Eric D. Lawrence

Detroit Free Press

Wayne County administration officials are projecting a budget surplus for the second year in a row.

The $44-million general fund operating surplus for fiscal year 2015-16 is based on preliminary information from the county's Department of Management and Budget, according to the administration of County Executive Warren Evans.

The administration said that following Evans' first year in office the county posted an accumulated unassigned surplus of $35.7 million after the fiscal year 2014-15 audit.

“Our recovery plan calls for creating surpluses through good fiscal management so that we can finish the jail and pay down our remaining unfunded liabilities, which are substantial,” Evans said in the release. “The better the county sits financially when we finance the jail project, the less it’ll cost us to borrow to complete it.”

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The county has projected that it will need to borrow $200 million to complete the unfinished jail on Gratiot in Detroit. Even as he awaits an offer on the site from businessmen Dan Gilbert and Tom Gores who want to bring a professional soccer team to Detroit, Evans has continued to state that he believes the Gratiot site is the most cost-effective path for completing a new county jail.

The announcement on the surplus happened the same day Moody's Investors Service upgraded the county's general obligation limited tax bonds from Ba2 to Ba1, which is just below investment grade, the county said.

The announcement also adds to the improved financial picture for the county, which exited a consent agreement with the state over its financial woes last year.

Despite the good news, the county is still short of recommended cash reserves.

“We need about 15 to 18 percent of annual expenditures in reserves in the General Fund at all times just to be stable over the long term. We’re not there yet,” Chief Financial Officer Tony Saunders said in the release. “This doesn’t go as far as a rainy day fund, but it helps move us closer to a basic threshold for financial practices that is critical for any municipal government over the long term.”

Contact Eric D. Lawrence: elawrence@freepress.com. Follow him on Twitter: @_ericdlawrence.