Review team finds financial emergency in Wayne County

An independent review team concludes that a financial emergency exists in Wayne County under Public Act 436 of 2012, the Local Financial Stability and Choice Act.

Gov. Rick Snyder by law has 10 days to consider the review team's report and reach a determination on the county's financial condition.

The review team conducted several meetings to consider the county's finances and interviewed elected officials, department heads, union leaders, and others with knowledge and relevant information. The review team also conducted a public information meeting with county residents, as required by law.

The team's extensive report indicates that numerous conditions led to the determination that a financial emergency exists in the county. Those conditions include the following:

 - The county's last four annual financial audits revealed notable variances between General Fund revenues and expenditures as initially budgeted, as amended, and as actually realized. In addition, County officials underestimated actual expenditures in three of the fiscal years by amounts ranging from $16.7 million to $23.7 million.
 - County officials engaged in unbudgeted expenditures in violation of Public Act 2 of 1968, the Uniform Budgeting and Accounting Act.
 - Although there was agreement among county officials that existing de-tention facilities are inadequate, there is no consensus about whether to complete construction on a new jail or to renovate existing facilities.
 - According to the county executive's recovery plan, unfunded healthcare-related liabilities were estimated to be $1.3 billion as of the last actuarial valuation with funding set aside for this purpose of less than one percent of liabilities. Healthcare-related liabilities represent 40 percent of the county's long-term financial obligations.

Wayne County Executive Warren Evans released this statement about the findings: 

"The report the State of Michigan Financial Review Team sent to Governor Rick Snyder validates the work done by my Administration to reveal the true financial status of Wayne County.  Our $52 million structural deficit in Wayne County is real and unless we solve it now, it will continue to grow year after year.  While we have already taken several significant steps forward to stop the debt from accumulating, there is still much work to be done.
The next step in the process is for the governor to make a determination based on the Review Team's findings. A declaration of a financial emergency will provide the elected officials of Wayne County the opportunity to decide the best path forward.
As we move further along in the process to secure Wayne County's future, I want to be clear that we have a plan that allows us to solve our own problems and we have a responsibility to use the tools available to us to get it done."

 

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