DALLAS -- Wayne County, Mich., Executive Warren Evans unveiled a $1.46 billion budget for the next fiscal year that anticipates a smaller surplus as it increases spending on public safety and a stalled jail project.
The budget for the next fiscal year, which begins Oct. 1, is little changed from the current fiscal year's $1.49 billion spending plan. Evans' budget includes a planned surplus of $4.23 million. While the county continues to operate in the black, the surplus is down from $35 million in the 2014-15 fiscal year and $46 million in the 2015-16 fiscal year.
The budget comes after the county emerged from a consent agreement with the state of Michigan with a recovery plan that cut labor and retirement and healthcare costs and boosted Wayne's credit ratings.
“We are again able to present a balanced budget that pays for critical public services while living within our means,” said Evans in a press release. “The recovery plan has successfully brought stability to the budget process. As a result, we are able to deliver real value to our residents for their tax dollars while tackling remaining challenges such as the jail.”
The state formally granted the county's request to be released from oversight last October. The county entered the consent agreement in August 2015. The pact allowed the county to work with the state to renegotiate contracts, improve its cash position, and reduce underfunding in the pension system, resulting in elimination of a structural deficit.
Evans said that with the 2017- 18 budget, Wayne County is able to afford to make key investments in public safety and quality of life programs, as well as position itself to finance the stalled jail project.
The county is currently reviewing proposals from Rock Ventures and Chicago-based Walsh Construction to finish a partially built, bond-financed jail project and expects to make a decision by the end of the month.
The Rock ventures proposal would move the jail to a new site. However the proposal hinges on a decision from the Internal Revenue Service over what penalties the county would incur if it were to deed the current Gratiot Avenue site to a private entity and re-purpose leftover bond money from the original 2010 deal to help fund construction at the alternate site.
Opting to move the site would expose the authority to losing the federal subsidy payments the county receives for the taxable bonds that were issued under the recovery zone economic development bond program. At risk is a total of about $170 million in subsidies, which includes more than $50 million the county has received so far.
In May, Moody’s Investors Service affirmed the county’s Ba1 limited tax general obligation rating while revising its outlook to positive from stable. S&P Global Ratings also affirmed the county’s LTGO rating of BB-plus and positive outlook. Fitch Ratings raised the county’s issuer default rating by one notch to investment-grade BBB-minus in late May.