Wayne County's $52 million deficit could lead to state intervention

Just a few months after Detroit emerged from bankruptcy, Wayne County executive Warren Evans is asking for similar protection and it could lead to state intervention.

Wayne County is facing a $52 million deficit. On Wednesday, Evans asked the state to make an emergency declaration for the county.

However, Evans does not necessarily have the support from Wayne County commissioners; they said that state intervention is the last thing they need.

Evans is asking the state treasurer to review the county's finances and allow the county enter a consent agreement to eliminate the $52 Million deficit. 

"Wayne County can't do it alone unless we can come to terms on a number of collecting bargaining agreements," Evans said Thursday.

Evans said the consent would focus on the unions to allow the county to open union contacts and make necessary adjustments to healthcare and retirement. Not everyone thinks consent is best option including Richard Johnson, the chief negotiator of AFSCME 25.

"Hopefully we don't end up there. We're trying to, through negotiations and put backs and concessions, to avoid that," Johnson said. "The question becomes what is the county doing on their side?"

Evans claims they've shaved tens of millions of dollars off the debt so far. On Thursday, the council voted to eliminate the 13th check - the extra payment that retirees get instead of an increase in cost of living. That money won't cut the debt but helps support county's general pension funds. 

Commissioners are upset with Evans for involving the state and claim it came out of nowhere and isn't needed yet.

"It would have been nice if the executive would have sat down with the commission to discuss that we're going to do this," Ilona Varga said. "We were blind-sided."

"Things are bad but they're not catastrophic bad. We need to sit down and make the necessary cuts. We're finding out, through audits, we're finding millions of dollars in savings," county commissioner Ray Basham said.

"We have made strides, especially this year. Today, we saved $20 million per year by a sad and unfortunate reduction in healthcare benefits for retirees," county commissioner Gary Woronchak said.

Some fear it would be Detroit all over again: a consent agreement leading to bankruptcy. Evans claims that won't happen and it's just a tool the county will use, if it needs to.

"This is a totally different situation," Evans said. "We've mapped it out, we started working on it, we created a strategy and now we're at the point to say we may possibly need some additional tools so lets apply for them now."

The decision by the state treasurer of whether or not to conduct a review is expected soon. If the state gets involved, it could lead to bankruptcy, mediation, or even an emergency manager.

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