It's tough finding solutions to Wayne County's finances

DETROIT – When you are looking for $70 million a year in reduced costs; when you are in a race with the clock trying not to run out of cash by the summer of 2016; when your bonds have been downgraded to junk status: you look everywhere.

Heck, you look in the couch cushions -- twice -- to find any stray money you can.

New Wayne County Executive Warren Evans is in a feverish hunt for cash and help to do so. Evans has not been able to find a new chief financial officer. It's a difficult sell when you consider the second to last one, Carla Sledge, is under indictment and the last CFO, Mark Abbo, was released by Evans during the transition. There's no money anywhere to solve any problems any candidate will face like the climb up Mt. Everest. It's sounding like the most thankless of all thankless jobs.

Evans has tapped former Benton Harbor emergency manager Tony Saunders, who also sits on the Detroit Financial Advisory Commission, as his chief turnaround officer. Together they are trying to stave off receivership or something just short of that. It's a tough slog to say the least and gives credence to the joke Oakland County Executive L. Brooks Patterson told at the Big 4 meeting during the auto show at Cobo Center. When asked if he had any advice for Warren Evans, without missing a beat -- as only Brooks can -- he said: "Ask for a recount!"

One of the ways to raise cash is to sell assets. Detroit refused to, but eventually negotiated in mediation the exchange of assets like the Detroit half of the Detroit-Windsor Tunnel as a way to exit bankruptcy. So Evans surveys the landscape similarly and spies a massive wastewater treatment plant Downriver -- in Wyandotte -- that might just raise some sorely needed cash. But he is likely to know firsthand the old adage: no good deed goes unpunished.

One of the last things former Wayne County Executive Bob Ficano did before leaving office was complete a five-year negotiation with 13 Downriver communities: Allen Park, Riverview, Belleville, Romulus, Brownstown Township, Southgate, Dearborn Heights, Taylor, Ecorse, Van Buren Township, Lincoln Park, Wyandotte and River Rouge. They agreed to partner on the Downriver wastewater treatment plant's operations and upkeep. The storied wastewater treatment plant has had trouble since the early '60s and was under federal consent agreement for decades. That ended recently and the agreement expired in the last year or so.

Ficano's agreement went to the County Commission which approved it in December. The 13 affected communities are in the process of officially approving the deal. Southgate is the only one that's done so tonight, but there are seven or eight expected to OK the deal this week, and the remaining should do so by next week.

So, it was a distinct surprise when the Evans administration faxed -- yes, you read correctly -- faxed a letter to all the community town or city halls unilaterally revoking the agreement. The fax was received by some while other faxes went to the wrong phone numbers. Some of the dusty old fax machines jammed preventing mayors or managers from reading the executive's words.

Evans claimed since the communities have yet to finalize their approval it left the door open for him to pull back the agreement on his own and revoke it.

The belief in the immediately unhappy communities is that Evans wants to sell the plant to someone, anyone, who would take it off the county's hands and pay handsomely for the privilege. It certainly makes sense, except for the fact that the Downriver communities don't believe Evans has the ability to quash the deal. They also don't believe the plant is Evans' to sell. There is also roughly $100 million in debt that the communities have taken out with Wayne County that would prevent a sale in any event.

Moreover, Dearborn Heights Mayor Daniel Paletko, who led the negotiations on the Downriver communities' part, says the day he hates most every year is when he passes along the price increases to residents for Detroit Water and Sewerage and Wayne County wastewater. Residents complain bitterly that they already are paying through the nose and the price just keeps going up and up. Paletko believes that if the plant were to be sold -- likely to a private company -- the customer costs would skyrocket. While he says he does not want a nasty battle with Warren Evans, he is happy to reopen negotiations on the wastewater deal. He will fight tooth and nail to prevent higher water and sewer bills.

Paletko says the real rub for Evans is a clause in the existing deal that requires a one-year notice for any changes in the plant's future. This could easily make a sale more difficult and longer, and time is something Evans has less of than cash.

Warren Evans' spokesman Lloyd Jackson put out this statement Wednesday afternoon: "The CEO felt that it was necessary to have further discussions with the 13 Downriver communities regarding this agreement for the wastewater treatment plant. The Administration plans to sit down next week to discuss its concerns with the agreement and believes a dialogue is what's needed to help us reach a consensus that best works for the downriver communities and Wayne County."

There is no discussion of a sale there so they will have to work out their issues on their own. But this is a classic example of just how difficult the job of turning around Wayne County will turn into. It's sort of like trying to do jumping jacks in a small elevator. It's close quarters -- you bang limbs at every turn and there isn't much maneuvering room to work up a sweat.

We can expect a lot of these kinds of problems as the Evans administration learns the ins and outs of this exceptionally complex labyrinth called Wayne County government. And there is still that pesky problem of finding any money in the couch cushions.


About the Author:

Rod Meloni is an Emmy Award-winning Business Editor on Local 4 News and a Certified Financial Plannerâ„¢ Professional.