Wayne County has a $70 million structural deficit on a roughly $550 million annual budget, says County Executive Warren Evans. Here’s the report, produced by Ernst & Young, that Evans distributed this week showing the dismal state of the county’s finances.
Newly elected Wayne County Executive Warren Evans delivered the news: a $70 million budget deficit on the county’s roughly $550 million budget.
Evans yesterday publicly discussed a report that’s been circulating privately for weeks. Done by Ernst & Young, a firm that’s been one of Detroit’s financial consultants, the report shows a “bad cash picture,” Evans said at a news conference.
Immediately the discussion turned to the potential options of emergency management and bankruptcy, such as in this Daniel Howes column in The Detroit News:
Public Act 436, the state’s emergency manager law, is more difficult to apply to counties with more than one constitutionally elected office with claims on public funds, say Evans and state officials who have studied the situation.
“The read I get from the governor is he has no particular desire to come in and manage Wayne County affairs,” Evans said. “I don’t want an emergency manager. I don’t want bankruptcy. If we can fix it short of that, that’s what we want to do.”
Here’s more media coverage:
The chief mediator in the Detroit bankruptcy case named two federal judges as mediators for continuing discussions toward a regional water authority. U.S. District Judges Sean Cox and David Lawson will facilitate discussions between the city and Macomb, Oakland and Wayne counties as they return to negotiating under the direction of Bankruptcy Judge Steven Rhodes. This morning, Rhodes ordered the parties back to the table to renew talks about an authority with shared governance between the city and the counties.
“The creation of a regional water authority is not only in the best interest of the city but also in the best interest of all the customers of the city’s water department,” Judge Rhodes said. “The customers of the water department, since we’re talking about a governmental function here, ought to have the opportunity to participate in the governance of that water authority and the governance of the delivery of water services, and that can only be done through a regional authority.”
The city has issued a “Request for Information” seeking proposals from private companies to manage the system after talks about the regional authority broke down. Suburban county leaders said the city’s proposals called for the non-Detroit municipalities to put too much money into the department and objected to their contributions potentially being moved to the city’s general fund.
With Judge Rhodes’s order today, the parties will resume talks.
Wayne County has filed a motion as part of Detroit’s bankruptcy case requesting a mediator to assist in stalled negotiations over a regional water authority. Ficano says the region should do everything it can to avoid private ownership of the Detroit Water and Sewerage Department. He spoke with WDET’s David Cassleman.
If you listened to Wayne County Executive Robert Ficano’s State of the County speech this week, you heard about cost-cutting measures underway to reduce a $175 million deficit. But will those be enough to keep the the state’s most populous county out of some kind of financial emergency?
The Detroit News’s Daniel Howes examines the county finances, politics and other factors that may be pointing to an inevitable conclusion in this story.
“This, dear county unions, sheriff and prosecutor, is where you don’t want to end up,” he writes.