Court Could Cost Shelby Whether It Stays Or Moves

Shelby and Macomb Township officials agree, on paper, that it makes more economic sense to relocate the 41-A District Court to Macomb. So, why is it still a painful move for Shelby?

If court stayed in Shelby, the city would continue to lose money every year.

However, if the court does relocate to Macomb, it would still cost taxpayers more than $5 million in retirement and other benefits for 41-A District Court employees, said Shelby City Attorney Rob Huth during a televised work session Dec. 15.

Huth said court revenue, which is on the decline, won't cover the costs of running the outdated and small courthouse in Shelby, and Shelby officials said committing to building a new court in the city would be too costly.

Macomb Township has said it would build the 41-A courthouse, which serves the townships of Shelby and Macomb and the cities of Utica and Sterling Heights, at its government center near 25 Mile and Broughton roads.

Why Shelby Can't Afford The Courthouse

The decline in revenue, which townships across the state are facing, is mostly due to the slowed growth of the community, a decrease in residents' abilities to pay fines, and tether programs that have been reinstated to ease overcrowding in the jails, Huth said.

On top of the decline in revenue, add the increasing cost for health care and personnel.

Huth said both townships are open to the idea of relocating the courthouse but it would be a move that would have to make financial sense for both cities.

One thing that both cities have agreed makes sense is to have Shelby Township cover the legacy costs of its retirees and the current employees nearing retirement.

These costs, which include retiree health care, accrue in Shelby at $175,000-$200,000 a year, Huth said. If the court stays in Shelby, the potential legacy costs in Shelby could reach $8.4 million in five years. If the court moves, Macomb is asking Shelby to pay $5 million to cover those long-term employee costs, which is what has accrued as of Jan. 10, 2010.

"We are asking our residents to weigh the costs of the court staying versus the court going. And while this is a decision ultimately made by many people, including the court itself, we need a resolution of who is going to pay for those legacy costs," Huth said.

While Shelby does have funds set aside to cover these costs until the end of the 2011 fiscal year, Macomb's post-employment health care is fully funded.

Huth said if the court moves to Macomb, Shelby could either accept as-is the legacy costs determined by accountants and pay a lump sum for its retirees, or negotiate with Macomb to pay the costs as employees retire.

Other Variables

When asked why Shelby Township can't afford the court, the board cited the differences between the townships' structures and finances.

Shelby Township pays more for fire and police personnel.

While Shelby employs a full-time police department with 90 employees, Macomb employs none, instead contracting with the Macomb County Sheriff.

"Comparing Macomb to Shelby, we spend between $16 million and $20 million for police and fire that Macomb does not have that expense … this is an expense for our residents," said Paul Viar, Shelby Township trustee.

Macomb also sports a larger general fund balance, almost $16 million more than Shelby as of 2009.

"Our culture here in Shelby, our expectations are much different than they are in Macomb," said Richard Stathakis, Shelby Township supervisor.

What The Future Holds

Negotiations between Shelby and Macomb are expected to continue into 2011.

The Shelby Township Board asks residents of both townships to express their opinions on the issue during this time.

Macomb Township Clerk Michael Koehs, who attended the work session, said he, too, plans to recommend his own township board and residents watch the video of the Dec. 15 presentation, available on the Shelby Township TV website.

The Shelby Township board suggested adding an online poll about the issue, but the site has not yet been updated with those features. For now, the trustees have asked that the public send an email with their comments.

Jenny Whalen, Local Editor for the Macomb Township Patch, contributed to this report.