Evans warns of Wayne Co.'s dire finances
The Wayne County executive discusses his plan for reducing the county's deficit with the Detroit News editorial board.
Detroit — It's inevitable that an emergency manager will step in to take charge of Wayne County finances if the county doesn't step up and make drastic cuts to its ever growing deficit.
That was one of the messages that Wayne County Executive Warren Evans made Wednesday morning at an editorial board meeting at The Detroit News.
Evans said wage cuts, a reduction to health care costs and pension plans were necessary to eliminate an annual $52 million structural deficit.
"Wayne County employees have made concessions over the past 10 years, which have helped to stabilize the county's budget," Evans said. "But there's still some anger at our condition because we're still broke. If we don't do it ourselves, someone else will come in and do it for us."
On Monday, Evans presented a recovery plan to fix the county's finances by cutting $230 million over four years, including:
■A 5 percent wage cut for most union and nonunion county workers. Newly hired sheriff's deputies (rate of pay is $13.40 per hour); prosecutors (starting salary $41,000 per year) and nurses would be exempt from the wage cut.
■Changing labor agreements to allow work performed by county employees to be outsourced.
■Cutting health care benefits for employees and retirees. Workers who retired before 2007 would be offered stipends to get health care.
■Restructuring the county's pension system, including cuts in future benefits and raising the minimum retirement age to 62. Currently, employees can retire at age 50 with 25 years of service, or 60 with five years of service.
Without action, the county executive warned, Wayne County will run out of money by August 2016. Evans said he realized that his proposals would be unpopular.
"I understand that service employees want to keep what they have," Evans said. "But look around the country, those days are gone."
But in an earlier interview Al Garrett, president of AFSCME Council 25, said the plan leaves out possible sources of new revenue, such as a millage request, and unfairly exempts employees of the sheriff's office and prosecutor's office from cutbacks.
"He's taken two departments and held them safe from pay cuts," Garrett said. "The irony is those are the two departments that have been run over budget for years. They help create the problem and they get a pass. That's basically a no-no from the get-go."
Garrett said county workers have already taken 20 percent wage cuts and furloughs, and gone six years without raises.
Garrett said the union raised a couple of ideas Monday during its briefing with Evans and officials "seemed to be interested in them."
"We'll modify the plan again as long as we get $52 million in cuts," Evans said. "We'll make changes if they make sense."
Evans said Wednesday the county is being drained by maintaining the "fail jail," the new $300 million Wayne County Jail that sits half finished and abandoned in Greektown after $100 million in overruns and charges of corruption.
"The jail is costing the county about $1.3 million a month just to sit there," Evans said. "In the meantime, the existing jail is in terrible condition. No money was put into existing jail while they tried to build the new one."
Evans said efforts to have someone else complete the new jail and then renting it from the county have come to naught.
Before Wayne County can even begin to tackle the expense of finishing the new jail or upgrading the old one, it needs a balanced budget and financial stability, the county executive tells the Detroit News editorial board.
"We've look around but no one is interested in finishing the jail," Evans said.
He also said the concept of building a new jail on Mound Road was unfeasible because a new courthouse would have to be constructed at the same time.
Evans confirmed the proposal was "a big bottle of medicine to swallow," especially for union members.
"But it has to be a shared sacrifice or it's never going to work," Evans said.