Shelby Township receives positive financial audit for 2017 fiscal year

By: Joshua Gordon | Shelby - Utica News | Published September 10, 2018

 Fully funded fire and police pension funds were a positive on the 2017 financial audit for Shelby Township, which was presented at the Aug. 21 Board of Trustees meeting.

Fully funded fire and police pension funds were a positive on the 2017 financial audit for Shelby Township, which was presented at the Aug. 21 Board of Trustees meeting.

File photo by Deb Jacques

SHELBY TOWNSHIP — The latest audit of Shelby Township’s finances by Plante Moran showed that the township is continuing to make smart money decisions.

Plante Moran presented the 2017 audit of Shelby Township at the Aug. 21 Board of Trustees meeting and highlighted the fully funded police and fire pension funds, a healthy general fund and paying for things in cash as reasons why the township is in a good spot financially.

The township was aided by the sale of the Shelby Manor apartment complex for $14 million in December of last year, as well as a 1.8 percent increase in property tax revenue, which Plante Moran said brought in about $500,000. The township also brought in $800,000 in revenue from permit fees associated with large projects, such as the Amazon fulfillment center opening soon at Mound and 23 Mile roads.

In total, Shelby Township had an increase in revenue of more than $15.9 million in governmental funds in 2017, most of which was due to the sale of Shelby Manor. The complex, located on Lakeside Boulevard, was sold to Shelby Township-based Shamrock Acquisitions LLC Dec. 14.

Plante Moran partner David Herrington said the audit is important for Shelby Township to make informed financial decisions for the next budget.

“(Shelby Township’s finances) are in excellent shape,” Herrington said at the meeting. “Your police and fire pensions are over 100 percent funded. The (other post-employment benefits) were expected to be over 50 percent funded, and you see that trend in the last five to 10 years, and that is outstanding.

“You are really thinking long term with a bunch of attention to legacy costs, and we are pleased to see that.”

With the Shelby Manor sale, the township used $5 million to transfer to the OPEB trust for retiree health care. The rest of the funds are expected to be used to help fund the construction of a new library and senior center.

The total general fund revenues for the township in 2017 were $87.5 million, offset by $75.2 million in total expenditures. The township’s combined net position increased from $211.6 million to $223.9 million.

Township Supervisor Richard Stathakis said property tax revenue, which usually accounts for around 30 percent of total revenues, is still about $4 million less than what was collected in 2009.

“It’s nice to see an increase in revenue, and this audit shows the real value of the policies enacted by the conservative majority of our Board of Trustees since 2008,” Stathakis said. “These policies allowed Shelby Township to maintain a steady and growing course while revenues dropped, without raising taxes, and they serve as our path for continued growth and stability.”

Plante Moran said Shelby Township also continues to have a healthy water and sewer fund despite paying about $2.5 million in expenses last year for the Fraser sinkhole. Herrington said the township has made the right decisions as far as rates go to keep them low for residents but still have money to take care of the infrastructure.

Township Treasurer Michael Flynn said the financial decisions may not be exciting, such as the one-time $5 million contribution to OPEB, but they have helped keep the township in a good position.

“It’s not glamorous because it’s financial news, but the fact that we put the additional $5 million in the OPEB trust, and the fact that we changed the way we recalculate how we do our annual contribution so we are not leaving money on the sideline, is a great story,” Flynn said. “Some of our neighbors are going to have to raise taxes if they want to remain solvent. Thankfully, that will not be the case in Shelby Township.”