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Macomb Township, Royal Oak Township, Utica

Shelby, Utica support agreement for district court revenues

July 29, 2013

MACOMB TOWNSHIP/SHELBY TOWNSHIP/UTICA — Officials from all three communities moved one step closer to the construction of a new 41-A District Court building in Macomb Township with the approval of an agreement that determines how court revenues would be shared.

The Macomb Township Board of Trustees originally authorized the language of the agreement May 22. Among other things, it states that once the proposed court building opens, Macomb would become the new funding unit for the court and would be paid all fines and costs generated by tickets issued in Macomb, other than those that violate state law. Meanwhile, Shelby Township and Utica would each be paid one-third of the fines and costs from tickets written in their respective communities, while the remainder would go to Macomb.

According to Macomb Township Clerk Michael Koehs, this arrangement is similar to that of the current 41-A District Court, in which Shelby receives all of the revenue from tickets written in Shelby and two-thirds of the revenue from those issued in Macomb and Utica.

The revenue-sharing agreement was approved by the Utica City Council July 9 and by the Shelby Township Board of Trustees July 16. It was also signed by Judge Michael S. Maceroni, chief judge of the 41-A District Court. At press time, it was expected to come back to the Macomb Township Board July 24 for final approval.

In Shelby, the agreement passed by a narrow 3-2 margin. trustees Nick Nightingale and Doug Wozniak cast
the dissenting votes, and Clerk Stanley Grot and Trustee Paul Viar were both absent from the meeting.

Supervisor Rick Stathakis, who voted in favor of the agreement, said he believes that it is in the best interest of his community to build a new district court in Macomb — and do it quickly.

“We do not need to stall any longer; we need to move forward on this project as soon as possible,” he said. “The more that we prolong things, the more problems that it’s going to cause for Shelby Township. There is also the possibility that they (Macomb Township) will just walk away from it all.”

Stathakis pointed out that Shelby’s retiree health care liabilities have steadily increased every  year and have now accumulated about $5 million in debt. If the court moves to Macomb, he explained, it would result in positive net revenue of about $115,000 per year for Shelby, which would allow the township to chip away at its overall debt. If the court stays in Shelby, however, it would result in a revenue loss of about $358,000 per year.

“Why would we want to keep something like that in Shelby Township?” Stathakis asked. “The other problem is that if we don’t build a new court, we will have to make some heavy-duty renovations to the existing one. Either way, it’s money that we don’t have to spend. Those dollars would be better used toward other services in this community.”

In Utica, the agreement was approved unanimously. Mayor Jacqueline Noonan stated that although building a new court in Macomb was not the first choice for her and other Utica officials, she would like to see the project — which the three communities have been discussing on and off for about a decade — finally begin to take shape.

“We would have preferred to have the court constructed in Shelby,” she said, “but we understand the financial issues that they’re facing. And if we find that this (agreement) has become a burden for us three or four years down the road, then we can always go to the chief judge and ask to revisit it.”

Noonan explained that since the early 1990s, Utica has had a deal with the 41-A District Court to allow many of its arraignments and much of its preliminary testimony to be conducted via video. That move has significantly cut back on the city’s transportation costs to and from the court.

“We will continue that arrangement after the new court is built, so even though Macomb is farther away from us, we will still be able to minimize any additional costs,” Noonan said. “It’s not the ideal situation, but we are fully on board with this project and ready to move forward.”

These latest court developments occurred in response to the recent support of an interlocal agreement between Macomb and Shelby that spells out how the two municipalities would finance the post-employment benefits of the 41-A District Court’s current employees. When the Shelby Township Board approved the agreement March 5, it gave Macomb Township a six-month window in which to make a decision about whether to construct a new court.

However, Koehs did not give much credence to that Sept. 5 cutoff date. “That’s a self-imposed deadline issued by Shelby, but we’re not worried about it,” he said. “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.”

On May 8, the Macomb Township Board voted to hire the governmental accounting and auditing firm Plante Moran to update a financial study of the 41-A District Court that was first conducted in 2010. Plante Moran representatives estimated that the study would take six to eight weeks to complete and cost the township $13,500 to $15,500. But as Koehs noted, the revenue-sharing agreement had to be approved before Plante Moran could move ahead with this study. He estimated that it would get underway by the end of July.

The study will determine whether building a new court in Macomb is financially feasible. Koehs said that the 2010 study indicated a positive cash flow at the court, but the new one will also take into account the economic climate of the last three years. He emphasized that if Macomb officials do approve the project, they will be sure that they can fund all of the court legacy costs in advance so that the township does not end up with a large debt like Shelby has.

“We will take any steps necessary to prevent that from happening,” Koehs said. “That’s why we’re doing this study in the first place: to find out if we can pay for the operational costs, employee salaries and fringe benefits at the court without losing money. We can’t help our neighbors by hurting ourselves.”

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