Evans touts Wayne Co.’s progress, says best days ahead

Charles E. Ramirez
The Detroit News

Detroit — The county is heading in the right direction, with deficits eliminated and a positive general fund balance, said Wayne County Executive Warren Evans, who lauded county employees and retirees who “were required to make huge sacrifices.”

“Tonight, I am pleased to report that as a result of unprecedented cooperation and shared sacrifice, Wayne County finished its last fiscal year with a positive general fund balance,” he said in his first State of the County address, held Tuesday told at the Detroit Film Theatre. “Let me say that again, for the first time in eight years, the county finished a fiscal year in the black.”

The county, facing critical fiscal issues including an underfunded pension system and a drop in revenues from lower property values as it struggled to avoid an emergency manager and bankruptcy, “has stabilized, it continues to improve, and that our best days lie ahead,” he said.

He said the county has reduced its health-care liabilities, slashing costs from $1.3 billion to $471 million. Without action, costs would have ballooned to $1.8 billion by the end of 2015, Evans said.

Evans also thanked the unions representing county workers and retirees who accepted concessions to reduce county costs.

In addition, the county executive said he plans to organize a summit of elected officials, community leaders, leading economists, business leaders and others in the coming weeks to develop an alternative to the system of local government funding, which depends on property taxes. Evans called the system “broken.”

“Our system of funding local governments threatens the financial stability of counties and local municipalities,” he said. “We cannot continue to underfund local governments. We need to start down the road to a solution.”

The Democrat and former Wayne County sheriff took office in January 2015. He said he didn’t make a State of the County address last year because he wasn’t ready to answer questions about the issues the county was facing, including avoiding an emergency manager and bankruptcy.

Instead, Evans met with residents, community groups, faith leaders and business owners to talk about the county’s problems, he said.

“It was important for me to let them know I planned to meet the county’s challenges head-on,” he said. “I told them solutions would require sacrifice, but I would do my best to make certain it was a shared sacrifice.”

When Evans took office, the county faced a $52 million annual deficit stemming from an underfunded pension system and a $100 million drop in property tax revenues since 2008. In addition, the county was pulling about $20 million from its general fund each year to bolster its pension system.

“The biggest problem was clearly the county’s fiscal health,” he said. “Wayne County had been insolvent for years and things were getting worse … (it) survived by continually robbing Peter to pay Paul.”

After four months in office, Evans rolled out a “recovery plan” that included pay and benefit cuts for employees, the end of health care coverage for future retirees and a restructured pension system.

Two months later, Evans asked the state to declare a financial emergency and intervene to help fix the finances of Michigan’s most populous county. In August, the county entered into a consent agreement with the state.

The deal granted Evans the powers of an emergency manager in contract talks with the county’s unions. The next month, the county had agreements with all but one union, the American Federation of State, County and Municipal Employees AFSCME Local 3317, which represents 95 people who are uniformed supervisors and command officers in the county sheriff’s office.

It was enough to impress one county resident. “I like what I heard,” she said after the speech.

County Commissioner Ilona Varga said “... he explained things so that anyone could understand.”

“I wish he would have talked more about clean air in the county, but overall, I liked it,” said the Lincoln Park Democrat.

Other highlights of his speech included:

■There’s a new spirit of cooperation between his office and other elected county officials.

■The county is improving services and saving money at the same time.

■The county is teaming up with nonprofit Black Family Development to launch a job training program.

Evans also spoke about a continuing problem in the county a county jail that sits unfinished at Gratiot and Madison in the Greektown district.

“We need to finish the partially built jail on Gratiot,” he said. “There is no cost-effective alternative.”

The 2,000-bed jail project was started by then-County Executive Bob Ficano. Construction on the $220 million project began in 2011, but was halted in June 2013 after $100 million in overruns and charges of corruption.

In October 2014, the county sued jail project contractors, claiming errors and delays caused the project to fail. The companies counter-sued.

But two months ago, the county and the contractors hammered out an interim settlement agreement. The two companies, AECOM and Ghafari Associates, will provide concept plans and cost estimates to finish a scaled-down project.

The county can pursue or reject either plan, and if costs exceed the target, the county can refile its lawsuit against the contractors, according to officials. Maximum construction costs for the project are fixed at $175 million.

“It will cost hundreds of millions of dollars to finish that jail,” Evans said. “The costs of restarting construction and the natural increase in prices will add millions to the cost to complete it.

“But the solid financial recovery the County has experienced will, likely, allow us to borrow the money necessary to complete this essential project. There is a long way to go before this is a reality, but our plan is solid and provides the best opportunity for success.”

cramirez@detroitnews.com

(313) 222-2058