Treasury won’t make Wayne Co. change budget reporting

Charles E. Ramirez
The Detroit News

The state Treasury will allow Wayne County to report the current fiscal year as part of budgetary information required to be shared with the state following the county’s release from a consent agreement.

This clarification from the state comes after Wayne County Commissioners on Thursday raised questions about a county executive request to change the years the county will provide budget information to the state, fearing doing so would extend Wayne County Executive Warren Evans’ powers over labor contracts.

A consent agreement — which the county was released from by the state on Oct. 18 after 14 months — required Wayne County to provide the state a two-year budget after it was released from the agreement.

As a result, Evans asked the county commission to withdraw the proposed 2017-18 fiscal year budget as the second year of its two-year budget since the consent agreement release came 18 days after this fiscal year began.

“The intent was to have the 2016-2017 fiscal year and the 2017-2018 fiscal year budgets as the two-year budget required by the consent agreement,” said Zenna Elhasan, director of the county’s corporation counsel department, who was at a commission meeting Thursday on behalf of Evans.

Elhasan said the county had asked the state to include the 2016-17 fiscal year budget as part of the two-year budget required by the consent agreement. On Thursday, she reiterated the request to state officials via email.

“It was also the intent to be released from the consent agreement in advance of the start of this fiscal year,” she said. “Having been released from the consent agreement on Oct. 18 and after the start of the most recent fiscal year, we cannot in good faith represent to the commission or the state that we would be directly in line with the consent agreement. That’s the change.”

A letter from Treasury on Thursday responded, noting it was focused on reviewing fiscal years 2016-17 and 2017-18: “The department did not waive the requirement for Wayne County to adopt a two-year budget,” it read. “As required by the consent agreement, the county must adopt a two-year budget beginning the first fiscal year after the release. The release date of the county from the consent agreement occurred 18 days after the start of the county's current fiscal year. However, for the avoidance of doubt, the two year budget contemplated by the department at the time of release was for fiscal years 2017 and 2018.”

Commission chairman Gary Woronchak, D-Dearborn, had said earlier Thursday he’s concerned changing the reported years could mean Evans will keep emergency manager-like powers granted by the state under the consent agreement.

Under state law, the consent agreement granted Evans the authority to impose labor agreements with the unions representing the county’s workers if they couldn’t reach a deal after 30 days of good-faith negotiations.

If the change is made, Woronchak said Evans would retain the powers until 2019, which is when the county’s current collective bargaining agreements expire. It’s also the year Evans could seek to be re-elected to another four-year term as county executive.

“If we do the administration’s new plan … the CEO would retain power for one more round of negotiations to impose contracts, impose terms,” he said. “If we do things this way, the unions will be forced to negotiation knowing that whatever terms the CEO wanted to impose could be imposed. It’s hard for me to not look at a calendar and see that this change in plan … would result in not having to have bona fide negotiations and potential labor unrest during an election year.”

Evans denied Woronchak’s claim.

“Speculation by some members of the county commission today was baseless,” Evans said in a statement. “I’m committed to negotiating in good faith throughout the collective bargaining process when current contracts expire.”

“Any claims or suggestions to the contrary are unfounded,” he said. “The county previously requested that the two-year budget requirement of the consent agreement start with fiscal year 2016-17.”

The commission took no official action during Thursday’s meeting, but said it will consider requesting discussions with the state Treasurer’s office about the situation and asking Evans to seek modifying the consent agreement’s terms to nullify his powers to impose labor contract terms with the county’s unions.

Wendy Lukianoff, president of AFSCME Local 25, thanked commissioners for raising the issue.

“If this can’t be worked out with the state, I hope the county executive will pledge to not impose contract terms on us,” she said. “They weren’t bargaining sessions last time.”

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.

The county was able to balance its budget for 2015 and 2016, create surpluses in each of those years and reduce its unfunded obligations.