Howes: Competence trumps cronyism in Wayne Co. workout
Warren Evans is proving the doubters wrong.
In little more than a year, the guy who replaced the hapless Bob Ficano as Wayne County executive is delivering a balanced budget and declaring over a financial emergency many figured would culminate in yet another Chapter 9 bankruptcy for this chronically mismanaged corner of Michigan.
Not true — so far, anyway. Credit the hammer of a consent agreement with the state Treasury, as well as Evans’ management style. He used dire financial reality backed by an implied threat of bankruptcy to build consensus and to wrest cooperation and, yes, concession from a culture too long shaped by denial and confrontation.
That’s not all. He assembled a crack restructuring team chosen for its expertise, not connections to a political machine. They include a 20-something Cass Tech grad, Tony Saunders; a former chief judge of Wayne County Circuit Court, Richard Kaufman; a former state Treasurer, Jay Rising; and a veteran Oakland County deputy executive, Bob Daddow, who has few peers in this state when it comes to municipal finance.
Evan’s explanation for recruiting Daddow, a longtime aide to Oakland County Executive L. Brooks Patterson, a Republican, should be required reading around here: “We are interested in good government,” Evans said in his first State-of-the-County address this week, “and don’t care where we get the information or expertise to accomplish it.”
Bingo! In 19 words, Evans captures the essence of what has been sorely lacking in Wayne County, like, forever: competence, people chosen for jobs because they demonstrate the requisite skills to do them well, not because they served with the boss in some previous government sinecure or because they raised money for his campaign.
It’s hard to overstate how revolutionary such basic managerial common sense is in Wayne County government. In its bureaucratic cesspool, practitioners like Ficano and too many of his staff elevated patronage and cronyism to high art; paid “severance” to senior managers who left to take new jobs; sweetened executive pensions before offering early retirement offers few could afford to ignore.
“The road that led to this financial mess resulted from a number of factors,” Evans said. “Mismanagement, poor decision-making, bad economic development deals, rising legacy costs for health care and pensions, and property tax revenue that plummeted as a result of the economic downturn of 2008. The real problem was the failure to see the coming financial crisis and the failure to make any tough decisions to avert it.”
He’s being kind. Evans inherited an accumulated deficit of nearly $100 million, a structural deficit of roughly $52 million and an unfinished county jail that symbolizes the financial irresponsibility of Ficano and his ilk. Unfunded health care liabilities (one of two ticking time bombs embedded in way too many public budgets) approached $1.3 billion, and a county pension fund that was fully funded when Ficano arrived now is only 44 percent funded, far from the 70-plus percent level it should be.
Health care liabilities have been winnowed to $471 million from $1.3 billion; 12 of the county’s 13 unions agreed to new contracts that helped reduce associated legacy costs, but not without painful concessions that effectively reversed a virtuous circle of ever-expanding taxpayer commitments; the county’s elected office holders, often at odds with the county executive, coalesced around Evans’ “Recovery Plan” that looked anything but consensual in its early days.
But it wasn’t painless, as Moody’s Investors Service detailed in a recent report upgrading its outlook on county debt: “Retirement benefit changes ... as well as current collective bargaining agreements include elimination of retiree healthcare benefits for current employees, replacement of retiree health care coverage with a monthly stipend for a large class of current retirees, and pension plan adjustments that will slow future accrual of benefits and reduce annual normal cost.”
Challenges remain, including discussions to end the consent agreement with Treasury. “We can’t start spending money again,” Evans told WJR’s Frank Beckmann in an interview Wednesday. “Certainly our problems are not gone; they’re just far less intense. We’re paying our bills, and we’re doing it the right way.”
The pessimists got it wrong. Emboldened by Detroit’s successful run through Chapter 9 bankruptcy and evidence the county was tracing the same path, the critics assumed the consent agreement they saw former Mayor Dave Bing and a clueless Detroit City Council bungle would be bungled by Wayne County, too.
They failed to account for two things: first, the powerful example that Detroit’s bankruptcy would have on county commissioners and union leaders who witnessed the power of Chapter 9, even if it could not be as readily adapted to use in a county. And, second, the leadership of Evans. He embraced the problem he inherited and found the right people to help fix it.
Daniel Howes’ column runs Tuesdays, Thursdays and Fridays. Follow him on Twitter @DanielHowes_TDN, or catch him 3 and 10 p.m. Thursdays on Michigan Radio’s “Stateside,” 91.7 FM.