable variance on municipal income taxes and cautioned the city is "still too early in the fiscal year to forecast expenses with any meaningful accuracy." He told members an annualized projection tied to the September revenue conference shows municipal income taxes roughly $61.1 million under that benchmark.
Treasury chief Valerie Agoli corrected an item in the presentation’s historical data during the meeting, saying a partnership figure in the materials “should be 1,381,000.” Agoli also outlined the city’s cash position: about $1.8 billion on hand in September and an ARPA balance of roughly $183 million compared with $423 million a year earlier, which she described as expected spending on capital projects and grant activity.
Officials said the city’s reserve for a potential corporate income-tax shortfall — a $42 million corporate income tax reserve created earlier by the council — is performing as intended and provides a buffer should revenues undershoot projections. Staff noted some line-item underspending this quarter is timing-related and warned that an annualized view of revenues could produce a more conservative result as the year progresses.
On liabilities, Agoli reported that HUD 108 loan notes were defeased in April 2025, eliminating certain principal outstanding balances and freeing CDBG resources previously used for debt service. Members asked about collection rates for property taxes and were told those rates will rise as the tax year progresses; Treasury staff explained the timing of summer/half-payment options affects the snapshot for the first quarter.
At the end of the presentation, a motion to receive and file the quarterly financial report (line item 7.7) was made and, with no objections, the committee took that action.
The committee did not take any additional budget actions at the meeting; staff emphasized next steps include continued monitoring and the February revenue estimating conference for more definitive revenue projections.
