CHICAGO – Wayne County, Mich.'s fiscal chief, who played a central role in its financial recovery, is leaving to launch a private equity and turnaround firm.
Tony Saunders will remain in his current position as chief restructuring and financial officer until a replacement is found, County Executive Warren Evans said in a statement. The new firm will specialize in financial turnaround consultation and Saunders will work locally and nationally from Detroit.
"We don't get where we are today in Wayne County without Tony Saunders. His work stabilizing our finances has been remarkable," Evans said. "Tony's a turnaround specialist, that's why we recruited him. But Wayne County is in its best financial shape in years and we've restored stability."
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 county has posted two consecutive year budget surpluses and has an accumulated surplus of $80 million. The county exited state oversight last October after 14 months "disproving many who believed the county was heading into bankruptcy," Evans said.
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.
"I like being thrown into a problem and finding a solution when everyone says you can't," Saunders said in the statement. "I want to thank Executive Evans for his steady leadership and providing me the opportunity to work on some of the most challenging fiscal issues facing a county anywhere in the nation. It's been a wild, but rewarding, few years."
Saunders is moving on as a big decision looms on whether the county will resume construction of its stalled downtown Detroit jail or move to another site, making way for developer Dan Gilbert's proposed Major League Soccer stadium.
Gilbert's company Rock Ventures submitted to the county this week a University of Michigan study showing a combined $2.4 billion impact of his plan that would support more than 30,000 temporary and full time jobs.
Rock Ventures would invest $1.5 billion in the 15-acre Gratiot Avenue development that includes the stadium in downtown Detroit. The new justice center Gilbert would finance -- to be located at an alternative site -- is expected to cost $420 million. In exchange, the county is asked for a financial contribution and would transfer the downtown property to Rock Ventures.
The study "does nothing to sway my thinking," Evans said.
"My standard for Rock's proposal has been absolutely clear: Is Rock prepared to build the county a criminal justice complex in a timely fashion, with buildings that meet our needs, at a price Wayne County can afford? If they can't meet that standard, everything else is irrelevant. This study moves us no closer to answering that fundamental question," he said.
The county halted construction of the Gratiot jail in 2013 after having spent $157 million. The county is pursuing a development plan but remains open to the swap. Under the county's current development plan, it would sell about $200 million in bonds for the project.