DALLAS — Wayne County, Mich. finished fiscal 2015 with a $5.7 million surplus, reversing a prior trend of deficits that led to state oversight, according to the county's financial results.
The official figures for the fiscal year ending Sept. 30, 2015 validated what the county previously announced based on unofficial results – that an accumulated deficit of more than $82 million had been eliminated and the books were closed with a $35.7 million unassigned surplus.
About $30 million of that was earmarked for specific uses, leaving the county with a surplus of $5.7 million, according to the comprehensive annual financial report the county submitted to the state government.
"Having a surplus for the first time in eight years is a significant achievement when you consider the financial challenges we faced just over a year ago," Wayne County Executive Warren Evans said in a statement Monday.
On August 2015, the county began operating under a consent agreement with the state due to its financial distress. At the time the city entered into the agreement it faced an accumulated deficit of $82 million, a yearly structural deficit of $52 million, $1.3 billion in unfunded health care liabilities and a pension fund that was underfunded by nearly $900 million.
Under the consent agreement, the county reported trimming nearly $50 million in spending, achieved with elimination or modification of retirement benefits, a contraction of payroll, and other operating efficiencies.
In February the county announced that it expected $23 million in fiscal 2016 budget relief from cuts in retiree healthcare benefits after trimming $850 million from its unfunded liabilities. The annual savings are expected to grow.
Some current employees and retirees have criticized the healthcare changes saying their costs are headed up and their employment was based on the expectation of those benefits being in place.
Evans, who on Tuesday morning gave the Detroit City Council an update on the state of the Wayne County's affairs, said the city will continue "to practice the fiscal prudence necessary to ensure we can complete the Gratiot jail, reduce our outstanding liabilities and repair our outdated facilities."
The cost of completing the jail is expected to run in the hundreds of millions of dollars.
In his recent state of the county address, Evans attributed the consent agreement powers with staving off an emergency manager and bankruptcy and he said the county would soon ask to be freed from oversight.
In February, Moody's Investors Service revised its outlook on the junk-level rating upward to stable from negative in recognition of the county's success in making substantial cuts to its retirement liabilities and other operating expenses.
The rating agency affirmed the county's Ba3 general obligation limited tax debt rating. The county has a total of $518 million of long-term LTGO debt outstanding, of which $336 million is rated by Moody's.
An additional $300 million of short-term LTGO delinquent tax anticipation notes are outstanding, but are not rated by Moody's.
