Shelby approves agreement for relocation of district court
July 29, 2013
SHELBY TOWNSHIP — The Shelby Township Board of Trustees voted 3-2 July 16 to narrowly approve an agreement regarding the relocation of the 41-A District Court — which serves Shelby Township, Macomb Township and Utica — from Shelby to Macomb.
The proposed agreement outlines issues such as distributions of fines and costs, and will require Shelby Township cases to be heard in Macomb Township until all bonds used to underwrite the cost of the court within Macomb Township are repaid.
Macomb Township and Utica have already passed similar agreements.
Supervisor Rick Stathakis said Shelby Township court employees are pressing for some sort of transaction — be it an update to the current building or a new court in Shelby Township or another community.
“Conditions are tight and present a dangerous situation when people with very high nerves are jammed in a small area,” Stathakis said.
Stathakis said if Shelby Township built a new court, the general fund would have to subsidize it and the township would lose approximately $500,000 per year, but if another community incurred the costs, Shelby Township could cap its legacy costs and gain $250,000 annually.
“That could be used to offset post-employment legacy costs and, over a five-year period, the net difference between hosting and not hosting a court could be millions of dollars in our township’s favor,” Stathakis said.
He said in the last five years, the Shelby Township court has net revenue of negative $1.16 million, largely because of legacy costs.
“We’re burning through about $758.47 per day on legacy costs, so every day does count,” Stathakis said.
In March of this year, the board addressed legacy costs: who is going to pay for the current employees when they retire not as Shelby Township employees, but rather as Macomb Township employees?
Robert Huth, the Shelby Township attorney, said both the Shelby and Macomb boards agreed on a formula, but that more issues would need to be addressed.
Huth said that while Macomb Township initially wanted the legacy costs up front, they have agreed that the costs “will be paid as they occur, and as it is clearly determined what they are,” because there were too many unknowns and it would put a difficult burden on Shelby Township.
He added that Shelby Township employees will go to the Macomb Township court under terms of a contract, and if it changes, then Macomb Township would honor those terms.
Huth said Shelby Township’s primary interest is how to pay for post-retirement employee benefits, while Macomb Township’s primary interest may be having Shelby’s cases heard in their not-yet-constructed court building while the bonds are outstanding.
“Among the things we are agreeing to is to have our cases heard in Macomb Township, as Macomb Township has had their cases heard here in Shelby these past years,” Huth said.
Many parts of the agreement with Macomb Township adhere to a “new operation date” — the date the court is ready to take action and hear cases.
While the new operation date is unknown, Huth said, one date is known — Sept. 5, “when we find out if Macomb Township is serious about this deal and by the terms of the agreement you have in front of you tonight.”
He said while the agreement is one of the steps that could move the court, there are other factors that could halt the process.
Trustee Doug Wozniak said he felt the agreement’s “date of operation,” when the court starts functioning, posed more risk to Shelby Township because of the monetary obligations that go along with it, and that the contract was not mutually drafted.
“I am not against this project, but I don’t think the contract is done in our best interest,” Wozniak said.
Huth said the agreement will eliminate some risk Shelby already has and, although it was not mutually drafted, it was mutually negotiated and fairly represents the intent of the board.
A $400,000 justice fund, Huth said, has been set aside from revenue incurred from all of Shelby’s and one-third of Utica’s and Macomb’s ticket fines to cushion transfer costs.
Stathakis, Treasurer Michael Flynn and Trustee Paula Filar voted “yes,” while Trustees Wozniak and Nick Nightingale voted “no.” Clerk Stanley Grot and Trustee Paul Viar were absent from the meeting.
Now that Shelby, Macomb and Utica have all approved the agreement, Macomb Township Clerk Michael Koehs said Plante Moran, a governmental accounting and auditing firm hired by Macomb, can update a 2010 financial study of the 41-A District Court, which projected a positive cash flow, to find out if building a court is financially feasible.
He estimated that the study would get underway by the end of July.
Plante Moran officials estimated that the study would take six to eight weeks to complete and cost the township $13,500 to $15,000.
Koehs said the Sept. 5 cutoff is “a self-imposed deadline issued by Shelby, but we’re not worried about it. We’re not going to rush things on our end because of that. If we don’t meet that deadline, then the only one it’s really hurting is Shelby.”
Staff Writer Jeremy Selweski contributed to this story.
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