Warren Evans asks state to declare a Financial Emergency

[Packman41]

"I am requesting this Consent Agreement because the additional authority it can provide the County may be necessary to get the job of fixing the county's finances done," Evans said in a statement.

http://www.detroitnews.com/story/new...ency/28886293/

PDF of his letter here:
https://s3.amazonaws.com/s3.document...nty-review.pdf

[Scottathew]

I'm glad he sees the issue for what it is and is getting the tools he needs. They'll need to address a lot of things, including legacy costs.

[Wesley Mouch]

These requests will never end. The only appropriate response would be 'drop dead'. This should not be resolved by increases in taxes. The taxpayers never agreed to Turkia's pension, nor for any of the other methods used to pump up five-digit pension into six digits. Just say no. If you're funded 53%, well you can just pay 53% and let the regular $25,000 a year retirees who will have to take $13,000 grab their pitchforks and torches and hunt down Evans, Ficano, Mullins and the rest of the six-digit retirement club.

[mwilbert]

These requests will never end. The only appropriate response would be 'drop dead'. This should not be resolved by increases in taxes. The taxpayers never agreed to Turkia's pension, nor for any of the other methods used to pump up five-digit pension into six digits. Just say no. If you're funded 53%, well you can just pay 53% and let the regular $25,000 a year retirees who will have to take $13,000 grab their pitchforks and torches and hunt down Evans, Ficano, Mullins and the rest of the six-digit retirement club.

I don't understand how this is responsive to the issue. Do you think Wayne County doesn't have a fiscal emergency? The fact that there have been abuses of the pension system, and I think it is pretty clear that there have been, is a [[very partial) explanation of that problem, but I don't see how that argues against an emergency.

[Wesley Mouch]

I don't understand how this is responsive to the issue. Do you think Wayne County doesn't have a fiscal emergency? The fact that there have been abuses of the pension system, and I think it is pretty clear that there have been, is a [[very partial) explanation of that problem, but I don't see how that argues against an emergency.

Sorry, i was just in piss-poor mood.

It has everything to do with the emergency. Did you see the funding percentages in his letter to the State? Under 60% funded pensions? And that's AFTER 5+ years of a bull market.

Once I read that, I stopped. Maybe I should read more. Or maybe you should. Read and find out what percentage of the budget is pensions. Tell us the figure. You should then understand why pensions are the single biggest contributor to the 'emergency'. Or you will have proven that I'm a fool. [[You wouldn't be the first.)

[JoeGeds]

The taxpayers never agreed to Turkia's pension, nor for any of the other methods used to pump up five-digit pension into six digits.

Umm, yes they did - on election day. This pension thing has been going on for 20 years plus, yet the taxpayers just kept voting in the wrong people. This isn't about Democrat vs republican, BTW. It's about a county that overwhelmingly votes one party over another so much so that serious contenders from the opposite party really aren't even considered. If the people that held public office had to worry about the next election, and be held accountable for their actions, they might do things for the people instead of friends and family. Ficano knew he could do anything he wanted, and he would be voted in again and again. It took a huge scandal for him to be voted out - and replaced by basically the same guy.

[lpg]

And the worst thing is every level of government operates the same way. The selection is limited. We always have to try to choose the person who will do the least amount of damage. It's rotten to the core.

[BankruptcyGuy]

This step was expected. The next one [[consent agreement? will that work? bankruptcy if it doesn't?) will be controversial.

[Wesley Mouch]

Umm, yes they did - on election day. This pension thing has been going on for 20 years plus, yet the taxpayers just kept voting in the wrong people. This isn't about Democrat vs republican, BTW. It's about a county that overwhelmingly votes one party over another so much so that serious contenders from the opposite party really aren't even considered. If the people that held public office had to worry about the next election, and be held accountable for their actions, they might do things for the people instead of friends and family. Ficano knew he could do anything he wanted, and he would be voted in again and again. It took a huge scandal for him to be voted out - and replaced by basically the same guy.

Well Joe, you are right -- up to a point.

Yes, Wayne County and Detroit voted in different people than Royal Oak and Oakland County. And they got different results.

I have friends in OC government. And they have a defined contribution pension there, and have since the 90s. Brooksie may not be everyone's cup of tea. But there'll be no need for an OC bailout.

But while that's true, I don't think even WC voters realized that the government could bind them to future pension obligations for promises made without funding them at the time of commitment.

[emu steve]

This step was expected. The next one [[consent agreement? will that work? bankruptcy if it doesn't?) will be controversial.

I see a lot of apples and oranges here...

"Evans said a consent agreement would allow the county to continue negotiations with stakeholders while giving it the ability, if necessary, to find other ways to achieve cost-savings and the county's $52 million structural deficit — a recurring shortfall that stems from an underfunded pension system and a $100 million yearly drop in property tax revenue since 2008."

1). Income down 100M in yearly property tax revenues. Okay, that is a here and now cash flow problem.

2). Underfunded pension system.

#2 - can the county declare a financial emergency based on something which will come to bite the county in the future?

EDIT:

Here is the relevant information to questions I raised above:

"Besides its $52 million annual structural deficit, the county takes about $20 million from its general fund each year to bolster its pension system."

So the pension fund contribution from the general fund is 20M.

Curious: 20M out of what [[total general fund)?????

EDIT[[2). Total county budget about 1.7B. So 20M is slightly more than 1%.

http://www.waynecounty.com/mb/1240.htm

[Wesley Mouch]

I see a lot of apples and oranges here...

"Evans said a consent agreement would allow the county to continue negotiations with stakeholders while giving it the ability, if necessary, to find other ways to achieve cost-savings and the county's $52 million structural deficit — a recurring shortfall that stems from an underfunded pension system and a $100 million yearly drop in property tax revenue since 2008."

1). Income down 100M in yearly property tax revenues. Okay, that is a here and now cash flow problem.

2). Underfunded pension system.

#2 - can the county declare a financial emergency based on something which will come to bite the county in the future?

EDIT:

Here is the relevant information to questions I raised above:

"Besides its $52 million annual structural deficit, the county takes about $20 million from its general fund each year to bolster its pension system."

So the pension fund contribution from the general fund is 20M.

Curious: 20M out of what [[total general fund)?????

EDIT[[2). Total county budget about 1.7B. So 20M is slightly more than 1%.

http://www.waynecounty.com/mb/1240.htm

Evan's letter say the underfunding is $870 million [[as of 9/2014). $20m is just 'bolstering' to kick the can down the road.

The real picture is still hidden. Just how bad is it really. How many people are they paying more than three times the average pension? Are they contributing to 'pension inequality'? What has been the return of the fund since 2004? Are they below or above market? Why have they not been able to pay their pension fund contributions? How can they not pay them and not be locked up in jail?

[emu steve]

What I'm getting at:

Someone can't declare a financial emergency because they can't pay something due down the line [[e.g., 2020).

Now, he says they have to kick in 20M a year out of the general fund. I can 'put my arms around that.'... That's money which has to be paid out now.

[Hypestyles]

Does a consent agreement have to get official buy in from the County commissioners?

[BankruptcyGuy]

What I'm getting at:

Someone can't declare a financial emergency because they can't pay something due down the line [[e.g., 2020).

Now, he says they have to kick in 20M a year out of the general fund. I can 'put my arms around that.'... That's money which has to be paid out now.

My understanding from the letter is that there is a structural deficit [[revenues less than expenses) and that the general fund has run dry. Generally, there is a cushion. They have been filling the hole [[i.e. not literally running out of cash) by drawing from the delinquent tax fund.

[compn]

called this wayne county emergency/bankruptcy last year when i figured the detroit plan was a plan designed to fail. although i thought it would happen in 3-5 years not 1!
http://www.detroityes.com/mb/showthr...899#post423899

what i dont get is why would the executive call in someone to basically do his job for him? i mean, is there some regulation or rule that prevents him from making the cuts to the budget that the efm does not have? i guess so? they have no way of changing those rules? is it just the pension constitution law? and the only way to get around that is federal bankruptcy court?

pretty nefarious stuff happening behind the scenes. these people dont care one duff about the county [[or detroit, or any other city dealing with efm), this is all about breaking the pension laws?

[Zacha341]

Paging: Robert Ficano, Mr. Ficano..................

[Wesley Mouch]

... this is all about breaking the pension laws?

I think pretty much you have that right.

If WC is to pay their pension promises, they have to raise taxes to get the cash. Looks like they've already raided every other cookie jar [[delinquent tax funds and so on).

Either the checks get a little smaller -or- you raise taxes and torture the citizens.

Evans is only asking because all the other options aren't enough to get enough money to pay the current and future retirees.

[emu steve]

My understanding from the letter is that there is a structural deficit [[revenues less than expenses) and that the general fund has run dry. Generally, there is a cushion. They have been filling the hole [[i.e. not literally running out of cash) by drawing from the delinquent tax fund.

I can understand that. That is probably a good example of 'insolvency'.

[emu steve]

As far as pensions are concerned, the federal government uses base pay [[no overtime, no bonuses, etc.) in it calculations.

So a CIA person who say 12 years ago, worked 70 - 80 hours a week [[many did that is no lie; 12 hour days 6 or 7 days a week), their salary for retirement purposes is this their base salary for the pay year.

I would think it is incredible stupid to have a retirement system which is based on anything other than yearly salary earned.

[BankruptcyGuy]

I think pretty much you have that right.

If WC is to pay their pension promises, they have to raise taxes to get the cash. Looks like they've already raided every other cookie jar [[delinquent tax funds and so on).

Either the checks get a little smaller -or- you raise taxes and torture the citizens.

Evans is only asking because all the other options aren't enough to get enough money to pay the current and future retirees.

They are also looking to reduce operating costs [[work rules in CBAs created those, according to the letter).

[Cincinnati_Kid]

I think pretty much you have that right.

If WC is to pay their pension promises, they have to raise taxes to get the cash. Looks like they've already raided every other cookie jar [[delinquent tax funds and so on).

Either the checks get a little smaller -or- you raise taxes and torture the citizens.

Evans is only asking because all the other options aren't enough to get enough money to pay the current and future retirees.

Including himself I presume. Evans is double-dipping as well as being the Wayne County Executive if I'm correct.