Wayne County faces mounting retiree liability crisis

In a recent government meeting, officials discussed critical financial matters concerning retiree benefits and funding obligations. The actuarial valuation report revealed that current plan assets are sufficient to cover 100% of employee contributions and approximately 71% of future benefits for present retirees and beneficiaries. However, there are significant concerns regarding the lack of funding available to meet employer match obligations.

The report highlighted that planned assets at market value can cover about seven years of retiree benefit payments, with future payments heavily reliant on upcoming contributions and investment returns. A notable point of contention is the unfunded liability associated with pre-2002 retirees from the Wayne County Airport Authority, which amounts to approximately $6.3 million. The airport authority has not made any payments towards this liability since fiscal year 2021, leaving the county to cover all benefit payments.

The meeting also addressed the delinquent tax revolving fund, which saw a $24.2 million increase in total net position, reaching $227.5 million by the end of 2023. However, future surplus transfers to the county's general fund are expected to decline. The county's cash and investments are currently sufficient to cover outstanding delinquent tax notes, but pending lawsuits could impact available funds.

Additionally, the meeting covered the ongoing management of tax-reverted properties, with a recent intergovernmental agreement (IGA) allowing the Wayne County Treasurer's Office to transfer properties to the land bank for maintenance and administration. The IGA, renewed in July 2023, is set to expire in May 2026 but may be extended.

Lastly, the county is in the process of transitioning to a new criminal justice and central utility plan, with costs projected to rise significantly from the original budget. The county's share of the project has increased to approximately $502.8 million, with a deadline to vacate current facilities looming in September 2024 to avoid additional costs.

The discussions underscore the ongoing financial challenges faced by the county, particularly in managing retiree obligations and ensuring adequate funding for future commitments.