Shelby Township financial director gives year-end overview

By: Sarah Wojcik | Shelby - Utica News | Published December 29, 2017 | Updated January 7, 2018 1:24pm

SHELBY TOWNSHIP — According to Shelby Township Supervisor Rick Stathakis, the township would have a surplus in its general fund every year if not for infrastructure needs.

The general fund had a deficit in 2016 and a proposed deficit in 2017, due to transfers to pay for district court and community center capital improvements.

The township’s general fund balance in 2016 was approximately $12.5 million. It was projected at approximately $11 million for 2017. The general fund projection for 2018 shows revenues exceeding expenditures by approximately $934,000, and the general fund balance to be approximately $11.9 million.

Shelby Township Financial Director Allan McDonald gave the annual overview presentation of the township’s three major funds — general, police and fire — from 2014 to 2018 at the Dec. 5 Board of Trustees meeting.

With the exception of 2017, which is affected by the sale of Shelby Manor, McDonald said the general fund revenues hovered around $15 million to $16 million. With the sale of Shelby Manor — which at the time of the presentation had not been completed, but which was completed a little more than a week later — he said the general fund revenues would rise to approximately $31 million in 2017.

The general fund expenditures are usually $14 million to $15 million, McDonald said. The expenditures were $17.9 million in 2016, and projected to be approximately $32.5 million in 2017.

“In 2016, the general fund transferred about $3.6 million for the district court into a separate capital projects fund. If not for that $3.6 million transfer, general fund expenditures would have been about $14.3 million,” said McDonald.

He said there are approximately $18 million in transfers in the 2017 projection, including money for future community center construction.

“So if you back out those $18 million in transfers, you’re hovering right around $14.5 million in 2017 as well,” McDonald said.

In 2015, he said, the general fund began shifting 0.18 mills to the police fund annually, as the department’s main source of revenue — just under 94 percent — is property taxes, and the township capped and eliminated the Fire and Police department pensions in 2014.

In 2014 and 2015, McDonald said, the township did not increase wages; in 2016, he said, employees received a 3 percent increase. After the sale of Shelby Manor, he said, the township proposed to transfer $5 million into its retiree health care trust to cut down that liability.

“And then the personnel (cost) drops down a bit in 2018,” he said.

Personnel, he said, is the biggest source of expenditures in all three funds.

As for the fire fund, McDonald said the revenues have been slightly increasing every year since the township closed the police and fire pensions and funded them through bonds, and the fund balance currently sits at around $9 million.

Pending completion of the new Fire Station No. 4 at 23 Mile and Mound roads, he said Fire Chief Jim Swinkowski plans to sell the old property and building at 23 Mile and Schoenherr roads for approximately $950,000 in 2018.

The last major expenditure, he said, took place from 2015 to 2016 when the Fire Department hired six additional firefighters to staff the new Fire Station No. 5 at 21 Mile and Schoenherr roads.

The police fund, he said, took a big hit in 2014 with the township’s switch to a 401(k)-style retirement plan instead of pensions, and before that, it had been running deficits for several years. In 2015, McDonald said, the police fund had its first surplus again at approximately $1 million.

“We’re projecting, at the end of ’18, to have approximately $3.3 million in the fund balance in the police fund,” he said.

At the Dec. 5 meeting, the board also approved the hire of six new patrol officers in 2018. Emir Vila, Stuart Martin, Mitchell Kuula, Nikoll Sinishtaj and Ryan Nicely were sworn in at the township board room Jan. 5, and Michael Retzler will be sworn in after he graduates from the police academy this spring, according to the township.

With the new police officers, the 2018 projection in the police fund showed expenditures exceeding revenues by just less than $60,000.

“I’m confident the police chief, as he always does, can find creative ways to cut that down and hopefully come up with a surplus when we do this next year,” McDonald said. 

Police Chief Robert Shelide, who came to the Shelby Township Police Department from the Southfield Police Department in 2015, said the hires fulfill his vision for a more diversified team.

“We’re bringing in two Albanian-speaking officers,” he said. “We have a large Albanian-speaking population, and it’ll be great for the department too. We have a need for Albanian-speaking officers for domestic situations.”

Stathakis said the year-end financial review of Shelby Township is one of his favorite parts of the year.

“The state of Shelby Township … is excellent,” Stathakis said at the Dec. 5 meeting. 

“We still will be ready for the next recession,” he said.

Utica Treasurer Phil Paternoster said the city of Utica’s fiscal year ended June 30 and his audit was not yet completed, so he did not want to comment for this story.

For more information, visit www.shelbytwp.org or call the Supervisor’s Office at (586) 731-5154.