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Budget

Executive Order 2018-02

New Executive Order issued to ensure the solvency and fiscal stability of Wayne County. Read Now

FY 2019 & FY 2020 Adopted Budget

2018-2019 Adopted Budget

FY 2020 & FY 2021 Comprehensive Executive Budget

View the 2019-2020 Comprehensive Executive Budget

In accordance with Article V of the Wayne County Charter, attached is my recommended two-year Comprehensive Executive Budget (Recommended Budget) for Fiscal Years (FY) FY 2019-20 and FY 2020-21. This is my fifth operating and capital budget plan I've presented to the Wayne County Commission. Included are the operating and capital budget plans for FY 2019-20 and FY 2020-21 for all County elected offices, agencies and departments. As in the past, the FY 2019-20 budget is for the County Commission to appropriate as required by Charter. The FY 2020-21 budget is a projection that will serve as the foundation for the 2021 budget cycle.

Our financial outlook remains the strongest it's been in many years. In 2018, the County received bond rating upgrades from all three rating agencies. Moody's Investors Services upgraded the bond credit rating to investment-grade for the first time in four years. S&P Global Ratings credit analyst attributes the rebound to cost cutting measures. We've experienced increasing surpluses in the General Fund for the last three years. The FY 2018 annual General Fund unrestricted surplus was $146.6 million, an increase of $35.3 million from FY 2017. This surplus was reported in the Comprehensive Annual Financial Report (CAFR) submitted to the State of Michigan. This surplus was the result of actions taken by my Administration with the help and support of the County Commission and other Elected Officials of the County.

Rebuilding in Motion
While the first four years have been focused on recovery, in the coming months and years, the effort will be about rebuilding the County. We need to rebuild and invest in our talent pool, facilities, and infrastructure. Additionally, we continue to have a strong commitment to public safety.
Criminal Justice Complex
In the Summer of FY 2017-18, we successfully negotiated an agreement with Rock Ventures that was approved by the County Commission to build a state of the art Criminal Justice Center (CJC) that will house our jail, criminal courts, juvenile detention center and offices for the prosecutor and sheriff. Construction has begun and is anticipated to be completed by the fall of 2022.
Violent Crime Joint Task Force
As a result of the upswing in violent crimes, we have included $1.69 milling in new funding for a new initiative in the budget called the Violent Crimes Joint Task Force. This new county wide initiative will include ten officers and command staff from the County Sheriffs department, three prosecuting attorneys from the Prosecutors office and other support from the my Executive office. Additionally, the task force will have dedicated law enforcement officers from the City of Detroit and other policing agencies within the County. The Violent Crimes Joint Task Force will focus on the enforcement efforts of violent crime offenders as well as coordinate with local prevention and reentry programs in an effort to achieve long lasting reductions in violent crime. We will continue to look for innovative ways to prevent violent crime from occurring and to hold criminals accountable.
Talent Pool
Last year we implemented the first general pay increase for our employees in over ten years. We continue to strategically increase the salary base in order to recruit and retain a talented workforce. We are committed to increase the minimum county wage to $15.00 per hour. We are currently in negotiations with a number of our unions and anticipate those negotiated outcomes will mutually benefit both labor and management. We will continue to take proper measures to invest in our people where we can, however, we must be disciplined and strategic in our approach.
Technology
We will continue to invest in our technology infrastructure. The Department of Information Technology has made great strides in upgrading our technology platforms and system. We will continue to invest $5 million annually until we have modernized our technology systems.
We are on schedule to replace our antiquated general ledger system (JD Edwards) and human resources/payroll system (PeopleSoft). We have earmarked $8.0 million in the current budget and will include another $8.0 million in the upcoming budget. The total cost of the implementation is expected to be approximately $30 million by the time it is fully implemented in FY 2023.
Roads & Bridges
No part of our rebuilding plan is more important to our 43 communities than our roads and bridges. Wayne County has the oldest and largest system of roads and bridges in this state. This year's harsh winter exasperated systemic problems of our crumbling road infrastructure. Our roads get more use and truck traffic than any other county. Potholes are everywhere.
We have hired HNTB Corporation, a consulting organization to determine how much it will cost to fix our roads and bridges. . As part of this process, we are exploring ways to maximize our funding to make our Roads funding go further and allow us to fix more of our roads and bridges each year. It will be an uphill battle. As an example of just how significant it is for us here in Wayne County is we have three projects that we need to do now. The collective cost of those three projects is a hundred million dollars. The Miller Bridge in Dearborn, the Dix Bascule Bridge in Detroit, and Haggerty Road that runs through Livonia, Canton and Van Buren townships all have been neglected in the past due to funding shortfalls but now require significant repair.
Once the study is complete, we will determine the mix of repair, replace, rehab and prevention that makes sense for the long term benefit of the County. An estimated cost of $3 billion in the next ten years will bring Wayne County infrastructure to good condition. The county also has 11 big brides in need of repair with an estimated replacement cost exceeding $10 million
Economic Development
Another way for us to continue to rebuild Wayne County is to deal more effectively with the Community Development Block Grants (CBDG) funding. These are Federal dollars designed for distressed communities meant to help deal with poverty and housing issues impacting the poor. Based on our recommendation, the County Commission recently adopted changes to the distribution formula of the CBDG grant funds which will produce a program that is more closely aligned with the outcomes intended by the Housing and Community Development Act of 1974, as amended. For the first time in over forty years of administering these funds, the County will conduct a Request for Proposals (RFP) that will result in activities more closely aligned with the Five Year Consolidated Plan we currently have on file with the U.S. Department of Housing and Urban Development. This should result in a more significant and direct impact to the citizens in those distressed communities in Wayne County.
Diversity
My Administration has always valued this County's rich diversity. It is one of our greatest strengths. It is an asset - culturally, socially and economically - that should be celebrated. The strongest Wayne County is one based on inclusion and a plurality of cultures, people and perspectives. Diversity has left an indelible mark on our past and continues to define who we are today and it contributes directly to our quality of life. Diversity has dividends. Wayne County has benefitted from it for generations. We are going to work toward building a more inclusive community with the other great organizations already working in this space.

The Comprehensive Executive Budget being presented to the Commission for FY 2019-20 and FY 2020-21 for consideration certifies revenues of $1.63 billion and $1.55 billion, respectively. The recommended budget for non-General Fund operations is $1.05 billion for FY 2019-20 and $0.97 billion for FY 2020-21. It includes funding for Special Revenue, Enterprise and Internal Service activities such as the County Roads and Parks operations, the Juvenile Justice System and the Delinquent Tax Revolving Fund (DTRF) programs. While many of these activities are partially subsidized by the General Fund, the majority of their revenue sources are non-General Fund restricted sources.

The County's General Fund Budget is segregated into two major sources of revenue: General Fund General Purpose revenue (GFGP) - used to fund health and welfare programs, public safety, and general government; and non GFGP revenue generated by departments and elected offices from specific sources. These revenues cannot be diverted to be used to fund other areas of General Fund expenditures.

In the current year, FY 2018-19, the County's General Fund Amended Budget includes available GFGP revenues for operations that totaled $406.87 million, including $20.72 million of funding from the County's DTRF and Forfeiture Programs. The GFGP revenues, along with department specific funding from non-GFGP sources (grants, charges for services and other revenue sources) which totaled $164.65 million, accounted for the General Fund's $571.31 million Amended Budget.

In next year's FY 2019-20 Recommended Budget, the County General Fund Budget will total $582.56 million, an increase of $8.25 million from the FY 2018-19 Amended Budget. The increase includes increases in GFGP, $6.97 million and non-GFGP sources, $1.28 million. The transfer from the DTRF programs is budgeted at $17.41 million, a reduction of $3 .31 million. In FY 2020-21, funding from the DTRF will be further reduced to $15.09 million. The year-to-year reduction in the DTRF transfers was anticipated, as it is an indication that there will be fewer property delinquencies and that the County's economy is improving.

The County's General Fund will have a total of $413.84 million in FY 2019-20 and $415.95 million in FY 2020.21 of GFGP revenue available to fund public safety, health and welfare programs and general government, an increase of $6.97 million from the FY 2018-19 Amended budget. The County will have to first fund its mandatory spending obligations of $93.56 million in FY 2019-20, a reduction of $4.58 million. The mandatory spending obligations are budgeted at $93.84 million in following year's budget. The County's mandatory spending obligations includes other debt service payments, rent payments, amounts set aside for liability settlements, required funding to the Parks, and payments to the Detroit Wayne County Mental Health Authority (DWCMHA).

The remaining GFGP of $320.28 million and $322.11 million, respectively, is available to allocate among the various GFGP supported departments and offices. Non-GFGP revenues, primarily grants, fees, and charges, are $168. 72 million in FY 2019-20 and $164. 79 million in FY 2020-21. Total General Fund combined GFGP and non-GFGP revenues are $582.56 million, and $580.74 million, respectively in FY 2019-20 and FY 2020-21.

Property tax collections, the County's primary source of General Fund revenue, have fallen dramatically since 2008, significantly reducing tax collection revenue. In 2008, property tax collections were $370 million. Beginning in FY 2013-14, that trend changed and property tax collections began to rebound; in the upcoming budget, we are estimating net property tax collections to be $301.79 million in FY 2019-20 and $306.19 million in FY 2020-21.

For the FY 2019-20 and FY 2020-21, the County expects to receive revenue sharing payments of $52.65 million based on the Governor's Executive State Budget. This is a $2.15 million increase from the payments expected to be received by the County in FY 2018-19. FY 2019-20 Court Equity payments, which are based on filing fees collected by the County's Circuit and District Courts and used to fund court operations, total $13.50 million, similar to the amount expected to be received in FY 2018-19. A similar continuation budgeted amount is included in the Recommended Budget for FY 2020-21.

The repeal of the Personal Property Tax was implemented in FY 2015-16, and as a result the County lost an estimated $14 million in tax collections. Counties and local municipalities now receive the replacement of this lost tax revenue from sales tax revenues from the State. However, the State continues to reduce replacement funding. In FY 2015-16, the first year of the PPT reimbursement, the County received $11.78 million in State reimbursement. The reimbursement increased to $16.64 million in FY 2016-17 but the replacement funding decreased to $9.87 million in FY 2017-19 and $8.53 million is projected in FY 2018-19. As a result, only $7.75 million is included in this budget in both FY 2019-20 and FY 2020-21.

The Recommended Budget also demonstrates my Administration's full commitment to public safety. This budget fully funds all jail and jail-related operations at the current level adjusted for reductions resulting from anticipated overtime, health care and pension changes.

The Recommended Budget for the County Prosecutor includes an increase of 8 additional positions and continues the additional $1.5 million in funding provided FY 2018-19 to invest in and retain talent in the Office. The budget funds 254 full-time and part-time attorneys and 132 support staff in the Prosecutor's Office. In addition, this budget supports the Prosecutor's vital role in the Violent Crimes Joint Task Force.
The budget for the Third Circuit Court is funded to the levels agreed to in the 2016 agreement and subsequent memorandums of understanding. Included in the budget, is a new State funded

initiative intended to improve the legal defense representation for indigent defendants in the Third Circuit Court adult criminal court system. Funded by a $17.4 million State grant managed by the State's Michigan Indigent Defense Commission (MIDC) and approved by the Commission in June, 2019, the initiative is in the early stages of being rolled out.

This budget funds 100% of the defined contribution retirement plan and the defined benefit retirement plans as determined by the independent actuary retained by the Wayne County Employee Retirement System (WCERS). This budget sets aside $5.0 million in the Road Fund as additional payments to WCERS to accelerate the reduction of the unfunded actuarial accrued liability of the retirement system.

In this budget, we are providing a onetime supplemental stipend increase to post-Medicare eligible retirees whose retirement benefit falls below the 2019 poverty level of $25,750. While this increase reflects the Commission's and my concerns for our retirees' fiscal and physical health and welfare, we must also continue to stand diligent in our fiscal responsibilities to reduce our long term liabilities. The allocation for this one time stipend increase is included on the understanding that it does not alter any aspects of the settlement agreement between the County, and Michigan AFSCME Wayne County Retiree Sub-Chapter 38, commonly known as the "MacDonald Class Settlement Agreement," and subject to the following pre-conditions for any Medicare eligible stipend recipients covered by the that Settlement. The preconditions, pursuant to Section 13 of the MacDonald Class Settlement Agreement are that: 1) the terms of the onetime increase will be in writing and signed by the duly designated representatives of AFSCME Subchapter 38, the County Commission and the County CEO; 2) the increase will be a one-time only increase; and 3) the County's payment does not a waive any of the County's or the CEO's rights under the Settlement Agreement that pertain to changes to the stipends.

County leadership must focus on providing true mandated services versus non-mandated services during budget deliberations. It is clear that the Commission must appropriate funds sufficient to fund mandates for Elected Officials and County government in general. The key question is "at what level must the County provide a particular service?"

Discretionary spending on non-essential and unnecessary expenditures simply because there were funds available in the budget should be reconsidered. We are the financial stewards of the Wayne County citizen's money. We need to stay focused and continue to make the difficult decisions that helped us get to where we are today. We cannot return to old ways of undisciplined spending.

We will continue to insist that each department, including those headed by elected officials, manage their expenses to available revenues. No departments or elected officials are receiving the exact level of funding that they believe they deserve as revenue sources continue to be limited. Moreover, we must face the difficult challenge of right-sizing and streamlining all County functions, while managing the workload in a fiscally prudent and operationally sound manner. Simply stated, there is never enough GFGP revenue to support all needs. New revenues must be found.

A schedule of monthly allotments for all elected officials and departments for the fiscal year will be developed by the Department of Management and Budget (M&B) with the assistance of the departments and elected offices shortly after the adoption of this budget. It will be based on historical spending patterns and input from the departments and elected officials. In the event that a department fails to submit a schedule of allotments, M&B will put one forward on behalf of the department or Elected Office, which will remain in effect until an acceptable schedule has been submitted by that department. The Schedule of Allotments will again be the basis for monthly reporting to the Commission through the Committee on Ways and Means.

These budgets assume that growth in enterprise and other non-general fund supported special revenue funds must not be exceeded by spending increases. We cannot deviate from the policy of holding the line on all spending.

With the leadership and collaboration of my Administration, staff, the Commission, and other elected officials, we can and will rise to the challenge before us. Our citizens are counting on it.
Sincerely,

Warren C. Evans
Wayne County Executive


View the 2019-2020 Comprehensive Executive Budget