State Review Is Next Step After Emergency Loan Board Finds 'Financial Stress' In Wayne County
DETROIT (WWJ/AP) - There is probable "financial stress" in Wayne County. That's the determination of the state's Emergency Loan Board, Wednesday afternoon.
The board made the announcement in Lansing following a preliminary review by Treasury officials.
"While county officials have taken some important steps in an effort to remedy the current crisis, the county continues to face significant financial difficulties that must be addressed now," said State Treasurer Nick Khouri, who chairs the Emergency Loan Board. "Given the issues noted in the final preliminary report, many of which county officials agree with, we feel a finding of probable financial stress is warranted."
[View A Copy Of The Preliminary Review]
Michigan law requires Gov. Rick Snyder to appoint a review team to look into the county's finances and $52 million structural deficit.
If a financial emergency is eventually found to exist in a local unit of government, local officials determine how the crisis is remedied by selecting one of four options: a consent agreement; an emergency manager; neutral evaluation; or Chapter 9 bankruptcy.
County Executive Warren Evans last month asked the state to declare a financial emergency. Evans has said he wants to enter into a consent agreement with the state that will allow the county to continue negotiations with its stakeholders.
A consent agreement would provide for remedial measures to address a financial emergency and may use state financial management and technical assistance to help alleviate it.
Among the report's findings:
- Without taking remedial measures, the County is projecting a $171.4 million deficit by fiscal year 2019. Other funds that had deficits in 2014 were the Health Fund of $5 million, the Nutrition Fund of $3.2 million, the Community and Economic Development Fund of $2.3 million.
- The County's primary pension plan is 45 percent funded and has a liability of $910.5 million based on the last actuarial valuation performed dated September 30, 2013. This is contrasted with a 94.8 percent funded ratio in 2004 and a total liability of $49.6 million at that time.
- Over the past several years, taxable values within the County declined approximately 24 percent reducing the amount of property taxes received. Since 2007, the property tax revenues in the General Fund declined by over $156 million while total expenditures increased by over $50 million.
Wayne is Michigan's most populous county, with about 1.7 million residents.
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