Wayne County , Michigan May Be Going Bankrupt By Summer: Wayne County Exec. Warns on State Takeover, Bankruptcy

The Bond Buyer reports:

Wayne County, Michigan's newly elected executive, Warren Evans, Thursday delivered a grim picture of the county's fiscal position, warning that a state takeover and bankruptcy are both on the table without major structural fixes.

The county, home to Detroit, is on track to run out of cash by August 2016, a date that Evans called "financial Armageddon."

Wayne also faces what auditing firm Ernst & Young called a "liquidity crisis" within the next six months, by August 2015.

"Even with all of the funds pooled together, we're going to get to the area where we just don't have enough to pay the bills," said Evans at a press conference Thursday where he presented the Ernst & Young report outlining the county's financial picture.

"It's a bad cash picture. One of the big requirements for bankruptcy, and that's an ugly word, is your cash position; if you don't have the cash it's one of the triggers."

Wayne County for years has run a structural annual deficit, now estimated at $50 million. It has an accumulated deficit estimated at $161 million and a pension plan with a funded status down to 45% from 95% ten years ago.

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