CHICAGO — Even as it stepped closer to a state takeover Tuesday, Wayne County, Mich.'s chief executive vowed that the struggling government would not travel down the same path as its largest city, Detroit.
"There's no way I see Wayne County needing an emergency manager or bankruptcy at this point," County Executive Warren Evans told Detroit City Council Tuesday. "We have a defined recovery plan that anyone can look at, and if this recovery plan is followed then the structural deficit is gone."
His comments Tuesday came just hours before an independent review team appointed by Gov. Rick Snyder concluded that a financial emergency does exist in the county. Snyder now has 10 days to consider the review team's report and make his own determination. If he agrees with the team, the county will be allowed to pick from among four options, one of which is a consent agreement.
Evans requested the financial emergency declaration for the junk-rated county, saying he needs the powers in a consent agreement to make some of the changes necessary to fix the county's deteriorating fiscal position.
"The county is in a significant financial situation, but the needle may move a little bit today [with the review team's declaration]," he told the council. "The strength of the consent agreement is that it gives us the ability to impose on collecting bargaining agreements that have expired," Evans said. "The reality is, if we can't [come to terms with the unions], we're going to go off the edge of the bridge financially."
Evans appeared before the council Tuesday to outline the county's fiscal position and how it affects Detroit, which accounts for 47% of Wayne County's population as the largest of its 43 municipalities.
It was his first appearance before the council since he took office in January. Evans has held a series of press conferences and issued reports warning that the county could be insolvent by next summer without major structural fixes. He asked for state intervention on June 17.
Some Detroit council members, as well as some residents, warned that a consent agreement had been Detroit's first step toward a full state takeover and eventual bankruptcy.
"We did not ask for a consent agreement, but we got one," council President Brenda Jones told Evans. "We were told if we followed it [we would remain in control], and we did, but guess what? We got an emergency manager," she said.
"That's probably why citizens are saying to you what they are saying, because it seems like déjà vu to some when they saw what happened in the city," Jones said.
"I say very, very clearly that that is absolutely untrue," Evans said. "Any problems we have are shown in our recovery plan, and how we get out of this is in our recovery plan."
The goal is to get the state in, but then to "hurry up and get them out," Evans said.
"We don't want them there lingering," he said. "I've spent over 40 years in Detroit and Wayne County, and I know we can fix our own problems. We're halfway home, the problem with the rest of the way home is it's the heavy lifting that can't be done unilaterally by a county commission or executive's office. It's the powers conveyed in the consent agreement that at least gives us the leverage to finish."
Evans listed the county's main financial problems: a $52 million structural deficit, a $900 million unfunded pension liability tied to a 45% funded plan, and a $1.3 billion retiree health care obligation. The health care liability makes up 40% of the county's long-term debt.
"There are significant liabilities out there, but if we get rid of the structural deficit we're on a path to have a balanced budget and get our credit rating upgraded," Evans said. "We're in government, you have to be able to borrow money, you have to be able to complete projects."
He pointed to the notorious half-finished jail project in downtown Detroit, which the county abandoned a year ago amid cost overruns and now can't afford to finish.
Evans says everyone wants to know what is going to happen to the jail.
"The answer is, without a balanced budget and with our bond rating, I can't do anything about it because whatever we're going to do is going to take more money," he said.
The state review team pointed to the abandoned jail project and lack of agreement as to how to move forward as one of the several conditions that led to a determination of a financial emergency.
In addition, the county's last four financial audits have shown "notable variances" between general fund revenues and expenditures as forecast, amended, and realized. County officials also underestimated expenditures in three of the last four years by up to $23.7 million, according to the review team.
