A stronger Wayne County heads into 2016 but big challenges remain

Warren Evans -- Monica Morgan Photo
Warren Evans — Monica Morgan Photo

In a way, it’s admirable that Wayne County Executive Warren Evans even took the job. Because several years ago, while most of the breath-holding attention was focused on all of Detroit’s bankruptcy woes, Wayne County wasn’t doing so hot either. The deficit was crippling, and the talk of corruption, bloated salaries and sweetheart contracts was severely tarnishing the county’s image. But worse than merely image, the concern was what was it going to take to set the county right-side-up again, and was anyone willing to face up to what it would take.
Once Evans took office at the beginning of this year, he set a tone by not just asking others to bite the bullet, but by shouldering some of the burden. He knew what had to be done was painful, but he gambled that if he just laid the cards on the table – all of them – then folks would be willing to come to the table.
Today, nearly a year later, it appears that Evans’ gamble has largely paid off. At least so far. The year 2016, and whether or not Evans manages to achieve a comparable amount of success facing his next round of challenges, will be critical in establishing the stability of his foundation for however many years he remains in that office. In a one-on-one interview conducted in his 33rd floor office in the Guardian building last week, this is some of what he had to say about the accomplishments of his office thus far, and what remains to be done.
The deficit
“We’ve gotten an awful lot done, but I always temper that with we’ve got an awful lot to go, but it doesn’t minimize at all the work that got done. The structural deficit is gone, $82 million. …Structural deficit is, every year we spent $52 million more than we took in, in revenue. You’re budgeting artificially because you know the $52 million is gonna be short, but you’d rather panic at the end of the year and worry about it than budget for it at the front end.
“So now, through reorganization, reduction in the number of appointees, pay reductions from my staff,” not to mention reducing unfunded healthcare liabilities by nearly $1 billion by eliminating retiree health care benefits, the county’s finances are on a better track.
Evans also praised the unions and their willingness to work with his office in good faith.
“I got a consent agreement, which gave me an enforcement tool, but in 13 of the 14 bargaining agreements, we didn’t have to use it. We came to terms. And so the ability to impose was there, but the reality is everybody stepped up to the plate and said ‘we don’t need to do this. Let’s come to terms.’ And so that got our structural deficit down.”
“The farther you get from the guy who created the problem, the more you inherit the problem, and I understand that. So you’re damned if you do and damned if you don’t sometimes, but I think we did it the right way.”
Shared sacrifice
“My health care is the same as the employees’ health care. …How do you go to all these people and get them to agree to these kind of concessions and then you get to the people who are a little better heeled financially” and you let them off the hook?
Unfunded liabilities a huge upcoming challenge
“There’s still one big piece which is not done, and that’s the unfunded liabilities in the retirement system. The worse thing you can have is somebody who worked 25 years and have a threatened retirement. Ten years ago our retirement system was the gold standard. It was 95 percent funded. In one decade it went from 95 percent funded to 44 percent. We gotta get it back up to 70. And that’s part of the heavy lifting that I don’t want people to forget about.”
“We now have a balanced budget, but in order to put money back into the retirement system, not only do I have to balance the budget, I have to have a surplus. Because the surplus is the only extra money there will be to move into the retirement system to try to bring that up.”
“I want the public to know the reality, and the reality is we did a lot of heavy lifting, but the other reality is we’re not out of the woods yet.”
How did it get this bad?
“A number of lucrative retirements were given out by the previous administration, plus it hasn’t been that long ago that you didn’t retire until you were 65. Now you got people 40-something retiring. And so you got that length of time to pay and the terms that they were giving for the retirement and the health care – health care benefits for life – were just drowning the system. And rather than looking at the actuarials and face the reality, it’s kinda like ‘everything’ll be all right someday.”
Dealing with the unfinished jail fiasco
“I think we will have a plan in the next several months. May not be the only plan, because the plan is going to take months to finish. By ‘plan’, I want to be real clear, it’s a plan to finish a facility, and to finance it. Because we have $50 million left in bonds that haven’t been wasted from the previous project.
“But that’s not going to be enough to finish the project. And so, when we figure out what that number is, we’ve got to be able to borrow to fill that gap. And since so much money has been wasted already my whole priority is I’m gonna do what’s cheapest for the taxpayer. And I don’t really have a dog in the fight as to where it is. The money looks to us looks like finishing on the existing site is by far the cheapest way to go. But we’re not precluding someone coming up with another plan. We’ve got no pride of ownership here. The only pride of ownership is we don’t have to ask the taxpayers to pay any more than is necessary to get it done.
“At one point, Dan Gilbert said we’ll give you $20 million for the existing facility, and people were saying, ‘$20 million beats nothing. It’s just sitting over there.’ But what they don’t understand is we already borrowed $130 million. You take 20 off the 130 and I’m still paying $1 million a month on the debt service. We borrowed the money, we gotta pay the folks back. And so $20 million does nothing in reality. And then you don’t have the building either.”
“There’s always talk about ‘why do you wanna do it downtown?’ and all of that, and, I mean, I don’t even have a dog in that fight. I do know, in most of the country, if you go look, the courts and the jails are downtown. They just are. Having said that, that doesn’t mean they have to be. It just gets back to, our whole issue is what’s the cheapest way to do it? And our math says the cheapest way is probably to finish the project that’s there. But If there’s enough time and we set it up in such a way that somebody comes up with a better program, or a better deal, then we can take the best deal for the taxpayers. To me it’s the biggest albatross in my lifetime that I’ve ever seen in one place. I go home some days happy that we’ve made the decisions that we have with respect to the finances, and we’re getting there. And you’re happy about it. And then you look up and see that thing, and you drop your head on the steering wheel, and say, ‘Jesus Christ, Wayne County screwed up’. It is an albatross. It has a psychological effect. I would think that if I went past there one day and saw some caterpillars in there and some hardhats, and some sparks flying across those beams, my attitude would completely change. You can’t minimize image. Especially when you’re trying to improve your image.”


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