DETROIT, MI – Gov. Rick Snyder today appointed a financial review team to closely examine the finances of Wayne County after a preliminary review requested by the County Executive found numerous troubling financial conditions.
The appointment of a review team is the second step under Public Act 436 of 2012 (Local Fiscal Stability and Choice Act), if the Local Emergency Financial Assistance Loan Board (ELB) determines “probable financial stress” exists in a municipality following a preliminary review by the Department of Treasury. The ELB reached that conclusion for Wayne County July 1st, following a preliminary review.
“While county officials are working to address this growing financial crisis, the recent request of the county and the finding of probable financial stress by the Emergency Loan Board indicates a deeper review is necessary,” said Gov. Snyder. “The individuals appointed today bring diverse and extensive experience to the review process. And given the County Executive’s request for an expedited review, I have directed this review team to work as quickly and efficiently as possible, to establish a solid baseline of facts on the county’s finances and a report which we can collectively work from.”
The preliminary review found several conditions in Wayne County government that raised concerns, including:
-Unrestricted deficits in the General Fund began in fiscal year 2008, with an unrestricted deficit of $10.6 million. Without taking remedial measures, the County is projecting a $171.4 million deficit by fiscal year 2019.
-County officials had not filed an adequate or approved deficit elimination plan with the Department of Treasury since fiscal year 2010. No plan has been submitted for FY 2014, which was due when the audit was submitted in March 2015.
-Over the past several years, taxable values within the County declined approximately 24-percent, reducing the amount of property taxes received. Since 2007, General Fund property tax revenues declined by more than $156 million, while total expenditures increased by more than $50 million.
-The County’s primary pension plan is 45-percent funded and has a liability of $910.5 million based on the latest actuarial valuation in September 2013. Over the past 10 years, the County’s funded ratio has dropped by nearly half while its unfunded liability has increased to more than 18 times its 2004 balance.
-In May, 2015, the Circuit Court of Wayne County issued a judgment in favor of the County’s retirement system for more than $49 million without the prior approval of the County’s governing body. Consequently, a judgment levy will be placed on the County’s tax rolls.
Review team members are:
Representing members required by PA 436
Clarence Stone, director of Legal Affairs, Michigan State Housing Development Authority (State Treasurer’s designee)
Stone has been director of Legal Affairs for MSHDA since July of 2011 after spending several years as a staff attorney and acting-director of administrative services for the authority. Prior to joining MSHDA, Stone practiced law at Detroit and Chicago-based law firms. Stone holds a Bachelor’s Degree from the University of Michigan and a J.D. from the University of Virginia.
Jeffrey Bankowski, chief internal auditor, State Budget Office within the Michigan Department of Technology, Management, and Budget (DTMB Director’s designee)
Bankowski has been chief internal auditor within the State Budget Office since January, 2015. Prior to joining state government, Bankowski was president of Capital for Merchants, LLC in Troy, MI after serving as vice president of Asset Acceptance Capital Corp. in Warren, MI. Bankowski holds a Bachelor’s Degree from the University of Michigan and a Master’s Degree from DePaul University.
Tom Davis, deputy director at Senate Majority Policy Office (nominee of Senate Majority Leader)
Davis has been deputy director in the Senate Majority Policy Office since October, 2013. Prior to that, he served as policy advisor and budget coordinator for the Michigan Senate. Davis also served as chief of staff for former state Sen. Shirley Johnson. David holds a Bachelor’s Degree from Michigan State University.
Sharon Madison, owner, Madison Madison International (nominee of the Speaker of the House of Representatives)
Madison is owner of Madison Madison International, a design and construction firm and has more than 25 years of experience in those industries. Under Madison’s direction, firms have completed projects for roads, bridges, mass transit, water and sewer, and land use planning. Madison holds Bachelor’s and Master’s Degrees from the University of Michigan and a Certificate in Marketing Communications from Harvard University.
Representing state officials with relevant professional experience
Frederick Headen, legal advisor for the Michigan Department of Treasury Headen served with the Bureau of Local Government Services from 1997 to 2012, before he was appointed to his current position. Headen also served as acting chair of the State Tax Commission. Prior to joining Treasury, he worked as legal counsel for the Citizens Research Council. Headen holds a bachelor’s and master’s degree from Michigan State University and a law degree from Thomas M. Cooley Law School.
Under PA 436, a review team must report to the Governor within 60 days of its appointment, whether or not a financial emergency exists in the local unit of government. For more information about PA 436, visit the Local Government Fiscal Health page on the Department of Treasury’s Web site at www.michigan.gov/treasury.