Guiding Principle # 1: Ensure Long-Term Fiscal Stability

 Introduction by Verna McDaniel, Washtenaw County Administrator

 

Budget Puzzle

 

As I mentioned in the State of the County presentation delivered to the Board of Commissioners on May 15, 2013, Washtenaw County government faces a projected $7 million deficit for 2014-2017.  This deficit is structural in nature, and must be addressed: the County is constitutionally obligated to present a balanced budget every year.  The good news is that we have been working diligently to ensure the County's long-term fiscal stability through a number of measures, including the containment of our legacy retirement costs by closing our pension and retiree health care plans to new employees; reducing our current health care costs through wellness incentives; moving to a four-year budget process; and negotiating ten-year contracts with our unionized workforce.

The other good news is that the County's property tax revenue - the General Fund's main source of revenue - is projected to grow at a rate of 1.35% per year over the next four years.  This increase will result in an additional $2.4 million in revenue for our General Fund.  At the same time, I am also working with all the Departments in County government to identify $1.83 million in operating cost reductions throughout the organization.  We are confident that this number - while certainly not painless - will be achievable.  In addition, out of necessity, we are preparing to reduce the County's contributions to outside agencies by $100,000.  Again, this proposition gives me no pleasure, but the County's long-term fiscal stability must be paramount in our deliberations.

And yet, even with all this hard work, we still face a daunting $5.06 million increase in our annual required contributions to the retiree pension and health care funds.  There are many reasons for this increase - and you can read more about those in the pages that follow - but the bottom line is: we need to find a way to address this obligation, and we need to do so without delay.

The Board of Commissioners has directed us to explore two main alternatives for doing so:

Alternative A: Bond Issuance

Alternative B: Additional Operating Cost Reductions through Cuts to Programs & Services 

 

Verna McDaniel, Washtenaw County Administrator, may be reached via email at WCAdministrator@ewashtenaw.org

Residents of Washtenaw County are encouraged to contact their elected representative on the Board of Commissioners.  Identify your Commissioner at www.ewashtenaw.org/government/boc, or simply call the Board of Commissioners’ office at (734) 222-6850 to let your views be known.

 

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