Wayne County, Michigan has tapped a former New York-based municipal treasurer chief financial officer.
Henry Dachowitz replaces Tony Saunders, who also carried the title chief restructuring officer. Saunders left the county in April to launch a private equity and turnaround firm. Saunders played a central role in crafting the county’s recovery plan that helped keep it out of bankruptcy and eventually exit state oversight.
“We’ve made tremendous progress stabilizing Wayne County’s finances but there is more work to be done,” County Executive Warren Evans said in a statement. “It’s critical that we hire the right person as CFO to continue guiding us through the Recovery Plan. Henry brings a lifetime of experience and a track record of success to Wayne County. I’m looking forward to working with him as we move forward with finishing the jail and finding cost-effective solutions for the County’s infrastructure issues.”
Dachowitz brings over 40 years of experience to the position, including four years as treasurer of Nassau County, New York, where he produced four budget surpluses and achieved 11 bond-rating increases, according to the statement. He was also responsible for computerizing the county's debt tracking system and established a compliance department to ensure greater accountability of tax dollars. Prior to joining Wayne County, Dachowitz was the founder and chief executive officer of his own financial and management consulting firm, Expert CFO Advisor.
"I see wonderful enthusiasm in the people I've met in Wayne County and Detroit,” Dachowitz said in a statement. “I'm excited about the turnaround, the revitalization of downtown and the high tech vibrancy here. The opportunity to contribute to that momentum as we continue to improve the County's finances appeals to me."
The county exited an emergency consent agreement with the state in 2016. The county is also close to resolving plans for new criminal justice center that would replace an old jail and substitute for an unfinished bond financed project located in downtown Detroit.
With a $52 million structural deficit and rising retirement costs, the county entered a consent agreement with the state in 2015 that paved the way for a fiscal restructuring. Legacy costs including retirement obligations were reduced to $1 billion from $2.4 billion.
The country has posted three consecutive budget surpluses, and increased the county’s pension funding level to 54% funded from 45%.
The county is close to reaching agreement with Dan Gilbert’s Rock Ventures LLC to build a new criminal justice center, one that substitutes for previous plans for a new jail on Gratiot Avenue in downtown Detroit. The county halted construction there after spending $157 million.
Rock Ventures plans to build the county the new center at a new site in exchange for the Gratiot site. Rock Ventures would build the county a new criminal justice center with a 2,280-bed jail, criminal courthouse, prosecutor offices, sheriff administrative offices and a juvenile detention facility at an approximate cost of $520.3 million.
The county would be responsible for $380 million plus the cost of acquiring the land and Rock would cover any cost overruns. The $380 million would be funded through a combination of unused proceeds from a $200 million direct-pay, taxable recovery zone economic development bonds sold in 2010 by the Wayne County Building Authority and the issuance of about $200 million of new bonds, according to Evans.
County officials say the plan still hinges on an IRS decision on whether the county can use jail bond proceeds from the original borrowing to build on the alternative site.
Rock Ventures originally intended to use the Gratiot site to build a professional soccer stadium but has since abandoned that plan. It is unclear how the land would be developed.
The county remains at junk rating levels but it's only one notch below investment grade territory after a series of upgrades. Moody's Investors Service rates the county's GOs Ba1, Fitch Ratings has the rating at BB-plus and S&P Global Ratings rates it BB-plus.