SHELBY TOWNSHIP — On its current financial course, the Shelby Township Police Department is facing insolvency in 2017.
Following a work session held in June by the Shelby Township Board of Trustees to review Police Department finances, Chief Roland Woelkers and consultant John Kaczor are due to make a presentation to the board Aug. 6 regarding possible solutions.
Supervisor Rick Stathakis cited a $1.67 million operating deficit, a $13.2 million pension liability and $29.2 million in unfunded legacy costs as the Police Department’s financial shortcomings.
He said even if the Police Department incurred no expenses, it would take two and a half years to pay off the current legacy debt.
“We are going to take whatever steps we have to take to make sure [insolvency] doesn’t happen,” Stathakis said, adding that under the leadership of Woelkers, the Police Department has seen $1.2 million in savings.
Woelkers said that the department is not in dire straits and is faring better than some neighboring communities.
“Shelby fortunately is a growing community, adding buildings and homes to tax rolls and increasing revenue,” Woelkers said. “The economy is rebounding.”
Woeklers said he just wanted to plan ahead and that the Police Department has a current fund balance of $8 million.
Stathakis said he tried to push a 401(k)-type pension plan when working on the last contract with the police and fire command, called a direct contribution, which is what the general township employees receive.
The pension costs are capped with general employees, so when they retire, the township pays nothing, he said.
“(The command) said no, took us to arbitration and the arbitrator ruled in their favor,” Stathakis said, which means police and fire personnel will stay on the defined benefits program and will receive an average pension amount of $75,000 per year for life, regardless of what they put in.
The Board of Trustees will listen to Woelkers and Kaczor’s presentation at the next meeting at 7:30 p.m. Aug. 6 at Shelby Township Hall and discuss a course of action.
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