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Wayne County exits consent agreement over finances

Charles E. Ramirez
The Detroit News

Wayne County has exited its financial consent agreement with the state after 14 months, county and state officials announced Thursday.

The county sought the release of the agreement earlier this month after it reported eliminating a $52 million structural deficit and an $82 million accumulated deficit and argued it was on a path toward longterm fiscal stability.

Officials also noted the county restructured employee and retiree health care and pensions to eliminate $829 million in unfunded health care obligations, raising the funding level of the pension system from 45 percent to 54 percent.

“The county is in its best fiscal position in quite some time, but there’s still a long way to go,” Wayne County Executive Warren Evans said in a statement. “Diligently implementing major pieces of our recovery plan has gotten us here but many key pieces of our recovery plan remain to be implemented. We are now, however, positioned to address those challenges.”

Evans updated the media Thursday on the consent agreement with the state. He called a news conference at his offices in the Guardian Building in downtown Detroit.

“Unfortunately, there was no painless way to address a financial crisis of this magnitude,” Evans said. “We are grateful to all who made sacrifices to help turn things around under the consent agreement. From employees and retirees to the county’s elected officials and the state Treasurer’s office, this positive turnaround took a whole lot of work, cooperation and sacrifice to make it happen.”

In a letter issued Tuesday, state Treasurer Nick Khouri applauded Evans and the county on its financial progress.

“I trust that your administration will continue the good work and financial reforms which justify this release,” he wrote. “I congratulate you for the significant progress the county has made while successfully completing this consent agreement.”

When Evans took office in January 2015, the county faced a $70 million annual deficit stemming from an underfunded pension system and a $100 million drop in property tax revenues since 2008.

In April 2015, he announced a recovery plan that called for reducing health care benefits for employees, eliminating health care for future retirees and restructuring the pension system to cut $230 million from the budget over four years.

Three months later, state officials declared a financial emergency in the county. To address the problem, Wayne County and the state entered into the consent agreement on Aug. 21, 2015. The move gave Evans some powers usually wielded only by emergency managers.

Since then, the county has been able to balance its budget, create a surplus and reduce its unfunded obligations.

cramirez@detroitnews.com