Detroit Mayor Mike Duggan: Proposed $2B budget could mark end of state oversight

Mayor Mike Duggan unveiled a $2-billion balanced budget Friday that he expects will allow Detroit to exit state oversight, nearly five years after the city filed for what was the largest municipal bankruptcy in U.S. history.

The proposed 2019 budget would give an $8-million boost to the Detroit Police Department, allowing Chief James Craig to make 141 additional new permanent hires. It would also allow the city to beef up its efforts to target commercial blight. The Detroit City Council has until March 9 to approve the budget.

"Once we get this budget passed, we have the opportunity to get out from active state oversight," Duggan said. "...I expect (in) April or May, we’re going to see the financial review commission vote to end oversight and return self-determination to the City of Detroit."

In order to exit active state oversight, the city had to present three balanced annual budgets to the state-appointed Financial Review Commission, which was charged with overseeing the city's finances, collective bargaining agreements and contracts.

But Duggan said even though passage of the budget could mark the end of active oversight, the financial commission won't cease to exist.

"As everybody here knows, the financial review commission doesn't entirely go away," he said. "They go into a dormancy period. ... If we in the future run a deficit, they come back."

Detroit became mired in the nation's biggest municipal bankruptcy in July 2013. But its latest financial report, released earlier this month, shows the city finished its third consecutive year with a balanced budget. It now has a surplus in the general fund of $53.8 million.

If the 11-member commission votes to waive oversight, it will continue to review each year for the next decade whether to resume oversight in case the city stumbles back into red ink, John Naglick, the city's finance director, said earlier this month.

Duggan is a member of the commission, along with state Treasurer Nick Khoury, Detroit City Council President Brenda Jones, and others appointed by Gov. Rick Snyder. Detroit schools superintendent Nikolai Vitti and school board chairperson Iris Taylor are part of the commission, but they are nonvoting members.

About $1 billion of the budget is comprised of the general fund, which Duggan said is healthy, in part, because of the city's income tax collection activities.

"Our income tax revenues continue to grow ahead of what anybody would have projected in the bankruptcy now — almost $300 million and that's what's allowing us to deliver the services that the residents in this city are seeing," Duggan said.

He said the city plans to use $100 million over four years to bolster capital projects and blight remediation. He said he hopes to double the rate of commercial demolition and get rid of every vacant, “unsalvageable” commercial property on major streets by the end of 2019.

"This will put us on track to clean up those commercial corridors," Duggan said.

The budget also will allow for more neighborhood redevelopment in certain targeted areas, including Delray, Cody Rouge, East English Village and Osborn.

Councilman Scott Benson said ahead of the budget proposal that he hoped to see plans to address the city's poverty rate, as well as more focus on neighborhood redevelopment.

Last year, officials announced Detroit's 2016 poverty rate was 35.7%, down from nearly 40% the prior year. But Benson said he's urging the city to commit to decreasing the rate at least one percentage point per year.

And while Duggan noted improvements in crime reduction, he admitted that "this city is not anywhere it needs to be in safety."

"The one area where there is a significant increase in full-time positions we're proposing is the Detroit Police Department," Duggan said, adding that the city has hired more than 500 officers in the last two years. "The last couple of years, there was no reason to ask for more authority because we couldn't fill the positions we had. We had 200 to 300 vacant police officer positions but with the new contract council passed two years ago, we've been filling these police academies with 30 every single month."

The budget also would expand two key initiatives the city has created: Project Greenlight and Ceasefire, both violent crime prevention strategies.

Project Green Light was first introduced in 2016 when DPD partnered with eight gas stations to install real-time cameras that police headquarters could access in an effort to deter crime. Duggan estimates the city will have between 400 and 500 Green Light locations by the end of this year.

Ceasefire began in 2013 and is an initiative where law enforcement and the community work together to reduce gang-related gun crime. Violent street group members on parole or probation are called in to meetings as a condition of their release, where they meet with police, social workers, community and clergy leaders, as well as families of victims of violent crime.

Duggan said that by the end of 2018, Craig hopes that every precinct in the city is a Ceasefire precinct.

But Duggan said every issue facing the city can't be fixed by law enforcement alone. He said he also wants to increase funding for workforce development programs and events such as Detroit at Work or the city's prisoner re-entry program.

Other highlights of the budget:

A roughly $10-million increase in the Department of Public Works, as a result of increased road funding and new initiatives.

A $10 million increase in the health department, including $6 million in grants. The health department is also adding 43 new positions, including six animal control officers.

Duggan wants to consolidate the city's park and recreation departments, under the general services department.

Contact Katrease Stafford: kstafford@freepress.com or 313-223-4759.