State Treasurer to review Wayne County's finances

The Detroit News

Detroit — Michigan’s Department of Treasury will begin a preliminary review of Wayne County’s financial condition after receiving a request from County Executive Warren Evans to do so.

On Friday, treasury officials said State Treasurer Nick Khouri notified Wayne County Executive Warren Evans and other county officials that the department would do a preliminary review of the county’s finances under Michigan’s emergency management law.

The state has 30 days to complete a financial review, but Khouri told Evans in a letter that the Treasury Department’s investigation “may be expedited in certain respects” because of “the urgency expressed in your letter.” Evans requested the review in a letter to Khouri on Wednesday.

Evans welcomed Friday the state’s financial reviews.

“Early on, I said that I would make the process of solving the county’s financial crisis the least onerous as possible to our stakeholders,” the first-term county executive said in a statement Friday. “Today, I stand firm on that position, and my entire administration understands that a collaborative approach is top priority. We will be inclusive while continuing to execute our recovery plan and nothing about my request to the state will change our approach.”

During a county commission meeting Thursday, the panel discussed Evans' request to declare a financial emergency in the county and intervene to help fix its finances.

Wayne County is wrestling with a $52 million structural deficit, a recurring shortfall that stems from an underfunded pension system and a $100 million yearly drop in property tax revenue since 2008. Adding to the deficit, the county has taken about $20 million from its general fund each year to help bolster its pension system.

Khouri noted in his Friday letter to Evans that the “pension plan is substantially underfunded” — at 44 percent for county employees and 58 percent for employees at Detroit Metropolitan Airport, which is run by the state-county Wayne County Airport Authority.

On Wednesday, Evans said he had asked Khouri to declare a financial emergency in the county and support Evans’ request to enter into a consent agreement.

A consent agreement is negotiated between a local government or school district and a state agency to address financial problems. It could enable Evans to squeeze millions of dollars in concessions from unionized county workers through contract give-backs.

Commission Chairman Gary Woronchak began Thursday’s meeting by discussing the request, saying the panel must be involved in decision-making if the state declares a financial emergency.

“This is what's most important for (commissioners) to know: If a financial emergency is eventually declared, under the law it is the Wayne County Commission, and only the Wayne County Commission, that in the first instance will decide what course of action will be taken to remedy the situation,” he said. “Under state law, the Wayne County Commission is an important part of this process. We owe it to our constituents to get it right.”

On Thursday, the commission voted to do away with an extra payment retirees get each year instead of cost-of-living increases, known as the “13th check.”

The vote was 8-5 with two commissioners abstaining. Alisha Bell, D-Detroit; Al Haidous, D-Wayne; Tim Killeen, D-Detroit; Jewel Ware, D-Detroit, and Ilona Varga, D-Lincoln Park, voted no. Commissioners Irma Clark-Coleman, D-Detroit, and Martha Scott, D-Highland Park, abstained.