Wayne County Executive Presents "Recovery Plan" to Solve County's Dire Fiscal Condition

published by: Communications on 4/29/2015
DETROIT - Wayne County Executive Warren C. Evans today released his Recovery Plan ("Plan") to solve the County's dire financial circumstances. In the Plan, Mr. Evans creates a roadmap for Wayne County's financial solvency through shared and equitable sacrifice from all of its employees. Plaguing the County is a structural deficit averaging nearly $52 million for the last four years. Only extraordinary transfers from the County's Delinquent Tax Revolving Fund allowed the County to eliminate its accumulated deficit in 2015. Without immediate action to rectify the factors that created this problem over that last decade, the fiscal crisis will worsen.

In five years, if nothing is done to solve the County's financial condition, the accumulated deficit is projected to grow to $203 million. Immediate and decisive action is required.

"Wayne County's financial state doesn't allow us the luxury of time," said Wayne County Executive Warren C. Evans. "Our pension system, alone, is in worse shape than Detroit's pre-bankruptcy. Our liquidity problems have not been addressed and we continue to hemorrhage cash. We cannot continue to do business as usual." said Evans. 

Currently, over 70 percent of the County's long-term obligations are for health care and pensions. In the Plan, the County Executive made the difficult decisions needed to reform health care and pension costs. The County is faced with $1.3 billion in unfunded health care liabilities and a pension system that needs $910 million to become fully funded. Detroit's pension system was 71 percent funded pre-bankruptcy and the County's pension system is 45 percent funded.

"The proposed changes to pensions and health care are tough decisions and we understand and appreciate the concerns of employees," said Evans. "At the same time we know these reforms are necessary for the County's viability. Our focus is to create a financially strong County that best serves both our employees and our residents."

The Plan also calls for operational restructuring initiatives to lower the cost of providing essential services to Wayne County residents and for reducing the County's real estate portfolio.

Fully implemented, the Plan saves the County's General Fund $230 million over the next four years. The Evans Administration believes this Plan is the first stage to resolve the County's severe financial crisis.

"Implementing this Plan is an essential step to address the causes of the County's financial crisis," said Evans. "There will be future challenges ahead to stabilize our financial footing, but this Plan will put us in a better financial place to resolve long-term issues."

Key Components of the Recovery Plan include:
  • Modifying employee and retiree health care benefits.
  • Future changes in pension benefits for employees.
  • Imposition of a 5% wage reduction with the exception of police officers, prosecutors, and nurses.
  • Relocating staff from leased office space into County owned buildings.
  • Creation of a new department, the "Department of Health, Community Wellness and Senior Services.
    This proposed new department consolidates the functions and responsibilities of the "Department of Health and Human Services," "Children and Family Services," and "Senior and Veterans Services." This reorganization will increase the quality of service and save the County money.
  • Eliminating the "Department of Economic Development Growth Engine" (EDGE).
  • Launch of a new procurement platform to replace the County's outdated process for purchasing. This platform will allow effective strategic sourcing, adequate contract management, centralized and electronic accounts payable and streamlined procurement processes.
  • Many other restructuring initiatives of County programs.
  • Reducing the County's costs and achieving greater efficiencies through changes to Collective Bargaining Agreements

   

View the Full Recovery Plan

  

View the Press Release Document

 

 

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