Wayne County cost cutting: Too little too late?

By Rod Meloni - Reporter, CFP ®

DETROIT - Just before Christmas 2013 I did an interview with Gov. Rick Snyder. He made it known he was ready to send a review team into Wayne County after the first of the year.

Read back: Wayne County's financial woes to be addressed soon

It was news to Wayne County Executive Bob Ficano and his brand new Chief Financial Officer Mark Abbo. They were obviously disheartened and disappointed to hear the governor's words when I interviewed them to get their reaction. It lit a fire under them, too.

Abbo has spent the past two months cobbling together a bold, tough and painful deficit reduction plan. He handed out copies of the plan a half hour before today's Committee of the Whole meeting at the Wayne County Commission's 7th floor chambers. He imbued a serious sense of purpose here.

Abbo succinctly put it: "I believe that if we don't take control of the situation and find a solution for ourselves that solution will be found for us by others."

County Commissioner Shannon Price said of the governor's words in the interview that while others may believe the emergency manager law does not apply to counties like Wayne, the governor obviously believes it does. "Forewarned is forearmed" goes the old bromide and so the County Executive knows he'd better get going and get it right, quickly. The first step of course is getting a plan the County Commission can agree on. He needs 8 votes of the 15 member panel and it's going to be a tall order.

Here is what Abbo is asking for: The County hopes to create an authority and sell its three wastewater treatment plants to the communities they serve. Abbo believes the county can raise $121 million with that sale. Taylor Mayor Rick Solars says his community might have some money to buy in but there are major issues to resolve; like why a city that's already paid for the system would do so again? Solars is not saying no, but he's not saying yes either. He needs a lot more information.

That, of course, takes time. Commissioner Kevin McNamara doesn't think that part of the plan can work because there are a lot of other cities and townships which can't afford that buy-in. Wayne County employees would see pay and benefit cuts across the board. Pension and other retirement plan contributions would be reduced; county employees would wind up on Obamacare healthcare exchanges. Unions will be asked for more and abundant givebacks and work rule changes. Abbo expects the Sheriff who went $30 million over budget the last two years to make cuts that will not be welcome. The same goes for the county prosecutor who is still in court over the budget cuts she took last year.

Abbo is also looking to reduce the number of circuit court judges in the county. Obviously there is no rubber stamp anywhere to be found. Then Abbo wants new revenue brought in as well. He intends to start renting out office space in the now county owned Guardian Building, which is nice but begs the question why didn't this happen sooner? When it comes to the proposed pain here , let's put it this way, pretty much everything the county can do to raise cash, change its financial fortunes and please the state is on the table.

You see the difficulty Ficano and Abbo face here. While they want an up or down vote in weeks, it's likely a lot of this would take months or even years to accomplish. But here is the really big question tonight? With pensions 55 percent underfunded and a structural deficit sitting at about $200 million [where have we heard these numbers before Detroit?] is this plan a last gasp that is too little too late? The answer of course will come from Lansing eventually.

That of course assumes the County Commission is more willing than the Detroit City Council was to try and solve its problems by taking the tough medicine and passing along the difficult cuts to its employees in an election year.

The clock is ticking and the state is watching.

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