Remember just before Christmas last year on Local 4 Gov. Rick Snyder admitted he planned to send his financial reviewers into Wayne County because its financial position has been so badly managed?
He had to get involved after county Executive Robert Ficano's folly; the failed new Wayne County Jail construction that went so badly awry. Its $160 million cost continues to move northward while the construction has completely shut down. I am told the progress on moving the failed jail project to the Mound Road facility is all but stalled right now, by the way.
Still, today we officially confirmed why we haven’t heard about the review team doing its deep dive into the county’s books just yet. Ficano, with his new Chief Financial Officer Mark Abbo, met with the state in January and convinced the governor’s team to sit tight for now. They apparently sold them on that their latest deficit reduction plan is the one that will save the county.
You may recall the county has submitted at least half a dozen plans over the past few years and the state gave thumbs down to each and every one. So Ficano knows it is do-or-die time. This is indeed his last stand.
But it’s not going especially well. An audit of the county’s 2013-2014 budget shows the county is actually doing worse today than it was this time last year, and that was nothing to brag about either. In April of last year Wayne County carried a $166 million budget deficit. State law says you can’t carry one at all. This year the number is 10 percent higher at $175 million. You may recall that when Detroit went into bankruptcy it was $327 million in the hole. Wayne County is 53 percent of the way there. And while we’re looking around the corner from the Guardian Building to the City County building, Detroit’s pensions are underfunded by 6 to 34 percent in the bankruptcy and there is considerable gnashing of teeth over how to deal with that.
Wayne County’s pensions are actually more severely underfunded, by as much as 50 percent. The only difference is Ficano didn’t get involved with SWAPs like Kwame Kilpatrick did. Nonetheless, Wayne County is teetering on the edge of financial disaster as is plain for all to see.
Yet when it comes to trying to pull the fat out of the fire, Ficano has a problem. While he only needs eight votes to get his plan approved by the commission, he doesn’t have them. He submitted the plan in February and the commission has yet to budge. It is telling him no, period! Several committee of the whole sessions where Ficano’s staff has discussed ways to find common ground proved fruitless.
Yet, because it’s a last gasp effort Ficano persists. He will tell you, as he did to me today in an on camera interview, he is already working his plan. He claims to be currently negotiating with county unions for serious givebacks, trying to get the Wayne County Treasurer Raymond Wojtowicz to hand over $81 million under his control in a property tax fund, trying to sell a sewage treatment plant for $120 million to Downriver communities already struggling with their own financial problems.
The sewage treatment plant and the pay and benefit cuts are what the commission is pushing back on hardest. Downriver reps say they are already paying for the sewage treatment plant’s services and ownership is no bonus to them. As we’ve already seen in Detroit, cutting pensions and other benefits come with their own unique kind of pushback. Ficano’s finding few friends in this process. If he had them the plan would have already passed and it’s not even come up for a vote and there isn’t one scheduled any time soon. They will meet next week in another committee of the whole session.
Of course, there are politics coming into play here. The veteran and beleaguered county executive desperately wants to get re-elected and to date is not garnering the kind of support he did in his last re-election. There is blood in the water and everyone from the Guardian Building to Plymouth-Canton can see this is indeed Ficano’s last stand.
The state is waiting and watching to see how this all plays out.