Snyder confirms financial emergency in Wayne Co.

Charles E. Ramirez
The Detroit News
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Gov. Rick Snyder affirmed Thursday that Wayne County is in a financial emergency.

“I confirm my determination that a financial emergency exists in Wayne County,” Snyder said in a letter dated July 30 to Wayne County Executive Warren Evans.

The Wayne County Commission now has until Aug. 6 to choose one of four options for state intervention: a consent agreement; an emergency manager; mediation, or Chapter 9 bankruptcy. The commission must send a resolution with one of the options to the state Treasurer.

“Having received the Governor’s final declaration of financial emergency, the Wayne County Commission will continue to study and weigh the four options provided by law to resolve the financial situation, and will consider which option to select by Thursday, Aug. 6, as required under PA 436 of 2012,” Commission Chair Gary Woronchak said Thursday in a statement. “Our next meeting on the matter will be a Committee of the Whole on Wednesday, Aug. 5 at 10 a.m.”

Synder’s letter Thursday cited several reasons for his determination, including: annual county budgets that reflected increased expenditures and increased revenues that never materialized, unbudgeted expenditures, and an estimated $1.3 billion in unfunded healthcare-related liabilities.

Last month, Wayne County Executive Warren Evans asked the state treasurer to declare a financial emergency in the county and support his request to enter into a consent agreement.

He then appointed an independent financial review team to examine the county’s books.

Last week, the review team submitted to the governor its finding that an financial emergency exists in the county.

Snyder sided with the team’s determination a day later.

County officials had until 5 p.m. Wednesday to request a hearing on the governor’s determination, but he said Thursday his office received no such request.

Evans has said he’s hoping for a consent agreement to fix the county’s finances. Such an agreement would spell out specific budgetary reforms the county would have to accomplish.

“Today’s confirmation by Governor Snyder supports our findings that a financial emergency exists in Wayne County,” James Canning, a spokesman for Evans, said Thursday in a statement. “We maintain the position that a consent agreement is the best option going forward.

“We will seek a consent agreement that respects the roles of the Wayne County Executive and Commission, and gives us the tools to focus our efforts on resolving the $52 million structural deficit.”

The recurring budget shortfall in Michigan’s most populous county stems from the underfunded pension system and a $100 million yearly drop in property tax revenue since 2008. Its accumulated deficit is $150 million.

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