Plan addresses operating and long-term accumulated deficit
DETROIT, MI—Wayne County Executive Robert Ficano today started the discussion on a completely new deficit elimination plan to address the County’s finances. With the county’s new chief financial officer, Mark Abbo, the county has revamped the way it is approaching both the structural operating and accumulated deficit.
“Fresh eyes and a lot of hard work from my executive team have resulted in a financial plan that we believe will resolve many of the long term issues the County has been facing since the real estate meltdown in 2008,” said county executive, Robert Ficano. “This plan asks that everyone step up to the plate to help ensure the financial stability of the county.”
The county is operating with property tax revenue that is $100 million less than in 2008. The cumulative decline in property tax revenue since 2008 is approximately $353 million. Property taxes are the primary source of revenue for the county’s general fund and support much of the operating expenses for state and charter mandated services.
There are two goals addressed in the plan presented to the Wayne County Commission this morning: elimination of the accumulated deficit and elimination of the annual structural deficit.
To eliminate the accumulated deficit, pegged at $175 million as of September 30, 2013, Abbo recommends two steps: including the Delinquent Tax Revolving Fund Unrestricted Fund Balance (DTRF) in the County’s general fund balance and reorganizing and recapitalizing county owned wastewater treatment facilities.
Elimination of the annual structural deficit is a multi-faceted task encompassing many areas of
County operations. They include savings generated from:
- · Revisions to pension and health care plans, (which will result in annual operational savings to the general fund, as well as virtually all County governmental and enterprise funds. There will also be estimated savings of up to $38 million to the accrued pension liability, and $418 million in savings accrued to other post employment benefit liabilities).
- · Reductions in County-wide levels of compensation.
- · Changes to employee work rules.
- · Re-prioritizing and reductions to service levels now provided through offices of both the Prosecuting Attorney and Sheriff through more efficient use of mental health beds with the State of Michigan and more timely processing of forensics and competency hearings.
- · Reducing the number of Circuit Court judges, as well as allocating benefit costs to the court budget.
- · Better utilization and leasing of County owned facilities.
Today’s presentation and discussion is the first step in a process that will involve labor, county-wide elected officials, courts and the Board of Commissioners. The State of Michigan must also approve the plan after the Commission provides input and approval of a final plan.